Lawyers seize mainland oil tanker

An oil tanker owned by an offshoot of China Ocean Shipping, the mainland's largest shipping company, was seized by lawyers in Hong Kong yesterday in a dispute over the payment of US$32.4 million covering a failed ship charter.

The 43,928 deadweight tonne vessel, Yan Shui Hu, is owned by Dalian Yuanchang Shipping which is controlled by Cosco Dalian.

Dalian Yuanchang Shipping is locked in a row with German shipping firm Hermann Dauelsberg over the charter of another ship, a 92,500 deadweight cargo bulk carrier.

The Bremen-based shipowner claims the Dalian firm agreed to charter the bulk carrier for seven years at a daily rate of US$32,000 from delivery of the ship by mainland shipbuilder Zhejiang Yangfan Shipbuilding in October.

But as charter rates fell to about US$21,000 per day before delivery of the ship, the German owner complained that the Dalian company failed to take delivery of the vessel and repudiated the charter.

As a result it recently started arbitration proceedings in London to recover about US$28 million, which is the difference between the two charter rates, plus interest and costs to make a total claim of US$32.4 million.