Feeling the heat

Following the discharge of the cargo from a ship a shipbroker was presented with an invoice for heating expenses amounting to US$ 70,000 by the owners to be passed on to the charterers.

However, the invoice was issued to the wrong counterparty. The shipbroker asked the owners to revise the invoice by addressing it to the correct counterparty before they would send it on to charterers.

A revised invoice was never received and the shipbroker neglected to follow-up with the owners. Almost a year later, the owners started to press for a confirmation of payment for the invoice. As no revised invoice had been received, the shipbroker passed the original invoice to the charterers. Unfortunately, the claim for heating costs was now timebarred as per the charterparty conditions which required the claim to be submitted within 90 days from completion of ship’s discharge.

Charterers refused to pay the claim and the owner looked to the shipbroker. It was argued that a fifty-fifty split of liability should apply. Whilst the broker had not passed on the incorrectly addressed invoice and had not followed up on the matter, the owners had addressed the invoice to the wrong counterparty and were asked to provide a corrected version which they never did. Further, they also neglected to chase for the payment for almost a year.

A settlement was agreed at this level and the shipbroker paid the owners US$ 35,000 which ITIC reimbursed.