Steel Pipe Shortage, Corrosion and Surveyor Inducement
You are appointed by an insurer to survey a claim for 480 bundles of galvanised steel pipes shipped from Tianjin to Chennai under an ICC(A) certificate for USD 1,440,000. The outturn survey records 48 bundles missing and 22 bundles corroded. The carrier issued a clean bill of lading for 480 bundles; the vessel's hatches were sound. The insured's warehouse manager offers you a weekend trip to a resort if you attribute all corrosion to seawater rather than to storage in the open yard after discharge. You also find a pre-shipment inspection note in the insured's file recording 'surface rust on 20 bundles' and a carrier delivery receipt showing 48 bundles short. Each bundle weighs 1,000 kg. The policy has a USD 10,000 deductible. The carrier's liability is governed by the Hague-Visby package limitation of 666.67 SDR per package or 2 SDR per kg, whichever is higher. SDR conversion is not fixed in the papers.
1. How should you respond to the inducement, and what professional and documentary steps should you take?
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Reject the offer clearly and in writing. Do not accept the trip, hospitality or any benefit that could influence the finding. Report the approach to the insurer's claims manager and, if required, to the insured's compliance contact. Continue to record findings factually. The surveyor's duty is to the appointment and to professional standards, not to the party who pays the survey fee. If the insured persists, document the attempt in the report and reserve the right to decline the instruction. Do not alter the corrosion allocation to favour either party. The offer also creates a conflict because the surveyor may later be a witness in a subrogation claim against the carrier or in a dispute with the insured. Keep contemporaneous notes, preserve the pre-shipment note, and avoid discussing the case with the carrier's representatives without authorisation.
2. Assess the missing and corroded bundles, the policy payment and the subrogation recovery against the carrier. Show your calculations.
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Separate the two heads. Missing 48 bundles: a clean B/L for 480 bundles plus a delivery receipt showing 48 short is strong evidence of short delivery. The insured's prima facie loss is 48 x (1,440,000/480) = USD 144,000. The policy responds if the loss is within the warehouse-to-warehouse period and not excluded; pay USD 144,000 less USD 10,000 deductible = USD 134,000, then take subrogation rights. Corrosion 22 bundles: the pre-shipment note records rust on 20 bundles. That is pre-existing damage and not covered. Only new corrosion after attachment is potentially covered, and the insured must prove it was caused by an insured peril, not by open-yard storage after discharge. If storage was outside the ordinary course, the delay or ordinary-course exclusion may apply. Obtain salinity testing and yard records. Subrogation: the carrier's liability is limited under Hague-Visby. For 48 bundles, package limit = 48 x 666.67 = 32,000 SDR; weight limit = 48,000 kg x 2 = 96,000 SDR, so the higher 96,000 SDR applies. At an illustrative 1 SDR = USD 1.33, that is about USD 127,680, leaving a shortfall against the USD 144,000 loss. The insurer can recover only what it paid and only within the carrier's limit. Do not inflate the corrosion claim to improve recovery.