Bill for a buoy
Canal transit agents represented a ship that collided with a buoy. The canal authority sent an invoice to the agent for the damage of US$ 225,000. The owners disputed the amount of the invoice and told the agent to negotiate with the authority.
The agent felt that the invoice was too high but that their principal’s figure was unrealistically low.
Canal transit agents are required to lodge a bond with the canal authority to cover their principal’s liabilities. When the negotiations became protracted the authority drew down upon the agent’s bond for the whole amount. The owners declined to reimburse the agent repeating their instruction to negotiate a reduction in the claim.
ITIC contacted the owners to advise that they should indemnify their agent irrespective of their view of the amount of the canal authority’s claim. The owners did not respond positively or even fund what they considered to be the true value of the claim. ITIC had been tracking the ship and arranged for it to be arrested in the Far East. This resolved the issue.