Persistence pays off for shipbroker in recovering charter party commission

International Transport Intermediaries Club (ITIC) has illustrated how persistence can pay off for shipping intermediaries looking to pursue legitimate claims in today’s difficult financial climate.

In the latest issue of its Claims Review, ITIC recounts the case of a shipbroker owed outstanding commission by time-charterers who were widely thought to be in financial difficulties. The charter party provided that the time-charterers were obliged to deduct the broker’s commission from the hire and pay this directly to the broker. The charterers had deducted commission of Euros 50,514 from the hire, but had only paid Euros 20,000 to the broker. Thereafter, payments had suddenly ceased without explanation. ITIC wrote to the time charterers on behalf of its shipbroker client on two occasions and was advised that payment was to follow. But no money was ever received.

The charterer was then warned that ITIC would consider a ship arrest should the next instalment not be promptly received. This prompted the payment of a further Euros10,000, leaving Euros 20,514 still owing. Payments ceased again. ITIC was advised 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, one of which was due to arrive in a jurisdiction where it could be arrested for shipbrokers’ commission. An arrest order was obtained, and this produced another payment of Euros 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, so the arrest order could not be served. An arrest order was therefore obtained to arrest another of the charterer’s fleet. This arrest was effective and the charterer paid the balance owed. The legal costs were paid by ITIC. “Persistence pays,” says ITIC.

Copies of the ITIC Claims Review can be requested from: chris@merlinco.com

• ITIC is managed by Thomas Miller. More details about the club and the services it offers can be found on ITIC’s website at www.itic-insure.com.

December, 2012 

ITIC Press Release PR0812