After it received a contract termination from the Brazilian mining giant Vale International, the Greek dry bulk shipping company Navios Maritime Holdings is standing its ground with intentions to take legal action against the company.
At the end of March, the mining company informed that it will not be performing the 20-year service contract for the iron ore facility currently under construction in Nueva Palmira, Uruguay, entered into with Navios South American Logistics, a subsidiary of Navios Holdings, in September, 2013.
The company said that it believes Vale’s position is without merit and considers that the contract remains in force, although it is “running slow.”
“We continue the construction of the new terminal and as of Q1 2016 we have paid approximately USD 65 million. In addition we have remained in constructional obligations of about USD 77 million,” Navios said, adding that in total, the company has paid USD 142 million out of a total budgetary CapEx of some USD 150 million.
Besides the 20-year contract for the new port terminal, Navios said it has several contracts of affreightment and time charters for the transportation of minerals without barge with Vale, all of which are under English or New York law.
“We currently have a dispute with Vale regarding the termination date of one COA contract which is under arbitration in New York. The final award for this case is expected in autumn,” the company added.
In April, Moody’s rating agency downgraded Navios Maritime Holdings’ corporate family rating to Caa3 from Caa1 as Vale pulled out of a service contract.
World Maritime News Staff