A Vafias-linked shipowner is understood to be appealing a US court ruling that calls on London arbitrators to decide a $20m dispute over a tanker that deteriorated beyond repair under Venezuelan detention and was sold for scrap.
If the Eastern District of Texas federal court ruling stands, it represents a defeat for Psara Energy — the ex-owner of the 104,500-dwt aframax CV Stealth (built 2005) — and a win for the ship's former charterer Space Shipping, affiliated to Turkey's Karamehmet family.
Psara's lawyer George Gaitas told TradeWinds the legal battle involves questions that go beyond the charterparty, which he said an arbitration panel would not be authorised to decide.
Accusations of fraud
Those questions include accusations by the Vafias-linked owner that the charterers fraudulently avoided liability for damage to the CV Stealth, and disputes over a performance bond issued separately from the charter.
As TradeWinds has reported, Psara's team has accused the Karamehmet side of perjury in its US court depositions, and engineering spurious changes of vessel and corporate ownership to escape the consequences of the CV Stealth charter and the guarantee.
Space Shipping is a single-ship company affiliated to the now defunct Geden Lines, with the performance guarantee backing the charter issued by Geden Holdings.
Geden Lines was controlled by Mehmet Emin Karamehmet until the 2015 sale of its fleet to Advantage Tankers.
Advantage is 85% controlled by Mehmet Emin Karamehmet's daughter, Gulsun Nazli Karamehmet-Williams. Advantage executives have insisted that the company is independent of Geden Holdings and the former Geden Lines.
- Vafias-linked shipowner is understood to be appealing a US court ruling that calls on London arbitrators to decide a $20m dispute
- Psara's lawyer claims legal battle involves issues beyond an arbitration panel’s remit
- Dispute centres on liability and issuance of a performance bond
- Psara's claims against Space come to $19.86m with interest
- The CV Stealth was detained in September 2014 by Venezuelan authorities at Puerto La Cruz
- The vessel was released three years later and was sold for scrap within months
Psara's claims against Space come to $19.86m with interest still running.
An appeal would seek to keep the dispute over the vessel in the Texas court.
Vessel arrest
The CV Stealth’s troubles started in September 2014, when it was detained by Venezuelan authorities at Puerto La Cruz over an alleged scheme to ship oil diverted from national energy major Petroleos de Venezuela (PDVSA).
The ship was then on charter to Space, subchartered to ST Shipping, and further subchartered on a voyage basis to an end-user linked to the PDVSA cargo.
The ship was detained for three years. By the time it was released, it was characterised as beyond repair and left Venezuela only months after its formal release under tow.
TradeWinds reported in September that the ship had been sold “as is” in Trinidad for $193 per ldt.
Many-sided dispute
Psara blames Space for failing to maintain the ship during the Venezuelan detention.
But the many-sided dispute has also involved Glencore-controlled ST Shipping and kept maritime lawyers busy in many jurisdictions.
Arbitration awards in favour of Space against Glencore were reported last year at more than $18m.
A large proportion of Space's claims against ST Shipping has been collected as a result of US court proceedings but is now being held by the Connecticut federal district court pending the outcome of arbitration.
Another $4.8m has been posted as security with the Texas court pursuant to two separate arrests of Advantage-controlled ships.
Advantage officials did not immediately respond to a request for comment.
