The feud between two estranged shipowning partners in Hong Kong is heating up, with underwriters being threatened with lawsuits if they sign or renew two disputed kamsarmax bulkers.

The move comes as a court in the flag state of Panama issued injunctions against selling, mortgaging or reflagging the 82,000-dwt New Prestige and New Honor (formerly the BBG Hope and BBG Glory, both built 2013).

It is the latest episode in an serial legal battle between Lau Wing Yan (Liu Yongren) and Chu Kong (Zu Jiang), which has resulted in commercial fallout for third parties involved with the ships.

TradeWinds reported last summer on a failed sale of the disputed former BBG Hope and BBG Glory to Raffles Shipping of Singapore at an under market price, then in September on their sale at a far lower price to an unknown entity.

Lawyers for Lau are now contacting protection-and-indemnity clubs and fixed premium insurers ahead of this year's 20 February renewals, warning them of legal action if they insure the disputed vessels in spite of Lau's claims. But some legal sources have expressed scepticism about the basis of such lawsuits.

Lau alleges his former partner Chu connived with a Chinese state-owned company to engineer a series of transactions that cut him out of his interest in the vessels through a fraudulent sale.

Lau's lawyers at DLA Piper cite a series of writs, judgments and injunctions in the British Virgin Islands, Singapore, Hong Kong and Panama as supporting the allegations.

Over many years, Lau and Chu partnered in several shipowning and operating ventures under the loose designation Pacific Bulk Group. Lau still does business under the name Pacific Bulk Enterprises.

The two kamsarmaxes were owned by a vehicle, Beibu Gulf Ocean Shipping (BBG), which controlled a 51% stake owned by a similarly named Chinese state-owned company, Guangxi Beibu Gulf International Port Group, and a 49% interest held by Ocean Sino, which was owned in equal parts by Lau and Chu.

Conscious uncoupling

After the partners were involved in an acrimonious split, in which Lau accused Chu of undermining his interests in the shipowning venture, Lau applied in 2015 to the Eastern Caribbean Supreme Court to liquidate that company. He won an order to do so in June 2017.

This was followed by the failed sale to Raffles and then a repossession of the ship by otherwise unknown financing company Premier Bright Holding. Premier Bright then sold the ship to likewise unknown New Shipping at just $11m per ship.

Lau has provided evidence in several court proceedings, suggesting that the last two companies are controlled by Chu family members and acquaintances.

The Panama court injunctions against sale, mortgage or reflagging were issued in October but did not take effect until early this year, according to a representative for Pacific Bulk Enterprises.

Efforts to contact Chu and BBG for comment were unsuccessful by TradeWinds’ deadline.