Havila Kystruten takes legal action to become owner of Havila Capella
Since 12thof April, Havila Capella has been at quay in Bergen, after the insurance companies terminated the ship’s insurance due to sanctions against Russian interests. The long-term financing with GTLK Asia of the ship is a financial leasing where the loan documentation gives Havila Kystruten all rights and all responsibility for the operation of the ship as if the ship were wholly owned by Havila Kystruten. The company has a purchase right from the leasing company two years after delivery and a purchase obligation at the end of the contract with the Ministry of Transport and Communications. On 8th of April, GTLK was added to the EU’s list of sanctioned companies because of Russia’s war against Ukraine.
On 26 th of April, the company received a dispensation from the Ministry of Foreign Affairs to operate the ship for 6 months. In the extension of the dispensation, the Ministry of Foreign Affairs did not take a position on the dispensation that applies to the insurance of the ship. This had to be applied for specifically by the insurance provider, and that application was rejected on 9thof May. During the period, Havila Kystruten has worked with short-term solutions to get the ship back into operation, at the same time as it has worked with solutions for a change of ownership of the ship.
This week, Havila Kystruten filed a case “The High Court of Justice, Business and Property Courts of England and Wales, Commercial Court (QBD)” in London to force a change of ownership of the ship.
“It is important for us to take over the ownership of Havila Capella. We have tried to find a solution with GTLK Asia, but the only solution they have put forward is to pay the amount due. It would be illegal for us to pay the amount due to a sanctioned company. We want to settle by paying the amount we owe GLTK Asia to a blocked account. The amount will be paid to GTLK Asia when the sanctions are lifted”, says CEO Bent Martini of Havila Kystruten.
“We have also not met very much willingness from our financing partner to find an amicable solution.
Therefore, we now choose to take legal action to demand a change of ownership”.
Havila Kystruten has been in continuous dialogue with several ministries in Norway to find a temporary solution to be able to operate the ship on the route along the coast to which the company is obliged in accordance with a contract with the Ministry of Transport. So far no political solution has been found.
If the Havila Coastal Route succeeds in legal action, Havila Capella will be put back into operation.
“A breakthrough for the change of ownership will solve the challenges we face meaning that Havila Capella receives full insurance and can return to operate along the Norwegian coast. It will mean a lot to us financially to get the ship on schedule again, but not least it also means a lot to the coastal communities and Norwegian tourism”, says Martini.
GTLK Asia is the formal owner of the ship after the financing solution chosen in 2019, almost three years before the tragic Russian invasion of Ukraine. This was a so-called “sale and lease back” financing, which meant that Havila Capella was transferred to the leasing company, at the same time as they leased the ship back to the Havila Coastal Route.
“In the agreement, we are obligated purchase the ship in 10 years, at the same time as we have the right to buy it back during the contract period. At the same time, this type of agreement presupposes that Havila Kystruten has all other responsibilities on the ship, so that the real ownership and ownership relationship lies with our shipping company. The financial solution also means that Havila Capella is capitalized as owned by Havila Kystruten and also tax resident in Norway”, Martini explains.
The company is also working to refinance the entire fleet.
“Redemption of our debt to GTLK is dependent on our success with the ongoing refinancing of the vessels, both those delivered from the yard and the vessels under construction”.
“The legal steps taken include requirements to secure the company’s interests in ships under construction at the Tersan shipyard. We have today, 16 June 2022, received a ruling from English judiciary which states that no activity or transaction can be carried out related to the two ships under construction without the approval of the Havila Coastal Route”.
A clarification from English law regarding Havila Capella is expected within a reasonable time.
Desires forced use and arrest
On 16 June, a petition was submitted to Hordaland District Court for temporary arrest and forced use of Havila Capella.
“A request for temporary arrest in and right of use of Havila Capella makes it possible to insure the ship in the name of Havila Kystruten pending that we can take over ownership”, Martini concludes.
Source: The Havila Voyages