In re M/V PACIFIC VIRGO

PRIVILEGED AND CONFIDENTIAL: ATTORNEY-CLIENT COMMUNICATION, ATTORNEY WORK
PRODUCT

Here's an update. I have included Janice because of the overlap of some of
the items:

1. David Best is working on a very short draft reply to Mitsubishi's
recently-received position in this matter, and will speak with Matt re the
wording before requesting authority to send it out. I will circulate it to
you for your approval once I see the final draft.

2. We still have not been advised by Mitsubishi who their lawyer or chemist
will be in this matter. We know that Mitsubishi recently tried to retain
Tony Rooth of Watson, Farland, who was conflicted out because of the role of
Watson, Farland's Singapore office in this matter. We expect that the delay
is attributable to the internal procedures at Mitsubishi that come into play
when retaining outside representatives.

3. Although the joint survey is tentatively scheduled for the week of August
21-25, that may slide, given that ECT's chemist, Steve Jones, and the cargo
underwriters' chemist, Cliff Bennett of Minton's, have not finalized the
testing program that they will jointly submit to whoever Mitsubishi appoints
as its surveyor. I agree with David that it is critical to (a) get the
program right and (b) make sure the lab (and lab technician) is capable of
handling this testing. The results of the joint survey will obviously have a
significant impact on this case.

4. Best anticipates that Steve Jones and Cliff Bennett will ultimately
recommend that ASTM D 3605 with and without ashing be used (I have previously
reported this).

5. In response to Matt's question about which testing method will prevail, I
agree with David that from the standpoint of resolution of the cargo
contamination case, we will not be in a position to determine this until
after the testing is done and the results analyzed.

6. I have spoken with Best about Janice's comments to me about the risk of
the substantial e-mail traffic in this case leading to inadvertent disclosure
of otherwise privileged material. We are both very open to communicating
strictly by telefax or letter (or memo, with respect to my communications to
each of you), if that does not impose an undue burden on anyone else. Janice
and Matt, would you let me know what thoughts/concerns you have about this
concept and/or how to implement it?

7. Janice has also mentioned that in resolving the cargo contamination
matter, we need to be mindful of the confidentiality provisions of the FGH
contract. It strikes me that we will need to introduce some evidence of our
contractual obligations to FGH and at least a specific description of the
accompanying specifications in arbitration in order to recover. Under London
arbitration, documents that are received in the course of discovery are
reportedly always treated as confidential and may not be disclosed without
the consent of the party who produces the document. Janice, I'll give you a
call to discuss whether production by ECT to Mitsubishi of the terms of the
FGH agreement under these circumstances runs afoul of the confidentiality
provision.

I welcome your comments and will continue to keep you advised.

Britt