A ship agent was asked by their principal to enquire whether there was space to transit through the Panama Canal on a specific date. However, the agent misunderstood the request to check if a slot would be available, instead taking the request as instructions to book the slot.
In the end, the principal did not require the slot at all. The agent tried to void the booking, but the canal authority denied their request to do so. They therefore had to cancel the booking which led to cancellation fees of US$ 94,000 being charged to the principal.
The agent tried to seek a mitigation request from the authority but it was denied. The principal sought recovery of these charges from the agent. The agent had no defence and the claim was settled in full. The amount was covered by ITIC less the ship agent’s deductible.