The Greek dry bulk shipping company Navios Maritime Holdings has started arbitration proceedings in London on June 10 over the service contract cancellation from Brazilian mining giant Vale International.
Namely, at the end of March Vale said that it will not be performing the 20-year service contract related to the iron ore facility currently under construction in Nueva Palmira, Uruguay.
The contract was signed between Navios’ subsidiary, Navios South American Logistics, and Vale in September, 2013.
“No assurances can be provided that the company will prevail in the arbitration or that Vale International will finally perform the contract,” Navios said.
The company further noted that if Vale fails to perform, there may be a significant impact on the company’s future business.
Navios South American Logistics earlier said that it believed Vale’s position is without merit and considered that the contract remains in force.
“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.
World Maritime News Staff