High Court awards Alfa Nero crew partial payment in legal dispute with government

SOURCE- DAILY OBSERVER: The High Court has issued its judgement on payment between the government and both current and former crew members of the Alfa Nero superyacht.

The dispute arose over the monies owed to the original crew members of the superyacht prior to 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 Malcom Lewis and Nautilus International – an independent UK-based trade union for maritime professionals and other seafarers, represented the unionized crew members, claiming 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 which 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-unionised crew members filed a separate claim in the court on 14 July 2023 seeking payment of €439,494.40 (EC$1.2million).

Altogether, the combined payment would have arisen to €2.7 million (EC$7.9 million).

The Alfa Nero has been in Antiguan waters since March 2022, following Russia’s war on Ukraine on 24 February 2022.

The government took ownership of the vessel on 11 April 2023, following legislative amendments to do so with the intention of auctioning the Alfa Nero in quick succession.

Questions over who the ultimate owner and benefactor of the vessel is has hampered the government’s ability to not only sell the vessel, but has also placed it in litigation.

Russian oligarch Andrey Guryev was thought by the government to be 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 hassle with Guryeva-Motlokhov saw both Eric Schmidt, and Warren Halle, whose auction bids were worth over US$60 million—above the government’s minimum selling price—withdraw their bids, with Halle suing the government for breach of its own auction rules.

The government has been seeking to negotiate with Halle since.

Several issues arose for High Court Judge Nicola Byer 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 were those that returned entitled to be remunerated.

The government  noted that on 10 March 2022, the employment of Captain Lewis and other crew members was terminated by Burgess Crew Services—the management company hired by Flying Dutchman Overseas Ltd to staff the Alfa Nero.

High Court Judge Nicola Byer, who handed down the judgement on December 12, assessed that while Captain Lewis hired crew members out of necessity, to which the government also accepted as fact, any increase in payment or promotion was outside of the captain’s authority.

She said that the crew who remained on board from “1 October 2022 and 10 April 2023 did so at their own risk.”

The promotions given by Captain Lewis to Andreas Koster as Relief Captain—a person who takes temporary control of the vessel if the captain is ill or on holiday— Todd Rankin-Hurst, and Michael Eves, and Benjamin Clogg (who was promoted to relieve Hurst as needed) as Chief Officers was found to be not necessary as none of the individuals promoted held their positions “substantially.”

According to the judgement, 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.

According to the judgement, 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 communication with Opus Private was used by the crew 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 secure the required US Treasury licenses to unfreeze the asset to make good on any promise.

“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 wrote.

The judge added 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 their contracts.

Additionally matters of gratuity, notice/leave pay, travel expenses, attorney fees and crew training expenses were also discussed in the judgement, with the judge largely dismissing most of the claims, except notice/leave pay.

The court found that the crew members hired through Burgess were entitled to their holiday pay in line with their contract before termination.

No date was given for when payment should be made to the crew members in last week’s judgement.

Until a buyer is found, the Alfa Nero will remain a bogey for the government, attracting more lawsuits than interested bidders.

The UK-based Sun newspaper on December 10 published an article, highlighting the challenges facing the government as taxpayers continue to foot a US$28,000 (EC$75,000) a week bill, which includes at least EC$4,000 to cover diesel fuel for the air conditioning unit to reduce mould on the vessel.

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