Singapore releases detained Iranian ships

Iran’s main container shipping line has buttressed its ability to keep operating in the face of international sanctions by winning the release of three nearly-new ships that had been detained in Singapore and offered for sale to the highest bidder.

The three Korean built ships, each capable of carrying 5,000 standard containers, are believed to have attracted more than 30 offers from a range of international bidders after they were offered for sale in November.

However, Singapore’s supreme court released the ships on Wednesday after a judge ruled that Islamic Republic of Iran Shipping Lines had deposited sufficient funds to satisfy its creditors.

The ships were held after IRISL defaulted on loan repayments following US and the European Union sanctions against the company, which Washington says has been involved in missile proliferation.

As a result of those measures, US officials say the line’s bank creditors have called in debts, international insurers have refused to provide cover and ports in Europe and elsewhere have made IRISL ships unwelcome.

A UN resolution has also frozen the assets of three of IRISL’s subsidiaries and called on member states to “exercise vigilance” over dealings with the company.

“Pressure on the company has become severe,” Robert Einhorn, the US’s co-ordinator of sanctions against Iran and North Korea, told the Financial Times. “They are facing very serious solvency problems.”

Although Washington says the Singapore court’s verdict was expected after IRISL took steps to satisfy in full the debt corresponding to the three ships, it represents a setback to the US’s efforts against the shipping line all the same.

Speaking to the FT earlier this week, Mohammad-Hossein Dajmar, IRISL’s managing director, said he expected the release of not just the three ships in Singapore but two others detained in Hong Kong and Malta, and insisted Asian ports had remained open to the company’s fleet.

He added that in the eight months since late March IRISL’s income had grown by 40 per cent and its shipping transactions by 25 per cent.

The ships, the Tuchal, Sahand and Sabalan, were detained after Crédit Agricole and Société Générale, the French banks, claimed that IRISL had defaulted on loan repayments and swaps agreements. The Export Import Bank of Korea also claimed repayment of loans.

The shipping line transferred at least €155m ($205m) to SocGen, as agent for the lenders, but the money has not been released because of an EU rule that funds from Iran can only be transferred with government approval.

The court heard that the French government has approved payments to the two French banks, but has so far not given permission for a transfer to Korea Exim Bank, even though the Korean central bank has given its approval.

However, Mr Justice Quentin Loh, the judge, said the payments made by the shipping line were sufficient to cover the sums alleged to be owed and there was no reason to expect French approval for the transfer to Korea to be denied.