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    Keng Hua Vs CA-1

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    Raymond Roque
    Keng Hua refused to pay demurrage fees to Sea-Land for failing to discharge cargo within the free period stipulated in the bill of lading. The Court of Appeals affirmed that Keng Hua was liable for the fees. There were three separate contracts involved - the contract of sale, letter of credit, and contract of carriage. The bill of lading formed the contract of carriage between the carrier Sea-Land and consignee Keng Hua, making Keng Hua liable for demurrage fees for late discharge regardless of any discrepancies in the other contracts.

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    Keng Hua Vs CA-1

    Uploaded by

    Raymond Roque
    153 views2 pages
    Keng Hua refused to pay demurrage fees to Sea-Land for failing to discharge cargo within the free period stipulated in the bill of lading. The Court of Appeals affirmed that Keng Hua was liable for the fees. There were three separate contracts involved - the contract of sale, letter of credit, and contract of carriage. The bill of lading formed the contract of carriage between the carrier Sea-Land and consignee Keng Hua, making Keng Hua liable for demurrage fees for late discharge regardless of any discrepancies in the other contracts.

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    Keng Hua vs CA-1

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    Keng Hua refused to pay demurrage fees to Sea-Land for failing to discharge cargo within the free period stipulated in the bill of lading. The Court of Appeals affirmed that Keng Hua was liable for the fees. There were three separate contracts involved - the contract of sale, letter of credit, and contract of carriage. The bill of lading formed the contract of carriage between the carrier Sea-Land and consignee Keng Hua, making Keng Hua liable for demurrage fees for late discharge regardless of any discrepancies in the other contracts.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    153 views2 pages

    Keng Hua Vs CA-1

    Uploaded by

    Raymond Roque
    Keng Hua refused to pay demurrage fees to Sea-Land for failing to discharge cargo within the free period stipulated in the bill of lading. The Court of Appeals affirmed that Keng Hua was liable for the fees. There were three separate contracts involved - the contract of sale, letter of credit, and contract of carriage. The bill of lading formed the contract of carriage between the carrier Sea-Land and consignee Keng Hua, making Keng Hua liable for demurrage fees for late discharge regardless of any discrepancies in the other contracts.

    Copyright:

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    Keng Hua vs.

    CA accepted the cargo, Keng Hua will be


    violating customs laws.
    Facts:
    1. Sea-Land Service, a shipping RTC:
    company, is a foreign corporation Keng hua is laible to pay demurrage
    licensed to do business in the fees
    Philippines.
    2. Sea Land received at its Hong CA:
    Kong terminal a sealed container Affirmed the liability of Keng Hua
    fro shipment to Keng Hua.
    3. In spite of the notice previously ISSUE: WON Keng Hua is liable for
    sent by Sea Land, Keng Hua failed demurrage fee
    to discharge the cargo during the
    free period. HELD: Yes
    4. Keng Hua was only able to
    discharge the cargo 481 days RATIO:
    after the free period, as a result of 1. Bill of Lading binding on Ho Kee
    which demurrage charges Wee, Keng Hua and Sea Land as
    accrued. The said fees were paid found by CA. Though Keng Hua
    by Sea Land. never expressly consented to the
    5. Sea Land then asked Keng Hua for provisions of the Bill of Lading,
    the reimbursement of the there was an implied consent
    demurrage charges since under since Keng Hua only objected
    the Bill of Lading executed thereto after 6 months after it has
    between Keng Hua (consignee), received a copy of the Bill of
    Ho Kee Wee (shipper) and Sea Lading.
    Land (carrier), both the consignee
    and the shipper is liable for 2. In a letter of credit, there are
    accruing demurrage fees should three distinct and independent
    the cargo be discharged beyond contracts: (1) the contract of
    the grace period allowed by tariff sale between the buyer and the
    rules. seller, (2) the contract of the
    6. Keng Hua however refused to pay buyer with the issuing bank, and
    prompting Sea Land to sue Keng (3) the letter of credit proper in
    Hua for collection of said fees. which the bank promises to pay
    the seller pursuant to the terms
    Keng Hua’s Defense: and conditions stated therein.
    “Few things are more clearly
    Bill of Lading is only a Contract between settled in law than that the three
    Ho Kee Wee and Sea Land. It is not contracts which make up the
    binding on Keng Hua. letter of credit arrangement are to
    be maintained in a state of
    Under the Letter of Credit issued by perpetual separation.”
    Equitable Banking for Ho Kee Wee 3. Hence, the contract of carriage,
    Waste Paper (seller of Keng Hua’s as stipulated in the bill of lading in
    merchandise and the shipper of the the present case, must be treated
    cargo), the remaining balance of the independently of the contract of
    shipment was only 10 metric tons while sale between the seller and the
    Sea Land is asking Keng Hua to accept buyer, and the contract for the
    20 Metric tons. Thus, if Keng Hua issuance of a letter of credit
    between the buyer and the
    issuing bank. Any discrepancy
    between the amount of the goods
    described in the commercial
    invoice in the contract of sale and
    the amount allowed in the letter
    of credit will not affect the validity
    and enforceability of the contract
    of carriage as embodied in the bill
    of lading. As the bank cannot be
    expected to look beyond the
    documents presented to it by the
    seller pursuant to the letter of
    credit, neither can the carrier be
    expected to go beyond the
    representations of the shipper in
    the bill of lading and to verify
    their accuracy vis-à-vis the
    commercial invoice and the letter
    of credit. Thus, the discrepancy
    between the amount of goods
    indicated in the invoice and the
    amount in the bill of lading
    cannot negate Keng Hua’s
    obligation to Sea Land arising
    from the contract of
    transportation.

    4. Furthermore, Sea Land, as carrier,


    had no knowledge of the contents
    of the container. The contract of
    carriage was under the
    arrangement known as “Shipper’s
    Load And Count,” and the shipper
    was solely responsible for the
    loading of the container while the
    carrier was oblivious to the
    contents of the shipment. Keng
    Hua’s remedy in case of
    overshipment lies against the
    seller/shipper, not against the
    carrier.

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