The Ronia Atlantic, one of the wellboats operated by Solvtrans Chile SA. Photo: Solvtrans Chile.

Solvtrans Chile ordered to pay $4.6m to rival company

A Chilean court has ordered wellboat operator Solvtrans Chile to pay more than $4.6 million in damages to rival wellboat company Naviera Orca. Solvtrans will appeal the decision.

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The case centred around Naviera Orca’s claim that Chilean ownership of Solvtrans Chile was a sham. The law states that Chilean shipping businesses must be majority-owned by Chilean nationals.

In 2015, Norwegian-owned Sølvtrans sold 51% of Solvtrans Chile SA to its general manager, Víctor Vargas, a Chilean national, for around £100,000 – a sum Naviera Orca claims massively undervalued the company, which has vessels valued at millions of pounds.

Víctor Vargas bought 51% of Solvtrans Chile, which owned wellboats worth millions, for $100,000.

‘Fraudulent act’

After a process of more than two years, the 12th Civil Court of Santiago decided to accept Naviera Orca’s claim, meaning that Solvtrans and Vargas must pay compensation for damages for the equivalent in national currency of US$4,638,475 plus interest, for violations of Chilean regulations. 

In its ruling, the court stated that the demand for restitution of the profit obtained by Solvtrans Chile SA was accepted due to the “fraudulent act” of the stock purchase agreement between Sølvtrans and Vargas.

Naviera Orca’s lawyer, Enrique Alcalde, said the ruling reinforced the principle that the only vessels authorised to carry out cabotage (carriage of goods for reward) work must be controlled by nationals.

‘Flouting regulations’

“This sentence comes to correct and punish a repeated conduct of representatives of foreign capital that, flouting all regulations, sought to profit from one of the activities where national identity and sovereignty is especially relevant,” said Alcade.

Solvtrans Chile general manager Víctor Vargas said Solvtrans Chile and the other defendants had filed an appeal against the judgment.

In July last year, the Santiago Appeals Court dismissed a case complaint against Vargas and a lawyer, José Manuel Domínguez, both accused of the alleged crime of simulated contract.

Threatening jobs

The argument over Solvtrans Chile’s right to operate led to Naviera Orca winning support from south Chile shipping and ports association Armasur, while Chile’s biggest trades union group, the Central Unitaria de Trabajadores (CUT), backed Solvtrans.

CUT accused Naviera Orca of threatening the jobs of its members and claimed the company was itself a subsidiary of another Norwegian wellboat company, Rostein AS.

This was denied by Rostein vice-president Glen Bradley, who said that although Rostein’s owner, Odd Einar Sandøy, also owned a quarter share of Naviera Orca, Rostein AS “had no interest in Chilean companies or any vessel operating in that country”.