SVITZER has launched a $7m legal battle against Z Energy and Seafuels, saying it entered into an “exorbitant and unfair” charterparty contract under duress while coping with the salvage of Rena.
Svitzer signed a contract with Seafuels to use its bunker tanker Awanuia to remove and dispose of oil from the wreck.
The case has been confirmed by court documents obtained by the Bay of Plenty Times that reveal that Svtizer wants the court to void the contract or annul it and modify the terms to reflect a more reasonable rate of remuneration.
SVITZER has launched a $7m legal battle against Z Energy and Seafuels, saying it entered into an “exorbitant and unfair” charterparty contract under duress while coping with the salvage of Rena.
Svitzer signed a contract with Seafuels to use its bunker tanker Awanuia to remove and dispose of oil from the wreck.
The case has been confirmed by court documents obtained by the Bay of Plenty Times that reveal that Svtizer wants the court to void the contract or annul it and modify the terms to reflect a more reasonable rate of remuneration.
For the 43 days it hired Awanuia, Seafuels billed Svitzer $7.2m plus $5,000 for miscellaneous items and $45,000 for Z Energy’s additional costs. Of this, Svitzer has yet to pay $2.4m.
The matter was put to a preliminary hearing in the High Court at Wellington on June 19 by Associate Judge David Gendall. 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 Awanuia as the primary vessel for bunkering ships at Auckland harbour.
On October 6, with Z Energy’s agreement, Svitzer entered into a short-term contract with Seafuels to use Awanuia, on terms it now claims were “outrageous”. The overall charter rate claimed was between $151,217-$161,729.
The original seven-day hire 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.
It claimed that Seafuels had taken advantage of the “extraordinary circumstances of an imminent environmental catastrophe” and threatened to refuse to make Awanuia available unless it agreed to the charterparty on its specific terms.
Seafuels denies these claims and 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 having been reimbursed for significant commercial disruption and financial costs incurred in breaking its own existing charterparty contract with Seafuels.
However, this request was dismissed by Associate Judge Gendall.
Apart from this, the judge ruled that it would be unwise to strike out either party’s cases or to make any summary judgments at this early stage in the proceedings. A decision has yet to be made about whether the claims will proceed to trial.
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