SNAPS NOTICE FOR BROCHURE

THIS IS TO INFORM TO ALL THE STUDENTS OF THE DEPT . THAT SNAPS FOR BROCHURE WILL TAKE PLACE . EVERYBODY MUST BE THERE IN THE FOLLOWING DRESS CODE .
-BLACK COAT
-BLUE SHIRT
-BLACK PANT
-BLACK TIE
SCHEDULE :
17 NOV 1 PM ONWARDS MIB,MFC,MMT&MRLM (PREVIOUS)
18 NOV 1PM ONWARDS MIB,MFC,MMT &MRLM (FINAL)

UN CONVENTION ON SHIPPING

UN CONVENTION ON SHIPPING BY NEERU AND RAJDEEP
· UNCTAD
· Develop country’s hegemony in shipping
· Complaints against conference system
· Battle for liner code
· UN Convention-The final act
· Convention on liner code: Highlights


UNCTAD
[United Nations Conference on Trade and Development]

UNCTAD was establish in the year 1964.One special feature is that, it has a committee on shipping, which deals mainly with the commercial and international trade aspects of shipping.
The work programme in the field of shipping adopted by the UNCTAD‘s committee on shipping at the committees first session held from eight to 23rd Nov. 1965 and at its special session held from 18th to 25th July 1966 and as amended at subsequent sessions constitutes the foundation of the numerous reports and studies on various aspects of shipping and shipping economics prepared and issued by the unctad.
Before establishment of the unctade of few shipping economist and the institute of shipping economist at Bergen in Norway and the institute of shipping economist at Bremen in German had brought out very valuable studies on some aspect of shipping and shipping economist. The reports and the studies prepared by the unctad secretariat in pursuance of the work programme in the field of shipping admirably further the cause of economist of shipping in as much as they covered wide and various aspects of shipping and there economist significance.
The research and studies included in the work program adopted by the unctad committee on shipping cover the following topics:

Establishment of National and Regional Consultation Machinery;
Level and structure of Freight Rates, Conference Practices and Adequacy of Shipping Services;
Improvement of port and connected facilities;
Establishment of merchant marines in developing countries;
Technological program of shipping;
Review of current and long-term aspects of maritime in shipping;
International seminars on shipping economics; and
International legislation on shipping.





Developed Countries Hegemony in Shipping

Although many developing countries were aware that the development of their shipping industry world contributes their economic growth, the shipping circles in the developed countries had propagated many misconceptions and myths. The later contended that the establishment of shipping industries by the developing countries was insufficient of their scarce of their resources, which could be more beneficially employed by them in the improvement of their infrastructure such as ports. Such connection is move by the developing countries to develop their shipping; they argued, would trade and were not in interest of world economy. Shipping, according to them was a highly capital-incentive and sophisticated industry in the provision of which developed countries had a great economic advantage over developing countries. The specialization of developed countries in shipping was economically most desirable and viable and any interference with this state of affairs would be at the cost of the world trade and economy. The developed countries had convinced themselves that on the basis of “sound economic criteria”, the development of merchant marine by developing countries was not desirable.

Complaints against conference system
Conference system serves the general trade of the world and spreads in monopolistic and oligopolistic tentacles.
The most importance institutional arrangement in shipping which preponderantly influences and acquisition and operation of liner ships, freight rate and important aspects of carriage of cargo in liner trades in the conference system, which has been in existence for a country. Although world sea-borne system, which is carried by linear ships, in much best in quantity than world sea-borne trade in dry bulky cargo and in oil cargoes, it far out weighs other cargoes in value.conferances which consisted almost exclusively until nineteen-fifties and thereafter predominantly of shipping lines from developed countries, possess semi-monopoly powers, and they control entry of new shipping companies into linear trades, control competition among their members and by competitive action among their member eliminate outside competition. This has the effect of preventing new shipping lines from participating in the trades and also of fixing and setting the freight rates, of adopting practices and of providing services which in many case of providing services which in many cases were not in the best interests of the trades to which they catered.
The developing countries were adversely affected in two ways.
Firstly, they could not build up liner fleets for participation in their own trades.
Second, their import and export trades also suffered because the conferences were in a very strong position and the shippers or consignees of cargo who were unorganized could not negotiate on equal terms with the conferences. The shipping circles and even the government of the developed countries resented the criticism on the ground that the critics did not understand the basic tenets of shipping economics in regard to provision of regular liner services.

Most of the complaints against the conference related to:
1. Fright rates: General insurance of freight rates, fixation of specific freight rates, and promotional freight rates;
2. Participation and share: Participation of share of national shipping line; that is; entry into conferences covering trades;
3. Unfair clauses: Unfair clauses in loyalty agreements and imbalance of obligations between shippers and ship-owners.
4. Inadequacy shipping: The inadequacy of shipping services, e.g. failure to serve particular port or range of ports.
5. Quality of shipping services: The quality of shipping services particularly the suitability of vessels and their cost of operation.
6. Unreasonble withholding: The unreasonable withholding of dispensation to use non-conference vessels.

In some circumstances, a shipping may not have an option on the vessels to be used. Because of certain laws enacted to protect a country’s interest, mandatory use of a particular vessel is not uncommon.

In general the rates changed by U.S. conference lines are higher than threats changed by lines of other nations. Operators of certain countries are able to charge lower rates because of subsidies and support received from their government. Some ships at one time were able to quote rate as much as two-thirds lower than U.S. conference lines published prices. Subsequently, conference lines decided to give illegal rebates to major customers in order to win bank cargo shipments lost to the soviets.
Recognizing both that nations have shipping interests and that subsidies cause problem, the UNCTAD proposed the UNCTAD code of liner conduct.
According to UNCTAD code. Each trading partner is allowed to reserve 40% of the total liner cargo for its national flag lines and to allocate 20% cargo to third flag operators





Battle for code of conduct:
The battle for the code began in right earnest at UNCTAD-3rd in Santiago in April-May 1972. It was at that conference that developing countries were able to agree upon the unified draft of a code of conduct for liner conferences and get it remitted to the UN general assembly for further necessary processing and adoption as an international convention any multilateral legally binding instrument.

DRY PORTS

DRY PORTS by shivani and Megha Nayyar


India has a long coastline spanning 7600 kilometres forming one of the biggest peninsulas in the world. It is serviced by 12 major ports and 185 notified minor and intermediate ports].
Major ports handled over 80% of all cargo traffic . However, the words "major", "intermediate" and "minor", do not have a strict association with the traffic volumes served by these ports. As an example, Mundra Port, a newly developed minor port in the state of Gujarat registered a cargo traffic of around 28.8 million tonnes per annum during the financial year of 2008, which is higher than that of many major ports
The classification of Indian ports into major, minor and intermediate has an administrative significance. Indian government has a federal structure, and according to its constitution, maritime transport falls under the "concurrent list", to be administered by both the Central and the State governments. While the Central Shipping Ministry administer the major ports, the minor and intermediate ports are administered by the relevant departments or ministries in the nine coastal states of West Bengal, Orissa, Andhra Pradesh, Tamil Nadu, Kerala, Karnataka, Goa, Maharashtra and Gujarat. Several of these 185 minor and intermediate ports are merely "notified", with little or no cargo handling actually taking place. These ports have been identified by the respective governments to be developed, in a phased manner, a good proportion of them involving Public-private partnership.
Cargo handling is projected to grow at 7.7% until 2013-14. Some 60% of India’s container traffic is handled by the Jawaharlal Nehru Port Trust inMumbai. It has just 9 berths compared to 40 in the main port of Singapore. It takes an average of 21 days to clear import cargo in India compared to just 3 in Singapore.
IMPORTANCE OF MARINE SECTOR


• Marine transportation plays a key role in Global economy
• 90% of the world’s trade involves shipping
• Importance of water transport is increasing with economic Globalization
• Only mode of transport that can effectively linked the centers of industrial production to their markets . Ports in developing countries represent a key asset for economic development

• They need to operate efficiently and be properly structured in order to support an increase in trade and GDP by linking countries, both coastal and land locked, productive hinterland and consumers to global markets
• Through their nodal role of facilitating intermodal transport ports have a significant role in contributing towards achievement of the Millennium Development Goals,


• They need to operate efficiently and be properly structured in order to support an increase in trade and GDP by linking countries, both coastal and land locked, productive hinterland and consumers to global markets

• Through their nodal role of facilitating intermodal transport ports have a significant role in contributing towards achievement of the Millennium Development Goals,
INDIAN PORT SECTOR SCENARIO
At the central level, the Department of Shipping of the Ministry of Shipping, Road Transport and Highways (MoSRTH) is responsible for formulating policies and overseeing the sector.
} At the state level, the maritime boards oversee non-major ports in Gujarat, Maharashtra and Tamil Nadu. In other states, port departments of the respective state governments oversee non-major ports.








WHAT IS MAJOR AND NON-MAJOR PORTS

The Indian port sector has been broadly divided into - Major ports and Non-major ports.
The technical nomenclature Major and Non-major is based on the legal distinctions made under the two key source laws viz. Indian Ports Act 1908 and Major Ports Act 1963.
The distinctions between the Major and Non-major Ports is in terms of the distribution of maritime jurisdiction between the Central and State governments.
Major ports are listed in serial 27 of the Constitution and are administered under Major Port Trust Act of 1963. All ports, other than major ports are listed under the concurrent list of the Constitution and administered jointly by Central and State governments under the Indian Port Act 1908.




LEGAL FRAMEWORK OF PORTS

} In 1998, the foreign direct investment (FDI) limit in the port sector was raised to 74 per cent and subsequently, in 1999, 100 per cent FDI in the sector.
} In 1998, the shipping ministry came out with Guidelines for Private Sector Participation in Ports” through JVs and foreign collaborations.
} In 2000, the Major Port Trusts Act, 1963 was re-amended to allow major ports to form JVs with non- major foreign ports and companies.
} During 2003, Rail Vikas Nigam Limited (RVNL), a Special Purpose Vehicle (SPV), was created to undertake rail-port connectivity projects under the National Rail Vikas Yojana (NRVY) which was initiated in 2002.

} In August 2004 - Formulation of the Draft Maritime Policy. The draft maritime policy, which is still awaiting final cabinet approval, has been partially implemented.
} In July 2004, the ISPS Code, which is a set of regulations designed for maritime security, came into force.
} Sethusamudram Ship Canal Project (SSCP) and the National Maritime Development Programme (NMDP)- were launched in 2005, in May and December respectively.
} The Rs 993.44 billion NMDP aims to increase capacity levels, enhance private investment, improve service quality and promote competition in the maritime sector.
} In January 2006 beginning of port based SEZ - approval of Vallarpadam and Puthuvypeen within the Cochin Port Trust area
} The main highlight of 2008 was the approval of the new model concession agreement (MCA) by the union government in January.



} PRIVATE SECTOR PARTICIPATION

· Inter-port and intra-port competition.
◦ Generally by tender; provision for nomination for captive facilities.
◦ Obligation to take workers in case of lease of existing facilities.
◦ Provision to handle operations outside strikes / breakdowns, etc.
◦ Preference to Indian companies except in few ports.
◦ Trade to be consulted before charges affecting them are amended.


} LAND MATTER

◦ Full powers to ports for leasing of land up to 30 years.
◦ Ports to be allowed to renew lease in favour of sitting occupants.
◦ Provision for subletting / partially subletting.
◦ Port Land not to be given for religious purposes.
◦ Change of land use as per land use. be allowed.
◦ Annual escalation reduced from 5% to 2%.




REGULATORY FRAMEWORK


◦ TAMP will be strengthened.
◦ Cost plus approach will be replaced by normative approach.
◦ Increase in efficiency by the private investor to be rewarded.
◦ Enforce and extend ISPS code implementation and adhere to IMO Conventions
◦ Measures for Wreck Removal, Oil Spill Management at Ports consistent with international norms.




NATIONAL MARITIME DEVELOPMENT PROGRAM- (NMDP)

} Introduction:
◦ National Maritime Development Programme launched in December 2005
◦ Programme being formulated to enhanced private investment
◦ Utmost importance is given to development of Infrastructure
◦ This programme would assure a good framework for facilitating Public and Private investments and competitions and improved efficiency.


} Focus Area :

◦ Deepening port channels - higher drafts
◦ Modernization of the system and usage of latest technology
◦ To exploit potential of hinterland
◦ Setting up Maritime Universities
◦ Promote training for better manpower
◦ Encouragement to inland water transport
◦ Development of sea waterways and SPMs through private sector participation
◦ Enhancement of coastal shipping
◦ Navigational safety
◦ Ship building and repairing yard
◦ Minor ports have to play important role in creation of capacity


INDIAN PORTS- AREAS ALLOWED FOR PRIVATE SECTOR PARTICIPATION


(a) Leasing out existing port assets;
(b) Construction/creation of additional assets, such as:
(i) Construction and operation of container terminals;
(ii) Construction and operation of bulk, break-bulk, multi-purpose and specialized cargo berths;
(iii) Warehousing, container freight stations, and storage facilities;
(iv) Cranage/handling equipment;
(v) Setting up of captive power plants; Dry docking and ship repair facilities.
(c) Leasing of equipment for port handling and leasing of floating crafts from the private sector;
(d) Pilotage;
(e) Captive facilities for port-based industries.


PORT LED DIRECT DEVELOPMENT

Capital goods
Ship Building
Fisheries
Refineries
Core Industries
Power Projects
POL Chemical
Cement Plants


PORT LED OTHER DEVELPOMENT

· Cold Chain
· Warehouses
· Area Development
· Revenue Generation
· Ancillary Industries
· Employment
· Tourism
· Green development



ISSUES

} Way behind international developments.
} Not a single port in top ten
} Severe connectivity issues
} No major shipping line in the country
} Poor levels of containerization
} Lack of seamless customs procedures
} Crippling man-power constraints
} Economy not export driven
} Hiatus between centre and State







OVERVIEW
SIZE
· Indian ports handled cargo of 510 million tonnes in 2004-05, 10.8% increase over 2003-04
· 80% of the port traffic by volume is dry and liquid bulk, remaining 20% is general cargo, including containers
o Containerised cargo has grown at a rate of 15% p.a. over the last 5 years
· India has 12 Major Ports and 185 Minor Ports along 7,517 km long Indian coastline
o Cargo handled by Major Ports has increased by 9.5% p.a. over last 3 years
o Major ports handle 75% of the total traffic

The JNPT port where thecapacity will be over3 million TEU by 2006
The port sector has seensignificant investment bymajor global port operators

· Of the 12 Major Ports, 11 ports are run by Port Trusts while the port at Ennore is a corporation under the Central Government. These ports handled 383 million tonnes of cargo in 2004-05
· Two major Government projects underway:
o Project “Sethusamundram”: Dredging of the Palk Strait, in Southern India to facilitate maritime trade through it
o Project “Sagarmala”: $22 billion project for the modernisation of Major and Minor Ports



STRUCTURE
· Government of India dominated maritime activity in the past. Policy direction is now oriented to encouraging the private sector to take the lead in port development and operations


· Many Major ports now operate largely as landlord ports - International port operators have been invited to submit competitive bid for BOT terminals on a revenue share basis
· Significant investment on BOT basis by foreign players including Maersk (JNPT, Mumbai) and P & O Ports (JNPT, Mumbai and Chennai), Dubai Ports International (Cochin and Vishakhapatnam) and PSA Singapore (Tuticorin)
· Minor ports are being developed by domestic and international private investors: Pipavav Port by Maersk, Mundra Port by Adani Group (with a terminal operated by P & O)


POLICY
· 100% FDI under the automatic route is permitted for port development projects
· 100% income tax exemption for a period of 10 years
· Tariff Authority of Major Ports (TAMP) regulates the ceiling for tariffs charged by Major ports/port operators (not applicable to Minor ports)
· A comprehensive National Maritime Development Policy is being formulated to facilitate private investment, improve service quality and promote competitiveness.




Cargo handled by Major Ports in India
Major Port
Trade(04-05, MMT)
Container Traffic(04-05)(million TEU*)
Chennai Port
44
0.62
Cochin Port
14
0.19
Ennore
9.5
—
Haldia
36
0.13
JNPT
33
2.37
Kandla Port
42
0.18
Kolkata Port
10
0.16
Mormagao
31
0.01
Mumbai Port
35
0.22
New Mangalore Port
34
—
Paradip Port
30
—
Tuticorin Port
16
0.30
Vizag Port
50
0.05
Source: Indian Ports Association
* Twenty foot equivalent unit

OPPORTUNITY
OUTLOOK
· Cargo handling at all the ports is projected to grow at 7.7% p.a. till 2013-14 with Minor ports growing at a faster rate of 8.5% compared to 7.4% for the Major ports
o Traffic estimated to reach 960 million tonnes by 2013-14
o Containerised cargo is expected to grow at 17.3% over the next 9 years
· The New Foreign Trade Policy envisages doubling of India’s share in global exports in next five years to $150 billion
o A large portion of the foreign trade to be through the maritime route: 95% by volume and 70% by value
POTENTIAL
· Growth in merchandise exports projected at over 13% p.a. underlines the need for large investments in port infrastructure
· Investment need of $13.5 billion in the major ports under National Maritime Development Program (NMDP) to boost infrastructure at these ports in the next nine years
o Under NMDP, 219 projects have been identified for the development of Major ports
o Public–Private partnership is seen by the Government as the key to improve Major and Minor ports
§ * 64% of the proposed investment in Major ports envisaged from private players
· The plan proposes an additional port handling capacity of 530 MMTA in Major Ports through:
o Projects related to port development(construction of jetties, berths etc.)
o Procurement, replacement or up-gradation of port equipment
o Deepening of channels to improve draft
o Projects related to port connectivity
· Investment need of $4.5 billion for improving Minor Ports



DRY PORTS


In recent times, global trade, in line with it the Indian foreign trade has grown phenomenally both in terms of volume and complexities. Infrastructure needs and innovative methods in logistics management are growing hand in hand with the International trade needs. Ports these days mainly act as gateways and cater to the hinterlands of India which are now serviced by the advent of ICDs. ICDs thus generate business opportunities, general employment and global competitiveness of the local industry.





} A DRY PORT IS AN INLAND INTERMODAL TERMINAL DIRECTLY CONNECTED TO A SEAPORT BY RAIL, WHERE CUSTOMERS CAN LEAVE AND / OR COLLECT THEIR STANDARDISED UNITS AS IF DIRECTLY TO THE SEA PORT


} “Dry port is a yard used to place containers or conventional bulk cargo, usually connected to a seaport by rail or road”. - Wikipedia








CONTAINER TERMINALS(ICD/CFS)
REGIONAL TALLY

Region
CONCOR’s
Others
Total
Northern India
15
22
37
Southern India
10
58
68
Western India
13
39
52
Central India
9
-
9
Eastern India
8
3
11
Total
55
122
177


RATIONALE & SIGNIFICANCE

} An ICD or a CFS, located away from a seaport, providing facilities for cross-border trade in close vicinity of production/consumption in hinterland, with linkages to gateway ports.
◦ A common user facility, for handling and temporary storage of import/export, laden/empty containers, for clearance by Customs for home consumption, warehousing, onward transit, or export.
◦ A CFS: generally on off-dock facility close to servicing port, helping decongest port by shifting cargo and customs-related activities outside the port.
◦ Also set up inland for linkage to a regional rail-linked ICD and to gateway port(s) by road.
} In India, only 40 dry ports close to seaports; all others – 137 – inland.

INSTITUTIONAL FRAMEWORK: A VITAL FACTOR


} IMC (Inter-Ministerial Committee):
◦ for appraisal and approval of applications for ICDs/CFSs
◦ Ministry of Commerce and Industry: nodal agency, coordinating with Ministry of Shipping, Roads and Highways; Ministry of Railways; Ministry of Finance
} IMC approval implies:
◦ single-window facility for mandatory clearances, payments, and incentives certification: presence of Customs, banks, shipping lines and agents, NVOCCs, CHAs, transport operators.


LEGAL AND LIABILITY FRAMEWORK:


◦ Multimodal Transportation of Goods Act, 1993
◦ Refinement of Motor Vehicles Act
◦ Single document of carriage – for inland transportation with clear liability and quick claim settlement terms.




Public-Private Partnership

— Consistent with country’s concerted strategy, towards blending synergy and strength of state and private sectors in finance, management and technology, PPP steadily materialises in infrastructure sectors.
- All recent container terminals at ports heralded PPP concept, e.g., at JN port, Chennai, Tuticorin, Visakhapatnam, Cochin.
- New large CFSs developed in PPP mode in collaboration with CONCOR.
- Intermodal rail networks developed as PPP projects, linking Gujarat coast ports by Pipavav Rail Corporation and Kutch Railway Co.
- Public sector Central Warehousing Corporation generated an ingenious model for its CFSs being managed and operated by private sector enterprises.
- Several inland CFSs uniquely managed as public-public partnership – CONCOR as a Central sector PSU joined hands with many state warehousing corporations to optimally manage and operate them.
- Dry port development in India itself a good blend of private sector and state sector: 108 of them set up by different public sector corporations, 69 others by private companies.
- Some 14 private sector companies now registered with IR for owning rolling stock and operating container trains in addition to CONCOR.





} Customs clearance made easy


◦ Risk Management System (RMS) for selective screening of only high-risk cargo for customs examination.
◦ Faster delivery system by creating separate area in port premises earmarked for instant delivery of cargo to specified accredited importers.
◦ Simplified procedure for amendment of IGM
◦ Simplified customs procedure for transshipment between gateway port and dry port (ICD/CFS).
◦ LCL carrying containers allowed movement from one CFS to another CFS for final consolidation/stuffing.
◦ Customs messages exchange with ports, airports, ICDs/CFSs, CONCOR, banks and DGFT.
◦ Facility of customs duty payment through more banks and via e-banking.
◦ 24x7 operations.








Conclusion

India’s ports are working well and their use is increasing at high speed , due to increase in its work ICD have developed which decrease its work load and helps in increasing efficiency of ports. Indian govt. is going to develop more ICD
in north region due to its effectiveness.
Today India’s most of the exports are send through ships and custom clearances are done their only.

SHIPPING OPERATIONS

SHIPPING OPERATIONS BY VIKAS AND ANIL MUNDAY
The shipping operations policy formally sets out the Bank’s strategy in this sector. Previous to the approval of the policy, there was a Shipping Guidelines document, approved by the Board in December 1994 (BDS 94-161). The shipping operations policy was approved by the EBRD board on 31 October 2001.
Since the early 1990s, the Bank has been active in financing the Shipping Sector and has been catalytic in introducing western financial institutions to shipping companies in the region. The Bank’s role continues to be relevant because many banks are still unable or reluctant to consider investing or providing long-term finance directly to companies operating in the region without the comfort and involvement of the Bank. This is demonstrated by the fact that out of a cumulative commitment to-date of Euro 664 million, assisting a total investment cost of Euro 1.19 billion, the Bank has mobilized more than 50% of its total financing, involving 22 commercial banks, in its co-financing efforts.
The Bank’s involvement has so far concentrated on debt financing for the acquisition and construction of various types of cargo vessels. The Bank will continue to finance deep-sea ship-owners, including its existing clients, in their on-going efforts to modernize their fleets. However, the Bank will also seek to diversify its portfolio to finance the renewal of other types of vessels including passenger and river ships. The majority of the shipping fleet (including river vessels) in the region is in imminent need of replacement and this renewal process is critical for the sector if it is to maintain or improve its competitiveness, and eliminate sub-standard vessels in order to improve crew safety and address environmental concerns. All Banks financed shipping projects should comply with IMO standards for safety and protection of the environment and ships should be operated in open and commercial markets.

Although the Bank has reviewed several proposals from a number of shipyards, it has not completed any operations in this sub-sector to-date. The Bank is intensifying its efforts to develop appropriate structures for projects in the shipbuilding industry.
Besides acting as a catalyst in channeling long-term financing to the region, the Bank’s involvement will provide the opportunity to achieve its transition goals. For the Bank’s future operations in the Sector, the following transition objectives have been identified:

Promotion of competitiveness through fleet renewal

Promotion of privatization and restructuring

Transfer of technical know-how and management skills

Promotion of good corporate governance and best business practice

Promotion of safety and environmental consciousness

Development of appropriate regulatory and legal framework

Facilitation of regional trade

These objectives will be appropriately adapted depending on the transition stage of the relevant country. Russia, where most of the Bank’s existing shipping projects have been located, will continue to be an important country for the Bank's operations. However, in order to expand and diversify the country profile in this Sector a new focus is being developed in other countries of operation, notably in the BAL tics, Caucasus and Caspian regions.

The Bank will face a considerable challenge in the river shipping sub-sector in which companies operate along many of the large inland waterways located in the region. This is because domestic legislation governing mortgagees’ rights in this sub-sector has still to be fully developed.


In shipbuilding, the Bank will continue to explore and structure projects that are not only sustainable, but also encourage the much needed and invariably difficult restructuring process. In shipbuilding, including conversion and repair, the Bank will not finance projects which receive state subsidies in excess of levels permitted under any applicable (EU, WTO and OECD) guidelines. In this sub-sector the Bank will seek to identify shipyards which have either benefited from strategic investors, have proven strong management or where the relevant national government has a clear commitment to the restructuring and privatization of their shipbuilding activity.

Service Routes

Currently, shipping lines operate three general types of deep-sea itineraries: end to end, pendulum and round the world service routes, End to end services schedule vessels back and forth between two continents. Pendulum services schedule vessels back and forth between three continents with one of these continents as a fulcrum, with the points at either end of the pendulum swing linked only through the fulcrum. This type of service offers a way to fill container slots four times on the same voyage and to eliminate certain overlapping port calls in the fulcrum area. The merging of separate end-to-end services into a pendulum or round the world service serves the two main purposes of broadening the range of through services and reducing the number of ships required to provide the same coverage. This gives a major cost saving by merging the previously duplicated port calls in the central region of the pendulum. Also round the world services can overcome the problems of end-to-end operations, by accommodating the needs of global corporations.



The world’s three principal trade corridors are tied together into one and this type of service can move in either direction, moving westward or eastward or in both directions. Intense competition in container markets not only makes it necessary for ship owners to offer high quality services between major trading regions but also makes it imperative for them to optimize fleet utilization. Such pressures have led to the development of multi-route operating patterns, notably ‘Round-the-World’ and ‘Pendulum’ services, enabling carriers to maximize vessel employment and slot utilization. North America-Europe-Asia, with vessels continually circling the globe in an eastbound or westbound direction. ‘Pendulum’ services, operated by a large number of carriers including Hanjin and Yang Ming, typically operate over all or some portion of the route linking the East Coast of North America, via Europe and Asia to the West Coast of North America, returning via the same route. Since vessels employed on ‘Pendulum’ services, unlike those employed in RTW services, are not required to transit the Panama Canal, post-Panamax vessels may be used.
A ship routing and scheduling problem for the industrial shipping industry is far from unique, and this review will give us an overview of the variety of problems. The objective of a classical industrial ship scheduling problem is to minimize the transportation costs for each ship in the fleet while ensuring that all cargoes are lifted from their loading port to their port of discharge. Normally, a cargo consists of a designated number of units of a product.




Liner Operation

Agreement between two or more shipping companies to provide scheduled cargo and/or passenger service on a particular trade route under uniform rates and common terms also called shipping conference. Cargo and/or passenger carrying shipping line operating a scheduled service between fixed points (ports) on a trade route.

Liner service is the backbone of international trade in manufactured goods. Liners, sailing on regular schedules along established ocean trade lanes, move vast quantities of consumer, industrial and military commodities ranging from video cameras to night-vision scopes, perfume to paint, jeans to milling machines.


Tramp Operation
Charter shipping is a tramp service. The term tramp, as used in the ocean shipping, refers to a cargo ship not operating on regular routes and schedules, and picking up cargo only when it is chartered (hired) from the ship operator.
While conference and non-conference shipping are for general cargoes, charter shipping usually is for bulk cargoes like oil, coal, ore, and grain. Charter shipping has the lowest freight rate per unit of weight or measure.

A charter party is required in charter shipping. A charter party---charter party contract---is a written contract between the ship operator and the charterer (shipper). The contract normally includes the ports, freight rate and time involved in the voyage(s).
The ship operator issues a charter party bill of lading. Unless a letter of credit (L/C) permits or calls for a charter party bill of lading, the bank will reject such transport document in the L/C negotiation

In tramp shipping, tramp ships are being used. As the name indicates, this branch of the shipping industry is very irregular in its activities. Tramp ships are sent in where the most paying freights are available. Therefore, tamping is very unstable and very little organized.

Tramp ships are, in accordance with the demand, contractually put at the disposal of charterers, to carry, for one or more voyages, a quantity of goods between named harbors (in voyage charter) or to carry out a number of transport assignments in a certain period of time (in time charter). In the broadest sense of the word, tramp shipping is the activity that is done with ships in voyage charter. Usually, under a charter agreement, they have to perform only one voyage so that each voyage stands completely apart from the other. The vessel is an independent operating and competing unit and its operation is highly individual. The sailing schedule of a tramp ship is consequently very irregular. The ship operator must see to it that his ship is rarely idle and in the port of discharge - or in a harbor as close as possible to the port of discharge - he must always try to get a new charter for the ship.


Tramp ships vary considerably in size and are sometimes of lesser quality than the liner ships. Because the cargoes usually don't have to be transported at a high speed and the ship doesn't need highly sophisticated equipment, tramp ships are relatively slow and cheap. However, the present-day tramp fleet counts numerous modern bulk carriers suitable for different sorts of cargoes, including tankers and specialized ships. Owners of modern and cost-effective tramp ships have a better chance than their competitors who offer inferior and less flexibility in the freight market.
Liner conferences are tolerated in other jurisdictions. What if the EU changes its regime and others do not?
The Commission is particularly aware of the international dimension of this dossier and of the fact that up to now conferences have been tolerated worldwide. That is why it has taken the initiative to establish close and frequent contacts with our major international partners (US, Canada, Australia, Japan). The outcome of those contacts is positive. We intend to keep up these bilateral contacts throughout discussions in Council.
If the EU were to repeal the present EU liner conference block exemption regulation this would mean that carriers (EU and non-EU) that are presently part of conferences operating on trades to and from the EU would have to stop their conference activities on those trades (namely price fixing and capacity regulation). Nothing would stop them from continuing being part of price fixing conferences on non-EU trade routes.
To give a concrete example, an EU carrier like Maersk, member of the Trans-Atlantic conference Agreement (TACA), could no longer be involved in price fixing and capacity regulation on the North Atlantic-EU and EU-North Atlantic trades, but could still do so on the US-Pacific trades. The same applies to non-EU carriers.

This is a logical consequence of the fact that there is not an identical competition regime in force world-wide. In fact, already today there are differences in what liner shipping companies are allowed to do in different jurisdictions. For example, today US law allows carriers to fix prices jointly on inland transport, while EU law does not. A conflict of law does not arise. This would only be the case if one jurisdiction were to require carriers to participate in conferences, whereas another was to prohibit it. This is not the case today.

The liner shipping industry is asking for a new regime to replace the conference block exemption. What will the Commission do about that?

Industry is divided on the need for a substantive alternative to Regulation 4056/86. The European Liner Affairs Association a carrier association representing roughly 80% of world capacity has proposed that the conference block exemption should be replaced with an exchange of information system.
The
European Shippers Association representing over 100,000 exporting companies, and generating around 90% of the EU's international maritime traffic, considers that a replacement regime is not necessary because carriers are already allowed to co-operate extensively under the consortia block exemption Regulation. This co-operation results in the provision of reliable liner services by groups of shipping lines in consortia and alliances. The European business organizations UNICE and consumer associations back this position.
To be acceptable, any new system for information exchange must respect the competition rules. Some elements of the current ELAA proposal appear to be in line with these requirements. However, others are problematic notably because they do not differ in effect from what conferences do today. Accepting the ELAA proposal as it is today would remove all the pro-competitive effects of the abolition of the conference system.

The Commission remains committed to continuing the dialogue with the ELAA with a view to assisting it in developing an alternative system compliant with EU competition rules. It has acknowledged that exchanges of information leading to greater market transparency may contribute to the improvement in the way liner services are provided, in the interest of carriers, transport users and the public in general.
Discussions will be focusing on the details of the various elements of the ELAA proposal. Thereafter, the Commission intends to issue guidelines on the application of the competition rules apply to liner and tramp shipping. The guidelines would treat issues such as an independent data warehouse, the creation of a trade association and of trade fore, the publication of a price index and common formulae for charges and surcharges. The guidelines would explain how the competition rules apply to the liner sector in general, including exchange and publication of capacity utilization information. As an interim step, the Commission will publish an issues paper on liner shipping in September 2006.


What is the impact of the proposal on small liner shipping carriers and on small short sea trades?

The European Community Ship owners’ Associations (ECSA) and the European Parliament have drawn the Commission’s attention to the needs of specific services, particularly short sea services and services to smaller trades. Since such trades generally do not require a large number of vessels to be serviced, relatively small carriers might be able to operate side by side with large carriers on these trades. ECSA and the European Parliament, therefore, questioned whether these relatively small carriers would be more affected by repeal than large ones.

The Commission is not aware of any liner shipping carrier that would fall with the scope of the Commission Recommendation concerning the definition of small and medium sized enterprises.1
After significant research, the Commission did not find that relatively small EU carriers would be adversely affected by a repeal of the conference block exemption. To the contrary, liberalization creates a market environment that allows for quicker growth than a regulated environment, in particular for small companies. It creates more new services and new niche markets which especially small companies are able to quickly enter. These market niches usually allow for rapid growth. Hence, small innovative companies are able to grow much quicker in a competitive environment – see for example the rapid growth of Ryan air that started as a small company with a new innovative business model in the recently deregulated aviation market. The success of small carriers depends on their ability to adapt to a competitive environment and not on their actual size.

















the difference between the two…??
Some of you might have heard the terminology Tramp service or Tramper or Tramp vessel and also the terminology Liner Service. What is the difference between the two..??

Liner Service– Liner Service is a service that operates within a schedule and has a fixed port rotation with published dates of calls at the advertised ports. A liner service generally fulfills the schedule unless in cases where a call at one of the ports has been unduly delayed due to natural or man-mad causes.

Example: The UK/NWC continent service of MSC which has a fixed weekly schedule calling the South African ports of Durban, Cape Town and Port Elizabeth and carrying cargo to the UK/NWC ports of Felixstowe, Antwerp, Hamburg, Le Havre and Rotterdam..

Tramp Service: Tamper on the other hand is a ship that has no fixed routing or itinerary or schedule and is available at short notice (or fixture) to load any cargo from any port to any port.
Example: A ship that arrives at Durban from Korea to discharge cargo might carry some other cargo from Durban to the Oakland in the West Coast of USA which in an entirely different direction. From Oakland say for example it could carry some cargo and go to Bremerhaven.
Liner shipping is distinct from tramp shipping. Liners operate as common carriers:-
1. They publish a freight tariff, operate on scheduled routes, and leave at scheduled times regardless of whether the ship has a full load of cargo. They usually carry a large number of smaller packages for a number of different shippers.
2. Tramp vessels, as distinct from liners, are usually chartered in some form by a shipper to carry a full shipload of cargo.
3. Both liner and tramp shipping have been subjected to a variety of different kinds of government regulation other than the self-regulation of the conference system (Fox and White, 1997).

It is useful to distinguish bulk from general cargo. Bulk cargo does not have to be packaged before loading; it is simply poured into holds in tramp ships specialized to bulk cargo. General cargo is anything that would be packaged in bags, bales, or boxes, and frequently comes from many small shippers. Since the late 1960s, general cargo has come to be carried largely in containers in specially designed container ships.








F.I.
(Free In)
The word "free" as used in the charter shipping term means not including. FI is a pricing term indicating that the charterer of a vessel (i.e., the shipper) is responsible for the cost of loading goods onto the vessel.
F.O.
(Free Out)
FO is a pricing term indicating that the charterer of a vessel (i.e., the shipper) is responsible for the cost of unloading goods from the vessel.
F.I.O.
(Free In and Out)
FIO is a pricing term indicating that the charterer of a vessel (i.e., the shipper) is responsible for the costs of loading goods onto the vessel and unloading goods from the vessel.
The dominant flows in the containerized trades are found on East-West arteries, such as those between Western Europe and the US. East Coast, and between Asia and the U.S. West Coast. The North-South lanes are of lesser density and, in some carrier networks, consist of feeder services linked to the East-West lanes at specific hub port locations.





Conclusion
Tramp/bulk shipping cannot effectively and appropriately be brought under an ETS scheme, due to its structure and operation.

INTERNATIONAL ARBITRATION

INTERNATIONAL ARBITRATION BY SUSHIL DHANGI

Types of dispute resolution-disputes may not be avoidable altogether but can be minimized by using standard terms and commercial practices and these are as:
Ø law suit
Ø Arbitration
Ø Collaborative law
Ø Meditation
Ø Conciliation
Ø Many types of negotiation
Ø Facilitation


International arbitration

International arbitration is the established method for resolving disputes between parties to international commercial agreements. As with arbitration generally, it is a creature of
contract, i.e., the parties' decision to submit any disputes to private adjudication by one or more arbitrators appointed in accordance with rules the parties themselves have agreed to adopt, usually by including a provision for the same in their contract. The practice of international arbitration has developed so as to allow parties from different legal and cultural backgrounds to resolve their disputes, generally without the formalities of their underlying legal systems.


Meaning of Arbitration- The hearing and determination of a cause between parties in controversy by a person or persons chosen by the party.
Arbitrator’ means an arbitrator selected from the panel of arbitrators.
‘Arbitral Tribunal’ mean one or more arbitrators constituting a tribunal to
adjudicate a reference to arbitration.
‘Arbitration and Conciliation Act’ means Arbitration and Conciliation Act,
1996 and any amendments thereto.
‘Applicant’ means a person who makes a reference to arbitration by filing an
application as prescribed by the Exchange.
‘Respondent’ means a person against whom the applicant makes a reference
to arbitration whether or not there exists a transaction or is a claim against
such person.
‘Panel of Arbitrators’ means a body of arbitrators, constituted by the
Releva.nt Authority from time to time.




Arbitration is international if:

The parties to the agreement have, at the time of the conclusion of execution of that agreement, their places of business in different countries; or
one of the following places is situated outside the country or countries in which the parties have their places of business: (i) the place of arbitration if determined in, or pursuant to, the arbitration agreement; (ii) the place where the predominant part of the obligations of the commercial relationship is to be performed or the place with which the subject matter of the dispute is mostly closely connected; or
the parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country.











Main Features of International Arbitration
The main reason that parties elect to have their international disputes resolved through arbitration is to avoid the uncertainties associated with litigation in national courts and the resulting need to enforce judgments in a foreign court.

Causes of Arbitration with the Company
The claims, differences or disputes between a company and any party may be:
arising out of or in relation to transfer, non-transfer, delay in transfer, nonreceipt
of dividend, interest, securities and/or any other corporate
entitlements, delay in conversion into demat or non-demat or keeping in
abeyance any one or more of the aforesaid actions;arising from and in connection with any one or more of the actions mentioned in Bye-law 15.5.1 above, which affects the right to ownership of securities and / or any entitlement thereon, or
arising out of or in relation to issue or non-issue of company objections /
duplicate company objections, delay in issue of company objections and /
or non-submission of valid, requisite and supporting papers / documents
thereto Provided that all the causes/actions mentioned under Bye-laws 15.5.1,
15.5.2 and 15.5.3 arise out of or in relation to or with reference to the
provisions in the Bye-laws, Rules and Regulations of the Exchange and /
or with reference to Good/Bad Delivery Guidelines, Depository
Guidelines, provisions under the Companies Act and/or any other
guidelines or circulars issued by the Government or statutory bodies and/or any depository.
.
Trades, Contracts and Transactions Subject to Arbitration
In all trades, contracts and transactions, which are made or deemed to be made
subject to the Rules, Bye-laws and Regulations of the Exchange, the provisions
relating to arbitration as provided in these Bye-laws and Regulations shall form
and shall be deemed to form part of the trades, contracts and transactions and
the parties shall be deemed to have entered into an arbitration agreement in
writing by which all claims, differences or disputes of the nature referred to in
Bye-law 15.5 shall be submitted to arbitration in accordance with the provisions
of these Bye laws and Regulations that may be in force from time to time.

Jurisdiction
All parties to a reference to arbitration under these Bye-laws and Regulations
and the persons, if any, submitting claims under them, shall be deemed to have
submitted to the exclusive jurisdiction of the courts in or any other court, as may be prescribed by the Governing Board or Managing Director or Relevant Authority for the purpose of giving effect to the provisions of the Arbitration and Conciliation Act, these Bye-laws and Regulations.

Construction of References
For the purpose of the Arbitration and Conciliation Act, in all claims, differences
or disputes which are required to be submitted to arbitration in accordance with
the provisions of these Bye-laws and Regulations, wherever the Arbitration and
Conciliation Act leaves the parties free to determine a certain issue, the parties
shall be deemed to have authorized the Managing Director or Relevant Authority
to determine that issue.


Administrative Assistance
For the purpose of the Act, in all claims, differences or disputes which are
required to be submitted to arbitration in accordance with the provisions of these
Bye-laws and Regulations, the parties shall be deemed to have agreed for
administrative assistance of the Relevant Authority in order to facilitate the
conduct of the arbitral proceedings.

Trading Members Liable for Transactions Executed on the ATS
The provisions of these Bye-laws shall become applicable to all claims,
differences and disputes between the parties mentioned therein for all trades,
contracts and transactions executed on the ATS of the Exchange and made
subject to the Bye-laws, Rules and Regulations of the Exchange provided such
trades, contracts and transactions had been entered into between the parties
mentioned therein upto and including the date on which the clearing member or
trading member was either declared a defaulter or expelled or has surrendered
his clearing membership or trading membership.

Explanation :
Rules, Bye-laws and Regulations and circulars, orders, directions, or rulings
issued by the Exchange or Clearing Agency shall form part of all trades,
contracts and transactions.

Reference of the Claims, Differences or Disputes
Save as otherwise specified by the Governing Board or Managing Director or
Relevant Authority, if the value of the claim, difference or dispute is more than
such value, as may be specified in the relevant Regulations on the date of
application, then such claim, difference or disputes shall be referred to an
arbitral tribunal comprising of odd number of arbitrators who are more than
one , as may be decided by the Regulatory Authority from time to time and if
the value of claims, difference or dispute is upto the value referred to above,
then the same shall be referred to an arbitral tribunal comprising a sole
arbitrator .Provided no claim, difference or dispute which is less than such value, as may
be specified in the relevant Regulations on the date of the application, shall be
allowed to be submitted to arbitration by the Exchange and the same may be
decided administratively by the Managing Director or Relevant Authority from
time to time.

Limitation Period for Reference to Arbitration
All claims, differences or disputes referred to in the Bye-laws above shall be
submitted to arbitration within six months from the date of the transaction or from
the date on which the client claims to have given instruction/order to buy or sell a
security or from the date on which the client claims to have paid money or given
a security, whichever is earlier, provided where the claim/complaint is not
settled/resolved through the process of the Investors’ Grievance Cell of the
Exchange within three months of the receipt of the claim / complaint, the
Exchange shall in such cases advise the concerned client to refer the case to
arbitration. The time taken in dispute resolution and/or conciliation proceedings,
if any, initiated and conducted in accordance with the provisions of the Arbitration
and Conciliation Act and these Bye-laws and the time taken by the Managing
Director or Relevant Authority or the investors’ Grievance Cell to administratively
resolve the claims, differences or disputes shall be excluded for the purpose of
determining the limitation period of six months under the Rules, Bye-laws and
Regulations of the Exchange. Any claim made or any difference/dispute raised
by any complainant/aggrieved person, after expiry of the time limit specified
herein, shall become time-barred for the purpose of availing of the remedy under
the Rules, Bye-laws and Regulations of the Exchange and may not, however, be
invalid for seeking remedy under appropriate civil laws.
Provided where a company fails or refuses to submit or abide or comply with any
award in arbitration, such company shall render itself liable for suspension of
trading in its security. The other party in whose favour the arbitration award has
been given shall be entitled to institute legal proceedings to enforce the award.

Penalty on Failure to Submit to or Abide by Award in Arbitration
A trading member/clearing member, who fails or refuses to submit to or abide by
or comply with any award in arbitration between clearing members, between a
clearing member and a trading member, between a clearing member and a nontrading
member, between trading member or between a trading member and a
non-trading member, as may be provided in these Bye-laws and Regulations,
shall be declared a defaulter or expelled by the Relevant Authority, as is
applicable, and thereupon the other party shall be entitled to institute legal
proceedings to enforce the award under the Civil Procedure Code in the same
manner as if it is a decree of the court.

Selection of Arbitrators
The procedure for selection of arbitrators shall be in accordance with the
provisions, as may be specified by the Relevant Authority from time to time.


Procedure for Appointment of Arbitrators
The procedure for appointment of arbitrators, in each case, by the applicant and
the respondent, or the Exchange shall be, as may be provided in the relevant
Regulations from time to time.

Vacancy in the Office of the Arbitrator
At any time before making of the arbitral award, if the office of the arbitrator falls
vacant for any reason whatsoever, including any vacancy due to the illness or
death of the arbitrator or termination of the mandate of the arbitrator by the
Managing Director or Relevant Authority, or for any other reason, the vacancy
shall be filled in by the Managing Director or Relevant Authority by following the
same procedure as specified by the Exchange for appointment of the arbitrator.

Recorded Proceedings and Evidence
Unless otherwise agreed upon by the parties, any arbitrator who has been
appointed by the Managing Director or Relevant Authority to fill the vacancy of

the office of the arbitrator may rely on the proceedings and evidence recorded
earlier or may conduct any hearing afresh for any hearing previously held.






Order or Ruling of Previous Arbitrator
An order or ruling of the arbitrator made prior to the termination of his mandate
shall not be invalid solely because his mandate has been terminated;
Provided that when the termination has been effected pursuant to Bye-laws
15.21 and 15.22.4, the order or ruling of the arbitrator made prior to termination
of his mandate shall become invalid, unless otherwise agreed upon by parties.
Disclosure by Person to be Appointed as Arbitrators
Every person, who is approached in connection with his possible appointment as
an arbitrator, shall disclose to the Managing Director or Relevant Authority in
writing, any circumstances likely to give rise to justifiable doubts as to his
independence and impartiality. If the person discloses any circumstances,
which, in the opinion of the Managing Director or Relevant Authority, are likely to
give rise to justifiable doubts as to his independence and impartiality, then he
shall not be appointed as an arbitrator in respect of such case.
Termination of Mandate of the Arbitrator
The mandate of the arbitrator shall terminate if;
The arbitrator withdraws from office for any reason; or
In the opinion of the Managing Director or Relevant Authority, which
shall be final and binding on the parties, the arbitrator becomes de jure
or de facto unable to perform his functions or for other reasons, fails to
act without undue delay, including failure to make the arbitral award
within the time period prescribed; or
the mandate of the arbitrator is terminated by the Managing Director or
Relevant Authority upon receipt of written request for the termination of
the mandate of the arbitrator from both the parties to arbitration; or the arbitrator discloses any circumstances referred to in Byelaws 15.21
which in the opinion of the Relevant Authority are likely to give rise to
justifiable doubts as to his independence and impartiality; or
the arbitral proceedings are terminated as provided for herein.


Place of Arbitration
The place of arbitration shall be any office of the Exchange, as may be notified
by the Exchange from time to time, or any such other place, as may be
designated by the Exchange or the Regulatory Authority from time to time.

Fees and Charges
The fees for arbitration and the charges for submitting to and for regulating the
proceedings of the reference prescribed in the relevant Regulations shall be
payable in advance and when there is a failure, neglect or refusal on the part of a
party or parties to pay accordingly, the other party shall be responsible for
making such payment in advance without prejudice, however, to its right, if any,
to recover the same from such party or parties failing, neglecting or refusing to
pay. It shall be a condition precedent to the hearing of any reference that the
prescribed fees and charges shall have been paid in advance to the Exchange
by the party or parties to the reference. The Exchange shall collect all such fees
and charges and make the necessary payments for regulating the proceedings of
the reference, provided that the sum collected shall not be greater than the sum
to be paid, and provided further that the fees and charges payable by the other
party shall not be collected from a client, who may lodge a claim against a
trading member, whether active or inactive or a trading member who has been
declared a defaulter or has been expelled from the trading membership if there

is no adequate asset vesting in the Committee for Settlement of Claims Against
Defaulters and such defaulter/expelled trading member has not paid the fees.
his counsel, attorney or advocate, after
obtaining necessary approval from the arbitral tribunal.
.








Differences with Domestic Arbitration and Mediation

International arbitration is a significant variant of the practice in many countries of arbitration, from which it is derived and shares many features. It is not just the fact that international arbitration arises in the context of international contracts that makes it different. In the international dispute resolution community, it is widely accepted to be a different animal entirely, involving different practices and rules, and being represented by a different community of arbitrators and legal practitioners.

Although the procedural laws of many countries provide for "international" arbitrations to take place, an "internationalized" form of a provincial or domestic arbitration practice should not be confused with genuine international arbitration, which can be fairly said to exist outside and beyond the rules of any particular jurisdiction. (See Redfern, Hunter, Blackaby & Partasides, Law and Practice of International Commercial Arbitration (2004), at 1-21, "an international arbitration will usually have no connection with the state in which the arbitration takes place, other than the fact that it is taking place on the territory of that state.").

In the international context, it is also worth making a firm distinction between Arbitration and Mediation, which are both sometimes characterized as forms of ADR (Alternative Dispute Resolution). In countries where mediation is new or struggling to be introduced as a concept, this association has given rise to the misleading impression that mediation is a form of non-binding arbitration, with the arbitrator "proposing" or suggesting outcomes based on an assessment of the parties' rights. In fact, arbitration and mediation are fundamentally different: the former is a determination of legal rights, the latter a form of facilitated negotiation which looks beyond rights and allows the parties to focus on their underlying interests. The one leads to a binding determination (arbitration), the other only in the event the parties agree to settle their dispute on mutually satisfactory terms (mediation).



The Advantages of International Arbitration

For international commercial transactions, parties may face many different choices when it comes to including a mechanism for resolving disputes arising under their contract. If they are silent, they will be subject to the courts of wherever a disaffected party decides to initiate legal proceedings and believes it can obtain jurisdiction over the other party. This may not sit well with parties that need to know at the time of entering into their contract that their contractual rights will be enforced. The alternative to silence is to specify a method of binding dispute resolution, which can be either litigation before the domestic tribunal of one of the parties or arbitration. If the parties choose to resolve their disputes in the courts, however, they may encounter difficulties. The first is that they may be confined to choosing one or the others' courts, as the courts of a third country may decline the invitation to devote their resources to deciding a dispute that does not involve any of that country's citizens, companies, or national interests. The second, and perhaps more significant difficulty, is that judicial decisions are not very "portable" in that it is difficult and sometimes impossible to enforce a court decision in a country other than the one in which it was rendered.

Neutrality and Enforceability of Arbitration Awards

The ability to resolve disputes in a neutral forum and the enforceability of binding decisions are often cited as the main advantages of international arbitration over the resolution of disputes in domestic courts. And there is solid legal support for this view. An international award originating in a country that is a party to the New York Convention of 1958 may be enforced in any other country that is also a signatory, as if they were rendered by domestic courts. Here is an example of this important concept: assume that parties from countries A and B have agreed to resolve their disputes in country C, and all three countries are parties to the New York Convention. This will mean that even though the arbitration will take place in country C, the resulting award can be enforced in the countries A (or B), as if it were a court decision rendered in the domestic courts of that country. (By contrast, there is no equivalent treaty for the international recognition of court decisions, although a draft treaty was initiated in 2005.)

Thus, parties to international contracts can decide to site their disputes in a third, neutral country, knowing that the eventual award can be easily enforced in any country that is a signatory to the New York Convention, which has been ratified by a significant majority of commercial nations, with notable exceptions like Qatar, which not having ratified the New York Convention cannot be assumed to give effect to arbitration decisions rendered in other countries. An international award therefore has substantially greater executory (legal) force than a domestic court decision.



International Commercial Arbitration

The resolution of disputes under international commercial contracts is widely conducted under the auspices of several major international institutions and rule making bodies. The most significant are the International Chamber of Commerce (ICC), the International Centre for Dispute Resolution (ICDR), the international branch of the American Arbitration Association), the London Court of International Arbitration (LCIA), the Hong Kong International Arbitration Centre, and the Singapore International Arbitration Centre (SIAC).

Association of international arbitration (AIA)

The association for international arbitration (AIA) was founded in 2001 in Paris. The AIA works towards promotion of ADR in general and Arbitration in particular, as a means of dispute resolution and strives to bring together the global community in this field, namely the professionals such as Judges, Lawyers, Arbitrators, and Mediators or as Academicians as well Research Scholars and Students. With this unique blend of people, it is our endeavor to inculcate an interest in ADR, not only in the professional sphere but also create awareness and interest in it among budding professionals in law schools/universities all around the globe. In the past AIA organized a Conference on critical issues raised in the “The Commission of The European Communities” Green Paper on Alternative Dispute Resolution in Civil and Commercial Law (Paris 2003).

For the present, the Association for International Arbitration would work from the intellectual aspect and endeavor to bring together all interested professionals in this field and work towards finding ways and means of promoting cooperation and understanding between them, to the common benefit of all.












International Investment Arbitration

The last few decades have seen the promulgation of numerous Bilateral Investment Treaties (BITs), as well as Multilateral Investment Treaties, which are designed to encourage investment in signatory countries by offering protections to investors from other signatory states. One of the significant features of BITs is that they provide investors with the ability to resolve disputes with the host states before the International Centre for the Settlement of Investment Disputes (ICSID).

]

INCOTERMS & EXPORT CONTRACT

International Commercial Terms (INCOTERMS) BY RAMGOPAL
The INCOTERMS (International Commercial Terms) is a universally recognized set of definitions of international trade terms, such as FOB, CFR and CIF, developed by the International Chamber of Commerce (ICC) in Paris, France. It defines the trade contract responsibilities and liabilities between buyer and seller. It is invaluable and a cost-saving tool. The exporter and the importer need not undergo a lengthy negotiation about the conditions of each transaction. Once they have agreed on a commercial term like FOB, they can sell and buy at FOB without discussing who will be responsible for the freight, cargo insurance, and other costs and risks.
The INCOTERMS was first published in 1936---INCOTERMS 1936---and it is revised periodically to keep up with changes in the international trade needs. The complete definition of each term is available from the current publication---INCOTERMS 2000. The publication is available at your local Chamber of Commerce affiliated with the International Chamber of Commerce (ICC).
Many importers and exporters worldwide are accustomed to and may still use the INCOTERMS 1980, the predecessor of INCOTERMS 1990 and INCOTERMS 2000.
Under the INCOTERMS 2000, the international commercial terms are grouped into E, F, C and D, designated by the first letter of the term (acronym), as follows:













International Commercial Terms( INCOTERMS )
GROUP
TERM
Stands for
E
EXW
Ex Works
F
FCA
Free Carrier
FAS
Free Alongside Ship
FOB
Free On Board
C
CFR
Cost and Freight
CIF
Cost, Insurance and Freight
CPT
Carriage Paid To
CIP
Carriage and Insurance Paid To
D
DAF
Delivered At Frontier
DES
Delivered Ex Ship
DEQ
Delivered Ex Quay
DDU
Delivered Duty Unpaid
DDP
Delivered Duty Paid

In practice, trade terms are written with either all upper case letters (e.g. FOB, CFR, CIF, and FAS) or all lower case letters (e.g. fob, cfr, cif, and fas). They may be written with periods (e.g. F.O.B. and c.i.f.).
In international trade, it would be best for exporters to refrain, wherever possible, from dealing in trade terms that would hold the seller responsible for the import customs clearance and/or payment of import customs duties and taxes and/or other costs and risks at the buyer's end, for example the trade terms DEQ (Delivered Ex Quay) and DDP (Delivered Duty Paid). Quite often, the charges and expenses at the buyer's end may cost more to the seller than anticipated. To overcome losses, hire a reliable customs broker or freight forwarder in the importing country to handle the import routines.
Similarly, it would be best for importers not to deal in EXW (Ex Works), which would hold the buyer responsible for the export customs clearance, payment of export customs charges and taxes, and other costs and risks at the seller's end.


EXW ( the named place)Ex Works
Ex means from. Works means factory, mill or warehouse, which is the seller's premises. EXW applies to goods available only at the seller's premises. Buyer is responsible for loading the goods on truck or container at the seller's premises, and for the subsequent costs and risks.
In practice, it is not uncommon that the seller loads the goods on truck or container at the seller's premises without charging loading fee.
In the quotation, indicate the named place (seller's premises) after the acronym EXW, for example EXW Kobe and EXW San Antonio.
The term EXW is commonly used between the manufacturer (seller) and export-trader (buyer), and the export-trader resells on other trade terms to the foreign buyers. Some manufacturers may use the term Ex Factory, which means the same as Ex Works.

FCA ( the named point of departure)Free Carrier
The delivery of goods on truck, rail car or container at the specified point (depot) of departure, which is usually the seller's premises, or a named railroad station or a named cargo terminal or into the custody of the carrier, at seller's expense. The point (depot) at origin may or may not be a customs clearance center. Buyer is responsible for the main carriage/freight, cargo insurance and other costs and risks.
In the air shipment, technically speaking, goods placed in the custody of an air carrier are considered as delivery on board the plane. In practice, many importers and exporters still use the term FOB in the air shipment.
The term FCA is also used in the RO/RO (roll on/roll off) services.
In the export quotation, indicate the point of departure (loading) after the acronym FCA, for example FCA Hong Kong and FCA Seattle.
Some manufacturers may use the former terms FOT (Free On Truck) and FOR (Free On Rail) in selling to export-traders.

FAS ( the named port of origin)Free Alongside Ship
Goods are placed in the dock shed or at the side of the ship, on the dock or lighter, within reach of its loading equipment so that they can be loaded aboard the ship, at seller's expense. Buyer is responsible for the loading fee, main carriage/freight, cargo insurance, and other costs and risks.
In the export quotation, indicate the port of origin (loading) after the acronym FAS, for example FAS New York and FAS Bremen.
The FAS term is popular in the break-bulk shipments and with the importing countries using their own vessels.

FOB ( the named port of origin)Free On Board It constitute the following:-
Ex-work price
packing charges
inland transportation cost
Wharfage porterage
Customs dues
Export duty, if any.
Cost of checking operations like checking of quality, measure, weight or quantity, if any.
FOB price actually comprises FOB port town plus charges incidental to actual shipment of goods but minus ocean fright and marine insurance charges. This quotation is very common in case where goods are exported through Export House and merchant exporters as also to such overseas customers in whose country import duty is charged on FOB Value at the port of shipment.
FOB transactions are carried out on a “mixed contract” basis, which implies that ‘exporter would base his quotation and costing on FOB basis but in addition act on behalf of his customer in arranging shipment, procuring the bill of lading and also arranging insurance.
The term i.e. FOB (named port of shipment) can only be used for sea or inland waterway transport . When the ship’s rail serves no practical purpose, such as in the case of “roll-off or container traffic, the FCA term is more appropriate.

CFR ( the named port of destination)Cost and Freight
CFR means the seller (exporter) must pay the cost and fright necessary to bring the goods to the named port of destination (and not departure or loading) but the risk of loss or dames to the goods, as well as any additional costs due to events occurring after the time the goods have been delivered on board the vessel, is transferred from the seller to the buyer when the goods pass the ships rail in the port of shipment. It requires the seller to clear the goods for export.
This term can also be used for sea and inland waterway transport. When the ship’s rail serves no off or container traffic, the CPT term in more appropriate to use.
It is equivalent to the term “C&F” used normally
CIF ( the named port of destination)Cost, Insurance and Freight
It is most commonly used in export transactions, includes FOB price plus cost of ocean freight and marine insurance, up to the port of destination. In CIF quotation, care must be taken to state the name of the port to which the goods are intended to be shipped .However, if the “CIF price is applicable all over the world, the quotation should be “CIF Main Port”.
CIF does not, however, include any charges for unloading the goods or for import duties, if any, in the country of importation .It is the preferred type of quotation because the importer can know what exactly the goods will cost him at his port. Moreover, it means fewer responsibilities for him because it is the export who takes all risks for fluctuations in ‘rates of insurance and freight, unless otherwise specified in the export contract’.
Thus, it is CFR plus marine insurance against the buyer’s risk of or damage to the goods during the carriage. The seller contracts for insurance and pays the insurance premium. It can only be used for sea and inland waterway transport. When the ship’s rail serves no practical purposes such as in the case of roll-on /roll-off or container traffic, the CIP term is more appropriate to use.
CIF³ & c
Cost, Insurance and Freight & commission
In this type of quotation, besides cost, insurance and freight, commission charged by a middleman, if any, is included in the price. It may also include the commission of the exporter which he may charge the buyer (importer) while acting on his behalf.
The small letter ‘c’ must, therefore, be explained clearly in the export quotation/contract as it may sometimes relate to the commission of the import agent.
CIF &C³ or FOB & C³
These are quoted where the exporter assumes the risk of exchange fluctuations that may occur between the date of contract acceptance and payment.
CIF & c & I³
The word’c’ & ‘I’ in this quotation stands for commission & interest and, hence, it makes clear to the buyer that bank’s interest and commission are payable by him. This type of quotation is used when export is affected to distant places in which case the settlement of the bill of exchange drawn on the importer takes some time.
CIF ex³
It includes cost, insurance, freight and exchange. The expression ‘exchange’ is, however, ambiguous in this type of quotation. Sometimes, it refers to the banker’s commission or charge and sometimes to exchange fluctuations. When it refers to exchange fluctuation , it means that the purchase price is not affected by the subsequent rise or fall of the agreed currency of payment between the exporter and the importer.
CPT ( the named place of destination)Carriage Paid To
The delivery of goods to the named place of destination (discharge) at seller's expense. Buyer assumes the cargo insurance, import customs clearance, payment of customs duties and taxes, and other costs and risks.
In the export quotation, indicate the place of destination (discharge) after the acronym CPT, for example CPT Los Angeles and CPT Osaka.

CIP (the named place of destination)Carriage and Insurance Paid To
The delivery of goods and the cargo insurance to the named place of destination (discharge) at seller's expense. Buyer assumes the import customs clearance, payment of customs duties and taxes, and other costs and risks.
In the export quotation, indicate the place of destination (discharge) after the acronym CIP, for example CIP Paris and CIP Athens.

DAF ( the named point at frontier)Delivered At Frontier
The delivery of goods to the specified point at the frontier at seller's expense. Buyer is responsible for the import customs clearance, payment of customs duties and taxes, and other costs and risks.
In the export quotation, indicate the point at frontier (discharge) after the acronym DAF, for example DAF Buffalo and DAF Welland.

DES ( the named port of destination)Delivered Ex Ship
The delivery of goods on board the vessel at the named port of destination (discharge), at seller's expense. Buyer assumes the unloading fee, import customs clearance, payment of customs duties and taxes, cargo insurance, and other costs and risks.
In the export quotation, indicate the port of destination (discharge) after the acronym DES, for example DES Helsinki and DES Stockholm.

DEQ ( the named port of destination)Delivered Ex Quay
The delivery of goods to the quay (the port) at destination at seller's expense. Seller is responsible for the import customs clearance and payment of customs duties and taxes at the buyer's end. Buyer assumes the cargo insurance and other costs and risks.
In the export quotation, indicate the port of destination (discharge) after the acronym DEQ, for example DEQ Libreville and DEQ Maputo.

DDU (the named point of destination)Delivered Duty Unpaid
The delivery of goods and the cargo insurance to the final point at destination, which is often the project site or buyer's premises, at seller's expense. Buyer assumes the import customs clearance and payment of customs duties and taxes. The seller may opt not to insure the goods at his/her own risks.
In the export quotation, indicate the point of destination (discharge) after the acronym DDU, for example DDU La Paz and DDU Ndjamena.

DDP ( the named point of destination)Delivered Duty Paid
The seller is responsible for most of the expenses, which include the cargo insurance, import customs clearance, and payment of customs duties and taxes at the buyer's end, and the delivery of goods to the final point at destination, which is often the project site or buyer's premises. The seller may opt not to insure the goods at his/her own risks.
In the export quotation, indicate the point of destination (discharge) after the acronym DDP, for example DDP Bujumbura and DDP Mbabane.
Export Contract

There are certain peculiar characteristics of international trade contracts which are not present in those for sale of goods in domestic market. The parties to all international trade contracts provide all their relative rights and obligations in several ways.
As far as export by Indians is concerned, all sale transactions whether in the domestic market or abroad are covered by the Sales of Goods Act. 1930 in the absence of any provisions to the contrary agreed to by the buyer and the seller.
The Indian” Sale of Goods Act, 1930” is generally based on common law system and, therefore, it bears a close resemblance to the relevant enactments on the subjects in U.K., the U.S.A. and the other Commonwealth countries which derive their laws from the common law systems”.
According to Section 5 of this Act,” A contract of sale is made by an offer to buy or sell goods for a price and the acceptance of such offer. It may provide for delivery to be made and price to be paid immediately or in future. It may be made orally or it may be implied from the conduct of the parties in each case”.

Standard Contract Forms:-
Notwithstanding the efforts are made by various national/international organizations like the United Nations Commission on international Trade Law (UNCIRAL) the Economic Commission for Europe (ECE) the Council for Mutual Economic Aid (CMEA), etc., “there is still no perfection or a device which would give the parties an accurate and complete idea of each others understanding of the various trade terms, the commercial practices and the rights and obligations vis-à-vis each other so that misunderstandings are practically eliminated. There is considerable diversity and plurality of commercial laws and practices in various parts of the world.”

General Conditions:-
On account of the fact that it is impractical to evolve a comprehensive standard contract form which is applicable to all trades and commodities, efforts should be made to put in the letter of sale/purchase which may as well be termed as export or sale/purchase contracts, certain minimum and important general requirements or standard general conditions. These conditions should give the parties a clear cut idea of trade transactions and also draw their attention to all important terms which should generally be included in international trade contracts.


Elements of Export Contracts
An export contract between the exporter and the importer should determine the exact point at which the expense and responsibilities change from seller to buyer it should be as explicit as possible and without any ambiguity regarding the exact specification of goods and terms of sale including export price mode of payment storage and distribution methods type of packaging part of shipment delivery schedule etc.
All the terms have a special connotation and meaning in international trade which must be understood by the parties particularly these days when there is by and large complete absence of sale and purchase or of transactions on the basis of as is where is . The different elements of an export contract are discussed below.

Products, standards and specifications

The first important element of an export contract is explicitly state the following
Product name including technical name if any
Sizes if any in which to be supplied.
Standards specifications national or according to specific requirements of buyer or as per the sample approved by him. Details of specification of the sample must be given in the contract.

Quantity

Put the quantity both in figures and words clearly specify whether it is in terms of number, weight or volume .if the quantity refers to goods by weight or measurement specify the nature of the same for example weight could be in terms of a metric ton of 1000 kgs. 2200 lb etc.
3. Inspection

Whereas a number of goods are now subject to pre shipment inspection by designated agencies the foreign buyer may still stipulated his own conditions and manner of inspections by any other agency.

4. Total value of the contract

The total value of the contract may also be put in both figures and words specifying the currency along with the name of the country.

5. Terms of delivery

Also known as the type of price terms of delivery should be clear incorporated in the contracted it could be a FOB, c.i.f., c & f etc.

6. Taxes duties &charges

The taxes duties and charges relating to exportation of goods are normally a part of the price terms of delivery quoted by the seller. Similarly, such levies if any in the country of importation are to the buyer. Nevertheless the contract should be explicit on this account so that no misunderstanding arises between the parties.

7. Period of delivery/ shipment etc.

As distinguished from terms of delivery period of delivery/ shipment relates to the actual date or dates of delivery/ shipment. In addition it must states the places of dispatch and delivery because if it is not designated the place of the business of he seller is usually deemed to be the place of delivery. The exact date of delivery should be essentially put in the contract as expressions like immediate delivery or prompt delivery is quite ambiguous. Moreover, it should be clarified whether the time for delivery will run from the date of the contract or from the date of receipt of the date of the contract or from the date of receipt of the notice of issuance of the import licence by the seller, etc.

Part- shipment/transshipment / Consolidation by cargo scheme.

The contract must clearly state whether part-shipment/transshipment are agreed upon by the parties. In the absence of such stipulations, a dispute generally arises when the seller (exporter) is unable to ship the goods in one lot or directly to the port of delivery (destination). If any, of the port of transshipment and the number, if any of the port shipment agreement and the goods are likely to be dispatched (shipped)under the consolidation of export-Cargoes scheme ,do make a reference to the same in the export contract. The incorporation of such a clause in the L/C opened by foreign buyer in favour of exporter will facilitate realization of export proceeds.

8. Packing, Labeling & Marking

The export contract must be as explicit as possible about the type of package and particular labels and marking requirements, if any. These requirements are normally quite different in case of export consignments and such involve additional cost necessitating an upward revision in export price. The language, colors of labels and even of marking have care of as required by the buyer.

9. Terms of Payment-Amount, Mode & Currency

The mode and manner of payment for the goods to be contracted vary from contract to contract depending upon the “term” settled between the parties. While quoting different payment terms, the exporter should specify as to whether the prices are based on current rate of exchange of the Indian rupee on the basis of another currency. It should also be stated whether fluctuations in the rate of exchange are to the account of the seller or buyer.

10. Discounts & Commissions

Depending upon the source of export enquiry and the intermediary involved, if any, in the execution of an order, the contract should be specify the amount of discount/commission to be paid and by whom. The basis of calculation of commission and the rate of the same may also be clearly stipulated. Some exporters may not prefer to include the term” commission/discount“ in their export contracts as it may encourage a buyer to ask for commission though the seller does not want to offer the same.

11. Licences and Permits

Normally, all export/import transactions involve obtaining of licences and permits/quotas to export/import in the country of exportation/importation. The problem with regard to import licences in the buyer’s country is sometimes more prominent and acute in different developing countries. The parties should, therefore, clearly state as to whether the export/import licences and whose responsibility and expense it would be obtain the same.

12. Insurance

It is important in international trade contracts to provide for insurance of goods against loss, damage or destruction during the voyage as it takes a long time before they are received by the buyers. The extent of insurance risk & its incidence needs to be clearly described & proper insurance policies obtained.

13. Documentary requirement

International trade transactions usually involve certain special documents which can be broadly divided into four categories:-

(i) Document required for exportation/importation of goods.

(ii) Documents needed by the buyer for taking delivery of goods.

(iii) Document relating to the payment.

(iv) Special documents depending upon the nature of goods & the conditions of sale. For ex. certain engineering goods may involve documents relating to erection, repair, maintained.

Documents commonly asked for & relating to the four diff. aspects stated above include:-

(i) Bill of exchange

(ii) Commercial invoice

(iii) Bill of lading

(iv) Insurance policy

(v) Letter of credit

(vi) Technical documents

Then, there may be certain conditions or cost attached to the preparation, & presentation of documents which need to be stated clearly the party who would bear the same.

14. Guarantee

The element of “guarantee” is usually dependent upon the “nature of goods their quality, the use for which they are intended & the like” The guarantee usually extend in respect of “faulty design, material or work-man ship & to such other characteristics as may be agreed upon between the parties”. Hence it is not a general element of contract as “guarantee” is applicable to specified goods only,

15. Force Majeure or For Non-Performance of Contract

However faithfully one may attempt to fulfill the conditions of contract, certain supervening circumstances render it impossible for a party to the contract to fulfill its obligations under the contract. Therefore, it is desirable for the parties to include in the contract certain provisions defining the circumstances which would relive them of their liability for non performance of their contract. Such provision which are also known as Force Majeure” are intended to deal with the relief which may be available to either party to the contract in the event of supervening circumstances taking place after the conclusion of the contract.

Definition of Force Majeure
The best approach in regard to the definition of “Force majeure” is to list the important event and circumstances which are agreed upon between the parties as specific grounds for relief and further add general wards to cover up anything that may have been omitted, e.g. or any other cause beyond the control of the concerned party which could not have been foreseen or avoided by the exercise of due diligence and so it be impossible of performance.

16. Remedies

It is always better to include in sale /purchase contract certain specific remedies in respect of deferent default of contractual obligation by any of the parties, mandatory should be in consonance with the mandatory provision of the applicable law to the contract. The Indian Council of Arbitration has suggested various clauses providing for possible remedies against contract. Exporters may, therefore, approach the ICA for obtaining its expert advice.

17. Arbitration

Last but not least id the need for providing an arbitration clause for amicable and quick settlement of disputes or difference that may arise between the parties. The various arbitration clauses and other aspect are dealt with in a separate chapter on Trade Disputes.


Model Contract Form

There is no particular form prescribed for the drawing up of trade contracts, except that they must fulfill all the essential requirements of a valid contract under the law applicable thereto.

Despite the difficulties in preparing a model contract from applicable to all trades, an attempt is made here to give a specimen export contract. It provides for various elements of export contracts described in fore going paragraphs & can be modified to suit the needs of exporters/importers.






























Specimen Export Contract


ABC( international India) Telex:
W-13, C.P. Cable:
New Delhi-110001 Phone:
Fax:
Contract NO ……………. Date……………….


CONTRACT

We have agreed (to buy from) (or sell to) you this day....................... The following:-

Product, standards & specifications.
Quality
Inspection
Total value of the contract
Terms of delivery
Taxes, Duties & Charges
Period of Delivery/ Shipment or Transshipment
Packing, Labeling & Making
Terms of payment
Discount & commission
Licenses & permits
Insurances
Documentary requirements
Guarantee
Force Majeure
Remedies
Arbitration

For & on behalf of
ABC (International)INDIA
Director

This contract is subject to the condition overleaf or attached here with. Received from ABC (International) INDIA, NEW DELHI, Contract No............ Dated................... for which we hereby confirm.
For & on behalf of………………………
Signature……………….

Please sign & return this portion


Proforma Invoice

Along with the export contract, a Proforma invoice is also dispatched to the foreign buyer, even if not asked for him.
This is a preliminary, provisional, and temporary invoice covering a contemplated shipment. It is advisable to send this invoice to the importer along with the quotation and terms set out in the contract form. The proforma invoice is usually made out in the exporter’s own commercial invoice forms and contains estimates and is not intended to have the status of bill for payment. It is useful to buyer in the following ways.

(i) It helps the importer to obtain an import licence in cases where proforma invoice is insisted upon by the authorities concerned.

(ii) L/C may be opened in accordance with this ‘invoice’.

(iii) It may help eliminate common mistake like incorrect spelling or description of goods, etc.





















Sample of Proforma Invoice


To …………..., 2009

XYZ International
P.O.Box 1867
London MK 46 ABN (England)

Proforma Invoice No. -------------------

Your reference No…………..dated………………for the supply ………………Of ………………………as per the terms and conditions set out herein and/or the export (sale) contract to be signed between us, to be dispatched by sea/air/post to……………….. (Port/place of destination).


Description of Goods
& Specifications
Code
Size
Quantity
Unit price &Currency
f.o.b./c.&f./c.i.f. etc
Amount










































E.&O.F





Prepared by:-




Checked by:-



For ABC(India) International




Director (Sale)


NB. See’ Terms &Conditions’ below:↓
Terms & Conditions

Price : f.o.b. (Mum./Cal./Chen./Cochin)
& C. &f. ( )
Validity c.i.f ( )

Insurance
& freight : Only approximate charges are given in this invoice. Actuals may vary either side
Payment Terms : By irrevocableL/C confirmed by a bank in New Delhi for full Amt.
Commission : Nil or ……..%

Pre-shipment : By us or Export Inspection Agency
Inspection

Certificate of : As advised
Origin

Import : Buyer’s responsibility
Lincence

Port of Shipment : Mum./Cal./Chen./Cochin

Shipping &
Insurance co. : As available at the time of shipment

Delivery period : Goods to be delivered (loaded for shipment) with in ………… days of the receipt of firm order & its confirmation by us.

Part ship-ment : Part / partial shipment permissible / not perm

Transshipment : permissible / not perm

Net weight : Each pack of…. Kegs

Export
License or visa / : our responsibility
Quota













References

Export, What where & How (Parasram)

Web Pages:

Inco terms.mht

www.export911.com

Google.com