On 15 February 2022 Contented Cow Co, Melbourne, Australia, contracts to sell to Shenzhen Provisions Inc., Shenzhen, Chi

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On 15 February 2022 Contented Cow Co, Melbourne, Australia,
contracts to sell to Shenzhen Provisions Inc., Shenzhen, China,
5,000 tins of its best quality, lactose-free milk powder on FCA
Melbourne terms (Incoterms, 2020). On 24 February, Contented
Cow Co informed Shenzhen Provisions that the goods are ready to be
shipped. In accordance with the contract of sale, Shenzhen
Provisions transfers the payment to Contented Cow’s account at the
Bank of Melbourne. Contented Cow Co packed the goods into five
containers supplied by China Line Shipping (CLS) and the containers
are shipped aboard the CLS vessel Navigator at the Port of
Melbourne on 2 March 2021. A Bill of lading is issued the same day,
which records the shipment of five containers containing powdered
milk.
The journey to Shenzhen is an eventful one. While passing
off the coast of Papua New Guinea (PNG), the ship is hi-jacked by a
small band of well-armed independence fighters from the island of
Bougainville. The pirates commandeer the Navigator
and force the captain and crew to sail to Kieta Port, on the
Eastern coast of Bougainville. There the crew are forced to
unload valuable cargo, including containers of grain, canned meat
products and two of the containers of milk powder shipped by
Contented Cow Co. The armed fighters hold the ship and its crew
captive for three weeks, during which time the ship’s Captain was
forced to file false reports that the ship had docked to make
necessary repairs. When the armed fighters finally leave the ship,
they warn the captain and crew to leave PNG and not report the
incident.
A fearful captain was careful not to report the hi-jacking until
after the ship with its crew had safely arrived in Shenzhen, just
over three weeks late. The Shenzhen Maritime Police finally receive
a report of the incident on 5 April 2021. A copy of the
report is sent to PNG Maritime Police in Port Moresby (capital of
PNG), but no other action is taken. Finally, the remaining
three containers of powdered milk are released to Shenzhen
Provisions, over six weeks later than the expected date of
arrival.
Shenzhen Provisions is most disappointed. The milk was to be
supplied to local hospitals under a Government contract at very
favourable terms. The hospital managers were so angry with the
delay they refuse to buy anything from Shenzhen Provisions ever
again. In addition, due to (largely unfounded) fears over imports
being contaminated with Covid-19, the demand for imported food
products has dropped. Shenzhen Provisions can only sell the 3
remaining containers of powdered milk to alternative customers at a
large discount (below cost) and has lost all profits.
As the shipment of powdered milk has departed from an Australian
Port, destined for an overseas Port under a Bill of Lading, you can
assume that the Australian modified version of the Hague Visby
Rules applies to the contract of carriage.