Meat Transportation Firm Gets a Raw Deal

A Norwegian exporter of meat products in Trondheim sold a consignment of 20,372 kilograms of meat products to a Danish importer for Nkr159,923. The Danish importer immediately resold the meat products to its subsidiary, which again resold the consignment to an importer in Gostivar in Macedonia for $33,207 (approximately Dkr227,932) on carriage and insurance paid to Gostivar terms.

The subsidiary contracted with a Danish transportation firm on the performance of the combined transport from Trondheim to Gostivar in Macedonia for a freight price of Dkr46,000. The truck was involved in an accident on the way from Trondheim to Oslo resulting in damage to the goods and the meat products could only be used for animal feed. After the accident, the subsidiary shipped a consignment of replacement products to the Macedonian buyer, who paid an amount equal to the previously agreed purchase price. The goods' insurers paid $33,207 in compensation to the subsidiary and instituted legal proceedings against the Danish firm, claiming indemnification for this amount. The transport firm submitted that the goods insurers were only entitled to Nkr159,923, equivalent to the original purchase price paid by the Danish importer, pointing out that if $33,207 were paid, the subsidiary/goods insurers would have collected the same profits twice.

The Maritime and Commercial Court(1) ordered the transportation firm to pay $33,207 on the grounds that it was the latest price agreed prior to the carriage, it was a fair market price and there was no basis for deducting the seller's profit in the case of a replacement delivery when computing the amount payable in compensation pursuant to Section 29 of the International Carriage of Goods by Road Act.

For further information on this topic please contact Jesper Windahl at Bech-Bruun Dragsted by telephone (+45 7733 7733) or by fax (+45 7733 7744) or by e-mail ([email protected]).

Endnotes

(1) December 6 2000 (Danish Weekly Law Reports 2001 625).