Shipping Corporation of India Ltd (SCI) has hired Shepstone & Wylie Attorneys to argue its case in a South African court relating to the arrest of its bulk carrier ‘Vishva Anand’ last November in that country by the Safesea Group.
SCI got the ship released with the help of an undertaking given by London-based Steamship Mutual Underwriting Association Ltd, the ship’s protection and indemnity Club (P&I Club).
In shipping, third-party liabilities arising from operating ships such as oil pollution, wreck removal, damage to port property, and ship arrest are commonly referred to as protection and indemnity (P&I).
Globally, such third-party risks are insured with the International Group of Protection and Indemnity Clubs (IG Clubs) a 13-member group based in London that provides liability cover to about 90 per cent of the world’s ocean-going ships. Steamship Mutual is a member of the IGP&I.
When a ship’s P&I Club gives a guarantee to help release the vessel during arrest, it validates the existence of a dispute between the ship owner and the entity to whom it owes money, said a shipping industry executive who has handled such cases at his company. A P&I Club does not stand guarantee to fund cash flows of a ship owner and help release the arrested ship, he added.
The US-based Safesea Group had arrested the ship to recover long-pending unpaid dues of some $500,000 including interest, for services rendered to SCI.
Shipping Corp privatisation in troubled waters over qualification of Safesea Group
‘SCI representative’
Shepstone & Wylie confirmed that the law firm was “acting as the shipowners’ representative in the litigation”, adding that the case is yet to be decided.
However, Shepstone & Wylie did not respond to an email sent on June 26 seeking further details of the litigation including the dispute between SCI and Safesea that led to the arrest of the ship and the amount involved.
Jonathan Andrews, Head of Syndicate & Head of Underwriting Eastern at Steamship Mutual, the insurer of ‘Vishva Anand’, declined to discuss the matter and told this reporter to speak to SCI.
SCI did not respond to an email send on June 21 seeking details of the litigation.
SCI has also not yet notified the stock exchange of the arrest of the bulk carrier and the subsequent litigation in South Africa.
Safesea Group is one of the three parties qualified by RBSA Capital Advisors LLP to participate in the privatisation of SCI. . The qualification of Safesea when a litigation was on-going with SCI, could impact the privatisation process, sources said.
RBSA Capital Advisors, the transaction advisor to the government for the sale of SCI, did not respond to a detailed questionnaire sent on June 8 seeking comment.