Britoil Offshore Services’ dispute with Ships & Boats Oil Services over the 4,200-bhp Sea King Elgedida (ex-Britoil 57, built 2003) would probably have been quickly dealt with in a legal jurisdiction that channels all maritime-related claims through an Admiralty court. This has not proven to be the case in Egypt.
A claim for unpaid charter hire filed with the Alexandria Economy Appeal Court in March 2020 dragged on until May 2021, when it was dismissed because Britoil could not provide a physical copy of the charter contract signed by both parties.
The court was unwilling to accept the digital contracts that had been used.
A second suit for non-payment of the balance of the purchase price was referred to arbitration.
Britoil chief financial officer David Palmer said arbitration was not the right forum as allegations that documents were forged put the case into the criminal domain.
He said a criminal case filed for the theft of the anchor-handling tug has also gone nowhere as the company is continuously “getting the runaround”.
Seizure at ports failed
Attempts to have the Sea King Elgedida seized at Egyptian ports have also failed.
“The Maritime and Port Authority of Singapore contacted Red Sea Port Authority and Suez Canal Authority on our behalf asking them to detain the vessel," Palmer said. "There was no response, and no action was taken.
“We have tried all reasonable ways to effect the return of our ship and the outstanding charter hire. We have reached dead ends in Egypt, where no one seems to be prepared to act and the court process is very long and drawn out.
“Nothing will happen until the authorities detain the ship and render it commercially useless to Ships & Boats."
The Sea King Elgedida’s AIS transponder showed it to be anchored off a remote part of Egypt's Red Sea coast.
With no legal resolution in sight, both Britoil Offshore Services and Ships & Boats Oil Services claim to be at a loss on how to resolve the dispute surrounding the 4,200-bhp Sea King Elgedida (ex-Britoil 57, built 2003).
Ships & Boats founder and owner Gomaa Mohamed complained that he has been left with an anchor-handling tug (AHT) with no class or flag, and cannot be used. “It’s costing me $1,800 a day in operating costs,” he said, while claiming to be out of pocket to the tune of $1.47m, mostly due to legal costs.
Britoil chief financial officer David Palmer said the company is $1.2m out of pocket once legal costs are factored in.
The AHT is still mortgaged to Standard Chartered Bank and, until the dispute is solved, the mortgage cannot be discharged.
Insurers refused to entertain Britoil’s claim for loss due to theft as the ship was willingly handed over on a bareboat charter and not taken by force.
Palmer said he was concerned that the ship’s protection and indemnity coverage with the Shipowners' Club had been suspended in November last year.
“As we are the registered owner, we are the ones who will face exposure if anything goes wrong,” he said.
Mounting costs
When asked by TradeWinds how they intended to resolve the dispute before legal costs exceed the value of the ship, each told TradeWinds they were willing to negotiate but the other side refused any attempts at communication.
Gomaa said that after a long court proceeding, the return of the money from Malaysia is imminent and indicated he would be willing to settle the matter if Britoil would accept the outstanding purchase price amount.
Palmer said the last offer received through a third-party intermediary was below the agreed price, and since then negotiations had been stonewalled.
