CIFFA Standard Trading Conditions: Good Value, Smart Move

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A May 2019 Federal Court decision provides solid evidence of the value of CIFFA’s Standing Trading Conditions (STCs). The summary judgment dismissed action against the defendants in the case, Panalpina Inc., Desgagnés Transarctik Inc. and Logistec Stevedoring Inc., based on Panalpina’s reference to the STCs on both quotations and invoices related to the shipments in question.

In October 2013, Nalcor Energy, through its subsidiaries Labrador Island Link General Partner Corporation and the Labrador Island Link Limited Partnership, entered an agreement with Panalpina to provide freight forwarding services in the shipment of all cargo for the Lower Churchill electrical transmission project. The freight forwarding service agreement (FFSA) between the parties named Panalpina as the principal provider, responsible for all services outlined in the agreement.

For the shipment of aluminum conductor steel-reinforced cable, supplied on steel reels, Panalpina contracted, with Nalcor’s approval, with Logistec for receipt and storage of the reels at Logistec’s terminal at the port of Trois-Rivières in Quebec, and with Desgagnés for transportation of the reels by sea from Trois-Rivières to Argentia, in Newfoundland.

On June 1, 2015, while discharging a shipment of 510 reels, Nalcor discovered damage to the reels. A second shipment, received in Argentia on November 2, 2015, was also found to be damaged. In both cases, Nalcor advised Panalpina of its intent to claim for the damage.

It was not, however, until May 29, 2017 that Nalcor commenced action against the defendants, seeking judgment in the amount of $3,711,451.94, based on the companies’ alleged negligence in storing, loading, securing and carrying the reels. The defendants then moved for summary judgment to dismiss that action, claiming that it was time-barred based on CIFFA’s STCs.

Judge Roger Lafrenière dismissed Nalcor’s claim for the following reasons, among others:

  1. The facts were “fairly straightforward”; all transactions were well documented and there were no issues of credibility.
  2. Panalpina’s quotations to Nalcor included, “Rates are subject to latest CIFFA Terms and Conditions (available upon request).” As the judge noted, according to section 19 of the CIFFA Terms, any suit against a freight forwarder “must be brought within nine months from ‘the date of delivery of the goods for claims for damage to goods,’ failing which the freight forwarder ‘shall, unless otherwise expressly agreed, be discharged from all liability.’”
  3. The quotations with this wording were accepted by Nalcor, despite the fact that the FFSA outlined different terms and conditions, and included the following text: “This Agreement constitutes the entire agreement between the parties with respect to the subject matter dealt with herein. This Agreement replaces and supersedes all prior agreements, documents, writings and verbal understandings between the parties in respect of the Work and there are no oral or written understandings, representations or commitments of any kind, express or implied, which are not expressly set forth herein.”
  4. Nalcor also approved a booking note from Desgagnés that said, under “Sea Waybill”: “All other terms and conditions are as per Desgagnés Transarctik’s Sea Waybill.” The Sea Waybill itself said: “The parties acknowledge and agree that the carriage performed under this contract is not governed by a Bill of Lading but rather by this Sea Waybill. However, they agree that the terms, provisions and conditions of Articles II to IX of the International Convention for the Unification of Certain Rules Relating to Bills of Lading signed at Brussels on August 25, 1924 (The Hague Rules) are incorporated by agreement into this contract. The Carrier’s rights and immunities including the $500.00 limitation of liability per package or unit are more specifically herein incorporated.”
  5. Panalpina’s invoices contained the following text, and were approved by Nalcor for payment:

All business will be accepted by Panalpina Inc. (hereinafter the “Company”) from the Owner, Consignee or Shipper (hereinafter the “Customer”) subject to the Standard Trading Conditions of the Canadian International Freight Forwarders Association, Inc. currently in effect which Conditions contain provisions which exonerate the Company from liability and limit the amount recoverable, and each Condition shall be deemed to be incorporated in and to be a Condition of any agreement between the “Company” and the “Customer”. In transacting such business with the “Company”, the “Customer” acknowledges that he is familiar with and accepts such Conditions. A copy of the Standard Trading Conditions can be obtained on request from the “Company” or from the Canadian International Freight Forwarders Association, Inc., in the latter case, by addressing such request to: the Canadian International Freight Forwarders Association (CIFFA), 170 Atwell Drive, Suite 480, Toronto, Ontario, M9W 5Z5, or via web

  1. Nalcor is a “sophisticated shipper with significant knowledge and experience regarding the role and business terms of the various players in the shipping industry,” and should “have been aware that Panalpina was a member of CIFFA from the start.”
  2. Any failure by Nalcor to take proper notice of terms that were clearly set forth in the documents exchanged between the parties is not a basis to refuse to apply the CIFFA Terms. “Nalcor could have taken issue or rejected the CIFFA Terms upon reviewing the quotes received from Panalpina, but failed to do so.”
  3. In the absence of any language in the FFSA dealing with a specific limitation period to commence an action, it was open to Panalpina to put forward terms when providing quotes to Nalcor.
  4. The action against Desgagnés and Logistec, as contractors engaged by Panalpina, was also time-barred, based on section 2 of the CIFFA STCs:

These Conditions also apply whenever any claim is made against any employee, agent or independent contractor engaged by the Company to perform any transport or related service for the Customer’s goods, whether such claims are founded in contract or in tort, and the aggregate liability of the Company and all such persons shall not exceed the limitations of liability in these conditions. For purposes of this clause the Company acts as agent for all such persons who may ratify such agency at any subsequent time.

CIFFA’s STCs, in particular Section 19, which limits liability in damage claims to nine months from the date of delivery of the goods, saved Panalpina and its sub-contractors from an expensive judgment.

Be sure that your company is protected; understand and reference the STCs in your communications and agreements. Learn more about the STCs in CIFFA’s interactive webinar workshops, Protecting Your Business with CIFFA STCs, held occasionally through the year.

Read the full decision at Federal Court Decisions.