Twin court dates for HNA

HNA Group subsidiary Grand China Logistics (GCL) and then the parent HNA Group itself will separately be meeting shipowners in London early next year to fight out time-charter guarantee rows.

At stake is some $95m in damages claimed against airline, real estate, travel and shipowning company HNA Group.

Norway's Spar Shipping, whose long-brewing case re-emerged in connection with a financial report this week, will make its arguments to the London High Court in late January, followed by China's Shagang Shipping in February in an entirely separate case but one involving similar issues.

The long-scheduled Shagang court date has been previously reported.

Spar and Shagang both hold guarantees that were issued in connection with aborted period charters to now defunct Grand China Shipping (Hong Kong) (GCSHK).

In both cases, GCSHK fixed ships at high rates, took delivery of them after the market had collapsed, paid hire poorly and soon redelivered the ships in breach of charter. Both Shagang and Spar initiated arbitrations.

Shagang won its full arbitrations claims hands down and then beat back an appeal of the arbitration award by Grand China in the English High Court.

After GCSHK was wound up, however, Shagang has found itself unable to translate its arbitration award into cash.

In Spar's case, it had its arbitration called off entirely in June 2013 because of the GCSHK wind-up.

In both cases, HNA companies have fought efforts to enforce financial guarantees they signed to back the time charters.

One difference between the situations of Shagang and Spar, however, is that Shagang's guarantee was issued by the parent HNA Group itself, while Spar's guarantee came from Grand China Logistics, one of several similar sounding names in the complex HNA Group.

Shagang's claim, amounting to over $66m at last count in March, involves a capesize newbuilding, the 179,300-dwt bulker Dong-A Astrea (built 2010), chartered in the heady early days of 2008 at $52,500 per day but delivered into a far different market market.

Shagang lawyers say full hire was never paid from October 2010 until redelivery in January 2012 and the bills up to redelivery were only collected through subsequent ship-arrest actions. Spar's $28m claim involves three supramaxes.

GCSHK redelivered the 58,000-dwt Spar Capella and Spar Vega (both built 2011) only a few months into five-year time charters while the 53,000-dwt Star Draco (built 2006) had one year left.

Ever since the redeliveries, Shagang has been conspicuous in repeated attacks on HNA group assets, including arrests during the past year of a capesize, a VLCC and a cruiseship, the last widely reported in Chinese mass media.

Spar, on the other hand, has not been very vocal in recent times about its claims, and in some quarters they were believed to have been settled privately.

This is by no means the case, says Jarle Ellefsen, managing director of Bergen-based Spar.

Ellefsen confirms a report by Norwegian newspaper Dagens Naeringsliv that his company continues to pursue claims against both Grand China entities and against South Korea's STX PanOcean over aborted charters, amounting to over $50m.

Spar's Grand China claims come to about $28m.In the case of STX PanOcean, the sides have negotiated a settlement and are awaiting approval of a South Korean bankruptcy court.

But Ellefsen tells Tradewinds there have been no recent negotiations with Grand China and HNA entities."It's fair to say that in all respects it has been difficult to get them to respond," said Ellefsen. "That has been our experience so far."