Grain Board of Iraq

18 March 2013


Some Members may already be aware that the Grain Board of Iraq (GBI), part of the Ministry of Trade, has recently introduced a Regulation which requires the Shipowner’s “P&I Representative” to sign various outturn documents upon completion of discharge. 

The new requirement applies to the Outturn Report, the Statement of Facts and any Shortage Report or Protest against Shortage/Damage. The GBI has advised that the latter will be presented in the following form:

“This is to inform you that after receiving the (rice OR wheat) from your ship we found out shortage in the shipment amounting…….as per shore scale, therefore we present this protest for reserving our rights. Please inform the concerned people.” 

The signature provided cannot be annotated “for receipt only”, given on a “without prejudice” basis or otherwise subjected to any form of reservation or qualifying remarks.  Where the P&I correspondent refuses to sign the documents on this basis, initial indications are that affected ships will be detained at the discharge port until the situation is resolved.  

There are obvious concerns about this development.  Signing such documentation without reservation may be interpreted as acknowledging the existence of damage or extent of any shortage as described.  This could undermine Owners’ ability to defend any cargo claim which is subsequently presented.  It is unclear whether the Regulation has the force of law in Iraq, but there may be limited scope for recourse to the local courts for assistance in view of the fact that the GBI is a state organisation.  

Members should therefore give careful consideration to how to protect their position if they are negotiating a voyage or receive orders to proceed to Iraq.  In so far as existing time charters are concerned, there may be arguments available that any additional liabilities to which Members become exposed may be recoverable from Charterers under an implied indemnity.  In negotiating future fixtures, in particular Voyage Charters or Time Charter Trips which specifically permit trade to Iraq, Members should consider the allocation of risk and whether a protective clause should be included which will pass the risk to their Charterer and down the charterparty chain.

In the meantime, the International Group of P&I Clubs (the IG) are seeking to persuade GBI that the “P&I representative” is not an appropriate representative of the Owners for these purposes.  Instead, the IG’s position is that any documents produced by GBI purporting to record the condition or quantity of cargo discharged should instead be submitted to either the Master or the ship’s agent on a “receipt only” basis without any pressure to acknowledge on an unqualified basis that the statements made by them are necessarily accurate. 

Should any Members receive a request from the local correspondent / GBI to sign any of the above documents other than on a “Without Prejudice and for receipt only” basis, they should contact the Club for advice as a matter of urgency. It is always our recommendation that no documents should be signed without first contacting the Club in any event.