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The shipping dispute cycle

Mark Taylor, Partner in the Mazars Forensic and Investigation Services team in London looks at the impact of the economic downturn on the shipping sector.

In the Mazars 2011 Litigation and Arbitration survey, we identified that the forecasted increase in disputes resulting from the economic downturn was yet to be seen. However, we noted that the shipping sector was behaving much more as one would expect. This global sector is apparently a copy book example of how the economic downturn manifests itself in worldwide disputes, and in view of this I'll share my recent experiences of disputes in the shipping sector.

I first noticed an uptick in shipping disputes when it became apparent that there was a shortfall of cargoes on the US East Coast and I was appointed on a breach of contract matter. This was in relation to an eight year contract of affreightment (CoA) that was breached as the charterer no longer had cargoes to ship.