The UK high court has turned down a bid from Turkey's Geden Lines to claim $1.4m in drydocking expenses arising from the detention of an aframax in a 2014 Venezuelan stolen-
cargo case.
Justice Andrew Popplewell rejected its appeal against Glencore's ST Shipping and Transport as part of a long-running legal dispute over the 104,000-dwt CV Stealth (built
2005), whose disponent owner was Geden affiliate Space Shipping.
The tanker was held at Puerto La Cruz on 19 September, 2014, by order of a Venezuelan court.
Charterer ST Shipping had hired out the ship to another firm for a voyage charter to Venezuela that September. But Venezuelan authorities alleged its crude oil cargo was stolen.
A Venezuelan man was later arrested for forging a document from PDVSA and the vessel remains there to this day.
A London arbitration court had earlier found that ST Shipping was still liable for CV Stealth's charter and Geden is seeking $7m from ST in a US court.
The new London judgement concerned $1.4m for drydocking expenses which Geden is claiming from ST.
The arbitrator declined to make a monetary award on the grounds that the costs constituted a saving which might have to be given credit for.
"At that stage there was an unresolved issue in the head charter arbitration whether the head charter had become frustrated prior to June 2015; and an unresolved issue whether the vessel had been validly abandoned to underwriters as a CTL," Popplewell said in his ruling.
"If either of those arguments succeeded, the disponent owners [Space Shipping] would never have to pay the drydocking costs and they would be permanently saved, and would or at least might fall to be deducted from their otherwise recoverable loss."
The arbitrator eventually held the vessel was not a CTL.
Space Shipping was trying to challenge the deduction of the $1.4m.
Appeal denied
The arbitrator had said that "as matters stand there must be a substantial possibility that the vessel will never, in her lifetime, be redelivered to the head owners and thus that the drydocking costs will never have to be borne by the owners here."
He referred to "the justice of allowing the charterers a provisional credit, failing which they would have to pay the owners $1.4m which the owners might never have to pay themselves, and which the charterers might not be able to recover."
He made clear that this was merely a provisional credit and that if the disponent owners should incur the drydocking costs they could come back for a further award in that respect.
Space Shipping argued that it was not open to the arbitrator to make this deduction.
But Popplewell said: "I am unable to accept this argument. It is important to keep in mind that with the full agreement of the parties the arbitrator has not been seeking to address the disponent owners' loss once and for all by reference to any date of assessment.
"Since it is not on a point of law but in substance an impermissible challenge to the arbitrator's agreed case management decision, it does not fall within clause 41 of the charter-party and permission to appeal should be refused."
