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Enron Mail |
Wayne,
Here is a brief privileged and confidential (not to be handed to the other side) description of the above-referenced matter from our attorney, Andrew Bicknell of Clyde & Co. in London. Andrew is available for further consultation with you on Wednesday if you so desire. His direct telephone # is 9-011-44-207-648-1833 (that's calling from the US, of course). Andrew's e-mail address is "andrew.bicknell@clyde.co.uk" I appreciate any help you can give us at your negotiations on Wednesday with Exmar. The best of all possible worlds is if both EGLI and Exmar could agree to withdraw/dismiss their claims against each other and walk away from this case before year end. If you wouldn't mind, I would appreciate a short e-mail from you regarding Exmar's response during your meeting with them. Many thanks for your help. Britt ----- Forwarded by Britt Davis/Corp/Enron on 12/11/2000 12:33 PM ----- Wendy.Labuda@clyde.co.uk 12/11/2000 12:25 PM To: Britt.Davis@enron.com cc: Richard.B.Sanders@enron.com, Daniel.R.Rogers@enron.com, Alan.Aronowitz@enron.com, Becky.Zikes@enron.com Subject: SANTA CLARA Britt I would summarise the main facts/status of this matter as follows: (1) Enron voyage chartered "SANTA CLARA" from Exmar N.V. by a C/P dated 5.2.91 to carry cargo of 4,200 mt 5% more or less at owner's option of propane, from Houston to Dunkirk. Under the Charterparty Enron had the option to load cargo either fully refrigerated or ambient or chilled. (2) On 26th February 1991 the Master advised Enron that the maximum quantity that the cargo could load at ambient temperature was 3,760 mt having regard to the vessel's pressure settings and the USCG and IMO Rules and Regulations. The Master was in fact absolutely correct but Exmar tried to make out that the vessel could load the full charterparty quantity. (3) It is our case that in order to load more than 3,760 mt (the cargo was loaded at ambient temperature) Exmar refrigerated the cargo as it came on board to reduce the volume. This caused the loading to be excessively slow. We say this method of loading was actually illegal. It was only by loading illegally in this way that Exmar could load more than 3760 mt at the required pressure setting. We also say it was an express term of the charterparty that the entire contractual cargo could be loaded within the contractual lay time. The vessel also had to raise the temperature and discharge causing further delays. (4) There was great commerical pressure on Enron at the time. The market for propane was falling rapidly in March 1991 (the end of the Northern European winter) and Enron had arranged the on sale of a minimum quantity of 3,990 mt on CIF terms based on an expected loading of 1st-7th March 1991. Enron were extremely concerned that this would lead purchasers Vitol to repudiate the sale contract leading to a very substantial trading loss (Vitol did try to repudiate the sale contract due to the loading delays and this developed into a very major trading dispute with Vitol which we eventually won in the House of Lords). (5) Exmar made out that slow loading was due to low back pressure in his Enterprise loading lines. We believe this is wrong but at this distance in time it is difficult to get clear evidence. (6) In the circumstances, on 7th March 1991to try and speed up loading Enron agreed that the minimum cargo of 3,760 mt should be loaded and agreed to pay Exmar deadfreight on the balance in the sum of US$22,714.84. (7) Furthermore, because of the slow loading of the vessel the Enterprise Terminal had to throw "SANTA CLARA" off berth. This would have caused a very substantial delay and might have justified Vitol in throwing over the sales contract. In the circumstances Enron negotiated an agreement with another vessel ("DONAU") to permit "SANTA CLARA" to be loaded ahead of "DONAU". The sum paid to "DONAU" amounted to US$153,472.15. We believe the "DONAU" was also operated by Exmar. (8) Accordingly, Enron deny liability for demurrage for the extended loading which Exmar have claimed in the sum of US$165,652.78 and Enron have counterclaimed a total of US$176,186.99 (i.e. the deadfreight and "DONAU" payments). Exmar are represented by London Solicitors, Lawrence Graham where the matter is being handled by Mike Lax and his assistant Stuart Dench. Lawrence Graham have always sought to charactercise this claim as a straightforward demurrage dispute and suggest that we have invented the technical arguments after the event. However, we consider there is merit in our case and that if the arbitrators properly understand the expert evidence we have reasonable prospects of successfully defending the demurrage claim and establishing the counterclaim. There is of course however an inevitable litigation risk in pursuing the matter to an arbitration and we have, to some extent, been inconvenienced by the loss of our original expert, Mr Ivor Jorstad, who sadly passed away earlier this year. Also some costs will be irrecoverable (if we win approximately two thirds of our costs should be recoverable). If you have any further queries, please do not hesitate to ring me and I would of course be pleased to speak to Wayne Perry when he is in London if he needs any further information to assist in negotiations. Best Regards. Andrew Bicknell __________________________ This e-mail and any attachments are confidential and may also be privileged. If you are not the named recipient, please notify the sender immediately and do not disclose the contents to any other person, use it for any purpose, or store or copy the information. In the event of any technical difficulty with this e-mail, please contact the sender or the London IT department on +44 (0) 20 7623 1244. Clyde & Co. 51 Eastcheap, London, EC3M 1JP Tel: +44 (020) 7623 1244, Fax: +44 (020) 7623 5427 Clyde & Co. Guildford Beaufort House, Chertsey Street, Guildford GU1 4HA Tel: +44 1483 555 555, Fax: +44 1483 567 330 E-Mail: postmaster@clyde.co.uk, Internet: http://www.clydeco.com
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