A Baffling Business Legal Case
19 February, 2018
KHARTOUM (Sudanow) - This is one of the rare judicial cases in the world of business, in fact a legal precedence in the international trade.
By its consequences, the case is seen to have increased the need for insuring the Sudanese exports and not simply ships a commodity without insuring it.
Dr. Hazim Awadalkareem Mohammad al-Haj, attorney of an export company, tells Sudanow that in 2004 his company contracted a local bank to fund a 4000 - ton shipment of sesame destined for export, the bank funds the shipment and the company runs the rest of the operation and distributes the profits.
The commodity was shipped on an Egyptian vessel from Port Sudan and headed to the Mediterranean via the Suez Canal.
Two weeks later the company received note that the ship was drowned by a strong wind.
Because the commodity was not insured, the bank filed a case against the company’s general manager, presenting the letter of guarantee as evidence in court. The manager was incarcerated in jail, pending the payment of the bank credit.
The company’s Attorney, Dr. Hazim, rejected the legal measure against the company’s manager arguing that commodity insurance was the bank’s duty not the company’s.
Ten days later the company’s London office chief sent a message saying he had read in one of the British newspapers that the authorities in Cyprus had intercepted a ship they suspected to belong to their foes in the northern part of Cyprus. The ship was detained and its crew put under arrest. The paper’s story said the ship was carrying a shipment of sesame. The company’s London office tipped the company that the sesame might be theirs.
The company immediately dispatched a delegation, lead by Dr. Hazim, to Cyprus to verify whether the shipment was theirs or not.
The Cyprus authorities notified the company’s delegates that ship’s crew members had no identity papers and allowed the delegates to meet them. The company’s delegates could identify one of the crew members who happened to be a national of “ a neighboring country.”
When the Cyprus police pressurized the man, he confessed to have leased another ship from the Suez free zone, moved the sesame shipment on board after changing the original bags and blew up the ship in the Mediterranean. He struck a deal with some traders to buy the sesame in the high seas, a deal which usually occurs when the commodity has no legal papers. Such a commodity is usually sold at far less than the market price. To justify this conduct, the man said the ship was aging and that he wanted to use its insurance money to buy another ship. He said he did not want the sesame shipment to sink with the ship he decided to blow up, so he moved it to another ship to later on sell it at any price.
The company’s delegates remained in Cyprus while the authorities continued to look for a clue that the sesame belonged to their company.
One day a police detective called and asked the delegates about the name of their company and they told him. He immediately produced five bags the police had found among the bags changed in the Suez free zone. On the five bags the name of the company and in its Khartoum addresses could clearly be read. That was sweeping evidence that the sesame belonged to the company.
Upon the company’s request, a court of justice approved the removal of the sesame from the ship to a store onshore at the company’s expense.
Ten days later the court ordered the commodity to be sold in auction, fetching four folds of the expected profit.
The ship captain was condemned by the court, being also sued by an insuring company that accused him of destroying the ship to collect the insurance. He received a three-year prison sentence. In jail he lost his mind.
The irony in this case, says Dr. Hazim, is that the British newspaper that first published the news about the sesame shipment had kept close contact with the company to get daily updates on the matter. And when the company’s delegation arrived in Cyprus, the paper’s editor-in-chief personally called on them and continued to eagerly follow and publish the court proceeding, day by day. And after the trial was over he held a party in their honor. Asked why he was so concerned, he disclosed that the case had raised his paper’s distribution” because there are curious readers who continued to be persuaded by the expression: To be continued tomorrow…” .
In addition, the paper had used to publish daily ad telling the readers to expect interviews with the company’s manager and its consultants.
The paper had virtually conducted a lengthy interview with the chief of the company’s London office.
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YH/AS
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