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Wednesday, 17 August 2011

Moore Stephens says HMRC may rethink its tonnage tax changes

Leading accountant and shipping adviser, Moore Stephens, understands that Her Majesty’s Revenue & Customs (HMRC) has agreed to re-examine, in consultation with the shipping industry, its earlier intention to unilaterally reinterpret the UK Tonnage Tax rules to the potential detriment of many shipowners.

Widely disputed changes based on unspecified ‘legal advice’ were set out in HMRC’s tonnage tax manual in September 2009. These focused in particular on a reinterpretation of the strategic and commercial management tests that are fundamental to qualification for the tonnage tax regime.

UK tonnage tax is widely credited with having helped increase the UK fleet substantially since its introduction in 2000, when it was regarded as a model of clarity and stability. Then, as now, there was the need for a stable UK tax regime to both support British business and to encourage international businesses to operate and stay in the UK. Under the reinterpretation of the rules, some groups would not have qualified for the UK regime, despite having previously received HMRC clearance, with the result that internationally mobile shipping groups could consider leaving the UK.

Sue Bill, a tax partner with Moore Stephens, says, “HMRC’s reinterpretation of the rules created a lack of certainty and sent completely the wrong signals to international shipowners who had relocated to the UK to take advantage of its tonnage tax regime. It would therefore be excellent news if, as we understand to be the case, HMRC decides to consider the matter afresh, and to consult fully with the shipping industry. This would be seen as an indication that the government means to continue to act fairly and reasonably, not least by protecting shipowners who elected into the regime for a ten-year period based on the original HMRC rules and clearances.

“While no formal change to HMRC’s position has yet been confirmed, it is understood that any changes to the rules will now be assessed carefully. HMRC has warned that this re-examination may not result in any change in its position at all. But we are hopeful that HMRC and the UK government will let us have a more considered view.

“We have been working with the industry, and in particular the Chamber of Shipping, in campaigning for some time, and we are delighted at this positive development.”

Moore Stephens LLP is noted for a number of industry specialisations and is widely acknowledged as a leading shipping and insurance adviser. Moore Stephens LLP is a member firm of Moore Stephens International Limited, one of the world's leading accounting and consulting associations, with 638 offices of independent member firms in 97 countries, employing 20,588 people and generating revenues in 2010 of $2.151 billion.

For more information:
Sue Bill, Moore Stephens LLP
Tel: +44 (0)20 7334 9191

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Tuesday, 16 August 2011

AKD says Chapter 11 protection is not enforceable in The Netherlands

Netherlands law firm AKD says that, while beleaguered shipowners may be looking increasingly to Chapter 11 filings in the United States to protect their financial interests, the fact is that Chapter 11 does not enjoy the force of law throughout the world, and certainly not in The Netherlands.

Haco van der Houven van Oordt, head of the shipping & offshore team at AKD’s headquarters in Rotterdam, says, “Nobody – and that includes the banks - wants to see shipping companies forced out of business. On the other hand, one cannot expect the banks to forgo the opportunity to ring-fence their losses in cases where they deem this to be the most propitious course of action.

“Some observers have predicted an increase by owners in the use of bankruptcy protection filings, and evidence from the banks suggests that a number of owners have indeed threatened to take such steps absent an agreement to restructure their debt.

“In this respect it is worth noting that Chapter 11 or similar protection does not enjoy worldwide currency. It works in those countries – including the US, the UK and in fact many others – which adopt a universal approach to cross-border insolvencies. But there are other countries, most notably The Netherlands, which adopt a territorial approach to bankruptcy.

“Banks can take action against the assets of a debtor in The Netherlands, even if the debtor is in liquidation or subject to similar proceedings. Under Dutch law, it is possible to act for banks and to auction vessels in The Netherlands, despite insolvency and/or liquidation proceedings being in place in other countries. Such proceedings do not prevent a bank from enforcing a mortgage in The Netherlands.”

The Netherlands is also a jurisdiction in which very few claims enjoy priority over mortgage claims. Moreover, it is widely recognised as a haven for those looking to attach ships and/or to arrange for their swift judicial auction, and counter-security is seldom required. There are very few legal hurdles to pass in order to obtain leave for attachment and, in addition, there is no obligation for the claimant to pursue its claim in the courts of The Netherlands following the attachment.

Haco van der Houven van Oordt adds, “While most mortgages are enforced in Rotterdam, a significant number are also dealt with in Amsterdam. All ships proceeding to Antwerp have to transit the River Scheldt, where they are also subject to Netherlands jurisdiction. And so it is that a number of mortgagees are known to have taken active steps in the past to direct vessels to ports in the Amsterdam – Rotterdam – Antwerp range for the specific purpose of bringing themselves within the jurisdiction of the Dutch courts.

“In the light of recent events, many observers are predicting a rush on the part of shipowners to seek Chapter 11 protection. But The Netherlands is a place where creditors can still pursue the attachment of assets despite a Chapter 11 filing.”

Notes to editors
AKD’s transport law division provides a full range of legal services to the maritime and transport industry. AKD is a full-service firm with over 250 lawyers. AKD is in the top tier of Legal 500’s Netherlands shipping, aviation and transport section.

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Monday, 15 August 2011

RINA obtains Kazakhstan recognition

INTERNATIONAL classification society RINA has been officially recognised as a competent and authorised authority to carry out classification and statutory services for ships registered under the Kazakhstan flag.

The authorisation was formalised in a recently signed agreement between the Ministry of Transport and Communications of the Republic of Kazakhstan and RINA Services SpA, the parent company of the Genoa-headquartered RINA Group.

Under the terms of this agreement, RINA is authorised to classify and survey Kazakhstan-registered ships, to confirm their conformity to the requirements of international and national conventions and agreements, and to issue corresponding certification.

The agreement also extends to cover the training of Kazakhstan Administration personnel, who will be able to apply to participate in RINA training courses, workshops, conferences and other similar events.

RINA is one of the oldest classification societies and certification companies in the world. Established in Genoa in 1861 to serve the marine industry, today it spans the globe as a multinational and multi-faceted company, sharing its knowledge and experience through a wide range of services which help industries and the community to improve their businesses and quality of life. RINA’s services cover the environment, energy, transportation, logistics, safety, quality and social responsibility.

For more information:
Claudia Filippone
Head of Media Relations RINA
+39 010 5385643

Giulia Faravelli
Media Relations
+39 010 5385505

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Wednesday, 3 August 2011

What price the specialist?

An insurance underwriter has launched a marine cargo policy which is apparently particularly suitable for brokers not used to dealing with traditional marine products. For the first time in the marine market, it is claimed, it will not be necessary to incorporate institute clauses.

This is supposed to make it easy to do business. Perhaps it will. But is it really what we want? For somebody who spent several years staring at the back of Bob Brown’s head at Willis Faber as he assiduously catalogued the wonderfully arcane marine clauses and their meanings, this is sacrilege.

Similarly, all those who spent a lifetime learning about the Inchmaree Clause and the Jason Clause (it worked both ways) will have to find something else not to understand if policies are going to start appearing without the institute clauses in them. It wasn’t just the clauses that appealed. It was the stories behind them, and how they got their names.

To be strictly accurate, a lot of the fun went out of the business when they dreamed up romantic names such as the Institute Cargo Clauses A, to replace what went before. But do we want marine business to be placed by brokers who are not used to dealing with it? The ones who know what they are doing are quite capable of making a mess of things without any help from tyro Tysers.

What is wrong with giving business to brokers who do understand the business? Is this part of the same thinking that is threatening to give us so-called Tesco law firms?

Move over, Cuthbert Heath.


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Marco Polo Seatrade granted US Court support

Netherlands-based Marco Polo Seatrade BV has been granted interim relief by a New York court which will allow it to continue to operate the business in the ordinary course under Chapter 11 protection.

The court yesterday granted Marco Polo, a company managed by Seaarland Shipping Management, the right to continue to operate and pay all operating expenses, the right to continue to pay employees and crew, the right to continue all cash management procedures and the right to continue to maintain all insurance, all in the ordinary course of business.

The management team continues to operate the business and the company will continue to honour all of its charter obligations during the pendency of the court protection. The company believes that the Chapter 11 filing will help it complete a restructuring process designed to restore the company to long-term financial health. The filing includes the following vessels: Montiron, Diana, Laura, Beth, Louise and Meg.

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Monday, 1 August 2011

Marco Polo Seatrade opts for Chapter 11 protection

Netherlands-based Marco Polo Seatrade BV, a company managed by Seaarland Shipping Management BV, has filed a voluntary petition for Chapter 11 reorganisation in the Southern District of New York in the United States.

The company believes that the Chapter 11 filing will help it complete a restructuring process designed to restore the company to long-term financial health. To help facilitate this restructuring, associated companies Seaarland Shipping Management BV, Magellano Marine CV and Cargoship Maritime BV have also begun co-ordinated Chapter 11 proceedings. Vessel operations and management services provided by the companies will meanwhile continue in the ordinary course of business.

As a result of the Chapter 11 filings, all creditor actions throughout the world, including any attempts to enforce claims against the companies' vessels, are automatically enjoined from proceeding while the companies reorganise their businesses.

The Chapter 11 filings are part of a long-term restructuring initiated in 2010 when the companies were hit by a sudden and dramatic drop in the shipping markets. During the past 12 months, enormous progress has been made as part of a commercially driven restructuring process but, notwithstanding important goals being reached, certain companies’ senior lenders unilaterally reversed their support for these restructuring efforts and started enforcement actions. The companies were therefore compelled to initiate Chapter 11 proceedings to halt those actions and to ensure the uninterrupted operation of vessels and services to their customers.

The companies are disappointed in the lenders’ unexplained reversal of support but remain positive in their belief that the steps taken will be of benefit to all their creditors, including the senior lenders.

The companies want to assure their customers and suppliers that Marco Polo Seatrade and associated entities will continue to operate in the ordinary course of business during the Chapter 11 proceedings and that other affiliated entities such as Seaarland (Singapore), Seaarland (Hamburg), Seaarland (Mumbai), Global Tanker, SynerGas and Motia have not filed for Chapter 11 protection and will continue in the ordinary course of business

The Chapter 11 filings include the following vessels: Montiron, Diana, Laura, Beth, Louise, Meg.

Seaarland’s principal legal adviser for the restructuring process and Chapter 11 proceedings is Bracewell and Giuliani LLP.

Further information about the Chapter 11 filing will be available shortly at www.seaarland.nl

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