Tuesday, December 9, 2008

Let the lawsuits begin

In my Dec. 2nd posting I discussed the problem in the Forward Freight Agreements (FFA) on the Baltic Exchange. There have been lots of defaults, or at least dragging of heels, to complete the contracts.

In the Dec. 8th issue of Lloyd's List, they confirm a couple of the lawsuits being filed.

... a growing number (of filings) before US and London courts relating to alleged breaches in freight derivatives contracts and counter party disputes.

Among the higher-profile disputes is Taiwanese owner and operator TMT, claiming $5.3m against Pan Oceanic Maritime for allegedly failing to pay money owed in October in four forward freight agreement contracts.

John Frederiksen’s Golden Ocean Group is also suing South Korean operator STX Pan Ocean for allegedly failing to pay $4.1m owed for FFAs taken out in November last year.

STX had bet that average 2008 rates for capesize ships would be more than $135,000 per day. But STX allegedly failed to make October monthly settlement payments.

I guess these disputes didn't get settled at that meeting held in November.

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