A VLCC owned by a subsidiary of Evangelos Marinakis’ Capital Ship Management (CMS) is the subject of a legal battle after being arrested in South Korea over allegations of more than $10m in unpaid charter-hire payments.
A partner from Seoul-based law firm Jipyong, acting for arresting party SK Shipping Europe (SKSE) — the European arm of South Korea’s SK Shipping — confirmed to TradeWinds that the 321,000-dwt Miltiadis Junior (built 2014) was arrested in Daesan on 26 June after a pre-judgment attachment order was delivered by Daejeon District Court.
The vessel is understood to have been discharging cargo to Hyundai Oilbank. It has recently been given permission to enter the Port of Daesan.
The lawyer said the ship’s owner filed an appeal against the pre-judgment order and the case was still pending in the Seosan branch of the district court.
“The parties are scheduled to submit their final briefs by late August 2018,” he added. “The court will render its decision after reviewing the parties’ final briefs.”
A spokesman for London-based SKSE explained that his company had chartered four VLCCs — the 314,000-dwt C Innovator and C Progress (both built 2012), and C Challenger and C Spirit (both built 2013) — to CMS in late 2016 for two years at rates of about $31,000 per day.
“We time-chartered out four VLCCs to Capital and these vessels were redelivered early,” he said. “We think this was a repeated breach of the time charter contracts, so we have some claim against Capital.”
The SKSE representative said CSM had not responded, so his company moved to try to secure its claim by arresting the vessel owned by the CMS subsidiary.
He said the initial claim by SKSE amounted to about $17m but this value was reduced after alternative employment was found for three of the vessels.
A spokesman for the Miltiadis Junior’s manager, CMS, said the tanker, which is owned by subsidiary Miltiadis Junior Carriers Corp (MJCC), had been “wrongfully arrested in Korea by SKSE”.
“MJCC has no actual or potential liability to SKSE, which is why no guarantee, bond or P & I [protection and indemnity] club letter of undertaking has been posted by our clients to procure the release of the vessel,” he said.
“The Korean arrest is therefore being vigorously challenged by MJCC as the owners of the vessel.”
The CMS spokesman said the Daejeon court is expected to decide on MJCC's application to set aside the arrest as soon as the first week of September.
“We and our clients are very confident that the Korean court will dismiss the arrest, and, recognising the speculative nature of SKSE’s claim in Korea, SKSE have been required by the Korean court to put up substantial security for a claim for wrongful arrest,” he said.
“SKSE have also been put on formal notice of MJCC’s significant claim for damages against them arising out of the wrongful arrest of the vessel.”
