South Africa to bar Russian P&I Pool insured ships
South Africa’s maritime authorities have warned that any vessel insured by the Russian P&I Pool will effectively be barred from entering the country’s ports following a dispute that could see the government paying for a $15m salvage operation.
The drastic move by South Africa’s maritime safety agency Samsa was taken in the wake of an increasingly expensive salvage operation to remove the 30,529 dwt bulker Seli 1 , which grounded off Cape Town on September 7.
The Turkish-owned handysize bulker was insured for hull risks by JSC Rosgosstrakh of Moscow and for P&I by Hamburg based Zeller Associates Management Services on behalf of the Russian P&I Pool.
However, after several weeks of limited contact with the two companies, Samsa has told Lloyd’s List that both the hull and P&I insurers had “sought to withdraw insurance cover” for the vessel.
Samsa is now resigned to the fact that it will be left to pay the salvage costs, which according to the latest estimates could cost up to $15m.
This is not the first time that the insurance company behind the Russian P&I Pool has been at the centre of such disputes and the Seli 1 episode has raised concerns about its associated companies, which also offer a fixed premium liability pool arrangement made of general insurers.
Zeller was involved in a 2008 case with some similarities to the Seli 1 dispute when the Algerian maritime administration threatened to ban vessels belonging to Zeller-managed Hanseatic P&I, following a ro-ro grounding near Skikda.
The situation was later resolved, but the fixed premium insurer found itself sued by the Greece-based Tsavliris salvage group in pursuit of a Lloyd’s Open Form salvage award.
Zellar managing director Bert Wardetzki insisted that the two cases were in no way related. “These are two different P&I facilities that have nothing to do with each other. We did honour the Sophia claim, for us it is a multi-million dollar claim… There are however legal proceedings in Athens which mean I cannot comment on this.”
According to Samsa regional manager Dave Colly a letter from Zellar was received late last week confirming that insurance cover had been withdrawn.
Mr Wardetzki, however, insists that the cover was not withdrawn, rather it was null and void.
“The policy maintained that hull and machinery cover must be maintained through the entire insurance period,” he explained. According to Mr Wardetzki the Russian P&I Pool was not informed that the hull insurance had expired and therefore there was a breach of contract.
“I regret this situation as well but there is no cover.”
According to Mr Colly, this is unacceptable. “They have effectively said the owner is in default, end of debate,” he said. “The owner, meanwhile, claims to be insured, but is ducking out on a technicality. It’s quite a big technicality though as far as we are concerned.”
Samsa has already informed both the vessel’s operator TEB of Turkey and Zeller Associates that salvors Smit had obtained an order from a Lloyd’s Open Form arbitrator in London and directed the owners or their insurers to put up $2.8m in security for Smit’s special compensation claims. As of October 2, this had not occurred.
The 29-year-old bulker sought refuge in Table Bay suffering from engine problems and, said Mr Colly, this and its other activities along the South African coast were “allowed on the strength of [its] P&I cover”.
The Russian P&I Pool is not one of the International Group P&I clubs which make up 90% of the world’s ocean-going fleet and is therefore not a ‘traditional’ club. Although the non-IG group fixed premium pools only make up a small quantity of the world’s international tonnage.
“The rest of P&I Clubs are tainted because this guy chooses to use the term P&I in his name,” said Mr Colly. “He doesn’t act like a P&I and I don’t think he has anyone’s interests at heart here”.
The drastic move by South Africa’s maritime safety agency Samsa was taken in the wake of an increasingly expensive salvage operation to remove the 30,529 dwt bulker Seli 1 , which grounded off Cape Town on September 7.
The Turkish-owned handysize bulker was insured for hull risks by JSC Rosgosstrakh of Moscow and for P&I by Hamburg based Zeller Associates Management Services on behalf of the Russian P&I Pool.
However, after several weeks of limited contact with the two companies, Samsa has told Lloyd’s List that both the hull and P&I insurers had “sought to withdraw insurance cover” for the vessel.
Samsa is now resigned to the fact that it will be left to pay the salvage costs, which according to the latest estimates could cost up to $15m.
This is not the first time that the insurance company behind the Russian P&I Pool has been at the centre of such disputes and the Seli 1 episode has raised concerns about its associated companies, which also offer a fixed premium liability pool arrangement made of general insurers.
Zeller was involved in a 2008 case with some similarities to the Seli 1 dispute when the Algerian maritime administration threatened to ban vessels belonging to Zeller-managed Hanseatic P&I, following a ro-ro grounding near Skikda.
The situation was later resolved, but the fixed premium insurer found itself sued by the Greece-based Tsavliris salvage group in pursuit of a Lloyd’s Open Form salvage award.
Zellar managing director Bert Wardetzki insisted that the two cases were in no way related. “These are two different P&I facilities that have nothing to do with each other. We did honour the Sophia claim, for us it is a multi-million dollar claim… There are however legal proceedings in Athens which mean I cannot comment on this.”
According to Samsa regional manager Dave Colly a letter from Zellar was received late last week confirming that insurance cover had been withdrawn.
Mr Wardetzki, however, insists that the cover was not withdrawn, rather it was null and void.
“The policy maintained that hull and machinery cover must be maintained through the entire insurance period,” he explained. According to Mr Wardetzki the Russian P&I Pool was not informed that the hull insurance had expired and therefore there was a breach of contract.
“I regret this situation as well but there is no cover.”
According to Mr Colly, this is unacceptable. “They have effectively said the owner is in default, end of debate,” he said. “The owner, meanwhile, claims to be insured, but is ducking out on a technicality. It’s quite a big technicality though as far as we are concerned.”
Samsa has already informed both the vessel’s operator TEB of Turkey and Zeller Associates that salvors Smit had obtained an order from a Lloyd’s Open Form arbitrator in London and directed the owners or their insurers to put up $2.8m in security for Smit’s special compensation claims. As of October 2, this had not occurred.
The 29-year-old bulker sought refuge in Table Bay suffering from engine problems and, said Mr Colly, this and its other activities along the South African coast were “allowed on the strength of [its] P&I cover”.
The Russian P&I Pool is not one of the International Group P&I clubs which make up 90% of the world’s ocean-going fleet and is therefore not a ‘traditional’ club. Although the non-IG group fixed premium pools only make up a small quantity of the world’s international tonnage.
“The rest of P&I Clubs are tainted because this guy chooses to use the term P&I in his name,” said Mr Colly. “He doesn’t act like a P&I and I don’t think he has anyone’s interests at heart here”.