One Ocean Expeditions Update

I’m easing back into work after a glorious long weekend by updating a couple of stories I’ve followed previously, which is why I’m talking about One Ocean Expeditions (OOE), the polar cruise operator founded by Westmount native Andrew Prossin.

Andrew Prossin (detail Tom Ayers, CBC, photo)

Andrew Prossin at CBRM helipad launch, 2020, note Resolute patch on vest. (Detail from Tom Ayers/CBC photo)

OOE, with debts of $29.6 million and assets worth just north of $1 million, sought creditor protection in a British Columbia court (it’s headquartered in Squamish) in 2020, escaping bankruptcy in October that year when its restructuring proposal was approved by BC Supreme Court Justice Sandra Wilkinson. (Fun fact: Prossin’s affidavit in support of the proposal was sworn right here in Sydney on 14 October 2020, while he was in town for the grand opening of the Port of Sydney’s helipad.)

Approval of OOE’s restructuring plan came as COVID cases were climbing in Canada (a wave that would peak in January 2021) and in the very early days of the country’s vaccine campaign (Canada had signed an agreement for 20 million doses of AstraZeneca just a month earlier). Cruise ships had been banned as of March 2020, and while the ban was scheduled to expire as of February 2021, the outlook for the cruise industry was uncertain, to say the least. But OOE argued the company could generate a better return to its creditors “by resuming operations” than by “filing an assignment into bankruptcy” and its creditors agreed, voting to accept the proposal despite the obvious headwinds facing a cruise company in the fall of 2020.

OOE hoped to resume operating voyages “as early as June 2021” with bookings beginning in late 2020. In fact, Prossin told the CBC’s Tom Ayers at the helipad opening that he hoped “to return to Sydney next year with another cruise ship after One Ocean Expeditions emerges from creditor protection.”

By June 2021, however, Port of Sydney CEO Marlene Usher was telling the CBC that Prossin had “formed a new company” to “offer Zodiac tours of Sydney harbor.”

That didn’t materialize either.

 

Default

OOE’s restructuring proposal included two options for OOE customers who’d prepaid deposits or fares for canceled cruises. The first was a credit equal to either 50% or 100% of their claim, up to a maximum of $100,000, which could be applied to “up to 50% of the cost of a future voyage.”

OOE also agreed to pay $600,000 into a fund from which it would refund some eligible creditors, but according to OOE’s insolvency trustee PricewaterhouseCoopers, the company missed its first $300,000 payment, due on 1 May 2021 and was granted an extension to 30 July 2021. A second $300,000 payment was due on 1 November 2021.

OOE doesn’t seem to have made either of these payments — the most recent document available on the trustee’s website, dated 8 September 2021, is a Notice of Default in the Performance of the Proposal in which PwC states its intention to “apply for a discharge without annulling the proposal,” leaving creditors to “take proceedings to annul the proposal and place One Ocean Expeditions Inc in bankruptcy at their own expense.”

Some 41 OOE employees lodged claims against OOE with British Columbia’s Employment Standards Branch (ESB). In 2020, the ESB issued three decisions relating to these claims, according to The Squamish Chief:

In February, the ESB issued a corporate determination that the Employment Standards Act did not apply to 17 employees working on One Ocean vessels, as they did not perform the work in British Columbia.

In April, the ESB determined that the company owed $263,029 in wages and $2,500 in administrative penalties to 24 employees for work performed in British Columbia.

In September, the ESB determined that Prossin is personally liable for $234,078.59 in wages and the full $2,500 in administrative penalties, as, under the Employment Standards Act, a director or officer can be held personally liable for up to two months’ wages.

OOE did not appeal the decisions and as of November 2020, when this story was published, the ESB was “attempting to recover the wages on behalf of the employees.” I asked BC’s Labour Ministry, which oversees the ESB, what progress had been made on this front and was told in an email that almost a year-and-a-half later:

The B.C. Employment Standards Branch is working with other jurisdictions to locate any assets that could be seized for payment of the debt. To date, the Branch has not received any of the funds owed by One Ocean Expeditions Inc. or Mr. Prossin for unpaid wages and administrative penalties.

 

Litigious

OOE also hoped to recoup some of its losses via “litigation claims” worth “in excess of $20 million” against Russia’s PP Shirshov Institute of Oceanology and Cyprus-based ship broker Terragelida.

OOE leased two vessels owned by the Shirshov Institute, the Akademic Ioffe and the Akademik Sergey Vavilov, via Terragelida. I’ve written at length about the dispute between the two, but the short version is that the Ioffee ran aground in the Canadian Arctic in August 2018 and OOE blamed the Russian crew and claimed its charter agreement with Terragelida meant the latter was liable for costs associated with rescuing passengers and canceling voyages while the Ioffe was undergoing repairs. Terragelida denies the responsibility and claims OOE owes it money.

Akademik Ioffe (Photo courtesy of OOE)

Akademik Ioffe (Photo courtesy of OOE)

The two sides attempted to negotiate a settlement but talks broke down in April 2019 and in May 2019, Terragelida terminated the charter arrangement and OOE found itself unable to make the monthly payments on its third vessel, the RCGS Resolute. The Resolute‘s owner, the oddly named Bunny’s Adventure and Cruise Shipping Co., terminated the charter and repossessed the vessel in October 2019. (There’s so much more to the Resolute story, but you can read it all here if you haven’t already.)

Both OOE and Terragelida claim to have been the party to initiate arbitration proceedings which are, apparently, ongoing in London and could take years to reach a resolution.

In August 2019, OOE filed a claim against the PP Shirov Institute (and all its vessels) with Canada’s Federal Court, which hears cases involving maritime law.

On 1 November 2021, the Akademik Ioffe was detained in the Danish port of Skagen at OOE’s request. Reuters reported that court documents associated with the detention showed OOE was claiming $6.1 million in damages from the Institute (the Vancouver Sun put the figure at US$19 million) and that the Ioffe had “avoided a previous attempt to detain it in Portugal.”

On 5 November 2021, however, the Western High Court of Denmark ruled that:

…the ship belonged to the Russian state and that the ship was used by a state research institute. The issue of arrest in the ship was therefore primarily regulated by Act No. 198 of 16 May 1950 on foreign state ships, etc. According to Section 3 of the Act, arrest may not be made in ships owned or used by the foreign state and used exclusively for state purposes. of a non-commercial nature.

The High Court further held that the ship was on its way to conducting an oceanographic scientific expedition and that this had to be regarded as a state purpose of a non-commercial nature. Section 3 of the Act on Foreign State Ships, etc. was therefore an obstacle to arrest in the ship. The High Court therefore overturned the arrest in the ship.

As of Tuesday, when I checked, the Marine Traffic website showed the vessel was in the Russian port of Svetly, in Kaliningrad Oblast, on the Baltic Sea.

The Shirov Institute has yet to respond to OOE’s lawsuit — on March 7 this year, the judge overseeing the case ruled that it would “continue to be held in abeyance,” and OOE would be required to submit a status update by July 4 “regarding its efforts to effect service of the Statement of Claim on the Defendants, along with a proposed timetable for the advancing of the litigation.”

I have to think serving a Russian state research institution has become more rather than less difficult since Putin’s invasion of Ukraine, but I guess we’ll find out in July.

And now, you’re as up to date as I am on the OOE saga.