A shipbroker has agreed to a $380,000 arbitration settlement after failing to inform charterers of key voyage restrictions, leading to the cancellation of a charter agreement. The dispute, highlighted in the latest Claims Review by the International Transport Intermediaries Club (ITIC), emphasizes the need for clear communication and transparency in maritime transactions.
The issue arose when the broker arranged a charter between shipowners and charterers but failed to relay a critical restriction—an R1 classification limiting the vessel’s navigation range. The broker initially missed the official certificate due to email issues and only received it via WhatsApp. However, technical difficulties delayed forwarding the document to the charterers. Confident the certificate would arrive soon, the broker neglected to inform the charterers of the vessel’s limits.
Unaware of the restriction, the charterers finalized the agreement. The problem surfaced when the ship's Master disclosed the vessel’s R1 limitation, making it unfit for the intended voyage. This led to the cancellation of the original charter and the creation of a new agreement at higher rates.
The charterers accused the broker of negligence and breach of contract, claiming additional costs, including time, fuel, legal fees, and insurance. After arbitration, the dispute was settled for around $380,000—about 70% of the initial claim.
Mark Brattman, Claims Director at ITIC, commented: "This case serves as a stark reminder of the essential role that precise and timely communication plays in maritime transactions. Brokers must ensure that all critical information, particularly operational limitations, is accurately conveyed to prevent costly disputes and maintain trust within the industry.”
