Avoidable appointment of armed guards

A ship manager was managing a tanker entering West African waters. The manager believed the terms of the charterparty provided that armed guards were to be appointed at the charterer’s expense. The manager duly appointed the guards for the voyage at a cost of US$ 170,000.

The charterers refused to pay the invoice. The terms of the charterparty did have provisions relating to the appointment of armed guards but their deployment was not mandatory. In addition, the charterparty provided that the charterers were only liable for up to US$ 20,000 of any costs. The charterers offered to pay that US$ 20,000.

The owners demanded the managers pay the shortfall. They pointed out that they had sent the manager voyage orders stating that the decision to appoint armed guards was for the owner to make. They had in fact only appointed armed guards for one out of the last ten calls to the area and on that occasion the charterparty required charterers to pay the security bill in full.

ITIC reimbursed the full claim of US$ 150,000. ITIC has seen a number of claims caused by ship brokers and managers acting on what they recall a charterparty says as opposed to checking what it actually says.