UK insurer International Transport Intermediaries Club (ITIC) has warned shipping players to have adequate cover following a pay-out to a tug operator involved in a salvage operation.
The mutual insurer is advising stakeholders to ensure measures are in place to cover additional financial obligations when settling unforeseen invoices.
In the latest edition of its six-monthly Claims Review round-up, ITIC detailed a case in which an unnamed ship was arrested to force the owner to compensate its agent for unpaid debts for a tug owner’s services during previous rescue efforts of another of its vessels.
The owner, whose ship experienced difficulties in the Atlantic, asked the agent to arrange for tugs to attend the scene.
The vessel eventually sank and the agent received invoices totalling $220,000 from the tug company, which it passed to the owner.
The shipping company said it could not pay the bill because it was in financial difficulties due to the loss of the vessel.
A promise was made to pay up when a sister ship had been sold, but no time frame was given for this.
“In the meantime, the agent was coming under pressure to settle the invoices of the tug company directly,” ITIC said.
The insurer wrote to the owner but did not receive a response.
ITIC noted that another vessel operated by the same company was heading to a French port at the time.
France is considered an “arrest-friendly” jurisdiction as it usually allows for the seizure of sister ships, ITCI added.
The vessel in question had a different registered owner, but advice from French lawyers confirmed that an arrest should be possible because the beneficial owner appeared to be the same.
This ship was arrested and the owner paid cash into court to release it.
Negotiations then began over the outstanding payment to the tug company, which ultimately agreed to lower its demands to $100,000 and the matter was settled.
Mark Brattman, claims director at ITIC, said: “If a shipping line becomes bankrupt, suppliers will look to get paid by any means and from any party.”
“Having suitable insurance in place can therefore be very helpful for agents finding themselves in these situations.”
