M/Y Indian Empress Impounded Over Crew Wage Dispute

7 March 2018

The 95-meter M/Y IndianEmpress was impounded in Malta on Tuesday, March 6, after its owner, VijayMallya, failed to pay crew more than $1 million in wages.

More than 40 crew have gone unpaid since September, whenMallya abandoned the vessel, and are owed anywhere between $6,250 to more than$92,000, according to apress release by maritime professionals union Nautilus International. Aroundthis time, Mallya was reportedly arrested in London over allegations that hesupported the Force India Formula One team he co-owns with money-launderedcash.

So far, Nautilus International has secured a milestonepayment of four month’s unpaid compensation totaling more than $615,000 for itsmembers by using the Maritime Labor Convention, 2006 provisions. They arecurrently working to recover an additional $330,000 on behalf of Nautilusmembers by enforcing a maritime lien on the arrested superyacht for outstandingwages and other costs over and above the amounts covered by the MLC. The Guardian reports that non-union crewmembers are owed hundreds of thousandsmore.

“Our members on board gave their employer and the shipownermultiple opportunities to pay monthly wages, displaying a loyalty and restraintgreater than many would show in such situations,” says Danny McGowan, theunion’s strategic organizer, in the press release. “These opportunities wereregularly ignored by the owner, leaving us with no option but to take the caseto the courts.”

Nautilus’s actions have achieved a first for the superyachtindustry — enforcing the financial security provisions of the Maritime LaborConvention.

“Our ability to enforce [this] shows the vital importance ofthe international measure and ‘safety net’ amendments that were introduced toprotect crew members,” added Charles Boyle, Nautilus International’s directorof legal services, in the press release.

Mallya is reportedly out on bail and living in amulti-million pound mansion in Britain pending extradition proceedingsinitiated by India. According to Reuters,his defense team claims he’s being used as a scapegoat by Indian politiciansto deflect public anger at bad debts by state-owned banks.

UPDATE: 4/23/2018
According to the Times of Malta, M/Y Indian Empress has now been ordered to pay more than €68,000 to two marine service agencies. Malta’s The First Hall of the Civil Court has reportedly upheld the claims of Agence Maritime Tropezienne (€25,829) and Luise Associates Riviera & Co. S.r.l. (€42,502) relative to services rendered to Indian Empress. "The yacht’s legal representatives have admitted the applicants’ claims," the Times reports.

Currently, the vessel is facing a maritime lien over a million-dollar unpaid wage bill and a €651,000 unpaid fuel bill. The former owner, ex-politician Vijay Mallya — who was also a co-owner of the Force India Formula One team — is still in the UK pending an extradition request attempting to force him to return to India so he can face charges for his financial crimes, which include money laundering and fraud.

UPDATE: 6/29/2018
The ongoing saga of 95-meter M/Y Indian Empress has concluded. The vessel was finally sold in Malta by court auction June 28 for €43.5 million, Malta Today reports. The winning bidder has not been identified.

The vessel was originally impounded in Malta on March 6 after owner Vijay Mallya failed to pay crew wages totaling more than $1 million. According to Boat International, 13 creditors were also owed money.

While Nautilus International managed to secure four month’s unpaid compensation totaling more than $615,000 for the crew a few months ago, the crew and creditors are still owed. “The funds from the sale must be deposited with the court within seven days of the sale,” says Danny McGowan, Strategic Organiser with Nautilus International. “After that point, the court will arrange for the process of distributing funds amongst those who are owed money. There is a process where they assess the ‘priority’ of the claims and distribute them in order. Knowing the figure that the vessel sold for, it appears that all creditors will receive their dues in this case.” Good news, finally.

UPDATE: 7/11/2018
It’s not quite over yet. The winning bidder in the Indian Empress court auction on June 28 applied for a 15-day extension to the payment deadline, which was originally July 5. But a court in Malta rejected the request for additional time to pay the auction price of €43.5 million.

Nautilus International agreed to the application to extend the deadline, on the basis that this was the best hope of securing the remaining €234,129 wages owed to the crew since the vessel was abandoned last year, according to a press release by Nautilus International.

“It’s interesting to see that the judge has declined the application for an extension to the deadline,” says Danny McGowan, strategic organizer at Nautilus International. “We’re pleased to see the law being applied so strictly in this case, as it sends a strong message to those purchasing the vessel that yacht ownership is something that needs to be taken seriously.”

Now, a second judicial auction must take place, and Nautilus International is waiting for an application to be made asking the court to appoint a new auction date. There were at least six registered bidders for Indian Empress, but only three made bids during the original auction.

The vessel’s owner Vijay Mallya claimed the yacht wasn’t his problem and told Reuters that he had not owned Indian Empress for more than seven years. The vessel belonged to “a Middle Eastern gentleman,” whose name he wouldn’t disclose, and Mallya had made a deal that gave him use of the vessel for one month a year.

UPDATE: 7/24/2018

The Maltese court has set a date for the second auction of Indian Empress on September 19, according to Boat International. Interested parties will be required to pay a €1 million deposit 48 hours before the auction date.

The winning bidder of the June 28 auction — Crediyacht, which was reportedly representing an Iranian buyer — has been banned from re-bidding.

UPDATE: 9/21/2018
The saga of M/Y Indian Empress is nearing a close as a buyer has offered to pay €35 million for the yacht in a private sale, Boat International reports.

This bid from Sea Beauty Yachting Limited came a day before the second public auction, which was scheduled for September 19. Barclays, the mortgagee, appealed to the Maltese court to allow the private sale.

The court will decide whether or not to grant this sale on September 25. If it is granted, the previous winning bidder Crediyacht will be responsible for paying the difference between the sale price and €43.5 million, the amount Crediyacht had bid for the yacht on June 28.

According to the International Law Office, this was part of Justice Mark Chetcuti’s decision when the new auction date was set, which was the first time the Maltese court has held a bidder liable for paying the difference and requiring bidders in a judicial sale to make a cash deposit before the sale.

Nautilus International expects that with the sale of Indian Empress, it will receive the outstanding wages that are owed to the crew and the Union, according to its press release.

“After the disappointment of the first sale falling through, we are pleased to hear of this update,” strategic organizer for Nautilus Danny McGowan says. “We urge the buyer to deposit the funds with the court as soon as possible so that our members can put the matter behind them with no further obstacles to them receiving what they are owed.”

UPDATE: 09/28/2018
M/Y Indian Empress has been sold at last to the buyer who offered to pay €35 million in a private sale. The Maltese court approved the bid from Sea Beauty Yachting Limited, Times of Malta reports.

The 95-meter vessel has been impounded in Malta for months, and this is the second court-ordered auction to sell Indian Empress in order to pay off creditors, including unpaid crew wages.