Fimbank Plc vs The Giant Ace, digital vs paper, Trump vs Mexico
For this fortnight's update, I've compiled Trade Finance Global (TFG)'s top stories in trade, treasury & payments...
Shipping law: The one-year time bar and trade finance
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Overview of Fimbank Plc v KCH Shipping Co Ltd (“The Giant Ace”)
Within The Giant Ace, the English High Court confirmed that the Hague-Visby Rules were applicable in the event of a mis-delivery claim.?
In March 2018, a cargo of coal was shipped by Farlin Energy & Commodities FZE (“Farlin”) on the Giant Ace vessel, with a bill of lading issued on the 1994 Congenbill form. As the original bill of lading was not available at the time of arrival at an Indian port in mid-April 2018, the carrier, KCH Shipping, discharged the cargo against a letter of indemnity presented by the charterers. The coal was then sold to third parties by Farlin. FIMBank plc , the bank that had financed the deal with Farlin held the bill of lading as security against payment under the terms of their financing arrangement. In argument, the bank identified that they took the bill of lading as security by way of a pledge by Farlin, and therefore obtained rights of suit under the Carriage of Goods by Sea Act 1992. The bank alleged that it was not able to obtain payment for the finance of the cargo from Farlin. Fimbank therefore intended to exercise their rights of suit to pursue a claim against KCH Shipping for the wrongful discharge of the cargo without the presentation of an original bill of lading.
The leading question presented in The Giant Ace was “Does Article III, rule 6 of the Hague-Visby Rules, apply to claims for mis-delivery of cargo occurring after discharge has been completed?” If the Hague-Visby Rules applied, in accordance with the UK House of Lords ’ finding in Aries Tanker Corp v Total Transport (“The Aries”) any claim would be extinguished by the time bar, to enable the carrier to clear his books. Whereas if the claim was outside of the scope of the Hague-Visby Rules, in accordance with s (2) and s (5) of the Limitation Act 1980 a claim in tort or in contract may respectively be presented within six years of the cause of action. Males LJ identified that the question “has been much debated” in English law...
Read the full article by Director of Alinea Customs , Holly Piggott , here.
The tide is turning on digital trade finance: Ride the wave or be swept out to sea?
Digital trade finance has been top of mind for years, but most will agree that 2024 has seen a significant shift in mindset towards adoption.?
While the pandemic underscored the need for digital solutions, the trade finance sector has remained fragmented, burdened by paper-heavy processes, and hesitant to fully embrace change. However, 2024 saw substantial progress, with several key developments accelerating the widespread adoption of trade finance software.
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A mindset shift
Many financial institutions and corporates are now understanding the value of digital trade finance, having previously regarded it as expensive, resource-intensive, and an unnecessary supplementary tool rather than a strategic imperative.?
Attitudes have softened, driven by clear business cases and competitive pressures, with resistance and uncertainty reserved for those held back by inertia and short-term perspective. As companies turn increasingly to digital solutions, it is becoming easier to cite return on investment (ROI), fast implementation, and ecosystem integration among digitalisation’s benefits. Companies leveraging digital solutions for document exchange and verification report significant reductions in processing times, transforming trade finance transaction completion from days and weeks into minutes and hours...
Full article here, by Surecomp ’s Senior Vice-President of Strategy, Digitization and Business Development, Enno-Burghard Weitzel .
Can Mexico weather a second wave of Trump’s trade policies?
In light of Canada’s Prime Minister Justin Trudeau resigning as his party’s leader in early January, and with Mexico’s President Sheinbaum only holding office since October, Donald Trump may be facing an entirely new set of neighbours upon taking office at the end of the Month.
As he prepares for a potential second term, the big question is: what’s next for Mexico? Could a new wave of tariffs or stricter rules under the USMCA push Mexico to the brink again, or has it learned enough from the past to weather whatever might come? Before diving into the future, let’s take a step back and explore how Mexican trade has evolved in the 21st century and what lessons it has learned from navigating its relationship with its powerful northern neighbour.
A brief look back at Mexican trade this century
When Trump entered the White House for the first time in 2017, the secure trading dependence Mexico had relied on for years felt fragile. Tariffs, trade wars, and a complete renegotiation of NAFTA threw Mexican industries into turmoil.
For decades, Mexico’s proximity to the United States shaped its trade policies, partnerships, and ambitions. Over 80% of its exports flowed north, creating a dependency that felt secure—until it wasn’t.
Trump’s first term in office brought a storm of change for Mexico. Renegotiations of NAFTA and the subsequent implementation of the US-Mexico-Canada Agreement (USMCA) shook the bedrock of Mexico’s economic reliance on its neighbour. Tariffs on steel, aluminium, and other key sectors further disrupted the balance. The uncertainty surrounding trade agreements and protectionist policies forced Mexico to confront its vulnerabilities...
Read the full article by Trade Finance Global (TFG) ’s Research Associate, Carter Hoffman , here.