Paradise Papers: Ship owner facing Navy claim went offshore
On January 30, 2011, INS Vindhyagiri, entering the Mumbai dockyard, was involved in a collision with MV Nordlake, a Cyprus-flagged container carrier which was moving out of the harbour.
Mumbai Fire brigade inside naval dockyard on January 31, 2011, after the collision of warship INS Vindhyagiri sinks in anchorage at Naval Dockyard. (Express Photo byPradeep Kocharekar)
Weeks after the Indian Navy blamed the MV Nordlake for the sinking of its frigate INS Vindhyagiri in 2011 and sought over Rs 1,000 crore in damages, the owner of the merchant vessel approached offshore legal firm Appleby to set up “8 Isle of Man companies to hold 8 vessels” to “limit liability” and ringfence assets.
On January 30, 2011, INS Vindhyagiri, entering the Mumbai dockyard, was involved in a collision with MV Nordlake, a Cyprus-flagged container carrier which was moving out of the harbour. INS Vindhyagiri caught fire and capsized. The Indian Navy’s First Information Report blamed the collision on MV Nordlake which rejected the charge . On February 23, 2011, an admiralty court formally placed MV Nordlake under arrest. The Indian Navy claimed Rs 1,058.54 crore in damages. MV Nordlake sought release by depositing a surety of Rs 46.87 crore, the value of the ship as assessed on April 7, 2011.
At this juncture, Appleby records show, the owner of MV Nordlake approached the law farm on May 5, 2011through a lawyer in Germany – Ulf Bertheau of Cyrus Ross, an association of law firms in Europe – to inquire about setting up eight companies in the Isle of Man to park one vessel each to “limit liability” in case of any adverse verdict. “The UBO (ultimate beneficial owner) is Mrs Christiane Scola. Reference website ‘rnkeo.com’, which has been newly designed after the accident of the ‘Nord Lake’, which has capsized a frigate in India after a collision on 30th of January 2011. This event prompted the enquiry for new Companies – the client is looking to limit liability and ring fencing assets,” Appleby’s ‘New Businesses’ records state.
Christiane Scola was wife of Klaus E Oldendorff, founder of the Reederei Nord Group in the 1960s. The couple emigrated to Limassol, Cyprus, in 1987. Christiane Scola took charge of the business after her husband’s death in 2003 and handed over shares of the group companies in equal parts to her two sons in 2013. She died in 2014.
Appleby records also underlined “utmost confidentiality” of the client’s details: “The client comes from a family well known to Simon i.e. the heirs of the late brother of Henning O. They have split their companies in the early 60s, this is of utmost confidentiality and you should not mention at all the names vice versa.” Appleby records do not reveal if the company went ahead and incorporated companies in the Isle of Man, an offshore financial centre.
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In March 2012, Bombay High Court allowed the release of MV Nordlake on the ground that an admiralty court cannot ask the vessel-owner to deposit a sum higher than the cost of the arrested vessel as surety even if the damages sought are greater.
In April 2012, the Supreme Court refused to stay the High Court order, ruling that the value of the bail required to secure the vessel’s release cannot exceed its value.
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In August 2012, the Central Information Commission ruled that details of the inquiry and the status of the case would not be revealed under the Right To Information (RTI) Act to safeguard India’s national security. Subsequently, claims were brought in London on behalf of MV Nordlake. In January 2016, the London High court assigned 60 per cent responsibility for the collision to MV Nordlake.
When contacted, Ulf Bertheau said in an email: “I am not aware of what you are referring to. Nevertheless, as you will appreciate my professional duties do not allow any comment to your mail.”
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In an email, Reederei Nord said: “The Nordlake was released by the Indian authorities after about 12 months of arrest in exchange for security payment in cash to the courts of India (in the amount of the vessel’s value of about USD 8 million). The court case about the question of the final responsibility for the damage is still pending in India. Any potential liability is covered by our security payment and the vessel’s insurance. “There is only one court judgment from London in the wider context of this case. This case, however, has no further relevance in relation to the Indian frigate, and the English judgment is not binding in India either.
“We do not work with any lawyers on or about the Isle of Man and we do not know the law firm you mentioned. All our ships fly EU flags and all offices of our company group businesses are located and registered in EU countries, except for a marketing office in Asia. We pay all taxes in the EU as obliged by law.
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“We have worked with the lawyer Mr Bertheau in other matters in the past, but our business relationship has been terminated some years ago. We did not appoint Mr. Bertheau for any matter concerning the Nordlake case in India. Mr. Bertheau was also not handling the Isle of Man flag case as described above.
“Many mediators, lawyers and other “specialists” approached us after the prominent collision of Nordlake and offered a variety services and had very proactive ideas, all unsolicited. But none of them received an appointment from us, other than Ince & Co in London. This law firm represents our interests in India.”
The Indian Navy is yet to respond to queries.
Ulf Bertheau said in an email: “I am not aware of what you are referring to. Nevertheless, as you will appreciate my professional duties do not allow any comment to your mail.”
Reederei Nord, owner of Nordlake, said in an email: “The NORDLAKE was released by the Indian authorities after about 12 months of arrest in exchange for security payment in cash to the courts of India (in the amount of the vessel’s value of about USD 8 million). This security amount was determined by the rules of an international treaty for the definition of liability at the sea.
2. Our ship had not suffered any significant damage by the collision, only paint scratches. The master had been detained onboard for several months by the Indian authorities, without a court hearing. But he was finally released, after involvement of the German consul. He is in pension now. The colliding frigate (built in 1978) sank a few days after the collision. This sinking was ultimately caused by the fire-extinguishing water while she was alongside the navy terminal.
3. The court case about the question of the final responsibility for the damage is still pending in India. Any potential liability is covered by our security payment and the vessel’s insurance. There is only one court judgment from London in the wider context of this case. As owners of NORDLAKE, we had sued the owner of a Greek container ship, which was also involved in the collision with the frigate but could escape unrecognized at the time. This case however, has no further relevance in relation to the Indian frigate, and the English judgment is not binding in India either.
4. We do not work with any lawyers on or about the Isle of Man and we do not know the law firm you mentioned. The only case in which we had dealings with the Isle of Man was about 15 years ago when we had transferred a container ship (NORDBALTIC) from the ships registry in Cyprus to the ships registry Isle of Man for operational reasons. That ship had been be re-registered in Cyprus ships registry a few years ago and since then, we had no contact with any institution on the Isle of Man.
5. All our ships fly EU flags and all offices of our company group businesses are located and registered in EU countries, except for a marketing office in Asia. We pay all taxes in the EU as obliged by law.
6. We have worked with the lawyer Mr Bertheau in other matters (documentation of ship sales) in the past, but our business relationship has been terminated some years ago. We did not appoint Mr Bertheau for any matter concerning the NORDLAKE case in India. Mr Bertheau was also not handling the Isle of Man flag case as described above.
7. It might be worth mentioning that many mediators, lawyers and other “specialists” approached us after the prominent collision of NORDLAKE and offered a variety services and had very proactive ideas, all unsolicited. But none of them received an appointment from us, other than Ince & Co in London. This law firm represents our interests in India and against the aforesaid Greek vessel.
8. We can assure you that since the 53 years of the existence of the shipping company NORD, we have always paid all taxes, bank debts and liabilities etc. on time. Further, we take the social responsibility towards our employees on land and the seafarers very seriously and we consider ourselves as one of the best ship operators in Europe.
9. We would also like to point out that we do not allow you to publish personal names, neither of the Oldendorff family, nor Scola, nor mine or any other employees. None of these persons is a person of public interest and we would ask you to respect that.
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Jay Mazoomdaar is an investigative reporter focused on offshore finance, equitable ... Read More
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