Shipping industry squabbles converge in SC via the Mideast and NYC – InsuranceNewsNet

A legal scrape that bobbled up in Charleston last week shows that what goes around can come around in the global shipping industry.

In this case, the international maritime dispute and at least a portion of the money trail circled back to a seized Liberian-flagged freighter that spent almost four months anchored off the South Carolina coast in 2020.

It’s a fresh wrinkle tied to the M/V Evolution, which was sold at a courthouse auction more than two years ago to settle an insurance squabble.

Creditors recently agreed how to divide the remaining proceeds from the May 2020 sale. Among them is a business that procured fuel for commercial ships around the world from its offices in Texas, the Mideast and Asia.

Virtual auction nets a buyer for detained ship in Charleston Harbor

Praxis Energy Agents, it turns out, was in need of a cash injection.

The company found itself in hot water in October 2019, after its Dubai affiliate booked a job to service Platina Bulk Carriers’ M/V Oceanmaster, most likely in the United Arab Emirates, though the precise location wasn’t specified.

The bill came to more than $271,000. Platina said it paid the tab – and then learned the hard way that Praxis Energy never compensated the UAE contractor that delivered the fuel.

Crew of cargo ship detained off Charleston say they haven’t been paid in months

A few weeks later, the cargo ship was seized in the port city of Fujirah, according to court filings. The Oceanmaster was released after Platina paid the delivery firm $147,335 while also securing the rights to go after Praxis Energy for the rest. It calculated the eight days of downtime and other losses at about $316,000, not including interest. The company’s lawyers are requesting $100,000 in legal fees.

The original lawsuit was filed U.S. District Court in Manhattan, as the contract terms stipulated. It hit the docket in June 2020, about a month after the Evolution was sold to the highest bidder in a virtual sale held in a parking lot behind the J. Waites Waring Judicial Center in downtown Charleston.

In some ways, it was a case of two passing ships in the U.S. justice system: The Oceanmaster was out to recoup its money in front of federal judge in New York from Praxis Energy, which, in turn, was some 600 miles away in the Holy City looking collect unpaid bills from the Evolution.

Ship seized in Charleston Harbor on Jan. 31 is back on the high seas

The 505-foot Evolution spent more time off the Charleston peninsula than its stranded crew of 21 could have imagined when they arrived in January 2020. The Marshals Service “arrested” the vessel shortly after it sailed into the harbor over a dispute involving its Greece-based owner. A group of insurers wanted the freighter sold at auction to compensate them for a shipment of iron that had been damaged while being hauled to Indonesia.

They pulled it off. The Evolution fetched a high bid of $1.34 million, with $355,000 immediately awarded to the crew for back wages. The stir-crazy mariners were allowed back on dry land two years ago today.

As for the rest of the pot, it took until earlier this month to finalize a plan to divvy it up. Judge Richard Gergel awarded $280,220 of the remaining proceeds to pay Praxis Energy. About $42,000 was for fuel the company provided the ship during its stay in Charleston Harbor.

Platina Bulk Carriers wants to block Praxis Energy from ever seeing the money. In its June 10 complaint, the ship operator is requesting a court order that would allow it to garnish the funds before they’re disbursed.

It doesn’t appear that Praxis Energy has much if any gas left in the tank.

The company, which received a $56,657 forgivable loan from the U.S. Small Business Administration’s emergency Payroll Protection Program in March 2021, is facing at least two other lawsuits similar to the Platina case.

In August, after being hit with a $170,000 judgment in Delaware, the company told the judge that it wasn’t able to pay a court-ordered deposit of $27,527 partly because of “a downturn in business.” In a written affidavit, Praxis Energy director Theodosios Kyriazis cited a “lack of assets, strained liquidity” and multiple unresolved legal claims.

The company’s financial troubles have sunk even deeper since then. Earlier this month, the lawyer who represents Praxis Energy in the Big Apple lawsuit asked for permission to withdraw from the case, saying his client has ceased operations and had no money to prepare for trial.