Hunter’s VLCC charter dispute reaches $86.41 million

By Amara Osei

Hunter Group’s disputed VLCC charter balance reached $86.41 million, excluding accrued interest, after the counterparty paid $18.62 million less than due for October, the Oslo-listed shipping investment company disclosed Monday.

That reduction marked the eighth consecutive month of underpayment and the largest monthly shortfall since the row began in March. The disputed balance climbed from $67.79 million at September’s end, an $18.62 million increase that exactly matched October’s missing payment.

The Norwegian company also recorded approximately $82.89 million in net time charter earnings for October, but $18.62 million of that remained outstanding. Strong crude tanker earnings and a sizeable collection gap occupied the same month. Handy little paradox.

How did the claim reach $86.41 million?

Hunter initiated proceedings before the London Maritime Arbitrators Association in June, after unpaid hire reached about $28.2 million. By October, the disputed balance excluding interest had more than tripled from that level to $86.41 million.

The charterer continues to challenge its obligation to pay the full contractual hire. Hunter said the reductions “constitute a breach of contract” and that it would “continue taking steps to recover the outstanding amounts.” The claims remain unresolved on the disclosure.

Interest sits outside the reported balance, which means the $86.41 million does not include accrued interest. The June arbitration threshold was about $28.2 million; October added another $18.62 million in disputed hire.

How did the rate structure shape the dispute?

Hunter’s tanker exposure centers on two scrubber-fitted VLCCs chartered in at fixed rates and chartered out on floating-rate arrangements linked to the Baltic Exchange’s TD3C benchmark. The structure gave Hunter exposure to stronger crude tanker earnings, with fixed incoming costs and floating outgoing hire.

Despite the rally, the counterparty’s reduced payments continued for an eighth month. The disclosure did not attribute the shortfalls to the TD3C calculation or identify the counterparty. For market readers, that distinction matters: a benchmark-linked employment structure does not settle the payment dispute.

What changes for shippers as the VLCC charters approach expiry?

Hunter disclosed no vessel withdrawal, cargo reallocation, sailing disruption or revised freight quote. In published operational terms, the disclosure shows no immediate effect on shippers: the story concerns cash collection and contract enforcement, not an announced change in crude tanker capacity.

For other carriers, the warning is straightforward: a strong market backdrop does not guarantee full payment from every charter counterparty. For forwarders, the practical watchpoint is the approach of expiry for Hunter’s two VLCC arrangements, especially while the company pursues $86.41 million in London.

Hunter’s fixed-in, floating-out structure could support future earnings if TD3C remains strong and the contracts are performed. But strong headline earnings cannot repair $18.62 million left unpaid in October, and the disclosure provides no timetable for resolving the claim.

New chief executive inherits the collection test

Erik Mathiesen became permanent chief executive on October 1, with a mandate to oversee current chartering operations and develop the company’s next phase as the existing VLCC arrangements approach expiry. His first month in post coincided with the dispute’s largest monthly shortfall and a disputed balance of $86.41 million.

That leadership brief now joins two jobs: managing recovery from the London arbitration and preparing the next phase of Hunter’s tanker portfolio. Mathiesen’s appointment did not resolve the charterer’s payment challenge, and Hunter continues to pursue the outstanding amounts.

Hunter’s position is that the contractual hire remains due and the reductions breach the charter. The commercial evidence is messier: $82.89 million in net earnings still left $18.62 million unpaid. A strong market can coexist with a weak payment record.

Neither the counterparty’s identity nor its reasons for challenging the full amount appear in the disclosure. Shippers and forwarders therefore should not treat the episode as proof of a broad tanker-market payment problem, or as evidence of an immediate capacity squeeze. It is narrower: one Hunter charter relationship, $86.41 million in dispute, and two VLCC arrangements nearing expiry.

The next test is whether Hunter recovers the disputed hire and what terms it secures as the current arrangements approach expiry. Strong TD3C earnings offer a favorable rate backdrop, but they cannot settle the collection dispute. The London arbitration bears on the first issue; the charter market and Mathiesen’s portfolio work will shape the second.