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Enron Mail |
britt,
thanks your reply which is noted. you will notice i have excluded david best and ngregson (?) preferring to keep my comments in house as privileged info, unless you feel this msg should be forwarded to them later. firstly, i am getting nowhere with mitsubishi on the settlement front. i have gone so far as to mention this morning to mitsuru that if this does goes to arbitration, and should mitsubishi succeed in their position, this will only serve to increase our claim by a similar amount since these costs would then become part of our contamination claim. he seems quite content to let this go to arbitration. as an example, he was suppose to call me back this afternoon but did not. secondly, with regards to your comments, i would just respond/add the following information: 1. i don't know if i am switching tactics so much as following what should have been done in the beginning (i.e. submit the claim to our insurance company and let them proceed against the owners). i honestly feel the arbitrators will say, "pay the freight (and possibly the demurrage now) and settle the contamination claim as a separate issue". clearly, the c/p says that freight is due without deduction once the vessel has completed discharge. on the issue of the "pre-sale" survey, i have discussed this matter internally with eric tan. seems our position is that singapore considered the sample that was drawn as a bad sample as well as we were not sure that the test methods used conformed with the testing methods required for first gas. this position is proved by the loading of the pacific virgo when the product subsequently tested on-spec for first gas. granted, it might still become an issue but, as you say. it could become an issue in either proceeding. i am getting a little confused on the matter of the joint testing. verbally i was advised that enron did not want to have the joint testing - at least not on a prompt basis. your msg now says that we do want to test the product and it should be done as soon as possible (as mitsubishi - and your advices that the underwriters and hear owner's p and i club would want). i assume this change is the result of the arbitration. be that as it may, i do have a bit of information that you may, or may not, be aware of or find relevant. when eric tan and i visited first gas in mid-oct to meet the personnel at first gas and witness one of the cargoes being discharged at the plant, we also took the opportunity to meet with sgs in subic bay to see their facilities and meet their personnel. during the conversation the subject of the elang cargo came up and the comment from sgs is that they were fairly certain it was off-spec due to "bugs". this may sound silly but i have heard of this before and is a problem with petroleum products. it seems sgs even went so far as to test the product themselves for these "bugs" and got a positive result. this test was not requested by enron or first gas and was done some time later in this process. i understand there may be some concern on our part over our subsequent sales to third parties if we knew there were bugs in the product. i would have to say that this was not known at the time and even today is only conjecture based on sgs' advices mid-oct (well after these sales). sgs also described "changes" to the product which would fit with the cargo having bugs (i.e. a strong sulphur smell and change in colour). if the testing is now done, i do not know if these bugs will be detected or not. however, if they are in the ship's samples, they may have changed the sample sufficiently that even a visual observation may detect the problem. the next problem becomes proving from where the bugs originated. were they in the previous cargo tanks that were not cleaned properly? or were they in the condensate when the cargo was loaded? obviously, testing of the shore sample prior to loading will determine the answer. if the shore sample is ok, then they had to come from the ship. if the shore sample also has bugs, then we should be claiming against our suppliers. this of course assumes the suggestion put forth by sgs is in fact correct. just something else to be considered. 2) i am not saying that we pay the full amount immediately but only the freight portion (about $500,000). we then advise mitsubishi (or their lawyers) that we will now review the demurrage claim (about $260,000) and revert by say end nov. the demurrage claim has been sent to our london office's demurrage department and i have asked them for their comments on the claim. after all, there may be issues with the ship's pumping performance or simple laytime errors which may reduce the demurrage claim. they will try to get me a response before the weekend. in this manner, we pay part of the money but still have a smaller portion which we may apply against our claim once the test results are known. i will leave this to legal as to decide how the approach to mitsubishi or their lawyers should be made rgds
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