The lingua franca of the international trade of my exporters is English. The whole world can communicate for commercial purposes and establish partnerships through this language. However, the cases where a foreign language is used for commercial purposes create some risks besides the opportunities. Maybe the most important one of those risks is some undesirable legal outcomes arising from understanding or use of the concepts.
I think two of the most confused concepts are “delivery” and “shipment” and the changeover between them. I realized that those two concepts are used interchangebly in several documents and contracts I examined and that the parties communicate with other parties for commercial purposes in this way. However, this may cause legal risk even though it is not considered as a problem when it is perceived as the same meaning. As a matter of fact, those two concepts do not have the same meaning. I would like to write about those two concepts and review a court decision related to the issue.
The concept of “delivery” means a transfer of a thing in order to transfer the ownership or control of that thing in Turkish and English as mentioned in the resources I provided below.[1] And the concept of “shipment” means a transportation of a thing.[2]
My purpose here is not to teach a grammar. However, I need to explain the importance of the issue through a arbitration decision. I would like to mention the Decision of Belarus International Arbitration Court with case no 1340/12-14 and date September 03, 2014 for you:
The Company A from Belarus and the Company B from China signed an agreement related to the sales of “production line for paving stones”. The conditions of the agreement was going to be conducted in the relevant city of Belarus through INCOTERMS delivery method of “Delivery Duty Unpaid” (DDU) and the Company B from China was going to be provide services related to assembly and operation of the line.
In accordance with the conditions of the agreement, the first lot will be shipped within 150 days after the letter of credit (L/C) for an amount of 15% is issued by the Company A from Belarus. The remaining lots will be shipped within 300 days after the L/C is issued.
The agreement has penal conditions for each day of delay on the delivery of the products.
The company from Belarus applied for arbitration for indemnity due to the late delivery of the production line.
The disputes arised from the use of the concepts of “shipment” and “delivery” interchangeably in the agreement.
The party from Belarus claimed that the parts of the production line were shipped late and sent to Belarus late; therefore, they are right for demanding indemnity for late delivery.
And the party from China claimed that shipping does not mean delivery and it is not possible to complete the assembly and operating works within 300 days when the duration spent on the way is considered; and also claimed that the delivery can be completed after the completion of the assembly, commissioning and opening the relevant production line subjected for the agreement for service.
The Arbitration Committee recognized the claim of the party from China by using the concept of “shipment” and “delivery” interchangeably does not only mean transfer of ownership of the line subjected for the agreement and accepting that they are also related to assembly and commissioning of the line, and rejected the claim of the party from Belarus.
Consequently, I tried to explain that irrevocable problems may arise by using the concepts “delivery” and “shipment” interchangeably with the example decision I provided above. Within this frame, I recommend you to be careful about the concepts which may create contradictions and which are indefinite while managing your international commercial relations, comminicating with foreign companies and signing contracts.
[1] Delivery n. the actual handing to another of an object, money or document (such as a deed) to complete a transaction. The delivery of a deed transfers title (provided it is then recorded), and the delivery of goods makes a sale complete and final if payment has been made. Symbolic or constructive delivery (depositing something with an agent or third person) falls short of completion unless agreed to by the parties. ( https://dictionary.law.com/) Delivery: an act that shows a transferor’s intent to make a transfer of property.
(https://www.merriam-webster.com/dictionary/delivery#legalDictionarya situation in which a buyer is given control of something they have bought:https://dictionary.cambridge.org/dictionary/english/delivery. Delivery – Teslim (https://tureng.com/tr/turkce-ingilizce/teslim. The concept of “delivery” (Tur. “teslim” – https://tureng.com/tr/turkce-ingilizce/teslim) is used as “delivering” or “giving” in the Turkish Encyclopaedical Legal Dictionary (compiled by D. Yılmaz Tekin).
[2] Shipment 1. The act or an instance of shipping goods. 2. A quantity of goods or cargo that are shipped together. (https://www.thefreedictionary.com/shipment) a large amount of goods sent together to a place, or the act of sending them: https://dictionary.cambridge.org/dictionary/english/shipment Shipment- Sevk/gönderme/Sevkiyat (https://tureng.com/tr/turkce-ingilizce/shipment). And the concept of “shipment” is indicated as “sending” in the Turkish Encyclopaedical Legal Dictionary (compiled by D. Yılmaz Tekin). It is indicated as “shipping” and “sending” in the dictionary Legal Dictionary of the decedent Ejder Yılmaz.
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