An Italian product tanker player said it will seek to reverse the scheduled auction of one of its tankers in Malta next week and threatened potential buyers with compensation claims if they lay their hands on the vessel.

Bari-based Morfini SpA saw Maltese authorities arrest in May one of its seven MR tankers, the 40,200-dwt MR Dominia (built 2009).

The request to do so had been filed by Nassau Maritime Holdings, an Ireland-based company known in recent years to have bought shipping loans from Germany’s HSH Nordbank.

The Malta Registrar of Civil Courts and Tribunals has announced that the ship will go under the hammer on 20 September.

In a booming tanker market, the prospect of pouncing on the SLS Shipbuilding-built ship has already sparked market players’ interest.

Morfini, however, vehemently disputes the legitimacy of the Malta procedure and vows to make life difficult for any hopeful would-be buyer.

The Italian company’s main argument rests in a separate decision by an Italian court in Bari on 9 May, when the vessel was still in Italian waters, that imposed a ban on judicial proceedings by creditors.

That decision preceded the vessel’s arrest in Maltese waters two weeks later.

Making life difficult

According to Morfini, Maltese authorities’ move contravenes European Union (EU) regulations on insolvency proceedings.

A Malta court has already rejected Morfini’s arguments but the Italian company has vowed to take them higher at EU court level.

On 7 September, it has filed complaints over violation of EU law and applied for diplomatic protection pursuant to the Treaty of the Functioning of the European Union (TFEU).

In Morfini’s view, this means that potential buyers will not be able to operate the vessel.

“In Italy, neither the removal of the current Italian flag nor the cancellation of the related mortgage will be authorised by the relevant authorities, due to the protective measures in place,” the Italian company argued in a statement.

“Anyone acquiring the Dominia will, of course, be exposed to any and all national and international compensatory actions for acquiring a vessel protected and safeguarded in Italy and Europe by laws that have been completely superseded or deliberately interpreted in favour of one party,” Morfinia added.

According to the Times of Malta, the dispute between Morfini and Nassau Maritime Holdings goes back to early 2022, when the Italian company presented creditors with a restructuring plan to the court of Bari. Nassau, however, rejected the plan and initiated bankruptcy procedures against the ship.