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A case of mistaken identity when serving demurrage documents

Given that there can be multiple brokers involved in chartering, it can sometimes be difficult to identify for which party is a broker acting – owner, charterer or both? Wrongly identifying the agents/principal could prove costly.

A typical example would be where claim documents (such as those relating to demurrage) are sent to brokers by owners and an assumption wrongly made that brokers are acting for the charterers. By the time the charterers get the documents the claim could be 'time barred'!

This is what happened in London Arbitration 19/18. There were four brokers involved – A, B, C & D. It was the role of ‘D’ that was in question. Charterers contended that D was owners’ broker because D’s commission was paid by the owners as per C/P. Owners said that D was acting for charterers. Tribunal, whilst referring to an article published by ITIC (Whose agent am I?) held that D was an "intermediary". Just because there was an express clause in C/P making owners responsible for commission, was not indicative of D acting for owners. Conversely, there was also no evidence that D was acting for charterers. D had no express / implied / ostensible authority to receive claim documents on behalf of charterers.

Owners' demurrage claim failed.

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