UK shipowner Imperial Shipping, which carries forestry products in Europe, is locked in a legal battle over cargo loss and wrongful arrest.
Imperial revealed in a filing to UK Companies House that it is “vigorously disputing” a claim from the owner of the 25,000-dwt open-hatch bulker Jade I (built 1998) for $1.77m, plus costs and interest, relating to the loss of deck cargo in a storm.
An arbitration hearing is expected in London in July.
“We are still confident that we are not at fault,” Imperial said of the incident in the Bay of Biscay in December 2021.
It said its lawyers estimate the chance of success in the case at between 65% and 70%, but the risk always encourages protection and indemnity clubs to recommend a compromise, it believes.
The owner of the Jade I, listed as Sunberry Oceanways of Athens by Equasis and VesselsValue, persuaded an Egyptian court to arrest Imperial’s 20,100-dwt multipurpose vessel Timberland (built 2000) in January 2023 in Alexandria, Imperial said.
A demand of $850,000 for the assets was made to reimburse the owner for money paid to cargo claimants.
Imperial posted security in Egypt to release the ship. It then filed a counterclaim of $1m for wrongful arrest on the grounds that the Timberland is owned by a subsidiary, Midlife Shipping.
The company said the London case could be concluded first.
Imperial’s ultimate controlling party is Sequana Maritime.
Profit up
The company once owned tramp and liner shipper Swedish Orient Line, now owned by JA Kjellberg & Soner.
Michael Kjellberg resigned as an Imperial director in 2018.
The company’s accounts for 2022, filed in March, show net profit was $3.47m from chartered voyages, up from $750,000 in 2021.
The contribution from the operation of vessels in the timber trade produced better-than-expected earnings, Imperial said.
There was a 57% increase in voyages and a 10% increase in market share.
Revenue was up at $48.4m from $27.2m in 2021. Imperial held assets of $10m at the end of 2022.
Accounts up to November 2023 and prepared forecasts for 2024 indicate a profit for both those years from ship chartering and operating.
The company owed $6.6m to Swedish Orient Line at the end of 2022. This has since been reduced to $4.5m, the accounts show.
Relations remain “excellent”, but Swedish Orient Line “found trading conditions challenging in 2023 and have sought to recoup the balance … as quickly as possible”, Imperial added.
The company also owns the 2,170-lane-metre ro-ro Greenland (built 1984).
The cost of hiring a typical 32,000-dwt ship fell from $30,000 per day to $14,000 over 2022, according to Imperial.
Rates for timber parcels from southern Finland also dropped from $65 per cbm to $45m per cbm in the second half of the year, “but overall the savings on hire costs meant profit margins improved”.
The freight market is now expected to be in a downward cycle and Imperial will benefit from lower hire rates at first, Imperial said.
But earnings contracted during 2023.
The owner sees opportunities to take ships on long-term deals at the bottom of the cycle, protecting itself from rising rates later, and allowing it to expand in transporting wind turbine towers and blades from Turkey into Scandinavia.
