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

Contracts

SAAM SMIT Towage Brazil Signs on with Helm

Helm Operations has signed on Brazilian harbor services company SAAM SMIT Towage to its Helm Marine Operations software to manage its billing and dispatch.    SAAM

Siemens Wins Vessel Electrical Installation Contract

Nautilus Minerals Inc. announces that the order for the supply of the entire electrical installation for the production support vessel has been awarded to Siemens International Trading (Shanghai) Ltd.

New Domestic Ferry for Faroe Islands Service

Third generation domestic ferry for service between Nólsoy and Tórshavn in the Faroe Islands.   According to the vessel's designer, this project is the second

Legal

Dispersants ... Will we ever be able to use them again?

On January 22, 2015, the Environmental Protection Agency (EPA) published a Proposed Rule on dispersants. The Proposed Rule drastically changes the EPA’s approach

ExxonMobil President Seeks Swift Action on US LNG Exports

The United States is at risk of losing economic opportunity and the ability to solidify its role as a global leader in energy production unless the government moves

Fishing Vessel Skipper Fined for Collision

The skipper of a fishing vessel that collided with a ferry was fined after pleading guilty for failing to keep a proper lookout. The skipper, Lindsay Haugh, of the fishing vessel Onward N336,

Finance

Royal Caribbean Cuts Profit Forecast

Royal Caribbean Cruises Ltd cut its adjusted profit forecast for the year, citing a jump in fuel prices since its January forecast and a strong dollar.   Shares

Baltic Index Up Slightly on Higher Rates for Large Vessels

The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry bulk commodities, rose slightly on Monday due to firmer rates for the large vessel segments.

ExxonMobil President Seeks Swift Action on US LNG Exports

The United States is at risk of losing economic opportunity and the ability to solidify its role as a global leader in energy production unless the government moves

News

SAAM SMIT Towage Brazil Signs on with Helm

Helm Operations has signed on Brazilian harbor services company SAAM SMIT Towage to its Helm Marine Operations software to manage its billing and dispatch.    SAAM

Siemens Wins Vessel Electrical Installation Contract

Nautilus Minerals Inc. announces that the order for the supply of the entire electrical installation for the production support vessel has been awarded to Siemens International Trading (Shanghai) Ltd.

Delivery Begins for HMS Prince of Wales Bridge

The bridge section of the U.K.’s second Queen Elizabeth Class aircraft carrier has been loaded out of its dock hall in Glasgow ahead of its first sea voyage to Rosyth.

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Standards Naval Architecture Pipelines Salvage Ship Repair Ship Simulators Shipbuilding / Vessel Construction Sonar
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: 0.2617 sec (4 req/sec)