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England and Wales High Court (Commercial Court) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> OCM Maritime Nile LLC & Anor v Courage Shipping Co Ltd & Or [2022] EWHC 452 (Comm) (04 March 2022) URL: http://www.bailii.org/ew/cases/EWHC/Comm/2022/452.html Cite as: [2022] EWHC 452 (Comm) |
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BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT
Strand, London, WC2A 2LL |
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B e f o r e :
SITTING AS A DEPUTY JUDGE OF THE HIGH COURT
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(1) OCM Maritime Nile LLC (2) OCM Maritime Kama LLC Claimants |
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- and – |
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Courage Shipping Co. Amethyst Ventures Co. Oryx Shipping Limited Defendants |
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Graham Dunning QC, Chris Smith QC, Claudia Wilmot-Smith (instructed by Rosling King LLP ) for the Defendants
Hearing dates: 19, 20, 24, 25 and 26 January 2022
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Crown Copyright ©
Sir Andrew Smith:
Introduction
The Trial
The Terms of the Charterparties
"During the Charter Period, the Vessel shall be kept insured by the Charterers at their expense against hull and machinery, war and Protection and Indemnity risks … in such form as the Owners shall in writing approve, which approval shall not be un-reasonably withheld….".
"(a) Charterers' Default
The Owners shall be entitled to withdraw the Vessel from the service of the Charterers and terminate the Charter with immediate effect by written notice to the Charterers if:
(i) The Charterers fail to pay hire in according with the provisions of this Charter …
(ii) The Charterers fail to comply with the requirements of:
(1) Clause 6 (Trading Restrictions)
(2) Clause 13(a) (Insurance and Repairs).
provided that the Owners shall have the option, by written notice to the Charterers, to give the Charterers a specified number of days grace within which to rectify the failure without prejudice to the Owners' right to withdraw and terminate under this Clause if the Charterers fail to comply with such notice;…".
"In the event of the termination of this Charter in accordance with the applicable provisions of this CharterClause 28, the Owners shall have the right to repossess the Vessel from the Charterers at her current or next port of call or at sea. or at a port or place convenient to them without hindrance or interference by the Charterers, courts or local authorities. Pending physical repossession of the Vessel in accordance with this Clause 29, the Charterers shall hold the Vessel asgratuitousbailee only to the Owners and continue to maintain, class and insure the vessel as required by the terms of this Charter notwithstanding the termination of the chartering of the Vessel. … All arrangements and expenses relating to the settling of wages, disembarkation and repatriation of the Charterer's Master, officers and crew shall be the sole responsibility of the Charterers….".
"… the Charterhire and other payments to be made by the Charterers hereunder .. shall be made as follows: …
(b)… in dollars … to the Owners' account number as advised by the Owners …".
It is not in dispute that the designated accounts were with Joh. Berenberg, Gossler & Co. KG ("Berenberg") in Germany.
" …
(l) Tracking
(i) The Charterers shall (or shall procure that the Approved Manager shall) allow any Mortgagee and/or the Owners (or its agents), at any time and from time to time, to access all information pertaining to the Vessel and to monitor and/or track the position of the Vessel using third party services….
…
(o) Sub-chartering
The Charterers may:
(i) …
(ii) without the prior written consent of the Owner enter into any time or consecutive voyage charters in respect of the Vessel which fulfils the Sub-letting Criteria for a term which exceeds (or by virtue of any optional extension may exceed) six months but which does not exceed (and which may not, by virtue of any optional extensions, exceed) 15 months; and
(iii) other than as described in paragraphs (i) or (ii) above, only enter into any time or consecutive voyage charters in respect to the Vessel with the prior written consent of the Owners,
Where "Sub-letting criteria" means that any such proposed sub-charter must:
(X) be on terms that EITHER
(A) the aggregate net charter hire receivable thereunder for the period of such charter exceeds the aggregate of (i) the relevant Monthly Fixed Hire for the period of such charter, (ii) the Variable Hire for the period of such charter and (iii) the Anticipated Opex for the period of such charter;
OR
(B) if the aggregate net charter hire payable thereunder is less than the aggregate of the relevant Monthly Fixed Hire and the Variable Hire for the period of the charter and the Anticipated Opex for the period of such charter (i) the Owners have consented thereto and (ii) …
AND
(Y) be to a charterer that:
(A) is a first class company with good market standing, a good track record as a charterer and no generally known risk of financial difficulties…".
(a) The Charterers agree, from time to time on demand, to indemnity and keep indemnified:
(i) the Owners against any Losses suffered or incurred by the Owners arising directly or indirectly out of the … operation, condition, maintenance, repair."; ...
(vii) the Owners against any Losses incurred or suffered by the Owners as a result of or in connection with any Event of Default … including, without limitation, all Losses incurred or suffered by the Owners under any Loan Agreement as a result of any such Event of Default…".
"The Charterers acknowledge that the Owners have entered into this Charter in full reliance on the representations and warranties by the Charterers set out in this Clause 42 (Representations and Warranties).
(a) General
The Charterers make the representations and warranties set out in this Clause 42 (Representations and Warranties) to the Owners on the date of this Charter….
…
(jj) Sanctions
The Charterers
(i) are not, and no director or officer of the Charterers are, a Restricted Person;
(ii) are not owned or controlled by or acting directly or indirectly on behalf of or for the benefit of, a Restricted Person.
…
(mm) Repeating Representations
The representations and warranties contained in this Clause 42 (Representations and Warranties) shall be deemed to be repeated by the Charterers as of the Delivery Date and on each date for the payment of Charter Hire hereunder as if made with reference to the facts and circumstances existing on each such date…".
" …
(o) Change of Ownership Structure
The Charterers shall not, without the prior written consent of the Owners (which they may withhold in their discretion) change or permit any change in the owning structure or control of the Charterers and the Approved Manager and will maintain the Charterers as a wholly owned subsidiary of the Shareholder…".
" …
(b) Maintenance of obligatory insurances
The Charterers shall keep the Vessel insured at its expense in the name of the Owners as primary insured against:
(i) hull and machinery plus freight interest and hull interest and increased value and any other usual marine risks (including excess risks);
(ii) war risks;
(iii) protection and indemnity risks (including liability for oil pollution for an amount of no less than $1,000,000,000 and excess war risk P&I cover) on standard Club Rules, covered by a Protection and Indemnity association which is a member of the International Group of Protection and Indemnity Associations…
(c) Terms of obligatory insurance
…
in the case of oil pollution liability risk, for an aggregate amount equal to … but such amount shall not be less than $1,000,000,000 …
on approved terms; and
through Approved Brokers and with western insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in first class war risks and protection and indemnity risks associations in the International Group of P&I Clubs, in each case approved by the Owners in their sole discretion ….".
"Each of the following shall be an "Event of Default" for the purposes of this Charter:
…
(b) Specific obligations
A breach occurs of … Clause 44(b) (Maintenance of obligatory insurance), Clause 44(c) (Terms of obligatory insurances) or Clause 44(e) (Renewal of obligatory insurances).
(c) Other obligations
A Transaction Obligor does not comply with any provision of any Relevant Document (other than those referred to in Clause 45(a) (Non-payment) and Clause 45(b) (Specific obligations)) to which it is a party, and:
(i) if such breach is in the Owners' reasonable opinion capable of remedy, it is not remedied within fourteen (14) days of the Owners' request that the relevant Transaction Obligor remedy such breach; or
(ii) if such breach is in the Owner's reasonable opinion not capable of remedy
An Event of Default shall be deemed to have occurred upon the occurrence of such breach.
(d) Misrepresentations
Any representation or statement made or deemed to be made by the Charterers in this Charter or any other document delivered by or on behalf of the Charterers under or in connection with any Relevant Document is or proves to have been incorrect or misleading when made or deemed to be made.
…
(o) Material adverse effect
Any event or circumstance occurs which has or is reasonably likely to have a Material Adverse Effect.
…
(q) Charter termination
This Charter is cancelled or rescinded or … frustrated or the vessel is withdrawn from service under this Charter before the time this Charter was scheduled to expire or an Event of Default occurs ….
(r) Insurances
If either (A) the Charterers shall fail at any time to effect or maintain any insurance required to be effected and maintained under this Charter, or any insurer shall avoid or cancel any such insurances … or (B) any of the said insurances shall cease for any reason whatsoever to be in full force and effect prior to any replacement cover being placed.
(s) Change of Ownership
There is any change in the immediate and/or ultimate legal and/or beneficial ownership or control of the Charterers and any Approved Manager from that existing on the date of this Charter without the prior written consent of the Owners (which they may withhold in their discretion).
…
(u) Performance of Relevant Documents
If any event occurs which would, or would with the passage of time, render performance of any Relevant Documents by any party to any such document impossible, unlawful or unenforceable by the Owners.
…
(w) Fundamental Term
The Owners and the Charterers agree that it is a fundamental term and condition of this Charter that no Event of Default shall occur during the Charter Period and that the occurrence of an Event of Default shall entitle (but not oblige) the Owners at any time during the continuation of such Event of Default to accept the repudiation by the Charterers of this Charter constituted by the occurrence of such Event of Default".
"(a) At any time after any circumstances described at Clause 45 (Events of Default) have occurred and are continuing, the Owners may, by notice to the Charterers, (aa) … and (bb) in all other cases immediately or on such date as the Owners shall specify, terminate the chartering by the Charterers of the Vessel under this Charter, whereupon the Owners may at their option (but with no obligation so to do):
(i) declare by notice given to the Charterers the aggregate amount of (i) the then Outstanding Principal and (ii) the Indemnity Sum to be immediately due and payable whereupon the same shall become immediately due and payable and the Charterers shall be obliged to pay the actual balance of the same to the Owners together with any interest in accordance with Clause 35(d) and then the applicable payment premium payable pursuant to Clause 34(i) as if the Outstanding Principal was being prepaid on the date of the Owners' notice; and/or
(ii) take any action at law and under the Relevant Documents to collect the full amount as mentioned in Clause 46(a)(i) above; and/or
(iii) unless the Charterers have paid to the Owners the full amount as mentioned in Clause 46(a)(i) above, by their agent or otherwise without further legal process, re-take the Vessel (wherever she may be)…
(iv) unless the Charterers have paid to the Owners the full amount as mentioned in Clause 46(a)(i), declare by notice given to the Charterers that the Vessel should be promptly re-delivered by the Charterers to the Owners whereupon the Charterers shall be obliged to cause the Vessel to be re-delivered to the Owners …
(v) unless that [sic] Charterers have paid to the Owners the full amount as mentioned in clause 46(a)(i), with or without retaking possession of the Vessel … to sell, lease or otherwise dispose of the Vessel …
(d) No remedy referred to in this Clause 46 … is intended to be exclusive, but each shall be cumulative. Save as expressly stated in this clause 46 …, the exercise or purported exercise of any one remedy shall not prevent the simultaneous or later exercise of any other remedy nor shall it prevent the later exercise of the same remedy. ….
(f) The Owners and the Charterers each agree that the payment of the Outstanding Principal and the Indemnity Sum as set out at Clause 46(a)(i) above is a reasonable pre-estimate of the damages that will be suffered by the Owners from the termination of the chartering of the Vessel and represent liquidated damages and not a penalty …".
"Provided that (i) no Event of Default has occurred and is continuing … the Charterers shall be entitled to exercise an option to purchase … the Vessel at any Hire Payment Date at the purchase option price (the "Purchase Option Price"), being the amount in dollars specified below for the relevant date of completion of purchase:
(a) before the 1st anniversary of the Delivery Date: 103% of the then Outstanding Principal; and
(b) after the 1st anniversary of the Delivery Date but on or before the second anniversary of the Delivery Date: 102% of the then Outstanding Principal" ….
If the Charterers have not exercised their Purchase Option before the Final Option Date, then they must purchase the Vessel (the "Purchase Obligation") for the Purchase Obligation Price. The date of completion of the purchaser must be the day of the Final Option Date. ….
Provided (i) the Charterers pay the Purchase Option Price (or the Purchase Obligation Price, as the case may be), the Indemnity Sum, the Success Payment, Charter Hire up to the date of completion of the purchase (the "Completion Date") and any outstanding interest under this Charter in full on or before the Completion Date, (ii) no Event of Default is continuing on the Completion Date, (iii) the Owners have not terminated the chartering of the Vessel under Clause 46 …, the Owners shall be obliged to deliver to the Charterers …. the title which the Owners had in respect of the Vessel …
Notwithstanding the aforementioned, , if on the completion date an Event of Default is continuing, the Owners shall have the sole discretion in deciding whether or not the Owners and the Charterers should fullfil [sic] their respective obligations under the Purchase Option on the completion date".
"In this Charter, unless the context otherwise requires, the following expressions shall have the following meanings:
…
"Anticipated Opex" means, in respect of any Charter Hire Period, the amount certified by the chief financial officer of the Charterers and agreed by the Owners as being the aggregate operating and voyage expenses, agency fees, management, general and administrative expenses, repair and maintenance costs, in respect of the Vessel for that Charter Hire Period. …
"Approved Broker" means any firm or firms of insurance brokers appointed by the Charterers and as may from time to time be approved in writing by the Owners …
"Event of Default" has the meaning given to it in Clause 45 (Events of Default) and an Event of Default is "continuing" if such Event of Default has not been remedied by the Charterers or waived by the Owners…
"Final Option Date" means the date falling on the last date of the Charter Period …
"Indemnity Sum" [means] the aggregate from time to time of any outstanding indemnity payments payable by the Charterers to the Owners pursuant to Clause 38 … or any other provision of this Charter…
"Losses" means all losses, costs, charges, expenses, fees, payments, liabilities, penalties, fine, damages, injuries, claims, demands, awards, judgments or other sanctions of a monetary nature…
"Material Adverse Effect" means in the opinion of the Owners a material adverse effect on:
(a) the business, operations, property, condition (financial or otherwise) or prospects of the Charterers;
(b) the ability of any Transaction Obligor to perform its obligations under any Relevant Document;
(c) the validity or enforceability of, or the effectiveness or ranking of any Security granted or intended to be granted pursuant to any of, the Relevant Documents or the rights or remedies of the Owners under any of the Relevant Documents…
"Outstanding Principal" means, at any relevant time [the part of the purchase price provided by OCM Nile or OCM Kama] less the aggregate Fixed Hire which has at any relevant time been received by the Owners in accordance with this Charter …
"Purchase Obligation Price" means at any relevant time the Outstanding Principal …
"Relevant Document" means … this Charter …
"Restricted Person" means a person that is (i) listed on, or owned or controlled by a person listed on any Sanctions List;…
"Sanctions List" means the "Specially Designated Nationals and Blocked Persons" list issued by OFAC…
"Shareholder" means the holder of all the shares in the Charterers as notified to the Owners on or before the date of this charter …
"Transaction Obligor" means each of the Charterers and any Approved Manager ….".
Clause 36, headed "Maintenance, Operations and Other Vessel Undertakings":
"…. (s) Sanctions. The Charterers shall:
(i) not be, and shall procure that any Transaction Obligor and any affiliate of any of them, or any director, officer, agent, employee or person acting on behalf of the foregoing is not, a Restricted Person and does not act directly or indirectly on behalf of a Restricted Person or have a course of dealings with a Restricted Person;
(ii) and shall procure that each Transaction Obligor and each affiliate of any of them shall, not use any revenue or benefit derived from any activity or dealing with a Restricted Person in discharging any obligation due to the Owners;
…
(iv) procure that no proceeds from any activity or dealing with a Restricted Person are credited to any bank account held with the Owners in its name or any affiliate of any of them;…".
The Events following Mr Mallah's designation as a SDGT
(i) that the "Courage" was subject to a sub-voyage charter dated 5 June 2021, and was laden with a cargo bound for Lagos, and bills of lading had been issued for it: he exhibited bills of lading and a fixture recap. He said that she was undergoing repairs, and unable to sail to either Lagos or Gibraltar until they were complete; and
(ii) that the "Amethyst" was "currently the subject of a sub-time charter dated 8 April 2021 … for a period of 5 plus 5 months at charterers' option" and that ACF had "ordered the MV 'Amethyst' to load a cargo of fertilizer at either Ruwais, UAE or Sohar, Oman for discharge at various ports in Brazil". He exhibited a redacted extract from the fixture "recap" email for the charterparty of 8 April 2021.
i) With regard to documents relating to insurance, specifically as to the circumstances of its cancellation on about 16 June 2021 and placing information and other communications about replacement cover, Mr Darbis said that Captain Khalil was responsible for insurance and no longer worked for Oryx, and that Mr Darbis had found no documents.
ii) With regard to documents relevant to problems with the main engine of the "Courage", including her engine logs, Mr Darbis said that the crew of the vessel was uncooperative and searches had not been possible, and that he had been unable to obtain any logs.
iii) With regard to "All correspondence, communications or other documents referring to or evidencing … negotiation, conclusion and/or execution of the alleged Transfer Agreement …", Mr Darbis responded that "[i]n relation to the Transfer Agreement, the parties held a meeting to conclude this and so there is no documentation to disclose. In this part of the world [presumably, referring to Greece] many negotiations and even agreements are made orally". He said that his searches of email accounts had revealed nothing.
The US Sanctions Regime
(i) "Non-US entities such as Claimants can face civil and criminal penalties from US enforcement agencies for causing a US person to engage in a prohibited transaction with a SDGT";
(ii) "If Defendants were considered blocked by the OFAC and continued to make payments to the Claimants in US dollars, there is a risk that Claimants would be penalized for causing a US financial institution or other US person to assist in processing that US dollar payment"; and
(iii) "… non-US entities such as Claimants may be designated by OFAC if they 'assist in, sponsor, or provide financial, material, or technological support for, or financial or other services to or in support of [Mr Mallah]' or are 'otherwise associated with [Mr Mallah]'. There is no requirement that this financial, material or technological support be provided directly, nor is there a requirement that such support meet a threshold of size or gravity".
The Claimants
i) Its obligations to its investors require it to comply with applicable laws and regulations, and to maintain an effective compliance programme.ii) Compliance is necessary in order for Oaktree CM to maintain its reputation with its investors, including institutional investors, pension funds and Sovereign Wealth funds
iii) The potential penalties for non-compliance could be very severe.
This part of Mr Orren's evidence was not challenged, and I accept it.
i) he sent Berenberg the email of 15 June 2021, telling them that "one of our clients", the bareboat charterer of the "Courage" and the "Amethyst", had been placed on "a sanctions list", and that the funds received on 11 and 14 June 2021 should be "frozen and left in the relevant bank accounts";ii) he sent Berenberg the email of 16 September 2021, asking for confirmation about the freezing of the Claimants' account; and
iii) on 17 December 2021, OFAC emailed to Mr Baker its licence to receive the June 2021 payment held by Berenberg.
The Defendants
"The seller will transfer all his rights and management authority to the buyers against 1 USD dollar. Motor vessel Courage and Amethyst will be buyers vessel" (clause 4).
"If the seller clears his name from OFAC within 6 months starting today, the shares and the management authority will be transferred back to the seller against 1 USD dollar" (clause 5).
"If the seller cannot clear his name from OFAC within 6 months, the buyers at their cost will appoint one of the big four auditing companies and obtain an evaluation report for these three companies [sc. the Defendants]. The value of the companies will be paid to the seller in four instalments starting from the date of the valuation report. Buyers cannot transfer any asset of the company during the six months until the full value is paid after the valuation report" (clause 6).
"After signing this agreement the seller will not enter the company offices. Will not use company money or will not engage in any business activity regarding these three companies" (clause 7).
"For smooth transition sellers brothers Luay Mullah and Mustafa Mullah will stay in the company as long as they and buyers wish" (clause 8).
"The buyers will decide their own percentage of shares within themselves. In any case El Khatip Jamil and Abla Channir will hold at least 51 percent of the shares and control the companies" (clause 9).
"The buyers will nominate Yousif Darbis as the sole shareholder and director in these companies" (clause 10).
i) When the Claimants took possession of the "Amethyst" and had access to her data systems, they found email exchanges between the Master and Ms Maybelle Pacaña who was apparently a crewing agent in the Philippines. In an email of 9 August 2021, Ms Pacaña asked whether there was food on the vessel, saying that she had followed up earlier requests for food "with Luia", apparently referring to Mr Luay Mallah, and on 12 August 2021, Ms Pacaña said that she would call Mr Luia Mallah and also inform "his brother". Although the Claimants invited the inference that this shows that Mr Mallah was still understood by Ms Pacaña to be involved with the "Amethyst", taken by itself, the email might have been referring to Mr Mustafa Mullah, who, according to the Transfer Agreement, was to "stay in the company" with Mr Luay Mullah. However, there were also exchanges between the Master and Ms Pacaña about the crew not being paid, and in an email of 18 August 2021, she wrote that she would follow that matter up with "Jalil", clearly meaning Mr Mallah.ii) Next, there was Mr Mangos' unchallenged evidence that on 28 August 2021 Mr Mallah referred to the "Amethyst" as "my vessel".
iii) Finally, in January 2021 the Civil First Instance Court of Tartus, Syria, arrested the "Courage" on an application by a Mr Othman Abdullah Jindi, who alleged that Mr Mallah was in breach of an agreement. The Master of the "Courage" made a declaration in, or in relation to, those proceedings, that Mr Mullah was the owner of Oryx and of the "Courage", and that he managed her activities and was responsible for her expenses and the wages of her crew. If Mr Mallah had had no involvement with Oryx or CSC since June 2021, it is unlikely the Master would still have been unaware of this in January 2022.
iv) The position is the stranger because on 18 January 2021, Mr Baker received an email that was, or purported to be, from the Master of the "Courage" about the crew's wages being unpaid, and saying that he had learned that Mr Mallah was "no longer involved". It is not explained how the Master became aware of Mr Baker's email address. Whether or not the email did in fact come from the Master, it does not explain his declaration in relation to the proceedings.
The Construction Defence
The Penalty Defence
"Thus, where a contract contains an obligation on one party to perform an act, and also provides that, if he does not perform it, he will pay the other party a specified sum of money, the obligation to pay the specified sum is a secondary obligation which is capable of being a penalty; but if the contract does not impose (expressly or impliedly) an obligation to perform an act, but simply provides that, if one party does not perform, he will pay the other party a specified sum, the obligation to pay the specified sum is a conditional primary obligation and cannot be a penalty" (at para 14).
(i) The provisions of which the Defendants complain could be triggered by any one of the many and varied Events of Default, although some might cause no, or no significant, damage.
(ii) The detriment to the Defendants resulting from losing the Purchase Option would, in all likelihood, be substantial whenever it occurred, because they had contributed half of the purchase prices of the vessels, and because hire, which was designed to repay the Claimants' contribution, was payable monthly in advance.
(iii) With regard to the provisions concerning the Purchase Obligation, which could be exercised only after the charter period had expired, the detriment that the Claimants might suffer from a failure on the Defendants' part to comply with primary obligations would often largely or entirely be compensated by the payment by the Defendants of, inter alia, the Indemnity Sum.
Relief from Forfeiture
(i) Before Mr Mallah's listing, the Defendants had performed the charterparties without complaint from the Claimants and without any issues arising between the parties.
(ii) The Events of Default stem from Mr Mallah being placed on the SDN list, which was "wrongful", and they involved no fault or culpability on the part of the Defendants; and Mr Mallah has applied for his name to be removed from the list.
(iii) Mr Mallah's listing does not prevent or make it unlawful for the Claimants to perform the charterparties since Mr Mallah is no longer a director or officer of the Defendants, and he does not own them. In any case, an application could be made to OFAC to permit the parties to perform the charterparties.
(iv) The Defendants will suffer irremediable prejudice if the charterparties are terminated and the vessels repossessed. Correspondingly, if the charterparties are terminated and the vessels repossessed, the Claimants will receive unwarranted windfalls.
(i) The AIS and other tracking systems of the "Courage" and the "Amethyst" were switched off on 25 and 26 June 2021 respectively. By her orders of 20 August 2021, Cockerill J ordered that the Defendants "forthwith" cause the vessels' AIS system and other tracking and communication systems to be switched on to allow the Claimants to track their positions. The orders were emailed that same day to the Defendants. The Defendants did not restore the beacons until 23 August 2021.
(ii) With regard to the "Courage", on 20 August 2021, Cockerill J prohibited CSC and Oryx from entering or remaining within areas excluded by the charterparty, which included Syrian waters. The "Courage" entered Syrian waters on 23 September 2021. I reject the explanation that she drifted there without power, and conclude that she was moved there under her own power. CSC and Oryx also failed to comply with the orders or 20 August 2021 and 27 August 2021, that the vessel be taken to Gibraltar or another port to be agreed between the parties.
(iii) CSC and Oryx, in breach of the order of Foxton J of 29 September 2021, have not procured that the "Courage" be towed to Piraeus, Greece as soon as reasonably practicable. She remains in Lakatia. I cannot accept that the Defendants have attempted to move her to Piraeus, and I reject the explanation that she was not towed there because the Defendants failed in genuine efforts to find a tug or to obtain permission from the Syrian authorities. Had there been proper efforts, they would have been evidenced by disclosable documents.
(iv) On 20 August 2021, Cockerill J ordered that AVC "forthwith upon the arrival of [OCM Kama's] duly authorised representatives and/or surveyors, allow such representatives and/or surveyors access to carry out a survey of the Vessel and ascertain the state of the Vessel's maintenance". When Mr Mangos and Captain Kolosioulis arrived at the vessel on 28 August 2021, they were obstructed by the Master of the "Rival", who, I infer, was acting on the Defendants' instructions, and were ordered to leave by Mr Mallah, who again was acting for the Defendants Mr Dunning described the effect of this as "trivial" because Mr Mangos and Captain Kolosioulis conducted an inspection between 29 and 31 August 2021, but that does not excuse breach of the Court's order.
(v) AVC and Oryx did not discontinue the proceedings for precautionary seizure of the "Amethyst" in the Courts of Sharjah in breach of their undertaking to Foxton J. On the contrary, on 6 October 2021 they served the Claimants with a court document dated 30 September 2021 by way of an appeal against the refusal of their application by the Court of First Instance.
(i) In his witness statement of 24 August 2021, Mr Chiotelis said that the "Amethyst" was under orders to load cargo at Ruwais or Sohar. I cannot accept that statement in view of Captain Subaan, as he told Mr Mangos, knowing nothing of such orders. I also observe that the evidence of Mr Chiotelis was misleading in that he said that the sub-charterparty of the "Amethyst" gave the option of a five months extension, without referring to Addendum No 2, but that that might have been an unintended error, and I attach no weight to it.
(ii) The complaint about the evidence that the "Amethyst" was under orders is aggravated because on 24 September 2021, in response to the Claimants'' criticisms of it, Andrew Baker J gave the opportunity for corrective witness statements to be served. The evidence was not corrected, nor were the criticisms answered.
(iii) Andrew Baker J was told on 24 September 2021 that the "Courage" had drifted into Syrian waters due to weather conditions, and this account was repeated in the affidavit of Mr Chiotelis of 27 September 2021, on the basis of information, he said, that he was given by Captain Khalil. I reject that account as untruthful.
i) the decision to switch off the AIS and other tracking equipment was a breach not only of the charterparties but also of SOLAS;ii) Mr Chiotelis' statement in his email of 14 July 2021 that Mr Mallah's relationship with the Defendants ended in January 2021 was deliberately untrue;
iii) in the same email, Mr Chiotelis said that both vessels were "under [time charter] with cargo on board", whereas there was no cargo on the "Amethyst"; and
iv) the Defendants did not inform them about the termination of the insurance covers.
i) The replacement P&I covers have a limit of US$500,000,000, and do not provide the required US$1 billion in respect of oil pollution liability;ii) The replacement P&I covers were not placed with a member of the International Group of P&I Clubs;
iii) The replacement H&M covers were not placed with "western insurance companies and/or underwriters"; and
iv) The covers were not on "approved terms".
(i) She has not been maintained, and, by the Defendants' account, she has problems with her main engine. Because she is at Latakia, she has not been inspected and the extent of the problems is unknown. The Defendants have not disclosed relevant documents.
(ii) Her insurance is unsatisfactory. Again, the Defendants' lack of disclosure obscures the position, but it does not comply with the requirements of the charterparties.
(iii) The only evidence of her hull and machinery cover is a Cover Note dated 17 September 2021 for the period from 16 September 2021 to 15 September 2022, and therefore it does not cover the period when the engine apparently suffered damage. In any case, the cover is of very doubtful value for other reasons, including trading limitations that exclude Syria, a "sanctions Limitation and Exclusion Clause", and the fact that cover commenced only when payment of the premium was received and there is no evidence of payment.
(iv) Further, the vessel is involved in Syrian Court proceedings and apparently under arrest there, but again the Defendants have provided little information about the proceedings.
(i) Assuming no licence is granted by OFAC permitting the parties to perform the charterparties, could they lawfully be performed, or alternatively, could the Claimants lawfully make restitutionary payments to the Defendants?
(ii) If so and again assuming no licence is granted by OFAC, would the Claimants and the OCM Group and its employees be exposed to risk under the sanctions regime?
(iii) What are the prospects of OFAC granting a licence permitting performance of the charterparties or payments to the Defendants?
(i) If the Claimants and the Oaktree Group were to continue doing business with Mr Mallah or entities associated with him while he is on the SDT list, it is likely to damage their reputation with their investors, banks and others with whom they do business.
(ii) The Claimants should not in any case be ordered to continue to do business with Mr Mallah or entities with which he is associated while he is a designated terrorist. This is a particularly strong point for OCM Kama in view of clause 36(s) of the charterparty, but it also applies in more general terms to the "Courage" charterparty.
Conclusions