War! (risk premium) - Who is it good for? Absolutely not the broker if they forget to pass on the quote

A tanker was fixed for a voyage. The voyage included an option to call at an additional war risk premium (AWRP) area. As per the terms of the charter party the charterer was liable to pay the AWRP if the ship was to go to the area.

However, it was for the owner to obtain a quotation for AWRP and pass same to charterer for approval “as soon as possible” and “before the AWRP is paid by the owner.”

The owner complied with the clause and passed the required information to the ship broker. After the completion of the voyage, the owner notified the charterers of their claim for the AWRP.

At this point it became clear that the brokers had forgotten to pass on the initial quotation and as a result the charterers refused to pay the AWRP.

ITIC attempted to persuade the charterer to pay the AWRP as (a) they decided to go to the area knowing that they would have to pay an AWRP and (b) the quotation was in line with the market at the time. Therefore, the delayed notification was not causative of any loss to the charterers. However, they refused as the terms of the CP had been breached by the owners.

This meant that the owners had a valid claim against the broker. The full claim for the AWRP of US$ 60,000 was paid by ITIC.