The venue of a long-running legal battle between Norwegian investment fund Parbulk II and Indonesia’s Humpuss Intermoda Transportasi has shifted to a court in Jakarta.
The dispute involves a sale-and-leaseback deal of a bulk carrier that went horribly wrong and the battle has since played out in courts and arbitration centres as far afield as London, Singapore and New York.
Parbulk II director Christian Due indicated in a statement sent to TradeWinds that there is a strong suspicion that Humpuss and its subsidiaries are trying to use the home ground advantage for this case.
These fears come despite Parbulk II — a fund set up by Pareto with investors including the Wilh Wilhelmsen and Blystad groups — having secured a $27m award against HITS subsidiary Heritage Maritime from an ad hoc LMAA arbitral tribunal.
In addition, the English High Court separately found in favour of Parbulk II pursuant to the guarantee signed by Humpuss, which provides for the High Court of England as the non-exclusive dispute resolution forum. The court ordered Humpuss to pay $28m plus interest to Parbulk II.
‘Undermining trust’
The award and judgment were issued over a decade ago, but Due claims Humpuss has yet to pay.
“Awards and rulings made against Humpuss and its subsidiaries in England have simply not been honoured by Humpuss ... Unless they are recognised and enforced in Indonesia in accordance with the prevailing laws and regulations in Indonesia, they risk undermining international trust and confidence in Indonesia and deterring foreign entities from entering agreements with Indonesian counterparties,” Due said.
The dispute stems from a sale-and-leaseback deal involving a panamax bulk carrier lined up between Pareto-managed Parbulk II and Humpuss in 2007.
Parbulk II agreed to buy the 70,000-dwt bulker Mahakam (built 1996) from Humpuss in 2007 for $67.5m. It bareboat chartered it back to the Indonesian company at $38,500 per day for five years.
However, the deal turned sour in April 2007, when Humpuss stopped making the charter payments.
In June that year, Parbulk II arrested the ship in Malaysia, claiming that Humpuss was in breach of the contract not only because it had failed to pay the charter hire but also because it did not maintain hull-and-machinery insurance, changed technical managers without consent and failed to keep the vessel in an acceptable condition.
Humpuss redelivered the Mahakam to Parbulk II shortly after its arrest. It was subsequently sold to Cyprus Sea Lines for $17.5m, less than one-third of what Parbulk II had paid for it two years prior.
Seeking to recoup the $30.7m it claimed it was owed for unpaid charter hire, Parbulk II filed a Rule B attachment against Humpuss in a New York court, followed by another Rule B attachment in a Connecticut court. It only managed to attach a total of $422,000 through these US proceedings.
The shipowner then arrested one of Humpuss’ small chemical tankers in Singapore.
Humpuss was hit around the same time by a string of lawsuits from foreign shipping entities such as Spyros Polemis’ Seacrest Shipping, John Fredriksen’s Golden Ocean Group and Hanjin Overseas Bulk, who all claimed they were owned substantial amounts of money related to charter hire.
The company had attempted to expand internationally through Singapore-based subsidiary Humpuss Sea Transport during the heady days of the dry bulk boom that immediately preceded the 2008 global financial crisis.
After the markets crashed and the lawsuits came flooding in, Humpuss left the international shipping scene and retreated into the domestic Indonesian trades, where it continues to operate with a fleet comprising small tankers and gas carriers, as well as tugs and barges.
These ships rarely make international voyages, which makes it almost impossible for foreign companies to arrest them to secure claims.
Parbulk II has filed its claim in the South Jakarta District Court.
TradeWinds was unable to reach senior executives at Humpuss for comment.
