---------------------- Forwarded by Richard B Sanders/HOU/ECT on 12/15/99 
11:42 AM ---------------------------


Helen_Godel@clyde.co.uk on 12/15/99 06:30:56 AM
To: Gail Brownfeld/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc: Robert C Williams/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, 
richard_b_sanders.ect%ei.enron.com@clyde.co.uk (bcc: Richard B 
Sanders/HOU/ECT)
Subject: Havmann





Gail -

To answer your questions, and being brief in this complicated case, I am
optimistic about the changes of a recovery against charterers' liability
underwriters.

Were we to revive the arbitration and it went to a final hearing on merits, I
rate the chances of success as 60:40 in our favour.  Underwriters have pleaded
the defence of inherent vice in the adjourned arbitration but the burden of
proof is firmly on them.  Further, Minton Treharne & Davies, our experts,
believe that the cargo was borderline on spec. and became off-spec. for
transit-related reasons (which cannot be blamed on the ship).  In our favour, 
we
have the Samarec certificate of quality and one loadport sample ex ship 
showing
the cargo on spec.  Against this is the circumstantial evidence of problems on
other ships and what will be a sustained technical attack on the credibility 
of
the Samarec certificate by a chemistry expert.

My instincts tell me we shall never reach a final hearing.  We will have to
revive the arbitration without doubt, but underwriters in my view have not got
the stomach for a fight.  I think they will try to settle for an agreed 
figure,
and will look to Enron to discount their claim.  We shall claim against them 
on
top of the settlement sum (yet to be paid by you), various costs and
disbursements incurred in defending shipowners' claims.  In my view they were
all reasonably incurred.  Underwriters were given every opportunity to settle
with shipowners but choose to do nothing.  They did not even bother to attend
the mediation.

To answer your queries on fees, the amount we are holding on client account is
approximately USD111,000 (Navigas settlement monies plus refund of arbitration
deposit less paid Clyde & Co. accounts).  Unbilled costs are approximately
o7,000 and unbilled disbursements o25,000.

Regards,
David Best.


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