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Thursday August 3, 2000

Canada Navy boards US owned ship

HALIFAX, Nova Scotia, Canada ( AP ) - Backed by warships, Canadian troops dropped from a helicopter and seized control of a U.S.-owned vessel off the Canadian coast Thursday, after the ship refused to deliver its cargo of military supplies because of a monthlong contract dispute.

The navy boarded the 750-foot freighter, the GTS Katie, because the ship was carrying important military supplies, said Canadian Defense Minister Art Eggleton.

After a warning if its intention to board, two naval ships approached the Katie Thursday afternoon. But the freighter accelerated, jerking from side to side, said Canadian Capt. Drew Robertson, who was in charge of the boarding.

As the Canadian vessels closed in, a navy helicopter lowered 14 heavily-armed soldiers to the Katie's deck to take control, said Robertson at a news conference.

``The master of the ship was rather dramatic, which is understandable,'' Robertson said. ``The crew was rather welcoming.''

The ship's Russian captain, Vitaly Khlebnikov, told reporters that the boarding was ``dangerous.''

``Our company's been shocked and horrified,'' said Peter Margan, president of Third Ocean Marine Navigation Company, the Annapolis, Md.-based firm that owns the freighter.

Officials said there were no injuries in the operation and no criminal charges would be filed.

The boarding came a day after Canada said it had received permission to board the boat from St. Vincent and the Grenadines, the Caribbean nation where the boat is registered. officials said.

The Katie was being escorted Thursday night to Montreal and was expected to arrive Sunday, three weeks after the original arrival date. Khlebnikov would continue operating the ship under the Canadian military's direction, Robertson said.

Eggleton said the Canadian and American companies involved in the contract dispute will have to resolve the issue in court.

``Being held hostage by these companies is not acceptable,'' he said. ``There was no confidence that short of taking control of that ship we would have any control of our equipment.''

The freighter was carrying five tanks, 200 of Canada's 2,000 armored vehicles, and 390 crates packed with munitions worth $150 million. Three Canadian soldiers are also on board to guard the cargo.

The freighter had been stationed in international waters about 140 miles off Newfoundland since Monday night.

Third Ocean was hired by a Montreal-based company, Andromeda, which had in turn been contracted by the military to bring back the military supplies used by Canadian peacekeepers in Kosovo, a province of Serbia.

But Third Ocean has refused to deliver the cargo, demanding payment it says it is owed. The Canadian government and the shippers had been negotiating a settlement since early last month.

Margan, who says Andromeda owes him $288,000, said that late Wednesday the military had given him an ultimatum to accept an offer of $90,000 or face being boarded.

The Katie had been scheduled to transport the shipment from Thessaloniki, Greece, to a port near Montreal by mid-July. But the ship was delayed reaching Greece, increasing costs of the voyage.

Canada routinely charters foreign transport for its military equipment overseas. The Navy has no transports equipped to carry heavy armor and the Air Force's C-130 Hercules transports are limited to about 20 tons of cargo.

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