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.” 


People & Company News

MN100: MarineCFO

The Company: Founded in 1992, UA Business Solutions was a pioneer in the field of Enterprise Resource Planning (ERP) and an early Microsoft Partner. The ERP evolution

MN100: All American Marine, Inc.

The Company: All American Marine Inc. was founded in 1987 and specializes in the construction of custom tailored aluminum boats from 30 to 150 feet LOA. Today,

Five Minutes with Paul Switzer

Five minutes with Paul Switzer - Manager, Shipbuilding & Offshore, Viega   For readers not familiar with Viega, please give a ‘birds eye’ view, putting the company

Contracts

ACE Winches Bags Order from Vard

Deck machinery specialist ACE Winches said it has been awarded a spooling contract with Vard Group AS for Norway’s largest construction vessel.   The scope of work includes the spooling of two 3,

Fugro, US Army Corps of Engineers Ink Mapping Deal

Fugro has been awarded a photogrammetric and LIDAR surveying and mapping contract by the U.S. Army Corps of Engineers, St. Louis District, Missouri. The agreement

Nakilat Upgrades VSAT Service for LNG/LPG Fleet

Nakilat, the shipping arm of Qatar’s liquefied natural gas sector, has entered into a contract with Global Eagle Entertainment Inc.’s Emerging Markets Communications

Legal

Philippines: Sea Dispute Won't Shift Ties with China, U.S.

The Philippines' territorial dispute with China over the South China Sea has not caused Manila to rebalance diplomatic ties with either its ally, the United States,

Hanjin Shipping to Submit Self-Rescue Plan

South Korea’s Hanjin Shipping is planning on submitting a self-rescue plan to creditors this week to stave off bankruptcy by Aug. 25, reports Korea Herald quoting local media.

US Coast Guard Announces Final TWIC Rule

The U.S. Coast Guard announced Tuesday the publication of the final rule concerning Transportation Worker Identification Credential (TWIC) reader requirements. The

Finance

Canada May Ask Far-offshore Drillers to Pay Extra

Canada may ask oil companies to contribute to the hundreds of millions of dollars or more the country has to pay to an international body if they drill far offshore,

European Owners Lead in Buying Up Secondhand Tonnage

With European owners leading the pack in buying up vessels, the sale and purchase market appears to have been notably active in recent years, reveals Clarkson Research Services Limited.

Monjasa Bags Credit Facility from Société Générale

Danish bunker fuel supplier and shipping firm Monjasa has signed a credit facility with French bank Société Générale for USD 80 million.    A statement from

News

US Navy Ships Conduct Astern Replenishment-at-sea

“While replenishments-at-sea are routine, astern refueling is unique and requires precise navigation and coordination,” said Lt. Cmdr. Jason Ileto, fleet replenishment scheduler for Commander,

US Offshore Lease Sale Yields $18 Mln in High Bids

Today’s U.S. oil and gas Lease Sale 248 garnered $18,067,020 in high bids for 24 tracts covering 138,240 acres in the Western Gulf of Mexico Planning Area, announced

Another Hurdle for The Ocean Alliance

Commissioner William P. Doyle of the U.S. Federal Maritime Commission today voted in favor of requesting additional information from The Ocean Alliance parties.

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Navigation Offshore Oil Salvage Ship Electronics Ship Simulators 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: 0.1547 sec (6 req/sec)