A complicated dispute over freight futures between Petros Pappas' Oceanbulk group and Nobu Su of TMT has been settled out of court.

TradeWinds reports the dispute in mid-2009
Pappas and Su have been battling over forward freight agreements (FFAs) running to tens of millions of dollars for more than two years with both experiencing victory and defeat in preliminary litigation.

But they have now reached a “full and final resolution of all disputes” depriving the shipping industry of what was set to be one of the more interesting legal bouts.

In a joint statement Oceanbulk and TMT said the settlement terms were confidential and they had agreed to make no further public comment.

The row between Oceanbulk and TMT centred on 63 FFAs concluded in 2008 of which 43 were “sleeved” or protected by back-to-back agreements.

In mid 2008 TMT defaulted on a $40.5m payment due to Oceanbulk to cover the previous month’s market movement.

The two shipowners discussed a share transfer deal to cover the outstanding amount but failed to agree.

If the FFA had been closed out in mid-August 2008 Oceanbulk would have locked in a profit of $47m, but a drastic market decline reversed the situation so that by the final quarter of 2008 Oceanbulk owed TMT $86m under open FFAs.

Read full details of the dispute in the two preliminary judgments in the related media column to the right.