Auction of the cargo before Public Notary

After a few years of implementation of the Spanish Shipping Act, we have now precedents which allow to provide a well-grounded feedback on several topics. One of those is the proceedings before Public Notary to auction abandoned cargo and get settlement of outstanding freight/charges.

– Who can apply for it?

The carrier, whether the actual carrier or the contractual carrier (i.e. freight forwarder), or its agent.

– When is it possible?

When the applicable law to the B/L permits so. For example, English law does permit so.

– Before what Notary should the application be filed?

Although the Shipping Act does not state so, a Notary of the city/place where the cargo remains would be the best option.

– What documents are needed?

B/L, SWB or relevant contract for carriage with the applicable terms and conditions*, sales invoice of the cargo (if available), invoices pending for payment*, appraisal report*, communications with the consignee (if available). If the applicant has no legal representative in the place, a Power of Attorney should be granted.

*Compulsory.

– How is the sale performed?

Cargo can be sold in public auction or through a third party, specialized in the specific trade, who finds a suitable buyer. If the second option is chosen, the Notary will be reluctant to accept the sale for a price below 50% of the appraisal value of the goods.

– Which are the steps to be followed? How long does it take?

Once the application is filed, the Notary requests the consignee to take delivery of the goods and pay any outstanding amount. If the consignee is not found (it usually happens) or does not take delivery/pay within 48 hrs, the Notary declares the cargo in bailment and proceeds with its sale, whether in auction or through a third party.

The whole proceedings can be concluded in one month, but if the public auction is chosen, it can take longer, one or two additional months.

– What happens if the amount obtained does not cover the expenses?

The outstanding balance can still be claimed in Court against Cnee.

– What is the estimate for fees and costs?

Notary fees and costs are in the region of Eur. 800/1,000.
Surveyor fees would depend on the type, amount, value of the cargo, but we would dare say around Eur. 500.-. Storage costs, again it will depend. If the cargo remains inside the container at a terminal, it will depend on terminal’s tariff. If it is in a bounded warehouse, it will depend on the volume/value of the cargo.

In so far as our fees, please feel free to ask for a quotation. Muñoz & Montañés is ready to assist you.

Muñoz & Montañés, law firm specialized in maritime law, transport and international trade, with offices in Valencia and Bilbao, providing services throughout Spain.