Arrest order forces cruise shipowner to settle outstanding ship agency bill

International Transport Intermediaries Club (ITIC) has warned that failure to pay ship agents promptly in accordance with contractual agreements can have serious consequences for shipowners, and can potentially involve them in costs which far exceed any unpaid invoices.

In the latest issue of its Claims Review, ITIC cites the case of a South American ship agent which was owed $25,000 by the owners of a cruise ship in respect of crew costs and supplies. The costs had been incurred over the course of a number of port calls and, when reminders and chasers to the owners failed to elicit payment, it was decided that more aggressive action was needed.

ITIC ascertained that the ship was chartered to a cruise line, was due to sail from a port in the Canadian Arctic for the High Arctic, and had no apparent plans to revisit South American waters. ITIC instructed Canadian lawyers to arrest the ship where it was, in the Canadian Arctic, and within hours of the arrest being served the owners had paid all outstanding debts in full.

ITIC notes, “The owners admitted that they did not think that anyone would be able to arrest the ship in such a desolate place. The owners were wrong, and paid not only the outstanding disbursements, but also the arrest costs”.

ITIC is managed by Thomas Miller. More details about the club and the services it offers can be found on ITIC’s website at www.itic-insure.com.

March 2011
ITIC Press Release PR0311