Auctioneers have had to postpone the auction of a 12-year-old suezmax planned for later this month, following legal action taken by an obscure company likely linked to Iran Shipping Lines (IRISL).
The entity, which is called Prime Paradise International and claims to be the "de-facto owner" of the 158,000-dwt Marvin Star (built 2009), filed an appeal against the sale at the High Court of Namibia.
"Attorneys are working towards a swift resolution of this appeal... in order to reschedule the auction as soon possible," auctioneer Ariella Kuper of Cape Town-based Solution Strategists said in an e-mail.
The Marvin Star was initially in the fleet of Irano Hind Shipping, a joint venture of state-owned outfits IRISL and Shipping Corp of India (SCI).
In recent years, however, the Marvin Star as well as three other MR tankers originally ordered by IRISL emerged under management and ownership of Piraeus-based Marvin Shipping Services and its clients.
During the recent tanker market downturn, creditors arrested all four Marvin ships and they were all slated for auction.
That's when entities linked to IRISL jumped into action, laying claim on the tankers with the argument that they were victims of fraud, never agreed to sell the vessels to Marvin but merely bareboat-chartered them to the Greek company.
Paying out of their own pocket
In an attempt to stop the vessels from going on the block, IRISL entities paid hundreds of thousands of dollars out of their own pocket to meet creditors' demands.
They succeeded in Rotterdam, where unpaid seafarers on 29 September dropped any claims they had on the 50,000-dwt sisterships Marvin Confidence and Marvin Faith (both built 2018), cancelling their impending auction.
IRISL, however, failed in Piraeus where a third MR sistership, the Marvin Independence, was sold on 1 September for just $17.1m — far below market levels.
IRISL stuck to its guns and a few weeks later arrested the Marvin Independence in Cyprus to lay claim on the ship. Cyprus's supreme court is expected to rule on the case in the following weeks.
Lawyers for Rexel Corp, the company that bought the Marvin Independence in the Piraeus auction, expressed confidence that Cypriot judges will release the ship, acknowledging that Rexel acquired it "with a clean slate".
If it comes soon enough, a Cyprus ruling in favour of Rexel would likely be encouraging for potential suitors of the Marvin Star, provided that the High Court of Namibia throws out the appeal by Prime Paradise and reschedules the auction for a new date.
A lawyer for US-based Wilmington Savings Fund Society, one of the creditors who arrested the Marvin Star and pushes for the auction to go ahead, was unimpressed with the arguments put forward by Prime Paradise.
"It remains unclear why Prime has allowed the vessel to trade around the world for the account of Marvin for years without taking steps," attorney Craig Cunningham at Bowman Gilfillan said, according to litigation documents released on 5 November.
None of the former Marvin tankers is subject to international sanctions against Iran.
