Construction of the proposed Hawai'i Superferry's first ship could come to a halt within days, putting the entire project in jeopardy, if a legal challenge is allowed to proceed, a company attorney argued in federal court yesterday.

"If new payments aren't made by the end of September, the shipyard will stop construction and the ferry could be sold to another buyer," attorney Michael Joseph said.

Opponents, including the Sierra Club, Maui Tomorrow and the Kahului Harbor Coalition, said the federal Maritime Administration should be required to order an environmental review of the project before signing off on a loan guarantee.

"The law is there to protect the environment," attorney Isaac Hall said. "We're entitled to a review."

At issue is a Maritime Administration ruling that exempts the Superferry project from federal environmental laws, in part because it will use existing trade routes. Hall said the high-speed ferries, which would carry up to 900 passengers and 250 vehicles between islands, pose new environmental dangers that weren't fully considered by the federal agency.

Joseph argued that federal law precludes legal challenges to loan guarantees authorized by the Maritime Administration. Without a quick dismissal, investors who have promised up to $200 million in funding may back away from the project, he said.

Since the loan guarantee has not closed, there's still room to oppose the administration's use of a categorical exclusion to exempt the project from an environmental review, Hall said.

U.S. District Judge Helen Gillmor late yesterday promised to issue a decision "shortly."

Reach Mike Leidemann at mleidemann@honoluluadvertiser.com.