18/12/2008 - 14:21

Fortescue Metals faces $130m law suit

18/12/2008 - 14:21

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A Greek shipping group has filed a $US130 million lawsuit against Fortescue Metals Group after the miner allegedly cancelled a five-year ship charter.

A Greek shipping group has filed a $US130 million lawsuit against Fortescue Metals Group after the miner allegedly cancelled a five-year ship charter.

An FMG spokesperson confirmed to WA Business News that Splendour Special Maritime Enterprise, owned by the Angelicoussis Group, has filed the suit in the United States district court.

The spokesperson said the $130 million figure includes interest and lawyers fees.

Earlier this month, Fortescue suspended all of its long-term cost and freight shipping contracts of (CFR) affreightment and consecutive voyage contracts.

The miner had said about two-thirds of its sales had been on CFR terms - whereby it covers transport costs and passes them on to customers at a premium - but this was likely to reduce to about one-third of sales.

It would instead increase freight on board (FOB) sales, which involve the customer directly paying a charter company for transporting product.


United Kingdom publication Lloyd's List reported that Splendour claimed FMG had cancelled a five-year ship charter contract and refused to accept deliver of the Anangel Splendour on December 8.

The vessel was contracted in July for 59-61 months at a rate of $US77,500 per day, the report said.

Meantime, Lloyd's List reported that bulk owner Armada (Singapore) and at least five other operators are taking legal action against FMG.

Armada was contracted for a total of 65 cargoes.

The company has filed a claim against FMG in the US for $2.53 million in damages.

The FMG spokesperson told WA Business News that the miner is facing a number of claims but would not verify the number.

 

 

 

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