John Fredriksen’s Frontline has triumphed in the first round of arbitration over its decision to pull out of a merger with Belgium’s Euronav.
Frontline tore up a combination agreement last month, but its would-be partner said it had no grounds for the move.
Euronav had sought emergency arbitration in Belgium to keep the agreement in place while a second arbitration examined the merits of Frontline’s move.
Frontline said on Tuesday: “Emergency arbitration claims filed by Euronav have been fully dismissed by the emergency arbitrator.
“The decision was issued today, and in addition to fully dismissing the claims, orders Euronav to pay to Frontline all costs of the emergency arbitration proceedings, including full compensation for legal costs incurred.
“This decision strengthens Frontline’s position that its decision to terminate the combination agreement was entirely lawful.”
The costs were not specified.
Euronav confirmed the arbitrator dismissed its “request for provisional and interim measures on the basis of the specific and procedural rules applicable to the emergency proceedings.”
In particular, the panel ruled there was a “lack of urgency” in the case.
“Euronav continues to believe that Frontline’s unilateral action in pursuing the termination of the combination agreement has no basis under the terms of the combination agreement and that Frontline failed to provide a satisfactory justification for its decision to pursue termination,” the shipowner said.
The company added that only the second arbitration will decide on the merits of the validity of Frontline’s actions.
It is not clear how much should be read into this first ruling, given that Euronav’s application was turned down partly because an injunction was not considered urgent, rather than on the merits of the arguments.
“Euronav is in the process of analysing the company’s options and will continue to take appropriate legal action to protect and preserve the rights and interests of Euronav and its stakeholders,” Euronav continued.
The merger was scuppered by the Saverys family, with its blocking stake of 25%. Frontline and Euronav then pursued a fleet tie-up before the Norwegian company decided to pull out.
Battles ongoing
Fredriksen has since equalled the Saverys’ stake through private holdings and shares owned by Frontline.
On Monday, Euronav said it had scheduled a shareholders’ meeting to vote on an attempt by Saverys-owned CMB to replace the Euronav supervisory board.
The Saverys family wants to move the VLCC and suezmax company along the road to decarbonisation.
Frontline and Euronav management had aimed to create the world’s biggest crude tanker company.
