Wayne,

Here is a brief  privileged and confidential (not to be handed to the other 
side) description of the above-referenced matter from our attorney, Andrew 
Bicknell of Clyde & Co. in London.  Andrew is available for further 
consultation with you on Wednesday if you so desire.  His direct telephone # 
is 9-011-44-207-648-1833 (that's calling from the US, of course).  Andrew's 
e-mail address is "andrew.bicknell@clyde.co.uk"

I appreciate any help you can give us at your negotiations on Wednesday with 
Exmar.  The best of all possible worlds is if both EGLI and Exmar could agree 
to withdraw/dismiss their claims against each other and walk away from this 
case before year end.  If you wouldn't mind, I would appreciate a short 
e-mail from you regarding Exmar's response during your meeting with them.

Many thanks for your help.

Britt
----- Forwarded by Britt Davis/Corp/Enron on 12/11/2000 12:33 PM -----

	Wendy.Labuda@clyde.co.uk
	12/11/2000 12:25 PM
		 
		 To: Britt.Davis@enron.com
		 cc: Richard.B.Sanders@enron.com, Daniel.R.Rogers@enron.com, 
Alan.Aronowitz@enron.com, Becky.Zikes@enron.com
		 Subject: SANTA CLARA




Britt

I would summarise the main facts/status of this matter as follows:

(1)  Enron voyage chartered "SANTA CLARA" from Exmar N.V. by a C/P dated 
5.2.91
to carry cargo of 4,200 mt 5% more or less at owner's option of propane, from
Houston to Dunkirk.  Under the Charterparty Enron had the option to load cargo
either fully refrigerated or ambient or chilled.

(2)  On 26th February 1991 the Master advised Enron that the maximum quantity
that the cargo could load at ambient temperature was 3,760 mt having regard to
the vessel's pressure settings and the USCG and IMO Rules and Regulations. The
Master was in fact absolutely correct but Exmar tried to make out that the
vessel could load the full charterparty quantity.

(3)  It is our case that in order to load more than 3,760 mt (the cargo was
loaded at ambient temperature) Exmar refrigerated the cargo as it came on 
board
to reduce the volume.  This caused the loading to be excessively slow.  We say
this method of loading was actually illegal.  It was only by loading illegally
in this way that Exmar could load more than 3760 mt at the required pressure
setting.  We also say it was an express term of the charterparty that the 
entire
contractual cargo could be loaded within the contractual lay time.   The 
vessel
also had to raise the temperature and discharge causing further delays.

(4) There was great commerical pressure on Enron at the time.  The market for
propane was falling rapidly in March 1991 (the end of the Northern European
winter) and Enron had arranged the on sale of a minimum quantity of 3,990 mt 
on
CIF terms based on an expected loading of 1st-7th March 1991.  Enron were
extremely concerned that this would lead purchasers Vitol  to repudiate the 
sale
contract leading to a very substantial trading loss (Vitol did try to 
repudiate
the sale contract due to the loading delays and this developed into a very 
major
trading dispute with Vitol which we eventually won in the House of Lords).

(5)  Exmar made out that slow loading was due to low back pressure in his
Enterprise loading lines.  We believe this is wrong but at this distance in 
time
it is difficult to get clear evidence.

(6)  In the circumstances, on 7th March 1991to try and speed up loading Enron
agreed that the minimum cargo of 3,760 mt should be loaded and agreed to pay
Exmar deadfreight on the balance in the sum of US$22,714.84.

(7)  Furthermore, because of the slow loading of the vessel the Enterprise
Terminal had to throw "SANTA CLARA" off berth.  This would have caused a very
substantial delay and might have justified Vitol in throwing  over the sales
contract.  In the circumstances Enron negotiated an agreement with another
vessel ("DONAU") to permit "SANTA CLARA" to be loaded ahead of "DONAU".  The 
sum
paid to "DONAU" amounted to US$153,472.15.    We believe the "DONAU" was also
operated by Exmar.

(8) Accordingly, Enron deny liability for demurrage for the extended loading
which Exmar have claimed in the sum of US$165,652.78 and Enron have
counterclaimed a total of US$176,186.99 (i.e. the deadfreight and "DONAU"
payments).

Exmar are represented by London Solicitors, Lawrence Graham where the matter 
is
being handled by Mike Lax and his assistant Stuart Dench.

Lawrence Graham have always sought to charactercise this claim as a
straightforward demurrage dispute and suggest that we have invented the
technical arguments after the event.  However, we consider there is merit in 
our
case and that if the arbitrators properly understand the expert evidence we 
have
reasonable prospects of successfully defending the demurrage claim and
establishing the counterclaim.  There is of course however an inevitable
litigation risk in pursuing the matter to an arbitration and we have, to some
extent, been inconvenienced by the loss of our original expert, Mr Ivor 
Jorstad,
who sadly passed away earlier this year.   Also some costs will be 
irrecoverable
(if we win approximately two thirds of our costs should be recoverable).

If you have any further queries, please do not hesitate to ring me and I would
of course be pleased to speak to Wayne Perry when he is in London if he needs
any further information to assist in negotiations.

Best Regards.


Andrew Bicknell


__________________________

This e-mail and any attachments are confidential and may also be privileged.  
If
you are not the named recipient, please notify the sender immediately and do 
not
disclose  the contents to any other person, use it for any purpose, or store 
or
copy the information.

In the event of any technical difficulty with this e-mail, please contact the
sender or the London IT department on +44 (0) 20 7623 1244.

Clyde & Co.
51 Eastcheap, London, EC3M 1JP
Tel: +44 (020) 7623 1244, Fax: +44 (020) 7623 5427

Clyde & Co. Guildford
Beaufort House, Chertsey Street, Guildford GU1 4HA
Tel: +44 1483 555 555, Fax: +44 1483 567 330

E-Mail: postmaster@clyde.co.uk, Internet: http://www.clydeco.com