Commission collection in court

A ship broker had entered into an exclusive commission agreement with a ship owner, which provided for commission of 5% to be paid to the broker on the sale of any of their fleet of vessels even if sold through another broker. The broker heard that two of the owner’s ships had been sold through another broker for EUR 30,300,000 each. The ship owners refused to pay the ship broker’s commission of EUR 303,000. Lawyers were appointed and the commission claim was heard before the First Instance Court in January 2013. The court found for the ship broker and awarded the commission of EUR 303,000 plus interest and costs.

The ship owner appealed the decision of the First Instance Court to the Supreme Court, and put forward an allegation that the broker who had initially handled the sale had been incompetent. The ship owner also involved the local ship brokers’ association in an attempt to evidence that the broker’s employee had fallen short of industry standards. The response of the local association to the questions on competence posed by the ship owners was in favour of the ship broker.

In April 2014, before the expense of a trial in the Supreme Court had been incurred, the ship owner approached the ship broker with an offer of settlement at the commission amount of EUR 303,000 without interest and without the payment of costs. The costs in taking the matter to trial at the Supreme Court were estimated at a further US$45,000, but ITIC was informed that the particular Supreme Court was always reticent in awarding costs and was unlikely to award more than US$10,000.

As taking the matter to the Supreme Court would result in additional unrecoverable costs, and the ship broker was willing to forego the interest, ITIC agreed settlement at the commission amount of EUR303,000 plus the costs awarded by the First Instance Court of US$32,300. The costs incurred in the Supreme Court proceedings were waived.