ITIC Says: Ship Managers Must Beware of Increase in Claims by Owners

(Press Release)
Wednesday, May 09, 2012

International Transport Intermediaries Club (ITIC) says it has seen a noticeable increase in claims against ship managers by shipowners who are going through difficult financial times.

In the latest issue of its Claims Review, ITIC notes that, as result of their financial difficulties, owners resist paying for the full maintenance of their ships and also end up owing ship managers not only for their own fees but also for disbursements paid on owners’ behalf. When ship managers try to collect the funds due, they are faced with a claim for negligence in the management of the ship. In ITIC’s experience, once shipowners fail to put managers in funds, the situation rarely improves, and usually deteriorates. The resulting claims are time-consuming and costly to defend.

ITIC says that it is of the utmost importance that ship managers’ records and correspondence with shipowners are clear and in good order. By way of illustration it cites a dispute between the manager and owner of a ship involving a balance of funds owed to the manager. It was agreed that those funds would be put into an escrow account. The matter remained idle for five months, until the owner raised a claim against the ship manager, through its lawyers, for alleged negligence. The owner claimed that the ship manager was in breach of its duty to maintain the ship in an efficient, employable state and that, as a result, it had suffered significant losses. The claim put forward by the ship owner was in excess of $17m and included alleged losses in respect of the vessel’s future employment, expenses paid by the shipowner for repairs/spares/drydockings, reduction in the vessel’s market value, and other additional damages.

The ship manager rejected these allegations in full and lawyers were appointed by ITIC to defend its position. The manager maintained that the vessel’s condition had deteriorated due to age, constraints of trade, and expenditure and maintenance restrictions imposed by the owner. The manager further stated that the owner was fully aware of the deficiencies and the condition of the ship when it was taken under management. Despite this, the owner had not taken the necessary steps to facilitate remedial action.

Lawyers for the owner aggressively pursued the claim against the manager. However, the manager’s files and correspondence on the ship were in good condition, and a thorough audit trail existed for every decision regarding the running and maintenance of the ship. The ship was eventually scrapped, but the owner continued to maintain that it had a claim against the manager, even though it was unable to provide any proof or to document its losses.
 
Eventually, after two years, the claim was finalised on a drop-hands basis. The total cost of the legal fees to defend the innocent ship manager was $250,000.
 

Maritime Reporter August 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Contracts

Sulzer Shareholder has 5 pct Dresser-Rand Stake

Russian billionaire Viktor Vekselberg's Swiss investment firm Renova Group said on Friday it had a 4.99 percent stake in U.S.-based Dresser-Rand, which might become the object of a takeover battle.

Source: Siemens Offering $6.1 bln for Dresser Rand

Germany's Siemens plans to offer more than $6.1 billion, or $80 per share, for U.S. compressor and turbine maker Dresser-Rand, Germany's Manager Magazin said on Friday.

Transas Simulators Boosts Western Shipping Training Center

Transas Marine Pacific has successfully completed the upgrade of a simulator complex for Western Shipping Pte. Ltd. training center. The simulator class was

Legal

Exxon: U.S. to Allow Wind Down Ops in Russian Arctic

U.S. oil major Exxon Mobil said on Friday the U.S. Treasury Department granted it a license to wind down operations on a drilling well in the Kara Sea in the Russian Arctic.

Sulzer Shareholder has 5 pct Dresser-Rand Stake

Russian billionaire Viktor Vekselberg's Swiss investment firm Renova Group said on Friday it had a 4.99 percent stake in U.S.-based Dresser-Rand, which might become the object of a takeover battle.

Russia: Exxon Still Drilling in its Arctic

ExxonMobil is still drilling in the Russian Arctic, a Russian minister said on Friday, in move that if confirmed will anger Washington after the U.S. administration

Consulting

Livingston Appoint Candace Sider V-P Regulatory, Canada

Customs brokerage and trade compliance advisors, Livingston, say that to better reflect the company’s integral role in regulatory affairs for its clients, Livingston

ZeoGas hires Foster Wheeler to Plan Gulf Coast Project

Foster Wheeler AG announced today that a subsidiary of its Global Engineering and Construction Group has entered into a Collaboration Agreement with ZeoGas LLC.

Leading Shipping Equity Analyst Joins Clarkson Capital Markets

Clarkson Capital Markets, the investment banking arm of shipping services group Clarkson PLC,  says it has enhanced its equity research coverage with the appointment

 
 
Maritime Security Maritime Standards Naval Architecture Offshore Oil Pipelines Pod Propulsion Port Authority Ship Repair Shipbuilding / Vessel Construction Sonar
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.0909 sec (11 req/sec)