The boat that wouldn't float

Colin MacLean
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Figure: MV Lyubov Orlova

What is the MV Lyubov Orlova still doing here? It's a question that's been asked many times in the past year, and finally there's an answer.

The vessel has been stranded in a legal quagmire for more than a year. But on Nov. 14, there was some movement in the case.

A Federal Court of Canada judge has approved a motion by the St. John's Port Authority to allow the vessel to be sold and its creditors paid from the proceeds.

The motion passed without objection from any of the creditors.

For the port authority, the court decision is the beginning of the end of the story of the Lyubov Orlova in Newfoundland and Labrador.

And it's about time, said Sean Hanrahan, president and CEO of the St. John's Port Authority.

"The effect on us has been troublesome, but not extreme. That would be probably the best description I can come up with," Hanrahan said in a recent interview.

"We have wanted the vessel gone. No one would want these circumstances to occur in their port," he said.

"When situations are as they are in this case, it's a fairly complicated piece of work because there's a lot of parties involved, there's a lot of creditors involved and the owner can't be located. So it's really a perfect storm of administration and legal manoeuvring to get this vessel sold."

How much the vessel sells for will determine who gets paid.

And the bills have piled up - to more than $750,000 and counting.

A brief history

The Lyubov Orlova, flagged in the South Pacific Cook Islands, has been tied to the St. John's dock since Sept. 25, 2010, when it was arrested upon arrival. At that time, the crew had not been paid in months and the ship's creditors were tired of waiting for their money.

On Oct. 2, 2010, the mostly Russian crew called a news conference on the wharf and explained their plight. They had no money, were running out of food and had no way to get home. The story garnered national and international attention, especially in Russia and across Canada.

The citizens of St. John's donated food and supplies for the stranded crew. Only a handful of them had the means to pay their own way home, and the Russian government eventually footed the bill for most of them.

The final crewmembers flew home in early December and the ship has been abandoned ever since.

The sale

According to court documents, responsibility for the sale of the former cruise ship, and the acting title of sheriff of the court, has been transferred to Gibson Canadian Global Inc. of Montreal.

"Gibson Canadian is the leader in Canada in the sale of vessels such as this, so if anyone can do it, they can do it," Hanrahan said.

A representative from Gibson Canadian said ship inspectors visited the Lyubov Orlova last week and have completed a preliminary inspection.

Those results were not available, but Hanrahan said that, to his knowledge, the vessel is in rough shape.

"The main thing now is whether or not her engines are working to the point where she can get out of here without undergoing a major repair," Hanrahan said.

"We don't know whether they will or not, to be perfectly honest. But it's a big plus if they do."

There is also a mould issue due to water seepage and some of the pipes burst last winter.

The sheriff's mandate to sell the ship is for 45 days, but can be extended by mutual agreement between the sheriff and the port authority. The court documents also include a provision that the sale of the vessel not include leased or rented equipment still onboard.

Cruise North Expeditions Inc., the former charterer of the ship at the time of its arrest, has been given permission to consult with the sheriff to retrieve any of its property still onboard. If no agreement can be reached between Cruise North and the sheriff, then the cruise company will have to go back to court to get a ruling on its property.

The crew

The 51-member crew, meanwhile, is owed more than $300,000 plus interest, for past-due wages.

According to maritime law, the crew has priority of payment when the ship is eventually sold. They are represented by the International Transport Workers Federation (ITF), which assumed their power of attorney last year and hired a local lawyer to represent them.

The lives of the former crewmembers have been severely affected by this episode, said Peter Lahay, a national co-ordinator with ITF.

"The crew continue to write to us; quite regularly I hear from the former captain. ... He's still in contact with the full crew and they're hopeful to see their wages," Lahay said.

The St. John's Port Authority and the sheriff are tied for second place on the priority list of creditors.

The sheriff is entitled to be paid for its efforts to sell the vessel and any costs accrued in doing so. The sheriff's cut is the greater of either $20,000 or two per cent of the sale price.

The port authority

The port authority has been responsible for the ship since the final crewmembers were flown back to Russia.

Hanrahan said the vessel has been accruing berthing costs since it was tied up 14 months ago.

The port authority is owed about $199,000 overall, and that bill goes up by $300 for every day the ship is tied to the wharf.

Of that amount, berthage for the ship accounts for the lion's share of the bill, at $120,000.

The port authority is owed $70,000 for ensuring the safety of the vessel, which includes having security patrol the area and replacing lines securing it to the dock when necessary.

The ship has listed more than a half-dozen times and every time it happens the port authority hires a company to inspect the vessel and to right it again.

Cruise North Expeditions

Before it was arrested last year, the Lyubov Orlova - owned by Russian-based Locso Shipping - was chartered by Cruise North for adventure tourism trips to the Canadian Arctic.

Cruise North was the first company to put a maritime lien on the vessel, which allowed authorities to arrest the ship. At the time, the owner of the ship owed the tour company more than $250,000.

Cruise North still has a lien on the vessel, but according to maritime law, its claim is weaker than that of the crew, the port authority and the sheriff, said Dugald Wells, former president of Cruise North.

"We would hope that the ship is sold and the creditors are paid. It remains to be seen how much an auction of the ship would get. ... Cruise North, unfortunately, is a simple trade creditor and, depending on how much money might be obtained by the vessel at auction - after all the various priority claimants are paid, and the court costs are paid and everything else - it remains to be seen how much money will be left," Wells said.

Last year, Cruise North become part of another company, Adventure Canada, and has replaced the Lyubov Orlova with a sister ship. It is still offering Arctic cruises.

cmaclean@thetelegram.com

 

Organizations: St. John's Port Authority, Federal Court, Global Inc. of Montreal ITF International Transport Workers Federation Canadian Arctic Adventure Canada

Geographic location: Canada, St. John's, Newfoundland and Labrador Russia South Pacific Cook Islands Arctic

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