Unlawful Release of Consignment and Payment Recovery

Pharma

At the time of beginning of the COVID-19 pandemic, a trading company based in South Asia purchased pharmaceutical raw materials (Azithromycin Dihydrate) from a Chinese supplier. The goods were shipped via air freight under a formal sales contract.
 
1. The sales contract contains the payment terms “Bank Contract At Sight”. Which means, the consignee/Buyer has to pay the amount to the supplier first, then documents shall be released, as well as goods.
 
 
2. The buyer assured the supplier/creditor several times to pay the dues soon as well as release the consignment. However, the Buyer/defaulter failed to honour his commitments.
 
 
3. Supplier/creditor reached us to recover the dues from the Defaulter/supplier.
 
 
4. We established the contact with the defaulter/Buyer and initially, they informed that they have arranged 50% partial payment and arranging remaining amount & assured to clear the dues in next 7 days. However, the partial payment was not possible without approval from the creditor/supplier’s bank. On debtor’s request, we arrange the partial payment swift message from the creditor/supplier’s bank to the defaulter/Buyer’s bank and allowed them to release partial payment. But defaulter/Buyer failed to honour his commitments.
 
 
5. We investigated the matter and approached to the relevant authorities to know the factual position of the matter and consignment. It came to our knowledge that the defaulter/Buyer has already released the consignment without paying money to the supplier/creditor. The authorities verbally stated that they have released the consignment to the consignee as per their norm/presentation of original Airway Bill. 
 
 
6. On other hand, the defaulter/Buyer also instructed their bank to return back the original shipping documents to the supplier/creditor. As per instruction, the bank returned back the original shipping documents to the supplier/creditor’s bank. 
 
 
7. Later, after our efforts, we got the relevant documentary proofs from the authority on behalf of which the consignee had released the goods and had illegally managed to get hold of the product without making payment to the supplier/creditor' and/or honouring the payment terms.
 
 
8. We strongly approached to the authority along with proof/copy of Airway Bill, (who had helped to defaulter/Buyer to get the consignment), which bears the endorsement & is signed by their officials in favour of defaulter/Buyer. We pushed the authority to pay to the creditor as their involvement is are main key point to default on this payment.
 
 
9. After our strong followups, the creditor/supplier received their payment from the defaulter/buyer.