Canada seizes US ship

At stake: 10% of the Canadian armed forces' equipment

Canada's armed forces have boarded and seized an American-owned ship that had refused to deliver its cargo of Canadian military supplies being returned from Kosovo.

The soldiers, who were dropped by helicopter onto the deck of the ship, took nearly an hour to gain control of the vessel. No one was injured in the operation.

The ship, GTS Katie, is now steaming towards a Quebec port, escorted by two Canadian warships.

It had remained outside Canadian territorial waters in the Atlantic Ocean for several days, waiting for a financial dispute to be settled.

The ship's cargo, worth more than $200m, represents around 10% of the Canadian armed forces' equipment.

US permission

The Canadian Government had been attempting to resolve the dispute through quiet diplomacy, but then said it believed it now had the right to seize the ship.

Canadian supplies

Five tanks

580 army vehicles

390 munition containers

The BBC's correspondent in Toronto, Lee Carter, says it is known that the US State Department had given its approval for a boarding.

The military hardware on board the Katie includes five tanks, 580 army vehicles and 390 crates packed with rifles, ammunition and communications equipment.

The ship had been scheduled to deliver the cargo by mid-July but it was delayed, increasing costs of the voyage.

Dispute

The ship owners, Third Ocean Marine Navigation, had demanded more than £200,000 before delivering the equipment.

The company said it would go bankrupt if it was not paid in full.

We've been told if we do not accept the $90,000 offer, they board us. We've told the ship's manager not to resist

Third Ocean Peter Margan

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

Third Ocean President Peter Margan admitted that the Canadian Government had issued an ultimatum to the ship's owners to accept a third of the money they say is owed to them or be boarded.

"We told the ship's manager not to resist," Mr Margan said.

Canada routinely charters foreign transport for its military equipment overseas.

Its navy has no vessels equipped to carry heavy armour.