Puerto Rico-Based Tugboat Company Sues Florida Waste Management Firm for Breach of Maritime Charter Contract
American Tugs Offshore, LLC, a maritime cargo transport company based in Puerto Rico, has filed a federal lawsuit against Florida-based OTB Waste Resources Company for breach of a maritime vessel charter agreement. Filed in the Southern District of Florida, the lawsuit arises from a written contract executed on April 8, 2024, under which American Tugs Offshore (ATO) agreed to provide a tugboat and barge to OTB for the transport of scrap metal between Turks and Caicos and Tampa, Florida. The contract was set to run for one year, with OTB agreeing to pay a daily charter rate of $8,500 plus fuel and operating expenses.
Maritime Transportation Company Claims Breach of Vessel Charter Agreement for Scrap Metal Hauling from Turks and Caicos to Florida
According to the complaint, the charter commenced on May 7, 2024, with ATO dispatching a fully crewed and seaworthy tugboat and barge in compliance with the contract’s terms. Over the following two months, ATO allegedly carried out multiple scrap metal transport operations on behalf of OTB, consistent with the agreed-upon services.
Plaintiff Alleges Unlawful Termination and Nonpayment Under One-Year Maritime Charter Agreement
However, OTB reportedly failed to make full payment for the initial months of charter services. Although the company allegedly acknowledged the outstanding balance and assured ATO of payment, it subsequently failed to remit the overdue amounts. On June 26, 2024, OTB unilaterally terminated the charter agreement, despite the absence of any contractual provision allowing for early termination absent breach by the tug operator.
Complaint Seeks Over $2.8 Million in Damages for Lost Charter Fees and Services Rendered
At the time of termination, OTB allegedly owed $286,368.45 for services already performed. The lawsuit further claims that because the charter was set for a fixed one-year term—with no clause permitting early cancellation—the remainder of the contract remains enforceable. ATO is seeking an additional $2,584,000.00 in damages for the remaining 304 days of the charter, calculated at the contractual daily rate.
In total, ATO claims $2,870,368.45 in actual damages and seeks to recover attorney’s fees, pre-judgment interest, post-judgment interest, and costs, all of which are expressly provided for in the written agreement.
Breach of Maritime Contract Lawsuit Filed Under Admiralty Jurisdiction in Southern District of Florida
The lawsuit is brought under the court’s admiralty jurisdiction pursuant to 28 U.S.C. § 1333(1) and general maritime law. Venue is based on both federal statutes and a forum selection clause contained in the written contract between the parties.
This case highlights the importance of clarity and enforcement in maritime commercial agreements, particularly when involving multi-month or multi-voyage charter arrangements. Under maritime law, early termination without cause or failure to remit timely payment can give rise to substantial breach of contract liability.
If your business is facing a maritime contract dispute involving tugboats, cargo transport, or vessel charters, it is critical to understand your legal rights and obligations. Contact us today to discuss your case.
