Estoril Shipping has arrested an LR1 tanker in Singapore after cancelling a charter because of the bankruptcy of its German owner.
Estoril, which appears to be a brass-plate entity registered in the Marshall Islands that has no connection with Estoril Navigation of Greece, seized the 73,600-dwt King Darwin (built 2007) as security for a $797,000 charter hire claim it intends to arbitrate in London.
The vessel, which is owned by King Darwin Tankschiffahrts and managed by Mercator Navigation, had been taken by Estoril on long-term charter in January 2015. It declared an option for a further 12 months at a rate of $18,000 per day last January.
Estoril deployed the King Darwin in the Scorpio LR1 Pool during the entire time it had the ship on charter, with commercial management assigned to Scorpio Commercial Management of Monaco, which in turn assigned management to Scorpio Marine Management of India.
Chain of command
Despite this convoluted chain of command, the King Darwin appears to have performed its task of carrying the chemical and petroleum products of the pool’s customers until 28 September.
That is when King Darwin Tankschiffahrts, through its managers, informed Estoril that it had filed for insolvency in Hamburg. The court placed the KG (limited partnership) shipowner under preliminary insolvency administration.
Estoril immediately terminated the charter agreement, saying it had the right to do so with no penalty, according to bankruptcy clauses in the original charterparty contract.
After handing back the vessel, Estoril sent the King Darwin’s owner an end-of-hire statement claiming $797,000. Off-hire periods and bunkers remaining onboard made up most of this amount.
Although King Darwin Tankschiffahrts is undergoing insolvency proceedings in Germany, Estoril said in its submissions to the High Court of Singapore that any court protection given there is applicable only to German and European Union creditors rather than those domiciled in the Marshall Islands.
It also pointed out that, unlike Singapore, Germany is not a signatory to the United Nations Commission on International Trade Law's Model Law of Cross-border Insolvency and, thus, that agreement is not applicable in Germany.
TradeWinds was unable to contact King Darwin Tankschiffahrts or Mercator Navigation due to a public holiday in Germany on Wednesday. Estoril could not be reached as it has no listed phone numbers or email address.
