Gulf Navigation asked to pay $10.2m in costs

Gulf Navigation’s financial woes continue, after a London arbitration panel found it was liable for $10.2 million of costs plus interest.

The arbitration proceedings concern the ‘bareboat’ chartering – where a vessel is chartered without a crew – of an oil tanker by the company from Bermuda’s Nordic American Tankers (NAT) between 2004 and 2010.

NAT claimed that the vessel was in poor technical condition when it was redelivered by Gulf Navigation, and made a claim against the company for costs incurred for its repair.

A London arbitration panel ruled in favour of NAT and awarded the Company $10.2m plus direct costs and calculated interest.

“This is a very disappointing award,” the company’s managing director Sandeep Kadwe said in a statement. “Gulf Navigation is now seeking advice from an international law firm based in the UAE, to find if GNH can appeal further on this in the court.”

Any appeal’s chances of success however appears to be limited, with London arbitration awards typically overturned only when proof exists of fundamental procedural errors in the arbitration proceedings.

Gulf Navigation today confirmed that the sum of $98 million agreed for the sale of its two oil tankers to Bermuda’s DHT Holdings was not sufficient to cover the outstanding loans on the vessels.

The company said that the final shortfall will be confirmed when the sale is completed on February 13th of 14th, but it estimated the current shortfall as being $7m.