An Active Shipping-connected tanker is set to go under the gavel next month after a nine-month legal battle over a package of ship mortgages in default.

The 115,395-dwt Pacific Sky (built 2009) will be auctioned on 16 December at the US federal courthouse in Lafayette, Louisiana, at the behest of Nassau Maritime Holdings Designated Activity Co.

"Pacific Sky has now had nearly seven months since the vessel's arrest to secure financing or otherwise negotiate terms for its release," US District Judge James Cain wrote in his order granting the sale.

"It shows no basis for extending this time, and the motion for interlocutory sale will therefore be granted."

In 2008, HSH Nordbank loaned $418m to five shipowning companies tied to Active Shipping chairman Mehmet Ali Umar.

June acquisition

Nassau acquired the loans last June and has argued it is owed more than $120m in principle and interest.

The Dublin-based loan buyer sued the ship and its registered owner, Pacific Sky Navigation, under seal in the US federal court for the Western District of Louisiana in March. Active Shipping was not named as a defendant.

In May, Nassau tried to force the vessel to auction, but Cain denied the motion for sale.

It tried again in September, arguing Pacific Sky Navigation has not attempted to post security and that the costs of keeping the ship were $3m per year.

Nassau would prevail on its second try, securing an order in early November.

In opposition, lawyers for the ship's registered owner, Pacific Sky Navigation, said it had been unable to obtain security "despite its best efforts" and was engaged in negotiations with Nassau to resolve the disputes.

They argued the move to force an auction was a "strong arm" attempt to get a better deal in negotiations and that, under the German law governing the mortgages, Nassau's acquisition was invalid.

Other ship seizures

In his declaration, Umar said Nassau had seized four other ships in South Africa, Malaysia and China.

Attorneys for the Pacific Sky and Pacific Sky Navigation did not return a request for comment.

The ship's ownership interests say it is worth as much as $24m, a value only rising as global economic conditions improve. VesselsValue pegs the tanker as worth $20.9m.

In its motion for sale, Nassau requested that it be able to bid on credit, up to $124m, or the total it is owed on the mortgages. Cain denied this request.

The Riverside was seized in September. Photo: Ludwigson/MarineTraffic

The dispute resulted in the seizure of another ship, the 115,406-dwt tanker Riverside (built 2009), which both NYK Line and Nassau targeted in separate actions in September.

Those actions included Active Shipping, a Singapore ship manager, and Turkish affiliate Active Denizcilik Ve Gemi Isletmeciligi as defendants.

On 12 November, the ship's registered owner, Glory Riverside Navigation, filed to throw out the attachment in the Nassau dispute.

Nothing has been filed in the NYK lawsuit since late September.

The Riverside is currently moored in the Gulf of Mexico, offshore Louisiana, according to automatic identification system data.