ITIC Highlights Value of Diligent Debt Collection

ITIC highlighted the value of diligently pursuing the collection of shipping industry debts in today’s difficult economic climate.

In its latest Claims Review, ITIC notes that a shipbroker acting for charterers was owed $25,000 in commission by an Indian voyage charterer under a charter party which provided that the charterer would deduct the commission. Having written to the charterer and not received a response, ITIC ascertained from local sources that the charterer was in serious financial trouble. It was also rumoured that the charterer was about to receive a large injection of finance from a foreign investor.

A local lawyer was appointed to pursue the debt, and a letter was sent to the charterer stating that, if it did not pay the outstanding commission, winding-up procedures would be started via an application to the local court. Again the charterer did not respond with an offer of settlement.

ITIC, as promised, began the winding-up process, prompting an immediate payment to the shipbroker by the charterer.

The ITIC Claims Review also highlights a problem of a different nature faced by a ship agent in Canada, which was owed more than C$70,000 by a local company which had been declared bankrupt. ITIC instructed lawyers to have the ship agent properly listed as a creditor, and although there were other creditors, aspects of the agent’s debt took priority over many of the claimants and ITIC managed to recover C$42,998 on behalf of the ship agent.

ITIC said, “The case shows the importance of ensuring that claims are properly filed in liquidations.