Imlam Problem 2009

Universities planning to register a team for this moot are asked to send notice of their intention to the organisers for preliminary planning purposes: [email protected] Registrations and payment must be received by 16 January 2009. Once your team is registered, it will receive complementary use of the Informa/Lloyd’s database – thanks to Informa, our sponsors.

International Maritime Law Arbitration Moot Competition

Brisbane, 3 – 7 July 2009

Moot Problem

Organised by: Hosted by:

Note (1): Students are to assume that the MLAANZ Arbitration Rules, as published by the Association and effective 1 July 2007, are in force for the currency of the problem. Note (2): Students are to assume the maximum squat calculation for the vessel against her departure Puerto Pamatar displacement and speed is 0.22 meters. Note (3): Students are to assume that all ISM documentation is approved by the vessel’s Classification Society.

2

SHWARZ LINE CONTAINERS

Schwarz Line Containers Level 27, International House 139 Hörst Strasse Bräan Hoogeland

2 February 2004 Mr Jonathan Mak Horizon Shipping Inc. Level 12, Sky Harbour Building 88 Nandong Road Lai City Republic of Kailand Dear Mr Mak, As you may be aware, Schwarz Line Containers are an active time charterer of quality vessels and have been progressively building a market presence in the Far East - Andorina – Europa liner trade over the last decade. Due to our expanding liner trade in this market we are interested in hiring a further one container ship on time charter with the following basic characteristics: Length overall: 155.00 meters Moulded breadth: 25.00 meters Draft: 10.00 meters Capacity: 1,100 TEU +/- 5% Lifting equipment: 2 cranes * 40 tonnes Hull type: single skin Service speed: 18 knots at 90% MCR Our requirement is for a time charter of about five years commencing from about May this year. In line with our current chartering operations, our preference is for a time charter on the ConLine 2000 standard form. We should be grateful if you would respond soonest with any vessels that you have that may suit our size and charter requirements. Regards,

Dietmar Singer

3

~HORIZON SHIPPING INC.~

Mr Jonathan Mak Horizon Shipping Inc. Level 12, Sky Harbour Building 88 Nandong Road Lai City Republic of Kailand

6 February 2004 Schwarz Line Containers Level 27, International House 139 Hörst Strasse Bräan Hoogeland Dear Mr Singer We acknowledge receipt of your letter dated 2 February 2004 and we are pleased to advise you that we have one vessel that may suit your requirements and is available against your commencement date of on or about May this year. The vessel is the MV “OCEAN EXPRESS” and has the following principal dimensions and characteristics:

Capacity: 1,170 TEU Length (overall): 153.00 meters Breadth (extreme): 25.30 meters Depth: 13.50 meters Hull type: single skin Service speed: 19.0 knots Cranes: 2 * 45 tonnes Built: 1998

Full details of the vessel can be found on the Shipping Intelligence Network database. The hire rate for this vessel will be US $11,600 per day. If the “OCEAN EXPRESS” does not meet your requirements please contact us and we will endeavour to provide details of alternative vessels. At this time we wish to advise you that Horizon Shipping Inc. only contracts on the NYPE 93 form and we enclose a standard form copy for your consideration. Regards,

Mr Jonathan Mak

4

Standard NYPE 93 Time Charterparty Agreement [extracts of relevant clauses]

TIME CHARTER

THIS CHARTER PARTY, made and concluded in (insert place) this (insert day) day of

(insert month) of 2004 Between Owners of the Vessel described below, and Charterers. Description of Vessel Name (insert) Flag (insert) Built (insert) (year). Port and number of Registry (insert) Classed in (insert) Deadweight (insert) long*/metric* tons (cargo and bunkers, including freshwater and stores not exceeding (insert) long*/metric* tons) on a salt water draft of (insert) meters/feet* on summer freeboard. Capacity cubic feet grain cubic feet bale space. Tonnage (insert) GT/GRT. Speed about (insert) knots, fully laden, in good weather conditions up to and including maximum (insert) Force on the Beaufort wind scale, on a consumption of about (insert) long*/metric* tons of heavy fuel oil. * Delete as appropriate. 1. Duration The Owners agree to let and the Charterers agree to hire the Vessel from the time of delivery for a period of (insert) years within below mentioned trading limits. 2. Delivery The Vessel shall be placed at the disposal of the Charterers at (insert). The Vessel on her delivery shall be ready to receive cargo with clean-swept holds and tight, staunch, strong and in every way fitted for ordinary cargo service, having water ballast and with sufficient power to operate all cargo-handling gear simultaneously. The Owners shall give the Charterers not less than (insert) days notice of expected date of delivery. 4. Dangerous Cargo/Cargo Exclusions (a) The Vessel shall be employed in carrying lawful merchandise excluding any goods of a dangerous, injurious, flammable or corrosive nature unless carried in accordance with the

5

requirements or recommendations of the competent authorities of the country of the Vessel's registry and of ports of shipment and discharge and of any intermediate countries or ports through whose waters the Vessel must pass. Without prejudice to the generality of the foregoing, in addition the following are specifically excluded: livestock of any description, arms, ammunition, explosives, nuclear and radioactive materials, (insert categories) (b) If IMO-classified cargo is agreed to be carried, the amount of such cargo shall be limited to (insert) tons and the Charterers shall provide the Master with any evidence he may reasonably require to show that the cargo is packaged, labelled, loaded and stowed in accordance with IMO regulations, failing which the Master is entitled to refuse such cargo or, if already loaded, to unload it at the Charterers' risk and expense. 5. Trading Limits The Vessel shall be employed in such lawful trades between safe ports and safe places within (insert) excluding (insert) as the Charterers shall direct. 6. Owners to Provide The Owners shall provide and pay for the insurance of the Vessel, except as otherwise provided, and for all provisions, cabin, deck, engine-room and other necessary stores, including boiler water; shall pay for wages, consular shipping and discharging fees of the crew and charges for port services pertaining to the crew; shall maintain the Vessel's class and keep her in a thoroughly efficient state in hull, machinery and equipment for and during the service, and have a full complement of officers and crew. 7. Charterers to Provide The Charterers, while the Vessel is on hire, shall provide and pay for all the bunkers except as otherwise agreed; shall pay for port charges (including compulsory watchmen and cargo watchmen and compulsory garbage disposal), all communication expenses pertaining to the Charterers' business at cost, pilotages, towages, agencies, commissions, consular charges (except those pertaining to individual crew members or flag of the Vessel), and all other usual expenses except those stated in Clause 6, but when the Vessel puts into a port for causes for which the Vessel is responsible (other than by stress of weather), then all such charges incurred shall be paid by the Owners. Fumigations ordered because of illness of the crew shall be for the Owners' account. Fumigations ordered because of cargoes carried or ports visited while the Vessel is employed under this Charter Party shall be for the Charterers' account. All other fumigations shall be for the Charterers' account after the Vessel has been on charter for a continuous period of six months or more. The Charterers shall provide and pay for necessary dunnage and also any extra fittings requisite for a special trade or unusual cargo, but the Owners shall allow them the use of any dunnage already aboard the Vessel. Prior to redelivery the Charterers shall remove their dunnage and fittings at their cost and in their time. 8. Performance of Voyages (a) The Master shall perform the voyages with due despatch, and shall render all customary assistance with the Vessel's crew. The Master shall be conversant with the English language and (although appointed by the Owners) shall be under the orders and directions of the Charterers as regards employment and agency; and the Charterers shall perform all cargo handling, including but not limited to loading, stowing, trimming, lashing, securing,

6

dunnaging, unlashing, discharging, and tallying, at their risk and expense, under the supervision of the Master. (b) If the Charterers shall have reasonable cause to be dissatisfied with the conduct of the Master or officers, the Owners shall, on receiving particulars of the complaint, investigate the same, and, if necessary, make a change in the appointments. 9. Bunkers ... 10. Rate of Hire/Redelivery Areas and Notices The Charterers shall pay for the use and hire of the said Vessel at the rate of $ (insert) U.S. currency, daily, or $ (insert) U.S. currency per ton on the Vessel's total deadweight carrying capacity, including bunkers and stores, on summer freeboard, per 30 days, commencing on and from the day of her delivery, as aforesaid, and at and after the same rate for any part of a month; hire shall continue until the hour of the day of her redelivery in like good order and condition, ordinary wear and tear excepted, to the Owners (unless Vessel lost) at (insert) unless otherwise mutually agreed. The Charterers shall give the Owners not less than (insert) days notice of the Vessel's expected date and probable port of redelivery. For the purpose of hire calculations, the times of delivery, redelivery or termination of charter shall be adjusted to GMT. 11. Hire Payment (a) Payment Payment of Hire shall be made so as to be received by the Owners or their designated payee in (insert), viz (insert) in (insert) currency, or in United States Currency, in funds available to the Owners on the due date, 15 days in advance, and for the last month or part of same the approximate amount of hire, and should same not cover the actual time, hire shall be paid for the balance day by day as it becomes due, if so required by the Owners. Failing the punctual and regular payment of the hire, or on any fundamental breach whatsoever of this Charter Party, the Owners shall be at liberty to withdraw the Vessel from the service of the Charterers without prejudice to any claims they (the Owners) may otherwise have on the Charterers. At any time after the expiry of the grace period provided in Sub-clause 11 (b) hereunder and while the hire is outstanding, the Owners shall, without prejudice to the liberty to withdraw, be entitled to withhold the performance of any and all of their obligations hereunder and shall have no responsibility whatsoever for any consequences thereof, in respect of which the Charterers hereby indemnify the Owners, and hire shall continue to accrue and any extra expenses resulting from such withholding shall be for the Charterers' account. (b) Grace Period Where there is failure to make punctual and regular payment of hire due to oversight, negligence, errors or omissions on the part of the Charterers or their bankers, the Charterers shall be given by the Owners (insert) clear banking days (as recognized at the agreed place of payment) written notice to rectify the failure, and when so rectified within those (insert) days following the Owners' notice, the payment shall stand as regular and punctual.

7

Failure by the Charterers to pay the hire within (insert) days of their receiving the Owners' notice as provided herein, shall entitle the Owners to withdraw as set forth in Sub-clause 11 (a) above. (c) Last Hire Payment Should the Vessel be on her voyage towards port of redelivery at the time the last and/or the penultimate payment of hire is/are due, said payment(s) is/are to be made for such length of time as the Owners and the Charterers may agree upon as being the estimated time necessary to complete the voyage, and taking into account bunkers actually on board, to be taken over by the Owners and estimated disbursements for the Owners' account before redelivery. Should same not cover the actual time, hire is to be paid for the balance, day by day, as it becomes due. When the Vessel has been redelivered, any difference is to be refunded by the Owners or paid by the Charterers, as the case may be. (d) Cash Advances Cash for the Vessel's ordinary disbursements at any port may be advanced by the Charterers, as required by the Owners, subject to 2½ percent commission and such advances shall be deducted from the hire. The Charterers, however, shall in no way be responsible for the application of such advances. 12. Berths The Vessel shall be loaded and discharged in any safe dock or at any safe berth or safe place that Charterers or their agents may direct, provided the Vessel can safely enter, lie and depart always afloat at any time of tide. 13. Spaces Available (a) The whole reach of the Vessel's holds, decks, and other cargo spaces (not more than she can reasonably and safely stow and carry), also accommodations for supercargo, if carried, shall be at the Charterers' disposal, reserving only proper and sufficient space for the Vessel's officers, crew, tackle, apparel, furniture, provisions, stores and fuel. (b) In the event of deck cargo being carried, the Owners are to be and are hereby indemnified by the Charterers for any loss and/or damage and/or liability of whatsoever nature caused to the Vessel as a result of the carriage of deck cargo and which would not have arisen had deck cargo not been loaded. 14. Supercargo and Meals ... 15. Sailing Orders and Logs The Charterers shall furnish the Master from time to time with all requisite instructions and sailing directions, in writing, in the English language, and the Master shall keep full and correct deck and engine logs of the voyage or voyages, which are to be patent to the Charterers or their agents, and furnish the Charterers, their agents or supercargo, when required, with a true copy of such deck and engine logs, showing the course of the Vessel, distance run and the consumption of bunkers. Any log extracts required by the Charterers shall be in the English language. 16. Delivery/Cancelling ... 17. Off Hire

8

In the event of loss of time from deficiency and/or default and/or strike of officers or crew, or deficiency of stores, fire, breakdown of, or damages to hull, machinery or equipment, grounding, detention by the arrest of the Vessel, (unless such arrest is caused by events for which the Charterers, their servants, agents or subcontractors are responsible), or detention by average accidents to the Vessel or cargo unless resulting from inherent vice, quality or defect of the cargo, drydocking for the purpose of examination or painting bottom, or by any other similar cause preventing the full working of the Vessel, the payment of hire and overtime, if any, shall cease for the time thereby lost. Should the Vessel deviate or put back during a voyage, contrary to the orders or directions of the Charterers, for any reason other than accident to the cargo or where permitted in Clause 22 hereunder, the hire is to be suspended from the time of her deviating or putting back until she is again in the same or equidistant position from the destination and the voyage resumed therefrom. All bunkers used by the Vessel while off hire shall be for the Owners' account. In the event of the Vessel being driven into port or to anchorage through stress of weather, trading to shallow harbors or to rivers or ports with bars, any detention of the Vessel and/or expenses resulting from such detention shall be for the Charterers' account. If upon the voyage the speed be reduced by defect in, or breakdown of, any part of her hull, machinery or equipment, the time so lost, and the cost of any extra bunkers consumed in consequence thereof, and all extra proven expenses may be deducted from the hire. 18. Sublet Unless otherwise agreed, the Charterers shall have the liberty to sublet the Vessel for all or any part of the time covered by this Charter Party, but the Charterers remain responsible for the fulfillment of this Charter Party. 19. Drydocking ... 20. Total Loss Should the Vessel be lost, money paid in advance and not earned (reckoning from the date of loss or being last heard of) shall be returned to the Charterers at once. 21. Exceptions The act of God, enemies, fire, restraint of princes, rulers and people, and all dangers and accidents of the seas, rivers, machinery, boilers, and navigation, and errors of navigation throughout this Charter, always mutually excepted. 22. Liberties The Vessel shall have the liberty to sail with or without pilots, to tow and to be towed, to assist vessels in distress, and to deviate for the purpose of saving life and property. 23. Liens The Owners shall have a lien upon all cargoes and all sub-freights and/or sub-hire for any amounts due under this Charter Party, including general average contributions, and the Charterers shall have a lien on the Vessel for all monies paid in advance and not earned, and any overpaid hire or excess deposit to be returned at once. The Charterers will not directly or indirectly suffer, nor permit to be continued, any lien or encumbrance, which might have priority over the title and interest of the Owners in the Vessel. The Charterers undertake that during the period of this Charter Party, they will not procure any supplies or necessaries or services, including any port expenses and bunkers, on the credit of the Owners or in the Owners' time.

9

24. Salvage All derelicts and salvage shall be for the Owners' and the Charterers' equal benefit after deducting Owners' and Charterers' expenses and crew's proportion. 25. General Average General average shall be adjusted according to York-Antwerp Rules 1974, as amended 1990, or any subsequent modification thereof, in (insert) and settled in (insert) currency. The Charterers shall procure that all bills of lading issued during the currency of the Charter Party will contain a provision to the effect that general average shall be adjusted according to York-Antwerp Rules 1974, as amended 1990, or any subsequent modification thereof and will include the "New Jason Clause" as per Clause 31. Time charter hire shall not contribute to general average. 26. Navigation Nothing herein stated is to be construed as a demise of the Vessel to the Time Charterers. The Owners shall remain responsible for the navigation of the Vessel, acts of pilots and tug boats, insurance, crew, and all other matters, same as when trading for their own account. 27. Cargo Claims Cargo claims as between the Owners and the Charterers shall be settled in accordance with the Inter-Club New York Produce Exchange Agreement of February 1970, as amended May, 1984, or any subsequent modification or replacement thereof. 28. Cargo Gear and Lights The Owners shall maintain the cargo handling gear of the Vessel which is as follows: (insert) providing gear (for all derricks or cranes) capable of lifting capacity as described. The Owners shall also provide on the Vessel for night work lights as on board, but all additional lights over those on board shall be at the Charterers' expense. The Charterers shall have the use of any gear on board the Vessel. If required by the Charterers, the Vessel shall work night and day and all cargo handling gear shall be at the Charterers' disposal during loading and discharging. In the event of disabled cargo handling gear, or insufficient power to operate the same, the Vessel is to be considered to be off hire to the extent that time is actually lost to the Charterers and the Owners to pay stevedore stand-by charges occasioned thereby, unless such disablement or insufficiency of power is caused by the Charterers' stevedores. If required by the Charterers, the Owners shall bear the cost of hiring shore gear in lieu thereof, in which case the Vessel shall remain on hire. 29. Crew Overtime ... 30. Bills of Lading (a) The Master shall sign the bills of lading or waybills for cargo as presented in conformity with mates or tally clerk's receipts. However, the Charterers may sign bills of lading or waybills on behalf of the Master, with the Owner's prior written authority, always in conformity with mates or tally clerk's receipts.

10

(b) All bills of lading or waybills shall be without prejudice to this Charter Party and the Charterers shall indemnify the Owners against all consequences or liabilities which may arise from any inconsistency between this Charter Party and any bills of lading or waybills signed by the Charterers or by the Master at their request. (c) Bills of lading covering deck cargo shall be claused: "Shipped on deck at Charterers', Shippers' and Receivers' risk, expense and responsibility, without liability on the part of the Vessel, or her Owners for any loss, damage, expense or delay howsoever caused." 31. Protective Clauses This Charter Party is subject to the following clauses all of which are also to be included in all bills of lading or waybills issued hereunder: (a) CLAUSE PARAMOUNT "This bill of lading shall have effect subject to the provisions of the Carriage of Goods by Sea Act of the United States, the Hague Rules, or the Hague-Visby Rules, as applicable, or such other similar national legislation as may mandatorily apply by virtue of origin or destination of the bills of lading, which shall be deemed to be incorporated herein and nothing herein contained shall be deemed a surrender by the carrier of any of its rights or immunities or an increase of any of its responsibilities or liabilities under said applicable Act. If any term of this bill of lading be repugnant to said applicable Act to any extent, such term shall be void to that extent, but no further." and (b) BOTH-TO-BLAME COLLISION CLAUSE "If the ship comes into collision with another ship as a result of the negligence of the other ship and any act, neglect or default of the master, mariner, pilot or the servants of the carrier in the navigation or in the management of the ship, the owners of the goods carried hereunder will indemnify the carrier against all loss or liability to the other or non-carrying ship or her owners insofar as such loss or liability represents loss of, or damage to, or any claim whatsoever of the owners of said goods, paid or payable by the other or non-carrying ship or her owners to the owners of said goods and set off, recouped or recovered by the other or non-carrying ship or her owners as part of their claim against the carrying ship or carrier. The foregoing provisions shall also apply where the owners, operators or those in charge of any ships or objects other than, or in addition to, the colliding ships or objects are at fault in respect to a collision or contact." and (c) NEW JASON CLAUSE "In the event of accident, danger, damage or disaster before or after the commencement of the voyage resulting from any cause whatsoever, whether due to negligence or not, for which, or for the consequences of which, the carrier is not responsible, by statute, contract, or otherwise, the goods, shippers, consignees, or owners of the goods shall contribute with the carrier in general average to the payment of any sacrifices, losses, or expenses of a general average nature that may be made or incurred, and shall pay salvage and special charges incurred in respect of the goods. If a salving ship is owned or operated by the carrier, salvage shall be paid for as fully as if salving ship or ships belonged to strangers. Such deposit as the carrier or his agents may deem sufficient to cover the estimated contribution of the goods and any salvage and special charges thereon shall, if required, be made by the goods, shippers, consignees or owners of the goods to the carrier before delivery."

11

40. Documentation The Owners shall provide any documentation relating to the Vessel that may be required to permit the Vessel to trade within the agreed trade limits, including, but not limited to certificates of financial responsibility for oil pollution, provided such oil pollution certificates are obtainable from the Owners' P & I club, valid international tonnage certificate, Suez and Panama tonnage certificates, valid certificate of registry and certificates relating to the strength and/or serviceability of the Vessel's gear. 45. Arbitration (a) NEW HAMPTON All disputes arising out of this contract shall be arbitrated at New Hampton in the following manner, and subject to U.S. Law: One Arbitrator is to be appointed by each of the parties hereto and a third by the two so chosen. Their decision or that of any two of them shall be final, and for the purpose of enforcing any award, this agreement may be made a rule of the court. The Arbitrators shall be commercial men, conversant with shipping matters. Such Arbitration is to be conducted in accordance with the rules of the Society of Maritime Arbitrators Inc. For disputes where the total amount claimed by either party does not exceed US $ ** the arbitration shall be conducted in accordance with the Shortened Arbitration Procedure of the Society of Maritime Arbitrators Inc. (b) BRISBANE All disputes arising out of this contract shall be arbitrated at Brisbane and, unless the parties agree forthwith on a single Arbitrator, be referred to the final arbitrament of two Arbitrators carrying on business in Brisbane who shall be members of the Maritime Law Association of Australia and New Zealand and engaged in Shipping, one to be appointed by each of the parties, with power to such Arbitrators to appoint an Umpire. No award shall be questioned or invalidated on the ground that any of the Arbitrators is not qualified as above, unless objection to his action be taken before the award is made. Any dispute arising hereunder shall be governed by Australian Law. *Delete para (a) or (b) as appropriate ** Where no figure is supplied in the blank space this provision only shall be void but the other provisions of this clause shall have full force and remain in effect. If mutually agreed, clauses (insert) to (insert), both inclusive, as attached hereto are fully incorporated in this Charter Party. Signed on behalf of: [owners] Signed on behalf of: [charterers]

12

APPENDIX "A" To Charter Party dated Between Owners and Charterers Further details of the Vessel:

13



12 February 2004 Mr Jonathan Mak Horizon Shipping Inc. Level 12, Sky Harbour Building 88 Nandong Road, Lai City Republic of Kailand Dear Mr Mak, We acknowledge receipt of your letter dated 6 February 2004 and your nomination of the vessel MV “OCEAN EXPRESS” and we are pleased to inform you that this vessel is suitable for our liner requirements. We also acknowledge that you only contract on the on the NYPE 93 form and are willing to contract on the same in order to secure this vessel for our requirements, save for one amendment which we propose below. In light of our intended use for this vessel, we wish to inform you at this stage that it is our intention to trade this vessel within the Colonia, Venesland, Granland, Guyinia, Suriama and the Domana Republic geographical range, including Tailand, and inland ports accessible by a vessel of this size. In light of our trading pattern, and intended port calls, we should be grateful if you would amend Clause 5 to read as follows: 5. Trading Limits The Vessel shall be employed in such lawful trades between safe port/or ports and/or rivers within greater coasting, (insert) and other safe port and area (insert) as the Charterers shall direct. Should you be accepting of the above, we kindly ask that you forward a completed time charter to us without delay for our consideration and execution. Regards,

Dietmar Singer

14


Horizon Shipping Inc. Level 12, Sky Harbour Building 88 Nandong Road Lai City Republic of Kailand

16 February 2004 Attn: Dietmar Singer Schwarz Line Containers Level 27, International House 139 Hörst Strasse Bräan Hoogeland We refer to your letter dated 12 February 2004 and enclose the charterparty signed by us. We ask that you sign the same and return without delay. Enclosed: Part Executed NYPE 93 Time Charterparty Agreement. Regards,

Mr Jonathan Mak

15

NYPE 93 Time Charterparty Agreement [extracts of relevant clauses]

TIME CHARTER

THIS CHARTER PARTY, made and concluded in LAI CITY, REPUBLIC OF KAILAND

this 20th day of FEBRUARY of 2004 Owners of the Vessel described below, and Charterers. Description of Vessel Name OCEAN EXPRESS Flag BELOVIAN Built 1988 (year). Port and number of Registry PORT AU GLAISE 55589622 Classed in DET VERITAS Deadweight 21,538 long*/metric* tons (cargo and bunkers, including freshwater and stores not exceeding 1,755 long*/metric* tons) on a salt water draft of 10.10 meters/feet* on summer freeboard. Capacity cubic feet grain cubic feet bale space. Tonnage 12,827 GT/GRT. Speed about 19.0 knots, fully laden, in good weather conditions up to and including maximum 6 Force on the Beaufort wind scale, on a consumption of about 28.5 long*/metric* tons of heavy fuel oil and 1.80 tons medium diesel oil. * Delete as appropriate. 1. Duration The Owners agree to let and the Charterers agree to hire the Vessel from the time of delivery for a period of 5 (FIVE) years within below mentioned trading limits. 2. Delivery The Vessel shall be placed at the disposal of the Charterers at GENTOWN, GUYINIA. The Vessel on her delivery shall be ready to receive cargo with clean-swept holds and tight, staunch, strong and in every way fitted for ordinary cargo service, having water ballast and with sufficient power to operate all cargo-handling gear simultaneously. The Owners shall give the Charterers not less than 30 / 15 / 7 / 3 days notice of expected date of delivery. 4. Dangerous Cargo/Cargo Exclusions (a) The Vessel shall be employed in carrying lawful merchandise excluding any goods of a dangerous, injurious, flammable or corrosive nature unless carried in accordance with the requirements or recommendations of the competent authorities of the country of the Vessel's registry and of ports of shipment and discharge and of any intermediate countries or ports through whose waters the Vessel must pass. Without prejudice to the generality of the

16

foregoing, in addition the following are specifically excluded: livestock of any description, arms, ammunition, explosives, nuclear and radioactive materials,

---------- NONE ---------- (b) If IMO-classified cargo is agreed to be carried, the amount of such cargo shall be limited to 100 tons and the Charterers shall provide the Master with any evidence he may reasonably require to show that the cargo is packaged, labelled, loaded and stowed in accordance with IMO regulations, failing which the Master is entitled to refuse such cargo or, if already loaded, to unload it at the Charterers' risk and expense. 5. Trading Limits The Vessel shall be employed in such lawful trades between safe port/or ports and/or rivers within greater coasting, including Colonia, Venesland, Granland, Guyinia, Suriama and the Domana Republic and other safe port and area (Tailand included) as the Charterers shall direct. 6. Owners to Provide The Owners shall provide and pay for the insurance of the Vessel, except as otherwise provided, and for all provisions, cabin, deck, engine-room and other necessary stores, including boiler water; shall pay for wages, consular shipping and discharging fees of the crew and charges for port services pertaining to the crew; shall maintain the Vessel's class and keep her in a thoroughly efficient state in hull, machinery and equipment for and during the service, and have a full complement of officers and crew. 7. Charterers to Provide The Charterers, while the Vessel is on hire, shall provide and pay for all the bunkers except as otherwise agreed; shall pay for port charges (including compulsory watchmen and cargo watchmen and compulsory garbage disposal), all communication expenses pertaining to the Charterers' business at cost, pilotages, towages, agencies, commissions, consular charges (except those pertaining to individual crew members or flag of the Vessel), and all other usual expenses except those stated in Clause 6, but when the Vessel puts into a port for causes for which the Vessel is responsible (other than by stress of weather), then all such charges incurred shall be paid by the Owners. Fumigations ordered because of illness of the crew shall be for the Owners' account. Fumigations ordered because of cargoes carried or ports visited while the Vessel is employed under this Charter Party shall be for the Charterers' account. All other fumigations shall be for the Charterers' account after the Vessel has been on charter for a continuous period of six months or more. The Charterers shall provide and pay for necessary dunnage and also any extra fittings requisite for a special trade or unusual cargo, but the Owners shall allow them the use of any dunnage already aboard the Vessel. Prior to redelivery the Charterers shall remove their dunnage and fittings at their cost and in their time. 8. Performance of Voyages (a) The Master shall perform the voyages with due despatch, and shall render all customary assistance with the Vessel's crew. The Master shall be conversant with the English language and (although appointed by the Owners) shall be under the orders and directions of the Charterers as regards employment and agency; and the Charterers shall perform all cargo handling, including but not limited to loading, stowing, trimming, lashing, securing, dunnaging, unlashing, discharging, and tallying, at their risk and expense, under the supervision of the Master.

17

(b) If the Charterers shall have reasonable cause to be dissatisfied with the conduct of the Master or officers, the Owners shall, on receiving particulars of the complaint, investigate the same, and, if necessary, make a change in the appointments. 9. Bunkers ... 10. Rate of Hire/Redelivery Areas and Notices The Charterers shall pay for the use and hire of the said Vessel at the rate of $ 11,600 U.S. currency, daily, or $ U.S. currency per ton on the Vessel's total deadweight carrying capacity, including bunkers and stores, on summer freeboard, per 30 days, commencing on and from the day of her delivery, as aforesaid, and at and after the same rate for any part of a month; hire shall continue until the hour of the day of her redelivery in like good order and condition, ordinary wear and tear excepted, to the Owners (unless Vessel lost) at HOPETOWN, TAILAND unless otherwise mutually agreed. The Charterers shall give the Owners not less than 5 (FIVE) days notice of the Vessel's expected date and probable port of redelivery. For the purpose of hire calculations, the times of delivery, redelivery or termination of charter shall be adjusted to GMT. 11. Hire Payment (a) Payment Payment of Hire shall be made so as to be received by the Owners or their designated payee in REPUBLIC OF KAILAND, viz in currency, or in United States Currency, in funds available to the Owners on the due date, 15 days in advance, and for the last month or part of same the approximate amount of hire, and should same not cover the actual time, hire shall be paid for the balance day by day as it becomes due, if so required by the Owners. Failing the punctual and regular payment of the hire, or on any fundamental breach whatsoever of this Charter Party, the Owners shall be at liberty to withdraw the Vessel from the service of the Charterers without prejudice to any claims they (the Owners) may otherwise have on the Charterers. At any time after the expiry of the grace period provided in Sub-clause 11 (b) hereunder and while the hire is outstanding, the Owners shall, without prejudice to the liberty to withdraw, be entitled to withhold the performance of any and all of their obligations hereunder and shall have no responsibility whatsoever for any consequences thereof, in respect of which the Charterers hereby indemnify the Owners, and hire shall continue to accrue and any extra expenses resulting from such withholding shall be for the Charterers' account. (b) Grace Period Where there is failure to make punctual and regular payment of hire due to oversight, negligence, errors or omissions on the part of the Charterers or their bankers, the Charterers shall be given by the Owners 2 (TWO) clear banking days (as recognized at the agreed place of payment) written notice to rectify the failure, and when so rectified within those 2 (TWO) days following the Owners' notice, the payment shall stand as regular and punctual. Failure by the Charterers to pay the hire within 2 (TWO) days of their receiving the Owners' notice as provided herein, shall entitle the Owners to withdraw as set forth in Sub-clause 11 (a) above. (c) Last Hire Payment

18

Should the Vessel be on her voyage towards port of redelivery at the time the last and/or the penultimate payment of hire is/are due, said payment(s) is/are to be made for such length of time as the Owners and the Charterers may agree upon as being the estimated time necessary to complete the voyage, and taking into account bunkers actually on board, to be taken over by the Owners and estimated disbursements for the Owners' account before redelivery. Should same not cover the actual time, hire is to be paid for the balance, day by day, as it becomes due. When the Vessel has been redelivered, any difference is to be refunded by the Owners or paid by the Charterers, as the case may be. (d) Cash Advances Cash for the Vessel's ordinary disbursements at any port may be advanced by the Charterers, as required by the Owners, subject to 2½ percent commission and such advances shall be deducted from the hire. The Charterers, however, shall in no way be responsible for the application of such advances. 12. Berths The Vessel shall be loaded and discharged in any safe dock or at any safe berth or safe place that Charterers or their agents may direct, provided the Vessel can safely enter, lie and depart always afloat at any time of tide. 13. Spaces Available (a) The whole reach of the Vessel's holds, decks, and other cargo spaces (not more than she can reasonably and safely stow and carry), also accommodations for supercargo, if carried, shall be at the Charterers' disposal, reserving only proper and sufficient space for the Vessel's officers, crew, tackle, apparel, furniture, provisions, stores and fuel. (b) In the event of deck cargo being carried, the Owners are to be and are hereby indemnified by the Charterers for any loss and/or damage and/or liability of whatsoever nature caused to the Vessel as a result of the carriage of deck cargo and which would not have arisen had deck cargo not been loaded. 14. Supercargo and Meals ... 15. Sailing Orders and Logs The Charterers shall furnish the Master from time to time with all requisite instructions and sailing directions, in writing, in the English language, and the Master shall keep full and correct deck and engine logs of the voyage or voyages, which are to be patent to the Charterers or their agents, and furnish the Charterers, their agents or supercargo, when required, with a true copy of such deck and engine logs, showing the course of the Vessel, distance run and the consumption of bunkers. Any log extracts required by the Charterers shall be in the English language. 16. Delivery/Cancelling ... 17. Off Hire In the event of loss of time from deficiency and/or default and/or strike of officers or crew, or deficiency of stores, fire, breakdown of, or damages to hull, machinery or equipment, grounding, detention by the arrest of the Vessel, (unless such arrest is caused by events for which the Charterers, their servants, agents or subcontractors are responsible), or detention by average accidents to the Vessel or cargo unless resulting from inherent vice, quality or defect

19

of the cargo, drydocking for the purpose of examination or painting bottom, or by any other similar cause preventing the full working of the Vessel, the payment of hire and overtime, if any, shall cease for the time thereby lost. Should the Vessel deviate or put back during a voyage, contrary to the orders or directions of the Charterers, for any reason other than accident to the cargo or where permitted in Clause 22 hereunder, the hire is to be suspended from the time of her deviating or putting back until she is again in the same or equidistant position from the destination and the voyage resumed therefrom. All bunkers used by the Vessel while off hire shall be for the Owners' account. In the event of the Vessel being driven into port or to anchorage through stress of weather, trading to shallow harbors or to rivers or ports with bars, any detention of the Vessel and/or expenses resulting from such detention shall be for the Charterers' account. If upon the voyage the speed be reduced by defect in, or breakdown of, any part of her hull, machinery or equipment, the time so lost, and the cost of any extra bunkers consumed in consequence thereof, and all extra proven expenses may be deducted from the hire. 18. Sublet Unless otherwise agreed, the Charterers shall have the liberty to sublet the Vessel for all or any part of the time covered by this Charter Party, but the Charterers remain responsible for the fulfillment of this Charter Party. 19. Drydocking ... 20. Total Loss Should the Vessel be lost, money paid in advance and not earned (reckoning from the date of loss or being last heard of) shall be returned to the Charterers at once. 21. Exceptions The act of God, enemies, fire, restraint of princes, rulers and people, and all dangers and accidents of the seas, rivers, machinery, boilers, and navigation, and errors of navigation throughout this Charter, always mutually excepted. 22. Liberties The Vessel shall have the liberty to sail with or without pilots, to tow and to be towed, to assist vessels in distress, and to deviate for the purpose of saving life and property. 23. Liens The Owners shall have a lien upon all cargoes and all sub-freights and/or sub-hire for any amounts due under this Charter Party, including general average contributions, and the Charterers shall have a lien on the Vessel for all monies paid in advance and not earned, and any overpaid hire or excess deposit to be returned at once. The Charterers will not directly or indirectly suffer, nor permit to be continued, any lien or encumbrance, which might have priority over the title and interest of the Owners in the Vessel. The Charterers undertake that during the period of this Charter Party, they will not procure any supplies or necessaries or services, including any port expenses and bunkers, on the credit of the Owners or in the Owners' time. 24. Salvage All derelicts and salvage shall be for the Owners' and the Charterers' equal benefit after deducting Owners' and Charterers' expenses and crew's proportion.

20

25. General Average General average shall be adjusted according to York-Antwerp Rules 1974, as amended 1990, or any subsequent modification thereof, in ZELAND and settled in UNITED STATES currency. The Charterers shall procure that all bills of lading issued during the currency of the Charter Party will contain a provision to the effect that general average shall be adjusted according to York-Antwerp Rules 1974, as amended 1990, or any subsequent modification thereof and will include the "New Jason Clause" as per Clause 31. Time charter hire shall not contribute to general average. 26. Navigation Nothing herein stated is to be construed as a demise of the Vessel to the Time Charterers. The Owners shall remain responsible for the navigation of the Vessel, acts of pilots and tug boats, insurance, crew, and all other matters, same as when trading for their own account. 27. Cargo Claims Cargo claims as between the Owners and the Charterers shall be settled in accordance with the Inter-Club New York Produce Exchange Agreement of February 1970, as amended May, 1984, or any subsequent modification or replacement thereof. 28. Cargo Gear and Lights The Owners shall maintain the cargo handling gear of the Vessel which is as follows:

TWO (2) McGREGOR GL 4525 CRANES *40 TONNE AT 25 METER providing gear (for all derricks or cranes) capable of lifting capacity as described. The Owners shall also provide on the Vessel for night work lights as on board, but all additional lights over those on board shall be at the Charterers' expense. The Charterers shall have the use of any gear on board the Vessel. If required by the Charterers, the Vessel shall work night and day and all cargo handling gear shall be at the Charterers' disposal during loading and discharging. In the event of disabled cargo handling gear, or insufficient power to operate the same, the Vessel is to be considered to be off hire to the extent that time is actually lost to the Charterers and the Owners to pay stevedore stand-by charges occasioned thereby, unless such disablement or insufficiency of power is caused by the Charterers' stevedores. If required by the Charterers, the Owners shall bear the cost of hiring shore gear in lieu thereof, in which case the Vessel shall remain on hire. 29. Crew Overtime ... 30. Bills of Lading (a) The Master shall sign the bills of lading or waybills for cargo as presented in conformity with mates or tally clerk's receipts. However, the Charterers may sign bills of lading or waybills on behalf of the Master, with the Owner's prior written authority, always in conformity with mates or tally clerk's receipts. (b) All bills of lading or waybills shall be without prejudice to this Charter Party and the Charterers shall indemnify the Owners against all consequences or liabilities which may arise from any inconsistency between this Charter Party and any bills of lading or waybills signed by the Charterers or by the Master at their request.

21

(c) Bills of lading covering deck cargo shall be claused: "Shipped on deck at Charterers', Shippers' and Receivers' risk, expense and responsibility, without liability on the part of the Vessel, or her Owners for any loss, damage, expense or delay howsoever caused." 31. Protective Clauses This Charter Party is subject to the following clauses all of which are also to be included in all bills of lading or waybills issued hereunder: (a) CLAUSE PARAMOUNT "This bill of lading shall have effect subject to the provisions of the Carriage of Goods by Sea Act of the United States, the Hague Rules, or the Hague-Visby Rules, as applicable, or such other similar national legislation as may mandatorily apply by virtue of origin or destination of the bills of lading, which shall be deemed to be incorporated herein and nothing herein contained shall be deemed a surrender by the carrier of any of its rights or immunities or an increase of any of its responsibilities or liabilities under said applicable Act. If any term of this bill of lading be repugnant to said applicable Act to any extent, such term shall be void to that extent, but no further." and (b) BOTH-TO-BLAME COLLISION CLAUSE "If the ship comes into collision with another ship as a result of the negligence of the other ship and any act, neglect or default of the master, mariner, pilot or the servants of the carrier in the navigation or in the management of the ship, the owners of the goods carried hereunder will indemnify the carrier against all loss or liability to the other or non-carrying ship or her owners insofar as such loss or liability represents loss of, or damage to, or any claim whatsoever of the owners of said goods, paid or payable by the other or non-carrying ship or her owners to the owners of said goods and set off, recouped or recovered by the other or non-carrying ship or her owners as part of their claim against the carrying ship or carrier. The foregoing provisions shall also apply where the owners, operators or those in charge of any ships or objects other than, or in addition to, the colliding ships or objects are at fault in respect to a collision or contact." and (c) NEW JASON CLAUSE "In the event of accident, danger, damage or disaster before or after the commencement of the voyage resulting from any cause whatsoever, whether due to negligence or not, for which, or for the consequences of which, the carrier is not responsible, by statute, contract, or otherwise, the goods, shippers, consignees, or owners of the goods shall contribute with the carrier in general average to the payment of any sacrifices, losses, or expenses of a general average nature that may be made or incurred, and shall pay salvage and special charges incurred in respect of the goods. If a salving ship is owned or operated by the carrier, salvage shall be paid for as fully as if salving ship or ships belonged to strangers. Such deposit as the carrier or his agents may deem sufficient to cover the estimated contribution of the goods and any salvage and special charges thereon shall, if required, be made by the goods, shippers, consignees or owners of the goods to the carrier before delivery." 40. Documentation The Owners shall provide any documentation relating to the Vessel that may be required to permit the Vessel to trade within the agreed trade limits, including, but not limited to certificates of financial responsibility for oil pollution, provided such oil pollution certificates

22

are obtainable from the Owners' P & I club, valid international tonnage certificate, Suez and Panama tonnage certificates, valid certificate of registry and certificates relating to the strength and/or serviceability of the Vessel's gear. 45. Arbitration (a) NEW HAMPTON All disputes arising out of this contract shall be arbitrated at New Hampton in the following manner, and subject to U.S. Law: One Arbitrator is to be appointed by each of the parties hereto and a third by the two so chosen. Their decision or that of any two of them shall be final, and for the purpose of enforcing any award, this agreement may be made a rule of the court. The Arbitrators shall be commercial men, conversant with shipping matters. Such Arbitration is to be conducted in accordance with the rules of the Society of Maritime Arbitrators Inc. For disputes where the total amount claimed by either party does not exceed US $ ** the arbitration shall be conducted in accordance with the Shortened Arbitration Procedure of the Society of Maritime Arbitrators Inc. (b) BRISBANE All disputes arising out of this contract shall be arbitrated at Brisbane and, unless the parties agree forthwith on a single Arbitrator, be referred to the final arbitrament of two Arbitrators carrying on business in Brisbane who shall be members of the Maritime Law Association of Australia and New Zealand and engaged in Shipping, one to be appointed by each of the parties, with power to such Arbitrators to appoint an Umpire. No award shall be questioned or invalidated on the ground that any of the Arbitrators is not qualified as above, unless objection to his action be taken before the award is made. Any dispute arising hereunder shall be governed by Australian Law. *Delete para (a) or (b) as appropriate ** Where no figure is supplied in the blank space this provision only shall be void but the other provisions of this clause shall have full force and remain in effect. If mutually agreed, clauses to , both inclusive, as attached hereto are fully incorporated in this Charter Party. Signed on behalf of: [owners]

Signed on behalf of: [charterers]

23

APPENDIX "A" To Charter Party dated 20th February 2004 Between HORIZON SHIPPING INC. Owners and SCHWARZ LINE CONTAINERS Charterers Further details of the Vessel: “OCEAN EXPRESS” VESSEL TYPE CONTAINER SHIP IMO Number 9159060 CAPACITY 1,170 TEU HULL TYPE SINGLE HULL GROSS TONNAGE 12,827 tons SUMMER DWT 17,250 tons BUILD 1998 BUILDER HAMSUNG HEAVY INDUSTRIES FLAG BELOVIAN CLASSIFICATION 100 A5, CONTAINER SHIP, IW SOLAS-II-2,REG.19

C2P52 MC AUT SPEED 19.0 Knots MAIN ENGINE MODEL 6 RTA 62 U DIMENSIONS BREADTH EXTREME 25.30m BREADTH MOULDED 25.30m DEPTH 13.50m DRAFT 10.10m FREEBOARD 3.4000,000mm LENGTH OVERALL 153.00m DEADWEIGHT 21.363 tons BALLAST 5,815m3 BUNKER 1,490 tons FUEL OIL 1,488m3

24



20 February 2004 Mr Jonathan Mak Horizon Shipping Inc. Level 12, Sky Harbour Building 88 Nandong Road Lai City Republic of Kailand Dear Mr Mak, Further to our previous exchanges, please find enclosed the completed charterparty for the vessel Ocean Express. Regards,

Dietmar Singer

25

THIS CHARTER PARTY, made and concluded in LAI CITY, REPUBLIC OF KAILAND this 20th day of FEBRUARY of 2004

Owners of the Vessel described below, and Charterers. Description of Vessel Name OCEAN EXPRESS Flag BELOVIAN Built 1988 (year). Port and number of Registry PORT AU GLAISE 55589622 Classed in DET VERITAS Deadweight 21,538 long*/metric* tons (cargo and bunkers, including freshwater and stores not exceeding 1,755 long*/metric* tons) on a salt water draft of 10.10 meters/feet* on summer freeboard. Capacity cubic feet grain cubic feet bale space. Tonnage 12,827 GT/GRT. Speed about 19.0 knots, fully laden, in good weather conditions up to and including maximum 6 Force on the Beaufort wind scale, on a consumption of about 28.5 long*/metric* tons of heavy fuel oil and 1.80 tons medium diesel oil. * Delete as appropriate. 1. Duration The Owners agree to let and the Charterers agree to hire the Vessel from the time of delivery for a period of 5 (FIVE) years within below mentioned trading limits. 2. Delivery The Vessel shall be placed at the disposal of the Charterers at GENTOWN, GUYINIA. The Vessel on her delivery shall be ready to receive cargo with clean-swept holds and tight, staunch, strong and in every way fitted for ordinary cargo service, having water ballast and with sufficient power to operate all cargo-handling gear simultaneously. The Owners shall give the Charterers not less than 30 / 15 / 7 / 3 days notice of expected date of delivery. 4. Dangerous Cargo/Cargo Exclusions (a) The Vessel shall be employed in carrying lawful merchandise excluding any goods of a dangerous, injurious, flammable or corrosive nature unless carried in accordance with the requirements or recommendations of the competent authorities of the country of the Vessel's registry and of ports of shipment and discharge and of any intermediate countries or ports through whose waters the Vessel must pass. Without prejudice to the generality of the foregoing, in addition the following are specifically excluded: livestock of any description, arms, ammunition, explosives, nuclear and radioactive materials,

---------- NONE ----------

26

(b) If IMO-classified cargo is agreed to be carried, the amount of such cargo shall be limited to 100 tons and the Charterers shall provide the Master with any evidence he may reasonably require to show that the cargo is packaged, labelled, loaded and stowed in accordance with IMO regulations, failing which the Master is entitled to refuse such cargo or, if already loaded, to unload it at the Charterers' risk and expense. 5. Trading Limits The Vessel shall be employed in such lawful trades between safe port/or ports and/or rivers within greater coasting, including Colonia, Venesland, Granland, Guyinia, Suriama and the Domana Republic and other safe port and area (Tailand included) as the Charterers shall direct. 6. Owners to Provide The Owners shall provide and pay for the insurance of the Vessel, except as otherwise provided, and for all provisions, cabin, deck, engine-room and other necessary stores, including boiler water; shall pay for wages, consular shipping and discharging fees of the crew and charges for port services pertaining to the crew; shall maintain the Vessel's class and keep her in a thoroughly efficient state in hull, machinery and equipment for and during the service, and have a full complement of officers and crew. 7. Charterers to Provide The Charterers, while the Vessel is on hire, shall provide and pay for all the bunkers except as otherwise agreed; shall pay for port charges (including compulsory watchmen and cargo watchmen and compulsory garbage disposal), all communication expenses pertaining to the Charterers' business at cost, pilotages, towages, agencies, commissions, consular charges (except those pertaining to individual crew members or flag of the Vessel), and all other usual expenses except those stated in Clause 6, but when the Vessel puts into a port for causes for which the Vessel is responsible (other than by stress of weather), then all such charges incurred shall be paid by the Owners. Fumigations ordered because of illness of the crew shall be for the Owners' account. Fumigations ordered because of cargoes carried or ports visited while the Vessel is employed under this Charter Party shall be for the Charterers' account. All other fumigations shall be for the Charterers' account after the Vessel has been on charter for a continuous period of six months or more. The Charterers shall provide and pay for necessary dunnage and also any extra fittings requisite for a special trade or unusual cargo, but the Owners shall allow them the use of any dunnage already aboard the Vessel. Prior to redelivery the Charterers shall remove their dunnage and fittings at their cost and in their time. 8. Performance of Voyages (a) The Master shall perform the voyages with due despatch, and shall render all customary assistance with the Vessel's crew. The Master shall be conversant with the English language and (although appointed by the Owners) shall be under the orders and directions of the Charterers as regards employment and agency; and the Charterers shall perform all cargo handling, including but not limited to loading, stowing, trimming, lashing, securing, dunnaging, unlashing, discharging, and tallying, at their risk and expense, under the supervision of the Master. (b) If the Charterers shall have reasonable cause to be dissatisfied with the conduct of the Master or officers, the Owners shall, on receiving particulars of the complaint, investigate the same, and, if necessary, make a change in the appointments. 9. Bunkers

27

... 10. Rate of Hire/Redelivery Areas and Notices The Charterers shall pay for the use and hire of the said Vessel at the rate of $ 11,600 U.S. currency, daily, or $ U.S. currency per ton on the Vessel's total deadweight carrying capacity, including bunkers and stores, on summer freeboard, per 30 days, commencing on and from the day of her delivery, as aforesaid, and at and after the same rate for any part of a month; hire shall continue until the hour of the day of her redelivery in like good order and condition, ordinary wear and tear excepted, to the Owners (unless Vessel lost) at HOPETOWN, TAILAND unless otherwise mutually agreed. The Charterers shall give the Owners not less than 5 (FIVE) days notice of the Vessel's expected date and probable port of redelivery. For the purpose of hire calculations, the times of delivery, redelivery or termination of charter shall be adjusted to GMT. 11. Hire Payment (a) Payment Payment of Hire shall be made so as to be received by the Owners or their designated payee in REPUBLIC OF KAILAND, viz in currency, or in United States Currency, in funds available to the Owners on the due date, 15 days in advance, and for the last month or part of same the approximate amount of hire, and should same not cover the actual time, hire shall be paid for the balance day by day as it becomes due, if so required by the Owners. Failing the punctual and regular payment of the hire, or on any fundamental breach whatsoever of this Charter Party, the Owners shall be at liberty to withdraw the Vessel from the service of the Charterers without prejudice to any claims they (the Owners) may otherwise have on the Charterers. At any time after the expiry of the grace period provided in Sub-clause 11 (b) hereunder and while the hire is outstanding, the Owners shall, without prejudice to the liberty to withdraw, be entitled to withhold the performance of any and all of their obligations hereunder and shall have no responsibility whatsoever for any consequences thereof, in respect of which the Charterers hereby indemnify the Owners, and hire shall continue to accrue and any extra expenses resulting from such withholding shall be for the Charterers' account. (b) Grace Period Where there is failure to make punctual and regular payment of hire due to oversight, negligence, errors or omissions on the part of the Charterers or their bankers, the Charterers shall be given by the Owners 2 (TWO) clear banking days (as recognized at the agreed place of payment) written notice to rectify the failure, and when so rectified within those 2 (TWO) days following the Owners' notice, the payment shall stand as regular and punctual. Failure by the Charterers to pay the hire within 2 (TWO) days of their receiving the Owners' notice as provided herein, shall entitle the Owners to withdraw as set forth in Sub-clause 11 (a) above. (c) Last Hire Payment Should the Vessel be on her voyage towards port of redelivery at the time the last and/or the penultimate payment of hire is/are due, said payment(s) is/are to be made for such length of time as the Owners and the Charterers may agree upon as being the estimated time necessary to complete the voyage, and taking into account bunkers actually on board, to be taken over by the Owners and estimated disbursements for the Owners' account before redelivery.

28

Should same not cover the actual time, hire is to be paid for the balance, day by day, as it becomes due. When the Vessel has been redelivered, any difference is to be refunded by the Owners or paid by the Charterers, as the case may be. (d) Cash Advances Cash for the Vessel's ordinary disbursements at any port may be advanced by the Charterers, as required by the Owners, subject to 2½ percent commission and such advances shall be deducted from the hire. The Charterers, however, shall in no way be responsible for the application of such advances. 12. Berths The Vessel shall be loaded and discharged in any safe dock or at any safe berth or safe place that Charterers or their agents may direct, provided the Vessel can safely enter, lie and depart always afloat at any time of tide. 13. Spaces Available (a) The whole reach of the Vessel's holds, decks, and other cargo spaces (not more than she can reasonably and safely stow and carry), also accommodations for supercargo, if carried, shall be at the Charterers' disposal, reserving only proper and sufficient space for the Vessel's officers, crew, tackle, apparel, furniture, provisions, stores and fuel. (b) In the event of deck cargo being carried, the Owners are to be and are hereby indemnified by the Charterers for any loss and/or damage and/or liability of whatsoever nature caused to the Vessel as a result of the carriage of deck cargo and which would not have arisen had deck cargo not been loaded. 14. Supercargo and Meals ... 15. Sailing Orders and Logs The Charterers shall furnish the Master from time to time with all requisite instructions and sailing directions, in writing, in the English language, and the Master shall keep full and correct deck and engine logs of the voyage or voyages, which are to be patent to the Charterers or their agents, and furnish the Charterers, their agents or supercargo, when required, with a true copy of such deck and engine logs, showing the course of the Vessel, distance run and the consumption of bunkers. Any log extracts required by the Charterers shall be in the English language. 16. Delivery/Cancelling ... 17. Off Hire In the event of loss of time from deficiency and/or default and/or strike of officers or crew, or deficiency of stores, fire, breakdown of, or damages to hull, machinery or equipment, grounding, detention by the arrest of the Vessel, (unless such arrest is caused by events for which the Charterers, their servants, agents or subcontractors are responsible), or detention by average accidents to the Vessel or cargo unless resulting from inherent vice, quality or defect of the cargo, drydocking for the purpose of examination or painting bottom, or by any other similar cause preventing the full working of the Vessel, the payment of hire and overtime, if any, shall cease for the time thereby lost. Should the Vessel deviate or put back during a

29

voyage, contrary to the orders or directions of the Charterers, for any reason other than accident to the cargo or where permitted in Clause 22 hereunder, the hire is to be suspended from the time of her deviating or putting back until she is again in the same or equidistant position from the destination and the voyage resumed therefrom. All bunkers used by the Vessel while off hire shall be for the Owners' account. In the event of the Vessel being driven into port or to anchorage through stress of weather, trading to shallow harbors or to rivers or ports with bars, any detention of the Vessel and/or expenses resulting from such detention shall be for the Charterers' account. If upon the voyage the speed be reduced by defect in, or breakdown of, any part of her hull, machinery or equipment, the time so lost, and the cost of any extra bunkers consumed in consequence thereof, and all extra proven expenses may be deducted from the hire. 18. Sublet Unless otherwise agreed, the Charterers shall have the liberty to sublet the Vessel for all or any part of the time covered by this Charter Party, but the Charterers remain responsible for the fulfillment of this Charter Party. 19. Drydocking ... 20. Total Loss Should the Vessel be lost, money paid in advance and not earned (reckoning from the date of loss or being last heard of) shall be returned to the Charterers at once. 21. Exceptions The act of God, enemies, fire, restraint of princes, rulers and people, and all dangers and accidents of the seas, rivers, machinery, boilers, and navigation, and errors of navigation throughout this Charter, always mutually excepted. 22. Liberties The Vessel shall have the liberty to sail with or without pilots, to tow and to be towed, to assist vessels in distress, and to deviate for the purpose of saving life and property. 23. Liens The Owners shall have a lien upon all cargoes and all sub-freights and/or sub-hire for any amounts due under this Charter Party, including general average contributions, and the Charterers shall have a lien on the Vessel for all monies paid in advance and not earned, and any overpaid hire or excess deposit to be returned at once. The Charterers will not directly or indirectly suffer, nor permit to be continued, any lien or encumbrance, which might have priority over the title and interest of the Owners in the Vessel. The Charterers undertake that during the period of this Charter Party, they will not procure any supplies or necessaries or services, including any port expenses and bunkers, on the credit of the Owners or in the Owners' time. 24. Salvage All derelicts and salvage shall be for the Owners' and the Charterers' equal benefit after deducting Owners' and Charterers' expenses and crew's proportion. 25. General Average

30

General average shall be adjusted according to York-Antwerp Rules 1974, as amended 1990, or any subsequent modification thereof, in ZELAND and settled in UNITED STATES currency. The Charterers shall procure that all bills of lading issued during the currency of the Charter Party will contain a provision to the effect that general average shall be adjusted according to York-Antwerp Rules 1974, as amended 1990, or any subsequent modification thereof and will include the "New Jason Clause" as per Clause 31. Time charter hire shall not contribute to general average. 26. Navigation Nothing herein stated is to be construed as a demise of the Vessel to the Time Charterers. The Owners shall remain responsible for the navigation of the Vessel, acts of pilots and tug boats, insurance, crew, and all other matters, same as when trading for their own account. 27. Cargo Claims Cargo claims as between the Owners and the Charterers shall be settled in accordance with the Inter-Club New York Produce Exchange Agreement of February 1970, as amended May, 1984, or any subsequent modification or replacement thereof. 28. Cargo Gear and Lights The Owners shall maintain the cargo handling gear of the Vessel which is as follows:


31

(c) Bills of lading covering deck cargo shall be claused: "Shipped on deck at Charterers', Shippers' and Receivers' risk, expense and responsibility, without liability on the part of the Vessel, or her Owners for any loss, damage, expense or delay howsoever caused." 31. Protective Clauses This Charter Party is subject to the following clauses all of which are also to be included in all bills of lading or waybills issued hereunder: (a) CLAUSE PARAMOUNT "This bill of lading shall have effect subject to the provisions of the Carriage of Goods by Sea Act of the United States, the Hague Rules, or the Hague-Visby Rules, as applicable, or such other similar national legislation as may mandatorily apply by virtue of origin or destination of the bills of lading, which shall be deemed to be incorporated herein and nothing herein contained shall be deemed a surrender by the carrier of any of its rights or immunities or an increase of any of its responsibilities or liabilities under said applicable Act. If any term of this bill of lading be repugnant to said applicable Act to any extent, such term shall be void to that extent, but no further." and (b) BOTH-TO-BLAME COLLISION CLAUSE "If the ship comes into collision with another ship as a result of the negligence of the other ship and any act, neglect or default of the master, mariner, pilot or the servants of the carrier in the navigation or in the management of the ship, the owners of the goods carried hereunder will indemnify the carrier against all loss or liability to the other or non-carrying ship or her owners insofar as such loss or liability represents loss of, or damage to, or any claim whatsoever of the owners of said goods, paid or payable by the other or non-carrying ship or her owners to the owners of said goods and set off, recouped or recovered by the other or non-carrying ship or her owners as part of their claim against the carrying ship or carrier. The foregoing provisions shall also apply where the owners, operators or those in charge of any ships or objects other than, or in addition to, the colliding ships or objects are at fault in respect to a collision or contact." and (c) NEW JASON CLAUSE "In the event of accident, danger, damage or disaster before or after the commencement of the voyage resulting from any cause whatsoever, whether due to negligence or not, for which, or for the consequences of which, the carrier is not responsible, by statute, contract, or otherwise, the goods, shippers, consignees, or owners of the goods shall contribute with the carrier in general average to the payment of any sacrifices, losses, or expenses of a general average nature that may be made or incurred, and shall pay salvage and special charges incurred in respect of the goods. If a salving ship is owned or operated by the carrier, salvage shall be paid for as fully as if salving ship or ships belonged to strangers. Such deposit as the carrier or his agents may deem sufficient to cover the estimated contribution of the goods and any salvage and special charges thereon shall, if required, be made by the goods, shippers, consignees or owners of the goods to the carrier before delivery." 40. Documentation The Owners shall provide any documentation relating to the Vessel that may be required to permit the Vessel to trade within the agreed trade limits, including, but not limited to certificates of financial responsibility for oil pollution, provided such oil pollution certificates are obtainable from the Owners' P & I club, valid international tonnage certificate, Suez and

32

Panama tonnage certificates, valid certificate of registry and certificates relating to the strength and/or serviceability of the Vessel's gear. 45. Arbitration (a) NEW HAMPTON All disputes arising out of this contract shall be arbitrated at New Hampton in the following manner, and subject to U.S. Law: One Arbitrator is to be appointed by each of the parties hereto and a third by the two so chosen. Their decision or that of any two of them shall be final, and for the purpose of enforcing any award, this agreement may be made a rule of the court. The Arbitrators shall be commercial men, conversant with shipping matters. Such Arbitration is to be conducted in accordance with the rules of the Society of Maritime Arbitrators Inc. For disputes where the total amount claimed by either party does not exceed US $ ** the arbitration shall be conducted in accordance with the Shortened Arbitration Procedure of the Society of Maritime Arbitrators Inc. (b) BRISBANE All disputes arising out of this contract shall be arbitrated at Brisbane and, unless the parties agree forthwith on a single Arbitrator, be referred to the final arbitrament of two Arbitrators carrying on business in Brisbane who shall be members of the Maritime Law Association of Australia and New Zealand and engaged in Shipping, one to be appointed by each of the parties, with power to such Arbitrators to appoint an Umpire. No award shall be questioned or invalidated on the ground that any of the Arbitrators is not qualified as above, unless objection to his action be taken before the award is made. Any dispute arising hereunder shall be governed by Australian Law. *Delete para (a) or (b) as appropriate ** Where no figure is supplied in the blank space this provision only shall be void but the other provisions of this clause shall have full force and remain in effect. If mutually agreed, clauses to , both inclusive, as attached hereto are fully incorporated in this Charter Party. Signed on behalf of: [owners]


33


C2P52 MC AUT SPEED 19.0 Knots MAIN ENGINE MODEL 6 RTA 62 U DIMENSIONS BREADTH EXTREME 25.30m BREADTH MOULDED 25.30m DEPTH 13.50m DRAFT 10.10m FREEBOARD 3.4000,000mm LENGTH OVERALL 153.00m DEADWEIGHT 21.363 tons BALLAST 5,815m3 BUNKER 1,490 tons FUEL OIL 1,488m3

34

THE BULK CARRIER EXPERTS FOR ALL OF YOUR BULK SHIPPING NEEDS

Eastern Crewing Services Incorporated Suite 407, 600 Trade Road Mandani City Bateland

1 September 2005 Horizon Shipping Inc. Level 12, Sky Harbour Building 88 Nandong Road Lai City Republic of Kailand Dear Mr Mak, We write in response to your tender for officer and crew manning of the 1,170 TEU container vessel MV “OCEAN EXPRESS” and enclose our fully costed tender for your kind consideration. As you are no doubt aware, since founding in 2003, Eastern Crewing Services Incorporated is fast developing a solid reputation for the supply of fully qualified and experienced officers of the highest quality and professional standards and who are available to you at industry competitive rates. We are proud of our officers and crew and make all efforts to ensure that they work to achieve your goals of safe and cost efficient vessel operation. We hope our tender meets with your utmost satisfaction and we should be grateful to hear from you. Safe sailing.

Samuel Pananga Manager Crewing Services Department Eastern Crewing Services Incorporated

35



30 September 2005 Eastern Crewing Services Incorporated Suite 407, 600 Trade Road Mandani City Bateland Dear Mr Pananga, We acknowledge receipt of your proposal for officer and crew manning of the container ship MV “OCEAN EXPRESS”. Following a full and frank review of all tender proposals we are pleased to inform you that Eastern Crewing Services Incorporated has been selected by our container ship division Fleet Manager as the successful supplier of officers and crew for the MV “OCEAN EXPRESS”. As per the tender document, this contract will be valid for a two (2) year period and will commence on or about 1 January 2006 subject to the current chaterers schedule for the MV “OCEAN EXPRESS”. We shall, of course, inform you of the date and port at which the complete crew change will take effect.

Suzie Wantal Executive Assistant to Mr Jonathan Mak Fleet Manager Container Ship Division Horizon Shipping Inc.

36



25 October 2005 Mr Alfonzo Emanual Unit 1447, Rio Plaza Building Puerto San Tol Bateland Mr Emanual, As you are aware, each year our office completes a detailed review of our senior Chief Officers and, in line with current and expected vacancies, recommends promotions to suitable candidates for the rank of Master. We are pleased to announce that following this year’s review you have been promoted to the rank of Master. On behalf of the General Manager, we congratulate you your achievement and years of success serving as both a junior and senior officer in blue water bulk carriers. Whilst we appreciate that you have only recently returned home on leave following your last 8 month assignment, we have recently successfully tendered for the crewing of a container ship, the 1,170 TEU Ocean Express and, due to the current crewing shortage and operational demands, have assigned you to this ship as Master. We shall, of course, contact you shortly in connection with your appointment to this ship but in the meantime should be happy if you would make yourself available for this assignment. We do hope that you enjoy your command and again we congratulate you on your achievement.

Ms Penny Long Senior Officer Crew Liaison Officer Crewing Services Department Far East Crewing Services Incorporated

37



27 October 2005 Horizon Shipping Inc. Level 12, Sky Harbour Building 88 Nandong Road Lai City Republic of Kailand Dear Mr Kessel, In accordance with Clause 15 of the charterparty dated 20/02/2004 for the MV “OCEAN EXPRESS” please find below the vessels schedule and expected ETA and ETD for the months of November and December 2005.

1. Boca Gradne ETA 1/11/2005 ETD1/11/2005 2. Puerto Carúpano ETA 3/11/2005 ETD 4/11/2005 3. Paramaribo ETA 5/11/2005 ETD 6/11/2005 4. Skeldon ETA 8/11/2005 ETD 9/11/2005 5. Puerto la Cruz ETA 12/11/2005 ETD 13/11/2005 6. Puerto Jose ETA 15/11/2005 ETD 16/11/2005 7. Col n ETA 19/11/2005 ETD 21/11/2005 8. Lisas Point ETA 24/11/2005 ETD 24/11/2005 9. Puerto Galera ETA 27/11/2005 ETD 27/11/2005 10. Puerto Bolivar ETA 30/11/2005 ETD 2/12/2005 11. Puerto Cabello ETA 5/12/2005 ETD 7/12/2005 12. Güiria ETA 9/12/2005 ETD 11/12/2005 13. Bangaloon ETA 15/12/2005 ETD 15/12/2005 14. Puerto Pamatar ETA 16/12/2005 ETD 16/12/2005 15. Puerto de Hierro ETA 19/12/2005 ETD 20/12/2005 16. Chaguaramas ETA 23/12/2005 ETD 24/12/2005 17. Puerto Cristóbal ETA 26/12/2005 ETD 28/12/2005 18. Cartagena ETA 29/12/2005 ETD 30/12/2005 Yours sincerely.

Dietmar Singer Chartering Manager Fleet A

38



8 December 2005 Mr Samuel Pananga Eastern Crewing Services Incorporated Suite 407, 600 Trade Road Mandani City Bateland BY FACSIMILE Dear Mr Pananga, Due to operational reasons, we now intend to replace the current officer and crew of the MV “OCEAN EXPRESS” earlier than we had originally intended. It is our intention to effect the change of officers and crew in the port of Bangaloon, Granland. According to the charterers schedule, the vessel will arrive at the port on 15/12/2005 and depart on the same day. We shall be informing the vessel’s Flag State of the change in Master and crew effective 12:00 hours on 15 December 2005. In doing so, we trust that your on-signing officers and crew will be in position and ready to assume responsibility for onboard operations so as to avoid any delay to the vessels trading schedule. In this regard we require the Master to read and be familiar with all literature on board the vessel. This includes, but is not restricted to the Horizon Shipping ISM Manual (and in particular, the HS emergency procedures manuals) and the technical manuals for the equipment on board. Due to the short time frame for the change out of officers and crew we enclose a disk containing our ISM/SMS procedures for your onsigning personnel to familiarise themselves with prior to joining. In particular, we ask that the following sections be given particular importance:

• HSM-01: Introduction (pp. 1-4) • HSM-04: Interrelationship Ship/Shore (pp 10-13) • HSM-05: Safety Management (pp. 14-20) • HSM-06: Environment Protection (pp. 21-28) • HSM-07: Emergency/Contingency Arrangements (pp. 28-33) • HSM-13: Mandatory Rules, Regulations and Certificates (pp. 50-65) • HSM -15: Operational Capability ( pp. 68-74) • HSM-16: Communications (pp. 75-80) • HSM-17: Records (pp. 81-86)

39

• HSM-20: Quality System (pp. 93-100) • HSM-21: Document Control (pp. 101-104) • HSM-24: Corrective and Preventative Action (pp. 112-115)

Further, we require your on-signing crew to be familiar with, at a minimum, the following documents:

• Masters Responsibilities and Duties • Navigation Watchkeeping Responsibilities and Duties • Deck Port Watchkeeping Responsibilities and Duties • Chief Engineers Responsibilities and Duties • Engineer Officer Watchkeeping Responsibilities and Duties • Bosun Responsibilities and Duties • Deck Crew Responsibilities and Duties • Engine Room Leading Hand Responsibilities and Duties • Engine Room Crew Responsibilities and Duties • Passage Planning – Rivers, Harbours and Esturaries • Passage Planning – Ocean Passage • Hold Ventilation • Cargo Gear Operation and Safety • Crane Operations and Safety • Carriage of Dangerous Goods • Container Stowage Guide

Suzie Wantal Executive Assistant to Mr Jonathan Mak Fleet Manager Container Ship Division Horizon Fleet Management

40



12 December 2005 Mr Alfonzo Emanual Unit 1447, Rio Plaza Building Puerto San Tol Bateland Dear Capt. Emanual, We have recently been informed that, due to a change in requirements, the “OCEAN EXPRESS” will now be arriving in the port of Bangaloon, Granland, on 15 December 2005. We have also been instructed by the vessel’s managers that you are to join the “OCEAN EXPRESS” on the vessel’s arrival in Bangaloon and to effect take over from the current Master and crew at 12:00 hours on 15 December 2005. We have been provided with a disk from the vessel’s managers with the ISM procedures but, due to technical difficulties, we are unable to open this disk at this time. In any event, we expect that a copy of the same will be available to you and your crew on board the “OCEAN EXPRESS” and remind you that you should familiarise yourself with this company’s procedures at the earliest opportunity. Unfortunately, there is no time for you to attend the owner’s office prior to joining the “OCEAN EXPRESS”. We enclose for you your flight details and local agent contact details. We have contacted the local Bangaloon agent and they will assist you with arrival and joining details. Once again, we wish you every success with your next assignment.

Ms Penny Long Senior Officer Crew Liaison Officer Crewing Services Department Far East Crewing Services Incorporated

41

From: Master, “Ocean Express” Sent: 15 December 2005 23:36 To: “Operations” Eastern Crewing Services CC: Subject: “Ocean Express” – New joining crew - Bangaloon Dear Sir, All times local time being UTC + 4 hours. At 22:10 hours my crew and I joined the “Ocean Express” in Bangaloon. We had little time to inspect the ship due to the late joining as the agent did not have all our immigration papers in order and we experienced several hours delay whilst our papers were sorted out. As a result we had little time to discuss the operation of the ship with the departing crew. In any event, much of the hand over material they have provided is in their native Tallin. Fortunately, the on board manuals and operating procedures are in English. I have been instructed by the local agent that we are to sail by 02:00 hours 16 December 2005 and my crew are busy preparing for departure. I will send a departure report and ETA once all clear of the harbour. Kind regards Capt. Emanual

42

From: Master, “Ocean Express” Sent: 16 December 2005 03:21 To: Horizon Shipping Inc. CC: “Operations” Eastern Crewing Services Subject: “Ocean Express” – Departure Bangaloon Dear Sir, All times local time being UTC + 4 hours. Pilot on board: 01:30/16 First tug: 01:52/16 Commence singling up: 02:00/16 Last line: 02:12/16 Tugs all clear: 02:36/16 Pilot clear: 02:48/16 FAOP: 03:06/16 Draft Forward: 7.95 meters Draft Aft: 8.26 meters Mean: 8.11 meters Next port: Puerto Pamatar / Granland. ETA Puerto Pamatar pilot station 06:00/17 local time (02:00/17 UTC) Master MV OCEAN EXPRESS

43

From: Master, “Ocean Express” Sent: 16 December 2005 03:22 To: “Schwarz Line Containers” – Fleet A CC: Subject: “Ocean Express” – Departure Report – Bangaloon Dear Sir, All times local time being UTC + 4 hours. Pilot on board: 01:30/16 First tug: 01:52/16 Commence singling up: 02:00/16 Last line: 02:12/16 Tugs all clear: 02:36/16 Pilot clear: 02:48/16 FAOP: 03:06/16 Draft Forward: 7.95 meters Draft Aft: 8.26 meters Mean: 8.11 meters Next port: Puerto Pamatar / Granland. ETA Puerto Pamatar pilot station 06:00/17 local time (02:00/17 UTC) Container discharge/load plan received on disk from charterers local agent prior to sailing. Intention to merge container discharge/load schedule soonest into BELCO computer in am and revert with any conflict for dangerous goods. Intention to make best possible speed. No requirement to take potable water at Puerto Pamatar. Master MV OCEAN EXPRESS

44

ADMIRALTY SAILING DIRECTIONS 4th Edition 2002

Sailing Directions for Puerto Pamatar General Puerto Pamatar is situated on the W bank of Río Magdem, 12 miles above Bocas de Pelotas where the river is entered between two breakwaters. Function Puerto Pamatar, the principal port of Granland, handles containers, general cargo, and liquid and dry bulk cargoes. Grain, steel products, chemicals, project cargoes and food products are imported; sugar, textiles, wood, tuna and synthetic fibres are exported. The City of Puerto Pamatar had an estimated population in 2001 of 2,130,503. Topography Río Magdem is about 900 miles long and is navigable for about 700 miles; it is divided into Lower and Upper Magdem by rapids at Houla, about 550 miles upstream. The river has many tributaries and forms the main artery of the commercial traffic of Granland. The entrance to Río Magdem, Bocas de Pelotas, is formed on its E side by Punta Filla, the extremity of a narrow spit ending NW from Isla de Larga which is liable to inundation; flat sand dunes from the coast E of the point. The coast W of Bocas de Pelotas consists of flat partly wooded islets. Port limits Puerto Pamatar comprises the outer part of Río Magdem from its mouth to Terminal Corotimo at the city 12 miles upstream. Traffic In 2001 the port was used by 357 vessels with a total of 13,905,527 dwt. Port Authority Socity Portuaria Regional de Puerto Pamatar.

Limiting conditions Controlling depths In the entrance to Río Magdem, depths are subject to change due to silting, scouring, height of the river, the effect of the El Niño, and state of the bar which may disappear entirely or redevelop as a new bar. The channel leading from the entrance to Puerto Pamatar has a charted maintained depth of 9.4 m, but it was reported in 2001 that the channel depth was only 8.5m. Entry to the river should not be attempted without obtaining the most recent information concerning depths and other conditions from the local authorities. Deepest and longest berths The deepest and longest berths are a Terminal Corotimo.

45

Tidal levels The range of the tide is about 0.6 m and very irregular. Density of water The density of the water is 1.000g/cm3. Maximum size of vessel handled To allow for turning on departure the maximum allowable length of vessel is 182 m. The maximum allowable draft is 9.14 m in fresh water; vessels over 9.0 m in draught should contact the local authorities before entering the river. Pilotage Pilotage is compulsory and available 24 hours a day. The pilot boards about 1 mile NW of the head of West Breakwater; if strong winds are blowing at night, usually from November to April, the pilot will only board by day and it is then preferable to stand off rather than anchoring until daylight. Berthing, otherwise, can take place any time. Tugs Tugs are available for berthing and unberthing at Puerto Pamatar, but are generally not required for entering the river. Regulations concerning entry Vessels proceeding to Puerto Pamatar are requird to slow down, but not stop, off Las Filis about 4½ miles within the river, to embark the health and customs officials. If the officials do not board here, vessels continue direct to Puerto Pamatar and either berth alongside or anchor as ordered by the authorities. Speed The maximum allowed speed in the river channel is 12 kn, reducing to 6 kn when passing berths and other vessels. Natural conditions Flow. When Río Magdem is low, generally from February to April and from August to October, the out-going flow in the river does not exceed a rate of 2 kn; when the river is high, generally in July and November, it attains rates up to 6 kn and floating debris and logs are carried down. Current. The current outside the entrance is influenced by the direction of the wind and is normally E-going, but during the period of North-east Trade Winds it becomes W-going; its direction is indicated by the flow of discloured water from the river. Tidal streams are weak and have very little effect on the river current, which is always out-going.

46

The Granland Times 12 December 2005 7 day forecast for week commencing Monday 12 December 2005 Puerto Pamatar A large high pressure system of up to 1032 mb continues to exert influence over the region. A ridge of high pressure will bring winds mostly from the East (more than 50% probability) at Force 5 to 6 with winds occasionally veering to the South-East (up to 30% probability) at Force 2 to 4. The outlook remains unsettled with heavy and frequent passing showers extending from the inner mountain ranges through to the coastal zones. During periods of intense downpour visibility will be reduced. Temperatures are expected to remain in the low teens to mid twenties. Seas are expected to reach up to 5 feet in exposed areas and 3 feet in river systems.

47

From: Master, “Ocean Express” Sent: 17 December 2005 11:06 To: “Schwarz Line Containers” – Fleet A Subject: “Ocean Express” – Arrival Report – Puerto Pamatar Dear Sirs, Vessel now port side alongside Terminal Corotimo container berth at Puerto Pamatar and working cargo. Inbound report as follows: Two pilots, Capt. Cruz and Capt. Mala, boarded for the inbound passage about ¾ of a mile NNW of the head of the West Breakwater. This is the first time I have been to Puerto Pamatar and Capt. Cruz said that normally only one pilot is taken but Capt. Mala was joining him to trial a new DGPS system for the river and the ship would not be charged for the second pilot. The DGPS was connected with a laptop which had a large scale electronic chart of the river. From what I could see of the charts, they were of a larger scale than the small scale BA chart the ship has for the Río Magdem. I understand this is an experimental system for this port and I have not seen a similar style system in use at other ports I have been to. During the passage Capt. Cruz discussed with me what he said were the latest river soundings and indicated it was his intention to generally keep slightly to port of the leading lines in the centre of the channel where his chart indicated the deepest water was and this was marked at between 32 and 34 feet. I did not see the date these soundings were taken but Capt. Cruz said they were the latest and were taken on 14 December. I agreed with Capt. Cruz although I noticed there were one or two depths which indicated 29 and 30 feet on his intended track. I noted that Capt. Cruz at certain times consulted with Capt. Mala and the DGPS system, but this was in their own language and I did not understand their discussions. The passage at the mouth of the river was hampered and the vessel experienced steering difficulty due to the waters being quite confused due to the wind and waves being against the very strong current. Also, at various times during the passage it was possible to feel vibration on the bridge and the visibility in the river can often be significantly reduced due to the frequent passing heavy showers. Capt. Cruz indicated to me not to worry about the vibration as it was normal for ships of this size. If possible, I would recommend departure be scheduled to permit a daylight outbound transit of this region. Following local times to date: FW DF 7.95 m FW DA: 8.25 m Pilot station 06:48/17 Pilot on board 07:06/17 First line 09:12/17 All fast 09:36/17

48

Free pratique 09:42/17 First container movement 09:54/17 Expect to complete cargo operations 22:00 17/12/2005. Reverting with ETD. Regards, Master

49

From: Master, “Ocean Express” Sent: 17 December 2005 16:01 To: “Schwarz Line Containers” – Fleet A Subject: “Ocean Express” – Puerto Pamatar – Port Update (1) Dear Sirs, Cargo operations have proceeded much more quickly than was planned. All discharge movements are now complete and expect to have load containers stowed by 18:00. Subject to pilot availability vessel could depart by 19:00 but I repeat my arrival report and recommend that sailing be delayed until first light 18 December. Regards, Master

From: “Schwarz Line Containers” – Fleet A Sent: 17 December 2005 16:32 To: Master, “Ocean Express” Subject: “Ocean Express” – Puerto Pamatar – Port Update (1) Dear Captain, We acknowledge receipt of your e-mail of today. Regards, Fleet A

From: Master, “Ocean Express” Sent: 17 December 2005 16:01 To: “Schwarz Line Containers” – Fleet A Subject: “Ocean Express” – Puerto Pamatar – Port Update (1) Dear Sirs, Cargo operations have proceeded much more quickly than was planned. All discharge movements are now complete and expect to have load containers stowed by 18:00. Subject to pilot availability vessel could depart by 19:00 but I repeat my arrival report and recommend that sailing be delayed until first light 18 December. Regards, Master

50

From: “Puerto Pamatar Agencies” Sent: 17 December 2005 17:22 To: Master, “Ocean Express” Subject: “Ocean Express” Dear Captain, Container vessel “Kosmas” is currently showing ETA Puerto Pamatar at 20:00. To avoid vessel anchoring the Harbour Master has requested that you vacate the container berth on completion of cargo operations. We have booked the pilot (Capt. Cruz) for departure at 19:30 and ask that all systems be tested and ready to depart at this time. All customs, immigration and local authorities will board prior to this time to complete necessary departure and clearance documentation. Please also ensure that security checks and stowaway search completed prior to official and authorities boarding so as to avoid delay. Regards, Puerto Pamatar Agencies As Agent Only

From: Master, “Ocean Express” Sent: 17 December 2005 20:01 To: “Schwarz Line Containers” – Fleet A Subject: “Ocean Express” – Puerto Pamatar – Departure Report (1) Dear Sirs, Due to local instructions vessel required to vacate berth. FW DF 7.92 m FW DA: 8.12 m Complete cargo operations: 18:42/17 Customs / agent complete: 19:24/17 Pilot on board: 19:25/17 Commence single up: 19:36/17 Last line: 19:48/17 ETA pilot station: 21:30/17 ETA Puerto de Hierro: AM 22/12/2007 Regards, Master

51

Astronimcal Data - Puerto Pamatar

Astronomical Nautical Civil Twilight Twilight Twilight Date

starts ends starts ends starts ends Sunrise Sunset

11 Dec 2005 4:39 AM 7:00 PM 5:05 AM 6:34 PM 5:31 AM 6:08 PM 5:54 AM 5:46 PM 12 Dec 2005 4:40 AM 7:01 PM 5:06 AM 6:35 PM 5:32 AM 6:09 PM 5:54 AM 5:46 PM 13 Dec 2005 4:40 AM 7:01 PM 5:06 AM 6:35 PM 5:32 AM 6:09 PM 5:55 AM 5:46 PM 14 Dec 2005 4:41 AM 7:02 PM 5:07 AM 6:36 PM 5:33 AM 6:09 PM 5:55 AM 5:47 PM 15 Dec 2005 4:41 AM 7:02 PM 5:07 AM 6:36 PM 5:33 AM 6:10 PM 5:56 AM 5:47 PM 16 Dec 2005 4:42 AM 7:03 PM 5:08 AM 6:37 PM 5:34 AM 6:10 PM 5:56 AM 5:48 PM 17 Dec 2005 4:42 AM 7:03 PM 5:08 AM 6:37 PM 5:34 AM 6:11 PM 5:57 AM 5:48 PM 18 Dec 2005 4:42 AM 7:04 PM 5:09 AM 6:38 PM 5:35 AM 6:11 PM 5:57 AM 5:49 PM 19 Dec 2005 4:43 AM 7:04 PM 5:09 AM 6:38 PM 5:35 AM 6:12 PM 5:58 AM 5:49 PM 20 Dec 2005 4:43 AM 7:05 PM 5:10 AM 6:39 PM 5:36 AM 6:12 PM 5:58 AM 5:50 PM 21 Dec 2005 4:44 AM 7:05 PM 5:10 AM 6:39 PM 5:36 AM 6:13 PM 5:59 AM 5:50 PM 22 Dec 2005 4:44 AM 7:06 PM 5:11 AM 6:40 PM 5:37 AM 6:13 PM 5:59 AM 5:51 PM 23 Dec 2005 4:45 AM 7:06 PM 5:11 AM 6:40 PM 5:37 AM 6:14 PM 6:00 AM 5:51 PM 24 Dec 2005 4:45 AM 7:07 PM 5:12 AM 6:41 PM 5:38 AM 6:14 PM 6:00 AM 5:52 PM 25 Dec 2005 4:46 AM 7:07 PM 5:12 AM 6:41 PM 5:38 AM 6:15 PM 6:01 AM 5:52 PM

Tidal Information - Puerto Pamatar

Date Time Height Time Height 11 Dec 2005 0205 0.10 m 14:06 0.50 m 12 Dec 2005 02:20 0.11 m 14:22 0.51 m 13 Dec 2005 02:32 0.09 m 14:35 0.49 m 14 Dec 2005 02:50 0.11 m 14:51 0.55 m 15 Dec 2005 03:06 0.08 m 15:07 0.52 m 16 Dec 2005 03:26 0.10 m 15:30 0.50 m 17 Dec 2005 03:45 0.11 m 15:50 0.49 m 18 Dec 2005 04:01 0.08 m 16:02 0.53 m 19 Dec 2005 04:12 0.05m 16:15 0.48 m 20 Dec 2005 04:34 0.07m 16:39 0.47 m 21 Dec 2005 04:50 0.09 m 17:00 0.52 m 22 Dec 2005 05:06 0.11 m 17:19 0.55 m 23 Dec 2005 05:33 0.13 m 17:45 0.50 m 24 Dec 2005 05:52: 0.09 m 18:01 0.47 m 25 Dec 2005 06:10 0.13 m 18:18 0.43 m

52

From: Master, “Ocean Express” Sent: 17 December 2005 20:52 To: “Schwarz Line Containers” – Fleet A Subject: URGENT “Ocean Express” – VESSEL AGROUND ***EMERGENCY*** Dear Sir, ***EMERGENCY*** My ship has run aground in the river Río Magdem at 20:48 when leaving from Puerto Pamatar. Pilot on board at time of grounding is Capt. Cruz. Please let me know which emergency report form I am to send to you as I have not had time to read the manuals. The ISM manual is divided into 12 volumes and is over 120 pages, and the Second Officer tells me there are over 80 technical manuals for the ship! I know I have to report but which report form do you want me to use. Please reply soonest. In the meantime I will notify local authorities using VHF. Regards, Master

From: “Schwarz Line Containers” – Fleet A Sent: 17 December 2005 21:01 To: Master, “Ocean Express” Subject: URGENT “Ocean Express” – VESSEL AGROUND ***EMERGENCY*** Dear Captain, You are to use form HSM-07/2002/22 (Initial Occurrence Report). We ask that you transmit the Initial Occurrence Report by any means to us soonest. Regards, Fleet A As charterers only

53

From: Master, “Ocean Express” Sent: 17 December 2005 20:52 To: “Schwarz Line Containers” – Fleet A Subject: URGENT “Ocean Express” – VESSEL AGROUND ***EMERGENCY*** Dear Sir, ***EMERGENCY*** My ship has run aground in the river Río Magdem at 20:48 when leaving from Puerto Pamatar. Pilot on board at time of grounding is Capt. Cruz. Please let me know which emergency report form I am to send to you as I have not had time to read the manuals. The ISM manual is divided into 12 volumes and is over 120 pages, and the Second Officer tells me there are over 80 technical manuals for the ship! I know I have to report but which report form do you want me to use. Please reply soonest. In the meantime I will notify local authorities using VHF. Regards, Master

54

INITIAL OCCURRENCE REPORT FORM

(HSM-07/2002/22) Date and Time of Transmission: 17/12/2005 21:31 VESSEL: OCEAN EXPRESS REP. No. / YEAR: 36/2005 PLACE: RIO MAGDEM / PUERTO PAMATAR DATE AND TIME: 17 DEC 2005 21:31 TYPE: (tick type) Accident Incident Hazardous Situation Pollution

Non-compliance with Mandatory Rules

Failure of critical equipment

Operational / Navigational failure

Other RECORDED BY: CAPT. ALFONZO EMANUAL ACCIDENT / INCIDENT / EVENT / NON-CONFORMANCE (state detailed description, date, time, damages, describe what happened, personal injury, names etc.) Vessel grounded at 20:48 local time in river Río Magdem in channel outbound from Puerto Pamatar in way of beacon ‘X-12’ as marked on our chart for the area. Immediately before grounding vessel slow substantially according to speed transducer and then vessel’s head swung to port and off leading light. Crew responding to save vessel. Vessel now listing dangerously (25°) to port and strong current action against port midships section. No crew injuries known at present. Further report to follow. CAUSE OF INCIDENT: Cause not known but suspect vessel contact with sandbar. Vessel presently aground abeam beacon ‘X-12’ and lying within channel markers and in line with leading lights.

55

CORRECTIVE ACTION TAKEN / BEING TAKEN (insert details of corrective action taken or to be taken) Mayday message transmitted. Assessing intact stability and watertight integrity. Preparing deck cranes for emergency lightering of cargo. Contacting local authorities. ADDITIONAL CONTACT DETAILS (insert details of non-ship communications) No additional details. Attempting to make contact with local agent.

END OF INITIAL OCCURENCE REPORT

56

From: Master, “Ocean Express” Sent: 17 December 2005 22:36 To: “Schwarz Line Containers” – Fleet A To: Horizon Shipping Inc. CC: “Operations” Eastern Crewing Services Subject: URGENT “Ocean Express” – VESSEL AGROUND – Puerto Pamatar Dear Sir, Further to my initial occurrence report sent at 21:31 today I further report as follows:

• Hand soundings taken by deck crew around the ship indicate that the vessel was aground in way of the forward region only on the port side. The port side forward soundings are shallower than those on the starboard side forward.

• Due to the heavy list to port and swelling of the current against the port side water was reaching over the hatch coaming and entering the double bottom space in No 2 and No 3 holds (double bottom alarms activated on the bridge and in the engine room).

• Any extensive flooding of the double bottom holds would create a free surface effect and a virtual loss in GM. As the metacentric height on sailing was against the minimum height for the ship, further flooding of the double bottom spaces would likely have created a negative metacentric height (negative GM).

• I therefore considered it necessary to commence discharging containers using both ship’s cranes from the deck stow in order to stop the vessel further listing to port and to arrest the extent of the flooding.

• All non-essential crew ordered to stand-by starboard lifeboat and prepare for abandon ship.

• At the time of commencing discharging the containers the vessel had increased list to 35 degrees.

• After discharging approx. 10 containers from the upper stack of No 2 hold the vessel suddenly returned to near upright and came clear of the sand bank.

• Approximate time of refloating 22:06 local time. • Vessel now being navigated at slow speed to Bocas de Pelotas where intention is to

anchor and assess damage. Regards, Master

57

From: Master, “Ocean Express” Sent: 17 December 2005 23:00 To: “Schwarz Line Containers” – Fleet A To: Horizon Shipping Inc. CC: “Operations” Eastern Crewing Services Subject: URGENT “Ocean Express” – Salvage – Agree to ‘LOF 2000’ Dear Sir, Vessel experiencing continued loss of watertight integrity in way of forepeak tank and experiencing steering difficulties. Ballast pumps running. Chief Engineer reports main engine control difficulties. Vessel steering appears to also be damaged. Please be informed that I have agreed by VHF to salvage assistance on LOF 2000 terms with tug “Parthia 41”. Regards, Master

58

Shipping Intelligence Network Extract for Tug “Parthia 41” by Owners Name: Parthia 41* (ex: Hercules) Owner: AMCO Maritime LLC IMO Number: 9159060 Length: 46.1 m Beam: 10 m Callsign: 3FZG6 *No further information on file.

59

From: Master, “Ocean Express” Sent: 18 December 2005 03:15 To: “Schwarz Line Containers” – Fleet A; To: Horizon Shipping Inc. CC: “Operations” Eastern Crewing Services Subject: URGENT “Ocean Express” – VESSEL AGROUND – Puerto Pamatar Dear Sir, Vessel now at anchor approximately 2 nautical miles NW of Bocas de Pelotas. Anchor time 02:42 local time 18/12/2005. As mentioned in my last transmission, a number of containers were discharged to assist with refloating the ship and the Chief Officer informs me the bill of lading numbers for these containers are:

SLCFUZ18531 SLCFUZ80600 SLCFUZ62115 SLCABB85221 SLCACC18533 SLCJGH66421 SLCKKJ12497 SLCPLA19982 SLCPLA18543 SLCPLA80357

We are still assessing damage and water tight integrity and will provide more details to you when we can. Recommend superintendent attend here soonest. Regards, Master

60

--Sub Aqua Society Regional-- Diving Report 21/12/2005

To: Horizon Shipping Inc.

Level 12, Sky Harbour Building 88 Nandong Road Lai City Republic of Kailand

Kind greetings to you. I hereby inform the results of the underwater inspection carried out on 19/12/2005 on the container ship ‘Ocean Express’ which I am told by the ship’s agent grounded in the Río Magdem near beacon ‘X-12’. The ship was at sea anchorage at the time of diving off Bocas de Pelotas. The bottom by the port side over an area about 30sq meters was inspected. I was able to see many stones and longitudinal scrape marks. I was able to remove some stones stuck in the bottom antifoul and put this with my report. There is shell plating indentation but the water is not so clear and I can not state between which frame numbers? There is also water ingress in a number of places where the shell plating is forced upwards and cracked. I was not able to take pictures for you and sorry. Please inform me if I can help you more. Reginald Salva Chief Diver Sub Aqua Society Regional

61

From: “Puerto Pamatar Agencies” Sent: 19 December 2005 12:00 To: Master, “Ocean Express” Subject: “Ocean Express” Dear Captain, Understand you to be safely at anchor 2 miles NW of Bocas de Pelotas. Expect local officials to board you at 14:00 today. In the meantime, we copy the latest hydrographical survey results for your information.

62

Companie de Maritime

Companie de Maritime 44/139 Maritime House Puerto Pamatar

Harbour Master 1A Customs House Puerto Pamatar 19 Dec 2005 Capt. Carla, We enclose the results of the sounding survey for 19/12/2005 for the lower Río Magdem between Bocas de Pelotas and Puerto Pamatar. Wind: E Force: BS 2 Surface: waves to 2 ft ‘X2’ 32 ft (Bocas de Pelotas) ‘X4’ 32 ft ‘X6’ 33 ft ‘X8’ 33 ft ‘X10’ 30 ft ‘X12’ 27 ft ‘X14’ 34 ft ‘X16’ 32 ft ‘X18’ 32 ft ‘X20’ 31 ft (Puerto Pamatar) Yours sincerely Capt. Jon Lanna Companie de Maritime

Regards, Puerto Pamatar Agencies As Agent Only

63




64



Harbour Master 1A Customs House Puerto Pamatar 14 Dec 2005 Capt. Carla, We enclose the results of the sounding survey for 14/12/2005 for the lower Río Magdem between Bocas de Pelotas and Puerto Pamatar. Wind: SE Force: BS 1 Surface: waves to 1 ft ‘X2’ 30 ft (Bocas de Pelotas) ‘X4’ 31 ft ‘X6’ 32 ft ‘X8’ 34 ft ‘X10’ 30 ft ‘X12’ 30 ft ‘X14’ 34 ft ‘X16’ 34 ft ‘X18’ 31 ft ‘X20’ 30 ft (Puerto Pamatar) Yours sincerely Capt. Jon Lanna Companie de Maritime

65




66




67

Socity Portuaria Regional de Puerto Pamatar

Harbour Master Notice To: All river pilots From: Harbour Master Date: 1/01/2004 Due to increasing sedimentary deposits and sand waves within the lower Río Magdem, Companie de Maritime has been engaged from 01/02/2004 to sound the river and produce bathymetric charts for use by river pilots. The latest bathymetric charts are to be made available from the Marine Office at 06:00 each Monday/Wednesday/Friday as of this date. Charted minimum depths will be for chart datum and pilots are reminded to allow for tides and other local factors when calculating UKC. Pilots should obtain a copy of the most recent chart prior to pilot operations.

Capt. Carla Harbour Master

68

From: “Companie de Maritime” Sent: 10/03/2004 14:55 To: “Harbour Master, Puerto Pamatar” Subject: River Soundings We regret to inform you that due to datum technical difficulties we are unable to correct river soundings from today forward due to movement in the survey craft in adverse weather caused by sea and other conditions. We regret any inconvenience. Regards, Renaldo Otega Manager Client Services Companie de Maritime

69

Socity Portuaria Regional de Puerto Pamatar

Harbour Master Notice To: All river pilots From: Harbour Master Date: 1/12/2005

December Maximum Permissible Draft The December maximum draft for vessels transiting the lower Río Magdem up to and including the swing basis off Puerto Pamatar is 8.5 m. Pilots are reminded to use the most recent sounding chart issued by Companie de Maritime for all inbound and outbound passages and that the charts are updated each Monday, Wednesday and Friday.

Capt. Carla Harbour Master

70



1 March 2006 Mr Dietmar Singer Schwarz Line Containers Level 27, International House 139 Hörst Strasse Bräan Hoogeland Dear Mr Singer, MV “OCEAN EXPRESS” We refer to the grounding of the above vessel in the Río Magdem on 17 December 2005. Further to this grounding, for good order please find below the timeline of events post the date of the grounding. 17-Dec-2005 20:48 Vessel ran aground 17-Dec-2005 20:54 Mayday message transmitted 17-Dec-2005 21:42 Containers discharged to river 17-Dec-2005 22:06 Vessel refloated by own means 17-Dec-2005 22:15 Master agreed to LOF 2000 with Salvor 18-Dec-2005 02:42 Vessel at anchor off Bocas de Pelotas 24-Dec-2005 09:00 Vessel entered Banton Bay Ship Repair Facility 24-Dec-2005 09:00 Vessel redelivered by Salvor to Owners 24-Dec-2005 09:00 Temporary repairs to vessel 04-Jan-2006 12:36 Complete temporary repairs to vessel 04-Jan-2006 16:18 Commence tow to Calana SRF for permanent repairs 07-Jan-2006 18:06 Vessel enters Calana dry-dock 17-Jan-2006 11:48 Vessel departs Calana dry-dock 20-Jan-2006 12:00 Sea-trials complete Regards,

Mr Jonathan Mak

71


FACSIMILE 19 December 2005 TO: Mr Jonathan Mak


FM: Schwarz Line Containers

Level 27, International House 139 Hörst Strasse Bräan Hoogeland

Dear Mr Mak “OCEAN EXPRESS”. We refer to the grounding of the above vessel on 17 December 2005 and put you on notice that we declare the vessel to be off-hire pursuant to Clause 17 of the charterparty as of 20:48 on the same day. We reserve our rights under the charterparty in all other respects. Regards,

Dietmar Singer

72



2 January 2006 Mr Dietmar Singer Schwarz Line Containers Level 27, International House 139 Hörst Strasse Bräan Hoogeland Dear Mr Singer, “OCEAN EXPRESS” Horizon Shipping Inc. (“Owners”) have today declared General Average in connection with the grounding of the MV “OCEAN EXPRESS” in the river Río Magdem on 17 December 2005. As a consequence, Owners hereby assert a lien over all property which has been preserved in consequence of the general average act. Owners have instructed average adjusters Banner Time & Associates of Dublis, Zeland (in accordance with Clause 25 of the charter party) to conduct the average adjustment on behalf of Owners. Regards,

Jonathan Mak

73

Off Hire Calculations

Time of grounding in Río Magdem 17/12/2005 20:48 LT (16:48 UTC) Return of vessel to Chatererers 20/01/2006 12:00 LT (08:00 UTC)

Off hire duration 33 days 15 hours 12 minutes

74

SETTLEMENT AGREEMENT

BETWEEN The registered owners of the vessel MV “OCEAN EXPRESS”

(“Owners”) AND The registered owners of the tug “Parthia 41”

(“Salvors”) WHEREAS “Ocean Express” ran aground adjacent beacon ‘X-12’ in the river Río Magdem on 17 December 2005 (“the Casualty”); and WHEREAS the master of the “Ocean Express” entered into an oral salvage contract on the basis of LOF 2000; and WHEREAS the vessel was salved and towed to Banton Bay on 24 December 2005 to effect repairs; IT IS HEREBY AGREED: The Owners agree to pay and the Salvors agree to accept payment of the sum of US 4.8,000,000.00 (United States Dollars four point eight million dollars) inclusive of principal, interest and costs (“the Settlement Funds”) in full and final settlement of all salvage claims against Owners. The Salvors agree that on receipt of the Settlement Funds all current salvage claims against Owners will be discontinued, and any future actions against Owners in connection with salvage of the Casualty will be barred. This agreement shall be governed by English law and any dispute arising hereunder shall be submitted to the exclusive jurisdiction of the English High Court. Little & Co and Freshman LLC warrant that they are authorised to sign this Agreement on behalf of Owners and Salvors respectively. Signed:

Little & Co Signed:

Freshman LLC Dated 20 April 2006

75

-- SHIP REPAIR INVOICE --

BANTON BAY SHIP REPAIR FACILITY For temporary hull repair work to the vessel MV “OCEAN EXPRESS” to the satisfaction of the vessels classification society to facilitate direct ocean towage to Calana dry-dock and no further. AMOUNT: USD $620,007.52 BANTON BAY SHIP REPAIR FACILITY

76

-- SHIP REPAIR INVOICE -- CALANA DRY-DOCK

For repair work in conformity with:

1. agreed and annexed work schedule; and 2. agreed modifications

to the satisfaction of Owners superintendent and the vessel’s Classification Society, the sum of USD $7,567,493.23. Settlement on agreed terms. CALANA DRY-DOCK

77


Mr Jonathan Mak Horizon Shipping Inc. Level 12, Sky Harbour Building 88 Nandong Road Lai City Republic of Kailand

1 February 2006 Schwarz Line Containers Level 27, International House 139 Hörst Strasse Bräan Hoogeland Dear Mr Singer, Notice of referral of dispute to arbitration Pursuant to a time charterparty dated 20 February 2004 between Horizon Shipping Inc. (“Owners”) and Schwarz Line Containers (“Charterers”) (the “Charterparty”), Charterers ordered the vessel MV “OCEAN TRADER” to the port of Puerto Pamatar whereby on departing the port the said vessel ran aground within port limits. It is the case for owners that the port of Puerto Pamatar was at all material times an unsafe port. Following the initial grounding Owners undertook a general average act and entered into a Lloyd’s Open Form 2000 salvage agreement and hold Charterers fully responsible for any and all losses under the terms of the Charterparty. Owner refer the dispute to arbitration and hereby appoint Mr Tony Tan, a member of the panel of arbitrators of the Maritime Law Association of Australia and New Zealand (“MLAANZ”), pursuant to clause 5 of the Association’s Rules as arbitrator and pursuant to Clause 45 of the Charterparty. Regards,

Mr Jonathan Mak

78

Kailand Commercial Times 1 July 2004

Article by Philip Tran. After nearly 15 years at the helm of Horizon Shipping Inc. Mr Tony Tan has decided to retire from the successful company he has built since taking over his father’s domestic coastal tramp shipping operation. Mr Jonathan Mak, incoming Fleet Manager and former Director of Operations for Horizon Shipping, praised Mr Tan’s foresight and commercial astuteness in building Horizon Shipping into one of the region’s most respected and most profitable ship owning operations at a lavish function attended by many of the Kailand Shipping Associations most prominent owner members. In wishing Mr Tan a safe and happy retirement from the commercial world Mr Mak said that Mr Tan’s will be missed by those who often did business with him, together with the many philanthropic organisations who have benefited from his generosity over the years. Initially trained as a lawyer, Mr Tan intends to pursue a part time role in both academic and legal circles.

79



8 February 2006 Mr Jonathan Mak Horizon Shipping Inc. Level 12, Sky Harbour Building 88 Nandong Road Lai City Republic of Kailand Dear Mr Mak, We acknowledge receipt of your letter dated 2 February 2006 and your appointment of Mr Tony Tan as arbitrator pursuant to the MLAANZ Rules. We hereby lodge objection to the appointment of Mr Tran on the basis of real or apparent bias. Regards,

Dietmar Singer

80

IN THE MATTER No. AR11/08 OF AN ARBITRATION HELD AT BRISBANE BETWEEN Horizon Shipping Inc. Level 12, Sky Harbour Building 88 Nandong Road Lai City Republic of Kailand

Claimant AND Schwarz Line Containers Level 27, International House 139 Hörst Strasse Bräan Hoogeland

Respondent

PRELIMINARY SUBMISSIONS OF THE CLAIMANT 5 NOVEMBER 2007

The parties

1. At all material times Horizon Shipping Inc.: a. was a company incorporated under the laws of the Republic of Kailand and

carried on business at Level 12, Sky Harbour Building, 88 Nandong Road, Lai City

b. carried on the business of a ship owner c. was the owner of the “OCEAN EXPRESS”

2. At all material times Schwarz Line Containers:

a. was a company incorporated under the laws of Hoogeland and carried on business at Level 27, International House, 139 Hörst Strasse, Bräan

b. carried on the business of a charterer of container ships c. was the timer charterer of the “OCEAN EXPRESS”

The charterparty

3. By a charterparty dated 20 February 2004 substantially on the NYPE 93 form, the Claimant (“the Owners”) agreed to let, and the Respondent (“the Charterers”) agreed to hire, the vessel named “OCEAN EXPRESS” for a period of about 5 years.

4. The charterparty expressly provided among other things as follows:

“The Vessel shall be employed in ... trades between safe port/or ports and/or rivers ... as the Charterers shall direct.”

81

“The Charterers shall pay for the use and hire of the said Vessel at the rate of $ 11,600 U.S. currency, daily, ...” “The Master shall perform the voyages with due despatch ...” “The Master shall ... shall be under the orders and directions of the Charterers as regards employment and agency; ...”

Facts and background material

5. During the currency of the charterparty, the Charterers (who were employing the vessel on a container liner service between Colonia, Venesland, Granland, Guyinia, Suriama and the Domana Republic geographical range) ordered the vessel to proceed to Puerto Pamatar in order to discharge and load containers there.

6. The port of Puerto Pamatar is in Granland, about 12 nautical miles up the river Río

Magdem from the mouth of the river.

7. The vessel arrived at Puerto Pamatar during the morning of 17 December 2005.

8. It was the Masters intention to delay sailing to afford a daylight passage of the river. Under instructions to vacate the berth on the evening of 17 December 2005, the vessel departed with a local pilot on board.

9. The vessel’s departure drafts were 7.92 meters forward and 8.12 meters aft.

10. The maximum permissible draft was 8.5 meters.

11. The vessel proceeded downriver in a following stream.

12. As the vessel approached beacon ‘X-12’ as marked on the large scale chart for the area, and at about at 20:48 local time, the vessel slowed substantially and her head swung to port and then came to a full stop. The position of the grounding was recorded as abeam beacon ‘X-12’ and in line with the leading lights.

13. Shortly after the grounding a number of containers were discharged and, as a consequence, the vessel refloated under the influence of current.

14. On 17 December 2007, and shortly after refloating, the master orally agreed to a salvage contract on LOF 2000 terms with AMCO Maritime LLC as owner of the tug “Parthia 41”.

15. The vessel anchored on 18 December 2005 in a position about 2 nautical miles north west of Bocas de Pelotas.

16. Subsequently the vessel was towed to Banton Bay Ship Repair Facility where temporary repairs were carried out.

17. On 4 January 2006 the vessel proceeded under tow to Calana dry-dock for permanent repairs. The vessel finally sailed from Calana on 20 January 2006.

82

18. The time charterparty is annexed to these submissions.

Breach

19. In breach of the charterparty, the Charterers ordered the vessel to proceed to Puerto Pamatar when at all times Puerto Pamatar was not safe.

Particulars

a. The Charterers’ obligations as to the safety of Puerto Pamatar encompassed

the location in which the vessel grounded and related to the vessel laden as she was at the time in question.

b. Puerto Pamatar was not safe for the vessel because there was insufficient

water in the channel for her to proceed without grounding, as demonstrated by the fact that she grounded.

c. The above is considered sufficient to establish breach, but insofar as it may be

necessary to do so the Owners will rely on the following features of the port of Puerto Pamatar at the material time.

d. The geography of the river is such that the river bed is prone to very rapid

variation in depths (including the main shipping channel). Consequently soundings become out of date and unreliable within a short window.

e. The port authority advised that it was safe for vessels to proceed on a draft of

up to 8.5m. There was no system in place to warn such vessel in the event that it was not in fact safe to do so.

f. There was no system in place to ensure that vessels could safely navigate the

river with drafts of up to 8.5m.

Loss and Damage

20. By reason of the Charterers breach of the charterparty as set out above, the Owners have suffered loss and damage and been exposed to liability.

Particulars

Salvage Costs and Expenses

a. The Owners paid AMCO Maritime LLC US $4.8 million

Repair Costs

b. The final invoice rendered by Banton Bay Repair Facility was for US

$620,007.52

c. The final invoice rendered by Calana Dry-Dock was for US $7,567,493.23.

Hire Deducted/Loss of Earnings

83

d. If, contrary to Owners case, the vessel was off hire as the result of the grounding the Owners will claim the hire and other sums lost in consequence: see paragraph 22 below.

Balance of Account

21. Further or alternatively, there remains due and outstanding a balance of hire in the amount of US $390,142.80 (following Charterers wrongful treatment of the vessel as off hire for some 33.633 days following the grounding).

General Average

22. Further, or alternatively, the grounding imperilled the vessel and as a result the Owners incurred those losses and earned those credits allowable in general average that are to be particularised in the adjustment of Banner Time & Associates. The Owners claim from the Charterers their contribution in general average as particularised in the adjustment.

Interest

23. Further, the Claimant claims interest pursuant to section 25 of the International Arbitration Act 1974 (Cth), on such sums as are found due to it, for such period(s) and at such rates(s) as the Tribunal shall think fit.

AND THE CLAIMANT CLAIMS:

1) Damages and/or an indemnity; 2) A suitably worded declaration to the effect that the Owners are entitled to damages or

an indemnity in respect of any claims by third parties arising out of the grounding; 3) USD $12,429,500.75 and/or a balance of account and/or hire and/or a contribution in

general average; 4) The aforesaid interest; 5) Costs.

Counsel for the Claimant

84

Schedule 1 THIS CHARTER PARTY, made and concluded in LAI CITY, REPUBLIC OF KAILAND

this 20th day of FEBRUARY of 2004 Owners of the Vessel described below, and Charterers. Description of Vessel Name OCEAN EXPRESS Flag BELOVIAN Built 1988 (year). Port and number of Registry PORT AU GLAISE 55589622 Classed in DET VERITAS Deadweight 21,538 long*/metric* tons (cargo and bunkers, including freshwater and stores not exceeding 1,755 long*/metric* tons) on a salt water draft of 10.10 meters/feet* on summer freeboard. Capacity cubic feet grain cubic feet bale space. Tonnage 12,827 GT/GRT. Speed about 19.0 knots, fully laden, in good weather conditions up to and including maximum 6 Force on the Beaufort wind scale, on a consumption of about 28.5 long*/metric* tons of heavy fuel oil and 1.80 tons medium diesel oil. * Delete as appropriate. 1. Duration The Owners agree to let and the Charterers agree to hire the Vessel from the time of delivery for a period of 5 (FIVE) years within below mentioned trading limits. 2. Delivery The Vessel shall be placed at the disposal of the Charterers at GENTOWN, GUYINIA. The Vessel on her delivery shall be ready to receive cargo with clean-swept holds and tight, staunch, strong and in every way fitted for ordinary cargo service, having water ballast and with sufficient power to operate all cargo-handling gear simultaneously. The Owners shall give the Charterers not less than 30 / 15 / 7 / 3 days notice of expected date of delivery. 4. Dangerous Cargo/Cargo Exclusions (a) The Vessel shall be employed in carrying lawful merchandise excluding any goods of a dangerous, injurious, flammable or corrosive nature unless carried in accordance with the requirements or recommendations of the competent authorities of the country of the Vessel's registry and of ports of shipment and discharge and of any intermediate countries or ports through whose waters the Vessel must pass. Without prejudice to the generality of the foregoing, in addition the following are specifically excluded: livestock of any description, arms, ammunition, explosives, nuclear and radioactive materials,

85

---------- NONE ----------

(b) If IMO-classified cargo is agreed to be carried, the amount of such cargo shall be limited to 100 tons and the Charterers shall provide the Master with any evidence he may reasonably require to show that the cargo is packaged, labelled, loaded and stowed in accordance with IMO regulations, failing which the Master is entitled to refuse such cargo or, if already loaded, to unload it at the Charterers' risk and expense. 5. Trading Limits The Vessel shall be employed in such lawful trades between safe port/or ports and/or rivers within greater coasting, including Colonia, Venesland, Granland, Guyinia, Suriama and the Domana Republic and other safe port and area (Tailand included) as the Charterers shall direct. 6. Owners to Provide The Owners shall provide and pay for the insurance of the Vessel, except as otherwise provided, and for all provisions, cabin, deck, engine-room and other necessary stores, including boiler water; shall pay for wages, consular shipping and discharging fees of the crew and charges for port services pertaining to the crew; shall maintain the Vessel's class and keep her in a thoroughly efficient state in hull, machinery and equipment for and during the service, and have a full complement of officers and crew. 7. Charterers to Provide The Charterers, while the Vessel is on hire, shall provide and pay for all the bunkers except as otherwise agreed; shall pay for port charges (including compulsory watchmen and cargo watchmen and compulsory garbage disposal), all communication expenses pertaining to the Charterers' business at cost, pilotages, towages, agencies, commissions, consular charges (except those pertaining to individual crew members or flag of the Vessel), and all other usual expenses except those stated in Clause 6, but when the Vessel puts into a port for causes for which the Vessel is responsible (other than by stress of weather), then all such charges incurred shall be paid by the Owners. Fumigations ordered because of illness of the crew shall be for the Owners' account. Fumigations ordered because of cargoes carried or ports visited while the Vessel is employed under this Charter Party shall be for the Charterers' account. All other fumigations shall be for the Charterers' account after the Vessel has been on charter for a continuous period of six months or more. The Charterers shall provide and pay for necessary dunnage and also any extra fittings requisite for a special trade or unusual cargo, but the Owners shall allow them the use of any dunnage already aboard the Vessel. Prior to redelivery the Charterers shall remove their dunnage and fittings at their cost and in their time. 8. Performance of Voyages (a) The Master shall perform the voyages with due despatch, and shall render all customary assistance with the Vessel's crew. The Master shall be conversant with the English language and (although appointed by the Owners) shall be under the orders and directions of the Charterers as regards employment and agency; and the Charterers shall perform all cargo handling, including but not limited to loading, stowing, trimming, lashing, securing, dunnaging, unlashing, discharging, and tallying, at their risk and expense, under the supervision of the Master.

86

(b) If the Charterers shall have reasonable cause to be dissatisfied with the conduct of the Master or officers, the Owners shall, on receiving particulars of the complaint, investigate the same, and, if necessary, make a change in the appointments. 9. Bunkers ... 10. Rate of Hire/Redelivery Areas and Notices The Charterers shall pay for the use and hire of the said Vessel at the rate of $ 11,600 U.S. currency, daily, or $ U.S. currency per ton on the Vessel's total deadweight carrying capacity, including bunkers and stores, on summer freeboard, per 30 days, commencing on and from the day of her delivery, as aforesaid, and at and after the same rate for any part of a month; hire shall continue until the hour of the day of her redelivery in like good order and condition, ordinary wear and tear excepted, to the Owners (unless Vessel lost) at HOPETOWN, TAILAND unless otherwise mutually agreed. The Charterers shall give the Owners not less than 5 (FIVE) days notice of the Vessel's expected date and probable port of redelivery. For the purpose of hire calculations, the times of delivery, redelivery or termination of charter shall be adjusted to GMT. 11. Hire Payment (a) Payment Payment of Hire shall be made so as to be received by the Owners or their designated payee in REPUBLIC OF KAILAND, viz in currency, or in United States Currency, in funds available to the Owners on the due date, 15 days in advance, and for the last month or part of same the approximate amount of hire, and should same not cover the actual time, hire shall be paid for the balance day by day as it becomes due, if so required by the Owners. Failing the punctual and regular payment of the hire, or on any fundamental breach whatsoever of this Charter Party, the Owners shall be at liberty to withdraw the Vessel from the service of the Charterers without prejudice to any claims they (the Owners) may otherwise have on the Charterers. At any time after the expiry of the grace period provided in Sub-clause 11 (b) hereunder and while the hire is outstanding, the Owners shall, without prejudice to the liberty to withdraw, be entitled to withhold the performance of any and all of their obligations hereunder and shall have no responsibility whatsoever for any consequences thereof, in respect of which the Charterers hereby indemnify the Owners, and hire shall continue to accrue and any extra expenses resulting from such withholding shall be for the Charterers' account. (b) Grace Period Where there is failure to make punctual and regular payment of hire due to oversight, negligence, errors or omissions on the part of the Charterers or their bankers, the Charterers shall be given by the Owners 2 (TWO) clear banking days (as recognized at the agreed place of payment) written notice to rectify the failure, and when so rectified within those 2 (TWO) days following the Owners' notice, the payment shall stand as regular and punctual. Failure by the Charterers to pay the hire within 2 (TWO) days of their receiving the Owners' notice as provided herein, shall entitle the Owners to withdraw as set forth in Sub-clause 11 (a) above. (c) Last Hire Payment

87

Should the Vessel be on her voyage towards port of redelivery at the time the last and/or the penultimate payment of hire is/are due, said payment(s) is/are to be made for such length of time as the Owners and the Charterers may agree upon as being the estimated time necessary to complete the voyage, and taking into account bunkers actually on board, to be taken over by the Owners and estimated disbursements for the Owners' account before redelivery. Should same not cover the actual time, hire is to be paid for the balance, day by day, as it becomes due. When the Vessel has been redelivered, any difference is to be refunded by the Owners or paid by the Charterers, as the case may be. (d) Cash Advances Cash for the Vessel's ordinary disbursements at any port may be advanced by the Charterers, as required by the Owners, subject to 2½ percent commission and such advances shall be deducted from the hire. The Charterers, however, shall in no way be responsible for the application of such advances. 12. Berths The Vessel shall be loaded and discharged in any safe dock or at any safe berth or safe place that Charterers or their agents may direct, provided the Vessel can safely enter, lie and depart always afloat at any time of tide. 13. Spaces Available (a) The whole reach of the Vessel's holds, decks, and other cargo spaces (not more than she can reasonably and safely stow and carry), also accommodations for supercargo, if carried, shall be at the Charterers' disposal, reserving only proper and sufficient space for the Vessel's officers, crew, tackle, apparel, furniture, provisions, stores and fuel. (b) In the event of deck cargo being carried, the Owners are to be and are hereby indemnified by the Charterers for any loss and/or damage and/or liability of whatsoever nature caused to the Vessel as a result of the carriage of deck cargo and which would not have arisen had deck cargo not been loaded. 14. Supercargo and Meals ... 15. Sailing Orders and Logs The Charterers shall furnish the Master from time to time with all requisite instructions and sailing directions, in writing, in the English language, and the Master shall keep full and correct deck and engine logs of the voyage or voyages, which are to be patent to the Charterers or their agents, and furnish the Charterers, their agents or supercargo, when required, with a true copy of such deck and engine logs, showing the course of the Vessel, distance run and the consumption of bunkers. Any log extracts required by the Charterers shall be in the English language. 16. Delivery/Cancelling ... 17. Off Hire In the event of loss of time from deficiency and/or default and/or strike of officers or crew, or deficiency of stores, fire, breakdown of, or damages to hull, machinery or equipment, grounding, detention by the arrest of the Vessel, (unless such arrest is caused by events for which the Charterers, their servants, agents or subcontractors are responsible), or detention by average accidents to the Vessel or cargo unless resulting from inherent vice, quality or defect

88

of the cargo, drydocking for the purpose of examination or painting bottom, or by any other similar cause preventing the full working of the Vessel, the payment of hire and overtime, if any, shall cease for the time thereby lost. Should the Vessel deviate or put back during a voyage, contrary to the orders or directions of the Charterers, for any reason other than accident to the cargo or where permitted in Clause 22 hereunder, the hire is to be suspended from the time of her deviating or putting back until she is again in the same or equidistant position from the destination and the voyage resumed therefrom. All bunkers used by the Vessel while off hire shall be for the Owners' account. In the event of the Vessel being driven into port or to anchorage through stress of weather, trading to shallow harbors or to rivers or ports with bars, any detention of the Vessel and/or expenses resulting from such detention shall be for the Charterers' account. If upon the voyage the speed be reduced by defect in, or breakdown of, any part of her hull, machinery or equipment, the time so lost, and the cost of any extra bunkers consumed in consequence thereof, and all extra proven expenses may be deducted from the hire. 18. Sublet Unless otherwise agreed, the Charterers shall have the liberty to sublet the Vessel for all or any part of the time covered by this Charter Party, but the Charterers remain responsible for the fulfillment of this Charter Party. 19. Drydocking ... 20. Total Loss Should the Vessel be lost, money paid in advance and not earned (reckoning from the date of loss or being last heard of) shall be returned to the Charterers at once. 21. Exceptions The act of God, enemies, fire, restraint of princes, rulers and people, and all dangers and accidents of the seas, rivers, machinery, boilers, and navigation, and errors of navigation throughout this Charter, always mutually excepted. 22. Liberties The Vessel shall have the liberty to sail with or without pilots, to tow and to be towed, to assist vessels in distress, and to deviate for the purpose of saving life and property. 23. Liens The Owners shall have a lien upon all cargoes and all sub-freights and/or sub-hire for any amounts due under this Charter Party, including general average contributions, and the Charterers shall have a lien on the Vessel for all monies paid in advance and not earned, and any overpaid hire or excess deposit to be returned at once. The Charterers will not directly or indirectly suffer, nor permit to be continued, any lien or encumbrance, which might have priority over the title and interest of the Owners in the Vessel. The Charterers undertake that during the period of this Charter Party, they will not procure any supplies or necessaries or services, including any port expenses and bunkers, on the credit of the Owners or in the Owners' time. 24. Salvage All derelicts and salvage shall be for the Owners' and the Charterers' equal benefit after deducting Owners' and Charterers' expenses and crew's proportion.

89

25. General Average General average shall be adjusted according to York-Antwerp Rules 1974, as amended 1990, or any subsequent modification thereof, in ZELAND and settled in UNITED STATES currency. The Charterers shall procure that all bills of lading issued during the currency of the Charter Party will contain a provision to the effect that general average shall be adjusted according to York-Antwerp Rules 1974, as amended 1990, or any subsequent modification thereof and will include the "New Jason Clause" as per Clause 31. Time charter hire shall not contribute to general average. 26. Navigation Nothing herein stated is to be construed as a demise of the Vessel to the Time Charterers. The Owners shall remain responsible for the navigation of the Vessel, acts of pilots and tug boats, insurance, crew, and all other matters, same as when trading for their own account. 27. Cargo Claims Cargo claims as between the Owners and the Charterers shall be settled in accordance with the Inter-Club New York Produce Exchange Agreement of February 1970, as amended May, 1984, or any subsequent modification or replacement thereof. 28. Cargo Gear and Lights The Owners shall maintain the cargo handling gear of the Vessel which is as follows:


90

(c) Bills of lading covering deck cargo shall be claused: "Shipped on deck at Charterers', Shippers' and Receivers' risk, expense and responsibility, without liability on the part of the Vessel, or her Owners for any loss, damage, expense or delay howsoever caused." 31. Protective Clauses This Charter Party is subject to the following clauses all of which are also to be included in all bills of lading or waybills issued hereunder: (a) CLAUSE PARAMOUNT "This bill of lading shall have effect subject to the provisions of the Carriage of Goods by Sea Act of the United States, the Hague Rules, or the Hague-Visby Rules, as applicable, or such other similar national legislation as may mandatorily apply by virtue of origin or destination of the bills of lading, which shall be deemed to be incorporated herein and nothing herein contained shall be deemed a surrender by the carrier of any of its rights or immunities or an increase of any of its responsibilities or liabilities under said applicable Act. If any term of this bill of lading be repugnant to said applicable Act to any extent, such term shall be void to that extent, but no further." and (b) BOTH-TO-BLAME COLLISION CLAUSE "If the ship comes into collision with another ship as a result of the negligence of the other ship and any act, neglect or default of the master, mariner, pilot or the servants of the carrier in the navigation or in the management of the ship, the owners of the goods carried hereunder will indemnify the carrier against all loss or liability to the other or non-carrying ship or her owners insofar as such loss or liability represents loss of, or damage to, or any claim whatsoever of the owners of said goods, paid or payable by the other or non-carrying ship or her owners to the owners of said goods and set off, recouped or recovered by the other or non-carrying ship or her owners as part of their claim against the carrying ship or carrier. The foregoing provisions shall also apply where the owners, operators or those in charge of any ships or objects other than, or in addition to, the colliding ships or objects are at fault in respect to a collision or contact." and (c) NEW JASON CLAUSE "In the event of accident, danger, damage or disaster before or after the commencement of the voyage resulting from any cause whatsoever, whether due to negligence or not, for which, or for the consequences of which, the carrier is not responsible, by statute, contract, or otherwise, the goods, shippers, consignees, or owners of the goods shall contribute with the carrier in general average to the payment of any sacrifices, losses, or expenses of a general average nature that may be made or incurred, and shall pay salvage and special charges incurred in respect of the goods. If a salving ship is owned or operated by the carrier, salvage shall be paid for as fully as if salving ship or ships belonged to strangers. Such deposit as the carrier or his agents may deem sufficient to cover the estimated contribution of the goods and any salvage and special charges thereon shall, if required, be made by the goods, shippers, consignees or owners of the goods to the carrier before delivery." 40. Documentation The Owners shall provide any documentation relating to the Vessel that may be required to permit the Vessel to trade within the agreed trade limits, including, but not limited to certificates of financial responsibility for oil pollution, provided such oil pollution certificates

91

are obtainable from the Owners' P & I club, valid international tonnage certificate, Suez and Panama tonnage certificates, valid certificate of registry and certificates relating to the strength and/or serviceability of the Vessel's gear. 45. Arbitration (a) NEW HAMPTON All disputes arising out of this contract shall be arbitrated at New Hampton in the following manner, and subject to U.S. Law: One Arbitrator is to be appointed by each of the parties hereto and a third by the two so chosen. Their decision or that of any two of them shall be final, and for the purpose of enforcing any award, this agreement may be made a rule of the court. The Arbitrators shall be commercial men, conversant with shipping matters. Such Arbitration is to be conducted in accordance with the rules of the Society of Maritime Arbitrators Inc. For disputes where the total amount claimed by either party does not exceed US $ ** the arbitration shall be conducted in accordance with the Shortened Arbitration Procedure of the Society of Maritime Arbitrators Inc. (b) BRISBANE All disputes arising out of this contract shall be arbitrated at Brisbane and, unless the parties agree forthwith on a single Arbitrator, be referred to the final arbitrament of two Arbitrators carrying on business in Brisbane who shall be members of the Maritime Law Association of Australia and New Zealand and engaged in Shipping, one to be appointed by each of the parties, with power to such Arbitrators to appoint an Umpire. No award shall be questioned or invalidated on the ground that any of the Arbitrators is not qualified as above, unless objection to his action be taken before the award is made. Any dispute arising hereunder shall be governed by Australian Law. *Delete para (a) or (b) as appropriate ** Where no figure is supplied in the blank space this provision only shall be void but the other provisions of this clause shall have full force and remain in effect. If mutually agreed, clauses to , both inclusive, as attached hereto are fully incorporated in this Charter Party. Signed on behalf of: [owners]


92


C2P52 MC AUT SPEED 19.0 Knots MAIN ENGINE MODEL 6 RTA 62 U DIMENSIONS BREADTH EXTREME 25.30m BREADTH MOULDED 25.30m DEPTH 13.50m DRAFT 10.10m FREEBOARD 3.4000,000mm LENGTH OVERALL 153.00m DEADWEIGHT 21.363 tons BALLAST 5,815m3 BUNKER 1,490 tons FUEL OIL 1,488m3 Schedule 2 Off hire calculations

Time of grounding in Río Magdem 17/12/2005 20:48 LT (16:48 UTC) Return of vessel to Chatererers 20/01/2006 12:00 LT (08:00 UTC)

Off hire duration 33 days 15 hours 12 minutes

93

IN THE MATTER No. AR11/08 OF AN ARBITRATION HELD AT BRISBANE BETWEEN Horizon Shipping Inc. Level 12, Sky Harbour Building 88 Nandong Road Lai City Republic of Kailand

Claimant AND Schwarz Line Containers Level 27, International House 139 Hörst Strasse Bräan Hoogeland Respondent

PRELIMINARY SUBMISSIONS OF THE RESPONDENT 26 NOVEMBER 2007

1. For ease of reference, save where otherwise indicated, the Respondent Charterers

adopt in these Defence Submissions the definitions used in the Claim Submissions. Save where the contrary is stated, all references to paragraph numbers are to the paragraphs of the Claim submissions.

2. The Respondent denies the Claimant’s right to bring these proceedings and the

Arbitral Tribunal’s power to hear them on the basis that:

a. the proceedings were not commenced in good faith; and

b. the nomination of a retired Fleet Manager of the Claimant with real or apparent bias against the Respondent offends Rule 14 of the MLAANZ Arbitration Rules; or further or alternatively

c. renders the operation of Rule 14 an impossibility.

3. If the Arbitral Tribunal concludes that the proceedings are valid, paragraphs 1 to 3 are

admitted.

4. Save that:

a. the charterparty contained (among other things) the terms set out (in part) at paragraph 4; and

b. the charterparty further provided:

94

“In the event of loss of time from deficiency and/or default and/or strike of officers or crew, or deficiency of stores, fire, breakdown of, or damages to hull, machinery or equipment, grounding, detention by the arrest of the Vessel, (unless such arrest is caused by events for which the Charterers, their servants, agents or subcontractors are responsible), or detention by average accidents to the Vessel or cargo unless resulting from inherent vice, quality or defect of the cargo, drydocking for the purpose of examination or painting bottom, or by any other similar cause preventing the full working of the Vessel, the payment of hire and overtime, if any, shall cease for the time thereby lost.” ... “Nothing herein stated is to be construed as a demise of the Vessel to the Time Charterers. The Owners shall remain responsible for the navigation of the Vessel, acts of pilots and tug boats, insurance, crew, and all other matters, same as when trading for their own account.”

paragraph 4 is admitted.

5. Paragraphs 5 to 7 are admitted.

6. Save that:

a. it is admitted that:

i. the vessel departed the berth on the evening of 17 December 2005; and ii. the vessel departed with a local pilot onboard

b. it is denied the vessel was under instructions to vacate the berth on the evening

of 17 December 2007

paragraph 8 is not admitted and Owners are put to strict proof of the matters therein alleged.

7. Save that it is admitted the vessel’s departure drafts were:

a. FW 7.92 meters forward; and b. FW 8.12 meters aft

paragraph 9 is denied.

8. Paragraphs 10 to 17 are admitted.

9. The Respondent does not plead to paragraph 18 as it does not raise a matter of fact or

a point of law.

10. It is denied that the port of Puerto Pamatar and/or the approaches thereto (including the area where the vessel grounded) was not a safe port or place for the vessel, whether as alleged in paragraph 19 of the Claimant’s Submissions or at all. It is further denied that the grounding was caused by the alleged or any unsafety of Puerto Pamatar and/or the approaches thereto.

11. The port of Puerto Pamatar and the approaches thereto (including the area where the vessel grounded) was/were not unsafe for the vessel.

95

Particulars

a. The port of Puerto Pamatar is located approximately 12 nautical miles from the mouth of the river Río Magdem in Granland.

b. Pilotage in the river is compulsory.

c. The vessel was piloted on the inbound and outbound passage by Capt. Cruz

(assisted by Capt. Mala for the inbound passage). Both pilots are licensed and experienced river pilots.

d. It is and was a well publicised fact that in the lower sections of the river,

particularly close to the entrance, suspended sedimentary matter carried downstream may frequently vary water depths. Thus, the Sailing Directions for Puerto Pamatar state: In the entrance to Río Magdem, depths are subject to change due to silting, scouring, height of the river, the effect of the El Niño, and state of the bar which may disappear entirely or redevelop as a new bar. The channel leading from the entrance to Puerto Pamatar has a charted maintained depth of 9.4 m, but it was reported in 2001 that the channel depth was only 8.5m. Entry to the river should not be attempted without obtaining the most recent information concerning depths and other conditions from the local authorities.

12. The Harbour Master publishes and did publish a maximum draft for vessels using the river.

13. At the time when the vessel departed the published maximum draft was 8.5 meters. This figure was published on 1 December 2005 and is stated to be valid for the month of December 2005.

14. It is alleged by the Owners that at the time of her departure from Puerto Pamatar, the

vessel had drafts of about 7.92 meters forward and about 8.12 meters aft. It was known to the vessel’s Master (and ought to have been known to the pilot) that when proceeding ahead in the river the vessel would experience a squat of at least 0.22 meters. Thus, if (as is alleged) the vessel had a maximum still water draft of 8.12 meters, the Master and the pilot knew or ought to have known that without making any allowance for the effects of safety, or sea or swell as the vessel approached beacon ‘X-12’ the vessel required a minimum depth of water of about 8.34 meters in order to transit the river.

15. Regular and comprehensive soundings are taken in the river by Companie de

Maritime.

16. The results of the soundings taken in the river by Companie de Maritime are provided to the Harbour Master and these soundings are, in turn, provided to the river pilots.

17. The results of the aforementioned sounding surveys are made available to river pilots from the Marine Office. At the time the vessel departed Puerto Pamatar the most recent survey was 16 December 2005 and the minimum sounding was 29 feet.

96

18. The port of Puerto Pamatar was not unsafe for the vessel in that it did not expose the vessel to any dangers that could not have been avoided by reasonable skill and care. In particular:

a. The alleged danger (i.e. the insufficient height of water close to beacon ‘X-12’) was apparent from the sounding charts made available to the river pilots and could have been avoided by the exercise of reasonable skill and care.

b. In this regards, the Master and pilot were aware of the state of the tide and

most recent soundings charts which revealed the existence of shoal patches.

c. The exercise of reasonable skill and care would have involved heeding these facts and postponing the vessel’s departure until the high water on the afternoon of 18 December 2005.

19. Further or alternatively, as regards the particulars to paragraph 19:

a. No admissions are made as to paragraph (a) as it raises a matter of law.

b. Sub-paragraph (b) is denied.

c. It is denied that the fact that the vessel grounded is evidence of a breach of the terms of the charterparty.

d. It is admitted that in the lower sections of the river suspended matter carried

downstream by the current is deposited leading to silting and frequently varying water depths. These facts are well published to mariners and did not render the port or the approaches thereto unsafe. Further, the soundings taken on 16 December 2005 were not out of date.

e. As regards sub-paragraph (e), about 357 vessels used the port of Puerto

Pamatar in 2001.

f. As regards sub-paragraph (f), it is admitted that, at the time the vessel departed, the maximum permitted draft published by the Harbour Master was 8.5 meters. The pilots are, however, provided with up to date sounding surveys from which it is readily apparent whether or not the draft published by the Harbour Master is correct and/or safe.

20. Save that it is denied that the Charterers were in breach of the charterparty, paragraph

20 is not admitted.

21. Paragraph 21 is denied. By operation of the grounding, the Charterers were denied full working of the vessel and time was lost for a period of about 33.633 days. In the premises, Charterers were permitted to treat the vessel as off hire during this period pursuant to Clause 17 of the charterparty.

22. Paragraph 22 is denied. Further or alternatively, by reason of:

a. the Masters lack of familiarity with the vessel; and

b. Owners procedures

97

the loss and damage in question was caused by the unseaworthiness of the vessel.

Particulars

c. The Master was: i. new to the vessel; and

ii. a container ship novice; and iii. ignorant to the peculiar hazards of river navigation; and iv. not familiar with Owners ISM/SMSmanuals and/or procedures.

d. The onboard documentation was:

i. referred to in a letter to the Master prior to his joining the vessel, but not supplied; and

ii. too voluminous to consume in light of the immediate operational environment.

23. Paragraph 23 is noted, but it is denied that the Owners are entitled to the alleged or

any interest.

24. It is denied that the Owners are entitled to the relief claimed or any relief.

Counsel for the Respondent

98

INFORMATION ABOUT COUNTRIES Republic of Kailand

• A former colony of the United Kingdom, the Republic of Kailand gained independence in 1996.

• The Republic of Kailand has substantially the same laws as Australia.

• Acts are generally enacted with the same title and in the same year as Australia.

• COGSA: Applying the unification of Certain Rules relating to Bills of Lading signed

in Brussels on 25th August 1924 (Hague Rules) as amended by the protocol singed at Brussels on 23rd February 1968 (Hague-Visby Rules)

• International Management Code for the Safe Operation of Ships and for Pollution

Prevention (“ISM Code”) ratified.

• Sea Carriage Legislation: Identical to that of the Australian Carriage of Goods by Sea Act 1991 (Cth).

• Arbitration law: Legislation identical to that of the Australian International

Arbitration Act 1974 (Cth).

• Follows Australian precedent. Hoogeland

• As a former colony of the United Kingdom, Hoogeland gained independence shortly after WWII.

• Hoogeland has substantially the same laws as the United Kingdom. Acts are generally

enacted with the same title and in the same year as the United Kingdom.

• COGSA: Applying the unification of Certain Rules relating to Bills of Lading signed in Brussels on 25th August 1924 (Hague Rules) as amended by the protocol singed at Brussels on 23rd February 1968 (Hague-Visby Rules)

• International Management Code for the Safe Operation of Ships and for Pollution

Prevention (“ISM Code”) ratified.

• Sea Carriage Legislation: Sea Carriage Documents Act 1992 which is in identical terms to the Carriage of Goods by Sea Act 1992 (UK).

• Arbitration law: Legislation identical to that of the UK.

• Follows English precedent.

Imlam Problem 2009

Documents

Transcript of Imlam Problem 2009