The vessels ?€” the Anton Gurin, Kapitan Pryakha, Dubrava, Vasily Polishchuk, Kapitan Kirichenko and Kommunar Nikolayeva ?€” formerly belonged to Vostoktransflot, or VTF, a Vladivosktok shipping company.
In 1995, Britain's Bank of Scotland and Holland's De Nationale Investerings NV, or DNI, opened a line of credit for VTF that put up the six refrigeration ships as collateral. During 1995 and 1996, the ships, as part of the loan agreement with the banks, were reregistered under the Cypriot flag, and the debt was passed to six Cyprus-based companies set up by the Bank of Scotland.
In 1998, when VTF was unable to fulfill its side of the loan agreement, ownership passed to the Cypriot firms. A bank declared VTF bankrupt in a September 1999 ruling. But the six ships were detained by order of the Primorsky region's prosecutor general's office in connection with alleged breaches of Russia's customs laws as a result of the transfer of ownership to the Cypriot companies.
According to Nikolai Bezruk, president of the St. Petersburg committee of the fishermen's labor union, an auction was held Dec. 5 in St. Petersburg at which five of the six vessels were sold.
The sixth ?€” the Dubrava ?€” was not put up for bid as it has outstanding debts to the EKO-Phoenix fuel company. The auction was held on the order of a Kirov regional court following a suit filed by the captains of the ships over wage arrears of over $1.5 million owed to about 200 crew members.
Allan McCarthy, the director of Recovery Strategies Ltd., the London-based legal firm representing the interests of the Scottish and Dutch creditors, said the auction was held without any prior notification being given to his firm's clients.
"The court was kind enough to give us notification of its decision, but we only received it [Tuesday]," McCarthy said in a telephone interview. "In such a case, where the limit for filing appeals is 10 days, you would think that the court would give the parties involved sufficient time to respond."
The court ratified the results of the auction Dec. 9, so any appeals would have to have been filed by Dec. 19. McCarthy also said his firm's next steps have yet to be decided. "We have over 30 pages of documents to sort through here before we can determine the legality of the court's action," he said. "If it was a valid auction and was conducted on the basis of international law, then we'll respect the court's decision.
"It doesn't appear that the court has competency to make a ruling as an international admiralty court, which international admiralty law calls for in such cases," he added. "If there is not the proper legal basis for the court's decision, then we will have to consider our options."
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