FEMCO clarifies M/V Alaed story

FEMCO Company has published on its website answers regarding its M/V Alaed, chartered to transport refurbished helicopters and other repaired equipment intended for Syria.

- Do you think that cancellation of the Vessel’s insurance cover was a false move from the Standard Club? Do you agree with the Club’s position, that the cargo shipped in breach of EU sanctions against Syria, cannot be insured?

- In our opinion, we cannot judge about the correctness of the Club’s actions, let’s leave it for legal advisers and marine society. We suppose that the Club’s actions were groundless, as we have provided them with all the necessary explanations, as per their request, including the copies of cargo manifest and legally issued Bills of Lading for the cargo. Our written explanations were sent to Mr. Robert Dorey, Offshore Syndicate Director, Charles Taylor & Co., Limited. He doesn’t consider it necessary to respond for this letter, ask for any additional information and try to sort out the issue, as the Club should do, because its main function is to protect the Member’s interest.

- The decision to proceed with such kind of shipments was made by FEMCO company on the basis of commercial reasons or under pressure of the state?

- We suppose that the Russian Federation is understood in this question? The decision was made only on the basis of commercial reasons and neither state, including the Russian Federation, brought pressure to bear on company. Moreover, it was a time-charter party, and the Vessel was chartered TEMPORARILY for the shipment of ANY cargoes, permitted by the Vessel’s class, but not on the basis of VOAYGE CHARTER for the shipment of particular cargo, indicating its nomenclature, volume and weight. Respectively, commercial operation of the Vessel, or as you say, shipments, were carried out by the Charterer as per time-charter party. In such kind of legal relationships, the decisions on shipments of particular cargoes are made by the Charterer, without the participation of the Owner and the profit is also gained by the Charterer. The Master and the crew of the Vessel obey the Owners, only with regard to the technical operation of the Vessel and security management. The instructions, related to commercial issues (including, the instructions concerning the cargo), are made by the Charterer, and the Master have to follow them. The delivery of the Vessel as per time-charter party was made through the freight broker and the communications between the Owner and the Charterer were also maintained through the Broker. It’s common practice in our business.

- Does FEMCO Company belong jointly to ROSNEFT and Sovcomflot?

- No, it doesn’t. The Owners of the company are the individuals, who have no relation to the above reputable companies.

- It seems strange, that the company which commonly operates on the Far East and supplies the oil platforms, according to the information on FEMCO web-site, was suddenly chartered for the shipment of the helicopters to Syria. Were there any special circumstances to inform the press?

- The special circumstances, which gave rise to the media hype, began after the charter was concluded and the loading was finished. Originally there were not any special circumstances and we consider nothing strange in this charter. In 2010 the company made a decision to diversify its core business – shipping. That’s why in November 2011 after the longtime negotiations m/v Alaed was purchased (besides, the company currently conducts negotiations for purchasing of two similar Vessels), and after finishing the shipment of humanitarian rice with destination at p. Praia, Republic of Cape Verde, the Vessel was preparing for the next voyage with the cargo from p. St. Petersburg to the ports of Far East of Russia. As far as by that moment this cargo was not ready for shipment, the freight broker offered another charter. As mentioned above – it was a TIME-CHARTER PARTY. We were satisfied with its terms and made an agreement.

- There are two strange statements on the company’s web-site: “As far as the Club does not present any documentary evidences of the existence of any weaponry on board the vessel designated to Syria, so as informed by the Club, the insurance cover was cancelled by virtue of “requests of secret services of the United Kingdom” “the Owner, which is not the Cargo Owner, but the Carrier and in accordance with the International law norms who is not responsible  for the nature of the cargo and its description in the shipping documents ”It seems that the company was not aware of the nature of the cargo shipped on m/v ALAED. Is this true? Which information was specified in the Bill of Lading?

- As it is stated above in the answer to Question 1, the Club doesn’t consider it necessary to respond to our written explanations and doesn’t provide us with any grounds for cancellation of the insurance cover. Our statements are based on the publications in press, in particular British press. As far as we also know from the press, such actions resulted from the requests of US department of State addressed to UK Government. In other words, Big Politics was involved in this case and there was no mention about any law and / or violation of the existing Rules of the Club. Let’s proceed to the issue of the company’s awareness about the nature of the cargo and its destination. Mr. Charles Clover, please note that the participants of the marine enterprise are:
The Shipowner

• The Owner of the Vessel, including Disponent Owner
• Manager (operator) of the Vessel
• The Carrier
• The Charterer
• The Shipper
• The Consignee
• The Cargo Owner

And frequently, in modern shipments, the above parties are different bodies, within one shipment of particular cargo on particular vessel. We would like to emphasize, that we do not conclude the voyage charter. However, we would like to explain, what information should be aware to the Charterer of our Vessel, regarding the cargo, accepted for shipment. In accordance with the Unification of certain Rules of Law relating to Bills of Lading (so called Hague-Visby Rules) the information about the cargo is presented by the Shipper to the Carrier. For this purpose the Bill of Lading must contain the main data, necessary for the identification of the cargo, AS DESCRIBED BY THE SHIPPER, - number of packages, quantity, weight, external appearance and visual condition of the cargo. The Carrier shall bear responsibility for the opening of a sealed container and/or damage to the package, unless such actions are caused by the issues related to safety of life and health of the people on board. That’s why the Carrier follows the description, provided by the Shipper and contained in the Bill of Lading and/or Cargo Manifest, i.e. shipping documents. Our web-site doesn’t enable to place the copies of the Bills of Lading, and we do not consider it necessary, because we have already provided the copies of these documents to the Club, and there is no information about Syria and munitions in them. However, everybody knows the result of the Club’s examination of these documents. Mr. Charles Clover, taking in consideration, that we carefully answer to all your questions, please respond to one of our question. Just one.

The question of FEMCO company to the “Financial times” newspaper, represented by Chief of Moscow bureau Mr. Charles Clover:

- The common worldly situation. You bought a car, for the purpose of gaining profit from its operation. And you rent this can to the taxi company. The taxi driver, without knowing it, drove thief to your house who robbed your home. Fully and to the ground. And now the question: Whom will you submit your claim and whom will you ask questions in this regard? To the taxi driver? To the thief? To the company - the taxi operator? Or to yourself as the owner of the car?

- The Russian Minister of Foreign Affairs Mr. Lavrov has informed “Interfax” on 21 June, that Alaed was carrying the helicopters: “Yes, the Vessel was carrying three repaired helicopters”. Instead of this, in the recent company’s statement it is said: “Without any intention to comment on the recent statement of the Russian officials about the nature of the cargo on board and its destination”. Once again, we do not comment on the statements and actions neither Russian officials, nor the officials of any other state, because FEMCO company is a commercial organization which provide the shipment services. Our aim is not to comment, but to secure the qualitative fleet operation in due time and without prejudice to the Shipper/Consignee/Cargo Owner, taking into account the perils on the sea. We should follow the terms and conditions of the charter party and lawful shipping documents on board the Vessel, but not the press publications.

- Does the cancellation of the insurance by the British underwriters have any influence on the future shipments? Will this fact affect the reputation of the British marine cargo insurance system?

- We are a small shipping company, who has its own problems and solve its own issues, that’s why we do not think so big, and we have nothing to answer, how this situation will affect the Russian freight traffic. As for the reputation of the British system of insurance, likewise, it probably should take some time to get an answer to this question. As for us, we have successfully solved the insurance issue, and certainly not with the Standard Club. We are now asking the rhetorical question to ourselves that will also probably remain without the answer, as the Ship owners’ Mutual Insurance Standard Club is also called the Protection & Indemnity Club, so after this case it became unclear to us to whom this protection is provided and what kind of indemnity is granted? And what has that to do with the Ship Owners Club?

- As stated on FEMCO’s web-site, the company has lost a number of customers. Could you confirm that the British underwriters cancel the insurances for all FEMCO Vessels?

- Currently only the insurance cover of m/v Alaed is cancelled… We suppose that now it’s high time to put this matter to rest. That’s all. We are preparing m/v Alaed for the next regular voyage and are engaged in our direct duties.

Press release of FEMCO