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Whats Up with Pearl Mist?

Shes Tied up at Shelbourn ship repair, waiting for Lawers to sort things out.
First Some Background.
ISI finished construction of the Vessel in April 2009, conducted dock–and–sea trials,
and on May 6, 2009 gave Pearl Seas written notice of completion of the trial run. During Consrtuction there were several changes made to the vessel design, and these were likely the source, at least in part, of the construction Delays. On May 9 Pearl Seas rejected the Vessel, aruging it is not compliant with the contract, that “would materially interfere with the operation of the Vessel.

The Contract contained an Arbitration Clause. During and after construction of the Vessel, Irving Shipbuilding and Pearl Seas repeatedly disagreed about the terms of the Contract and each other’s performance. They convened an arbitral panel to which they have submitted their numerous disputes. Perl Seas have sited several issues, including Late Delivery and deficencies (70 issues were identified, 17 of which were “[t]he most serious defects.”) including cosmetic or minor construction defects, failure to install certain Contract items, excessive noise and vibration (of HVAC), and failure to install shower stalls. As well, The Flag State Determined that the condition of ‘Pearl Mist’ is not to a standard acceptable for registration, and Pearl Seas argued the vessel was not in complicance with USCG Regulations. For these reasons, Pearl seas Terminiated the contract.

Irving Shipbuilding argued it was not in default because none of the non–regulatory defects rose to the level of a failure to perform a material requirement
of the contract, and that USCG requires that the owner of a ship must be part of the certification process, and that the “vessel must be crewed, in order to carry out the Training and Drills tests”

The arbitrator agreed with Irving, and and Pearl Seas Sued Irving in Connecticut Court to dismiss the arbitrators Verdict. In both cases the Case was dismissed. So Where does this Leave the Pearl Mist? Likely In the Arbitation Panels hands. At this point it appears that Pearl Seas will be held to the contract – though will likely recive some compensation for the deficencies (which is capped at 2 million dollars or so)

For the Rullings, See:

http://02ec4c5.netsolhost.com/blog/wp-content/uploads/2011/04/Pearl-Seas-2.9.11.pdf
http://docs.justia.com/cases/federal/district-courts/connecticut/ctdce/3:2010cv01294/90364/51/0.pdf?1297340424

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Peter Ziobrowski

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