Singapore shipowner CH Offshore (CHO) has lost an appeal against paying brokers for what it claimed were "secret commissions" in Venezuela.
Justice Clare Moulder dismissed its argument at the London-based Court of Appeal that it was kept in the dark about discussions between three domestic shipbrokers and state oil company Petroleos de Venezuela SA (PDVSA) over the charter of two of its anchor handling tug supply ships in 2008.
Brokers Internaves Consorcio Naviero, Maritima Altair Petromar and Lamat Offshore Marine won an arbitration case over the payments in London in 2019.
After months of talks, the 12,200-bhp Amethyst and 12,200-bhp Turquoise (both built 2008) had been fixed to PDVSA's shipping arm PDV Marina for $47,600 per day.
It then emerged that another company within the PDVSA organisation had entered into an agreement for two different vessels with another company, Astilleros de Venezuela (Astivenca), and the CHO vessels were not needed.
Charter instalments were not made and CHO demanded redelivery of both vessels.
$60m settlement
The shipowner started legal proceedings against PDV Marina, Astivenca and PDVSA in London.
In 2015, it won $60m from PDV Marina as a settlement amount.
Disputes then arose about unpaid commissions and arbitration began in London.
CHO's primary case was that the terms of the settlement precluded the commission claims.
The company alleged that the rate of hire paid by PDV Marina under the charterparties was "inflated" by "secret commissions", which were "siphoned off" by Internaves, Maritima Altair and Lamat.
"In my view, however, there is no finding of dishonesty or corruption (fraud) in the award," Moulder ruled.
CHO claimed that a revised proposal sent to PDVSA raising the rate from $47,000 to $47,600 was evidence of "reprehensible conduct", Moulder added.
"In my view, there is no finding by the tribunal that this was done deliberately in order to increase their commission," she said.
The tribunal was told the higher amount was a "clerical error". The panel found this was not an "attempt to earn a secret profit".
One arbitrator disagreed, but Moulder said this carried no weight as an official finding.
No secrecy
"In any event, the full amount of $47,600 was disclosed to CHO as this represented the amount paid and received under the charterparty and the net amount received by CHO reflected the larger figure. There was no deceit or concealment in this regard," she added.
"These were not secret commissions. PDVSA was aware that commissions were payable by CHO but did not enquire as to the amount."
The amount of the claims was not disclosed. The only commission figure revealed was 2.5% payable to UK broker Braemar Seascope, which was involved in the broking chain but not a party to the appeal court proceedings.
