Ship that hit Demerara Harbour Bridge was not required to lodge cash before departure -Attorneys

Ship that hit Demerara Harbour Bridge was not required to lodge cash before departure -Attorneys

The operators of the fuel tanker, MV Tradewind Passion, that slammed into the Demerara Habour Bridge causing more than $1B in damages last October, were not required to deposit $250 Million in cash before the ship departed Guyana, according to the attorneys representing the ship company.

Earlier this week, local authorities suspended three employees of the Demerara Harbour Bridge after the fuel tanker left Guyana without their knowledge. Minister of Public Works, Juan Edghill, though admitting that the High Court ordered the release of the ship, has insinuated that Maritime Administration committed an irregularity in allowing the ship to depart because it deposited no cash.

But Attorneys from the Cameron and Shepherd Law Firm which is representing the ship company said there was no requirement for a cash downpayment.

It was explained that after the ship was detained by an order of the Court, the Cameron and Shepherd’s attorneys applied for its release on the security of a Letter of Undertaking (LOU) by the insurers for approximately $250M. 

“The LOU is an internationally recognized guarantee that is accepted for the release of ships under arrest or by agreement of the parties when an accident occurs. The sum of two hundred and fifty million guaranteed is arrived at on the basis of a formula set out in the Shipping Act which is itself based on an international convention subscribed to by the Government of Guyana,” the attorneys explained.

The Demerara Harbour Bridge (Kevin Somwaru Photo)

The attorneys said in ordering the release of the ship, the Court accepted the deposit of the LOU with the Registrar.

“No order was made for a deposit of cash. If such an order was sought by the Demerara Harbour Bridge, we are confident that the court would have rejected it. Therefore, the statement of the Hon Minister bemoaning the release of the ship without the deposit of cash had to have been made without legal advice,” they said.

They contended too that the penalization of staff of Maritime Administration over the ship’s departure is baffling, since the court ordered the release of the ship and later ordered costs totaling $2M on an appeal of the refusal to order a second arrest.

“The failure of Maritime Administration to release the ship would have opened the staff of Maritime Administration to contempt of court proceedings and potential imprisonment if found liable,” they reasoned.

It was noted that maritime laws of ancient vintage exist in relation to accidents involving ships. According to the lawyers those laws provide for the release of ships when arrested as a result of an accident upon the lodgment of security. “Every court will do so once it is satisfied that appropriate security, in modern shipping practice, an LOU, is lodged,” they said.

The Cameron and Shepherd law firm said the shipping laws exist all over the world and facilitate the stability of international shipping.

“The Government cannot defy those laws and detain a ship when an accident occurs if the court orders its release. If it continues to do so, as it has done in the past, ships will no longer come to Guyana or shipping fees will escalate to unheard of proportions,” the lawyers warned.

The accident, which occurred on October 8, 2022, resulted in four spans of the bridge being damaged which represents the worst damage to be suffered to the bridge at any one time. The ship company has also countered the government’s request for it to cover the costs for the bridge repairs, pointing to a number of issues outside of its control that contributed to the ship’s accident.

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