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 Today

The Maritime Industry's original and most viewed E-News Service

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


Royston Appoints New US Distributor

Diesel power engineering specialist Royston has appoint a new U.S.-based distributor, citing growing interest in its advanced Enginei marine fuel management and monitoring systems.

MacGregor Wins Orders for Pusnes Deck Machinery

MacGregor, part of Cargotec, announced it has secured orders for a series of Pusnes deck machinery packages for several shipowners. The Pusnes equipment has been

BTӦ Orders Damen ASD Tug

Sweden-based BogserTeam Ӧresund (BTӦ), part of MarCon gruppen, recently signed a contract with the Damen Shipyards Group for the delivery of a Damen ASD Tug 2810.


U.S. Ups Philippines Aid as South China Sea Turmoil Builds

The United States has raised its military aid to the Philippines this year to $79 million, the U.S. ambassador said on Wednesday, as tension rises in the region

BWM Convention Doesn't Resolve U.S. Issues - ICS

ICS notes that the IMO Secretary General has announced that the Ballast Water Management Convention will enter into force worldwide from 24 November 2016, following

Maritime Cook Islands Expands Network to India

Maritime Cook Islands (“MCI”), the leading ship registry, has recently established its presence in India with the appointment of two deputy registrars (“DR”),


When Conducting Investigations Consider 'Privileges'

Whether voluntarily or as required by the International Safety Management Code, the American Waterways Operators’ (AWO) Responsible Carrier Program, or some other rule or regulation,

North Group Increases Projected Free Reserve

Directors of the North P&I Club and Sunderland Marine Insurance Company (North Group) have revised their projection for the group’s year-end free reserve up to $380 million,

American Club Announces 2.5% Increase

At its meeting in New York on November 20, the American Club’s board resolved to levy a general premium increase of 2.5 percent for P&I cover, but no increase in


Maritime Cook Islands Expands Network to India

Maritime Cook Islands (“MCI”), the leading ship registry, has recently established its presence in India with the appointment of two deputy registrars (“DR”),

MANSA, NMIS Ink MOU for Skill Development

Mumbai and Nhava-Sheva Ship-Agents Association (MANSA) and Narottam Morarjee Institute of shipping (NMIS) signed a Memorandum of Understanding for lauching a

Peel Ports' Cargo200 drive Secures 50 Supporters

Peel Ports has today (Thursday 19 November) announced that it has secured 50 advocates for its Cargo200 initiative and is urging other shippers in the North-west to add their weight to the campaign.

Maritime Contracts Maritime Standards Offshore Oil Pod Propulsion Port Authority Salvage Ship Electronics Ship Repair Ship Simulators 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: 0.0641 sec (16 req/sec)