SUPREME COURT REFUSES TO TAKE UP U.S.-ICELAND SHIPPING DISPUTE

SUPREME COURT REFUSES TO TAKE UP U.S.-ICELAND SHIPPING DISPUTE    The U.S. Supreme Court has decided not to take up a case involving a dispute between an Iceland ocean carrier and the U.S. government.
   The Icelandic Steamship Co., or Eimskip, filed a petition with the Supreme Court which questioned the validity of two ocean carrier contracts awarded to Trans Atlantic Lines by the U.S. Army’s Military Traffic Management Command in 1998.
   “It’s not a surprise,” said Gardar Thorsteinsson, general manager and vice president of Eimskip USA, based in Norfolk. “We knew that the odds of succeeding were small.”
   Eimskip said the contracts were awarded to two carriers controlled by the same management, which violated a U.S.-Iceland treaty and memorandum of understanding. The treaty and MOU require the military shipments be divided between a U.S.-flag carrier and an Icelandic shipping company, with the lowest bidder holding 65 percent and the next-lowest bidder from the other country handling the rest. The cargo goes to support the U.S. military basein Keflavik.
   In a suit filed by Eimskip in 1998, the U.S. District Court in Washington ruled in favor of Eimskip, stating that Army’s contract with Trans Atlantic Lines was in violation of the treaty and MOU. But the U.S. Court of Appeals for the District of Columbia overturned the decision.
   “We think the D.C. Court of Appeals decision was exactly correct,” said Joseph O. Click, the attorney representing Trans Atlantic Lines-Iceland and Trans Atlantic Lines LLC.
   The contract between the Army and Trans Atlantic Lines expires Oct. 31, but may be extended through 2003.
   “The fact that the Supreme Court didn’t take up the case will not affect our course of action,” said Bill Merrigan, MTMC’s deputy legal officer.
“The Appeals Court decision is what applies.”
   Eimskip is hopeful that the MTMC will resubmit the U.S.-Iceland contract for bid later this year.
   However, diplomatic relations between the United States and Iceland
continue to be strained. Last week, the Icelandic government passed legislation which will affect how Icelandic companies do business with the U.S. military base. The legislation takes effect May 2001.