Approximate cause

A charterparty stated that “charterers shall give owners approximate 20/15/10/7/5/3 days’ notice including intended re-delivery port, thereafter 2/1 day(s) definite notice…”

Charterers duly sent the broker a 20-day approximate redelivery notice. However, due to an oversight, the broker failed to forward this notice to owners. When charterers later sent a 15-day approximate notice, the broker did forward it, but the owners rejected it on the grounds that the initial 20-day notice had not been received.

Upon realising the error, the broker attempted to rectify the situation by asking owners to accept the original 20-day notice retrospectively. The owners refused. Without informing charterers of the issue, the broker then independently issued a new 20-day redelivery notice to owners, stating a later redelivery date.

Subsequent notices from charterers still indicated an earlier redelivery date, which the broker passed on to owners. However, owners rejected these notices, arguing they conflicted with the 20-day notice they had received from the broker.

The ship was ultimately redelivered on the earlier date, as per the charterers’ final notices. Nevertheless, owners claimed hire up to the later date stated in the broker’s replacement notice and withheld the overpaid hire, amounting to approximately US$200,000.

Charterers refused to pay the difference and held the broker responsible, citing the failure to forward the original notice and the confusion caused by the broker’s unilateral issuance of a new one.

Extended discussions followed, during which ITIC supported the broker. The defence focused on several key points: that the redelivery notices were approximate by nature; that owners could not reasonably rely on a single notice while disregarding subsequent updates; that the Master had provided an inaccurate ETA, which affected the redelivery timeline; and that owners had not demonstrated that they could have secured alternative employment for the ship during the disputed period.

Ultimately, the matter was settled at approximately US$50,000, significantly less than the original claim. ITIC covered the claim in full.

This claim highlights the critical importance of timely and accurate communication, especially when handling contractual notices. Brokers must ensure that all notices are promptly and correctly passed between parties, and avoid taking unilateral action that could misrepresent either side’s intentions. Transparency, diligence, and clear documentation are essential to maintaining trust and avoiding costly disputes. When errors do occur, early disclosure and collaborative resolution can help mitigate financial exposure and preserve relationships.