A claim quickly despatched

A shipbroker regularly acted for the same charterers in a particular trade where it was customary to agree to “half despatch”. This is essentially a charge that the charterer gets from the owner if they conclude operations with the ship faster than the allotted time they have been given. It is in effect the opposite of paying demurrage. The rate is usually half of the demurrage rate – hence “half despatch”.

However, in this particular fixture the owners requested free despatch i.e. they would pay nothing. 

The recap was issued which contained reference to “half despatch” and the owners advised the broker that this was incorrect and that they had agreed basis free despatch.

The individual broker was covering for another broker. The second broker agreed that this was the case, but he had failed to inform the charterers, or to amend the recap accordingly. Therefore, the position was that charterers believed they had agreed “half despatch” and owners believed they had agreed “free despatch”.

Unsurprisingly, at the end of the voyage charterers felt that they had despatch due to them, but owners refused to pay. The charterers looked to the broker to reimburse the funds they felt they were owed.

As the difference was relatively low, and it was clear an error had been made (albeit it arguable it was not causative of any loss) it was felt prudent to settle for US$ 45,000 in lieu of legal costs and litigation risk. This was reimbursed by ITIC.