1. FREIGHT FORWARDING - Legal aspects
Philip Teoh
Partner/Head Shipping, International Trade, Insurance Practice
Arbitrator
Lawyer [QUALIFIED SPORE & MSIA]
Azmi & Associates Malaysia 1

2. Freight Forwarders Forwarder as principal Forwarder as agent
usually charges a commission
Procures with due diligence others who perform the carriage, storage, packing or handling of the goods
Customer enters into a direct contractual relationship with others
Contract may be based on Federation of Malaysian Freight Forwarders Standard Trading Conditions
Forwarder as principal
usually charges an “all-in” price
Enters into a contract of services with the customer
Actual services undertaken by forwarder may be carried out by others
Forwarder is not accountable to customer for his profits when contracting with the actual operators
(c) Philip Teoh

3. Forwarder as Agent
The freight forwarders role as an agent can be seen in cases where they do not issue any contractual documents (e.g. bill of lading, airway bill) and where their role is to arrange for transport.
Eg. Arranging haulage for containerised cargo , booking cargo with liners
What happens if cargo uncollected ?
Responsibility as agent ? To cargo owner ; to carrier
(c) Philip Teoh

4. Forwarder as Principal
Where the forwarder issues contractual documents such as bills of lading and airway bills, they represent themselves to the goods owner as a contractual carrier.
Forwarder has warehouse, trucks
Eg. NVOCC Bills of lading, forwarders awb
(c) Philip Teoh

5. DETERMINING Forwarders Role & LIABILITY
What duties does forwarder actually perform ?
What does he undertake in contract ?
Does he deal physically in goods ?
Label in contract not conclusive.
(c) Philip Teoh

6. Contract – Detailed Formal Contract Tort – Representation Bailment
Basis of liability
Contract – Detailed Formal Contract
STC – FMFF
Tort – Representation
Conversion
Bailment
To create objectives targeted to the audience and desired level of learning/thinking:
1. Ask yourself whether you want attendees to be able to: know, apply, integrate, consider the human
dimension, care, learn to learn, comprehend, apply, analyze, synthesize, or evaluate .These outcomes
represent different levels/kinds of thinking.
2. Match your action words to the desired level of learning/thinking (see Presenter Tips #1 at end of presentation template)
3. Match learning objective with appropriate teaching/learning strategy (see Presenter Tips #2 at end of presentation template).

7. Fmff Standard trading conditions
Available to Forwarding Companies of the FMFF eg Selangor – SFFLA
These conditions regulate the contractual relationship of the Forwarder and Customers
Salient terms – Definition of role, limits of liability, time bar
Approach by Malaysian Courts – Incorporation & Validity

8. BAILMENT
Whenever the Forwarder is having control and custody of goods not belonging to the Forwarder, it is the Bailee of those goods The bailee has a duty to take reasonable care of the goods and return them in accordance with the terms of any express or implied contract of bailment Bailment duties are independent of contract and are imposed by law Contractual bailment arises when there is contractual relationship with the owner of the goods

9. Lien & Conversion
A lien is a right to detain goods for non-payment of freight or warehouse charges The lien can be extended by contract Where the forwarder / carrier wrongfully detains, then the cargo owner can claim for conversion

10. Forwarder as carrier
Where the Forwarder issues Contractual Shipping Documents eg Bills of lading, Airwaybills, the Forwarder becomes a Contractual Carrier The following Conventions are adopted and apply in Malaysia: Hague Rules – under the Carriage of Goods by Sea Act Warsaw Convention – under the Carriage by Air Act

11. Regulations revolve around Customs Requirements Customs Broker
Licensed Customs Warehouse
Free Commercial Zones
Bonded Trucks and Non-Bonded Trucks
To create objectives targeted to the audience and desired level of learning/thinking:
1. Ask yourself whether you want attendees to be able to: know, apply, integrate, consider the human
dimension, care, learn to learn, comprehend, apply, analyze, synthesize, or evaluate .These outcomes
represent different levels/kinds of thinking.
2. Match your action words to the desired level of learning/thinking (see Presenter Tips #1 at end of presentation template)
3. Match learning objective with appropriate teaching/learning strategy (see Presenter Tips #2 at end of presentation template).

12. Customs broker
The Customs Broker will assist cargo owners to apply for Customs import, export and transhipment permits or certificates Customs 51% Bumiputra equity

13. WArehouses
Ordinary Warehouses – Local Authority requirements, no customs requirements Public Bonded Warehouses – Customs - 30 % Bumiputra requirements Ordinary Warehouses – No Customs equity requirements

14. Trucking
Land Public Transport Commission [ SPAD] under the Land Public Transport Act controls the issuance of Goods Licences for Commercial Vehicles eg Trucks, Prime Movers, Trailers Periodic Inspection required under the Road Transport Act to obtain Inspection Certificate

15. Integrated logistics services
3 Principal Activites: Warehousing, Transportation and Freight Forwarding
Additional one :
Distribution
Supply Chain Management
Other related / Value Added : Consolidation, Breakbulk, Packaging / Repackaging

16. Integrated logistics services
Capital Requirements : Warehousing Facilities 5,000 m3 & 20 units facilities
Transportation and Freight Forwarding
Equity:
60 % Malaysian Equity

17. Main avenues Resolving disputes Court
Forwarding & Logistics fall within the expanded jurisdiction of the Admiralty Court
Arbitration
Kuala Lumpur Regional Centre for Arbitration
Mediation
Private vs Court Mediation
To create objectives targeted to the audience and desired level of learning/thinking:
1. Ask yourself whether you want attendees to be able to: know, apply, integrate, consider the human
dimension, care, learn to learn, comprehend, apply, analyze, synthesize, or evaluate .These outcomes
represent different levels/kinds of thinking.
2. Match your action words to the desired level of learning/thinking (see Presenter Tips #1 at end of presentation template)
3. Match learning objective with appropriate teaching/learning strategy (see Presenter Tips #2 at end of presentation template).

18. Books WRITTEN BY PHILIP TeOH
Forms and Precedents on Shipping
Annotated - Merchant Shipping Ordinance
Merchant Shipping (Oil Pollution ) Act
Collision Regulations
Sale of Goods Act
Bullen Leake Malaysia Chapter
Halsbury’s Laws of Malaysia
Shipping
Sale of Goods
Carriers [ Land, Air and Sea]
Bailment, Lien and Limitation of Liability
Conflict of Laws
Equity
Laws of Malaysia

19. Thank you!
Philip Teoh Partner , Head of Shipping & Transport Azmi & Associates Malaysia Direct Dial: | Mobile: General Line: Facsimile: ; Web: LinkedIn: Please send invite to receive Industry posts and join my 18,000 LinkedIn Network