$800 million investment proposal for developing Mongla port.

I found this news on a online news site and thought it is related to my studies as i took the module Carriage of goods by sea.

A British firm has offered nearly $800 million investment proposal for developing the Mongla port in Bangladesh. According to the proposal, the development will be conducted under Public-Private Partnership (PPP).

The money will be used to construct new facilities including water and power plants and modernize container handling operations.

As Mongla is considered as the second port in Bangladesh, the development of this port will play a significant role in promoting trade and commerce as Bhutan and Nepal will use this port when transit facilities will be launched.

This would certainly have a huge positive impact on Bangladesh economy as most of the goods imported or exported from Bangladesh are done by sea. Therefore developing a new port will enhance their opportunities.

http://biz.bdnews24.com/details.php?id=178775&cid=4&us=sbv39lu4kvfce4tlgppvlij5l1

What is letter of intent and letter of comfort?

A letter of intent is a letter from one company to another acknowledging a willingness and ability to do business. It is often used as acknowledgement of the fact that a merger between companies or an acquisition is being considered seriously.

A letter of comfort is in no way guarantees the loans approval for the subsidiary companies. It merely gives reassurance to the lending institution that the parent company is aware and approves of the situation.

This is important as we are doing commercial contracts. A letter of intent is not intention to create legal relations.
British Steel Corporation v Cleveland Bridge and Engineering Co Ltd 1984.


Also a letter of comfort is not intention to create legal relations.Kleinwort Benson Ltd v Malaysia Mining Corporation1988.


http://www.investorwords.com/2775/letter_of_intent.html
http://www.investopedia.com/terms/l/letterofcomfort.asp

Difference between charter party contract and bill of lading contract

As we did our first class of carriage of goods today, I thought it would be helpful for all my friends to post a brief difference between Charter party contract and Bill of Lading contract.

A charter party contract is a contract between the ship owner and a merchant, by which a ship is let or hired for the conveyance of goods on a specified voyage, or for a defined period. In a charter party contract usually the whole ship is hired. There are usually two forms of charter contracts, depending upon whether the vessel is chartered for a period of time or for one or more voyages. In both cases ship owners retains control of equipping and managing the vessel and agrees to provide a carrying service.

Voyage charters- ship owner undertakes to carry a cargo between specified points.(e.g. CIF contracts)

 Time charter- Ship owner agrees to place the carrying capacity of his vessel at the disposal of the charterer for the period of time.

Bills of lading contracts on the other hand, are for shippers with a small quantity of cargo available. Their requirement are normally catered for the regular liner services which operates between major ports or alternatively they make use of the services which operates between major ports or alternatively they make use of the services of the tramp vessels which sails from port to port in search of a cargo. Once the cargo is loaded, the bill of lading will act as the evidence of the terms of the contract of carriage.

For details please see the book

Wilson J, Carriage of Goods by Sea (6th edition,Pearson Education ltd, Essex 2008)3

Who gets more benefit in a CIF contract? The buyer or seller

While doing the revision of CIF workshop one question struck my mind that who gets more benefit in a CIF contract is it the buyer or the seller?

As we all know by now that in a CIF contract, it is the obligation of the seller to ship the goods at the port of shipment specified in the contract at his own expenses and to insure the goods.CIF has been described as, ' the contract for the sale of goods to be performed by the delivery of the documents'.[1] This means that whenever the buyer receives the documents he is bound to pay the money to the seller whether he receives the goods or not(i.e the seller is getting immediate payment). On the other hand, having possession of the documents, the buyer gets the benefit of contractual claims against the carrier and insurers together with the property in the goods and the right to immediate possession from the carrier on arrival at the port of destination. .

However, the major problem arises when the buyer fails to accept the documents. In this scenario, the buyer is in breach of his fundamental obligations under the contract which, if accepted by the seller as a repudiation of the contract, relieves the seller of any further obligation to deliver the goods and enables him to sue the buyer for non- acceptance.[2] But there are options for the buyer. He must take delivery of the goods and then has the right under S 34 and 35 of Sale Of Goods Act 1979(SGA)   to inspect the goods and reject them if he can show that the goods did not conform when the seller shipped them. Moreover, upon lawfully rejecting the documents the buyer can recover damages for non-delivery of the goods under s 51 ,54 SGA 1979. There are several other examples to show that the buyer and seller is getting equal benefit.

Finally I came to a conclusion that CIF contract gives equal benefits to the buyer and the seller. At some point if the buyer gets a benefit, then on the other side seller will also receive a benefit. What is your thought?

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[1] Per Bankes LJ, Arnhold Karberg v Blythe, Green, fourdain & Co[1915] 1 KB 495,510;  J Katalikawe, Law of International Trade( 5^th edn, OBP, London 2005)47,49.

[2] Gill v Duffus Berger

Katalikawe J, Law of International Trade (Oxford Bailey Press,London) (2005) 43

Bangladesh can export to 27 countries of European Union without any tax or custom duties.

The Generalised system of Preferences (GSP) is a preferential trade arrangement which gives preferential tariff treatment (i.e reduced or zero import duty) to import from developing countries. It is a unilateral arrangement (i.e granted autonomously by the community, and not reciprocal). It includes the so called Everything but Arms (EBA) arrangement which grants duty and quota free access to all goods excepts arms.

As I was going through a Bangladesh newspaper today, I found that from 1st January 2011, European Union (EU) will start 'one stage GSP rules of origin'. If this rule starts Bangladesh can export ready made garments to the EU countries without any duties.Already 27 members of the EU gave positive views about this rule.

Bangladesh Garments Manufactures and Exporters Association (BGMEA) president Abdus Salam Murshidi said, 'If Bangladesh gets the oppurtunity to export(free of duties) to the EU, then it will have a huge positive impact on the Bangladesh economy'. He also said currently China has the largest market share on the EU among the Asian countries. If Bangladesh gets this oppurtunity then it will be able to compete with the giant exporting countries like China and India.

This is a good news for Bangladesh and hope they can utilise the facility properly and make a step forward towards development.

<http://www.kalerkantho.com/?view=details&type=gold&data=Bank&pub_no=334&cat_id=1&menu_id=13&news_type_id=1&index=4>accessed 6th november.

 <http://ec.europa.eu/taxation_customs/resources/documents/customs/customs_duties/rules_origin/preferential/gsp_faq_en.pdf> accessed 6th november

Since this information is taken from a Bangla newspaper I have also provided a link which provides all the information regarding the GSP.Hope it wll help.

Thank you.

Presentation on Child labour

I could not give my presentation because of lack of time. That is why i have uploaded my presentation slides on www.slideshare.net. Please have a look at my slides. The link is http://www.slideshare.net/khandaker.

hope you will like it.

Is fair trade fair??

Fair trade is a tool for development. The main motive of fair trade is to help the poor producers fight from poverty and to reduce the gap between developed and developing countries so that the developing countries can also contribute to the world economy. Fair trade can be achieved by offering the producers a price which covers their cost of production and providing long term contract which assist predictable planning. But there are various problem of fair-trade and the main problem is the consumer is not able to take the benefit and the producer can taka a benefit.  Moreover there are many other reasons which is making Fair-trade ineffective, e.g. Fair Trade products seems to be much more expensive than the conventional ones. Labels of Fair Trade tell the people that certain criteria’s has been met in the production process. However that is not so true. Ethical initiatives are increasing day by day and some of them may be independently verified and others may be not. At present days the retailers and consumers are both interested in ethical sourcing. As we know, Fair trade standards were mainly aimed to guarantee human rights at all levels of global trade from producers to consumers..However, things are not as easy as it looks. Because of the above mentioned problems, the main objective of fair trading is not being achieved. If the problems are solved, then the producer will taste the real benefit of fair trade. Also because of various problems the main objective of fair-trade is not being achieved. If the problem of fair trade are solved the doctrine of fair-trade will contribute in the world economy.