Marchand Navigation, a Greek company that at one point was the disponent owner of the bulker Maria Theo 1, has won a Singapore-seated legal case to exercise a lien against hire payments from Olam Global Agri to a subcharterer of the vessel.
On Tuesday, Singapore High Court judge Justice Kwek Mean Luck awarded Marchland the $190,112 that Olam owed Singapore-based subcharterer Sinco Shipping for the hire of the 28,400-dwt Maria Theo 1 (built 2017).
He did so after upholding clause 18 in the New York Produce Exchange 1946 Time Charter form that stipulates a disponent owner can place a lien on sub-freights, sub-hires or demurrages if it steps in to pay for expenses such as bunker fuel that are the contractual responsibility of the charterer.
The charterparties at the heart of Marchand’s claim involved a time charter for the Maria Theo 1 that it lined up with Sinco, which then subchartered the vessel to Olam under a voyage charter contract in late 2022.
Marchand told the court that by the time Sinco’s voyage charter to Olam had been completed, it had paid $406,401 owing for bunkers procured for the vessel by Sinco from Integr8 Fuels.
While Sinco stated that it intended to repay its bunker creditors in full as part of a scheme of arrangement proposal, Marchand said it was forced to pay because Integr8 Fuels was threatening to arrest the vessel, as Sinco had defaulted on payments.
Marchand notified Olam in January this year that it was exercising a lien on the charter hire owed by the commodities trader to Sinco.
Sinco, in turn, told Olam that it should still get paid for the voyage charter because any disputes between itself and Marchand should be settled through arbitration.
Olam, faced with competing claims from Marchand and Sinco, notified them that to avoid the risk of paying twice, it would hold on to the money and make payment in accordance with any agreement reached between the two companies.
No amicable agreement
Olam also offered to pay the charter hire into escrow pending a resolution.
Despite Olam’s efforts to reach an amicable agreement, Marchand began legal action against Olam in Singapore in early 2023. Sinco was subsequently added as a party to the proceedings, and all parties appeared before Judge Kwek in September.
He directed that $190,112 be paid to the court pending his determination of Marchand’s application. This was released to Marchand.
Judge Kwek dismissed Sinco’s argument that the bunker fuel matter be settled through arbitration, agreeing with Marchand that the arbitration clause did not apply because there was no dispute referrable, given that Sinco had admitted that the Integr8 sum was due and owed.
The judge ruled in favour of Marchand and awarded the company an additional SGD 13,000 ($9,735) for costs. Sinco was also ordered to pay Olam SGD 9,000 in costs.
S&P Global data indicates that the Mario Theo 1, at the time of the charters, was owned by a subsidiary of Oaktree Capital Management, while VesselsValue puts the ship under the commercial control of Evripos Shipmanagement of Greece.
The ship was sold in September this year to Liberian-registered Atlantic Adam Shipping and renamed Atlantic Adam upon delivery in November.
Neither Marchand nor Sinco could be reached for comment.
