• Fri
  • Nov 28, 2014
  • Updated: 2:40pm

Standard contract for brokers

PUBLISHED : Monday, 08 April, 1996, 12:00am
UPDATED : Monday, 08 April, 1996, 12:00am

The Federation of National Associations of Ship Brokers and Agents (Fonasba) has launched a standard international brokers commission contract to address problems of commission collection from recalcitrant shipowners.


Such problems arose in the past because shipbrokers were not signatories to the charter party. So if a shipbroker was not paid for arranging the charter, he could not sue the defaulting owner under the terms of the charter party. His recourse to the courts was severely impaired and any action was likely to be expensive and the outcome uncertain.


Paul Smith, vice-chairman of the federation's documentary committee, said the initiative for the new contract came from Peter Tudball who, as chairman of the Baltic Exchange, raised the matter at a meeting of the Baltic & International Maritime Council (Bimco), held in Venice in September 1991.


Shipbrokers will now invite the owner to sign the contract, which lays out the terms under which commission is payable and establishes where, if a dispute arises, arbitration proceedings should be held.


Should the owner refuse to sign such a straightforward document, then the broker can draw his own conclusions, according to the federation.


The Baltic and International Maritime Council is recommending its use and has placed it in its Forms of Approved Documents list.


The federation says national shipbrokers' associations including the Association of Ship Brokers and Agents (Asba) in the US, has expressed support for these contracts.


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