Lloyd's Maritime and Commercial Law Quarterly


Craig Forrest *

271. Borne Logistics CC v Zvoimpex a.s 1

Nature of a maritime claim—meaning in CIF contract

The claim arose out of three contracts for the sale of timber logs to Borne Logistics CC (Borne) to Zvoimpex a.s, a Slovakian company. The contracts were cost, insurance and freight (CIF) contracts with delivery to take place in ports in China. All three contracts provided for the payment of a deposit and the balance against the delivery of copies of the shipping documents. Zvoimpex claimed that it had made payments in terms of the contracts but, as Borne failed to deliver the rest of the timber, it cancelled the contracts and claims the money back in respect of which it has not received timber.
Pursuant to the s.1(1)(h) of the Admiralty Jurisdiction Regulation Act (AJRA),2 Zvoimpex obtained an in rem arrest of “[t]he Freight Advanced to Borne Logistics CC and held at First National Bank”. Borne applied to have the arrest set aside on the basis that Zvoimpex’s claim is not a maritime claim as defined in the AJRA.
Decision: Application allowed and arrest set aside.
Held: (1) A CIF contract is one in which the price includes the cost of the goods and the insurance and freight to the named destination. The seller (Borne) is required, at its own expense and risk, to put the goods into the possession of a carrier at the port for shipment and obtain a bill of lading covering the entire transportation to the named destination; load the goods and obtain a receipt from the carrier showing that the freight has been paid or provided for; obtain a policy or certificate of insurance; and prepare and forward the documents required to effect shipment and comply with the contract.3 The contracts relating to carriage, freight and insurance are concluded between the seller (Borne) and the carrier and insurer respectively. The buyer (Zvoimpex) is not a party to those contracts.
(2) AJRA, s.1(1)(h) refers to any claim for, arising out of or relating to “the carriage of goods in a ship, or any agreement for or relating to such carriage”.
(3) The payments made by Zvoimpex to Borne were part payments in respect of the purchase price of the timber. There was no obligation on Zvoimpex to pay for the freight or the insurance premium. Zvoimpex’s claim arises out of and relates to the purchase by it of timber. The carriage of the timber in a ship, and the agreement for such carriage, was a matter between the seller and the carrier, and the fact that the purchase price included the


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