Greek Shipping News Cuts
Week 26 - 2008


Ocean-going prospects remain positive says National Bank

---Greek shipping companies should be able to hold firm in stormy seas according to the National Bank of Greece. In a report released June 24, the NBG expressed firm belief in the positive prospects of ocean-going shipping, despite the negative situation of the world's economy, saying it will remain a pillar of the Greek economy.
NBG analysts believe demand for dry bulk carriers "is very resilient" and contend demand for basic commodities is increasing at a healthy rate. But the outlook is less promising for 2009 and 2010 for tankers when the bank sees rates plunging by up to 40%.
However, the bank's report notes that given the link between shipping and macroeconomic figures of the global economy is tighter than ever nowadays, "short-term prospects of the shipping industry are increasingly uncertain". The NBG says that's because the global fleet's capacity is expected to increase, since a large orderbook is now being constructed, while the global economy has deteriorated from mid-2007 onwards.
Nevertheless, it notes freight rates have continued to reach new highs. The strong demand for commodities like iron ore, coal and oil, mainly from BRIC economies (Brazil, Russia, India and China) and the increased level of macroeconomic stability worldwide, have led to a boom of international sea trade, with an average growth rate of 8.3% on an annual basis in terms of volume. At the same time, the global economy grew at an average pace of 4.4% during these past four years, when the shipping boom took place. As a result, the slow adjustment of the world's shipping fleet and the congestion problems observed in many key ports, have led to an average annual increase of freight rates by 45% from the end of 2003. So, by the end of 2007 freight rates were 180% higher from the end of 2003 and 260% higher from the average rate of the last 10 years.
The arrival of new wet tonnage between 2009 and 2010 will stamp out the recent rise in the tanker market, NBG warns. It tips rates to drop off by up to 40% before a balance between supply and demand is restored, though income for tankers will still be around 160% above the 10-year average.
Meanwhile, Greek shipowners have fortified their position through a massive investment programme of over Euro 90bn during these last years. At the same time, they have increased their exposure to markets other than the wet, since tankers market share in the Greek-owned fleet dropped to 36% in 2007, against 39% in 1997.
The fleet's growth and modernisation will continue as present contracted orders stand at 66m dwt, or 32% of the total capacity of the fleet, or the 17.5% of the global orderbook. By the end of 2010, the country's fleet will increase 28% in terms of capacity, and its average age will drop below 11 years by 2011. This will result in qualitative upgrade, which will enable the Hellenic shipping industry to remain on the forefront of the sector for the years to come, further enhancing its competitiveness.
The bank notes shipping alongside tourism is Greece's main export industry. Net shipping revenues topped Euro 17bn in 2007, or 7% of the country's GDP, covering 28% of the trade deficit, while the sector accounted for around 4% of total employment in 2006-2007. The bank's analysts said they expected shipping revenues to grow 8% this year, to fall by an annual average rate of 4% in 2009-2010 and to grow again by 6% in the period 2011-2014.
The importance of shipping revenue was emphasised by the latest figures released by the Bank of Greece which blamed rising oil prices for the country's expanding current account deficit. It was Euro 12.85bn in the first four months of 2008, up 5.7% on the 2007 period. The fuel balance reached Euro 4bn at end-April against Euro 2.8bn end-April 2007.
The BoG said the c/a deficit was partly offset by European Union funds and currency unflows from shipping. Shipping earnings reached Euro 6bn in the first four months, up from Euro 4.9bn in the 2007 period, while EU funds of Euro 3.4bn were up from Euro 2.06bn in 2007.
-- Filed: 2008-06-25

Shipping revenues up 8% in '08
---The Greek-owned shipping sector is strengthening its international competitive position, a report by National Bank of Greece, focusing on the outlook of global shipping, revealed on Tuesday.
The report said Greek shipowners enhanced their leading position in the ocean-going shipping market by adopting an impressive investment programme worth more than 90 billion euros, which peaked over the last two years, by promoting a significant quality and quantity upgrading of the Greek-owned fleet. Under the programme, the average age of the Greek fleet fell below the international average of 14.6 years to 14 years, for the first time in the last seven years.
Greek shipowners are also appearing to adapt well to changes in the international business environment by significantly changing the structure of their orders, focusing more on dry cargo vessels and containers and gradually reducing their orders in tankers (their share fell to 36 pct of the Greek-owned fleet in 2007 from 39 pct in 1997).
The development and renewal of the Greek-owned fleet is expected to continue over the next few years, since the inventory of new ship orders in the last two years amounted to 66 million DWT, or 32 pct of total capacity of the Greek-owned fleet, namely, some 17.5 pct of global orders. The capacity of the Greek fleet is expected to grow by 28 percent by the end of 2010, with average age falling below 11 years by 2011.
Net shipping revenues totaled 17 billion euros in 2007, or 7.0 pct of the country's Gross Domestic Product, covering 28 pct of the trade deficit, while the sector contributed around 4 pct of total employment in the period 2006-2007.
National Bank's analysts said they expected the shipping sector's revenues to grow by 8.0 pct this year, to fall by an annual average rate of 4.0 pct in 2009-2010 and to grow by 6.0 pct in the period 2011-2014.
Source: Athens News Agency, Greece - Jun 24, 2008,

Development of cruise tourism
---Tourist Development Minister Aris Spiliotopoulos, addressing a conference on cruises on Thursday, stressed the need for the country to take advantage of opportunities appearing for the further robust development of tourism through cruises.
Well-known companies have already activated themselves in the Mediterranean with buyouts of European companies, however, they are using ports in Italy and Spain as hubs.
Most big companies prefer circular access to the Eastern Mediterranean from Greece or a quick passage through Greek territory, Spiliotopoulos said, pointing out that "we must take advantage of this fact, also imposing our country dynamically on the map of international reputation cruises."
The minister further said that "in 2006 we saw about 1.2 million cruise passengers in Piraeus, mainly from ordinary transit arrivals."
Source: Athens News Agency, Greece - Jun 27, 2008

New ships, with focus on passenger safety
The image of the proverbial rust bucket setting sail from Piraeus for an island is one that is gradually disappearing from the Greek coastal shipping scene but worries about the safety of some vessels have not necessarily taken the same route.
Although many ferry companies are introducing new ships to their fleets, concerns about the safety of older vessels are still being voiced. Passengers often complain about the safety and hygiene standards on some aged ferries, which are notorious for having run-down facilities and being unreliable.
The sinking of the Sea Diamond cruise ship off Santorini last April, which left two people dead, and the rescue of more than 300 people from a tour boat that ran aground off Poros have brought the issue of safety at sea back into the spotlight.
The issue had been at the center of public debate following the sinking of the Express Samina ferry off Paros in September 2000, which cost the lives of 82 people. This prompted the government to introduce in 2001 tougher laws that prevented ferries from sailing once they had been in operation for 30 years. However, an amendment was introduced two years ago that allows well-maintained ships to stay in operation for longer.
The Panhellenic Union of Merchant Marine Engineers (PEMEN) has been prominent in voicing concerns about standards on older ships and lodged an official complaint in February about the safety on some ferries.
PEMEN official Isidoros Makras told Athens Plus that international regulations require all passengers to be evacuated from a ferry in distress with-many Greek ferry companies only pay lip service to this regulation. He claimed that crews do not carry out proper evacuation drills.
Makras says that this only applies to some 15 ships sailing relatively short distances in the Saronic Gulf and from the ports of Rafina and Lavrion.
These concerns were dismissed by the Masters and Mates Union (PEPEN), which told Athens Plus that Greek coastal shipping is perfectly safe.
He said that crews are adequately trained and drilled.
Tarlamis added that all ferries pass safety checks, are issued with the appropriate certificates and are captained by experienced Greek captains.

Water tankers to begin journey from Greece today
---By Jean Christou
At a news conference in Nicosia, Ioannides said the first tanker should set sail later today with 50,000 cubic metres of water n board. Work to fill up the tanker, which began yesterday was to take around 24 hours.
The ship will take 41 hours to reach Limassol and is due to dock at 6pm on Monday.
Ioannides said when the boat reached Limassol, the water would remain on board until tests on samples of the water were completed. By Wednesday it is expected that the water will be channelled into the system.
He said when the analysis is complete, the ship would anchor at Yermasoyia to begin the process of unloading the water.
He said the company had chosen six of its tankers out of a possible 60 that they inspected because they had covered facilities for the transportation of the water and held international certification for the transportation of water.
Ocean tankers, he said was also pursuing the placing of desalination units on its ships, which could then be used as floating units for any country that may need water.
Such units could produce 50,000 to 300,000 tonnes of water per day at a lower cost for drought-hit countries like Cyprus.

Alexandria in handy debut
---Alexandria Shipping of Greece is moving into handysize bulkers with the purchase of two ships.
A company executive confirms the company has bought the 32,000-dwt Eduarde Oldendorff and Gertrude Oldendorff (both built 2001). He declines to comment on the price but brokers peg the duo at around $54m each.
The bulkers will be delivered charter-free despite some brokers saying there are three-year time charters in place back to the seller.
Alexandria was set up in 2002 and took delivery around a month ago of the 72,000-dwt Suerte (ex-Anna, built 1995), purchased from compatriot owner Lykiardopulo last December for a reported $72m.
Alexandria also operates the 69,000-dwt Maria V (built 1987) and 52,000-dwt Marylisa V (built 2003).
Earlier this year, the company made a hefty profit on the sale of the 67,000-dwt Thrasyvoulos V (built 1984) for $37m. The ship was acquired for just $6.8m.
Gillian Whittaker Athens, published: 26 June 2008

Tsakos Group is planning to build a bulker joint venture
---The Tsakos Group is planning to build a bulker joint venture with Soya Mills, Greece's largest soybean and gain processor and distributor. This joint venture "TSoy Marine" is committed to acquire Ray Sea Shipping, which owns an 82,000-dwt bulker.
TSoy Marine will seek to acquire two other bulkers. On Monday the company announced its intent to float on Alternative Investment market (AIM) in a move that is designed to raise about US-Dollar 77.6m.
The joint venture aims to charter the ships to third parties in a combination of spot and time charters or charter them itself. In addition to shipping Soya Mills also operates one of the largest private ports in Greece at Kalamaki.
Online- Redaktion 24.06.2008

Sri Lanka national carrier in joint venture with Greek shipping dynasty
---June 24, 2008 (LBO) - Ceylon Shipping Corporation (CSC), Sri Lanka's national shipping line, has struck a deal with a member of a famous Greek shipping dynasty for a joint venture project to transport petroleum products and supply ship fuel.
"We have signed an MoU (Memorandum of Understanding) to see if we can form a joint venture company to go for oil transportation, particularly for CPC (Ceylon Petroleum Corporation) and also to do bunkering in Colombo," a senior company official said.
The MoU was signed with Pyrros Vardinoyannis, scion of one of Greece's well-known shipping families with interests in shipping as well as petroleum.
The joint venture has tentatively been named CSC Kandia.
"We have signed a kind of pre-incorporation agreement outlining the objectives of the joint venture," the CSC official said.
"The Greek party will provide a vessel, either their own or chartered, and invest along with the CSC. We're looking to see whether a joint venture company of both parties can be formed to go into business."
The official said the joint venture is aiming to bid for a tender from the Ceylon Petroleum Corporation, the state oil refiner, for a long-term transport contract to ship petroleum products.
"The CPC is calling tenders for freight. They usually go to the spot market but this time they've called for a one year-period."
The CPC wants to go for long-term freight contracts to reduce costs and be able to ship bigger parcels, officials said.
The CSC official said the joint venture is also eyeing opportunities to do bunkering in Colombo, south Asia's transhipment hub.
Bunker prices in Colombo are among the highest in the region and there is scope for more competition, officials said.
The Vardinoyannis family network includes shipping and petroleum refining as well as sports.
It is one of Greece's close-knit shipping clans that are connected to each other and have considerable influence in the maritime world.

Small Talk: A tale of the Greeks and the soya bean stalk
---By Alistair Dawber, Monday, 23 June 2008
Stathis Giavroglou laughs alittle nervously when asked if his relatives fully approve of the decision to list the family business after 38 years of trading. The impression is that certain people took some persuading.
On the one hand Soya Mills is already well established and is not going to use the money as a get-rich-quick jape for the directors. The group will sell 30 per cent of the ordinary shares, with the cash partly being used to fund expansion plans. The rest will be spent on a joint venture with Tsakos Group to acquire three dry bulk vessels. The move into shipping is a hedge against transport expenses, which make up between 20 and 30 per cent of costs, says Mr Giavroglou, chief executive.

Sealion Shipping has placed an order three Multi-Purpose Vessels on behalf of Toisa Ltd
---Sealion Shipping Ltd is very pleased to announce that, on behalf of Toisa Ltd, an order has been placed with the ABG Shipyard in India for the construction of three new, large Multi-Purpose Offshore Support Vessels.
This newly designed series of ships will enter service commencing March 2012.
This order represents a positive recognition that, not only is there a clear and increasing demand for multi-purpose offshore support vessels around the world, but that current fleet numbers of such vessels will not be able to service the needs of the offshore oil and gas industry in the future without such new vessels.
Higher and more demanding standards in safety, dynamic positioning operations and the use of environmentally sensitive vessels can only be met by the introduction of new vessels into the world fleet. We are proud to be a market leader in the operation of such vessels and are committed to ensuring that our clients have access to the best vessels we can provide.
Full details of the Toisa Fleet can be found on our website at and further details of this new order can be obtained from the Chartering Department at :
Sealion Shipping Ltd, Sealion House, The Courtyard, 17 West Street , Farnham, Surrey, GU9 7DR, England . Tel +44 (0)1252 737 773, Fax +44 (0)1252 737 773
Farnham UK 24th June 2008.

Transmed linked to VL rumour
---GREEK owner Transmed is being linked to an order for four VLCCs at yet-to-be-built Rajapur shipyard on the west coast of India. It would be the first time ships of this size are constructed in India. Details are vague but the contract is rumoured to be worth $1Bn, with four more on option.
Source: Fairplay Daily News 27 Jun 2008

Navios Maritime Holdings Inc. acquie Two Ultra Handymax Vessels
---PIRAEUS, Greece, June 24 /PRNewswire-FirstCall/ -- Navios Maritime Holdings Inc. ("Navios Holdings") (NYSE: NM), a large, global, vertically integrated seaborne shipping and logistics company, announced today that Navios Holdings has entered into agreements to acquire two ultra handymax vessels for its wholly owned fleet. Total consideration for the vessels is approximately $152.5 million.
The first vessel is a 2007 built, 55,728 dwt, ultra handymax built in Japan. The vessel is expected to be delivered by October of 2008. The second vessel is a 58,500 dwt, ultra handymax under construction at Tsuneishi-Cebu. The vessel is expected to be delivered in the first quarter of 2009.
Ms. Angeliki Frangou, Chairman and CEO of Navios Holdings stated, "We believe that it is a good time to deploy cash from our balance sheet to secure quality, charter-free tonnage, particularly in light of the current strong short-term rate environment. As such, we anticipate employing these newly purchased vessels in the spot market to complement the continued stable cash flow generated by our existing long-term charters-out."
About Navios Maritime Holdings Inc.
Navios Maritime Holdings Inc. is a global, vertically integrated seaborne shipping and logistics company focused on the transport and transshipment of drybulk commodities including iron ore, coal and grain.
Navios Holdings may, from time to time, be required to offer certain owned Capesize and Panamax vessels to Navios Maritime Partners L.P. for purchase at fair market value according to the terms of the Omnibus Agreement.
For more information about Navios Holdings please visit our website:

---Michael Tartsinis, chairman of Global Oceanic Carriers, is spearheading a170.5p recommended bid for the Greek shipping group.
Source: 27/06/2008,

TOP Ships announces sale of five suezmax vessels
---ATHENS, GREECE (June 26, 2008). TOP Ships Inc. (NasdaqGS: TOPS) announced today that it has entered into an agreement to sell five double-hull Suezmax tankers built between 1992 and 1996 for an aggregate sale price of $240 million.
The vessels are expected to be delivered to their new owners between June 2008 and August 2008.
The Company said that the net proceeds of the sales may be applied to acquisitions and general corporate purposes.
About TOP Ships Inc.
TOP Ships Inc., formerly known as TOP Tankers Inc., is an international provider of worldwide seaborne crude oil and petroleum products and of drybulk transportation services. Upon delivery of the five suezmaxes to their new owners the Company will operate a combined tanker and drybulk fleet as follows:
-- a fleet of 12 tankers, consisting of 4 double-hull Suezmax tankers and 8 double-hull Handymax tankers, with a total carrying capacity of approximately 1.0 million dwt, of which 86% are sister ships. Eight of the Company's 12 tankers will be on time charter contracts with an average term of two years with all of the time charters including profit sharing agreements above their base rates. In addition, the Company has ordered six newbuilding product tankers, which are expected to be delivered in the first half of 2009. All the expected newbuildings have bareboat employment agreements for periods between seven and ten years.
-- a fleet of five drybulk vessels with a total carrying capacity of approximately 0.3 million dwt, of which 70% are sister ships.. All of the Company's drybulk vessels have employment contracts for an average period of 30 months.
Source: press release

26 June 2008
Article by Tim Strong and Ivan Wilkinson
Following the Court of Appeal's ruling last year in IFE v Goldman Sachs, Gloster J's detailed recent judgment in JP Morgan Chase Bank v Springwell Navigation Corporation [2008] EWHC 1186 (Comm) has affirmed the principle of caveat emptor in the capital markets. The ruling indicates that "experienced investors" in the bond markets will face an uphill battle if they wish to argue that banks - via their salesmen - owe them any advisory duty or responsibility for investment decisions, where this would be inconsistent with the disclaimers and other terms expressly set out in the deal documentation.
Springwell Navigation Corporation was the investment vehicle of the Polemis family, the owner of a large Greek shipping fleet. During the 1990s, Springwell invested heavily in emerging markets bonds and related instruments. The investments, whose face value exceeded US$700 million, were acquired through JP Morgan Chase ("Chase").
Much of the portfolio was invested in Russia and other CIS states and, following the 1998 Russian default, heavy losses were incurred. Proceedings seeking a declaration of no liability were commenced by Chase in 2001, with Springwell counterclaiming damages soon after - and hence becoming the effective claimant.
Springwell made a wide range of claims against Chase. Its primary claims, based on either breach of contract or negligent misstatement, were based on the contention that Chase owed Springwell a duty of care to advise on the overall balance of Springwell's portfolio and the suitability of new investments. This alleged advisory relationship was said to have arisen out of the regular discussions about potential investments which had taken place in 1990- 1998 between Adamandios Polemis ("AP"), who was responsible for investment decisions at Springwell, and Justin Atkinson ("JA"), a debt security trader at Chase. In the alternative, Springwell also claimed against Chase for misrepresentation and breach of fiduciary duty.
In its defence Chase relied, amongst other things, on the numerous disclaimers and limitations of liability contained in the contractual documentation relating to the transactions, including: a Master Forward Agreement, a Global Master Repurchase Agreement, two letters setting out terms for "Dealings in Developing Countries Securities", and also the terms of many of the instruments themselves, along with various associated term sheets and confirms.
Breach of contract/negligent misstatement
Springwell claimed that Chase owed contractual and tortious duties to advise it as to the appropriateness of investments and the overall composition of its portfolio. Springwell claimed that the opinions and recommendations expressed by JA to AP between 1990 and 1998 constituted ongoing financial advice from Chase, giving rise to a duty of care in contract or tort. Chase denied this, saying that any of Mr Atkinson's "recommendations" merely constituted marketing, which did not therefore give rise to any such duty.
It was clear on the evidence that the relationship between Chase and Springwell extended beyond a simple "execution only" relationship. JA and AP had had regular discussions about the merits of various investment products, and JA had clearly had an influence on Springwell's general overall investment strategy.
Mrs Justice Gloster accepted that JA was going beyond simple "execution only" transactions, and that this may have given rise to a low level duty of care (essentially requiring the accurate description of products). However, any such duty did not extend to providing "investment advice" entailing responsibility either for the selection of particular investments, or for monitoring the composition of the portfolio as a whole. In line with earlier authorities in this area1, she described the following as the significant factors against the finding of that wider duty of care:
* Sophistication of Springwell. Although Springwell (as represented by AP) knew significantly less about the capital markets than Chase, and although AP did not always read contractual documentation before signing it, Springwell was nonetheless a sophisticated investor with commercial acumen and with significant experience in capital market investments.
* None of the signs of an advisory relationship were present. There was no written agreement, which was not conclusive, but was a strong pointer against the existence of a duty (particularly given that Chase's, and the market's, standard practice was to record contractual relationships in written documents). Nor were there any telephone recordings or internal memoranda making reference to the existence of an advisory agreement, or any analyses of Springwell's investment objectives or portfolio statements (as one would have expected if there had been an advisory agreement).
* Independence of Springwell's investment decisions. Although JA's recommendations and opinions had influenced AP, that latter did not always follow JA's recommendations and, in the final analysis, the judge found, it was AP's desire for high returns which drove the investments. Furthermore, the advice provided by a salesman, even if relied upon, did not create an investment advisory relationship with an associated duty of care.
* The existence of a duty of care to advise was in any case clearly ruled out by the various disclaimers in the contractual documentation between the parties, and in particular by Springwell's acknowledgement that it had placed no reliance on any advice/representations from Chase in its decision to invest. As a result, Springwell would have been contractually precluded from claiming for losses based on its investment decisions, even if a prima_facie duty of care had otherwise been made out. Having contractually defined the scope of its relationship with Chase, Springwell was not entitled to make a claim in tort which went beyond the ambit of those contractual terms.
The judge gave short shrift to the various arguments that the bank should not be entitled to rely on its written disclaimers of liability. She rejected the challenges to their "reasonableness", under UCTA 1977, for two reasons. First and foremost, in line with the Court of Appeal's ruling last year in IFE v Goldman Sachs2 , she held that most of the relevant clauses were merely clauses defining the extent of the parties' relationship, rather than exclusion clauses, so did not fall within the ambit of UCTA (or, as regards misrepresentations, the Misrepresentation Act 1967). Second, to the extent that there were any residual disclaimers or exclusion clauses falling within the ambit of the statutory provisions, the judge held that they could not be construed as unreasonable given the commercial context and the fact that the parties were of equal bargaining power.
Springwell had also attempted to argue3 that it should not be bound by the various disclaimer wording, as its effect had not been clearly drawn to Springwell's attention. The judge, however, commented that this principle must have "a very limited application to signed contracts between commercial parties operating in the financial markets" and certainly did not apply in the present case - given that the relevant disclaimers were standard for the transactions in question, and did no more than to confirm that Chase did not have an advisory relationship and would not be responsible for Springwell's investment decisions.
Springwell claimed that Chase/JA had made a number of misrepresentations in relation to the suitability of various investment products and particularly misrepresentations about the Russian market.
The judge dismissed all of the misrepresentation claims. Again, this was in essence because of the effectiveness of the various contractual disclaimers, the result of which was that Chase had not made any actionable representations at all. Furthermore, Springwell also expressly confirmed in the contractual provisions that they were not relying on any representations and made the decision to invest independently. The judge concluded that JA's statements were a "salesman's opinion" and that no reasonable person would have placed reliance on these statements in the light of the contractual provisions. Springwell were therefore contractually precluded from bringing any claim for misrepresentation.
Breach of fiduciary duty
Springwell also claimed that Chase were in breach of their fiduciary duties by acting in their own interests, to the detriment of Springwell's interests, by taking advantage of AP's lack of expertise in order to offload unwanted bonds and also by failing to seek consent or failing to disclose the excessive profits they received.
All of these grounds were rejected by the judge - she held that, as it had been established that there was no advisory relationship, it followed that there were no fiduciary duties. In any event, she held that the investment proposals were consistent with Springwell's investment objectives and attitude to risk.
Other issues
In the light of the above, the judge did not strictly have to make any rulings on breach, causation, quantum, or contributory negligence. She did, however, make some interesting indicative rulings on these further areas. For example, she said that even if Springwell had been successful, its claim would have been reduced by up to 70 per cent for contributory negligence for an inappropriate reliance on an implied agreement. This was because it would be an abdication of Springwell's own responsibilities to expect a full advisory service but never to have agreed or confirmed the terms of that service, never to have clearly explained its investment objectives, and never to have raised any concern about the investments acquired.
Yet again this decision shows the UK courts' reticence to interfere with the express terms of capital markets contracts. It therefore illustrates the prime importance, for participants, of ensuring that the contractual documentation reflects the reality of the perceived commercial relationship - and in particular that well-drafted clauses can be effective in limiting the extent of a bank's relationship with investors, and disclaiming responsibility for the latter's investment decisions.
Perhaps most significantly, this ruling demonstrates that investors who sign up to capital markets activity as "sophisticated investors", on arm's length terms, will be treated by the courts as responsible for their own investment decisions - even if in practice they have much less knowledge and expertise than the banks with which they do business. If this is not the relationship they want with their bankers, they will have to ensure, if they can, that the parameters of any wider advisory relationship or investment mandate are clearly and expressly agreed in writing.
Having said that, every case of course turns on its own facts, and even this judgment - which appears to represent somewhat of a "high water mark" for banks' defence arguments - leaves open the possibility of successful claims being brought by investors in different circumstances, for example where particular products have been misdescribed by salesmen and where the facts might lead to a different view being taken on the enforceability of any applicable disclaimers. This ruling is therefore unlikely to be the last word on claims of this type.
1 For example Valse Holdings v Merrill Lynch International Bank [2004] EWHC 2471, and Bankers Trust International PLC v PT Dharmala Sakti Sejahtera [1996] CLC 518.
2 [2007] EWCA Civ 811.
3 Following Interfoto v Stiletto [1989] 1 QB 433.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Specific Questions relating to this article should be addressed directly to the author.

Hellenic Shipping News interviews Mr. Bobby Mitropoulos of Weberseas S.A.
---Monday, 23 June 2008
As for the second hand market, he points out that handymax and supramax tonnage is currently the most popular in the market, also in terms of the number of deals concluded, mainly because of the larger number of ship owners involved in this market segment.
First of all, could you provide us with a brief profile and background of Weberseas, in terms of the services provided?
WeberSeas (Hellas) S.A. is leading ship brokerage firm based in Piraeus, Greece. The company is specializing in sale & purchase of second hand vessels, newbuilding projects, demolition and tanker chartering. Our client base includes ship owners in Greece as well as a large number of shipowners worldwide, including financial institutions and banks.
In addition the company conducts evaluations of ships for many different participants of the shipping industry. Finally the company performs maritime research and industry studies for both dry and wet markets, including specific market segments to accommodate our clients' needs.
Infrastructure growth in China is maintained at very high levels thus the demand for products such as coal and iron ore have increased, supporting the strong freight rates. Since these cargoes are mostly carried by panamax and capesize bulkers we have seen the freight market and Baltic indices for these vessels types at very high levels.
At the same time, demand for cargoes into India have also shown strong increase which is helping the demand for the smaller sized ships (handysize up to supramax).
Over the last 2 years we have seen an equilibrium of supply and demand perhaps with a slight variation in that demand has always been one step ahead pushing the market to new highs. As we are approaching 2009 and 2010 the n/b orders coming out will almost certainly have an effect in greatly increasing the supply of tonnage (across all sizes). Demand will have to make significant increases in order to keep up at the same pace.
At the same time we have to point out that the supply of dry bulk tonnage will also be affected by the large number of non double hull tankers which are being converted into dry cargo ships. Also in 2007-2008 we have seen various n/b options of tankers being switched to dry bulk vessels.
How is the shipbuilding market shaping up from the beginning of the year, especially in terms of the credit crunch observed in these past few months. Has it affected newbuilding orders in terms of financing? Are Greek ship owners more reluctant to place new orders?
Of course the credit crunch has greatly affected the n/b scene. There are
many owners who are facing problems in financing their n/b orders. This does
not mean that they are not able to obtain finance at all, but at different terms & conditions than when they placed their orders, something affecting their business plan. Financing costs have increased as a result of the banking crisis.
Having said this, most of the Greek owners (and particularly the major owners) are considered "cash rich" hence if they do need to place an order we do not believe they would have a problem in doing so. The issue for them is not financing but the state of the freight market when their new orders will come out in 2010 and the years to follow. This is the one of the concerns.
Do you believe that we shall witness more cancellations of orders, something that some analysts have almost wished, in order to avoid an oversupply of ships after 2009?
We are of the opinion that we will definitely witness cancellation of orders. Following closely the situation in China but also in Korea, we notice that financial problems and issues with refund guarantees in combination with lack of supply of main engines etc will force several smaller and new yards not to deliver all their orders. We expect the percentage of these cancellations to be between 10 and 25 pct.
How can a ship owner protect himself, when dealing with a smaller shipbuilder, for instance in China, who offers better prices and more attractive delivery times, but at a higher risk?
Smaller or newly established yards are very risky and really there is little
protection that the owners can have, other than the contract they agree with the
yard. The issue here is for the owner to do his due diligence and make an accurate evaluation of the yard in question - not all small or new yards present the same risk. Special attention is needed as far as the refund guarantee is concerned
and which bank will issue it also important to have is an experienced n/b team to assist with all matters of the n/b process and in particular to have a very good supervision of the vessels - supervision is perhaps the most important aspect of a n/b.
In general, yes, there is strong demand for 2nd hand vessels in the s&p market. There is a huge volume of p/e's for all vessels types. It seems that market demand is divided into: a) the modern ships (from 10-13 years old and younger) where the demand is extremely strong - primarily due to the buying interest from the various stock listed companies and b) for the older vessels where demand is there but at a much slower pace.
We have noticed in the last 1-2 months or so that demand for 80's built bulkers has somewhat slowed down and sales are harder to be completed simply because there is a large gap between sellers and buyers prices (sellers are reluctant to sell at lower levels simply because they are earning large freight levels whereas buyers are reluctant to meet high prices due to uncertainty and because of the rate of return from the various period fixtures which their banks usually demand in order to finance such older vessels).
It is also interesting to note here that there is also strong demand for tanker vessels which is again divided into double hull and non double hull ships. Non double hull ships are in great demand from Far Eastern buyers mostly for conversion into bulkers whereas the double hull units are in great demand due to the improving market prospects from the 2nd half of 2009.
Which vessel types are proving to be rather attractive in the second-hand market today and why?
Obviously the capesize vessels are in good demand simply because of their great earning capacity, which on many occasions has increased to more than $250,000 per day (assume dely cont for loading Brazil discharging China). However, due to lack of available tonnage in the second hand market there are not many deals concluded.
On the other hands there are many deals concluded in the panamax and supramax
sectors as they seem to have a good balance between the selling price and the earning capacity.
Out of all of the sectors it seems that handymax/supramax tonnage is the most
popular probably due to the larger number of owners involved in this market
Have we seen any substantial price increases in vessel prices and for which types especially?
Price increases have been witnessed on all vessels. Optimism and in some cases luck of tonnage keeps prices firm.
By Nikos Roussanoglou, Hellenic Shipping News