Fred Olsen Cruise Lines has failed in its quest to prevent the beaching of a former cruise ship it sold for eventual recycling in Turkey but turned up off the Indian ship recycling beach at Alang.
The 28,600-gt Odin (ex-Black Watch, built 1972) was beached at the plot of Alang-based GGSBY Industries on Saturday after a High Court of Gujarat judge lifted the arrest warrant the UK-based, Norwegian-controlled cruise operator obtained on 6 June to prevent its demolition from taking place in India.
Fred Olsen claims that it sold the Black Watch to Turkish company 2E Maritime in September 2020. Clauses in the sales contract expressly stipulated that the ship was to be used as an accommodation ship at a shipyard in Tuzla for six to eight months, after which it was to be recycled at a Hong Kong Convention-compliant facility in Turkey.
Lawyers representing Fred Olsen in the Indian legal proceedings said the onward sale to Olivia Navigation, an affiliate of cash buyer Best Oasis, was in breach of the original memorandum of agreement with 2E Maritime and therefore it should be cancelled and the ship returned to Turkey for recycling.
The monetary value of the losses Fred Olsen claimed to have suffered was $4.14m based on the difference between the achievable market prices in Turkey and India.
However, Fred Olsen’s Indian lawyers told TradeWinds at the time of the arrest that the goal of the legal proceedings was not to obtain a monetary judgment.
The company wanted the ship returned to Turkey for dismantling by an approved facility based on the argument that that 2E Maritime’s sale of the ship to India was in blatant breach of the terms of the original sale agreement, and as such the Turkish company did not have title to the ship, and therefore sale to Olivia Navigation was invalid.
Lawyers acting on behalf of Olivia Navigation subsequently filed a petition to lift the arrest.
Their argument was that the Olivia Navigation purchased the Black Watch from an entity called Kepno Shipping for $8.12m, and were provided with documentation from the Republic of Palau showing that Kepno was the registered owner, and it was being sold free of all liens and encumbrances.
Olivia Navigation’s lawyers argued that because there was no privity of contract between Fred Olsen and Olivia Navigation, there can never be any maritime claim against Olivia Navigation for any alleged breach of contract, nor any arrest of vessels under its ownership.
That breach of contract, they told the court, was between Fred Olsen and 2E Maritime and these parties should any claims for damages due to contract breaches through arbitration.
Court documents indicate that an arbitration proceeding is going on between Fred Olsen and 2E Maritime in London.
High court judge Justice Vaibhavi D Nanavati agreed to lift the arrest upon receipt of an affidavit of undertaking from Olivia Navigation to bear the amount claimed by Fred Olsen if the court finds in favour of the cruise operator. The case remains ongoing.
Fred Olsen group holding company Bonheur is the largest shareholder in NHST Media Group, which owns TradeWinds.
