Mahmood Jabbar Khan

Barristers & Advocates

Summit Centre (6th Floor) 18 Karwan Bazar Commercial Area Dhaka-1215, Bangladesh Phone: 815 2486-7 Fax: (880 2) 913 5916 e-mail: mjklaw@intechworld.net

Partners: Imtiaz Mahmood Advocate, Supreme Court Sk. Jenefa K. Jabbar Barrister-at-Law Mustafizur Rahman Khan Barrister-at-Law

15 January 2012 BY REGISTERED POST WITH A/D Mr. SK Faridul Islam Managing Director M/S Swift Freight International Ltd. House # 65, Road # 17, Block # C, Banani, Dhaka-1213, Bangladesh. Re: Dear Sir, We act on behalf of our client, TNZ Apparels Ltd. (the Company), Sha-74, (3rd & 4 Floor) North Badda, Progoti Shwarani, Badda, Dhaka-1212, Bangladesh, represented by its Managing Director, Mr. Shahadat Hossain Shamim. The Company has instructed us to serve this notice upon you as follows, which we hereby do:
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LEGAL NOTICE

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You are fully aware that TNZ Apparels Ltd. is 100% Export Oriented Readymade Garments Industry engaged in manufacturing exportable Garments product. The Company is conducting its business with full satisfaction to its business circles in the country and abroad. During the month of February 2011, the Company has completed an order of 111,000 Pcs of Boys Denim Shorts worth US$ 365,000 for one of the Companys USA buyers M/S. LNC Apparels LLC, USA. Particulars of the export consignments are as follows, (a) Invoice # TNZ/EXP/0105/2011 worth US$ 90,529.92 under House B/L # SFI/NYC-05284 for 2,418 Ctns (29,016 Pcs). H-B/L issued by Swift Freight Internatinal Ltd., Dhaka. (b) Invoice # TNZ/EXP/0106/2011 worth US$ 112,320.00 under House B/L # SFI/NYC-05290 for 3,000 Ctns (36,000 Pcs). H-B/L issued by Swift Freight Internatinal Ltd., Dhaka.

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Mahmood Jabbar Khan

(c) Invoice # TNZ/EXP/0107/2011 worth US$ 63,648.00 under House B/L # SFI/NYC-05299 for 1,700 Ctns (20,400 Pcs). H-B/L issued by Swift Freight Internatinal Ltd., Dhaka. (d) Invoice # TNZ/EXP/0103/2011 worth US$ 56,160.00 under House B/L # 861392300 for 1,500 Ctns (18,000 Pcs). H-B/L issued by MAERSK BANGLADESH LTD, Dhaka. 3. As per the trade terms and conditions, the Company made all the arrangement in due time and ordered goods were shipped through the Buyers specifically nominated Freight Forwarding Company i.e. M/S Swift Freight International Ltd. (Freight Forwarder) on FOB Basis. After shipping the goods and forwarding the Bank documents to the Buyers bank in USA, the Company has been in regular contact with the concerned parties along with Freight Forwarder and LNC local office to receive the Companys payment in due course. In fact, the Company has received one payment from the Buyer but above mentioned consignments were still lying in the U.S. Government warehouse, which the Company came to know only after about 3 months later. In this regard the Company was closely monitoring the clearing status of the consignments and payment for the ordered goods through Buyers nominated Freight Forwarder on Periodical basis. The Company was notified by the buyers nominated freight forwarder that the consignments were under clearing process to be released one by one and subsequently payment would be released. Notwithstanding the Companys repeated persuasion for so many days (almost 3 months), the Company is now told by M/S Swift Freight International Ltd. that all these consignments were not yet released by the Buyer even though they notified the Company vide their E-mail dated 3 rd of May that one consignment under B/L # SFI/NYC-05284 for 2,418 Ctns ( 29,016 Pcs) has been released already but the fact remains that none of these 4 consignments are released yet and they are not able to give the Company any exact information as to when they will be released. As Buyer nominated Freight Forwarder M/S Swift Freight International Ltd. has specific responsibility to ensure the delivery of the consignment in due time and repatriation of the Export Proceeds thereby. But in this case the Company was under shock to observe that M/S Swift Freight International Ltd. completely failed to notify the SHIPPER/EXPORTER about such un3

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usual delay in the clearance process of the consignments. The Company was also shocked to observe that M/S Swift Freight International Ltd. was not communicating with the Company in the best transparent manner while the Company contacted your good office to discuss the matter in concern but Freight Forwarder failed to provide any positive response. 8. The Company has worked hard to execute the order in good quality and standard. The products were delivered in due time with entire satisfaction of the Buyer. The Buyer has also issued an Inspection certificate mentioning that the goods are of acceptable standard and good quality. Regarding this subject matter after lot of hard work the Company could retrieve only a small fraction of the amount by selling the goods to another U.S. Buyer. As a matter of procedure relevant documentation formalities to deliver the goods to the new buyer has been completed through M/S Swift Freight International Ltd. The Companys loss Component against 3 consignments shipped through Freight Forwarder are as follows. (a) Invoice # TNZ/EXP/0105/2011 worth US$ 90,529.92 under House B/L # SFI/NYC-05284 for 2,418 Ctns (29,016 Pcs). H-B/L issued by Swift Freight Internatinal Ltd., Dhaka. (b) Invoice # TNZ/EXP/0106/2011 worth US$ 112,320.00 under House B/L # SFI/NYC-05290 for 3,000 Ctns (36,000 Pcs). H-B/L issued by Swift Freight Internatinal Ltd., Dhaka. (c) Invoice # TNZ/EXP/0107/2011 worth US$ 63,648.00 under House B/L # SFI/NYC-05299 for 1,700 Ctns (20,400 Pcs). H-B/L issued by Swift Freight Internatinal Ltd., Dhaka. Total Export Value for 85,416 Pcs @ US$ 3.12/Pcs=US$ 2,66,497.92 Amount realized from new Buyer @ US$ 0.72/Pcs=US$ 61,499.52 Amount Shortfall = US$ 2,04,998.40X73 = TK. 1,29,64,883/= 10. It should be mentioned here that the Company has forced everybody to pay the every little due amount concerned in this export formalities process. But the Company is suffering enormous financial losses without any fault of the Company. As per the central Banks regulations, the negotiating bank has put a stop for further banking facilities with the Company due to non-receipt of export proceeds against above consignments. The factory has become literally unstable due to such kind of undue financial losses.

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The Company has contacted the M/S Swift Freight International Ltd. in writing several times regarding the matter in concern and sought support to recover this financial loss of the Company but Freight Forwarder did not take the matter seriously and did not provide any response positively. As a result, the Company was compelled to lodge a complaint before the Arbitration Committee of the Bangladesh Garment Manufacturers & Exporters Association (BGMEA) for Arbitration to resolve the matter amicably. On receipt of the complaint dated 20.09.2011 by BGMEA from the Company, BGMEA communicated in writing with M/S Swift Freight International Ltd. but any kind of reply was not given. Thereafter, BGMEA Arbitration Committee meetings were held on 01.10.2011, 09.10.2011, 15.10.2011 and 22.10.2011. On behalf of M/S Swift Freight International Ltd. Mr. Kabir Uddin, Manager attended only once on 01.10.2011 and he did not attend and did not submit any documents in BGMEA Arbitration Committees subsequent meetings. Instead, M/S Swift Freight International Ltd. Manager, HR, Admin and Law issued a letter dated 20.10.11, where he mentioned that Buyer LNC Apparel LLC has gone into bankruptcy and unable to release the goods after arrival in USA. In a decision dated 01.11.2011 the BGMEA Arbitration Committee hold M/S Swift Freight International Ltd. responsible for the entire financial loss of US$ 266,497.92 of the Company. In the Arbitration decision it was stated that it was Freight Forwarders responsibility to provide POD and pursue consignee to release of the Cargo after arrival, which you have failed. After more than 2 months the Cargo was not released by your consignee and you did not inform the Company in due time as well. When the Company got to know the information that the Companys exported goods were not released after about more than 2 (two) months, The Company had to arrange with some other new customer after huge penalty of discount and recovered only US$ 61,499.52. Due to your negligence the Company is facing severe liabilities with the Bank against back to back L/Cs to extend to US$ 2,05,998.40 now. In the Arbitration Committee decision it was decided that you are therefore fully liable to pay compensation immediately for the Losses Company is incurring.

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In the above mentioned facts and circumstances, it is manifest that you acted in breach of trust and the fiduciary duty reposed in you as a Buyer nominated Freight Forwarder for the Company. You the freight forwarder has made the Company to sustain financial loss of an amount of US$ US$ 266,497.92 /-.

In the premises, we have been instructed to call upon you, as we hereby do, to pay to the Company an amount of US$ 266,497.92 /- (US Doller Two Lac Sixty Six Thousand Four Hundred Ninety Seven only) along with interest at the rate of per annum calculable from till date of payment within 15 (fifteen) days of your receipt. In the event that you fail to comply with this notice, we have instructions to initiate appropriate legal action against you for recovery of the amount in this regard. The risk, responsibility and consequence as to cost of such legal action shall rest with you. A copy of this notice is retained in our office for future reference. Yours faithfully, For Mahmood Jabbar Khan

Md. Abdullah-al-Shaikh Barrister-at-Law