Norden settles COA spat

A spat between Norden and Russian aluminium giant Rusal over three huge shipment deals has ended with the Dane walking away with $23m.

The amount is just over a third of what Norden had hoped for from its seven arbitration cases against Rusal affiliate RTI Ltd but is sweetened with the addition of a new two-year contract of affreightment (COA).

The row between the shipowner and Jersey-based RTI over three large COAs erupted last year and led to Norden freezing almost $100m of the latter’s funds through maritime attachments in a US court (Norden freezes Rusal funds).

The three deals involved a total of 4.4 million tonnes of cargo to be shipped by the Dane for RTI from both Australia and Brazil to Europe.

On Tuesday Norden announced it has “reached a full and final settlement” in the seven arbitration cases it had with RTI with the Dane to receive $23m on 22 March.

“In addition Norden and RTI Ltd have agreed on a new two-year [COA] for two million tonnes of bauxite,” the announcement continued.

Later on Tuesday the Dane went on to publish its annual report for 2009 which included more information on the settlement.

“The claims which Norden had legitimate expectations of pleading against RTI Ltd amounted to $60-65m, calculated in February 2009.

“The company has assessed that it would be most expedient to settle disagreements outside the court room. It is also positive that the company can maintain commercial relations to a large player within bulk transportation.”

The spat came to light as Oslo-based broker Morten Riis took Norden to arbitration in an attempt to force through commissions of $10m from two of the three COAs which his firm Panamax Bulk AS brokered in December 2007.

Of the three COAs for 2008 bauxite hauls, one that was negotiated on 18 December called for 43 shipments of some 2.58 million metric tonnes from Weipa in Australia to the Porto Vesme smelter in Sardinia at $64.65 per tonne.

Another December deal called for 1.34 million tonnes to be shipped from Trombetas in Brazil to the Aughinish smelter in Ireland at $55.50 per tonne. A third COA signed in early September 2007 covered 540,000 tonnes from Weipa to the Ukrainian port of Dneprobugskiy at $62.95 per tonne.

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