Credit Suisse swooped in to arrest a Hermes Marine Management-controlled VLCC in Singapore within an hour of the High Court of Singapore lifting an earlier arrest by Koch Shipping.
The Swiss bank seized the 320,000-dwt crude carrier Chloe V (built 2011) on 15 October seeking $44.8m outstanding on a mortgage loan it called in after the registered owner Chloe Navigation allegedly breached loan covenants.
The legal troubles of Piraeus-based Hermes worsened on Monday when lawyers acting on behalf of the vessel's crew filed writ of summons seeking unpaid wages and repatriation.
The Chloe V was originally arrested in July by Koch Shipping, part of US-based Koch Industries, over a defective scrubber instalment.
In what sources with knowledge of the situation described as a joint project, Hermes and Koch fitted a Viswa H-Scrubber V2 open loop horizontal scrubber in Jinhai, China.
The scrubber unit proved defective from the outset.
Numerous repair attempts were made by external contractors and the vessel's crew, culminating in a major effort made in Singapore during July which also produced an unsatisfactory result.
Legal documents obtained by TradeWinds revealed that Hermes was allegedly unwilling to reimburse Koch for the expenses incurred during the installation of the scrubber, nor for its share of the cost of the scrubber at the end of the charter.
Koch demanded that Hermes either pay up or hand back the scrubber.
Although Koch has lifted its arrest, a Koch Industries spokesman said that the dispute is still the subject of ongoing legal proceedings.
Hermes did not respond to further requests for comment.
Writ of summons
The writ of summons filed by the Chloe V's crew on Monday demanded that they be paid accrued wages, joining, medical, and victualing expenses, and all reasonable costs of repatriation.
The crew's salary payments stopped after the vessel arrested in July.
Hermes, in an email sent to TradeWinds shortly after the crew sent out an SOS in early October, said that it been advised that Koch, as arresting party, was responsible for the expenses of the vessel while it was under arrest.
In addition, Hermes claimed that the mortgagee of the vessel was also responsible for the expenses because it was preventing them from spending money on "lawful" expenses.
Lawyers at major shipping law firms in Singapore said there is no direct legal obligation requiring parties that arrest ships there to pay the crew’s monthly wages.
Arresting parties are only obliged to indemnify the sheriff only for the costs incurred by the vessel during the arrest.
Koch denied that it was responsible for paying the crew.
"Koch fully complied with all of its obligations as an arresting party while the vessel was under its arrest," the company's spokesman said.
A senior officer onboard the Chloe V who has been designated to speak on behalf of the crew said on Tuesday that the crew received a one-month salary payment from Hermes around the time Koch's arrest was lifted, but no further money has been forthcoming.