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 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Contracts

US Navy Awards $22mln Waterfront Inspection Deal

The U.S. Navy has awarded a five-year, $22 million contract to Appledore Marine Engineering, a specialist focusing exclusively on the inspection and design of marine infrastructure,

Keppel Delivers Jackup to UMW-OG

Keppel FELS, a wholly owned subsidiary of Keppel Offshore & Marine (Keppel O&M) has delivered UMW Naga 8, a KFELS B Class jackup rig, to Malaysia’s UMW Oil & Gas Corporation Berhad (UMW-OG).

Rolls-Royce to Design, Equip Canadian Stern Trawler

The shipbuilding company VARD Group AS in Norway has received an order from a Canadian company for a shrimp stern trawler to be designed and equipped by Rolls-Royce,

Legal

Oakland Terminal Operators Propose Off-peak Hours

Marine container terminal operators at the Port of Oakland are developing a program to operate their terminal gates on Saturdays to reduce weekday congestion at the port.

Greek Coast Guard Seizes Weapons Ship Bound for Libya

Greek authorities have seized a freighter carrying an undeclared shipment of weapons en route from Turkey to Libya, coast guard officials said on Wednesday. A

Cosco CSCL Merger Talks Continue

The closed-door talks on what is believed to be merger discussions between Cosco and China Shipping continue, reports local media.   According to JoC, the Chinese

Insurance

MN 100: Continental Underwriters, Ltd.

The Company: Continental Underwriters, Ltd. is a national, multiline firm for all types of marine coverage. The firm offers both admitted and non-admitted products in all 50 states,

Syncrude Uncertain about Plant Fire Affecting Production

The operator of Canada's largest synthetic crude project said on Saturday it is investigating the causes of an early morning fire at an upgrading plant. Firefighters extinguished the blaze,

MN 100: Gencorp Insurance Group

The Company: Gencorp Insurance Group provides the Insurance and Surety needs of Marine Contractors, Vessel Operators and Shipyards throughout the country and Caribbean.

Consulting

Glosten Acquires Noise Control Engineering

Seattle-based naval architecture and marine engineering consultancy Glosten, Inc. has acquired Noise Control Engineering LLC (NCE), a consulting firm specializing in ship noise and vibration control.

Nominations Invited for BIMCO Awards

BIMCO, the world’s largest international shipping association is now calling for nominations for its prestigious awards, to be presented in Hamburg in November 2015.

AFBO to Provide Security in Arctic Waters

State of the Arctic Council to establish a new mechanism to strengthen operational cooperation and coordination of activities at sea. This is dictated by the

 
 
Maritime Contracts Maritime Security Offshore Oil Pipelines Ship Electronics Ship Repair Ship Simulators Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | 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: 0.4698 sec (2 req/sec)