Summary of the liability relationship between the shipper and the foreign trade company in the dispute of maritime freight forwarding agency

In the dispute of maritime freight forwarding agency, there may be a three-party agreement among the shipper, foreign trade company, and freight forwarding company. In this case, the foreign trade company is the agent of the shipper and entrusts the freight forwarding company to handle the export procedures in its own name. This situation is commonly known as "agency of agency" and involves two levels of agency relationships. This issue was involved in the Shanghai Modern Yalun Shipping v. Shanghai Zhongyi Fangyuan and other Freight Forwarding Contract Debts and Guarantee Contract Disputes case. The following is an analysis of this case in simplified terms.

Shipper A entrusted Freight Forwarder C to handle customs clearance and transportation of goods through Foreign Trade Company B. B issued a repayment plan to C and its legal guarantor provided personal property as collateral. During the agency process, C paid for necessary expenses such as ocean freight and quota fees. In response, the three parties agreed that "Qiu Yi Clothing will pay all miscellaneous fees to Shanghai Yalun, if Qiu Yi Clothing fails to pay relevant miscellaneous fees to Shanghai Yalun in a timely manner, Zhongyi Fangyuan may deduct the relevant miscellaneous fees from the money collected from Qiu Yi Clothing." After the advance payment, when C requested repayment, neither A nor B paid. C sued the court to claim their corresponding rights.

A key issue in this case is whether the advance payment between the shipper A and foreign trade company B constitutes joint liability. The author believes that how the parties assume responsibility and how to repay can be freely agreed upon based on the autonomy of the contract, without violating mandatory provisions of the law, then the contract should bind the parties. When a dispute arises, the court should adjudicate according to the contract that has been formed. In this case, joint liability and guarantee liability have already been clearly agreed upon and should be handled according to the agreement.

As the shipper, A should repay the expenses paid by C. According to the three-party agreement, the third party, foreign trade company B, should pay the transportation costs involved to Freight Forwarder C. From the fact of verification, it can be inferred that A has already received the money involved in the case. According to the three-party agreement, A should pay the transportation costs involved to C within the amount of the collected money. At this point, A and B assume the debt of the transportation costs involved. The legal representative of B should assume joint guarantee liability.

Of course, according to the current judicial trend, there may be defects in the meaning of B's "debt joining" . According to relevant regulations, if a company joins a debt and assumes joint liability for the debt, it must meet the relevant requirements of China's Company Law and must be resolved by the shareholders' meeting. If C knows or should know that the legal representative of B made the statement of debt joining beyond the authorized agency, the final result may be that the collegial panel will rule the debt joining behavior as invalid solely based on the "repayment plan" signed by the legal representative.

Zhai Dongwei International Trade & logistics Attorney team was founded in 2007. Its founder, Zhai Dongwei, is the founding partner of Guangdong Yingzun Law Firm. Focusing on International trade,maritime affairs, and supply chain cases for more than 16 years, the team currently has more than 30 professional logistics attorneys, of which more than 10 have overseas work and study experience, and can use Chinese, English and French to work and participate in business negotiations.