Rena salvors launch $8.8m battle

By Sandra Conchie of the Bay of Plenty Times

The wreck of the container ship Rena. Photo / Maritime NZ
The wreck of the container ship Rena. Photo / Maritime NZ

A legal stoush is brewing between Rena salvors Svitzer and two other companies centred on a $8.8million bill for its hireage of a tanker used to recover oil from the grounded ship.

Court documents obtained by the Bay of Plenty Times confirm that Svitzer Salvage BV has lodged a High Court civil claim against Z Energy and Seafuels , saying that when it entered into a Charterparty contract with Seafuels to use its bunker tanker, Awanuia, to remove and dispose of oil from the wreck, it signed the contract under duress.

Svitzer also said that the costs and terms of the short-term contract it negotiated with Seafuels were exorbitant and unfair and now argues that the court should void the contract or annul it and modify the terms to reflect a "more reasonable rate of remuneration".

For the 43 days it hired the Awanuia, Seafuels billed Svitzer $8,882,433.72, including GST, plus $6209.57 for miscellaneous items and $55,589.38 for Z Energy's additional costs.

A total of $2,966,145.50 remains unpaid by Svitzer.

The matter was heard in a preliminary hearing in the High Court at Wellington on June 19 by Associate Judge David Gendall, and in his recently released written judgment, the judge confirmed that Seafuels filed a counterclaim on April 30 against Svitzer for the unpaid amount.

Z Energy has been named as a party to the civil proceedings because at the time of the Rena grounding it had a long-term exclusive charter contract with Seafuels to use the Awanuia as the primary vessel for bunkering ships at Auckland Harbour.

The outcome of the proceedings could have a bearing on how much Svitzer may be required to pay Z Energy.

Court documents state that on October 6, with Z Energy's agreement, Svitzer entered into a short-term contract with Seafuels to use the Awanuia, on terms it now claims were outrageous.

The overall charter rate claimed was between $187,000 and $200,000 a day plus GST.

The original seven-day hireage was extended 12 times on the same terms and conditions, but in an email sent to Seafuels on October 9, 2011, Svitzer said it accepted the terms of the Charterparty but that it was doing so under protest.

Svitzer said it believed the terms and conditions were outrageous but felt it had to accept them because of the situation and the pressure it was under.

Svitzer said Seafuels had taken advantage of the "extraordinary circumstances of an imminent environmental catastrophe" and threatened to refuse to make the Awanuia available unless it agreed to the Charterparty on its specific terms.

Seafuels denies any illegitimate pressure was put on Svitzer during the contract negotiations and sought to have the matters dismissed or a summary judgment made in its favour.

Z Energy has argued that the court should remove it as a party to the proceedings, because it was not a party to the Svitzer-Seafuels Charterparty agreement, despite it being reimbursed for the significant commercial disruption and financial costs incurred in breaking its own existing Charterparty contract with Seafuels.

Z Energy also argued it was not liable as suggested for the conversion of oil recovered from the Rena as the ship's owners agreed to sell the oil to it for $230,000 in an arrangement it said superseded the terms of the Charterparty.

Associate Judge Gendall has ruled that it would be unwise to strike out either party's argued courses of action or make any summary judgments at this early stage in the proceedings.

He also dismissed Z Energy's application to strike it out as a party to the proceedings, because the question of any remuneration it may be entitled to was yet to be determined.

A decision is yet to be made on whether the claims will proceed to trial.

- APNZ

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