Port clearance predicament

A ship sailed from Western Australia without the correct port clearance. The Australian border authorities would not issue the Master with port clearance after sailing. The ship was discharging in China, but they would not accept the ship without the correct port clearance. Consequently, the ship had to sail to the Philippines to obtain port clearance before continuing on to discharge in China.

As the agents of the ship, there was a concern that they could be held liable by the local border force and potentially their principal for the additional costs incurred. The total additional costs were approximately US$100,000. Initially, it was thought that the agent had no liability as it was the Master who sailed without the correct documentation. However, upon investigation, it was found that some confusion was partly caused by the agent. A draft port clearance was issued for the Master to confirm, which they did, and the agent applied to the border force. However, the actual confirmation email the agent relied upon was for a departure of the same ship a month prior and not this voyage.

So the ship sailed, but it was argued that regardless of the confusion caused by the agent, the delay of the ship in Australia until the correct port clearance was issued would have been minimal. The fact remained that the Master should not have sailed. Therefore, a settlement of US$20,000 on a "without prejudice" basis was offered, which was accepted.