Appointing party and ship owners: company confusion

An English ship agent accepted a nomination for the agency of a ship from a company in St. Petersburg. The appointment message simply read “please advise D/A, restrictions and timetable in your port for our ship going to discharge about ABT 1,700 mts from Amsterdam”. Advance funds were requested but none were received. The ship arrived and departed and, following chasers for payment, ITIC’s assistance was requested.

An investigation revealed that the owners of the ship were, in fact, a different company in Russia. ITIC contacted the company explaining that they had contracted as principals and owed the money. This was denied and the Russian company claimed they had contracted as agents only. ITIC’s legal correspondent in St. Petersburg was appointed to approach them, explaining that they should honour their obligations or, at the very least, compel the owners of the ship to settle the debt.

By chance, the same company once again contacted the agent with a nomination for a ship, at which point the Agency Manager pointed out to them that they would be hardly likely to assist given that, the last time they had done so, they had gone unpaid for their work. Payment was then made. This case demonstrates the importance of the way people contract. Often, ITIC has been asked to defend ship managers and agents who have not made their agency status clear. For more information, please see the March 2000 Intermediary article ‘Signing off 2: Purchase orders.’