Although it is normal practice for a broker to collect commission from the owner, the Baltic Exchange appreciates that in certain circumstances the broker will arrange to collect the commission from the charterer. The Baltic would like to remind brokers that such an an agreement should be documented by both principals.
The Baltic Code addresses this arrangement as it can lead to conflict should commission fail to be paid:
8) All parties must ensure there is absolute clarity regarding the payment of broker commissions. In the event it is anticipated that commissions will be deducted from hire and paid to the broker by the charterer, then this must be expressly stated in both recap and charter party. Any subsequent change must be similarly documented.
Brokers are advised to make clear to both owners and charterers during the negotiation, who will be responsible for commission payment and include this in the charter party. If this is agreed at a later stage then the Baltic Exchange recommends that email confirmation is obtained by both parties, stating who will be responsible for the payment of the broker’s commission.