Failure to incorporate terms and conditions could find shipping out of its depth

International Transport Intermediaries Club (ITIC) has warned its members of the need to incorporate terms and conditions into their business dealings in order to limit their potential exposure to liability.

ITIC cites the case of the agent at a discharge port who advised a shipper with cargo on board an inbound vessel that that the maximum draft was 40ft. Since the vessel’s draft was just under 41ft, it made an interim call to unload some cargo.

The agent subsequently received a claim from the shipper alleging that the
information it had provided was incorrect, and that vessels with drafts in excess of 40ft could still call at the port, but with two pilots on board, rather than one. The shipper argued that the agent should have been aware of this, and claimed $250,000 in respect of the costs of the wasted call and transporting the excess cargo.

The agent could not find the relevant provision relating to vessel draft on the website of the local pilots’ association, but was subsequently advised by the shipper that there was a link on the agent’s own website to an article explaining that vessels over 40ft could call at the port, providing there were two pilots on board. The agent contacted the local pilots’ association who confirmed that it was possible to call with a draft of 41ft and that the information was on its website, albeit not easy to find.

The agent had incorporated standard trading conditions which limited its liability to ten times its agency fee. This amounted to $36,500, which sum was accepted by the shipper and reimbursed to the agent by ITIC.

ITIC says the claim demonstrates the importance of businesses incorporating their terms and conditions into all their business dealings. ITIC’s terms and conditions, and guidelines for incorporating them, can be accessed at: https://www.itic-insure.com/knowledge/standard-trading-conditions/

ITIC is managed by Thomas Miller. More details about the club and the services it offers can be found on ITIC’s website at www.itic-insure.com


For more information:
Charlotte Kirk
ITIC
Tel. +44 (0)20 7338 0150
charlotte.kirk@thomasmiller.com

Failure to check charterparty wording catches ship manager off guard

International Transport Intermediaries Club (ITIC) has urged ship brokers and managers to check the terms of their charterparty agreements closely before signing, in order to avoid costly mistakes further down the line.

By way of illustration, ITIC cites the case of the manager of a tanker entering West African waters who believed that the terms of a charterparty provided that armed guards were to be appointed at the charterer’s expense. The manager duly appointed the guards for the voyage at a cost of $170,000, but the charterer refused to pay the invoice.

The terms of the charterparty did in fact include provisions relating to the appointment of armed guards, but their deployment was not mandatory. In addition, the charterparty provided that the charterer was only liable for up to $20,000 of any such costs. The charterer offered to pay that $20,000, and the owner demanded that the managers pay the shortfall.

The owner pointed out that it had sent the manager voyage orders stating that the decision to appoint armed guards was one for the owner to make. It had in fact only appointed armed guards for one out of the last ten calls to the area and on
that occasion the charterparty required the charterer to pay the security bill in full.

ITIC says it has seen a number of claims caused by ship brokers and managers acting on their recollection of a charterparty wording, as opposed to checking what the charterparty actually says. On this occasion, ITIC reimbursed the full claim of $150,000.

ITIC is managed by Thomas Miller. More details about the club and the services it offers can be found on ITIC’s website at www.itic-insure.com


For more information:
Charlotte Kirk
ITIC
Tel. +44 (0)20 7338 0150
charlotte.kirk@thomasmiller.com

ITIC says simple checks will defeat shipping industry fraudsters

International Transport Intermediaries Club (ITIC) says ship brokers and agents are among those most at risk of exposure to fraud in the shipping industry, and urges them to carry out simple checks in order to protect themselves.

In the latest issue of its Claims Review, ITIC cites the case of a ship broker which received an emailed freight invoice from an owner for $120,000. The bank account detailed in the invoice was the same as that previously used by the owner but, several hours later, a further email was received, apparently from the owner, advising a change to the bank account details because the original bank account was ‘no longer available to receive payment due to an internal audit.’

The message was not in fact from the genuine owner, but from a very similar email address created by a fraudster, who had also provided a fake account registration form. The broker failed to notice the change in the email address, and it was only after the owner enquired about the whereabouts of the freight that the scam was discovered. The charterer had to pay the freight again and claimed from the broker for negligence. The broker reimbursed the charterer and ITIC reimbursed the broker.

In another incident, a ship agent received an email purportedly from its principal explaining that the principal’s bank details had changed and that funds were to be sent to a new bank account. Although the new bank account had no apparent link to the principal, the agent duly transferred into it the sum of $53,000. The principal, however, did not receive the funds, because the agent had paid the money into the wrong account, failing to notice that the email address notifying the change of bank account was slightly different to the correct email address of its principal. ITIC duly reimbursed the agent for the full amount.

ITIC says it continues to see a large number of such frauds. While most of the victims and intended victims have been ship brokers and ship agents, ITIC has also received reports from members carrying out a wide range of other activities.

ITIC emphasises that anyone making a payment could be the target of fraudsters, and warns that any message purporting to change bank account details should be regarded with suspicion. It has urged its members when transferring funds to use
the telephone to check account details with a trusted representative at the recipient’s office. Simple checks, it says, will defeat the fraudsters.

To access a dedicated fraud section on ITIC’s website, which contains advice and information relating to potentially fraudulent activity, go to:
https://www.itic-insure.com/knowledge/circulars/fraud-circulars/

ITIC is managed by Thomas Miller. More details about the club and the services it offers can be found on ITIC’s website at www.itic-insure.com


For more information:
Charlotte Kirk
ITIC
Tel. +44 (0)20 7338 0150
charlotte.kirk@thomasmiller.com

ITIC e-learning video highlights dangers of switch bills of lading

International Transport Intermediaries Club (ITIC) has produced an e-learning video for ship agents on the use of ‘switch bills of lading’, a second sets of bills used as a substitute for the original bills of lading issued at time of shipment.

ITIC legal advisor Mark Brattman says, “There are a number of valid reasons why a carrier may be asked by the holder of a bill of lading to issue switch bills. For example, the original bill might name a discharge port which is subsequently changed, or perhaps the sellers of goods in a chain of contracts want to protect their commercial position by removing the name of the original shipper that appeared on the bills. Alternatively, the buyer of the goods may require one bill of lading covering items originally shipped in a number of smaller parcels.

“The issuance of a second set of bills of lading, however, is an extremely dangerous practice and the perils of having two sets of bills in circulation for the same cargo are obvious. Great care must be exercised by ship agents who are asked to issue switch bills. They must follow certain rules. It is essential that the second set of bills should only be issued if the complete first set has been surrendered for cancellation. Moreover, the principal must agree in writing to switch bills being issued, and must also approve any changes to the content of the original bills.

“If the second set of bills contains any misrepresentations, the carrier and its agent may be at risk of claims from parties who have suffered a loss as a result of such. Agents should also be aware that switch bills of lading are sometimes issued in addition to – rather than against cancellation of - the first set of bills. This may be because the first set has been held up in the country of shipment, or because the ship arrived at the discharge port in advance of the first set of bills, or simply because the first set have been lost.

“Agents should only ever act on the instructions of their principal and should not, for example, respond to direct requests from a consignee to issue switch bills of lading.” Agents should comply with reasonable requests from their principals but should never knowingly change information that is factual – for example the port of loading – even if offered an indemnity to do so.”

The e-learning video can be accessed at: http://bit.ly/switchbills


ITIC is managed by Thomas Miller. More details about the club and the services it offers can be found on ITIC’s website at www.itic-insure.com


For more information:
Charlotte Kirk
ITIC
Tel. +44 (0)20 7338 0150
charlotte.kirk@thomasmiller.com

ITIC reimburses broker accused by owner of breach of authority

International Transport Intermediaries Club (ITIC) recently represented a shipbroker accused by an owner of breach of warranty of authority in a dispute arising under a non-performing contract of affreightment (CoA).

The shipbrokers had negotiated the terms of a CoA between the charterers and the ship owners, receiving all their instructions from an agent purporting to act for the charterers. The CoA provided for a minimum of 18 shipments to take place over a 12-month period but, when the charterers failed to nominate any cargoes during the period of the CoA, the owners began proceedings against them, claiming damages of $3.1m. In their defence, the charterers denied being a party to the CoA and alleged that neither the shipbrokers nor the agents had authority to negotiate or enter into the CoA on their behalf.

The owners then joined the shipbrokers into the proceedings, alleging that they had breached their warranty of authority by representing to them that they were authorised by the charterers to conclude the CoA. They added that, if the brokers did not have such authority, then they would be liable for the loss suffered.

Liability for breach of warranty of authority does not, under English law, depend on any negligence on the part of the shipbroker. It is, however, specifically covered under ITIC’s rules. The shipbrokers maintained that they had not purported to represent the charterers and said that the owners had known that the brokers were acting on the agent’s instructions. The agents, meanwhile, claimed that they had been authorised to conclude the CoA.

After filing their defence, the charterers did not take an active part in the proceedings. The matter went to mediation between the remaining parties but did not settle on the day. Following the mediation, the owners indicated that they would be willing to accept a
substantial reduction in their claim. The brokers and agents were able to negotiate a
split of the settlement, with the agents paying the largest proportion. ITIC reimbursed the shipbrokers’ contribution of $260,000.

ITIC is managed by Thomas Miller. More details about the club and the services it offers can be found on ITIC’s website at www.itic-insure.com


For more information:
Charlotte Kirk
ITIC
Tel. +44 (0)20 7338 0150
Fax. +44 (0)20 7338 0151
charlotte.kirk@thomasmiller.com

ITIC puts members on alert after uncovering fraudulent diversion of cash

International Transport Intermediaries Club (ITIC) has warned its members to perform proper bank account checks when transferring funds to principals and intermediaries.

The warning comes following the fraudulent diversion of a significant sum of cash transmitted in good faith by ship agents to the master of a ship. The ship agents received a request from a shipowner to deliver $45,000 in cash to the ship’s master during an upcoming port call. The funds were remitted and received by the agents who, a few days later, received a call from a supply company and then from the master asking that, rather than delivering the full amount to the master, they should first deduct part of the amount as payment for fresh provisions, to be delivered to the ship during its stay at the port.

The ship agents agreed, as it was not an unusual request, and they subsequently received email confirmation from the master, copying-in the shipowner. A few days later the master confirmed that the actual amount to be delivered on board was $23,000, adding that the remaining funds should be remitted to the supply company as settlement for provisions. This email contained a preliminary delivery note signed by the ship supply company.

Later that week, the ship agents received a message from the master explaining that he expected the provisions to be delivered at 1800hrs the same day, and outlining the denomination of the funds required. This email had the ship supply company in copy and was sent as a reply to previous messages regarding the provisions and cash to master.
However, it transpired that the email had not been sent by the master, but rather had originated from a very similar - but crucially different - email address. This was not spotted by either the agents or the ship supply company.

The agents received an invoice with banking details bearing the ship’s stamp and master’s signature, together with the stamp and signature of the ship supply company. The email attaching the documentation appeared to have the ship supply company in copy, but in fact the email address - again unnoticed by the unsuspecting parties - was slightly different.

The money had in fact been remitted to a party which had intercepted the communication chain and fraudulently obtained the funds. ITIC reminds its members that, when transferring funds, they should use the telephone to check the account details with a trusted representative at the recipient’s office.

ITIC is managed by Thomas Miller. More details about the club and the services it offers can be found on ITIC’s website at www.itic-insure.com


For more information:
Charlotte Kirk
ITIC
Tel. +44 (0)20 7338 0150
Fax. +44 (0)20 7338 0151
charlotte.kirk@thomasmiller.com

ITIC warns on the potential cost of being an expert

International Transport Intermediaries Club (ITIC) has warned that the role of expert witness should not be undertaken lightly and that all professionals acting in this capacity should be aware that they could face legal action for negligence.

In the latest issue of its online newsletter, The Wire, ITIC cites a case involving an explosion on board a yacht at a marina which resulted in an insurance claim being made against the owner. An expert appointed by the insurers to investigate the cause of the loss concluded that the explosion and fire were the result of a deliberate act by the owner.

The insurers rejected the claim for a number of reasons, and the owner challenged the insurer’s decision in the local court, which found in favour of the insurers because the owner had been working on the vessel without the requisite authority. Therefore, irrespective of the allegation of arson, the policy did not have to respond to the loss.

The owner then claimed €650,000 in damages for defamation in respect of the allegations of arson raised in the expert’s report. Proceedings were issued against the insurers and the expert.

The insurers wanted the expert to pay the costs of the defence of the defamation claim, based on the fact that it was the allegation in the expert’s report that had given rise to the issue. ITIC, however, persuaded the insurers that they should support their expert, especially since they were, in part, relying on the report to reject the claim. ITIC said that, if it turned out that the report was negligent, the insurers could make a claim against the expert which would fall under their ITIC cover but, until then, the insurers should defend the expert. The insurers accepted that position and the claim was ultimately rejected by the courts.

ITIC says, “In addition to potential liabilities, even an ‘innocent’ expert can face substantial legal costs dealing with a claim. At best, only a proportion of these costs will ever be recovered.”

ITIC recently held an expert witness panel discussion at its London offices where the subjects under discussion included the liability of the expert, the incorporation of standard terms and conditions, and effective report writing. The latest edition of The Wire includes articles on these and other issues, as well as a list of ten golden rules of loss prevention for expert witnesses. These include not allowing the desire to help a client blind one to the evidence, not allowing oneself to be bullied, challenging inadequate or misleading instructions, not accepting instructions if it means an inability to remain independent, and not straying outside areas of expertise. “To err is human,” concludes ITIC, “ - the answer is insurance.”

ITIC is managed by Thomas Miller. More details about the club and the services it offers can be found on ITIC’s website at www.itic-insure.com


For more information:
Charlotte Kirk
ITIC
Tel. +44 (0)20 7338 0150
Fax. +44 (0)20 7338 0151
charlotte.kirk@thomasmiller.com

Owner claims against manager for failure to update ballast water management plan

FAILURE to keep a proper onboard record of regulatory and legislative changes can have costly consequences for shipowners and their intermediaries, as evidenced by a claim recently handled by International Transport Intermediaries Club (ITIC).

The crew of a ship which frequently traded to US ports found themselves in contravention of state legislation when they conducted deballasting operations enroute to California more than 50 nautical miles out from the California coast. Such an operation had been permissible - and had indeed been performed by the crew - under the regulations in force when the ship had previously traded to California. But, on this occasion, such deballasting was in violation of new regulations which had entered into force in July 2017, requiring ships entering from international waters to deballast more than 200 nautical miles from the coast of California.

The Californian authorities had disseminated this change to the shipping community by way of circulars. Information had also been published by the ship’s P&I club, but the change had not been not picked up by the ship’s managers. As a result, the ship’s ballast water plan had not been updated to reflect the new rules.

The master admitted to the Californian authorities that the crew were not aware of the change in legislation, and the authorities duly issued a fine of $280,000 against the owner. This was subsequently negotiated down to $215,000, which the owner claimed from the ship managers on the basis that they should have been aware of the change in law and should have updated the ballast water plan. The claim was settled by ITIC.


ITIC is managed by Thomas Miller. More details about the club and the services it offers can be found on ITIC’s website at www.itic-insure.com


For more information:
Charlotte Kirk
ITIC
Tel. +44 (0)20 7338 0150
Fax. +44 (0)20 7338 0151
charlotte.kirk@thomasmiller.com

Ship agent liable for negligence leading to excessive dunnage disposal charges

International Transport Intermediaries Club (ITIC) has recently reported a dispute in which a ship agent in Australia was held liable to its shipowner principal for excessive charges demanded by a contractor for the disposal of dunnage and other materials related to the packing of cargo.

The agent was asked by its principal to arrange for the disposal of the materials upon the arrival of the principal’s ship in Australia, where strict local quarantine regulations apply. The agent engaged the services of a licensed disposal company which, although it had previously been used to dispose of ship’s garbage and other more hazardous waste, was not the company the agent normally used to dispose of dunnage.

The agent instructed the disposal company by telephone, without verifying the total cost. The materials were disposed of and the disposal company submitted its bill for approximately Aus$70,000. When the owner questioned the unusually high charges, the disposal company said it had charged its usual rate for licensed waste disposal. Subsequent enquiries by the agent, meanwhile, confirmed that the amount which its usual dunnage disposal company would charge to deal with dunnage and packing materials would have been approximately Aus$7,000.

The owner was unwilling to pay more than the reasonable costs which should have
been incurred. Because the agent had been negligent in its selection of the disposal company, ITIC reimbursed it the balance of the invoiced sum, amounting to Aus$63,000, which the agent was liable to pay the owner.

ITIC is managed by Thomas Miller. More details about the club and the services it offers can be found on ITIC’s website at www.itic-insure.com


For more information:
Charlotte Kirk
ITIC
Tel. +44 (0)20 7338 0150
Fax. +44 (0)20 7338 0151
charlotte.kirk@thomasmiller.com

ITIC helps ship manager successfully refute owner’s allegation of negligence

International Transport Intermediaries Club (ITIC) has successfully defended a ship manager against allegations of negligence made by a shipowner following the loss of a lifeboat overboard.

The lifeboat was subsequently found drifting off the port of Naze, Japan, after the master of the vessel had reported it missing. In view of the cost of deviating the ship to recover the lifeboat, compared to the cost of replacing it, it was decided, in consultation with hull underwriters and the vessel’s P&I club, to abandon it. The P&I club arranged for the lifeboat’s disposal through its correspondent in Japan.

The owner brought a claim against the ship manager for $90,000, which sum was moreover withheld against fees and disbursements owed to the manager, alleging that the loss of the lifeboat had been caused by the manager’s gross negligence and mismanagement.

However, under the SHIPMAN 2009 management contract governing the relationship between the parties, the owner had no right to set off a claim against what was owed to the manager. Neither could the owner provide any evidence to support its claim that the ship manager had been negligent, let alone grossly negligent.

A report into the incident concluded that it had not been possible to physically examine the release mechanism of the lifeboat before arrangements for its disposal were made by the P&I club correspondent in Japan. The lifeboat had successfully undergone its annual service and inspection six months previously, however, and had been wire-lashed on board the vessel for added security.

ITIC advised the owner that, if the sum owed to the manager was not paid, interest would be applied, and the ship would be arrested. The owner thereafter remitted the funds due, and nothing further was heard about the lost lifeboat.

ITIC is managed by Thomas Miller. More details about the club and the services it offers can be found on ITIC’s website at www.itic-insure.com


For more information:
Charlotte Kirk
ITIC
Tel. +44 (0)20 7338 0150
Fax. +44 (0)20 7338 0151
charlotte.kirk@thomasmiller.com

Shipbroker liable for fixture error leading to damages in rising market

International Transport Intermediaries Club (ITIC) recently helped a shipbroker reduce its level of exposure to claims from a charterer for damages and loss of profits in a rising market, following a failure to pass on fixture options correctly.

The charter agreement between the parties contained an option for a second voyage, but the broker failed to pass on the charterer’s message declaring the second-leg option, which had to be nominated upon completion of loading on the first voyage. The owner refused to perform the second leg as the option had not been declared in time, and the market had risen in the meantime.

The charterer maintained that, if the owner did not perform, it would claim from the broker damages of $500,000 representing the additional cost of fixing a ship in the prevailing market.

Following negotiations with ITIC and the broker, the owner agreed to perform the second leg for an additional $275,000, which more accurately reflected what could have been achieved on the spot market. ITIC reimbursed the broker for the additional freight.


ITIC is managed by Thomas Miller. More details about the club and the services it offers can be found on ITIC’s website at www.itic-insure.com


For more information:
Charlotte Kirk
ITIC
Tel. +44 (0)20 7338 0150
Fax. +44 (0)20 7338 0151
charlotte.kirk@thomasmiller.com

ITIC helps limit naval architect’s exposure after survey vessel capsizes

In a recent dispute, International Transport Intermediaries Club (ITIC) helped a naval architect to successfully reduce the level of a claim by a shipbuilder for damages and loss of profits following the sinking of a hydrographic survey vessel which was deemed to be unstable.

The naval architect was appointed by the builder to approve the vessel’s design and stability in accordance with prescribed standards. The naval architect surveyed the vessel, conducted a stability test, and issued the necessary certificates of compliance, confirming that the vessel conformed to the relevant standards.
The vessel was then put through sea trials during which it capsized, resulting in significant damage. The buyer rejected the vessel and ended discussions about the possible purchase of a number of other vessels from the same builder.

Following the capsize, the buyer and the relevant maritime safety authority commissioned separate reports from two other naval architects, who both deemed that the vessel did not meet the required standards. The builder brought a claim against the naval architect for approximately $2m., representing direct losses allegedly suffered as a result of the incident and a large loss of profits claim in respect of the buyer’s decision not to have further vessels built.

After proceedings were issued, the parties agreed to conduct a repeat of the stability test, which showed the vessel to be unstable and confirmed that compliance certificates should not have been issued. After negotiation, the claim was ultimately settled for $250,000. This reduced settlement was achieved because the builder was unable to provide evidence that further build contracts would have been placed.


ITIC is managed by Thomas Miller. More details about the club and the services it offers can be found on ITIC’s website at www.itic-insure.com


For more information:
Charlotte Kirk
ITIC
Tel. +44 (0)20 7338 0150
Fax. +44 (0)20 7338 0151
charlotte.kirk@thomasmiller.com

ITIC warns about re-emergence of people-smuggling scam
International Transport Intermediaries Club (ITIC) has warned ship agents about the re-emergence of a scam whereby they are being used by people-smugglers to cover the movement of illegal migrants.

The basic pattern of the scam is for owners or managers to ask an agent to attend a vessel's call, and to provide assistance with crew changes. Usually the owner or manager will be previously unknown to the agent. The approach is a sham, but the agent’s involvement will provide cover for the migrants’ arrival in the country. The migrants will then promptly disappear, and the agent will be left with unpaid hotel bills and may face fines from immigration authorities as well as being liable for detention and repatriation costs if the migrants are caught.

ITIC has reminded all agents worldwide to be vigilant when being approached to carry out crew changes by owners or crew managers who are unknown to them.

ITIC is managed by Thomas Miller. More details about the club and the services it offers can be found on ITIC’s website at www.itic-insure.com


For more information:
Charlotte Kirk
ITIC
Tel. +44 (0)20 7338 0150
Fax. +44 (0)20 7338 0151
charlotte.kirk@thomasmiller.com

Superyacht refit overspend dispute illustrates danger of acting outside contract

International Transport Intermediaries Club (ITIC) has warned against the dangers of marine service providers informally offering advice which falls outside the scope of their contracts.

ITIC cites the case of a yacht manager contracted to provide crew management and ISM consultancy for a superyacht. Although the manager was not contracted to provide technical management, the owner sought its advice on two refits. The manager reviewed the scope of works and the budgets from the refit yards as a favour to its client.

Unfortunately, both refit budgets overran and the owner claimed that the manager had been in breach of its duty of care by failing to recommend suitable repair yards, failing to budget properly and failing to properly supervise the refits. The owner alleged that, while the management contracts had said that the manager was not providing technical management, it had in fact done so.

The owner made a formal claim against the manager for EUR900,000 and a sole arbitrator was appointed by the parties. The manager denied that it had accepted any responsibility for the refits, maintaining that the owner’s own staff had chosen the yards. The manager had commented on the scope of works and the budgets provided and, far from managing the refits, had simply been kept in the loop in correspondence, despite the owner’s claim that it had expected the manager to take an active role.

The arbitrator found that the majority of overspend was due to the works which were required by the yacht’s classification society. The owner had not suffered a loss due to the alleged negligence of its manager, and the owner was obliged to pay the costs to keep the yacht in class. Ultimately, ITIC agreed to the payment of $25,000 in settlement, much less than the owner claimed it had incurred in legal costs. ITIC also paid the cost of defending the claim of over $110,000.

ITIC says, “Although the owner’s allegations lacked merit, the claim is an illustration of the dangers of informally providing advice outside the scope of the contract.”

ITIC is managed by Thomas Miller. More details about the club and the services it offers can be found on ITIC’s website at www.itic-insure.com


For more information:
Charlotte Kirk
ITIC
Tel. +44 (0)20 7338 0150
Fax. +44 (0)20 7338 0151
charlotte.kirk@thomasmiller.com

ITIC settles off-hire dispute resulting from ship manager’s negligence

International Transport Intermediaries Club (ITIC) recently settled a claim brought against a ship manager for failure to maintain its obligations under a technical management contract, leading to liability for costs incurred when the vessel was denied permission to berth by port authorities in Australia.

The manager was responsible for the technical management of a bulk carrier which called regularly at an Australian port to load iron ore. The master had notified the manager of a problem with the winch used for the vessel’s mooring rope which, although still operational, needed its worn pinion gear replaced.

The manager had taken no action to arrange the repairs and, over the following months, the vessel called several times at the same port. Each time, when the pilot went on board, the master explained the problem to him, and the pilot was satisfied that, as the mooring lines could be lifted by the winch, the vessel was able to berth safely.

The situation continued until one pilot decided that he would not accept the master’s assurances and refused to allow the vessel to berth. The pilot spoke to the harbour master, who instructed the vessel to go to the anchorage until the winch could be repaired. This caused a four-day delay, during which time the vessel went off-hire in accordance with the terms of the charter-party.

The owner subsequently brought a claim for approximately $150,000 against the manager for the hire not paid to it by the charterer during the off-hire period, and for the additional costs incurred in rectifying this problem outside of scheduled maintenance.

The owner argued that, had the manager responded when it was first made aware of the issue, the repairs could have been carried out without the vessel having to go off-hire. Investigations confirmed that this was indeed the case.

ITIC reviewed the owner’s claim, and determined that some of the losses claimed would have been incurred irrespective of the manager’s negligence. Ultimately, however, it was clear that the manager had breached its obligations to the owner under the ship management agreement and a settlement of $120,000 was negotiated by ITIC.


ITIC is managed by Thomas Miller. More details about the club and the services it offers can be found on ITIC’s website at www.itic-insure.com


For more information:
Charlotte Kirk
ITIC
Tel. +44 (0)20 7338 0150
Fax. +44 (0)20 7338 0151
charlotte.kirk@thomasmiller.com

ITIC settles dispute after Turkey bars entry to vessel with Cyprus connections

International Transport Intermediaries Club (ITIC) recently settled a dispute between a shipowner and its Turkish agent for losses arising from the refusal of Turkish port authorities to allow a vessel to berth because of its connection to Cyprus.

Turkish regulations prohibit any vessel directly or indirectly related to the Republic of Cyprus from calling at Turkish ports. The owner was an existing customer of the agency group appointed to handle the ship’s call in Turkey, but had not called at this particular Turkish port before.

In the agent’s pre-arrival messages to both owners and charterers, it mentioned that anything linking the vessel to Cyprus could lead to the ship not being allowed to berth. In spite of the agent’s express warning to its principal, a document was sent to the agent showing the address of the Panamanian-registered owning company as being ‘care-of’ a company in Cyprus. The agent failed to notice the address and the documentation was forwarded to the authorities.

After the vessel was refused permission to berth, the agent maintained that the owner had been warned about the embargo of all things Cypriot, and had failed to take the necessary action. The owner, meanwhile, claimed that the agent should have carefully reviewed the document. Accordingly, it deducted its alleged losses from other sums due to the agency group.

Although the owner ultimately agreed to accept 50 percent responsibility for the incident, this still left the agency group with a shortfall of $50,000, which was reimbursed by ITIC.


ITIC is managed by Thomas Miller. More details about the club and the services it offers can be found on ITIC’s website at www.itic-insure.com


For more information:
Charlotte Kirk
ITIC
Tel. +44 (0)20 7338 0150
Fax. +44 (0)20 7338 0151
charlotte.kirk@thomasmiller.com

German ship agent wins ITIC-sponsored FONASBA Award

The FONASBA Young Ship Agent or Broker Award 2017, co-sponsored by International Transport Intermediaries Club (ITIC), has been awarded to Niklas Soltow of SCA Logistics GmbH of Kiel, Germany. Katy Aldrick of Seaforth (Kenya) Ltd also received a special ‘highly commended’ award for her paper on the threats and opportunities facing small independent shipping agents in East Africa.

The award was introduced in 2015 and entries were reviewed and judged by a committee headed by former FONASBA President Gunnar J Heinonen which also included ITIC director Charlotte Kirk. Mr Heinonen, expressing FONASBA’s gratitude to ITIC and fellow sponsor BIMCO, said the winning paper provided an excellent picture of the present situation of the market and much food for thought for what is likely to be a challenging future. It is FONASBA’s intention to develop the award still further to create even more interest among the growing number of young ship brokers and agents who represent the future of the profession.

Niklas Soltow said the award was a wonderful way to sustainably encourage the professionalism of young people who want to take up the challenge of the industry

Charlotte Kirk says, “ITIC is proud to be a sponsor of these FONASBA awards, which will be of enormous benefit to the industry as a whole in helping to identify the outstanding ship brokers and ship agents of the future.”

ITIC is managed by Thomas Miller. More details about the club and the services it offers can be found on ITIC’s website at www.itic-insure.com

FONASBA (The Federation of National Ship Brokers and Agents) provides a united voice for the world’s shipbrokers and agents. Founded in 1969, the organisation promotes fair and equitable practices and ensures that the needs of its members are understood at both a governmental level and across the maritime industry. www.fonasba.com


For more information:
Charlotte Kirk
ITIC
Tel. +44 (0)20 7338 0150
charlotte.kirk@thomasmiller.com

ITIC pays out for pool manager’s acceptance of unacceptable tanker

International Transport Intermediaries Club (ITIC) has highlighted the costly consequences of a shipping pool manager’s failure to accurately describe a tanker, leading to a substantial claim by charterers.

The pool manager misdescribed the tanker as being acceptable to a specific oil major, even though he had received an email from the head owner prior to fixing which stated that it had rejected the vessel. This email was overlooked by the pool manager when the tanker was fixed for a spot voyage to load ultra-low-sulphur diesel.

The fixture recap contained a clause stating, “To the best of owner’s knowledge at the time of fixing, vessel is not unacceptable to following oil majors …” The list referred to a number of companies, but did not include the specific oil major.
The pool manager, however, had mentioned during negotiations that the tanker should be acceptable to this specific oil major since it was not excluded.

The charterers could not sell the cargo and had no other option than to put it into
storage. They claimed $250,000 in damages, a claim which was settled by the pool
manager, who was duly reimbursed by ITIC.
ITIC is managed by Thomas Miller. More details about the club and the services it offers can be found on ITIC’s website at www.itic-insure.com



For more information:
Charlotte Kirk
ITIC
Tel. +44 (0)20 7338 0150
Fax. +44 (0)20 7338 0151
charlotte.kirk@thomasmiller.com

ITIC reimburses surveyor accused of negligence leading to ferry damage

International Transport Intermediaries Club (ITIC) has reimbursed a marine surveyor accused of negligence by the owner of a ferry which sustained significant machinery damage while being towed to a shipyard.

The ferry, which operated in North American waters, was due to be towed to a shipyard to undergo a refit. A marine surveyor was engaged by the shipyard to undertake a ‘fit for tow’ survey and to provide a certificate of approval confirming that the towage arrangements between the tug and the ferry were satisfactory.

The surveyor completed his survey and issued the certificate of approval. Three days later, however, the ferry took on water during the course of the tow and sustained considerable damage to its main machinery compartment. The owner of the vessel brought proceedings against the shipyard, the tug company and the marine surveyor for repair costs of US$750,000.

The owner alleged that the surveyor had been negligent in confirming that all watertight openings were closed, whereas expert evidence suggested that water had entered the vessel via open air vents. The surveyor maintained that these air vents were a rarity, that it was outside the scope of the survey to inspect them, and that liability should fall on the company undertaking the tow.

Mediation proceedings took place at which the owner acknowledged contributory negligence on its part and agreed to reduce its claim to US$500,000. All three defendants, including the marine surveyor, contributed to a settlement in this amount.


ITIC is managed by Thomas Miller. More details about the club and the services it offers can be found on ITIC’s website at www.itic-insure.com



For more information:
Charlotte Kirk
ITIC
Tel. +44 (0)20 7338 0150
Fax. +44 (0)20 7338 0151
charlotte.kirk@thomasmiller.com

ITIC and ASG launch new surveyors’ indemnity wording

International Transport Intermediaries Club (ITIC) and the Admiralty Solicitors Group (ASG) have launched a new surveyors’ indemnity wording designed to address the imbalance between owners’ and surveyors’ responsibilities typically encountered under existing indemnity agreements.

Surveyors are invariably asked to sign a waiver and indemnity by the master of a vessel before they are given approval to board. Such documents will frequently stipulate that surveyors must waive all rights to make a claim against the owner and the vessel in respect of any personal injury or loss of or damage to their equipment which they suffer, even if it is caused by the fault of the owner. Conversely, surveyors are also asked to indemnify the owner if any of the vessel’s crew suffer death or personal injury, or if there is any loss or damage to the vessel itself or its equipment. Occasionally, the indemnity will even extend as far as claims made against the owner by third parties.

Mark Brattman, ITIC’s legal director, says, “These waivers and indemnities are usually presented to surveyors as they are climbing aboard the vessel. Surveyors therefore do not have a realistic opportunity to read such documents and invariably just sign them, in order to gain access to the vessel to perform their jobs.

“ITIC has seen many owner-produced wordings over the years, all of them unfavourable to the surveyor. The ASG had a wording which was a significant improvement on the owner-produced documents, but ITIC felt that this could be made more balanced. With the agreement and co-operation of the ASG, a new wording, the ASG/ITIC 10 has been produced.

“Under the ASG/ITIC 10 wording, the owner will have the usual responsibilities of any occupier to any visitors, unless the vessel is considered a casualty, in which event the surveyor will acknowledge that the master cannot guarantee the safety of visitors, and the owners’ liability will be restricted to losses specifically caused - or contributed to - by the negligence, recklessness or wilful misconduct of the owner. Discussions about what constitutes a casualty can take place after the event, thereby allowing the surveyor to avoid the need to negotiate on the steps of the vessel.

“Both ITIC and ASG agree that the new wording represents a far more equitable apportionment of liability when surveyors are asked to attend a vessel, whether by a P&I club on behalf of an owner or by charterers, cargo interests or insurers.”


ITIC is managed by Thomas Miller. More details about the club and the services it offers can be found on ITIC’s website at www.itic-insure.com

The Admiralty Solicitors Group promotes and preserves standards in the practice of maritime law in England. As well as Admiralty Law issues, its interests also embrace dry matters, including the carriage of goods, sale and purchase, insurance and all other aspects of shipping law in which member firms play a prominent part.

For more information:
Charlotte Kirk
ITIC
Tel. +44 (0)20 7338 0150
Fax. +44 (0)20 7338 0151
charlotte.kirk@thomasmiller.com