Lawyer Alfonso: T&T could make less than $1 million from ‘Solo Creed’ | Business

EXPERT maritime lawyer Nyree Alfonso says the arrest of tugboat Solo Creed to recover $244 million could become “a situation where the candle costs more than the funeral” because she believes the costs and efforts of the legal pursuit could ultimately outweigh any financial recovery.

Alfonso stated that, based on his 31 years of experience, he believed that the Government might be forced to sell Solo Creed and recover less than US$1 million from that sale.

Therefore, he believes that we should temper all expectations regarding the situation.

Alfonso made the comments during a telephone conversation with the Express yesterday, responding to the Ministry of Energy’s announcement that the tugboat Solo Creed was detained in Angola to secure Trinidad and Tobago’s claim for more than $244 million in damages arising from the oil spill in Tobago. In February.

“Usually when you detain a ship, it is to provide security for any damage, loss, debt incurred. That’s why we need to look very critically at the ship you arrested,” Alfonso said.

The person arrested in this case was a single tugboat, Alfonso said.

“This is not a brand new tugboat from shipbuilders, so (Solo Creed) might be worth $500,000 or $750,000, and when you arrest that, it will cost you money to arrest it. You need to hire a lawyer to arrest him. There are also the costs of keeping him detained, these are court costs; and Admiralty Marshal costs; and security costs,” he said.

“If it’s with a port authority, it costs money to keep it, so there’s docking fees, marine fees and things like that. “When you arrest this ship, how much of this cost can be covered from the value of this ship?” Alfonso said.

Normally, after considering all these factors, they would analyze whether it is worth detaining the ship and covering the associated costs, Alfonso said.

“And if the owners go bankrupt and you have to sell the ship, of course you now do a fire sale and get a very small share of the value of the ship. “So one wonders whether the excitement of arresting this ship is justified,” he said.

Alfonso said the ships are sometimes part of a P&I (Protection and Indemnification) club, a mutual insurance association that provides insurance and other services to its members.

“So these organizations can provide security above the value of the ship, and then the ship will be allowed to continue on its way. However, in the initial searches I made upon the request of a few people, we could not find one of the 12 P&I clubs in the world covering this ship,” he said.

“It is unlikely that an insurance company or P&I club will emerge to provide security; And of course, if I own the ship and my ship is valued at $750,000 and someone is asking for $35 million, I will tell them: ‘Here’s my ship, do the best you can,'” Alfonso said.

Alfonso stated that in such cases, creditors will pursue the ship owner, but the ship owner could potentially declare bankruptcy.

“I wouldn’t get too excited,” Alfonso said.

“It was announced that this was the solution, that it was certain. You will deposit money. “Unless there is a well-developed jurisdiction in Angola to sell ships and take them back on something close to a commercial basis, unless there is a well-developed jurisdiction in Angola in that sense, then it will probably be in the loss zone,” he said.

Alfonso stated that he himself encountered similar situations during his time as a maritime lawyer arresting ships.

He said he arrested a US$4 million oil tanker in Trinidad and Tobago in the mid-90s over a US$350,000 claim.

“When I went to arrest the ship, the owner went bankrupt. I had to sell that ship to get that $350,000. Usually when you talk about a claim it is well below the value of the ship. My arrest expenses will be covered, my lawyer expenses will be covered, my security expenses, Naval Forces Commander, everything will be covered. “I don’t believe I see this scenario developing here,” Alfonso said.

“The reason people use these old vessels that do not have proper insurance and are not registered with the P&I club is that there is no real loss if they are seized in these circumstances. “If you have a pearl, a gemstone or a diamond ship, you don’t want it to get lost in Trinidad and Tobago,” he said.

Alfonso said Gulfstream’s release may indicate that Solo Creed may also be sacrificed.

“If you have experience in these areas, you should put that in the rubric: they are always prepared to lose that ship if something hits the fan. “It has to be something you are willing to sacrifice,” Alfonso said.

By August, approximately 60,000 barrels of fuel (spilt from the overturned Gulfstream barge towed by the Solo Creed) had been diverted offshore and from shore, including the environmentally sensitive Cove reef site in Tobago.

The Ministry of Energy said that efforts are continuing to recover the amounts spent during the cleaning efforts from the International Oil Pollution Compensation (IOPC) Fund.

During the Standing Committee on Finance in Parliament, Energy Minister Stuart Young expressed confidence that Trinidad and Tobago would recover most of the money spent on the Tobago oil spill.

Young said the Government had been successful in its application to the UK-based IOPC.

The IOPC provides financial compensation for oil pollution damages occurring in member countries due to persistent oil leaks from tankers, the website said.