Persistence pays

Shipbrokers notified ITIC of their concern about outstanding commission owed to them by time charterers, who were widely thought to be in financial difficulties. The charterparty provided that the time charterers were obliged to deduct the broker’s commission from the hire and pay this directly to the brokers. The charterers had deducted EUR 50,514 commission from hire paid, but had only paid EUR 20,000 to the brokers; payments suddenly ceased without explanation.

ITIC wrote to the time charterers on behalf of the shipbrokers on two occasions and were advised that payment was to follow, however no money was ever received. A local lawyer was then appointed and contacted the debtor directly, warning that ITIC would consider a ship arrest should the next instalment not be promptly received. This prompted the payment of a further EUR 10,000, leaving EUR 20,514 still owing. Payments ceased again.

ITIC was advised by the local lawyer that it was not possible to arrest the ship against which the commission had been incurred because the debtors were only the time charterers. However the charterers had their own fleet of ships. A ship owned by the charterers was due to arrive in a jurisdiction where she could be arrested for shipbroker’s commission. An arrest order was obtained, and this produced another payment of EUR 10,000. Unfortunately, no further payments were received and it became apparent that the ship on which the arrest order had been obtained was held up at the previous port and the arrest order could not be served. An arrest order was therefore obtained to arrest another of the debtor’s fleet. This arrest was effective and the debtor paid the balance owed.

The legal costs were paid by ITIC.