Maritime lawyer: Government 'taking a chance' on Solo Creed

Maritime attorney Nyree Alfonso says despite arresting the Solo Creed tug in Angola, the government may never recover the $244 million already spent on clean-up efforts.

The Solo Creed was towing a barge named Gulfstream, which overturned off the coast of Tobago in February, leading to a massive oil spill which damaged the island’s marine ecosystem and negatively affected fishermen’s livelihoods.

After Gulfstream overturned, the Solo Creed reportedly fled the area and failed to report the incident to the authorities.

The Ministry of Energy and Energy Affairs (MEEA), in a release dated October 24, said the Solo Creed had been located in Angola and the government was taking action against the boat and its owners.

“Pursuant to proceedings filed by the Republic of Trinidad and Tobago in the Republic of Angola, the tug Solo Creed has been ordered by the Court to be arrested to secure the claim of Trinidad and Tobago.”

It said the arrest would allow TT to “protect the fruits of its claim” and recover more than $244 million spent to clean the spill.

It said the figure is a preliminary one as the full cost continues to be tabulated.

The ministry said the tug will not be allowed to leave Angola unless security is lodged to secure TT’s interest.

It added, “That security will provide protection towards satisfying the claim and compensate for the damage resulting from the oil spill off Tobago during the towing operations of the barge in February.”

Alfonso told Newsday while this decision may have been done in the pursuit of justice, it may end up costing taxpayers in the long run.

“Justice must be done and must be seen to be done. But spending money to arrest a boat of low value when you're looking at this kind of liability and any other liabilities that you are expected to meet when you arrest a boat, then you have to ask, ‘Is that justice or am I just trying to say I did something and it looked good?’”

Government quiet on cost

Alfonso explained when a boat is arrested, the court holds the vessel until the claimant gets their money.

“If the owners want to get back their boat, they put up security (in escrow) and say, ‘I will take my boat in return for the security and then we'll litigate and we can fight up in court.’”

Alfonso said that based on her estimated value of the Solo Creed, there is little chance anyone will put up security for the boat, given the size of the government’s claim.

“Nobody in their right mind will put up more money than their vessel is worth and my rough estimate is that this boat is worth maybe $US500,000 - US$750,000. So that means the likelihood of somebody coming forward to put up security is next to nil.”

She said the Solo Creed is not a new vessel and added it is common knowledge in the industry that as a boat begins to age past its point of commercial feasibility some nefarious owners choose to put it to other use.

“As vessels come to the end of their commercial life, some owners will risk them. Because they might be caught carrying sanctioned oil, for instance, or some other kind of contraband. And therefore, owners tend to only use boats that are not the diamond and gold in their fleet. So the returns are high, but the risks are low.”

She said questions over the incident may lead the owners to believe it is cheaper to forfeit the boat than to come forward and face any additional consequences.

She added if this is the case, the government will then have to sell the boat at a reduced price to recover any costs.

“When people come to buy a vessel in a judicial sale, you're looking for a fire sale. You don't pay optimum prices when it comes to buying a house in mortgage sale so it's the same story here.”

Alfonso noted these costs are often considerable, with lawyers’ fees alone costing tens of thousands of US dollars.

“Aside from the lawyers, it costs money to keep the boat under arrest. You have security charges, port charges, the Admiralty Marshall has to be paid because the arrested vessel is in their custody. So your tab is running in terms of expenses. And if the owner does not come forward and put up security, ultimately, you may have to sell that boat in order to realise any value from it.”

Alfonso: Government ‘taking a chance’

“So this is going to cost you money upfront and you have to pray to almighty God that everything goes right and that you're able to recover some money by selling the boat, but with all the expenses having to be covered first before any money is put in you’re taking a chance.”

Alfonso said if the government were her client, she would have advised them to undertake a cost-benefit analysis before trying to arrest the boat.

“I see no point in arresting the vessel because of the great distance between the (value of the) claim and value of the vessel. Like I said, when you arrest a vessel, the owner or the owner's interest or the insurance company is not obliged to put up any more money than the vessel is worth. So the devil is in in the details.”

Newsday sent WhatsApp messages to Energy Ministry Stuart Young, Finance Minister Colm Imbert and Attorney General Reginald Armour seeking information on the cost of arresting the vessel but by press time, none had responded.

Messages to Imbert’s phone from this reporter appeared to be blocked as messages to his phone from another number were delivered.

Finding ‘murky’ owners is difficult

In its release, the MEEA said the Government will continue to pursue all legal proceedings to ensure its rights and interests are protected and vindicated, including hunting the owners.

“We will take all steps to hold the owners and or persons interested in the vessel accountable for the extensive damage caused to the livelihood of the people and environment of Tobago.”

Calling on her experience in the industry, Alfonso said the government will have a hard time finding Solo Creed’s owners as many boat owners exist on paper only and hide behind shell companies.

“They flag their vessel or register their vessel in what we call flags of convenience, which means you have no ties to the country where your vessel is registered and no assets within that jurisdiction… and the only thing the company owns is the vessel.”

She said even if the owner is found, recovering money from them will also be difficult.

“(Companies) might own 50 vessels, but every single vessel is owned under the name of a different company. All the companies have the same fax or phone number, the same physical address and so on, but every single vessel has a slightly different owner so that when you take one, you can't touch the rest of the fleet. So you may have a paper company with no assets other than the vessel itself.”

She added the companies are also registered as limited liability companies, so holding the beneficial owners to account is difficult.

“The ownership of the vessel seems to be as dark as the vessel and as murky and mercurial as the vessel and its operations. And therefore, unless you're reaching beyond the vessel into the ownership of the vessel and you can tap into that to get back money, I think it's an academic exercise.”