British International Freight Association – New set of standard trading conditions

BIFA have intimated a new set of trading conditions which are going to come into force later this year on 1 October 2017.

 Some of the changes are simply cosmetic – changes in terminology such as “pets, livestock” to “living creatures” and, in a similar vein, “bullion, coin” to “bullion, currency”.  There are a few minor reductions in time limits and the introduction of a time limit by which the BIFA member should supply copies of contracts it has entered into on behalf of its customer, if the BIFA member has acted in an agency capacity.

But the major changes relate to the SOLAS Convention, regarding verified gross matt (VGM); “an acceleration clause” with regard to the creditworthiness of the customer and any credit terms given; and a change to the law/jurisdiction clause.

SOLAS

The revision provides an extension of the warranty that the customer gives to the forwarder that the information is accurate.  This has been extended, expressly, to take into account the requirements of SOLAS with regard to VGM – there must be a declaration as to the weight of the container prior to shipment. Where the forwarder may not be able to avoid any liability by making the declaration on the customer behalf, it is important that the forwarder can look to the customer for redress.

Acceleration clause

Often, the freight forwarder gives the customer time to pay.  This may be based upon the freight forwarder’s assessment of the customer’s then creditworthiness.  However, this creditworthiness may change and, if the freight forwarder believes this to be the case and there is default by the customer in payment obligations, the revision permits the forwarder to cancel any credit terms and demand that all sums become immediately payable.  This would permit the exercise of a lien over goods in respect of all invoices which then become payable.  Remember a lien can not be exercised in respect of sums which were not then due and owing.

Law/Jurisdiction

The major change is the introduction of an option to resolve differences by arbitration.  The driver behind this is that it is easier to enforce an arbitration award than an English court judgment in some parts of the world.

If you have any further questions, please do not hesitate to contact John Habergham.

Myton Law are associate members of BIFA