Case Studies

Case Studies

Case Study – Total Loss Claim

Real Life Situation:

A vessel was insured for P&I insurance through us. Unfortunately, the vessel sank with a laden load of logs. 12 crews perished in this accident. The ship master and officers are Korean and the crews are Filipino.

The Problem:  

Apart from usual problems expected, there are some other problems to be addressed which includes,

  1. The Owner did not have sufficient funds to settle the crew claims under the “pay to be paid” rule;
  2. Korean crew death claims were known to be very difficult to handle, usually by custom, it is expected to be higher than that provided under the Korean crew contract;
  3. The Filipino crew claims were revised so that the Owner was liable for a much higher limit of compensation;

The estimated total claim, including cargo damage and crew death claims, amounted to approximately USD 45,000,000. This is the largest claim in the Club’s history.

Action Taken:

We handled all claims and correspondence as well as acted vis-à-vis the club on behalf of the owner. Numerous discussions were held with the Directors of the Club to get assistance on claim settlement for the crew despite of the “pay to be paid” rule.

Through our perseverance, the Club agreed to settle the full amount of crew claims. In addition, we have successfully negotiated with the Club Directors to cover the increased ex gratia settlement to the Korean crew despite that it was not within the Club’s terms of cover.

The cargo claims were also resolved and concluded amicably.

All crew and cargo claims arising from this accident were concluded smoothly and swiftly within 2 month from the date of disaster.