Recently, Sea Trucks Group (STG), an international group of companies that provides offshore installation, accommodation and marine support services to the oil and gas industry worldwide, initiated legal and commercial actions to recover assets owned by the Group from West African Ventures (WAV), a Nigerian company controlled by Jacobus Roomans, which provides logistics and engineering services to the oil and gas industry
Sea Trucks claims that the dispute arose following WAV’s breach of the terms of the vessel hire charter agreement with Sea Trucks and repudiation of the charter’s legitimacy by WAV.
“Sea Trucks has initiated legal and commercial actions to recover its assets from West African Ventures Limited, a Nigerian company controlled by Jacobus Roomans. Sea Trucks comprises Sea Trucks Group Limited (in liquidation) and its operating subsidiaries (which are not in liquidation). Sea Trucks-owned vessels had been chartered to WAV. Over a number of months, WAV declined to pay the amounts owed under the charter agreements. As a result, Sea Trucks had no choice but to terminate the charter agreements with WAV. Accordingly, WAV has no legal right to operate or possess any of the Sea Trucks vessels”, the company stated.
Based on the foregoing, Sea Trucks launched arbitration proceedings in London against WAV seeking repossession of the over 30 charter vessels in the possession of WAV including the DP3 vessel, the Jascon 30. Sea Trucks is also seeking damages arising from the charter terminations.
Read Also: Sea Trucks Group clarifies appointment of provisional liquidators
On May 5th, 2017, Sea Trucks released a statement announcing that it had been placed under provisional liquidation by the Eastern Caribbean Supreme Court in the High Court of Justice British Virgin Islands.
Read Also: Idle trucks cause 70% of Apapa gridlock – Council chair
“Following poor performance by Sea Trucks under the ownership and management of Jacobus Roomans, there was a default on bonds issued by Sea Trucks. A new board was appointed to Sea Trucks, by agreement with Roomans. However, it soon became apparent that Roomans was unwilling to work with the new board”, Sea Trucks said in an official statement.
With the appointment of liquidators, Sea Trucks says the Group is now controlled by the liquidators. “As a result of an attempt by Roomans to remove the board, the bondholders took steps to appoint a liquidator over STGL (being the Sea Trucks parent company). This had the effect of removing all of Roomans’ power to direct Sea Trucks. STGL is now controlled by the liquidators. The subsidiary companies are run by independent boards who are working alongside the liquidators to ensure that it remains “business as usual” for Sea Trucks”.
Navigating through Liquidation
The Group has clarified that appointment of the liquidators does not in any way affect the proper operations of Sea Trucks Group. The proceedings affect all those affiliated with the “Group”. In a recent statement on its website, Sea Trucks said “The appointment of liquidator is only to the Company, being the group holding company, underlying operating/asset owning companies (the “Subsidiaries”) are not subject to insolvency proceedings. The Company collectively and the Subsidiaries are referred to as the “Group”.
According to Joint Provisional Liquidator of the Group, Chad Griffin: “The provisional liquidation will provide stability and Court protection, to create a platform to maximise value. We will be working closely with the Group’s directors and management team to understand the affairs of the Company.”
Also, the Executive Chairman of the Group, Tom Ehret said: “The appointment of Provisional Liquidators has no impact on the Group’s operations; the management team remain at the helm and look forward to working with our loyal customers to continue to develop our successful trading relationships. Fundamentally, the Sea Trucks Group is and remains a strong and viable business, well positioned in its markets. We are excited about its prospects and will continue to service clients to the expected high standards”.
The Fight-back by WAV
West African Ventures has, however, swiftly denied the allegations levelled against it. WAV also denied any association with Sea Trucks Group Limited.
“The media has recently reported on the matter between Sea Trucks Group Limited and the Bondholders of the 9 percent STG Senior Secured Callable Bond Issue 2013/2018. However, some of these reports have erroneously attempted to link West African Ventures Limited (WAV) to these matters. Whilst STG and WAV share a common beneficial ownership, both companies are entirely separate and distinct.
WAV is a 100 percent Nigerian company incorporated in the Federal Republic of Nigeria and STG on the other hand, is a company incorporated in the British Virgin Island. STG does not own any share in WAV and WAV is not a subsidiary of STG. Aside from the shared common beneficial ownership, there subsists a Non-Competition and Non-Circumvention Agreement between both entities for the operation of STG assets, when available for work in Nigeria and in the West African sub-region”, WAV stated on its website.
The claim by WAV is, however, being challenged by STG in its suit at the court. STG is challenging the Non-Competition Agreement as interpreted by WAV and asserts it did not agree that the agreement is binding on the subsidiary operating companies of Sea Trucks.
According to a recent statement by STG, “We strongly refute WAV’s suggestion that Sea Trucks is unable to offer services in Nigeria and/or West Africa, and we look forward to providing full support to the Nigerian, and West African oil and gas industries as soon as possible”.
Implications for businesses in Nigeria
Sea Trucks insists that WAV acted in breach of the charter agreement. Besides this, WAV rebuffed all attempts made by STG to achieve an amicable resolution of the issue. STG also says it has the full support of its creditors and the liquidators to take all necessary steps to ensure the return of the vessels, in order to allow Sea Trucks to return to normal business.
As the arbitration tussle continues, what has become clear is that WAV continues to operate the contentious charter vessels despite the liquidation order by the BVI court.
The lingering dispute may potentially impact the Nigerian oil and gas industry considering the fact that the vessels provide services in Nigeria. In addition to this, the development may further dissuade foreign investors who remain wary of Nigerian companies and their ability to keep business agreements.
Sea Trucks has moved to dispel these fears by providing reassurance that it remains committed to maintaining its assets in Nigeria in order to service the needs of industry operators.
“The Group is totally committed to maintaining its assets in Nigeria, to ensure the vessels are available to service the needs of the Nigerian Oil and Gas industry. Sea Trucks is determined that the vessels become truly local in the fullness of time – but first they must be returned by WAV. Going forward, Sea Trucks is happy to partner with indigenous Nigerian partners to develop a local business in the future”, according to a statement on the Group’s website.
As the Federal Government of Nigeria continues its drive to attract foreign investment across various sectors of the economy, there is need for companies operating in Nigeria which stand to benefit from such investment to play by the book and respect agreements.
FRANK UZUEGBUNAM
