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Wednesday, September 26, 2012

OSM Arena arrested in Chennai - poses danger to others....



The comparison may be invidious – a mighty ship with a lowly bird – but OSM Arena and Emus are suffering a similar fate – no owner to claim for, no body to maintain and take care, nobody willing to maintain, no body to sell and still none to buy – no money – debts keep rising and uncertain future is totally bleak..

The ill-fated South Korean flagged Bulk carrier cargo ship with IMO No. 8411334 and dimensions of 190 M length and 32 m beam with  call sign  - DSOC5 ‘OSM Arena’ got mired in to troubles one after another is struck below the bow in muddy waters literally and legally.  From its and its occupant pathetic conditions, it tried to get loose and came almost closer to the sands of Marina – courtesy very severe cyclonic storm “Thane” that ravaged Pondy and Cuddalore.

As posted earlier by me, Chennai was not the happiest of its ‘port of call’ when it arrived here in Jan 2010. Calcutta High Court passed an order that the said vessel should not to leave Portof Chennai without the leave of Calcutta High Court. Orders were passed directing the Custom authorities to ensure that the said vessel does not set sail without leave of the High Court, Calcutta.  The vessel which sure had forgotten sailing and perhaps is unlikely to sail more, has been subject matter of litigation in different ways.  

The vessel was advertised for sale and there were some interested parties but more litigation ensured that sale never fell through, money never changed hands; its poor occupants continued to live in shackles without visiting the shore though close to it, living in pathetic conditions with little food that too coming as courtesy.   Sad - the Madras High Court had ordered the sale of vessel and tenders were floated for sale in public auction in "as is where is" condition, free of all liens. The tenderers were to pay EMD of Rs.25,00,000/-  Following the floating of tenders, the auction purchaser had deposited 25% of the bid amount and the balance was to be deposited by borrowing from Bank. An amount of Rs.20.68 crores was reportedly deposited by the auction purchaser. As there were more and more litigation, the Auction purchaser stated that he had acted in good faith in submitting a bonafide bid for purchase of the vessel and that because of the protracting litigation and the objections to the sale, they shall mbe permitted to withdraw the bid amount of Rs.20.68 crores including the EMD deposited by the auction and the sale fell through.  

Subsequently, Madras High Court  directed Sea Traffic who had been taking care of maintenance of supplies to the vessel would have first charge for the amount spent by them and asked them to continue maintenance on the grounds that they receive their dues on priority basis  out of the sale proceeds of the vessel.

A Kolkatta based company LMJ International inevitably got into thick of litigation  - from C.S.No.75 of 2011 on the file of  Madras High Court, it is understood that  this company being  aggrieved by the order in A.No.2504 of 2011 in C.S.No.75 of 2011 interalia directing the Appellant/Intervener-LMJ International Limited to pay USD 671,658.24 and also to pay a sum of Rs.50,57,544.90 to M/s.Sea Traffic, the agent, who are now taking care of the supply of necessaries to the vessel   M.V. OSM Arena,  an appeal was filed.  

According to it,  M/s.Shinhan Capital Company Limited purchased the vessel M.V. OSM Arena from M/s.Sunwoo Merchant Marine Company Limited in Nov. 2009.    The ship was leased back to M/s.Sunwoo Merchant Company Limited under the Vessel Lease Agreement.  In 2009, there was amended mortgage and the new lessee  Ocean Success (OS) Maritime Company Limited [OSM] incurred debt under the mortgage security.  By a Charter Party agreement in Aug 2009, the vessel M.V. OSM Arena carried about 43,000 MT Bulk iron ore belonging to LMJ International Limited from Haldia, Paradip, Vizag to a designated Port in China.    Vessel M.V. OSM Arena arrived at the Port of Haldia in August, 2009 and completed the loading at the Port of Haldia on 22.08.2009.   At Paradip port, dispute and differences arose between the LMJ and the vessel as to the payment of demurrage and issuance of bill of lading.  LMJ filed suit before the Calcutta High Court interalia claiming that the bill of lading  has been rightfully issued and valid. 

In Jan 2010, the  Appellant filed an application after getting informing that the said vessel was arriving at the Port of Chennai.   In Feb 2010, Calcutta High Court passed an order directing the Custom authorities to ensure that the vessel not to leave the Port of Chennai without leave of the High Court, Calcutta

During the pendency of the civil suit on the file of High Court, Calcutta, three of the  crew members of the vessel which has been lying arrested in the Port of Chennai filed suit before the High Court, Madras claiming the wages and compensation payable up to 31.01.2011 together with future wages till the date of signing off from the vessel.   Remaining crew members on Board the vessel also filed suit claiming outstanding wages  due from October, 2010 stating that  the owner of the vessel committed breach of contract by not paying the wages as per the respective contracts of employment.    Though notice was served on the owner of the vessel, they failed to appear and contest the suit.  Since the owner of the vessel failed to appear before the Court, sale of vessel M.V. OSM Arena was ordered by Madras High Court.  However that had to be cancelled after Kolkatta HC ordered vessel’s arrest on business dispute.  

As if all these were not enough, LMJ International Limited filed a Transfer Petition (Civil) no. 665 of 2011 before the Supreme Court of India with application for stay.  After some adjournments as no appearance was made on behalf of the petitioner, the Hon’ble Court dismissed the case for non-prosecution by its order dated 9th July 2012.  

The vessel remained stranded off the city coast since Dec 2010 with none to claim ownership.  Now there is news [today’s Times of India – Chennai edition] that the ship OSM Arena stands arrested on fears that it could pose danger to ships during monsoon.    The vessel which has become a nightmare since its arrival has made its occupants suffer as there had been blackout and sailors on board starving.  Stating that such dead vessels post lurking threat to others passing through, the Chennai Port Officials have arrested the vessel on Tuesday, 25th Sept. 2012.  

When it was moved away by cyclone Thane, it reportedly had  bunker fuel of around 400 tonnes – the vessel lies abandoned and the 14 myanmarese sailors crew on board have not seen the shore in the last 14 months.   The International Transport Workers Federation (ITF)  is to  approach the immigration department for temporary landing permission to take them for a medical check-up.  The sailors had been found starving during several inspections by Coast Guard and shipping ministry officials earlier.

The vessel reportedly is in bad shape – with  anchors, engines and life-saving equipment, including signals not functioning.  The newspaper report quotes Chennai Port Trust deputy chairman P C Parida as saying that the vessel will be in the custody of port until November and berth and outer anchorage charges levied from the vessel operator. There had been suggestions earlier to bring the vessel inside the port, but the authorities refused as there was nobody to pay the berth charges. Chennai port  is reported to charge Rs.93,000 a day for the berthing. The vessel so far owes the port more than 1 crore for remaining in the outer anchorage.

Perhaps, the vessel badly needs ‘euthanasia’  intentional ending of life so that its pain and suffering can be relieved – so also of others who have got entangled in messy legal tangle

With regards – S. Sampathkumar
26th Sept. 2012.

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