Policy & Compliance
Know your BIFA Standard Trading Conditions 2021 – Clause 20
This month we reach an important clause in the BIFA STC – Clause 20
Clause 20 The Customer shall save harmless and keep the Company indemnified from and against: Clause 20(A) All liability, loss, damage, costs and expenses whatsoever (including without prejudice to the generality of the foregoing, all duties, taxes, imposts, levies, deposits and outlays of whatsoever nature levied by any authority in relation to the Goods) arising out of the Company acting in accordance with the Customer’s instructions, or arising from any breach by the Customer of any warranty contained in these Conditions or from negligence of the Customer; Clause 20(B) Without derogation from Sub- Clause (A) above, any liability assumed or incurred by the Company when by reason of carrying out the Customer’s instructions the Customer has become liable to any other party; Clause 20(C) All claims, costs and demands whatsoever and by whomsoever made or preferred in excess of the liability of the Company under the terms of these conditions, regardless of whether such claims, costs and/or demands arise from, or in connection with, the breach of contract, negligence or breach of duty of the Company, its servants, sub-contractors or agents; Clause 20(D) Any claims of a general average nature that may be made on the Company.
Liability for a general average contribution should fall on the cargo owner who should seek an indemnity from his cargo insurer.
Comment on Clause 20(A) There are three limbs to this important Sub-Clause. Under the first limb, the Customer indemnifies the BIFA Member for a wide range of outgoings where they are incurred by acting in accordance with the Customer’s instructions. For the indemnity to be effective those instructions must have caused the outgoings – it is not enough that the BIFA Member acted on those instructions from the Customer. Under the second limb, the Customer indemnifies the BIFA Member for outgoings caused when the Customer breaches warranties in these Conditions, notably those given under Clause 17. Under the third limb, the Customer indemnifies the BIFA Member for outgoings caused by the Customer’s negligence. Comment on Clause 20(B) This Sub-Clause gives an additional indemnity to the BIFA Member when he or she incurs liability to any other party by
liability on the part of the BIFA Member to the Customer for amounts in excess of the limits specified in Clause 26. At English common law, if negligence is proved or accepted, there can be liability additional to that for the value of goods lost or damaged provided it is not consequential and not too remote – for example the loss of income from an earning chattel as well as the value of the chattel itself – ‘ The Greta Holme’, All ER Reprints [1895- 1899] 127 and B Sunley & Co Ltd v Cunard White Star Ltd, All ER [1939] 3 541. Comment on Clause 20(D) This clause covers the situation where the BIFA Member is made liable for a general average contribution either as a shipper or consignee. The shipping company may look to the BIFA Member for such a contribution when the latter is shown as a party on the bill of lading. However, liability for a general average contribution should fall on the cargo owner who should seek an indemnity from his cargo insurer. This sub-clause should be read in conjunction with Clause 22.
“ This Sub- Clause [20(B)] gives an additional indemnity to when he or she incurs liability to any other party by reason of carrying out the Customer’s instructions the BIFA Member
reason of carrying out the Customer’s instructions.
Comment on Clause 20(C) This is a very important indemnity Sub-Clause and it blocks any
November 2023 | 21
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