ITIC Reimburses Shipbroker For $100,000 Claim Due To Laycan Clause Conflict

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The International Transport Intermediaries Club (ITIC) recently reimbursed a shipbroker $100,000 after a complex dispute arose from conflicting laycan clauses in a voyage charter party. This case, featured in ITIC’s Claims Review, emphasizes the importance of detailed contract drafting in the maritime industry to avoid costly mistakes.

Case Summary

  • Issue: The shipbroker, acting as the sole broker, was instructed by both the charterers and shipowners to incorporate their respective laycan (lay days and cancelling) clauses. However, the broker included both clauses in the charterparty without realizing they were contradictory.
  • Outcome: Neither party noticed the discrepancy initially. Later, when the shipowners anticipated delays due to prior commitments, they invoked their laycan clause to adjust loading dates, which charterers did not reject within the stipulated period. However, upon noticing the delay, the charterers invoked their own laycan clause to cancel the charterparty.
  • Financial Impact: The cancellation forced shipowners to seek alternative employment for the vessel, which led to alleged financial losses. An initial $400,000 claim was reduced to $100,000 after negotiations, which ITIC ultimately reimbursed.

Lessons Highlighted

Mark Brattman, Claims Director at ITIC, noted that this case illustrates the crucial role of precise contract review in maritime agreements. Inserting contradictory clauses without verification led to significant financial ramifications, stressing the need for meticulous attention to detail in drafting and reviewing charterparty contracts.

This incident reinforces the importance of clear, aligned terms to prevent similar disputes, and ITIC’s role in supporting intermediaries facing such contractual complexities.

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Source: ITIC