Greek Shipping News Cuts
Week 20 - 2011


Fewer But Larger Ships For Greek Ship-Owners

---Tuesday, 17 May 2011 - 17:37. Greek ship-owners ranked first in deals in 2010, with investments of $9.3b for 325 ships of total capacity of 22.8 million tons dtw. Shipbroking sources note that Greek ship-owners regain the leading position from Chinese, with a bulk of orders for new ships in Asian shipyards.
Although they made an impressive turn to investing transaction, they had started to renew their fleets a few years ago, reducing significantly the average of ships. 221 ship transactions worth $4b have been made in 2009, in comparison with 302 transactions worth $4.1b by Chinese ship-owners.
Overall, the Greek-owned fleet amounted to 3,848 ships in March 2011, with a capacity of 261 million tons dtw, decreased by 148 ships in the previous year. However, the total capacity stood at 258.121 million tons in March 2010.
Last year, the average daily freights was $16,035, increased by 25%, in comparison with 2009, according to N. Cotzias Shipping Consultants, while the average daily operating cost was about $7,500, generating substantial profits for ship-owners.
Under estimates, the freight prices in 2011 will be at 2010 levels and the ship-owners consider the financing of new investments and overcapacity.
By 2014, the world fleet is expected to increase by 30% in capacity, however analysts and brokers are concerned by the overcapacity, as it would result in huge reduction of freight.
7,142 new ships are expected in 2011, reflecting a 10% of the market despite of 969 cancellations of orders. According to N. Cotzias, one of six cancellations is by a Greek company.

Greek owners shift bets
---OWNERS in Athens have refocused on box ship plays after being convinced that bulkers will suffer a lengthy malaise, Deutsche Bank analyst Justin Yagerman reported today.
Yagerman met with 12 industry sources in Athens last week, including public owners, private interests and brokers.
Source: Fairplay Daily News 17 May 2011

That, however, did not take the shine and good humour out of the annual dinner, despite the need to hurriedly convert what would have been an outdoor venue into a tented and partly protected area. Occasional pleas for warmth even saw a few tables provided with standing heaters hastily wheeled out.
Intertanko chairman Captain Graham Westgarth raised a chuckle when he stepped up on the edge of a flower bed to address guests, although the messages he passed were serious.
Greek Minister of Maritime Affairs, Islands and Fisheries Ioannis Diamantidis made a late arrival but seemed to enjoy his short stay among the tanker moguls including several who assiduously avoided the TradeWinds camera, such as Nikolas Tsakos of Tsakos Energy Navigation (TEN), Dinos Martinos of Thenamaris and Costis Kertsikoff of Eletson Corp.
Also preferring his lovely daughter to face the flash was Suay Umut, president of Dunya Denizcilik of Istanbul, while the Norwegian contingent were in evidence, several hanging out with Polys L Haji-Ioannou.
By Gillian Whittaker Athens
Published: 22:01 GMT, 19 May 11 | updated: 20:51 GMT, 18 May 11

Germans quit submarine contract at Hellenic Shipyards
---Lawyers of shipbuilder HDW have told the Greek Defence ministry May 16 the German company wants out of its subcontract, for construction of two new Class 214 submarines for the Hellenic Navy, at Hellenic Shipyards. Termination does not impact the contract under law 3885/2010 between the Greek state, Hellenic, HDW and the yard's owners Abu Dhabi MAR, which has made it clear it wants to remain in Hellenic Shipyards and in Greece.
At issue is the subcontract between contractor Hellenic and the main subcontractor HDW, known as 'Neptune II' for the mid-life modernisation and repair of one Class 209 submarine, the Oceanus, plus construction of two new Class 214 submarines for the Navy -- the 'Neptune I' contract -- which was in existence prior to ratification of law 3885/2010.
The ministry says the development is not related to acts or omissions by the Greek government but rather to serious disagreements that have arisen between the Skaramanga-based yard's present owner (Privinvest Shipbuilding / Abu Dhabi MAR) and previous owner (ThyssenKrupp Marine Systems / HDW). The differences not only embroil Hellenic and the navy, but also the wider cooperation between those two parties in Germany.
Defence minister, Evangelos Venizelos, said Greece's interests are fully secured by law 3885/2010, and this development does not affect the agreed delivery schedule of the three completed Class 214 subs at Hellenic, the ownership of which have already been transferred to the Greek government, under provisions of law 3885/2010.
Equally secured are payments made by the government following law 3885/2010 coming into force concerning completion of the 'Archimedes' contract and the support material of the Class 209 submarines which the Greek navy has. The small sums paid for the 'Neptune' contract still, nonetheless remain in the hands of Hellenic.
May 18 Iskandar Safa, md of Abu Dhabi MAR, and Hellenic chairman Boulos Hankach, met with Venizelos to discuss the problems facing the Skaramanga yard. During the meeting Safa reassured the minister the company wants to remain in Greece, but is having difficulty attracting customers. The minister said he understood Hellenic could not survive on Greek navy contracts alone, saying it's imperative orders be secured from other navies, given the fact that "for the next 15 years, Hellenic is prevented from building commercial ships by a decision by the EC, covering state aid.
Venizelos has briefed the relevant parliamentary committee on the Navy's documents and the letters he himself had sent to ThyssenKrupp / HDW, in relation to the transparency and audit clauses provisioned by law 3885/2010 -- letters which were forwarded to Germany's ministers of Finance and Defence.
Meanwhile, Financial Crimes Squad (SDOE), chief, Constantinos Papageorgiou has told the parliamentary committee investigating the allegedly corrupt deal for Greece to acquire the four German-designed Class 214 subs, that his officers have been unable to obtain the original contract. He said a number of amendments had been made to the initial agreement and that Euro 230m in offsets included in the contract remain unaccounted for.
-- Filed: 2011-05-19

Capesize owners urged to consider scrapping
--- Friday 20 May 2011, 15:26 by Nigel Lowry
Carriers Chartering says 30% of capesize clients shun loss-making charters
A SIGNIFICANT number of spot market capesize bulk carriers are being kept idle in view of loss-making freights, but owners would be better off scrapping at least the older ships, a leading Greek shipbroker has said.
Speaking at the Greek Shipping & Ship Finance Conference, organised in Athens by Informa, Mr Christofides urged owners to speed up the rate of scrapping in the sector.
Even then, he saw opportunities arising to acquire vessels again as robust scrap prices were a factor in keeping secondhand values firm.
Mr Christofides said that it was unclear globally how much capesize capacity was currently idling for want of remunerative employment.
The conference was also told that very large ore carriers built for shipping Brazilian iron ore to China have been overhyped as the principal threat to independent owners of capesizes.
A tally of 560m dwt of capesize newbuildings projected for delivery between 2011 and 2013 far exceeded projected growth in ore trades.
Very large ore carriers greater than 250,000 dwt had inexplicably not been built for a decade.

Box Ships Inc. Takes delivery of its fourth and fifth containership
For more information, contact:
Box Ships Inc.
15, Karamanli Ave.
Voula, Athens 166 73,

GL software for German, Greek and Dutch companies
---(May 20 2011) GL Maritime Software has announced the agreement of three new contracts, with NSC Schiffahrtsgesellschaft of Germany, Aegean Bunkering Services of Greece, and Dutch shipping company Feederlines BV.
HullManager allows for condition monitoring of hulls with visual inspections and thickness measurements based on an actual 3D model of the vessel.
Greek shipping company Aegean Bunkering Services has decided to implement GL ShipManager and GL FleetAnalyzer on 52 vessels, installing the Technical Management and Procurement System functions from GL ShipManager in its offices and onboard the vessels.
The shipping company hopes that the implementation of the software will help to manage tasks in a more time and cost effective manner, providing increased transparency of all vessel data and keeping operations in line with industry requirements such as ISM and TMSA.
Meanwhile, Dutch shipping company Feederlines BV will implement GL ShipManager and GL FleetAnalyzer software systems on board 48 ships in its fleet.
Feederlines has chosen to utilise Technical Management, Procurement, Compliance Management and Ship and Voyage Management software systems on board its vessels for decision support, and improved efficiency and transparency across its fleet.

Technology Outlook 2020 launched in Greece
---Tuesday, 17 May 2011 19:12
Technology Outlook 2020 looks at future technologies in four main areas: shipping, fossil energy, renewable and nuclear energy, and power systems. The report covers seven global megatrends which DNV believes will effect developments in the selected areas, and explores four scenarios, a combination of drivers which form possible alternative futures.
In the energy sector, fossil fuels will be the largest part of the energy mix also in 2020 and DNV believes the focus will be on increasing efficiency and improving the environmental footprint from operations. Increasingly more advanced subsea oil and gas production systems are expected to be used, and drilling and intervention technology will diversify, apply smarter monitoring and increase efficiency. Unconventional oil and gas, mainly dominated by shale gas, will be a considerable part of the energy mix, and the challenges related to water treatment will have to be solved.
Elisabeth Harstad is Senior Vice President and Managing Director of DNV Research & Innovation. She holds an MSc in Process Engineering and she has had various positions in DNV including those of COO of DNV Technology Services, Director of Planning, Business Development and Marketing for Oil&gas.
NikosNikolaos Kakalis is the Head of DNV Research & Innovation Greece. He holds a PhD in Chemical Engineering and an MSc in Process Engineering and has brought significant international expertise stemming from his previous research & development assignments.
For more details or copies of the report, please do not hesitate to contact:
Email :

Shipowners can bind cargo owners to arbitration in salvage agreements
May 19 2011
A shipowner or master can bind cargo owners to arbitration where it is offered in a salvage agreement (under the Lloyds Standard Form of Salvage Agreement (LOF 2000)). The shipowner's or master's authority derives from the London International Salvage Convention (1989), ratified by both Greece and the United Kingdom, among others. The shipowner's or master's authority is governed by the law on the main legal relationship (salvage agreement) to which the ex lege (ie, by operation of law) authority relates.
In February 2005 a ship was stranded in open water off the Greek island of Chios in the Aegean Sea. The master of the ship, upon the instruction of the shipowner, entered into a written salvage agreement (under the LOF 2000) with the salvor, a Piraeus salvage company. Following standard practice, on the condition that salvage was successful, the salvor's reward would be determined by arbitration at Lloyd's in London under the English Arbitration Act 1996, as part of the arbitration clause contained in the salvage agreement. The parties also agreed that the agreement would be governed on the merits by English law, which included the London International Salvage Convention (1989).
After 33 days, the salvage of both the ship and its cargo was successful, and in June 2005 the salvor initiated arbitration proceedings in London against the shipowner and the cargo owners in order to determine its reward. Despite proper notice of the arbitration proceedings having been given to all respondents, the cargo owners did not participate in the arbitration. The tribunal rendered its award in November 2005, determining that the cargo owners' apportionment of the salvage reward amounted to 75% of the salvaged cargo's value. As no appeal was filed by the parties (which had the right to appeal to a Lloyd's appeal arbitrator), the award became final.
The cargo owners refused to abide by the rulings of the award and the salvor sought to enforce it in Greece under the provisions of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (ratified by Greece in 1961). In their defence, the cargo owners questioned the validity of the arbitration agreement (contained within the salvage agreement). In particular, they submitted that the shipowner lacked the authority to enter into an arbitration agreement on their behalf. Further, they also submitted that they were deprived without their consent of the court determined by the Greek Constitution (Article 8) to hear the disputes they were involved in, and that the award therefore violated Greek public policy.
The Piraeus First Instance Court dismissed the cargo owners' defence and held that the award was enforceable in Greece. The cargo owners appealed before the Piraeus Court of Appeal. The court held that under English law - of which the London International Salvage Convention of 1989 forms part, whose provisions applied in the case in dispute - both the master and the shipowner have the right to enter into such (salvage) agreements on behalf of the owners of cargo carried by the ship and to bind such cargo owners.(1)
The court pointed out that the Salvage Convention was ratified by Greece in 1996, implying that the situation would not be different even under Greek law. As the shipowner acts by operation of law as agent of the owners of cargo carried by the ship and the scope of its authority is determined by law, a specific empowerment by the cargo owners to enter into an arbitration agreement (such as that contained in the LOF 2000) is not required.
The court was further satisfied that the requirements for the formal validity of the arbitration clause had been met. In this context, it applied the provisions of the English Arbitration Act 1996, which were held applicable on the basis of a Greek choice of law rule (in particular Article 11 of the Greek Civil Code, which determines the applicable law on the formal validity of contracts). Finally, the court dismissed the respondents' assertion that Greek public policy was violated. The court noted that this ground of the appeal was attributed to the alleged lack of authority on the part of the shipowner, which had already been dismissed.
The judgment of the Piraeus Court of Appeal raises arbitration law issues at both the substantive law and the conflict of laws level. At the substantive law level, it is made clear that both shipowner and master had the authority to bind the cargo owners in an arbitration agreement in virtue of Article 6(2)(b) of the London International Salvage Convention (1989). Although the court applied English law, of which the convention forms part after the Merchant Shipping (Salvage and Pollution) Act 1994, the situation is no different under Greek law, of which the convention also forms part after Law 2391/1996 (in force since June 3 1997). The court left this in no doubt, as it specifically noted that the convention also applies under Greek law. Prior to the Salvage Convention coming into force in Greece, case law accepted the master's authority to enter into an arbitration agreement - binding for cargo owners - as part of the general authority conferred upon him or her by the law, in the context of salvage as well.(2)
At the conflict of laws level, the court addressed the issue of the applicable law that governed the shipowner's authority to bind the cargo owners to arbitration and the issue of the applicable law that governed the formal validity of the arbitration agreement. As regards the former, the court did not make specific reference to its conflict of laws approach, but simply applied English law in order to ascertain the shipowner's authority. In essence, it applied the law governing the main legal relationship (salvage agreement) to which the ex lege authority related. If the court had applied the law of the place where the act took place, this would have been Greek law, as it appears from the facts that both ships involved - the ship in distress and the salvor's ship (on board one of which the salvage agreement appears to have been signed) - flew the Greek flag. As regards the formal validity of the arbitration agreement, the solution adopted by the court is questionable. The court applied a national choice of law rule (Article 11 of the Greek Civil Code) that determines the applicable law on the formal validity of contracts. Nevertheless, at the same time, the court held that the New York Convention applied. The latter has a substantive rule (Article II(2)) on the formal validity of arbitration agreements. The Greek Supreme Court has already held - in accordance with other national courts and legal doctrine - that the formal validity of an arbitration agreement is determined only in virtue of Article II of the New York Convention in an autonomous manner and without recourse to national choice of law rules.(3)
For further information on this topic please contact Antonios Tsavdaridis at IK Rokas & Partners by telephone (+30 210 361 6816), fax (+30 210 361 5425) or email (
(1) Piraeus Court of Appeal Judgment 738/2010.
(2) Piraeus Court of Appeal Judgment 341/1990.
(3) Supreme Court Judgment (in plenary) 8/1997.

3rd Annual SIAM Conference 2011: Cost Efficiency, New Trends & Their Impact
(Shipping Investment & Asset Management) on the 7th of June 2011, at the Athens Golf Club in Glyfada, Greece.
Registration begins at 14:00 at the Athens Golf Club, Glyfada (directions available at