1 Receivers opinion and demandsThe receivers insurance broker Mr Lu once again explained the case to the parties present They emphasized that all the cargo discharged from our vessel was damaged

Receiver's Opinion and Demands

During the meeting, the receiver's insurance broker, Mr. Lu, reiterated that all the cargo unloaded from our vessel was damaged, with cargo hold No. 4 being the worst affected. The factory was unable to produce high-quality goods due to the poor quality of the damaged cargo. As a result, the quality of the products produced from slightly damaged goods was also poor, with a KOH protein solubility of about 67% and an acid value of about 3.6-3.8 for crude oil. The receiver requested that we provide suggestions for mitigation methods and subsequent loss assessment.

The opposite lawyer, Mr. Liu, stated that the soybean meal market is currently strong, and the factory could not issue the quality of the soybean meal produced from our vessel's soybean due to the lack of good soybeans or soybean meal inventory for blending. The factory had to sell the poor quality soybean meal directly, which could harm their reputation. They also faced losses such as product yield, production capacity reduction, increased energy consumption, and auxiliary material consumption. The receiver asked for our opinion on the handling of 1,700 tons of goods that suffered severe losses. The factory currently tends to mix the 1,700 tons of goods into the entire shipment for processing.

The opposite lawyer proposed using contract price adjustment provisions as the first method of loss assessment. The loss would be calculated based on the change of total damage multiplied by the price stipulated in the contract. The opposite believed that the change of total damage occurred during transportation and was a more direct reflection of the loss.

The second method proposed was to statistically determine the actual loss, which was mainly divided into three aspects: product yield loss, various consumption losses, and loss caused by product quality. The loss caused by product quality mainly referred to the decrease in protein solubility of soybean meal, and the value of unit protein solubility could be used as the basis for evaluation.

The opposite also stated that they would be transparent throughout the entire production process, including production data and product samples. However, they required our signature confirmation on the inspection items after the inspection was completed