Sinking feeling for tug owners

A ship agent was asked by the owners of a ship which was in difficulties in the Atlantic to arrange tugs to attend to the ship.

The agent arranged for tugs to attend the ship, but the ship subsequently sunk.

The agent received invoices from the tug company which they passed to the owner. The invoices totalled US$ 220,000.

The owner claimed that due to the loss of their ship they were in financial difficulties and unable to pay the invoice. They promised that payment would be made once the sale of one of their other ships had been completed but it was unclear when this might be. In the meantime, the agent was coming under pressure to settle the invoices of the tug company.

ITIC wrote to the owner but received no response. ITIC noted that another ship operated by the same owner was heading to a French port. France is considered an “arrest friendly” jurisdiction as it usually allows for the arrest of sister ships. The ship in question had a different registered owner but advice from French lawyers confirmed that an arrest should be possible as the beneficial owner appeared to be the same.

The ship was arrested and in order to obtain its release the owner placed security by way of a cash deposit into the court’s account. The ship was released. Negotiations took place regarding the beneficial ownership of the ship. Ultimately, the tug owner agreed to lower their demands to US$ 100,000 and the matter was settled for this sum by recovering this from the owner.