An Eastern Pacific Shipping product tanker spent most of this month sitting in India as the unwitting victim of a legal war between a Mauritian shipowner and a trading company.
The departure of the 47,900-dwt Pacific Diamond (built 2010) from the port of Mangalore, south-western India, in the early hours of Monday morning appears to have marked the end of the Indian portion of a legal battle between tanker owner Betamax and Mauritius' State Trading Corp (STC) that has been waged in several locations around the Indian Ocean rim.
Betamax, based in the Mauritian capital, Port Louis, is attempting to obtain security of $120m for an arbitration award obtained against STC for unlawfully cancelling a 15-year oil transport contract.
STC, which holds the monopoly on importing refined petroleum products and LPG into Mauritius, awarded Betamax the contract in 2009 to ship refined petroleum products from main supplier Mangalore Refinery and Petrochemicals.
The contract, which began in May 2011, required Betamax to transport an average of two to three shipments per month.
To carry this out, the outfit had the 75,000-dwt product tanker Red Eagle (built 2011) constructed at Sungdong Shipbuilding & Marine Engineering in South Korea. According to company officials, the ship was tailor-made for the contract, specifically designed to carry both clean and dirty petroleum products at the same time. Betamax officials say they have been operating the Red Eaglein the spot market, where it is frequently fixed by leading oil majors.
After a change of government in Mauritius in December 2014, new politicians alleged that Betamax had been awarded the contract by corrupt and conspiratorial means.
In February 2015, STC notified Betamax that the deal was being terminated with immediate effect — despite Mauritius’ State Law Office advising the government that the contract was fully compliant with prevailing laws. A subsequent investigation by the Office of the Director of Public Prosecutions also failed to find any wrongdoing.
Betamax sought damages for the early termination of its contract at the Singapore International Arbitration Centre. In June this year, the arbitration tribunal awarded Betamax $120m, including damages and costs.
In response, STC applied to the Supreme Court of Mauritius to have the award set aside on grounds that the tribunal had no jurisdiction to issue the award and that the award was contrary to the public policy of Mauritius, among other reasons.
The matter is still pending before that court and STC declines to comment further on the case.
