Favourable shipping market conditions in 2021 led to a quieter year for the Baltic Exchange’s Dispute Resolution Service. As dry bulk rates reached multi-year highs, it seems Baltic Exchange members were more content to chase business rather than pursue outstanding payments.

Anthony Zavos, who manages the service, reports that 20 claims were presented last year with a total value of over $2m. Of these, around 60% of the cases were settled with 100% of the claim recovered or a settlement negotiated.

The free-for-members service can be a quick and inexpensive solution to solving difficult disputes without the need of expensive legal assistance. The service has handled claims as small as $3,500 up to as much as several million dollars. Anthony notes that all disputes, irrespective of size, are treated equally and the aim is to try and resolve all disputes amicably where sometimes pursuing a dispute via legal routes may be counter-productive or upset commercial relationships. Claims can vary from unpaid freight, outstanding demurrage/despatch and unpaid arbitration awards. Disputes involving FFA’s can also be considered.

“Our role is to ensure a fair outcome for the claimant and defendant and settle the dispute as quickly and as amicably as possible,” says Anthony, who notes that some claims can be resolved overnight, but warns some can take several years to conclude.

He highlights one dispute that was resolved late last year, but was introduced in 2019. It involved two member companies who were co-broking on a particular deal. A dispute arose and one company did not receive its share of the commission.  “The dispute didn’t involve a great deal of money but there was a principal attached,’’ says Anthony. In the end the claim was settled on terms that both parties were happy with.

“Our service is focussed on mediation between the two parties, and we try and smooth the waters so that matters can be settled amicably.”

Of course, if no satisfactory resolution can be achieved then the defaulting company is at risk of being ‘Posted’, suspended or expelled from membership.

The service is overseen by the Baltic Membership Council.

Currently chaired by Colm Nolan, the Council is made up of six members and meets every six weeks. It has disciplinary powers of censure, suspension and expulsion over members and is responsible for maintaining proper, ethical standards in trading.

All members have access to the posting list which can be found in the intelligence section of the password protected “MyBaltic” area of www.balticexchange.com.

Anthony reveals that eight companies were posted last year. He says: “The Baltic Exchange’s decision on such matters carries great kudos. It still has weight amongst most charterers and owners within our industry and I encourage a company with a claim however large or small to consider our service.”

Access to the claims service is a straightforward procedure thanks to the recent introduction of a new software system. The claimant is asked for a summary of the dispute, a copy of the charterparty (if relevant), and details of the defendant, including domicile and full address. All parties involved are then contacted for clarification and due diligence is performed.

“The Baltic Exchange has always offered a mediation service in some form, and the slick service available today is a benefit of membership that I encourage members to consider,” he says, adding that the new ‘ticketed’ service, logs every aspect of a claim from the beginning to the end to enable  a more streamlined process.

Whilst the service is freely available for all Baltic members, the service can also act on behalf of a member’s client. In these cases, the Baltic will take a success fee which is 15% of the value of the claim, capped at $15,000. One or two major P&I Club already use the service to support its claims handling on a regular basis. 

For further details or to discuss a potential claim please do not hesitate to contact Anthony Zavos.

Tel: +44 (0)20 7369 1628

Mob : +44 7775 745512

Email: disputeclaims@balticexchange.com