Empty victory for owner of MV Meob Bay

Empty victory for owner of MV Meob Bay

NAMIBIA’S worst-ever maritime disaster – the sinking of the fishing vessel MV Meob Bay with the loss of 19 lives on June 7 2002 – had a sequel in one of South Africa’s top two courts last week.

With litigation over the sinking of the Meob Bay still pending both in Namibia and South Africa, the Supreme Court of Appeal of South Africa on Thursday gave the green light for the sale of a ship belonging to an associate company of the marine mining company blamed for the Meob Bay disaster. The court ordered that the proceeds from the sale are supposed to go into a fund, where it should remain until litigation that the owner of the Meob Bay, the Luederitz-based Marco Fishing, has against the owners of the mining ship blamed for the Meob Bay’s sinking, has been resolved in South Africa.For Marco Fishing, the victory that it won in the Supreme Court of Appeal might be a substantially empty one, though, demonstrating the high price often associated with a failure to bring litigation to a speedy conclusion.According to the court’s judgement, the MV Spirit of Namibia has been stripped of millions of dollars worth of equipment in the almost four years it has lain docked in Cape Town.It has also accumulated liabilities of hundred of thousands of dollars in port dues and has deteriorated to such an extent that it is now deemed to be suitable only to be sold for scrap.The money that could be realised from the sale of the vessel might not even be enough to pay Marco Fishing’s legal costs in the various court cases that have already been fought over the fate of the ship.The Meob Bay set out to sea from Luederitz with a crew of 28 late on the afternoon of June 7 2002.Only a few miles out of port, the vessel’s propeller caught a piece of drifting rope attached to an anchor on the ocean floor.The propeller became snagged in the rope and, in heavy swell, the fishing vessel quickly started taking on masses of water.Within less than two and a half minutes the Meob Bay sank.Nineteen crew members died in what has to date been the most deadly maritime accident yet in Namibian waters.The anchor and rope, Marco Fishing is claiming, had been left at that spot by a diamond mining vessel, MV Lady S, which belonged to a South African-registered company, Gemfarm.Marco Fishing initially had the Lady S attached in Cape Town as it launched legal proceedings in South Africa against Gemfarm.It soon agreed to an offer from Gemfarm to instead have the MV Spirit of Namibia take the Lady S’s place, since Gemfarm claimed to urgently need that vessel to continue working.At that stage, Marco Fishing was informed that the Spirit of Namibia, which belonged to an associate company of Gemfarm, Big Red Incorporated, which is registered in the British Virgin Islands, was worth about R35 million.Big Red Incorporated and its South African-registered holding company, Quarterdeck Prospecting and Mining, were Marco Fishing’s opponents in the case in which the court gave its judgement last week.On December 19 2002, Marco Fishing instituted legal action against Gemfarm, claiming damages of R7,98 million from that company, the events are related in the Supreme Court of Appeal judgement.The next court proceedings followed in August 2003, when Marco Fishing launched an urgent application in which it claimed that it had discovered that after the Spirit of Namibia had been attached, it had been stripped of a considerable amount of equipment, which was subsequently installed on another mining vessel in which Gemfarm also had an interest.At that stage a marine surveyor estimated that the Spirit of Namibia had been reduced to “a neglected hulk”, worth between R5,5 and R6 million.The outcome of that urgent case was that Gemfarm was ordered to furnish security in the sum of R3,5 million to Marco.By July 2004, a marine surveyor had another look at the Spirit of Namibia, concluded that she had deteriorated considerably, and expressed the view that her only remaining value was as scrap.He calculated that she could be sold as scrap for about R2,73 million.Taking into account the cost of towage to the point where she would be scrapped, it would leave about R1,5 million.Also at that stage, the vessel was incurring port dues at a rate of R30 000 a month.By late September 2004, accumulated port dues amounted to over R837 000 – which would have left no more than about R700 000 for distribution if the ship was sold at that stage, the Supreme Court of Appeal notes in its judgement.By the time the Cape High Court authorised the sale of the Spirit of Namibia, further outstanding port fees would have reduced that realisable amount by another R360 000.The remaining balance of R340 000 would not even have been sufficient to cover the legal costs that had already been awarded to Marco Fishing in litigation against Gemfarm, the court also noted.With the case between Marco Fishing and Gemfarm still pending, Gemfarm was provisionally declared bankrupt in November.It has since been finally liquidated.Big Red One Incorporated has however, at the time the Spirit of Namibia was substituted for the Lady S, undertaken to be liable to pay any amount found due by Gemfarm – but how much more than a name registered in the British Virgin Islands that company is, still remains to be seen.The court ordered that the proceeds from the sale are supposed to go into a fund, where it should remain until litigation that the owner of the Meob Bay, the Luederitz-based Marco Fishing, has against the owners of the mining ship blamed for the Meob Bay’s sinking, has been resolved in South Africa.For Marco Fishing, the victory that it won in the Supreme Court of Appeal might be a substantially empty one, though, demonstrating the high price often associated with a failure to bring litigation to a speedy conclusion.According to the court’s judgement, the MV Spirit of Namibia has been stripped of millions of dollars worth of equipment in the almost four years it has lain docked in Cape Town.It has also accumulated liabilities of hundred of thousands of dollars in port dues and has deteriorated to such an extent that it is now deemed to be suitable only to be sold for scrap. The money that could be realised from the sale of the vessel might not even be enough to pay Marco Fishing’s legal costs in the various court cases that have already been fought over the fate of the ship.The Meob Bay set out to sea from Luederitz with a crew of 28 late on the afternoon of June 7 2002.Only a few miles out of port, the vessel’s propeller caught a piece of drifting rope attached to an anchor on the ocean floor.The propeller became snagged in the rope and, in heavy swell, the fishing vessel quickly started taking on masses of water.Within less than two and a half minutes the Meob Bay sank.Nineteen crew members died in what has to date been the most deadly maritime accident yet in Namibian waters.The anchor and rope, Marco Fishing is claiming, had been left at that spot by a diamond mining vessel, MV Lady S, which belonged to a South African-registered company, Gemfarm.Marco Fishing initially had the Lady S attached in Cape Town as it launched legal proceedings in South Africa against Gemfarm.It soon agreed to an offer from Gemfarm to instead have the MV Spirit of Namibia take the Lady S’s place, since Gemfarm claimed to urgently need that vessel to continue working.At that stage, Marco Fishing was informed that the Spirit of Namibia, which belonged to an associate company of Gemfarm, Big Red Incorporated, which is registered in the British Virgin Islands, was worth about R35 million.Big Red Incorporated and its South African-registered holding company, Quarterdeck Prospecting and Mining, were Marco Fishing’s opponents in the case in which the court gave its judgement last week.On December 19 2002, Marco Fishing instituted legal action against Gemfarm, claiming damages of R7,98 million from that company, the events are related in the Supreme Court of Appeal judgement.The next court proceedings followed in August 2003, when Marco Fishing launched an urgent application in which it claimed that it had discovered that after the Spirit of Namibia had been attached, it had been stripped of a considerable amount of equipment, which was subsequently installed on another mining vessel in which Gemfarm also had an interest.At that stage a marine surveyor estimated that the Spirit of Namibia had been reduced to “a neglected hulk”, worth between R5,5 and R6 million.The outcome of that urgent case was that Gemfarm was ordered to furnish security in the sum of R3,5 million to Marco.By July 2004, a marine surveyor had another look at the Spirit of Namibia, concluded that she had deteriorated considerably, and expressed the view that her only remaining value was as scrap.He calculated that she could be sold as scrap for about R2,73 million.Taking into account the cost of towage to the point where she would be scrapped, it would leave about R1,5 million.Also at that stage, the vessel was incurring port dues at a rate of R30 000 a month.By late September 2004, accumulated port dues amounted to over R837 000 – which would have left no more than about R700 000 for distribution if the ship was sold at that stage, the Supreme Court of Appeal notes in its judgement.By the time the Cape High Court authorised the sale of the Spirit of Namibia, further outstanding port fees would have reduced that realisable amount by another R360 000.The remaining balance of R340 000 would not even have been sufficient to cover the legal costs that had already been awarded to Marco Fishing in litigation against Gemfarm, the court also noted.With the case between Marco Fishing and Gemfarm still pending, Gemfarm was provisionally declared bankrupt in November.It has since been finally liquidated.Big Red One Incorporated has however, at the time the Spirit of Namibia was substituted for the Lady S, undertaken to be liable to pay any amount found due by Gemfarm – but how much more than a name registered in the British Virgin Islands that company is, still remains to be seen.

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