Shipbroker Pays the Price

Press Release
Tuesday, December 04, 2012

International Transport Intermediaries Club (ITIC) has emphasised the potentially costly consequences of a failure on the part of shipping intermediaries to confirm in writing any initiatives performed on behalf of their principals.

 
In the latest issue of its Claims Review, ITIC says it has seen an increasing number of claims on its shipbroking members relating to the receipt and forwarding of messages. Emphasising the importance of accurate record-keeping and the need to reconfirm telephone conversations in writing, it reports how the failure of a shipbroker to provide written confirmation of the appointment of an arbitrator in a dispute between its principal, a charterer, and a shipowner, exposed the broker to a claim and costs in excess of $200,000 at a court-ordered mediation in the United States.

 
The shipbroker found itself in the middle of a dispute between the owners and charterers involving a demurrage claim in excess of $400,000. The charterers failed to settle and the owners initiated arbitration in London. As the charterers failed to nominate their arbitrator, the owners nominated a sole arbitrator. Despite orders from the sole arbitrator to serve defence submissions, no communication was received from the charterers. The arbitrator subsequently awarded owners the full amount of the demurrage claim plus interest and costs - a total of $575,000.

 
The owners tried to collect the award against the charterers through the US courts. The charterer’s defence was that they had never been advised of the arbitration proceedings and therefore had not had an opportunity to appoint an arbitrator. The charterers also alleged that the shipbroker had failed to inform them about the arbitration, and brought the broker into the US action.

 
The broker confirmed that it had advised the charterer by telephone about the appointment of an arbitrator, and again when arbitration proceedings had started. But it had failed to confirm this by email and the charterer, well aware of the lack of written confirmation, simply denied that such telephone conversations had taken place.

 
ITIC notes that, if the court had found the broker to be an ‘agent’ of the charterer, it could have been argued that the service of notices regarding arbitration proceedings on the broker could be deemed to be service on the charterers, with the result that the arbitration award was enforceable against the charterers, who in turn may have pursued the broker for the full value of the award.

 
The case was concluded at a court-ordered mediation by means of a payment to the owners of $450,000. The broker contributed $75,000 to the settlement, and the legal costs of defending the broker were in excess of $140,000 – a total of $215,000.

 
“This was a high price to pay,” says ITIC, “for a simple failure to follow up a telephone conversation with an emailed confirmation.” 

Maritime Today


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

Maritime Reporter April 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Chevron Suffers Loss, Plans Job Cuts

Chevron Corp. reported a first-quarter loss as slumping oil prices continued to drag down revenue. The company said that it is "on target" to lay off a total of 8000 workers by the end of 2016,

China COSCO to be First through the Expanded Panama Canal

China COSCO Shipping has won the draw for its container vessel Andronikos to make the ceremonial first transit through the Expanded Panama Canal during the waterway’s inauguration on Sunday, June 26.

Sellick Equipment to Open New Facility

On April, 20, 2016, at the young age of 97 years, Walter Sellick along with sons Howard Sellick - President, David Sellick - Vice President and grandson Colin Sellick - Systems Manager,

Contracts

Great Lakes Inks M.E., N.C. Coastal Protection Project Deals

Great Lakes Announces $55 Million in Subcontract Work in the Middle East and Award of $38 Million for a Domestic Coastal Protection Project Great Lakes Dredge

Olympic Subsea Vessel Bags Contract

Olympic Shipping has secured a contract for Olympic Delta, an inspection, maintenance and repair (IMR) vessel, with an international client  to work on a renewable energy project.

Asia Tankers-VLCCs Rates Ease as Tanker Jams Fade

Port congestion eases at Basra and Chinese ports; tanker demand set to expand on lower oil prices. Freight rates for very large crude carriers (VLCCs), hurt by slower-than-usual release of cargo,

Finance

Oil Price Bottoming Depends on Global Growth - IEA chief

International Energy Agency (IEA) chief Fatih Birol said on Sunday that oil prices may have bottomed but that would depend on global economic growth. Asked if oil prices had reached a bottom,

ExxonMobil 1Q Profits Plunge 63%

Highlights   * Earnings of $1.8 billion decreased 63 percent from the first quarter of 2015.   * Earnings per share were $0.43 assuming dilution.   * Cash

Shipping, Key Ingredient of EU’s Africa Agenda

The African economy has become one of the most promising global growth markets. Shipping is taking care of the largest part of international trade and in Africa

News

Oil Price Bottoming Depends on Global Growth - IEA chief

International Energy Agency (IEA) chief Fatih Birol said on Sunday that oil prices may have bottomed but that would depend on global economic growth. Asked if oil prices had reached a bottom,

Blacklisted Tanker Returns to Libya's Zawiya Port

A tanker that Libya's rival eastern government had been using to try to export oil in defiance of the Western-backed administration in Tripoli returned to the country on Saturday,

Lerwick Harbor sees Seasonal Boost

The opening of the offshore season in northern waters has seen specialist oil industry vessels return to Lerwick Harbor during April to support subsea development projects.

 
 
Maritime Contracts Maritime Security Maritime Standards Naval Architecture Navigation Pipelines Salvage Ship Electronics 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: 0.1420 sec (7 req/sec)