Tinian Shipping ferries seized

Ferry service between Tinian and Saipan has been temporarily suspended after the Federal Court ordered the seizure of two vessels owned by Tinian Shipping & Transportation Inc. due to the latter’s failure to settle its loan to Debis Financial Services Inc.

According to Anthony Ha, spokesperson of TSTI, the company will appeal the decision handed down by the court, and “will fight it until the end.”

TSTI, a subsidiary of Tinian Dynasty Hotel and Casino, likewise asked Tinian residents and the municipal government to rally behind the troubled company to allow them operate the ferry service while awaiting court dates for appeal.

The shipping company had acquired a loan amounting to $7,616,000 from Debis Financial to finance the acquisition of two vessels — Saipan Express and Tinian Express. Based on the loan agreement, the company will pay back Debis $753,270 every six months for seven years.

But the financial crisis in Asia and the decline in visitor arrivals to the CNMI has brought TSTI into financial distress since it started operating the ferry in 1996.

As part of its marketing campaign to encourage tourists to come to Tinian, TSTI even lowered its ferry rate in a desperate move to attract customers to Tinian Dynasty. However, such decision only hurt the shipping firm, making it more difficult to meet its financial obligation in the early part of 1999.

According to Ha, a meeting between the two parties was held in May and an agreement for a new repayment schedule was reached. However, Debis Financial billed TSTI for additional interest after its default on three payments.

TSTI did not agree on the amount as it protested the way the interest was calculated, Ha said. He added that TSTI has shown its willingness to pay the outstanding loan by remitting $150,000 to Debis in February 1999. Subsequent payments were made in May and June 1999 totaling $903,270.

Still, Debis was not satisfied with the payment since an agreement was never reached concerning the amount of interest. This led Debis to file a lawsuit against TSTI seeking seizure of the vessels and recall the entire outstanding loan amount. Ha said negotiations were made between the two parties hoping to seal an out of court settlement and prevent the seizure of the vessels.

To show TSTI’s sincerity and willingness in paying the outstanding loan amount, Ha claimed the company remitted to Debis some $1,330,000 in August 1999 to clear all previous default payments plus interest.

This brings to $2,383,270 the total amount of payments made to Debis in 1999 or $123,460 more than the three payments that TSTI had in default. Considering the amount paid by the company, Ha said TSTI should no longer have been considered in default but Debis still went to court on Aug. 26, 1999 and received a judgment to seize both of the vessels.

“Debis disregarded TSTI’s willingness to repay the loan and acted in a selfish manner. It is inequitable for them to seize the vessels while payments are no longer outstanding. They are acting irresponsibly and inconsiderately toward TSTI and the people of Tinian. Our ferries were and still are undoubtedly one of the significant modes of transportation between the two islands,” Ha said.

He added that Debis did not take into consideration the adverse effects on the economy and tourism of Tinian island when it asked for the seizure of the vessels. “The court of law has also ignored Tinian island’s ubiquitous need for convenient transportation by awarding a judgment in favor of Debis,” said Ha.

“Taking away the vessels would definitely impede the growth of the local economy and all of the businesses found on the island. More significantly, the people of Tinian would also be deprived of the mobility of traveling between the islands and freedom of traveling to Saipan during nighttime,” said Ha.