Oil Plunge Will Mean Huge Wave of Shipping Disputes in 2015

by Ship & Bunker News Team
Thursday April 23, 2015

Norway-based global law firm Wikborg Rein Wednesday told the Singapore Sea Asia conference that by the end of 2015 it expects a wave of legal disputes resulting from the dramatic fall in oil prices, ShippingWatch reports.

"The cases that are coming due to the oil plunge will be huge and could take even longer than what we have experienced in shipping before," said Steffen Pedersen, partner for Wikborg Rein in Singapore.

Pedersen said Wikborg Rein has already handled a case for a Brazilian client involved in a dispute over an onerous contractual position.

"So far we have not seen a lot of disputes but this is just the eye of the storm," he said.

"At the end of 2015 and in the beginning of next year, we will be seeing a whole lot of disputes over companies that can't live up to their commitments.

"These disputes, as we'll see, will involve a lot of money and they will be fierce."

Pedersen said that many deals were done at a time when the price of oil had been around all-time highs and there is pressure on parties to untangle themselves from contracts which have become unfavourable since the dramatic drop in oil prices.

"The dispute will be worse than following the collapse that we saw after the shipping crisis of 2008," he said.

Pedersen also said the oil and gas industry will see companies become targets for rivals, governments and private equity firms, while players will look to move operations to lower cost jurisdictions to stay afloat.

Ship & Bunker News Team
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