Reports alone are not enough

Ship managers acted as managers of a vessel for a number of years until it was sold. When it was delivered in Northern Europe to the buyers, Class suspended the vessel’s approvals due the state of its ballast tanks.

The sellers faced a claim from the buyers which was settled. They then turned their attention to the managers issuing proceedings in which they alleged that they had not been kept sufficiently informed about the condition of the vessel’s ballast tanks. In addition they claimed that the managers had failed to have the ballast tanks repaired during dry-docking in South Africa six months earlier. The claim amount was the difference in repair costs between undertaking the repairs in Durban and Northern Europe six months later.

The managers defended the claim on the basis that they had reasonably relied upon figures attained during the dry docking in South Africa and the owners had received copies of the reports obtained over the years. The court appointed expert produced their report stating that survey reports showed deterioration in the ballast water tanks for a number of years and these should have been investigated. If this had been done the repairs would have been undertaken earlier at less cost. The expert concluded that it was not enough that the owners had received copies of the reports and that “the manager was under a duty to bring the future need for substantial steel renewals clearly and unequivocally to the attention of the owner”.

A negotiated settlement of US$ 700,000 was reached.