Exhibit
4.32.3   NOVATION
AGREEMENT   Dated 18 March, 2004   CEDARHURST TANKERS LDC   CALICO LEASING (GB) LIMITED (formerly Natwest Leasing (GB) Limited)   and   KTL MAYFAIR, INC.   relating to a Conditional Sale Agreement dated 25th November, 1996 m.v. Magdala   ALLEN & OVERY  LONDON  
   CONTENTS   Clause  1.
  Definitions2.
  Novation3.
  Conditions
  Precedent4.
  Consideration5.
  Costs6.
  Representations and
  Warranties7.
  Disclaimers and Exclusions8.
  Counterparts9.
  Applicable Law  
   THIS NOVATION  AGREEMENT is made
on  18  March, 2004 between:  (1)CEDARHURST TANKERS LDC a company incorporated in the Cayman Islands whose registered
office is at third floor, CIBC Financial Centre, PO Box 1234, George Town,
Grand Cayman, Cayman Islands (the Seller);  (2)CALICO LEASING (GB) LIMITED(formerly Natwest Leasing (GB) Limited) a company incorporated in
England and Wales whose offices is at 30 St Mary Axe Avenue, London EC3A 8EP
(the Old
Purchaser); and  (3)KTL MAYFAIR INC, a company incorporated in Liberia whose registered office is at 80
Broad Street, Monrovia, Liberia (the New Purchaser)  WHEREAS:  (A)The
Seller and the Old Purchaser entered into a conditional sale agreement (the Conditional
Sale Agreement) dated 25th November 1996 relating to one
approximately 298,000 dwt double hulled very large crude carrier M.V. Magdala
(the Vessel);  (B)The
Old Purchaser and the Seller entered into a charterparty by way of demise dated
12th February 1997 relating to the Vessel (the Charterparty);  (C)Following
the termination of the charterparty of the Vessel the Old Purchaser wishes to
effect a Conditional Sale Agreement Transfer in accordance with the provisions
of Clause 18 of the Charterparty.  THIS DEED WITNESSES as follows:  1.DEFINITIONS  (a)In
this Agreement words and expressions defined in the Charterparty shall have the
same meanings when used herein and the following expressions shall, unless
otherwise specified, have the following meanings:  Deed of Releasemeans
the agreement so entitled and to be made between the Seller, the Old Purchaser
and the Agent pursuant to which the Seller will release and discharge the
Lessor Mortgage and Assignment.  Effective Timemeans
the date on, and time at, which the Old Purchaser notifies the Seller and the
New Purchaser in writing that the conditions precedent listed in Clause 3
(Conditions Precedent) are in a form and substance satisfactory to the Old
Purchaser or have been waived by the Old Purchaser.  Lessor Proceeds Account means the account of the Old Purchaser with National Westminster
Bank Plc at PO Box 34, 15 Bishopsgate, London EC2P 2AP, Sort Code 50-00-00,
account name NatWest Leasing (GB) Limited, re: Cedarhurst Tankers LDC account
number 95484485.  Old Purchasers Group means European International Reinsurance Company Limited (EIR)
any company which is a Subsidiary from time to time of EIR, the Holding Company
from time to time of EIR and any company (besides EIR) which is from time to
time a Subsidiary of its Holding Company.  1 
   (b)The
principles of construction set out in Clause 1.2 (Interpretation of the
Charterparty) shall have effect as if set out in this Agreement.  (c)A
person who is not a party to this Agreement has no rights under the Contract
(Rights of Third Parties) Act 1999 to enforce any term of this Agreement.  2.NOVATION  (a)The
novation to be effected pursuant to this Agreement shall have effect from the
Effective Time.  (b)The
New Purchaser undertakes to the Seller and to the Old Purchaser to perform,
discharge and observe all such obligations and liabilities on the part of the
Old Purchaser under the Conditional Sale Agreement as fall to be performed,
discharged or observed from the Effective Time as if the New Purchaser were
named in the Conditional Sale Agreement in place of the Old Purchaser with
effect from the Effective Time.  (c)In
consideration of the New Purchasers undertaking in Clause 2(b), the
Seller releases and discharges the Old Purchaser from all claims, demands,
obligations and liabilities whatsoever in respect of the Conditional Sale
Agreement which relate to the period beginning on the Effective Time.  (d)The
Seller undertakes to the New Purchaser to perform, discharge and observe all
obligations and liabilities on the part of the Seller under the Conditional
Sale Agreement and acknowledges that the New Purchaser shall be entitled to the
rights and benefits of the Conditional Sale Agreement as if the New Purchaser
were named in the Conditional Sale Agreement in place of the Old Purchaser with
effect from the Effective Time.  (e)In
consideration of the Sellers undertaking in Clause 2(d), the Old
Purchaser releases and discharges the Seller from all claims, demands,
obligations and liabilities whatsoever to the Old Purchaser in respect of the
Conditional Sale Agreement which relate to the period beginning on the
Effective Time.  (f)Subject
as amended by this Agreement, the Conditional Sale Agreement shall continue in
full force and effect and the transfer effected by this Agreement shall be
subject to, and with the benefit of, the Initial Sub-Charter, if any.  3.CONDITIONS PRECEDENT  Clause 2 shall have effect on the date and
time at which the Old Purchaser notifies the Seller and the New Purchaser that
the Old Purchaser has received the following conditions precedent in form and
substance satisfactory to the Old Purchaser:  (i)a
certified copy of the resolution of the board of directors of the Seller and
the New Purchaser approving the transactions contemplated by this Agreement,
together with any power of attorney issued pursuant thereto;  (ii)this
Agreement duly executed by the parties hereto;  (iii)the
Deed of Release duly executed by the Seller;  (iv)the
written confirmation referred to in Clause 18.9(ix) of the Charterparty;  2 
   (v)evidence
that the consideration referred to in Clause 4 (Consideration) has been
credited to the Lessor Proceeds Account;  (vi)Confirmation
from the Agent and the Seller that the Lease Discharge Date (as defined in the
Lessor Direct Agreement) will, subject to the Agent unconditionally and
irrevocably withdrawing the Net Novation Proceeds from the Lessor Proceeds
Account, occur on the Effective Time;  (vii)an
appraisal from an independent reputable appraisor appointed by the Seller
(which appraisal shall be dated no more than 15 days prior to the date hereof)
evidencing the open market value of the Vessel.  The conditions precedent in this
Clause 3 are for the benefit of the Old Purchaser and the Old Purchaser
may waive any of them by written notice given to the Seller and the New
Purchaser.  4.CONSIDERATION  (a)As
consideration for the novation under Clause 2 (Novation) above, the New
Purchaser shall pay to the Old Purchaser, by crediting the Lessor Proceeds
Account, the sum of £34,245,575.34 on the Effective Time.  (b)The
consideration referred to in Clause 4(a) shall be applied in accordance with
the provisions of Clause 5.9 (Payment of Proceeds of Sale) of the Lessor Direct
Agreement.  5.COSTS  The Seller shall pay all costs and expenses
(including legal fees and expenses) properly incurred by the Old Purchaser in
connection with this Agreement (including, without limitation the preparation,
negotiation and execution of this Agreement and all documents, agreements,
approvals and consents required in connection herewith).  6.REPRESENTATIONS AND
WARRANTIES  (a)Each
of the parties to this Agreement represents and warrants to the other party to
this Agreement, that as at the date hereof:  (i)it
has full power and authority to enter into, and perform all its obligations
under this Agreement;  (ii)this
Agreement constitutes its legal, valid and binding obligations; and  (iii)the
entry into and performance by it of this Agreement does not and will not
violate in any respect any existing law or regulation, its constitutional
documents or any agreement to which it is a party.  (b)The
Old Purchaser further represents and warrants to the New Purchaser that:  (i)it
has not created any Lessors Lien;  (ii)the
Old Purchaser has not, save for the Lessor Granted Security Documents and the
Charterparty, executed any instrument or entered into any arrangements whereby
its rights to take title to the vessel under Clause 5 of the Conditional Sale
Agreement have been encumbered or otherwise disposed of by the Old Purchaser.  3 
   (iii)the Old
Purchaser has not exercised its right to take title to the Vessel under
Clause 5 of the Conditional Sale Agreement;  (iv)the Old
Purchaser has not revoked the appointment of the Seller or the Agent as
exclusive sales agent of the Lessor in relation to the Vessel; and  (v)the
Old Purchaser has not revoked, and will not revoke, the authority given to the
Agent to instruct the Account Bank to pay to the Agent the Net Novation
Proceeds from the Lessor Proceeds Account pursuant to Clause 5.9 (Payment of
Proceeds of Sale) of the Lessor Direct Agreement.  7.DISCLAIMERS AND EXCLUSIONS  (a)The
New Purchaser acknowledges and agrees that:  (i)the
Vessel has been designed, manufactured, assembled, constructed, tested, trialed
and examined without reference to or involvement of the Old Purchaser or any
other member of the Old Purchasers Group;  (ii)neither
the Old Purchaser nor any other member of the Old Purchasers Group has made or
given or shall be deemed to have made or given any representation, warranty,
term or condition, express or implied (whether statutory or otherwise), as to
the seaworthiness, capacity, state, value, quality, durability, condition,
design, construction, operation, performance, description, merchantability,
fitness for use or purpose or suitability of the Vessel or any part thereof, as
to the absence of latent or other defects, whether or not discoverable, as to
the absence of any infringement of any patent, trademark, copyright,
intellectual property or other rights, or as to title to the Vessel or any
other representation, warranty, term or condition whatsoever, express or
implied, with respect to the Vessel, all of which are hereby excluded;  (iii)the New
Purchaser is taking possession of the Vessel from the Seller on an as is,
where is, and with all faults basis.  (b)Save
as otherwise expressly and specifically provided by this Agreement the New
Purchaser hereby waives as between itself and the Old Purchaser all its rights,
express or implied (whether statutory or otherwise), against the Old Purchaser
or in respect of the Vessel.  (c)Without
prejudice to the generality of the other provisions of this Clause 7 the
Old Purchaser shall be under no liability to the New Purchaser whatsoever and
howsoever arising and from whatever cause, and whether in contract, tort or
otherwise, in respect of any loss (consequential or otherwise), liability,
damage (including death, injury or disease) or Unavailability of, or to, or in
connection with, the Vessel or any person or property whatsoever.  8.COUNTERPARTS  (a)This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one and the same Agreement and any party may enter
into this Agreement by executing a counterpart.  9.APPLICABLE LAW  (a)This
Agreement is governed by the laws of England.  4 
   (b)For
the benefit of the Old Purchaser, each of the Seller and the New Purchaser
agrees that the courts of England have jurisdiction to settle any disputes in
connection with this Agreement and accordingly submits to the jurisdiction of
the English courts.  (c)Each
the Seller and the New Purchaser:  (i)waives
objection to the English courts on grounds of inconvenient forum or otherwise
as regards proceedings in connection with this Agreement; and  (ii)agrees
that a judgment or order of an English court in connection with this Agreement
is conclusive and binding on it and may be enforced against it in the courts of
any other jurisdiction.  5 
   IN WITNESSof which this Agreement has
been entered into on the date which appears first on page 1.  SIGNED by Nicholas Sherriff
  )
  /s/ Nicholas Sherrifffor and on behalf of
  )CEDARHURST TANKERS LDC
  )SIGNED by Bob Ratcliffe
  )
  /s/ Bob Ratcliffefor and on behalf of
  )CALICO LEASING (GB) LIMITED
  )SIGNED by Nicholas Sherriff
  )
  /s/ Nicholas Sherrifffor and on behalf of
  )KTL MAYFAIR, INC
  )  6