Canadian Warships Try to Send Message to U.S. Firm

Two Canadian warships have pulled alongside a transport ship carrying hundreds of Canadian army vehicles home from Kosovo to send a message to its U.S. owners to stop delaying the voyage and proceed to port.

But the owners, who say they are not being paid by the contractor that hired them, said on Tuesday they intend to keep the ship, the GTS Katie, at large until their bitter commercial dispute is ended.

"I guess she's going to stay at anchor until we get an agreement," said Flip Walters, chief executive of the Katie's owners, Third Ocean Marine Navigation.

The Katie is now anchored 86 nautical miles south of Newfoundland's southeastern tip. It stopped sailing on Monday night because of bad weather but Walters said that because commercial negotiations had broken down on Tuesday it would now stay put, even if the weather cleared.

The Canadian government, unhappy that C$223 million ($150 million) worth of equipment is effectively being held hostage, ordered the destroyer HMCS Athabaskan alongside the ship on Sunday night and the frigate HMCS Montreal on the other side of the ship on Monday at midnight. "We wanted to demonstrate to the parties that we were interested in bringing this to a quick and safe resolution," Alastair Mullin, a spokesman for Canadian Defense Minister Art Eggleton, said. But unless the Canadian Forces actually boarded the ship and steered it into port in Quebec, it did not appear the intimidation would move it along.

"Right now, we're keeping all our options open," Mullin said.

Walters said the Ukrainian crew of the ship - flagged in St. Vincent and the Grenadines - would not throw up any resistance to boarding, but said: "Just keep the guns at home."

The vessel holds about one-tenth of the Canadian army's equipment - 580 tanks, armored personnel carriers and other army vehicles, along with 390 sea containers of ammunition and other material. The Montreal company SDV Logistics Ltd. won the contract to bring the equipment home for $895,000, and subcontracted it to another Montreal firm, Andromeda Navigation, which in turn hired Third Ocean.

The dispute is primarily between Third Ocean and Andromeda and centers on whether Andromeda will pay Third Ocean and whether Third Ocean had a responsibility to bring the ship in regardless. The ship was contracted to arrive in Quebec in mid-July, but Walters said Andromeda's traffic manager Rita Chirola flew to Baltimore on July 5 to inform Third Ocean that Andromeda would not be making its next payment because of counterclaims it had on the U.S. firm.