Clause for concern

A shipbroker negotiated a short time charter on behalf of disponent owners (owners). The broker had worked with the owners for several years and it was their usual practice for the broker to use the rider terms of the owners’ head charter when fixing sub charters. This meant the rider terms of the head charter and the underlying charters would be the same.

Towards the end of the charter period the ship was left idle for several days at anchorage. At redelivery, the owners insisted the ship had to undergo hull cleaning before they would accept her. They also claimed hire for all the time she was idle. However, charterers insisted that they had no obligation to pay hire under the terms of the charter, just the hull cleaning if required. It turned out the rider clauses in the sub-charter were different to those in the head charter.

Unfortunately, the broker had passed to the charterers a copy of a different charter’s rider terms, not the disponent owner’s rider terms. The charterers were therefore in their right to reject payment of the extra hire whilst the vessel was inspected and undergoing cleaning.

Ultimately the ship did not require cleaning but had already lost ten days in ballast to reposition to a port where the hull cleaning could have been performed if the ship had indeed required it. The charterers offered to pay for the hull inspection and no more. The owners stood by their claim of about US$ 75,000 for time in ballast and turned to the broker for a recovery. As the broker had sent terms to the charterer that the owners had not agreed there was very little defence. A deal was reached whereby the broker paid the owners US$ 65,000. The amount was reimbursed by ITIC.