Bruce Barnard, Special Correspondent | Apr 13, 2012 10:06AM EDT
Norway’s Star Reefers said it has reached a “satisfactory” solution to its dispute with Russia’s largest fruit importer that had ignored a U.K. court award of $16.5 million in damages for violation of charter contacts for three refrigerated cargo ships.
The Oslo-listed company, which operates one of the largest fleets of conventional reefer vessels, said the terms of the agreement with the St. Petersburg-based JFC Group are confidential.
The High Court in London awarded Star Reefers $16.5 million damages plus legal costs and interest in August after ruling a JFC subsidiary had terminated the 36-month charters fourteen months before their scheduled expiry on the basis of spurious allegations about the performance of the ships.
JFC had failed to pay or appeal the judgment by March, prompting the UK court to extend an order freezing its assets.
Star Reefers said it also had agreed to sell six of its smaller and less efficient reefer ships for scrapping and will use the $6 million proceeds partly to prepay debt and for working capital.
“The sale of vessels for scrap is a positive step towards repositioning the company by focusing on the more modern and energy efficient tonnage in view of the difficult market conditions,” said CEO Simon Stevens.
Star Reefers, which controls a 40 ship fleet, booked a net loss of $24.9 million in 2011 compared with a $100,000 profit in 2010 on revenues of $276.5 million against $240.5 million.
Contact Bruce Barnard at brucebarnard47@hotmail.com.