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Case study shortage claim
1. CASE STUDY- SHORTAGE
CLAIM
•INSURER X INTIMATED US FOLLOWING LOSS WITH A
REQUEST TO SURVEY A BULK CONSIGNMENT
•B/L QTY:23300 M.T PHOSPATE IN BULK
•SHORE RECEIPT:23023.620 M.T
•SUM INSURED: RS.132,637,974.00
•CLAUSES ATTACHED: ICC ‘A’ WITH 0.25% EXCESS
3. PRELIMINARY SURVEY &
FINDINGS
• With the above fact that Insured suffered 1.18%
shortage, we proceeded to Insured’s premises for
assessing the loss.
• We received survey intimation on 23rd
October,2009, whereas delivery completed on 13th
October, 2009 itself.
• So we could only do a sort of post-mortem.
• We asked Insured various background of
information pertaining to the consignment.
4. Survey Findings contd.
• We served a letter of requirement to Insured to furnish the following:-
• Load port Draft survey report
• Load port Hold Cleanliness Report prior to loading.
• Load port Quality Report
• Ship’s Particulars especially her age and Classification details
• Invoice copy
• B/L copy
• Stowage Plan
• Statement of facts copy
• Bill of Entry copy
• Chennai Draft Survey Report
• Disport Quality Results
• Final warehouse weighment
• Trucks that left the shipside, whether turned up for weighment?
• Any evidences of handling losses at Chennai ?
• Vizag draft survey report and shore receipt quantity
5. SALIENT FINDINGS
• Only after initial survey, we came to know that the vessel carried a total
quantity of 35000 MT Rock phosphate from Eilat, Israel out of which
23300 MT was discharged at Chennai and 11700 MT was discharged at
Vizag, where again the receiver is Insured itself.
• Hence we insisted, shore receipt figure at Vizag, as we anticipated some
excess quantity may have been discharged at Vizag.
• Insured at Chennai kept informing us that Vizag also suffered loss.
• Insured submitted their surveyor’s report at Chennai evidencing the loss.
• Our intervention with the Insured and their Surveyor did not give any clue as
to cause of shortage, as there were no abnormal evidence of loss like severe
rain/flood to have washed off cargo.
• Insured submitted all requested documents except Vizag Shore Receipt
Quantity.
• We analyzed Load Port, Disport- Chennai and Disport – Vizag Draft Survey
findings and expressed our apprehension as under:
6. DRAFT SURVEY ANALYSIS
• Eilat Departure Nett Displacement 44478.1 MT (1)
• Chennai Arrival Nett Displacement 44480.0 MT (2)
• Chennai Departure Nett Displacement 21180.0 MT (3)
• Vizag Arrival Nett Displacement 21350.0 MT (4)
• Vizag Departure Nett Displacement 9650.0 MT (5)
• Difference of (1) and (2) as above + 1.9 MT
• Difference of (3) and (4) as above +170.0 MT
• Our inference form the above analysis is that the vessel in fact
arrived at Chennai with whatever cargo loaded at Eilat, Israel..
However, after part-discharge at Chennai, about 170 MT appears
to be over-carried to Vizag. With this apprehension in mind, we
requested Insured to obtain shore receipt quantity at Vizag.
• Insured’s Surveyor, even after our apprehension kept telling that their
calculation at Chennai was correct and our apprehension has no
basis.
7. OUR INTERVENTION AT VIZAG
• We arranged to enquire through our Vizag Office about the shore out-
turn at Vizag.
• Normal course, had the vessel been berthed at Fertilizer Berth, next to
Oil Jetty, they never do weighment, as cargo discharged through
conveyor belt into their silo and cargo from silo cleared through their
private road by their own trucks to their factory.
• Fortunately, this consignment berthed at West Quay, Inner Harbour
and hence Insured exercised 100% weighment.
• They appointed Surveyor only for Draft Survey.
• As per Insured’s 100% weighment, cargo received was found to be
11854.500 MT. i.e 154.500 MT more than Vizag B/L Quantity.
• At last our apprehension came almost true.
8. MOISTURE ANALYSIS
• We have been provided Moisture contents
both at Eilat, Israel and Chennai, India.
• Our analysis was as under:-
• Load port Moisture : 1.13%
• At Chennai moisture : 0.70 %.
• Hence evaporation of moisture : 0.43%.
10. FINAL LOSS ASSESSMENT
• As the Insured at both Ports is one and the
same we proposed following method of loss
adjustment:-
• We apportioned both receipt quantity
according to the respective B/L Quantity.
• We give the tabulated statement as under:
11. APPORTIONMENT OF LOSS
Name of Port B/L Qty
MT
Actual Receipt
MT
Pro-rated
receipt MT
Chennai 23300 MT 23023.620 MT 23218.863
Vizag 11700 MT 11854.500 MT 11659.257
TOTAL 35000 MT 34878.120 MT 34878.120
12. FINAL LOSS ASSESSMENT
• CHENNAI SHORE O/T: 23218.863 MT
• EVAPOURATION : 0.43%
• B/L QTY : 23300.00 MT
• POLICY EXCESS : 0.25%
13. FINAL LOSS WORKINGS
• Thus pro-rated receipt quantity at Chennai = 23218.863 MT (a)
• B/L Quantity = 23300.000 MT (b)
• Therefore Difference = 81.137 MT (c)
• Excluding evaporation loss @ 0.43% which is nature of cargo
• (vide General Exclusion Clause) = 99.841 MT
(d)
• Excess as per Policy @ 0.25% on B/L Qty = 58.250 MT (e)
• TOTAL EXCLUSION & EXCESS = 158.091 MT
• As above exclusion and excess put together (d +e) i.e 158.091 MT
exceeds difference between B/L Qty and Pro-rated receipt 81.137
MT (c) the consignment under reference may be treated as NO
CLAIM.
• A provisional claim of Rs.12.4 lacs closed as NO CLAIM.
14. LESSONS LEARNT
• WHENEVER TWO PORT DISCHARGES
TAKE PLACE, CARE SHOULD BE
GIVEN IN DISCHARGING FIRST PORT
• FORTUNATELY RECEIVER IN THIS
CASE IS ONE AND SAME, OTHERWISE
IT WOULD HAVE BEEN A HAVOC, AS
NO CARGO INETERESTS ADMIT
EXCESS RECEIPT.