The customary trade allowance in Morocco

Although it has been long recognized that the principle of “customary trade allowance” (CTA) falls within the conditions of the exemption from which the sea carrier benefits, there is nevertheless a permanent debate around whether or not the shortage registered falls within the ‘trade allowance’.

For lack of reference to the ‘’customary trade allowance’’ in Hamburg rules, same is governed under the Moroccan law by the articles 459 & 461 of the law N ° 15- 95 forming Commercial Code.

Article 459 of the law N ° 15-95;

 ‘’The carrier is released from all liability if he proves that the loss or damage was caused:

By the inherent defect of the items themselves or by their nature ’’

Article 461 of the law N ° 15-95;

 ‘’For items which, because of their nature, generally suffer a loss of weight or volume by the mere fact of transport, the carrier is only liable for the part of the loss which exceeds the tolerance determined by usage.

The preceding paragraph cannot be invoked if it is proven, according to the factual circumstances that the loss does not result from causes, which justify the tolerance’’.

It is important to distinguish the ‘’customary trade allowance’’ from the dispersal

/cargo spillage occurring during the unloading operations usually caused by of the stevedoring company (Careless handling, use of improper grabs, absence of tarpaulin between the vessel and the pier, overload of the receivers trucks causing spillage below the hopper and between the pier and the weighbridges …..). In fact, under the article 461 of law N ° 15-95, the principle of the ‘’customary trade allowance’’ is limited to the period of carriage only. Furthermore, the responsibility of the carrier under the article 218 of the Moroccan maritime trade code ( DCCM) as well as the article 4 of the Hamburg rules covers the period of carriage from the time when the carrier received the goods at the loading port until the time of delivery at the unloading port by;

• Handing over the goods to the consignee; or
• In cases where the consignee does not receive the goods from the carrier, by placing them at the disposal of the consignee in accordance with the contract or with the law or with the usage of the particular trade, applicable at the port of discharge, or
• Handing over the goods to an authority or other third party to whom, pursuant to law or regulations applicable at the port of discharge, the goods must be handed over’’.

The ‘’customary trade allowance’’ should also be distinguished from the tolerance at the discharge port (+/- %) usually inserted by the shipper in the commercial invoices in line with the circular n° 5460/312 issued by the customs administration and indirect taxes in virtue of which for all invoices established for a quantity with indication of a reasonable rate of uncertainty (+/- %), the cargo receivers is exonerated from the payment of duties and taxes corresponding to the cargo shortage that fall within the said tolerance (+/- %).

Insofar most of bulk cargoes are unloaded at Casablanca port, the cargo underwriters do file the majority of their claims for shortage before the commercial courts of Casablanca which trend could be summarized as follow.

* Situation before the Commercial court of Casablanca;

The current trend of the Commercial court of Casablanca is to reject the majority of the shortage claims in the basis of its case law.

Usually, the Commercial court of Casablanca consider cargo shortages not exceeding 1% of the manifested cargo quantity as customary loss allowance. This may be considered as a favourable trend but it is not the case for the following reasons;

1. The commercial court rely on its own case law coming after uses as source of law under Moroccan law.
2. The commercial court goes against the trend/presidents of the commercial court of appeal used to order a court survey in cargo shortage claims in the purpose to determine the customary loss allowance event with a general mission.
3. The Commercial court goes against the decision n° 491 of the supreme court delivered on 03/05/2012 in the court case n° 2011/1/3/671 under which the decision n°:1000 delivered by the commercial court of appeal of Casablanca on 02/03/2010 in the court case n° 9/2008/2341 was quashed on the ground that the commercial court of appeal relied in its own case law and failed to carry out the necessary investigations in the purpose to determine the ‘’Customary loss allowance’’ at the discharge port.

Recently and based on a decision n° 11/1 delivered by the supreme court on 03/01/2019 in the court case n° 2019/1/3/1559, the commercial court of Casablanca has rejected the shortage claims corresponding to the cargo unloaded into the SILOS on the ground that the cargo shortage was discovered after delivery and while the cargo was under the custody and the responsibility of the SILOS company.

Situation before the Commercial court of appeal of Casablanca;

In contrary to the shortages discovered after delivery/transfer of the cargo under the custody/responsibility of the SILOS company which majority of appeals are rejected based on the decision n° 11/1 of the supreme court, in line with the decision n°491 of the supreme court, the commercial court of Casablanca is used to order court survey in the shortage claims (unloading by grabs) with the ultimate mission to determine the ‘’Customary loss allowance’’ or ‘’ Freinte de route’’. This trend would as a matter of principle be considered as satisfactory comparing

to the trend of the commercial court but once again, it is unfortunately not the case for the following reasons;

1. Usually the mission of the court surveyor is always the same, ‘’ determine the customary loss allowance by taking into consideration; a) the nature of the cargo, b) the duration of the voyage, c) the weather experienced by the vessel during the voyage, d) the unloading equipment’’ bearing in mind that the customary loss allowance is limited to the period of the carriage only (Article 461 of the law n ° 15-95, article 4 of the Hamburg rules, article 2018 of the Moroccan maritime trade code) and that any loss or spillage occurring after delivery as a result of the negligence of the stevedores or due to the use of improper equipment should be attributed to the stevedoring company and not the vessel.
2. From a scientifically point of view, the court surveyor should be asked to determine the ‘’Customary loss allowance’’ by checking whether there would be any difference / decrease in the moisture percentage between the loading port and the unloading port based on the quality certificates / analysis results performed by the phytosanitary authorities in both ports.
3. The court surveyor should be asked to distinguish the ‘’customary loss allowance’’ from the ‘’cargo spillage’’ usually resulting from the negligence of the stevedoring company during the cargo unloading. In the event the court surveyor would ascertain a negligence from both vessel during the voyage and stevedores, he should share the responsibility proportionally to the participation of both of them in the cargo shortage registered in line with the paragraph 7 of the art 5 of Hamburg rules.
4. The court surveyor should be asked to take into consideration the vessel’s specifications.
5. The court surveyor should be asked to determine the ‘’ Customary loss allowance’’ for each Bill of Lading separately. In fact, based on the paragraph 3 of the article 461 of the Moroccan Commercial code ‘’ In the event that the goods transported with a single Bill of Lading are divided into several lots or packages, the tolerance is calculated for each lot or package, when its initial weight is indicated separately on the Bill of lading or can be ascertained in another way’’
6. In the event the stevedoring company is called into the proceedings, check the calibration certificate of their weighbridges.

Depending on the court surveyor appointed by the appeal court, the ‘’ Customary loss allowance” would range from 0,1% to 0,5% and rarely 1% for the solid cargoes while it does not exceed 0,2% for the liquid cargoes. Worth mentioning that the Order of the Minister of Finance n ° 871-78 of 19 moharrem 1398 (30 December 1977) relating to transit loss allowance of some petroleum products (Arrêté du ministre des finances n° 871-78 du 19 moharrem 1398 (30 décembre 1977) relatif aux freintes de transport sous douane de certains produits pétrolier) has exonerated the cargo receivers from the payment of the customs duties within the limits defined below;

• Light and medium oils listed in Table C of Article 9 of the Dahir enacting law n ° 1-77-340 of 25 chaoual 1397Law No. 1-77-340 of 25 Chaoual 1397 (October 9, 1977): 2% .
• Heavy oils listed in table C above: 1%.

Some court surveyors are known by their fixed and definite ‘’ Customary loss allowance‘’ of 0,1% whatever is the nature of the cargo transported, duration of voyage, weather experienced by the vessel during the voyage, whether the vessel is equipped with a ventilation system limiting the moisture evaporation process during the voyage and without even comparing whether there would be a

difference between the moisture percentage between the loading port and the unloading port.

RECOMMENDATIONS:

At the time of the cargo operations, it is recommended to proceed by way of   the discharge survey with issuance of Letters of Protest against the stevedores/receivers for any spillage that would be noticed after delivery, either on the pier, sea water, or under the hopper due to the overload of the receivers’ trucks.

In case of proceedings, apply for a court survey based on the decision n° 491 of the Supreme Court delivered on 03/05/2012 in the court case n° 2011/1/3/671in the purpose to;

• Determine based on the BLs /endorsements/Commercial invoices/ Customs declarations the cargo quantity received by the cargo receiver.
• Check whether there would be any discrepancy in the moisture percentage between the loading and unloading ports.
• Determine whether there would be any tolerance fixed by the shipper at the discharge port in line with the circular n° 5460/312 issued by the customs administration and indirect taxes.
• Determine the causes and responsibilities of the cargo shortage registered (during the voyage or after delivery).
• Determine the ‘’Customary loss allowance’’.
• Determine the exact prejudice amount after removal of the deductible amount insofar not supported by the cargo underwriters.