A shipowning company affiliated with the Moundreas-family-controlled NGM Energy is chasing the owner of a general cargo ship that slammed into its tanker off Qingdao in 2021 to lodge security for a damages claim to the tune of $110m.
The 35,200-dwt Sea Justice (built 2005), a general cargo ship controlled by China’s Glory Ships but registered under Marshall Islands single-ship entity Sea Justice Ltd, collided with the NGM Energy-controlled 150,000-dwt suezmax A Symphony (built 2001) while it was anchored off the Chinese port, rupturing one of its bitumen-filled cargo tanks.
The accident led to an oil spill that required an extensive marine and coastal clean-up operation that stretched over 54 days. It also caused the cancellation of a lucrative deal NGM had lined up to sell the tanker to undisclosed buyers for $14.8m.
Details of the subsequent legal battle between the two registered entities that are listed as the official owners of each vessel have come to light after Symphony Shipholding, the registered owner of the A Symphony, arrested the Sea Justice, which recently arrived in Singapore under the name G Harmony, although still under Glory Ships control.
The NGM Energy affiliate, in its Singapore arrest proceedings, blamed the collision on the negligent actions of the Sea Justice and its master, based on the findings of the China Maritime Safety Administration (MSA) collision investigation report published in February.
The MSA said the A Symphony was anchored off Qingdao in heavy fog when its bridge watch team noted that the Sea Justice was approaching on a potential collision course. The tanker’s third officer repeatedly tried to hail the Sea Justice on radio to warn it of the danger but received no reply. Warnings were also repeatedly sounded on the ship’s horn.
On board the Sea Justice, the master was found to have ignored warnings given by the bridge duty officer a full 10 minutes before the collision that there was a radar target dead ahead.
The master attempted to take evasive action only after the duty officer was able to spot the A Symphony through the fog using a telescope, but by then it was too late. Within seconds, the cargo ship struck the A Symphony’s port side No 2 tank at an angle of 59 degrees.
The MSA report identified the Sea Justice and its master’s failure to keep a proper lookout, to use safe speed or to take effective avoiding actions, and poor bridge management, as the primary causes of the collision.
The vessel and its master were also cited for improper emergency response actions, including immediately going astern to separate from the tanker and leaving the hole it created completely exposed to the sea and the bitumen inside to spill into the ocean.
The A Symphony was found to have sounded wrongful fog signals that indicated it was underway rather than at anchor. In addition, its third officer was found to have failed to report the urgent situation to the master in time. The master was notified only six minutes before the collision.
Around 9,400 tonnes of bitumen was spilt, with 5,283 tonnes recovered in the clean-up operation.
On 30 April 2021, Sea Justice Ltd applied to the Qingdao Maritime Court to establish the Sea Justice Limitation Fund in China in relation to the collision. The application was approved and CNY 39.5m ($6m) was paid into it.
Symphony Shipholding, the registered owner of the A Symphony, lodged a claim against that fund, but also filed a case against Sea Justice Ltd in the High Court of the Republic of the Marshall Islands.
An attempt by Sea Justice Ltd to block the Marshall Islands legal proceedings through a worldwide behaviour preservation order, the Chinese equivalent of a worldwide anti-suit injunction, was rejected by the Qingdao Maritime Court, which ruled that the parallel legal action was not against Chinese law.
Both cases are ongoing.
The A Symphony continued to trade in the NGM fleet until July last year, when it was sold to Sino Susceed Shipping, for which it trades as Cathay Phoenix.
The G Harmony remained under arrest in Singapore on Tuesday with a full load of buses stowed on top of its cargo hatches.
Glory Ships could not be reached for comment.
Disposal costs | $5,300,000 |
Off-hire for a period of 156 days | $1,872,000 |
Repair costs | $6,180,000 |
Claim for bunkers | $185,250 |
Superintendent charges | $150,000 |
Loss of sale | $4,800,000 |
Qingdao port disbursements | $103,320 |
AS CLC 92 limitation fund | $74,210,796 |
SPSO costs | $5,892,968 |
Skimming vessel costs | $145,051 |
Lightering costs | $6,615,183 |
Anti-pollution measures by Bihai Maritime Consulting | $43,630 |
Escort tugs and the provision of 10 tons of foam | $717,415 |
MSA pollution penalty | $8,600,000 |
MSA collision penalty | $31,250 |
TOTAL | 110,846,865 |
Values have been rounded up to the nearest dollar
