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The High Court has issued a ruling on the payment dispute between the government and both current and former crew members of the Alfa Nero superyacht.
The disagreement arose over the funds owed to the original crew members of the superyacht before its abandonment and those who remained on board or were hired as part of the skeleton crew between March 2022 and April 2023.
Captain Christopher Malcolm Lewis and Nautilus International, which is an independent UK-based trade union for maritime professionals and other seafarers, represented the unionized crew members.
They claimed on March 17, 2023, that they were entitled to a sum of €2.2 million (EC$6.4 million) at an interest rate of 4%.
Their argument was based on Section 49(1) of the 2006 Merchant Shipping Act, which stated that a maritime lien that included wages and other sums owed to the master [or sea captain], officers, and other members of the ship’s complement in respect of their employment on the ship held priority over any other debts such as mortgages.
Meanwhile, the non-unionized crew members filed a separate claim in court on July 14, 2023, seeking payment of EC$1.2 million.
Combined, the payment owed would have amounted to EC$7.9 million.
The Alfa Nero has been anchored in Antiguan waters since March 2022, following Russia’s war on Ukraine on February 24, 2022.
The government took ownership of the vessel on April 11, 2023, following legislative amendments to do so with the intention of auctioning the Alfa Nero quickly.
The government’s ability to sell the vessel has been hampered by questions over who the ultimate owner and benefactor of the vessel is, which has also put it in litigation.
The government believed that Russian oligarch Andrey Guryev was the beneficial owner of the 267ft vessel, but his daughter Yulia Guryeva-Motlokhov, with Flying Dutchman Overseas Ltd, a British Virgin Islands incorporated entity, is claiming ownership.
The dispute with Guryeva-Motlokhov caused Eric Schmidt and Warren Halle, whose auction bids were worth over US$60 million, above the government’s minimum selling price, to withdraw their bids. Halle is suing the government for breach of its auction rules, and the government has been seeking to negotiate with him since.
High Court Judge Nicola Byer had several issues to consider, including whether Captain Lewis had the authority to hire a crew to manage the vessel and, in some cases, promote them, and at what rate of pay those that returned were entitled to be remunerated.
The government noted that on March 10, 2022, Burgess Crew Services, the management company hired by Flying Dutchman Overseas Ltd to staff the Alfa Nero, terminated the employment of Captain Lewis and other crew members.
Judge Byer, who handed down the judgment on December 12, assessed that while Captain Lewis hired crew members out of necessity, any increase in payment or promotion was outside of the captain’s authority.
She said that the crew who remained on board from October 1, 2022, to April 10, 2023, did so at their own risk.
The promotions given by Captain Lewis to Andreas Koster as Relief Captain, Todd Rankin-Hurst, and Michael Eves, and Benjamin Clogg (who was promoted to relieve Hurst as needed) as Chief Officers were found to be unnecessary as none of the individuals promoted held their positions substantially.
According to the judgment, the ship’s captain had engaged with Opus Private Ltd, another overseas entity with alleged claims to the Alfa Nero, through Tyne Trust, which alleged that it owned all shares in Flying Dutchman.
The crew relied on the talks with Opus Private to remain on the vessel, and several emails between them talked about financial incentives and an attempt by Opus Private to obtain the required licenses to make payments to the crew.
The crew used the communication with Opus Private in their claim for double pay, as a December 2022 email from the overseas entity noted, “subject to legal input will be the promise of double pay, effective 1 December for all crew that remain employed, until such time as salaries are paid.”
According to the judge, the claim of double pay was dismissed as the crew could not show that Opus Private Ltd had the ability to follow through on their emails, and even if they did, Opus Private had not secured the required US Treasury licenses to unfreeze the asset to make good on any promise.
The judge wrote, “This court accepts that there were discussions, and indeed there was an intention, and that intention, however, well meaning, did not translate into a promise. Any such promise was, in fact, outside of the power of Opus Private to make.”
The judge added that the crew members, originally hired by Burgess, were entitled to payment at the rate of pay prior to their termination, and those not employed via the management company were entitled to a standard rate of pay as expressed in the contract.