"The Starsin" Validates T. O. Lee's Forecasts

LC VIEWS, 12 April 2006

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This Starsin problem is not new to me. I had realized such dilemma about 25 years ago when I did self-enhancement studies on maritime transport, UCP and cargo insurance, as Jia Hao now does. In the meantime, in DC Pro discussions and other magazines, I have also written some articles to forecast and warn that problems similar to the Starsin case would arise when bankers, carriers and insurers do not meet often and talk to one and other. With the way legislations on transport, banking (including UCP) and cargo insurance are drafted today, such dilemma is bound and sure to happen. The matter is only WHEN! Now I am glad that Jia Hao has found the Starsin case to provide a solid evidence to support my forecast some 25 years ago.
For those who do not know me, I am familiar with timber chartering trade that I had done about 25 years ago, shipping cut logs or sawn timber from a range of Malaysian and Indonesian ports to clients in Taiwan, Japan and Korea. There was no China trade at that time because China was locked under the bamboo curtain and was closed to the rest of the world. So I am familiar with the Starsin case trading environment.
In a nutshell, the Starsin case dilemma originates from the fact that the "Carrier" named in the bill of lading is a time charterer.
I see more landmines here than those reported by Jia Hao. Different judgments would be made depending on many variables. That may also explain why the judgments from different levels of English courts are different or even reversed. As the trial went along, more and more information was made available that would turn over the previous court judgments. This is one possibility but it may not be true. It may be also possible that all three levels of courts are in fact looking at the same set of evidences. I do not know.
According to the information provided by Jia Hao, the unreported variables that may affect the judgment on the party responsible for the damages (time charterer or the shipowners) are:

Whether the time charterer is a demise charterer or not?
If the time charterer is a demise charterer, is he also a bareboat charterer? In other words, who hires the master mariner (official name of the "master" in UCP)? This makes a lot of differences regarding who is responsible for the damages to the cargoes (not "goods" as used in UCP 500/600 transport articles) because the master mariner may be an agent of the shipowners, not an employee of the time charterer.
According to the terms of the demise or bareboat charter party, whether regular or routine checking/inspections for seaworthiness and other maintenance duties are to be done by the demise or bareboat charterer or the shipowners? From my experience in dealing with charter party disputes, the damages to the cargoes may be due to negligence in routine inspection and maintenance, rather than the negligence or wrong doing of the master mariner or officers in ship management?
There are nine kinds of shipowners according to Lloyd's of London reports. So who are you talking about when you mean shipowners"? the registered owner? the beneficial owner? the disponent owner? the operating consortium owner? or.....???

So trust me, this Starsin case has a lot to discover and discuss. It is not as simple as it appears on its face.
Talking about whether bankers could be made competent to check the charter party bill of lading, I would say "Yes" as a trainer. I have confidence to train them to be fully competent to check the charter party bill of lading and other maritime transport document after about a full week's training. I can guarantee that this is mission possible. The problem is not whether bankers can be made competent to deal with bills of lading. The trainer is here to offer a "No success full refund" guarantee. The problem is that they do not want or resist to know transport knowledge. Jia Hao, as a banker from Bank of China, is a rare exception and I am very glad to offer him help and encouragement, when he met me about two years in the cyberworld, as one of the subscribers to my website www.tolee.com. Yet I regret that I have not met him in person. And I am very glad that I have finally found a young banker who is eager to learn transport, cargo insurance and international trade laws and conventions.
So "bankers cannot understand the complicated transport issue" is not an excuse. The solution is here.
Whether bankers are required to check the terms and conditions of a transport document? Let us forget about the existing UCP requirements as reported by Soh Chee Seng. They have no such requirements simply because they don't know how to begin.
For me, this issue depends on whether they can be trained or not. If they cannot be trained, then there is only one simple answer: "No". Bu if they wish to learn and can be trained, then the answer would be "Perhaps". I think bankers should not compete on prices alone. If one bank can provide checking on terms and conditions of transport and/or insurance documents, I am sure that they can grab many customers from other banks that do not provide such services. This is leading edge competition - a new way of banking service excellence.
Lastly, I am glad to meet all of you in my two hour presentation on bill of lading on 19 May 2006 in Vienna, to be hosted by ICC Vienna as a special program after the ICC Banking Commission meetings. I was told that about 100 participants have already registered.

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