The 'A' rated, 65 million GT North of England P&I Club
has alerted shipowners in the Middle East and India yesterday (20 September 2006) to the possibility of more sale and purchase disputes and a further increase in their P&I premiums.
The warnings were given at a seminar attended by around 80 representatives of Middle-Eastern and Indian shipowners at the Dubai Beach Resort in the UAE, which North of England organised in conjunction with sale and purchase experts from international shipping law firms Ince & Co and Mills & Co.
According to the club's associate director Katherine Birchall, 'As a result of recent fluctuations in freight rates in both the dry cargo and tanker markets, we believe owners will experience increased volatility in second-hand tonnage prices, which in turn will increase the potential for disputes under sale-and-purchase contracts'.
North of England FD&D manager Mark Robinson noted the club had experienced relatively few sale and purchase cases over the past few years. 'It appears buyers were willing to accept ships in circumstances where they may not have in the past, and tended to ignore issues which could have led to disputes. However, we expect the commercial balance between buyers and sellers will soon become more equal and this, coupled with the changes in ship values, is likely to result in a higher number of disputes.'
North of England deputy managing director Paul Jennings then provided a review of the club's finances. 'With the support and commitment from a growing number of high quality members from the Middle East and India, we have been able to consolidate our 'A' rated financial strength,' he said. 'But we also believe the continuing industry-wide increases in shipowner liabilities and claims costs, combined with ongoing uncertainty in the investment markets, will put further upward pressure on rating at the forthcoming P&I renewal.'
Regional director and underwriter Savraj Mehta confirmed North of England's continuing development in the Middle East, which now accounts for 15% of entered tonnage. He highlighted the consistently high quality of ships from the region and the continuing influx of additional tonnage and newbuildings from existing members. He concluded, 'Our strategy going forward is one of concentrating on service excellence and a growing commitment to loss prevention support.'
The club's Middle-Eastern and Indian members include companies such as Emirates Trading, Gulf Energy Maritime, Great Eastern, IRISL, Emarat Maritime, Bakri, Mercator Lines, Qatar Shipping, United Arab Shipping, Shipping Corporation of India and Tolani.
The seminar is one of a series North of England is holding for members and their intermediaries around the world. Further events are planned later this year in Singapore, Hong Kong and Monaco. Other presenters at today's event included Michael Hope from North of England, Bob Deering from Ince & Co's Dubai office, and Guy Mills from
Mills & Co in Newcastle.