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 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