Singapore, September 15: In this ICC Academy Alumni Story, we spoke with one of our Incoterms® 2020 Certificate graduate Edward Liu, to learn about his career transformation from starting off as a paralegal to becoming a legal director and partner of an international law firm in Hong Kong.
From the traits that helped him reach a senior position to how ICC’s world-renowned trade terms, the Incoterms®2020, has proven to be an indispensable tool, Edward will walk us through his more than ten years of experience that led him to the high-level position he is in today.
ICC Academy: Edward, tell us about yourself?
EL: I started my career as a paralegal at Clyde & Co and then moved on to be a senior associate with Reed Smith. In 2018, I joined Hill Dickinson as a legal director and this year, have been promoted as the Partner at the same law firm. Today, I am a commercial and maritime lawyer with a license to practice in England, Wales, and China.
Along with that, I am also the Principal Representative of the International Chamber of Shipping (China) Liaison Office, an arbitrator, accredited mediator, and editorial member of Lloyd’s Shipping & Trade Law and member of the Advisory Committee on Promotion of Arbitration, Hong Kong Department of Justice.
As for my qualifications, I have a bachelor’s degree in law from Shanghai Maritime University and a Masters in Maritime Law from the University of Southampton. It was during my master’s degree days between 2008-09 that I had the privilege of attending Charles Debattista’s lectures. Mr. Debattista was a special adviser of ICC’s Incoterms® 2020 Drafting Group. At the time, I was learning about Incoterms® 2000, and more specifically, the amended customs clearance obligations, and benefited immensely from his teachings.
So, for the last ten years, I have experience working with arbitration and dispute resolution, as well as maritime, shipping, and trade law.
ICC Academy: Why do you think understanding the full scope of the Incoterms® rules is essential for lawyers dealing with clients in international trade?
EL: In today’s ever-evolving international trade landscape, it’s extremely crucial for lawyers, especially maritime lawyers, to be aware of ICC’s commercial trade terms, the Incoterms® rules. The latest version, Incoterms® 2020, includes a range of updates from comprehensive explanatory notes and detailed graphics to illustrate the responsibilities of importers and exporters for each rule to information on how to choose the most appropriate term for any given transaction and how a sales contract interacts with ancillary contracts. All these aspects have been very clearly elaborated within the curriculum of the Incoterms® 2020 Certificate.
For a maritime lawyer like myself, we often get approached by clients wanting to know about the latest Incoterms® rules, which define the responsibilities of buyers and sellers for the transport and delivery of goods under B2B sales contracts. We are expected to advise them on the authoritative rules so they may determine how certain key costs and risks are allocated between both parties or understand the advantages of certain clauses within a contract and issues that might arise later, should not turn out as planned. For lawyers to be able to provide guidance to their clients on these matters, it’s imperative that they have extensive knowledge of all 11 commercial trade terms and their usage, along with which term to use for which trade.
ICC Academy: You have touched briefly on advising your clients on using the Incoterms® rules for their commercial contracts, but what happens if a dispute arises? How do you manage a delicate matter?
EL: To be fair, most of the traders within the international trading community today are very sophisticated. They tend to have a good idea of the relevant Incoterms® rules. The reason being that the ICC trade terms have existed since 1923 and have been well implemented since their beginning. Also, if in doubt, traders today have the option to refer to the ICC Handbook on Transport and the Incoterms® 2020 Rules and other key ICC textbooks or case laws to better understand the terms and their use.
However, disputes arise when there is an incorrect interpretation of the commercial terms. In my experience as a lawyer, I do deal with issues between traders on international arbitration matters, which happens when parties have different interpretations of the trade terms — meaning the terms they have chosen within the contract have different meanings to each of the parties. For example, recently I advised some clients on non-contentious matters, such as, whether to choose Free On Board (FOB) or Free Carrier (FCA) or what is the difference between the Delivered At Place Unloaded (DPU) and Ex-Works (EXW).
As lawyers, we need to be more than familiar with the terms. When consulted by clients, lawyers need to understand what the client needs, what they want to achieve by using the Incoterms® rules, and how the rules will satisfy their requirements. But in doing so, that also means understanding any potential risks that clients might face by using certain terms. It’s our job to make our clients aware of not only the significance of each term but also its implications on the entire contract. That is why it is vital that lawyers make sure that their client’s contracts are aligned with the most appropriate Incoterms® rules and that there are no inconsistencies.
ICC Academy: Which Incoterms® rules do you come across or use most regularly?
EL: As a maritime lawyer, and also for those in international trade, the most widely used terms are the ‘F’ terms, FOB (Free on Board) and FAS (Free Alongside Ship), and the ‘C’ terms, CPT (Carriage Paid To), CIP (Carriage and Insurance Paid To), CFR (Cost and Freight) and CIF (Cost, Insurance and Freight).
ICC Academy: Recently, there was a huge uproar surrounding the Suez Canal blockage. As a lawyer, what are your thoughts around this?
EL: The spotlight on the Suez Canal blockage was due to disruption of the global supply chain and the geopolitical issues on how important the global shipping industry is to the world economy. It was an unfortunate event for the shipowner Ever Given and a complete mess for the shippers and receivers of the containers carried on board.
For shipping lawyers, this single case has called into question many aspects of shipping laws – from general averages and salvage costs to disputes arising out of bills of lading, cargo claims, and vessel damage, to name a few. This single incident caused issues that lawyers have not had the opportunity to deal with in recent years.
After the incident, our firm received instructions on how to proceed with incidents such as this from a cargo perspective. As we all know, the Suez Canal authorities had brought in a large volume of claims against the Ever Given, which have ultimately been settled. Simply put, the ship owners have already declared the general average, meaning every person with an insurable interest and who has received the salvage from this incident will need to bear the liability for the salvage fees. This event not only emphasises how important container shipping is to global trade but also shows how indispensable it is for maritime lawyers to have complete and comprehensive knowledge of all angles of a large-scale dispute.
ICC Academy: Can you share your experience with the ICC Academy’s Incoterms®2020 Certificate?
EL: It is mandatory for maritime lawyers to have a complete grasp of the latest Incoterms® rules. After going through the previous edition, Incoterms®2010, under Mr Debattista during my days at the University of Southampton, I was delighted to learn that he was the course author of the ICC Academy’s Incoterms® 2020 Certificate. I knew that meant the programme would be high quality and so registered for the certification even before its formal launch.
The curriculum provided me with a comprehensive working knowledge of ICC’s globally recognised commercial trade terms that focused on how to avoid costly misunderstandings by clarifying the tasks, costs, and risks involved in the delivery of goods. Divided into seven lessons, the programme walks you through each of the 11 Incoterms® rules and its corresponding obligations using videos, graphics, assessment questions, and case studies.
It took me two days to complete the professional certification and pass my final examination – and would say the certification is a good value for the cost. Not just that, as an ICC alumnus, I now have access to a range of intensive guides and interesting podcasts available free of charge. Through the programme, I also discovered ICC’s collection of essential Incoterms® 2020 digital resources, including the Incoterms® 2020 Pocket Guide and the recently launched Incoterms® 2020 app, all of which I have found to be extremely beneficial.
In addition, their Learning Management System (LMS) platform is very easy to use, allowing for a seamless learning experience. It is no surprise that they recently won the Brandon Hall Group HCM Bronze Excellence Award 2021 for the platform.
ICC Academy: Can you share an example of how you apply your learnings in your day-to-day job?
EL: I advise clients on how to choose the right rules for the right trade, including the advantages and disadvantages of why a particular term is suitable for their needs – something I am confident in doing now that I have completed the Incoterms® 2020 Certificate. That paired with the thorough understanding of my client’s business puts me in an ideal position to provide guidance.
ICC Academy: What skills have helped you reach a senior position?
EL: It goes without saying, lawyers need to have a thorough understanding of all legal aspects. That’s basic! When clients come in for advice, a lawyer should be well equipped to translate loads of structured and unstructured information into simple language. So, on a fundamental level, attorneys are communicators. That is why lawyers must have solid communication skills, both written and verbal. They communicate with their clients, with other parties to the case, and with the court. They also know how to get important ideas across through formal legal writing, informal emails, phone conversations, discussions in official legal settings, and private client conversations. But it’s not just about the law, it’s also about business. Lawyers need to know how to network with potential clients and to demonstrate their professional capabilities in consultation with prospective clients.
They also need creativity. Lawyers need to be creative to find real solutions to issues their clients face. Every case is unique; each client needs to be handled differently, and each solution needs to be carefully crafted to respond to those needs. To do that, we must think outside the box. The best way to develop tailored solutions is to approach each situation with compassion, while practicing active listening which enables me to really understand my client and the adversary’s need.
ICC Academy: Any advice to people starting their career in international trade?
EL: For starters, having a thorough understanding of legal knowledge is of paramount importance. That said, we should not look at international trade in isolation. It’s complex and multifaceted, going beyond the Incoterms® rules to letters of credit, Uniform Customs and Practice for Documentary Credits, bills of lading, and more. Having an overall perspective of international trade is a must for those starting out to establish good practices.
When you are a maritime lawyer, you just can’t say that you understand bills of lading and not the trade side. You should have an eye for the larger picture; when a vessel is carrying cargo for trade, the larger picture here is trade and not just the contract. Even if you do not handle cases relating to trade, you still need to have an overview of the entire scope of the trade. Only then can you advise your clients properly shipping disputes arise.
A very recent example is the escalated situation and relationship between China and Australia. Several shipping vessels were detained at a Chinese port. Cargo that was loaded from Australia could not be unloaded and discharged. I have dealt with quite a few disputes relating to this type of prolonged detention. For this, having a comprehensive knowledge of the trade and its processes can help lawyers have a 360°-degree view and not only the chain of the shipping contracts but also the chain of international trade, starting from the first contract to that of third parties.
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