It has been a quieter year for the Baltic Exchange’s dispute resolution team, with the overall number of cases down on 2018.
Commercial shipping disputes come in many shapes and sizes. From unpaid broker commissions to relatively small disbursements, the Baltic Exchange is able to support its members in retrieving monies owed to them through its popular disputes resolution service, headed up by former shipbroker Mike Dunwell in London.
Speaking on this year’s cases, Mike Dunwell said:
“It is great to see the number of cases we are having to deal with is down this year. This ultimately shows a higher standard of business being undertaken. Of course, we are on hand to support should this not be the case.”
Around two-thirds of cases brought to the Baltic this year have been successfully settled, a similar figure to last year. Less than a fifth of complaints have resulted in the errant company having to face the ultimate penalty of being “posted”. A posting means that all members of the Baltic Exchange are advised to contact the Baltic to find out more details before doing business with the company in question. Leading maritime counterparty risk analysis firm Infospectrum also uses the Baltic posting information when flagging risk to its clients. 12 per cent of this year’s total complaints are still ongoing, with eight per cent requiring no further action.
For those ongoing cases, a decision on how to proceed will be made at the next Baltic Membership Council meeting. Until this time, Mike Dunwell will continue with efforts to persuade companies to reach mutual agreement in order to avoid posting.
About the Baltic Dispute Resolution Service
For those unfamiliar with the Dispute Resolution Service, it is a complimentary resource run by the Baltic Exchange for its Members. The service is designed to recoup money owed to Members, mainly relating to commission in the case of brokers, and hire/freight where owners are concerned. However, it can also be used to ensure that an arbitration award is honoured, or, to highlight any form of malpractice according to the Baltic Code of Conduct.
When a breach in the Baltic Code has occurred, and appropriate reparations have not been made, the party is faced with the possibility of being posted by the Baltic Exchange. The threat of being published as an unfit counterparty in front of the global membership, represents a final, highly undesirable, penalty for those unwilling, or unable, to make good on the losses that they have caused. This action is recognised both within the shipping community and by the wider financial and commodity markets, as well as due diligence agencies operating across other related sectors. Clear breaches of the Baltic Code are also often cited in arbitrations.
The Dispute Resolution Service is free of charge to Members who can also use the service to collect monies owed on behalf of their clients. Non-Member companies using the facility will be charged 15 per cent of the total recovered, capped at a maximum of £15,000 per case. The Baltic’s goal is to increase the benefits of being a Member, and this fee to non-Members will enable the Baltic to pursue more cases and give better support to Members seeking help, while still providing a much relied on service to the industry at large.
“We would like to express our appreciation for the Baltic’s hard work, patience and persistence in getting our commission settled which, in spite of all our efforts, remained outstanding for nearly one and a half years.
We realise that this was not an easy task but thanks to your efforts the matter was finally resolved.
It was the first time in our history that we had occasion to use this service which the Baltic provides to its Members and it was a good reminder of the importance of being a Member of a historical institution such as the Baltic Exchange”. – Prominent Greek Dry Cargo broker.
“We highly recommend the Baltic Resolution Service. It is exceptionally user-friendly and responsive and, most importantly, it delivers results. Recently, it helped us resolve a long-standing dispute and recover a large sum of money.” – Leading bulk and tanker operator.
“As a major futures broker, we requested the assistance of The Baltic Exchange Dispute Resolution Service, with five clients who had failed to pay for some time. Within 15 days of initial contact, four out the five parties have paid very promptly and the fifth is still pending.
In our view having membership with the Baltic Exchange is very good value for money.
The Baltic Exchange and SGX contacts were also very influential, as any shipping company would not want to be posted on the Baltic Exchange, or, have this kind of publicity.
Mike Dunwell is very easy to talk to and we trust him and his team with his style and powers of persuasion chasing clients for payment.“– Major worldwide Broker.
Source: Baltic Exchange