July 4, 2019 8:54:49 am
FEARING AN oil spill off Mumbai’s coast, the Bombay Port Trust (BPT) and the Jawaharlal Nehru Port Trust (JNPT) have approached the National Company Law Tribunal (NCLT), asking it to direct the lenders of bankrupt firm TAG Offshore Limited to remove its 13 oil vessels that are floating unmanned near BPT and JNPT.
TAG Offshore owes about Rs 1,500 crore to a consortium of lenders. Most of these unmanned vessels are used to ferry diesel and other petroleum products from one location to another.
Both BPT and JNPT have particularly indicated the potential navigation issues and environment hazard as at least two of these oil vessels — TAG 6 and TAG 22 — are lying tangled in the sea. “The ships are floating unmanned. Two of these vessels are entangled near BPT and with the prevailing monsoon, there is a chance that the oil in these unmanned vessels may spill. The floating ships may also affect the navigation channel and can cause great danger to the port,” said the lawyer representing BPT before the tribunal.
Besides, the Directorate General of Shipping in Mumbai has written to the resolution professional (RP) appointed by the lenders of TAG Offshore that in case of any environment damage, the RP will be held responsible. RPs typically take charge of bankrupt firms and act as a go-between for lenders and borrowers to resolve bankruptcy.
The NCLT has now directed the lenders to arrive at a consensus and sell the 13 unmanned ships of TAG Offshore by the end of July. A large number of these ships are encumbered with IDBI Bank and IFCI Ltd.
“This is a very serious issue. It can lead to immense damage. The RP has to ensure that the lenders come to a consensus, appoint a valuer and dispose these ships,” said Bhaskara Pantula Mohan, judicial member at NCLT.
The NCLT has also directed the RP to ensure the ships are untangled and safely manned. It has asked the lenders to bear the expenses for the proper maintenance of the ships.
TAG Offshore was set up in 2003 by demerging the offshore business of Essar Shipping Limited. The top management of the firm is connected to the promoters of the Essar Group. TAG Offshore offers marine support services to offshore exploration, production, marine construction, port and terminal activities.
In April, the Bombay High Court had ordered the arrest of one of the ships of TAG Offshore — MT TAG Navya — after hearing an admiralty suit filed by SES Bunkering Private Limited. The ship is currently in the possession of the Sheriff of Mumbai.
Subsequently on April 24, RH Petroleum Private Limited, an operational creditor of TAG Offshore, moved NCLT to initiate corporate insolvency resolution process against the shipping firm under the Insolvency and Bankruptcy Code (IBC). TAG Offshore owes about Rs 80 lakh to RH Petroleum.
On May 15, the high court allowed 16 crew members of the arrested ship TAG Navya, who were stranded aboard the ship, to disembark due to the deteriorating condition of the ship.
Following the NCLT order, the lenders of TAG Offshore are likely to meet this week to decide the fate of the 13 unmanned ships of the company.
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