Shipping Sub Agency Agreement

The facts were as follows: E.S. Binnings (“Binnings”), an agent at the golf ports, sued the shipping company on an unpaid commission of about $500,000. The shipping company had previously hired a New York steamboat agent, F.W. Hartmann – Co. Inc. (“Hartmann”) as a general agent for regular operations in North America. Hartmann`s contract with the shipping company allowed Hartmann to appoint sub-agents to ports where Hartmann did not have an office. Hartmann appointed Binnings as Hartmann`s sub-agent for the Gulf of The United States and the ports of New Orleans and Houston. This contract between Hartmann and Binnings required both to pay a 3% commission on all cargoes shipped through New Orleans and Houston. Between 1981 and 1984, Hartmann`s financial situation deteriorated and during 1983 and 1984 Binnings accepted Hartmann`s notes for approximately $300,000 for unpaid commissions.

FONASBA are also publishers of the Standard Liner Agency Agreement and the General Agency Agreement (for Liner Services), both of which were revised and adopted in July 1993. The FONASBA sub-agency agreement follows the general layout of the Standard Liner agency agreement and contains clauses dealing with general terms and conditions, accounting and finance, remuneration, insurance, duration, sub-agent tasks, functions of the delegate general and finally the court. As an alternative to establishing an exhaustive list of the subcontractor`s tasks, the agreement refers to the agency agreement between the line and the general plenipotentiary and leaves it to the parties to identify the tasks covered in this document that the subcontractor must perform instead of the general plenipotentiary. In practice, it can, of course, be difficult to convince a line leader to agree that the sub-agents appointed by the General Plenipotentiary actually act as agents of the client. A similar case was tried in Canada in 1986 concerning the bankruptcy of a general agent. Once again, the sub-agents failed to convince the court that there was a “contractual practice” between the client and the sub-agent (the contractual relationship between the two parties to the agreement). The Canadian Court was referred to an English case, Calico Printers` Association v. Barclays Bank, and in particular the Wright J. decision, which stated that the practice of a ship agent employing a sub-agent to perform duties in a port where the agent himself does not have an office will be known to many readers of The Intermediary. The custom seems to be improving, and this seems to be due to the client`s desire to deal with a small number of agents around the world, so that the officers themselves must make their own arrangements for local representation. FONASBA (Federation of National Associations of Shipbrokers and Agents) recognized the requirement for a standard document and recently published the first edition of a sub-agency agreement.

This was adopted at the last annual meeting of FONASBA in October 1998 in Slovenia. The document has also been approved by the Baltic and International Maritime Council (BIMCO). The general agency agreement was developed for the provision of selected agency services over a period of time in a given area or territory. It is designed to be used in all trades and can be tailored to the individual needs of the parties.