Owner fails in low sulfur fuel cost claim against port agent

SEPTEMBER 15, 2015 — Indemnity insurer International Transport Intermediaries Club (ITIC) has reported a case in which the owner of a chemical tanker was unsuccessful in claim against a port agent for costs incurred in taking on additional low sulfur fuel at a European port. 

The port agent was appointed by the owners of the chemical tanker to attend the vessel in port. As the agent did not have an office at that particular port, it engaged its usual sub-agent to assist locally. 

Prior to the vessel's arrival, the master sent an email to the agent asking whether there were any restrictions on the type of fuel that could be used while the vessel was both alongside and at the port's outer roads.

The agent passed this request to its sub-agent, who in turn made inquiries of the local harbor master, who was responsible for enforcing the EU directive relating to the use of low sulfur fuel.

The harbor master confirmed that the vessel was required to burn low-sulfur marine gas oil from the time of its arrival at the port's outer roads. This advice was passed to the master, who duly followed these instructions. 

As the vessel waited at anchorage it became clear to the master that he would not have sufficient low-sulfur fuel on board to complete operations and, as the vessel was unable to take on additional low-sulfur fuel at that port, the owners decided to divert to another port to replenish their supply.

The vessel thereafter returned to its intended discharge port and operations proceeded without further disruption. 

The agent subsequently received a claim from the owners of the vessel for approximately $150,000. The owners alleged that the information provided to them by their agent was incorrect, and that the local regulations only required vessels to burn low sulfur fuel while alongside the berth, and not at anchorage. Because low-sulphur fuel was more expensive, the owners claimed for the additional costs incurred in burning this fuel when, they claimed, this was not necessary. They also claimed for the costs of diverting the vessel to take on the additional low sulfur fuel. 

It was established that the sub-agent had simply passed on the instructions received from the harbor-master, and that the agent had in turn passed this on, word for word, to the owners.

Lawyers mounted a vigorous defense to the claim, which was subsequently withdrawn. ITIC covered the legal  costs of defending the agent.

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