ISMAIL DILAWAR

KARACHI: A bulk carrier of Pakistan National Shipping Corporation (PNSC) has been arrested at a South African port, thanks to a $14 million trade row between Pakistan Steel Mills (PSM) and its foreign partners.

M/v Hyderabad stands detained at Port Elizabeth for the last five days after the South African port authorities, citing a local court order, arrested the Pakistani vessel.

“Yes, the ship is under arrest for a matter we have nothing to do with,” confirmed a PNSC official, seeking anonymity for he was unauthorized to talk to media.

The arrest, according to sources, came as a result of “some arbitration matter” between PSM and its unknown South Africa trading partner which had made a $14 million financial claim against the Pakistani steel maker.

“There is some sub judice matter. The South Africans contend that PSM’s state-owned status made the Government of Pakistan a direct beneficiary of the trade deal,” explained official at the national flag-carrier.

This is why the PNSC ship was detained. Officials at PSM, however, termed the arrest as “unjustifiable” saying PNSC had nothing to do with the “litigation” the Mills had with a Singaporean-registered shipping firm.

“We are in litigation with them for a dispute over a portion of the freight agreement we probably had signed with the Singaporean shippers in 2009 or 2010,” the official said, requesting not to be named in this “high level” matter.

Unable to recall the company name, he said the disputed amount in no way exceeded $0.5-$0.6 million. “The issue is being taken up on Prime Minister’s level,” the PSM official told Business Recorder. “We would only accept their claim until a proper platform, say a court of law, decrees so,” the official said.

Asked how a shipping line registered in Singapore was able to get PNSC ship arrested in South Africa, he said the company “might have South African ownership”.

Officials at PNSC, on the other hand, are running form pillar to post to get their vessel released through, what an official said, offering a “back-to-back” government guarantee to the detainer.

“We are pursuing the issue on all fronts. Be it on High Commission level, ministry of finance, ports or industries,” the official said.

“The government, hopefully, would issue us a Letter of Guarantee in a day or two,” he said, adding that PNSC itself could not extend a guarantee as in case of a “call” the organization would be in a fix.

However, the sources privy to the matter claimed that the issue was waiting to be decided in the Economic Coordination Committee’s next meeting which was not scheduled to take place as yet.

Though PNSC officials would keep mum on it, the ship’s almost weeklong detention meant the national exchequer losing millions of dollars on account of freight, besides inflicting on Pakistan a huge reputational damage. This very factor should put the local authorities on their toes.