3rd Party Inspection and Testing Agencies
Anirban
(Querist) 14 September 2010
This query is : Resolved
I am involved in the trade of bulk commodities like iron ore/coal/steel, etc.
Recently, we are experiencing that there in few of our shipments there is a vast difference between the chemical analysis as declared by the agencies appointed at the loadport (say, India) and chemical analysis declared for the same cargo at the discharge port (say, China).
We buy provisionally basis loadport results and sell basis discharge port results. Accordingly, we incur heavy losses when there is such huge discrepancy.
As I understand, as per ISO standards there could be variation in analysis results upto 0.50% between 2 samples drawn from same cargo. But in the instant cases, the differences are more than 5% and in some cases 10%.
My questions are -
a. what is the legal recourse that I can have against the Inspection and Testing Agency whose result is erroneous?
b. who gives license to such Inspection and Testing Agencies and whether such license can be cancelled?
Regards,
Anirban Sen
Kiran Kumar
(Expert) 14 September 2010
firstly find out the rules the governing rules in this regard.
thereafter give a representation to the concerned department mentioning about the comparative difference and analysis.
in case the representation is not decided in view of constitutional mandate and you find prejudice and illegality on the part of govt. then you may approach High Court by way of Writ Petition.
s.subramanian
(Expert) 15 September 2010
You have to first of all ascertain as to which Inspection and Testing Agency is at fault since two agencies are involved one in India and the other abroad.Without doing it you cannot fix the responsibility. Once this is ascertained then you have to think of the remedial measures. If the Indian Agency is at fault you can take appropriate proceedings against it for damages for its erroneous reports and the consequent loss suffered by you. If the foreign agency is at fault,you have to complain to the appropriate authority at the discharge port for necessary action.If the Indian agency has wantonly committed this fraud, then you can ask for the cancellation of its license with concrete proof and strong evidence.
B.R. BHALLA, ADVOCATE
(Expert) 15 September 2010
In international trade, the normal practice is that the buyer himself recommends and appoints the Third Party Inspection of his choice and the charges too are paid by him. It is for him to be very selective in appointing the Third Party Inspection Agency. There are few International Inspection Agencies which are accredited ones and command good reputation. Assume that your Inspection has not neglected while examining the material under shipment but the supplier has shipped different lot than what was shown and inspected by your Agency, then how you claim damages from them. Secondly these Agencies are indepently working without any Registration and you cannot resort to cancellation of their licence. There is no licence for such kind of Consultancy establishment. You can, however, file suit for compensation against the supplier in International Dispute Courts.
Anirban
(Querist) 17 September 2010
Dear Mr. Bhalla,
Thanks for your message. Actually, the stands taken by the assayers are -
1. the samples they took during the loading/discharging of the vessel were analyzed to be of the grade they reported. It could be possible that other samples collected by other agencies were of different grade.
2. they are responsible for sampling and analysis of the cargo and no way confirm that the cargo inspected/analyzed were indeed loaded into the vessel.
In practical scenario what happens is that the samples are drawn by lowly paid staff of the sampling agency (in India, about Rs. 3000 per month). When a supplier wants to cheat the Buyer, they just try to bribe the sampler and get the samples changed. The sampling/assaying company will most probably never know that the samples were changed and would report the grade of the changed samples.
With the stand taken by the sampling agencies vis-a-vis the vulnerability of the system, I am at a loss as to how to bind the sampling agency to the results they declare for a shipment.
