that led to the seizure of three of its ships, and insists they will not now be auctioned off in Singapore, though the Singapore High Court has not yet ruled on that.
The three container ships—Sahand, Sabalan and Tuchal—were ordered seized by a Singapore court in September when a French bank went into court saying the Islamic Republic of Iran Shipping Lines (IRISL) had not made payments due on the vessels.
And now two more ships have reportedly been seized in two other countries.
The key issue appears to be the new American sanctions that took effect in July and threatened the business in the United States of European firms that insure Iranian shipping. After that, all the major European firms, which do much of their business in the United States, dropped their Iranian business.
The Straits Times said IRISL then insured the ships with the Iranian insurer, Moallem. According to the court papers, this was a breach of the mortgage agreements under which Credit Agricole had funded the construction of the ships.
The bank then demanded payment last summer. When no payment was made, Singapore went to court in Singapore, where the three ships were docked, and requested seizure, which the court granted.
The seizure was not known, however, until earlier this month when the Singapore court published a notice of an auction. It appears IRISL had done nothing in the intervening three months to clear its debt, so the court moved to the next step.
At that point, IRISL went into action.
The Straits Times of Singapore reported Monday that IRISL’s lawyers in Singapore filed papers last week to stop the auction saying IRISL had paid $205 million to an agent bank in France for payment to its lenders. There was no explanation for why IRISL had not made the payment before September when the French bank went to court.
Mohammad Dajmar, then head of IRISL, was telling Iranian reporters last week that the three ships had been seized “a few days ago,” when in fact they had been seized three months earlier.
Dajmar insisted that the effort to seize his ships was a Western plot against Iran and not a real financial issue. He said, “We had a loan and, because of the sanctions, they changed it from ‘debt’ to ‘due.’ In other words, they committed a violation because the debt contracts were signed before the sanctions. They committed violations; what they did was against the law.”
The payment issue is still not completely resolved, however. The Straits Times said it is still a question whether the French authorities will clear the cash transfer or whether the payment process will be blocked as a result of the banking sanctions that have been causing chaos for Iranian banking transactions.
Furthermore, The Straits Times said that four other European banks, led by Germany’s HSH Nordbank, are seeking to seize five other IRISL ships for alleged default on $268 million in loans to build the ships.
The 2006 loan was transacted in dollars. But the subsequent US Treasury restrictions on Iran conducting business in dollars stopped dollar payments. The newspaper said two of the five ships, Dandle and Decretive, were detained in Malta and Hong Kong last month.
The French bank that went to court in Singapore is the Credit Agricole Corporate and Investment Bank. It sought $210 million in payments for a defaulted loan. The difference between the $205 million payment and the $210 million demanded was not explained.
The Straits Times said the High Court in Singapore has scheduled a hearing for early January to release the vessels, if the payment funds have cleared, or sell the ships, if they have not. The newspaper said several bids had been received during the court auction last Tuesday.
The three ships are anchored off the south side of Singapore island. They have no cargo on board.
