In its recent claims review, ship broker and agent P&I mutual insurer ITIC, managed by Thomas Miller, has reported on a case in which ship brokers fixed a charter party that contained an option for a second voyage. Unfortunately the brokers failed to pass on the charterer’s message requesting a second-leg option, which as a result had to be declared upon completion of loading of the first voyage.
The owners refused to perform the second leg (the spot market having risen in the interim) as the option had not been declared in time. On being informed of the broker’s mistake the charterer’s position was that, if the owners did not perform then the charterers would claim US$500,000 in damages from the brokers. The charterers claimed that the sum was the additional cost of fixing a ship in the, by then, higher, market.
The broker, with ITIC’s support, negotiated with the owners, who agreed to perform the second leg for an additional US$275,000. This figure more accurately reflected what could have been achieved in the spot market, ITIC said. It then reimbursed the broker for the additional freight.
https://www.itic insure.com/resources/publications/claims review/article/option omission 143458/