Arrested ship's cargo auctioned to pay debt

Two ships have just been arrested at SA ports, and, after a court order, the cargo of one auctioned off to repay a company’s claim for R3.15 million in unpaid monies. Chrome ore shipments valued at about US$1m (R10.5m) were arrested as a Chinese bank and a logistics agent in Mozambique, both creditors of the insolvent trading house Metalmin Metals & Minerals, pursued the material. The logistics company was the Mozambique arm of the Dutch-owned LBH Group, a port agency which has five offices in SA port cities. As agents, the group handled more than 800 million tonnes of bulk cargoes last year. Andrew Pike, director of Velden Pike Nichols, the Durban-based lawyers acting for LBH Mozambique, told FTW that his client was a former cargo agent of Metalmin, and was owed payments for previous services “The claim amounted to US$300 000 (R3.15m) and the client had at one point been out of pocket by US$600 000 (R6.3m),” he said. “Metalmin changed cargo agents and shipped 5 000 tonnes of chrome concentrates from Maputo in Mozambique to China. We heard that the vessel, MV Red Fin, was going to stop in Richards Bay so we arrested it there. The appraised value of the cargo was about US$870 000 (R9.14m).” In the court action, Velden Pike Nichols had to fight off a claim by the China Construction Bank, which had been financing Metalmin. “They tried to negotiate a deal with us saying the bank had pledges over all Metalmin cargoes,” Pike said. “We challenged that, because we didn’t think the pledge had been perfected for Mozambique. The bank backed off, and we got a court order for the material, which was sold to a new buyer in China.” “We also arrested a cargo in Durban which was owned by the same company and pledged to the China Construction Bank. We released it and allowed it to be shipped. It was a much smaller claim.” Pike points out that SA maritime law provides that, when cargo is arrested, the proceeds will be distributed among creditors with maritime claims. “As far as our client is concerned its claim is now covered,” he added. INSERT & CAPTION Chrome ore shipments valued at about R10.5m were arrested. – Andrew Pike