Failure to check status of owners

A shipbroker Member in Italy, acting on behalf of a Swiss charterer, fixed a ship to carry a cargo of soya pellets from Argentina to Tunisia with arrival at the load port to be between 18 and 22 September.  The Member was advised by the owner's agent of delays to the ship and extensions were granted by the charterer up to 26 September.  In the event, the ship did not complete the discharge of its previous cargo until 29 September.  The owner refused to present her for loading until he received an indemnity from the charterer holding him harmless from claims for delay.  The charterer extended the cancelling date to 2 October but refused to provide the indemnity.

On 1 October the owner's agent informed the broker that the owner was unwilling to present the ship for loading due to charterer's unreasonable refusal to provide an indemnity.  The charterer then formally agreed to the owner's request but owner's agent advised that their principals had already withdrawn the ship.

The Member subsequently received a telex from the charterer's lawyer putting him on notice that the Member, as well as other parties, would be held responsible for damages consequent on the non-performance of the charter party.  The damages consisted of additional freight and demurrage for a replacement ship, the extra cost of the cargo and penalties for the delay in loading.  The writ alleged negligence on the part of the broker for his failure to make a substantially greater effort to establish the precise status of the ship when it became clear the situation was deteriorating and, more importantly, his failure to ascertain that the ship had not actually been purchased by the alleged owner at the time the charter party had been concluded.

The Club's lawyers in Italy advised that the only part of the claim which would be admitted was the extra freight charges.  The other items were questionable both as to liability and as to quantum.

After lengthy delays in the court proceedings a settlement was ultimately negotiated.