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Should Customer’s / Shipment Information be provided to 3rd parties?

Jagan - December 16, 2015 - 2 comments

Some of our clients were recently approached by independent 3rd parties (who assist their clients to conduct due diligence / company search etc.) seeking details of some their customers together with details of some specific shipments effected. This article considers as to whether this information should be provided by a Carrier (Shipping Line and / or Shipping Agents) to an independent 3rd party.

  1. Companies may engage 3rd parties to conduct due diligence / search to ascertain details of their counterparties including details of the shipments which they may have effected as a part of their risk management process. In turn, the 3rd parties, may contact Carriers to seek details of their customers / shipments giving reference to details which may be made available to them.
  2. Many Carriers have tracking systems available in their websites and from which data on shipments could be easily retrieved using the Bills of Lading / Container information. However, information such as Shippers / Consignee, Cargo details, etc. are generally not retrievable through the tracking systems. Carriers, in any event, would be required to provide information on the shipments to the relevant authorities at the country of origin / loading and discharge / destination and provision of such information would be incidental to the services being provided by them. However, the article focusses on the provision of information to 3 parties for which there is no legal and / or contractual requirement.
  3. Many countries have legislated Data Protection Acts so as to ensure that data provided is not released without permission of the party providing the data (Singapore – Personal Data Protection Act 2012, UK Data Protection Act 1998, etc.). However, these acts are generally with respect to personal data and a reading of these acts do not suggest that they apply to business data / entities. As shipments are generally effected by commercial entities, release of such information may therefore not fall foul of the relevant Data Protection Acts.
  4. It is however submitted that Carriers have an implied duty of confidentiality to their clients. In an English Case, Tournier v National Provicial and Union Bank of England, a Bank’s duty of confidentiality to their clients was identified (while we have taken this as an analogy, we are aware that the banker – customer relationship is an agency contract and which is not the same between a Carrier and their customers). This case (Tournier) further states that the bank’s duty of confidentiality is not absolute and is subject to four exceptions and which are:
    1. Disclosure by compulsion of law
    2. Disclosure under duty to the public interest
    3. Disclosure under the bank’s own interest and
    4. Disclosure under the customer’s approval
  5. Accordingly, if third parties approach a Carrier, unless they (Carrier) are compelled to provide the information (say by a court order, police investigation, etc), they must not provide the information sought. Instead, good practice suggests that Carriers must advise their customers of the contact made and seek their advice as to whether they (customers) agree to the voluntarily release of the information sought by the third parties.
  6. Provision of information by the Carrier to third parties may, in some circumstances, lead to a claim by the Carrier’s customers subject to them proving causation and the extent of loss. While such claims would rarely occur, Customer’s may instead avoid using the Carrier and which would affect the Carrier’s business. While we have considered the duty of confidentiality in the Shipping Context, it is submitted  that a similar duty also exists in other professional relationships such as a Broker/Insurers and Insured.
  7. To conclude, Carriers must be aware of the implied duty of confidentiality to their clients. If contacted by third parties for provision of any information of their clients and / or details of the shipments effected, unless they (Carriers) are compelled by law or have the express permission of their clients, they should not release the same and instead direct them to their customers and / or advise them of their implied duty of confidentiality.

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