Unpaid disbursements

A ship agent in Spain was owed US$ 12,000 in outstanding disbursements by the owner of a tanker which had called at a Spanish port under their agency.

Having sent numerous chasers to the owners, the agent asked ITIC to pursue the owners on their behalf under the terms of their debt collection cover with ITIC.

ITIC wrote to the owners who replied that payment could not be made until they had received a freight payment from their charterers in respect of a completely different ship. ITIC responded to say this was an unacceptable excuse, and that if payment was not made the ship would be tracked with a view to arresting it at the next suitable port.

Given the relatively modest amount of the debt, ITIC needed to ensure that the agent did not arrest in a jurisdiction where the legal costs would be disproportionate to the amount due. In these circumstances costs can be minimised and legal action made financially realistic if the agent makes sure that their accounts are presented in a clear and accurate manner.

The ship was due to head to Malta where ITIC instructed lawyers to prepare the arrest documents. Unfortunately, the ship did not enter Maltese territorial waters, instead performing a ship-to-ship transfer operation offshore, meaning that she could not be arrested.

Noting that the ship was heading for Greece, Greek lawyers were instructed to prepare and file arrest proceedings. The arrest papers were served on her arrival. Almost immediately, the debt was paid in full. ITIC covered the costs of both the Maltese and Greek lawyers under the agent’s debt collection cover, which came to approximately US$ 6,000.

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