Arbitration backs Ocean Yield in dispute with Okeanis Eco Tankers over VLCC deal

An arbitration tribunal in London has ruled in favour of Ocean Yield, deciding that it was not required to sell back four VLCC tankers to Greek owner Okeanis Eco Tankers.

The four Hyundai-built vessels were delivered last year, and financed via a sale-and-leaseback deal between the two companies. In October 2019, Okeanis Eco Tankers gave notice to Ocean Yield requiring the sale of the four vessels back to Okeanis for 103% of the outstanding lease amount plus breakage fees. Ocean Yield disputed the right for Okeanis to do so, and the matter was referred to arbitration.

The arbitration ruled in favour of Ocean Yield, however Okeanis says that the award is subject to very limited grounds of appeal under English law and it is considering its options with its legal advisors.

“The Tribunal dealt only with issues of liability (i.e. questions relevant to determining the Charter Guarantors’ right to require such sales and the terms) and did not decide issues relating to legal costs. Those issues are to be decided in a later quantum stage (for which a timetable has not yet been agreed/determined). In the meantime, the effect of the awards is that the Vessels remain on their existing long-term bareboat charters from Ocean Yield,” Okeanis Eco Tankers said in a statement.