Question $1.$ Case Study $[4$ x $4=16$ Marks$]$

There is a shipper by the name of $$Rishabh Steel.$$ He has his factory at Manesar and sent the cargo of steel ingots to his buyer named $$Lederer GMBH$,$ Germany. The port of discharge was Hamburg, with the buyer$$s warehouse being located at Karlsfeld on the outskirts of Munich, Germany. The shipment was stuffed at shipper$$s premises as the shipper had a factory stuffing permission and thereafter the shipper handed over the containers at ICD Tughlakabad for railment to the gateway port of Pipavav $($Gujarat$).$ The shipment was dispatched in two lots. One lot was of $5$x$20$ basis FOB. The other was of $8$x$20$ basis CIF. The two lots were shipped out with a time difference of $7$ days between them. The services of a freight forwarder were used for custom clearance at origin, negotiating freight with the shipping line and eventual loading of containers on the planned vessel, custom clearance at destination and on$-$carriage to the buyer$$s warehouse at Karlsfeld. The freight forwarder issued a $$Multimodal Transport B$/$L $($Manesar $$ Karlsfeld$).$

Before the shipments were dispatched, the shipper conducted a pre$-$shipment inspection and everything was okay. The shipment was executed and the shipping line issued a $$Clean Bill of lading $($port to port$).$ The problem arose when the cargo arrived at port of destination and the buyer concluded that the cargo in one of the lots $($first lot of $5$x$20)$ was wet and had gathered some amount of rust.

The buyer $$Lederer GMBH$$ contacted the shipper $$Rishabh Steel$$ to get an inspection done, but finally the buyer got the survey done without the presence of seller or his authorized representative. The inspection concluded that the cargo had a thin layer of deposit which indeed looked like rust. It also had different dimensions than those indicated by the seller, besides being wet.

The buyer refused to pay because the cargo was wet, had a layer of rust and had different specifications.

It is an understanding that the seller is not responsible because in FOB and CIF the risk is transferred to the buyer, when the cargo is on board $($loaded on vessel$).$

Questions:

$1.$ Who is responsible in this case?

$2.$ Can the shipping line or the freight forwarder be held responsible in this case?

$3.$ Are FOB and CIF, the appropriate terms to be used? If yes, justify. If not, what are the appropriate terms that can be used and why?

$4.$ What are the possible measures that can be adopted to mitigate such a condition in the future?