Legal Issues for Trading Relationships in West Africa

1
Legal Issues for Trading Relationships in West
Africa

• Jeremy Sivyer
• Partner
• Projects Group
• 04 May 2006

2
Introduction

• Contracting with importers/exporters in West
  Africa sometimes requires a cautious approach
• Risk of non-performance/non-payment
• Potential for delay due to bureaucracy of
  import/export or customs clearance
• Problems not unique to West Africa, but
  potentially more acute
• Various ways to minimise risk of legal exposure
  if contract not performed
• Legal documentation not a panacea

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Export transactions into West Africa

• Payment Mechanisms
• Letter of Credit
• becomes documentary transaction
• which bank is to give it?
• London branch of international bank?
• Third party guarantee
• Trustworthy trading partner - background checks

4
Export transactions into West Africa

• Risk
• Damage to goods in transit
• Problems at customs level
• Ss 12-14 Sale of Goods Act 1979
• if goods not legally compliant in destination
  country seller liable for breach of implied
  warranties (satisfactory quality/fitness for
  purpose)

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Export transactions into West Africa

• Minimising the suppliers exposure
• Free on Board transaction to ensure customer
  bears primary risk of shipping and customs
• Place customer under obligation to disclose local
  legal issues and specify packing requirements
• Use reputable shipping line with local knowledge
• Control of local agents and documentation

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Import transactions from West Africa

• Quality of goods
• Specify pre-shipment inspection by reputable
  third party
• Documentation
• Obtain specific warranties as to quality/fitness
  for purpose - importance of contract description
• Require performance guarantee or retention from
  purchase price until delivery and post-delivery
  inspection

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Import transactions from West Africa

• Delivery
• Contract for goods on fully delivered basis
• opportunity to inspect goods before acceptance
• Liquidated damages for late delivery
• Right to cancel if goods not delivered by agreed
  cut-off date

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Import transactions from West Africa

• Other Points
• Factoring
• Non-transferable contracts

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Other issues

• Governing law
• Currency of account
• Arbitration as a method of dispute resolution

10
Legal Issues for Trading Relationships in West
Africa