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

Tanker brokers count cost of failure to pass on claims documentation

International Transport Intermediaries Club (ITIC) says delay in submitting - or failure to pass on - documentation is the most common cause of claims against tanker brokers. Moreover, the tightening of procedures in a difficult market may serve to make such failures more costly.

In the latest issue of its Claims Review, ITIC cites the case of a demurrage claim for $352,122 which was passed onto a charterer by a broker within the 90-day charter party time limit period. The charterer, however, declined to pay because it had not been given notice that a demurrage claim would be made within the 60-day period provided for in the charter party. Although the owner had informed the broker within the 60-day period that a demurrage claim would be made, the broker had not passed on this information to the charterer.

In the past, this 60-day notification deadline that a demurrage claim was coming had not been strictly adhered to, the owner and charterer tending to concentrate instead on the 90-day demurrage time limit for the relevant documentation to be sent to the charterer. A tightening of procedures by the charterer, however, meant that the claim in this case was rejected, whereupon the owner sought recovery from the shipbroker.

The relevant clause in the Shellvoy charter party provided that failure to give notice extinguished the claim and that subsequent presentation of the claim within 90 days did not remedy the situation. Although, in this case, there were issues as to whether the previous conduct had amounted to a waiver of the right to rely on the 60-day notice period, the fact that the broker had failed to pass on the message meant that it had to contribute substantially to the claim.

ITIC says the failure to pass on claims documentation within the relevant time limit is the most common cause of claims against tanker brokers. It adds that it has also settled liabilities arising from a failure to pass on documents relating to deviation and port costs, among other things.

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