OneOcean Expeditions: The Road to Bankruptcy

OneOcean Expeditions: The Road to Bankruptcy

A news report on 30 April 2020 advised that OneOcean Expeditions had filed for bankruptcy. While it is always upsetting when an expedition cruise operator is unable to continue, in this case it was not unexpected. It also seems particularly unfortunate, as Penguins and Polar Bearshad a strong connection to the company; they very kindly gave the author access to their photography bank, and the book benefited enormously from the many quality images provided.

A brief profile of the company is provided on pages 80-81 of the book. The following is an attempt, by the author, to offer some background to the bankruptcy. Much of what follows is fact, but of necessity there is quite a bit of supposition by the author based on his background in charter parties and maritime contracts.

I believe that the downfall of the company can be traced back to the grounding of the Akademik Ioffein the Astronomer Islands on 24 August 2018. No pollution occurred, and passengers were safely transferred to the Akademik Sergey Vavilov, which happened to be nearby, which then took them to Kugaaruk for repatriation. However, the ship did not proceed south until 20 September, and went to the Verreault Shipyard at Les Mechins, Quebec for inspection and repair. This means that the ship lost the balance of its 2018 Arctic season, and much-needed revenue for OneOcean. For a company that seemed, from rumours of late payments, to be living hand-to-mouth – this would have created significant cash flow problems.

The ship arrived at the Dry Dock Wharf on 30 September and was there until moving to the Public Wharf on 05 November. She remained alongside until 28 December, when she sailed south and eventually undertook a partial Antarctic programme. A senior member of OneOcean’s management team supervised repair work, which was probably paid for – or at least a substantial part of the direct repairs to the hull subsequent to the grounding – through the owner’s (Shirshov Institute) Hull and Machinery Insurance policy.

Thus the Ioffenot only lost the balance of its Arctic season, but also part of its Antarctic season, which would have meant more revenue problems. Reportedly, the company did not refund all passage monies, but moved as many reservations as they could forward. The Vavilovwent on to complete another couple of cruises in the Canadian Arctic.

The Akademik Sergey Vavilovand the Akademik Ioffeundertook at least a partial 2018/19 Antarctic season on behalf of OneOcean. There were, however, suggestions of growing cash flow issues, as the RCGS Resolutehad bunkering problems (financial) at Ushuaia in December 2018, which cut short the ship’s Antarctic itinerary.

On 24 April the Akademik Ioffewas photographed by Shipspotting in Lisbon, quite bare of any deck kit. It seems the ships had made an unscheduled call there, to dump OneOcean’s equipment, before continuing to their home port of Kaliningrad. Then in May 2019, once they were safely in Russian waters, the Shirshov suddenly withdrew them, even though OneOcean reportedly had an ongoing agreement, and a well-booked summer season for Spitsbergen and the Canadian Arctic. Despite the Shirshov claiming they had no contractual responsibility to OneOcean, they issued a statement that the ships were still available for charter.

The Institute was reported to have produced a letter, purportedly from the Russian government, stating that the ships were needed in Russia. The reason for this sudden withdrawal, may relate to terms of the charter agreement with OneOcean. This probably involved the responsibility of the Shirshov for cost of repairs and loss of business by OneOcean. It is interesting that although repairs were undoubtedly completed on the Ioffeby 05 November, the ship did not sail south for well over a month, leaving on 28 December 2018. This suggests there may have been difficulties over paying for the work at Verreault, as the shipyard would certainly not release the ship until bills had been paid.

The May withdrawal meant that OneOcean lost its 2019 Spitsbergen season, for which there was no feasible alternative ship, as well as the 2019 Arctic Season. Although OneOcean did its best to make their single ship – the RCGS Resolute– carry to load, it is obvious that the company was desperately short of funds as there were two arrests of the Resolute, one in Iqaluit on 09 August 2019, and another in Halifax on 20 September 2019 for unpaid bills to different suppliers as well as non-payment of salaries. In both cases OneOcean promptly paid the amounts owed and the ship proceeded on its itinerary.

In connection with the withdrawal of the Shirshov ships, it is likely that negotiations were going on behind the scenes during the Antarctic season, although the unscheduled call in Lisbon was an indicator that something was amiss. If OneOcean had not by this point called for arbitration, they would not have had grounds for registering a lien against the ships to recover monies owed. This would have been the same process as used against the Resolutein Iqaluit and Halifax, and such a lien would have made any ships owned by the Institute subject to arrest, and a possible Admiralty auction to recover costs. However, when the RCGS Resolutewas arrested in Buenos Aires, $3.6m was obviously well beyond the financial resources of OneOcean, and the amount was eventually paid by the ship owners (probably TUI as the owners of Hapag-Lloyd) to ensure that they retained a valuable asset. The ship sailed from Buenos Aires on 05 March, slow steaming north. A report on the interesting things that happened on this trip can be found in the quarterly up date.

As a codicil to this sorry story, the Shirshov Institute recently announced that it was going to refit the two ships for research work and that they would no longer be available for cruise charters. The ships will have to remain in Russian waters for the foreseeable future; if they ventured out and visited a western port, they would no doubt be arrested.

See the following for more details:


Photograph: Photograph of Akademik Ioffe by Daisy Gilardini courtesy of OneOcean Expeditions