Misdescription of cargo capacity of vessel

A shipbroker Member acted for owners in the fixing of their ship to charterers.  Unfortunately, when describing the cargo capacity of the ship, the figure of 119,995 cubic metres was given by the Member, whereas the correct capacity was 115,003 cubic metres.

The charterers submitted a claim for deadfreight, and the dispute was submitted to arbitration.  The owners argued that the charterers had fixed the ship because it was of a well-known type, suitable for their purposes, and not because of any precise capacity figure.  However, the arbitrators decided, by a two to one majority, that the error made by the brokers gave the charterers a right to recover damages from the owners.

The damages awarded to charterers amounted to US$30,030 plus their costs.  The owners demanded an indemnity from the brokers for this amount plus their own costs.  The Club's lawyers advised that there was little defence to the claim, but were able to reduce the amounts claimed by the owners and charterers as costs.  The claim was settled at a total of US$75,000.