Technical manager caught by “smoking gun”

The technical manager of a tanker which he had managed for three years, found himself on the receiving end of a claim from the owner for US$ 1,400,000.  Multiple claims were made, mostly without any particular merit, relating to repair costs and loss of earnings.  The owner’s main grievance appeared to be the alleged negligence of the crew supplied by the manager.  At an early stage in the arbitration proceedings  the arbitrator ruled that the owner’s lawyers were entitled to a full inspection of all the manager’s files, which were found to include an internal memo (the “smoking gun”) from the manager’s superintendent criticising the performance of certain crew members and recommending their replacement. The claim was settled at the threshold of arbitration for US$ 300,000, mostly because of the “smoking gun” memo. The legal costs amounted to an additional US$ 300,000.