23.11.2018

Insurance company refused to pay compensation on salary non-payment to seafarer

The Far Eastern Territorial Organization (FETO) of SUR received a complaint from a seafarer. The insurance company Soglasie which had insured the seafarer's salary from non-payment, refused to pay him a compensation.

Andrey Leonidovich Pavlenko, who worked as Master  on the ship Smile, have made a complaint about the non-payment of wages for the period from February 6 to February 28, 2017. The owner of the ship was Linton Consulting Ltd, which entered into a bareboat charter agreement with Laetana Holdings Ltd. On February 23, 2017, the vessels operator, MV-Line, asked Andrei Leonidovich to prepare Smile for delivery to representatives of a Chinese company in the port of  Jiangyin. When the Master asked  about salary, he was promised that the backdated wages would be paid to him at the company's office in Vladivostok. When he arrived in the city, the representatives of the "MV-Line" refused him to pay his salary, citing the fact that there was no money. After some time, the crew members of "Smile", who applied to law enforcement agencies, found out that neither the ship, nor the company longer exists.

The salary of seafarers for this period of time was secured by the insurance company "Soglasie". According to the amendments to the Maritime Labor Convention, 2006, which entered into force in Russia on January 18, 2017, each vessel must have insurance certificates in order to  guarantee the payments to seafarers in case of  ships bankruptcy. In such event, a seafarer has a right to apply to the insurance company by himself  and ask for wage compensation.  Andrey Pavlenko did just that.

But the company Soglasie  told him that  the franchise in the amount of 2,500 dollars should  be deducted from the 3,730 dollars of wages  due to him for the period in question. In addition, he was required to submit documents which he could not had in principle:  bareboat charter agreement between the shipowner and Laetana Holding Ltd and certificate of unpaid wages from Laetana Holding Ltd. It should be noted  that these requirements were not stipulated in the terms of the insurance agreement. Thus, actually  the "Soglasie" refused to make insurance claim payout to Andrei Leonidovich.

The SUR FETO prepares a lawsuit in court upon the Master's complaint. This is the first case when  seafarer files a lawsuit against  insurance company. Our lawyer  examined the complaint from Andrey Pavlenko and admitted the requirements as fair. This process is very important for us. Many members of our Union work on ships insured by the Soglasie, said Nikolai Sukhanov, the SUR FETO Chairman.

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