Shipbroker leaves message for another day

A London broker was the sole broker in relation to a contract of affreightment (“COA”). The COA contained a base freight rate for Rotterdam discharge. The freight rate was stated to be on the basis of a specified discharge rate.

The broker was told by charterers that in the future they may wish to sell a cargo for discharge at a port that was not mentioned in the COA. The charterers had indicated that this would be at a slower discharge rate than the figure used for Rotterdam. The owners responded that if the discharge rate was the same as Rotterdam it would be the same freight.

The broker noted that owners had not responded on the basis of the lower discharge rate and carefully reported to charterers exactly what had been said. At this point the broker went on holiday and was on a beach when he received a message from charterers which read:

“As we had discussed last week we have noted owners confirmation to use same Rotterdam CP rate for discharging vessel basis the same discharge rate. We confirm the same and shall let owners know as and when we have cargoes.”

The broker felt that the message did not require action and did not forward it to owners.

A few months later the charterers nominated a cargo on that basis. The parties disagreed about the freight rate. Charterers insisted that they had a deal at the Rotterdam freight rate. Owners said that the rate they had given was merely indicative and they had not made a formal offer.

Charterers brought a claim against the broker. They pointed out that they had sold the cargo on the basis of the Rotterdam freight rate. They claimed that had the broker passed on their “acceptance” message owners would have responded saying the rate was only an indication and not binding. In those circumstances charterers would not have sold the cargo at the same price.

Ultimately a solution was reached. Owners reduced their freight requirements to nearer the Rotterdam figure and the broker contributed US$ 50,000 to the additional freight. ITIC reimbursed the broker.