Tariff trouble

A hub agent was appointed as the ship’s protective agent by the owner. The charterer was an oil major.

Two months after the ship called at a Libyan port, the local sub-agents appointed by the agent informed them that there had been an increase in applicable tariffs with retroactive effect. The sub-agents did not quantify the increase and as a result the agent believed the increase to be inconsequential.

The Pro Forma Disbursement Account (“PDA”) was estimated at EUR 14,000. However, when the Final Disbursement Account (“FDA”) was provided it was for EUR 87,000. Furthermore, it was issued after the contractual time bar in the charterparty for passing port costs onto the charterers due to a delay by the port in providing the relevant invoices. Needless to say, the charterers refused to pay the costs stating that the matter was timebarred.

The owners had no choice but to pay the FDA as they needed to call at the port again and there was a significant risk of their ship being arrested if the costs were not paid. As such, the FDA was paid and the owners claimed against their protective agent for the difference due to a lack of notification of the increased costs.

It transpired that the new tariff had been printed before the time bar and therefore, if the owners had been informed by the agent, they could have calculated the amount due on the basis of the new increased tariff, despite not being able to present an invoice within the time period allowed.

Nevertheless, ITIC advised that, due to the late provision of some invoices by the port, it was always unlikely that the time bar would have been complied with. However, the late invoices were not the full amount of the claim and therefore it was possible the remainder of the costs could have been recovered. The owners were threatening to commence litigation if the matter was not resolved.

ITIC successfully negotiated a settlement of 50% of the difference and reimbursed the agent EUR 36,373.