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

London P&I Club issues renewed warning on cargo liquefaction

The London P&I Club says the lifting of an iron ore ban in India, together with the recent total loss of two ships, has put the spotlight once again on the problem of cargo liquefaction.

In the latest issue of its StopLoss Bulletin, the club says, “There are specific challenges involved in the export of iron ore fines from Indian ports during the monsoon season which can increase the moisture content of the cargo to levels where liquefaction can occur. This can result in severe loss of a ship’s stability and, sometimes, in the vessel sinking. Other cargoes such as nickel ore are also prone to liquefaction.

“Last month, the Indian Supreme Court lifted the ban imposed in 2010 in Goa on the mining, storage and export of iron ore, and allowed the e-auctioning of 11.5m tonnes of excavated iron ore which has been lying unused since the ban was introduced. The process will be supervised by a committee set up by the court. A separate committee was also appointed to advise how much iron ore can be extracted each year, and it is due to report its recommendations by 15 February, 2014. It is likely that there will be an increase in iron ore loadings from that region.

“There have also been total losses in recent months of a ship carrying Indian iron ore fines and a second carrying nickel ore. Investigations into both cases are at an early stage to establish precisely the cause of the sinkings. There are currently no links between these incidents and the cargoes on board.”

The London Club has issued a number of warnings about the dangers of cargo liquefaction, particularly in cases involving the carriage of iron ore fines and nickel ore from places such as India, Sierra Leone, Guatemala, Indonesia and the Philippines. It says, “Great care must be taken when handling these cargoes, and the rules governing them under the IMSBC Code must be closely observed. Ships can be offered cargo which is unsafe due to their moisture content being above the Transportable Moisture Limit. This can lead to liquefaction, and is a particular problem in locations such as parts of India, when the cargoes are exposed to monsoon rain.

“Owners who are considering carrying iron ore fines or nickel ore are strongly advised to contact the club early on, before concluding a fixture, to ensure that the risks and associated precautions are fully explored.”