• Penalty due to negligence of service by a leading international shipping agency

Hi

We had an International commercial shipment handled by UPS with whom we have an account. The Shipment arrived in India on 13th March. UPS had tried to contact the designated person via email and phone. Since the designated person was away overseas could not remain contacted for a day. On 15th and 17th We had asked our office to contact UPS Customer Care about the same and we were promised necessary action. Since no action was happening we had contacted the Person in UPS who have been handling our account with them. And he had written to designated persons on 21st March to help in managing this shipment. There was a follow-up mail from the team asking for AD Code, GST Details and IEC which was provided promptly. After that several email reminders were sent and requests have been made for this shipment. Finally after several email reminders finally on 2nd April they have asked one Clearing Agency to Take up the shipment for Clearance. Since the Shipment was lying with Customs with out any initiation for filing Bill of Entry, we were asked to pay penalty as per Customs rules which amounted to be 185000. This is a clear case of negligence of service by UPS. Is there a way that we can seek compensation for penalty being paid for no mistake from our end ? Your expert answers will be appreciated.
Asked 4 years ago in Civil Law

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12 Answers

1) issue legal notice to UPS to remiburse you for penalty paid by you of Rs 1,85,000

2) mention that delay in clearance occurred because of gross negligence by shipping agency

3) if agency refuses to pay file suit for damages

Ajay Sethi
Advocate, Mumbai
87938 Answers
6207 Consultations

5.0 on 5.0

Dear Client,

Going through above details, its a clear case of default in performance/business ethics by UPS.

Civil recovery is maintainable for penalty incurred cause of negligence/unprofessional act of UPS.

AS it is your ship, and ur company at stake, payment was bound on u to get shipment release from customs.

Now two ways for recovery - Recovery Suit,

Next - depends on the terms of contact/agreement executed with UPS.

preferably u should deduct from UPS commission/payment if any due referring such clause of default if any in the agreement,

Or direct deduct the penalty amount, and let UPS take legal action against recovery. Ur case is on higher side.

,

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

If UPS has been engaged to clear the shipment and they wilfully defaulted in clearing the shipment and delivering as per the schedule, then it amounts to deficiency and negligence, wherein the aggrieved can seek remedy the under the consumer protection laws. Even, the penalty incurred on account of negligence and deficiency can also be claimed.

Rajaganapathy Ganesan
Advocate, Chennai
2085 Answers
8 Consultations

4.9 on 5.0

Yes your entitled to compensation for the penalty.

Firstly, issue a legal notice to the UPS for reimbursing the loses suffered by you.

Since you have hired the services of UPS and have suffered losses due to deficiency in services and the damages are computed so you file a consumer complaint(if company or partnership firm under authorisation letter) for the recovery of damages.

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

Hello,

Send a legal notice to the UPS for recovery of damages.

If they do not respond to the same then you will have to file a civil suit to claim compensation and damages.

The case can not be filed in the consumer forum since the transaction is commercial in nature.

Regards

Anilesh Tewari
Advocate, New Delhi
17940 Answers
377 Consultations

5.0 on 5.0

1. Well, there is indeed apparent negligence on the part of UPS which is deficiency of service.

2. Now since this is a commercial transaction you can not file case before the consume forum seeking damages and compensation.

3. So civil remedy through civil suit is only option.

4. In that respect you will have ti file a suit for damages due to negligence of the UPS. Do note that such suit takes lot of time. So remain prepared for that.

Devajyoti Barman
Advocate, Kolkata
22515 Answers
402 Consultations

5.0 on 5.0

In this scenario you should initiate arbitration proceeding against that company under the arbitration and conciliation act 1996. You should give notice to that company regarding the loss borne by you out of that incident. Generally in commercial dispute arbitration proceeding is more effective than the normal proceeding before the Civil Court. If there is a clause regarding the arbitration in the contract between you and that company then you should follow that preceded otherwise you can move a petition before the Civil Court for appointment of arbitrator for adjudication of the dispute. 

Shivendra Pratap Singh
Advocate, Lucknow
5127 Answers
78 Consultations

4.9 on 5.0

On the basis of evidence from your side, you may cause to issue a legal demand notice demanding the amount paid by towards penalty to the customs department

Subsequently you can either drag them to the consumer forum or civil court for recovery.

But if you have constraints in handling the shipments,in future better dont rely upon a single person, who may not be available nor would have entrusted this job to some other person.

T Kalaiselvan
Advocate, Vellore
78097 Answers
1543 Consultations

5.0 on 5.0

legal notice has to be sent to its office as mentioned in agreement

2) suit can be filed in bangalore also . it mentions non exclusive jurisdiction of Mumbai courts

Ajay Sethi
Advocate, Mumbai
87938 Answers
6207 Consultations

5.0 on 5.0

Such clause (Venue) is Maintainable in arbitration agreement

Parties to the agreement has no authority to agree with the Jurisdiction of civil court as cannot over ride, Code of Civil Procedure by agreement.

And Accordingly...

In Case Of Dispute Between Two Or More Persons With Respect To Movable Property, Business Or Any Other Wrong Done:

Where a wrong has been caused to a person, or any damage has been caused to a movable property, then the suit may be instituted either,

· In the place, where wrong or damage has been caused, or

· In the place, where defendant (the person who caused the loss) resides.

Where there is a dispute in business, agreement or any other kind of civil dispute, except matrimonial matter, then the suit may be instituted either,

· In a place, where the defendant resides, or carries on business, or

· In a place, where the cause of action has arisen, i.e. where the dispute or wrong took place

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

Since the jurisdictions for all disputes, it may be essential that you file a suit in Mumbai jurisdiction.

However for a complaint before consumer court, you can choose your place itself for filing the same.

T Kalaiselvan
Advocate, Vellore
78097 Answers
1543 Consultations

5.0 on 5.0

It is a well settled principle that by agreement, the parties cannot confer jurisdiction.

Rajaganapathy Ganesan
Advocate, Chennai
2085 Answers
8 Consultations

4.9 on 5.0

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