KARACHI: The Pakistan National Shipping Corporation (PNSC)’s vessel MV Hyderabad was arrested at Port Elizabeth on Friday on the orders of the South African high court, according to official sources.

The vessel was on its way to the West African port of Pedro but had to report at the South African port for refuelling where it was arrested on a court decree issued in a freight default case against the Pakistan Steel Mills (PSM), they said.

Under South African law, a vessel can be arrested once a court decree is issued. The order was issued in a case filed by a Singaporean shipping company against the PSM over its failure to pay freight against the haulage of iron and ore in 2008.

According to the sources privy to the development, the PSM engaged the company in 2008 for the haulage of one million tonnes of iron/ore from South Africa.

But the PSM could not make freight payments of $7.5 million to the company and it, after carrying 0.8 million tonnes in four trips out of total six trips, stopped the haulage of iron/ore.


The arrest is result of a court order in freight default case against PSM


Besides ordering payment of $7.5m freight, the court also ordered the PSM to pay $6.5m interest to the company, the sources said.

Due to the arrest of MV Hyderabad belonging to the PNSC, a government-owned entity like the PSM, the corporation had to face the consquences for no fault on its, they said, adding that the court order was a sort of attachment of state asset.

After the PSM failed to make payment of freight charges and the shipping company stopped the haulage of iron and ore, the two sides evoked arbitration clause of the contract.

A two-member arbitration tribunal with Capt Anwar Shah representing the PSM and Capt Sulat Majeed representing the company gave a split decision.

Upon this the Sindh High Court in 2010 appointed a neutral empire (a retired judge) to sort out the issue but again the PSM made a default as it did not pay the agreed fee to the judge.

Since the case could not make progress and after about six years, the South African high court issued a decree for confiscation of state (Pakistan) asset, official sources said.

PNSC sources said that the corporation had several options to get the vessel released by getting international surety and guarantee at an amount of $5m. The corporation has approached Finance Minister Ishaq Dar and the Pakistan high commissioner in South Africa in this regard.

Answering a question, a PNSC official told Dawn that MV Hyderabad was on a chartering with a foreign company and was loaded with clinker. This means there is no fear of goods getting perished or damaged.

Published in Dawn, August 23rd, 2016

Now you can follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Disquiet on the western front
Updated 07 Dec, 2022

Disquiet on the western front

IT is very difficult for Pakistan to be delinked from Afghanistan, because of reasons of geography and history.
Fuel from Russia
07 Dec, 2022

Fuel from Russia

THE apparent headway made with Russia for the purchase of its crude oil, petrol and diesel at discounted prices is a...
More women SHOs
07 Dec, 2022

More women SHOs

IT is encouraging to see more employment avenues opening up for women in Pakistan, with an increasing number of...
Is there a plan?
Updated 06 Dec, 2022

Is there a plan?

The ball currently is in Imran's court, but it appears he is stumped as to what to do with it.
Riverfront concerns
06 Dec, 2022

Riverfront concerns

THE door-to-door drive being launched by a group of landowners to mobilise affected communities against what they...
Morality police out
06 Dec, 2022

Morality police out

FOR several months, Iran has been rocked by unprecedented protests, sparked by the death on Sept 16 of Mahsa Amini, ...