The court – an international forwarder who claims an unpaid debt to him must bring witnesses familiar with the shipments’ details.

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by: gill@nadel-law.co.il
Word Count: 1241
Date: Mon, 28 Nov 2011 Time: 5:01 AM

The facts of the case and claims of the parties:
Megam Security Company deals with manufacturing parachutes, and asked to export shipments to Argentina by an international forwarder.

Megam opened a line of credit with an international forwarder and used his services to export two deliveries to Argentina in 2007. 
The international forwarder claimed that Megam did not pay him a debt of 30,000 NIS for these shipments, leading him to file a claim.

The international forwarder claimed that when the deliveries reached Argentina they were taken care for by his local branch which paid customs duties, VAT, routine payments, commission for the customs agent, storage fees and paper work commission, who then charged the forwarder in Israel $6500  for these services. He further claimed that according to the bill of lading, Megam took the responsibility of paying the Customs payments in Argentina.

Megam claimed that the shipments were meant for display for the Ministry of Defense of Argentina and were supposed to return to Israel after two months, and as planned, so it was.

Therefore, Megam claimed that the shipments should not have been dutied and if such customs duties were paid, Megam wasn't liable for them.

On behalf of the international forwarder testified the import manager and a worker from accounting. On behalf of Megam, the VP of marketing testified.

The Verdict:
The court repeated the rule that the burden of proof falls on the plaintiff, and he is the one who must prove that his claim is justified.

In this case, the court determined that the two witnesses who were brought by the international forwarder, both the import manager and the worker from accounting are only involved in the activities of the company in Israel and not in Argentina. Therefore, they can not testify on the specific deliveries of Megam Company which were sent to Argentina as to where they were headed, were they to be returned to Israel etc.
In addition, the court mentioned that many documents that were filed by the International forwarder to back up his claims were in Spanish without Hebrew translation and the court could not understand them.  

The international forwarder claimed that it was unreasonable to bring the representatives of the local branch abroad to Israel each time a dispute arose regarding a shipment from Israel, and the court decided that, at the very least, the international forwarder should have translated the documents into Hebrew and the witnesses that he did bring should have been able to explain them; yet all this was not done.  

In addition, the court decided that the international forwarder's claim that he paid the payments to the local branch in Argentina was not proven. 

The court decided that the evidence indicated that Megam’s claim regarding the purpose of the shipments (for display) which were then returned to Israel, was not contradicted and therefore the cost of the shipments alone should have been a few hundred NIS and not as much the international forwarder claimed they should be.

Furthermore, in light of the evidence displayed, the court determined that the international forwarder did not have power of attorney from Megam, which allowed him to pay the extra payments in Argentina, and if he was indeed charged with those payments, the international forwarder should have requested Megam's approval beforehand, and not in retrospect

Eventually, the court rejected the claim and charged the international forwarder with 10,000 NIS for expenses and attorney fees. 

Conclusion and Discussion:
This case demonstrates how in order to prove a claim regarding international forwarding services, one must bring to court witnesses that have full knowledge of the disputed shipments and it is not enough to bring workers from accounting or managers who are not fully aware of the details. 

Since the sum of the claim was only 30,000 NIS, a sum which is not high, we assume that the international forwarder did not think it worth his time and money to translate the documents and bring expert witnesses from abroad, and these decisions, at the end of the day, stood against him.

(C.Q.F. (civil quick file) (Magistrate Tel Aviv) 151935- 09, verdict from 29.4.11, judge Ilan. Advocates of the parties were not mentioned).

About the Author

Gill Nadel - Born in Israel in 1969, graduated from Bar Ilan University`s Faculty of Law (cum laude) and from the Department of Musicology. He also has a master`s degree in law from the same institution. Member of the Israel Bar since 1999. Speaks Hebrew, English and Polish. Fields of expertise: Commercial and Business Law, International Trade Law, Import and Export Law, Intellectual Property Law, Maritime and International Forwarding Law, Litigation and Court Representation. Adv. Nadel provides lectures on international trade law and import and export law to in courses organized by the Bar Ilan University Center for Commercial Law, Israel Bar, Israel Chambers of Commerce, Manufacturers Association of Israel, Israel Export Institute, Customs Brokers Association, International Forwarders, and more.

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