The wrong box

A commercial ship manager received legal papers from cargo interests in connection with a cargo claim. The commercial managers immediately notified the lawyers for the cargo interests that they were “managers only” for the ship in question and therefore not responsible for cargo claims. The lawyers then pointed out that “owner’s box” in the relevant charterparty contained the following words “[name of commercial manager] as managing owners”.

On investigation by ITIC, it was established that the actual ship owner’s P&I coverage did not include cargo claims. With the risk that the ship owner might not indemnify their commercial manager, ITIC made an approach to them to ensure that the claim was well taken care off.

Had it not been, there was a clear risk that the claim could be pursued against the commercial manager whom it might have been alleged, had failed to make their agency status clear. The advice from ITIC to this member on how to describe themselves on future charterparties was “[Name of commercial manager], as managers, on behalf of owners [ name of owners]”.