Broker Penalized $380,000 for Failing to Respond to Email

A shipbroker recently settled a negligence claim for $380,000 after failing to inform a charterer about a navigation restriction on a vessel, as reported by brokerage insurer ITIC. The broker was arranging a charter party between shipowners and charterers, where the owners had indicated that the vessel’s navigation area was restricted to R1. Despite this restriction being listed on the ship’s official certificate, the broker failed to forward it to the charterers due to technical issues with email spam filters and the WhatsApp chat application, neglecting to inform them of the limitation.

As a result, the charterers finalized the charter party without realizing the vessel’s navigation area was restricted, leading to complications when they sent voyage instructions to the ship’s master. The charterers only discovered the R1 notation from the vessel’s captain, causing the original charter agreement to be canceled. Negotiations ensued, resulting in a new deal that accounted for the ship’s actual capabilities. During this process, it was revealed that the broker had been aware of the R1 restriction before the deal was finalized, leading the charterers to pursue an arbitration claim against the broker for additional expenses incurred.

The broker faced the potential threat of a larger claim from both the charterer and the shipowner. Ultimately, a settlement was reached in arbitration for approximately 70 percent of the charterer’s demand, amounting to $380,000. ITIC’s claims director, Mark Brattman, emphasized the importance of accurate communication of critical information, particularly operational limitations, to avoid costly disputes and maintain trust in the maritime industry. This case serves as a reminder of the vital role that precise and timely communication plays in maritime transactions.

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