In Ruritania, Export Grain Sales must be on Certificate - Case Study - Management Assignment Help

Assignment Task:

Task:

Scenario 1:
In Ruritania, export grain sales must be on certificate final at loading terms, per official inspection certificate to be issued by Rurinspekt, the official state-owned superintendents and analysts. Rurinspekt are not Gafta recognised but state that they employ Gafta sampling and analysis procedures.
Ruritania produces three grades of wheat, Grade # I, which is suitable for milling for flour and for bread, Grade # II, which is suitable for milling for flour, cakes and biscuits and Grade # III which is used for animal feed. Grades # I and # II are only distinguishable by detailed chemical analysis of samples. Grade # III is distinguishable from Grades # I and # II to the experienced naked eye. You buy, from a Ruritanian exporter, 10,000 tons (+/- 10% in seller’s option) of Grade #1 Ruritanian wheat CIF on the basis of Gafta 48, cash against documents. The contract says:

“Weight and quality final at loading as per official Rurinspekt certificate”. You receive a contractual Notice of Appropriation. The documents, including a Rurinspekt certificate, are presented. All the documents, including the Rurinspekt certificate, appear to be in order and you take them up and pay for them. Just before the vessel arrives you see the following message posted on the Ruritanian Government website:

“TO ALL IMPORTERS OF RURITANIAN WHEAT
Please note that it has come to the Governments’ attention that with regard official Rurinspekt quality certificates the accuracy of such certificates issued in the last month cannot be guaranteed due to certain mistakes in procedures and other irregularities. Our government naturally regrets any inconvenience caused. We assure all importers of Ruritanian grain that prompt and effective steps are in hand to restore the integrity and international reputation of the Ruritanian Grain inspection service.”
The vessel arrives and on opening the hatches it is obvious that the cargo is Grade # III Ruritanian wheat.

Task 1
Please explain if you can reject the goods and discuss whether you have any claims.

Scenario 2:
Per official regulations Banana skin pulp pellets come in two grades; Grade A and Grade B. Grade A is the same as Grade B except that Grade A requires less than 5% broken pellets whereas Grade B permits between 5% and 15% broken pellets.

You buy, CIF, GAFTA 100 incorporated into the contract, 15,000 tons of Grade A pellets “weight and quality final at loading per official inspection report issued by Banana Products Inspection Service” (BPIS)”. Shipment is to be in November, no extension. The contract is cash against documents and one of the documents to be presented is the BPIS certificate. The BPIS certificate says:

“MV Pellet Princess b/l dated 30 November

We hereby certify that we have inspected 15,000 metric tons of Banana Skin Pulp Pellets loaded on the above vessel at Port Banana ex Silo 69 AND HEREBY CERTIFY that said goods were shipped in good condition on the above date and that they are classified as Grade A according to the official BananaRepublic grading system.”

You take up and pay for the documents, including a bill of lading dated 30 November. When the vessel arrives you discover that:
(i) The goods are in fact Grade B, not Grade A
(ii) The goods are mouldy. Further enquiries show that this was because of leak in the roof of Silo 69 resulting in rainwater damage before loading.
(iii) Loading on board the vessel did not commence until 1 December.
Task 2
Please discuss any claims you may have and please explain how or if your answer would differ of the contract had not been on certificate final terms.

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