A Chinese leasing player has arrested a pair of large modern tankers by Greece’s Eletson Corp, after a commercial dispute.
Action has been taken against the 109,900-dwt Folegandros and Kastelorizo (both built 2019). The first vessel is off Galveston, Texas, and the Kastelorizo is at Teesside oil terminal in north-eastern England.
The registered owners of the vessels — both units of Cosco Shipping Development — filed cases at the end of January in London’s Commercial Court and in the federal court for the Southern District of Texas.
According to litigation documents in the Folegandros case in the US, registered owner Oriental Fleet Tanker 02 is targeting Folegandros Shipping, a one-ship Eletson company that is the ship's bareboat charterer.
Eletson is also named as a defendant, in its role as guarantor for unpaid charter hire of more than $600,000.
A senior Eletson official said he expected the row to be resolved soon.
“We have been in commercial negotiations with said financier and are surprised by this action,” chief financial officer Peter Kanelos said in an e-mail.
“As always our intentions are to amicably resolve disputes with financiers and in fact we are making very good progress in doing so.”
Eletson attributed the row to "issues arising out of the Covid-19 pandemic”, which delayed a “planned restructuring of the financing” of the two ships.
“The vessels are in excellent technical and operational condition and should resume normal business operations after completion of these owner's matters, which we expect will be shortly," Kanelos said.
Aframax freight rates have been at their lowest level in years.
Eletson financed the Folegandros and Kastelorizo in November 2017, when both ships were still newbuilding projects, in a deal with Cosco.
Eletson has made similar financing arrangements for other vessels with China's Bank of Communications (Bocomm).
On 21 January, Bocomm Financial Leasing unit Haotai International Ship Lease Co sought an order to arrest Eletson's 109,900-dwt Salamina (built 2019), which is also off Galveston.
In papers filed, Haotai claimed that Eletson Chartering failed to pay full charter hire due for the final quarter of 2020 to the tune of more than $700,000.
On 22 January, US Magistrate Judge Andrew Edison issued an order arresting the ship, but it is not known whether the warrant has been served on the vessel, which remained anchored at Galveston as of Thursday.
A lawyer for Haotai in the US told TradeWinds he was not at liberty to discuss the case.
Kanelos said the Kastelorizo and Folegandros are the only Eletson tankers facing disruption.
Bob Rust, Holly Birkett and Eric Martin contributed to this article
