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 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

Shipping experts identify realities of risk in ITIC panel debate

The need for proper training, sound risk management, and contractual expertise were among the issues identified as essential to commercial success in a panel debate following the annual board meeting of the International Transport Intermediaries Club (ITIC) in Athens on 24 September.

The panel, moderated by ITIC’s underwriter for Greece, Robert Hodge, and comprising Tim Jones of Barry Rogliano Salles (BRS), Bob Bishop of V Ships, Bjorn Tonsberg of Wilhelmsen Ships Service and Paul Herring of Ince & Co, was asked to debate The Realities of Risk, and what kept them awake at night.

Tim Jones referred to a case where a junior broker reportedly concluded a fixture using social media. A dispute arose post-fixture on the terms of the agreement but, since the broker had left the company by the time the dispute arose, it was not possible to obtain the necessary information from the social media site. Jones emphasised that BRS’s policy is to only use company emails when negotiating fixtures.

Bob Bishop observed that it was relatively easy to monitor the performance of machinery and that problems could be predicted and fixed. Monitoring the performance of staff was harder, but an essential task in managing a service company. He added that training is essential within any company, to ensure that the younger generation has the knowledge to avoid the mistakes of the past.

Bjorn Tonsberg emphasised that risk management is a key factor, an important part of which is to carry out due diligence, in order to establish exactly who one is dealing with. Commenting that he was aware of ship agents offering to act for agency fees far lower than commercial rates, Tonsberg stressed that it was essential for owners to carry out due diligence on the agent, including whether or not that agent had professional indemnity insurance in the event of a loss.

Paul Herring noted that good contractual management, including the use of standard trading conditions, enabled businesses to sleep better at night, a sentiment with which all the panel were in agreement.

Following questions from the audience, attendees retired to a drinks reception on the balcony of the Hilton Athens as the sun set over the Acropolis.

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

Persistence pays off for shipbroker in recovering charter party commission

International Transport Intermediaries Club (ITIC) has illustrated how persistence can pay off for shipping intermediaries looking to pursue legitimate claims in today’s difficult financial climate.

In the latest issue of its Claims Review, ITIC recounts the case of a shipbroker owed outstanding commission by time-charterers who were widely thought to be in financial difficulties. The charter party provided that the time-charterers were obliged to deduct the broker’s commission from the hire and pay this directly to the broker. The charterers had deducted commission of Euros 50,514 from the hire, but had only paid Euros 20,000 to the broker. Thereafter, payments had suddenly ceased without explanation. ITIC wrote to the time charterers on behalf of its shipbroker client on two occasions and was advised that payment was to follow. But no money was ever received.

The charterer was then warned that ITIC would consider a ship arrest should the next instalment not be promptly received. This prompted the payment of a further Euros10,000 - leaving Euros 20,514 still owing. Payments ceased again. ITIC was advised that it was not possible to arrest the ship against which the commission had been incurred because the debtors were only the time-charterers. However, the charterers had their own fleet of ships, one of which was due to arrive in a jurisdiction where it could be arrested for shipbrokers’ commission. An arrest order was obtained, and this produced another payment of Euros 10,000.

Unfortunately, no further payments were received and it became apparent that the ship on which the arrest order had been obtained was held up at the previous port, so the arrest order could not be served. An arrest order was therefore obtained to arrest another of the charterer’s fleet. This arrest was effective and the charterer paid the balance owed. The legal costs were paid by ITIC.

“Persistence pays,” says ITIC.

Copies of the ITIC Claims Review can be requested from: chris@merlinco.com

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