Contract analysis

1. This skeleton argument is filed on behalf of Thalassa Shipping & Logistics SA ("TSL") in opposition to the application by Korinthian Maritime Holdings Ltd. ("KMH") dated 19 August 2024 (the "Application") to set aside LCIA Award No. 224718 dated 28 June 2024 (the "Award") pursuant to sections 68 and 69 of the Arbitration Act 1996 (the "Act").

2. The Award was rendered by a distinguished tribunal comprising Sir Malcolm Fenton-Clarke (Presiding Arbitrator, appointed by the LCIA Court), Professor Athena Drakopoulos (co-arbitrator, nominated by TSL), and Dr. Henrik Dalmqvist (co-arbitrator, nominated by KMH) (together, the "Tribunal"). The Tribunal Secretary was Ms. Fiona Beckett. The Award followed a fully contested 10-day evidentiary hearing at the Internat

3. The Award ordered KMH to pay TSL the total sum of £96,450,000, comprising: (a) Damages of £42,300,000 for wrongful early redelivery of M/V Aegean Fortuna; (b) Outstanding hire and damages of £28,150,000 for M/V Crimson Horizon; (c) Restitution of £2,740,000 for fabricated off-hire deductions on M/V Volga Spirit; (d) Loss of profit and market differential damages of £16,480,000 across all three charter-parties; and

4. The Tribunal also awarded costs of £12,150,000 (being £3,240,000 in LCIA administrative and tribunal costs, plus £8,910,000 in TSL's legal costs, with 85% of those costs allocated to KMH), bringing the total liability to £108,600,000. The Award further provided for post-award interest at 5.25% per annum simple on all unpaid sums from 29 June 2024.

5. Permission to enforce the Award as a judgment of the court was granted by Mr. Justice Ashworth on 2 August 2024 pursuant to section 66 of the Act.

6. TSL submits that KMH's Application should be dismissed in its entirety. The Application is, in substance, a disguised appeal on the merits of the Tribunal's factual and legal findings, dressed up as challenges under sections 68 and 69 of the Act. None of the five grounds advanced by KMH meets the high threshold required by the Act. KMH advances three grounds under section 68 (serious irregularity) and two grounds

7. TSL respectfully invites the court to dismiss the Application with costs on the indemnity basis, for the reasons developed in this skeleton argument.

8. TSL is a Société Anonyme organized under the laws of the Hellenic Republic, with its principal offices at 14 Akti Miaouli, 4th Floor, Piraeus 185 35, Greece. TSL was founded in 1987 by the Papadimitriou family and has since grown into a substantial international shipping enterprise. TSL operates a fleet of 34 vessels, comprising bulk carriers, tankers, and container feeders, with annual revenues of approximately €

9. KMH is a private limited company incorporated in Nicosia, Cyprus (Company Registration No. HE 387421), with a registered office at 28 Themistokli Dervi Avenue, Suite 601, Nicosia 1066, Cyprus. KMH controls approximately 18 dry-bulk carriers through a network of single-purpose vehicle subsidiaries incorporated in various jurisdictions. KMH is beneficially owned by the Volkov family through a series of holding struc

10. The underlying dispute arises out of three time charter-party agreements entered into between TSL (as charterer) and KMH (as disponent owner or owner, as the case may be) in respect of three dry-bulk vessels: (a) M/V *Aegean Fortuna* (IMO 9784521): a Supramax Bulk Carrier of 58,200 DWT, registered under the flag of the Republic of the marshall Islands, owned by Dnepr Shipholding Inc. (a KMH group entity). The cha

11. All three charter-party agreements were governed by English law and contained arbitration clauses providing for disputes to be resolved by arbitration under the Rules of the London Court of International Arbitration ("LCIA"), with the seat of arbitration in London. The arbitration clauses were materially identical, providing for a tribunal of three arbitrators, with each party nominating one co-arbitrator and the

12. Beginning in mid-2022, KMH engaged in a course of conduct that the Tribunal found to constitute a pattern of repudiatory breach across all three charter-parties: (a) M/V *Aegean Fortuna*: KMH wrongfully redelivered the vessel on 18 June 2022, approximately 14 months before the contractual expiry date, in repudiatory breach of the charter-party. TSL accepted the repudiation and claimed damages for loss of bargain.

13. These breaches occurred against the background of a substantial decline in the dry-bulk freight market in the second half of 2022, which the Tribunal found was the economic motivation for KMH's conduct. The Tribunal expressly found, at paragraph 187 of the Award, that "KMH's breaches were deliberate and commercially motivated, designed to extricate itself from charter-party commitments that had become unprofitabl

14. TSL filed its Request for Arbitration on 14 November 2022, commencing LCIA Case No. 224718. The Tribunal was constituted on 8 February 2023 following the appointment of the co-arbitrators by the respective parties and the appointment of the Presiding Arbitrator by the LCIA Court.

15. The Tribunal conducted a thorough case management process, including a first procedural conference on 27 February 2023 at which detailed directions were given for the exchange of statements of case, witness statements, expert reports, and disclosure. The procedural timetable was agreed by both parties and embodied in Procedural Order No. 1 dated 3 March 2023.

16. The evidentiary hearing took place over 10 hearing days from 11 to 22 September 2023 at the IDRC, London. Both parties were represented by experienced legal teams. TSL was represented by Calderwood & Harkness LLP. KMH was represented by Harkness Whitford & Co. (SRA No. 614823), with Ms. Catherine Whitford (Partner, International Arbitration) and Mr. James Thornbury (Associate) acting as KMH's principal legal repr

17. The factual witnesses who gave evidence at the hearing included, for TSL, Captain Dimitrios Kouretas and Ms. Elena Stavridis, and for KMH, Mr. Alexei Demidov and Ms. Marina Kazakova. Expert witnesses included, for TSL, Mr. Jonathan Briggs of Camberwell Management Consulting (shipping market expert) and Mr. Richard Hennessy FCA of Harborline Advisors (quantum expert), and for KMH, Mr. Simon Derbyshire of Arrow Shi

18. The Final Award was issued on 28 June 2024. It is a comprehensive document running to 312 paragraphs over 97 pages, addressing in detail every issue in dispute between the parties. E. The Award

19. The Award made the following findings and orders, in summary: (a) M/V *Aegean Fortuna* damages: £42,300,000, calculated by reference to 14 months of remaining charter period at a market differential of approximately £3,021,429 per month between the contractual charter rate and the available market rate for comparable vessels, as established by TSL's expert evidence. (b) M/V *Crimson Horizon* damages: £28,150,000,

20. The total amount of the Award was £96,450,000 (approximately USD $120 million at the prevailing exchange rate of £1 = USD $1.2441 as of 28 June 2024).

21. On costs, the Tribunal ordered that KMH should bear 85% of all costs, resulting in an allocation to KMH of £12,150,000 (being £3,240,000 in LCIA administrative and tribunal costs, plus £8,910,000 in TSL's legal costs). The Tribunal further ordered post-award interest at 5.25% per annum simple on all unpaid sums from 29 June 2024 until the date of payment.

22. It is to be noted that the Award was unanimous. All three members of the Tribunal — including Dr. Henrik Dalmqvist, the co-arbitrator nominated by KMH — concurred in the findings and the relief granted. F. Enforcement Proceedings

23. TSL filed its application for permission to enforce the Award as a judgment of the court pursuant to section 66 of the Act on 15 July 2024, in these proceedings (Claim No. CL-2024-000487). Permission was granted by Mr. Justice Ashworth on 2 August 2024.

24. In parallel, on 16 July 2024, TSL obtained a worldwide freezing order on an ex parte basis from Mr. Justice Ashworth, freezing KMH's assets worldwide up to the value of £108,600,000. The freezing order was continued with modifications on the return date on 30 July 2024. The evidence filed in support of the freezing order, including the witness statement of Mr. Nikolaos Papadimitriou and the asset tracing report p

25. KMH filed the present Application on 19 August 2024, seeking to set aside the Award on grounds arising under sections 68 and 69 of the Act.

26. TSL has also commenced enforcement proceedings in parallel jurisdictions, reflecting the multi-jurisdictional nature of the KMH group's asset base. These include: proceedings in Cyprus (Case No. 2247/2024, Nicosia District Court), Singapore (OS No. 872/2024, Singapore High Court), and the United Arab Emirates (Case No. 1893/2024, Dubai Court of First Instance). Those proceedings are not directly before this court

III. LEGAL FRAMEWORK A. Section 68: Serious Irregularity

27. Section 68(1) of the Act provides that a party to arbitral proceedings may apply to the court challenging an award in the proceedings on the ground of serious irregularity affecting the tribunal, the proceedings, or the award. A party may only bring such a challenge if the serious irregularity has caused or will cause "substantial injustice" to the applicant.

28. Section 68(2) sets out an exhaustive list of the categories of serious irregularity that may found a challenge. These include, so far as relevant to KMH's Application: (a) Failure by the tribunal to comply with section 33 of the Act (the general duty of the tribunal to act fairly and impartially as between the parties, giving each party a reasonable opportunity of putting its case and dealing with the case of its

29. The threshold for a successful challenge under section 68 is "deliberately high." This has been emphasised by the highest courts on numerous occasions: (a) In Lesotho Highlands Development Authority v Impregilo SpA [2005] UKHL 43, the House of Lords held that section 68 is designed to cover cases where the tribunal has gone "so wrong in its conduct of the arbitration that justice calls out for it to be corrected"

30. Critically, the role of the court under section 68 is not to review the merits of the tribunal's decision. As the Court of Appeal held in Checkpoint Ltd v Strathclyde Pension Fund [2003] EWCA Civ 84, the court must resist the temptation to carry out a detailed textual analysis of the award with a view to finding fault with it. Section 68 is not a backdoor appeal on the merits, and is not a mechanism for challengi

31. The requirement of "substantial injustice" is a separate and additional hurdle. It is not enough for an applicant to demonstrate that a serious irregularity occurred; the applicant must also demonstrate that the irregularity caused, or will cause, substantial injustice. This requires the applicant to show that, but for the irregularity, the outcome of the arbitration would have been, or could realistically have b

32. Section 69(1) of the Act provides that, unless otherwise agreed by the parties, a party to arbitral proceedings may appeal to the court on a question of law arising out of an award made in the proceedings. However, such an appeal may only be brought with the permission of the court, unless all the other parties agree to the appeal.

33. Section 69(3) sets out the criteria for granting leave to appeal. The court shall not grant leave unless it is satisfied that: (a) The determination of the question will substantially affect the rights of one or more of the parties; (b) The question is one which the tribunal was asked to determine; (c) On the basis of the findings of fact in the award, the decision of the tribunal on the question is either (i) ob

34. These criteria are cumulative. All four must be satisfied before leave may be granted. If any one of them is not met, leave must be refused.

35. Furthermore, the LCIA Rules, under which the parties agreed to arbitrate, provide at Article 26.8 that awards shall be "final and binding." This provision reflects the parties' bargain for finality. While the parties did not enter into an express exclusion agreement under section 69(1), the court should take into account the parties' choice of institutional arbitration under the LCIA Rules as a factor weighing ag

36. The court should be especially reluctant to grant leave where the question is one of mixed fact and law, or depends on the tribunal's interpretation of a specific contract applied to specific facts, as opposed to a pure question of law of general application. As the Court of Appeal held in CMA CGM SA v Beteiligungs-KG MS "Northern Pioneer" [2003] 1 WLR 1015 (per Tuckey LJ at [20]): "The more the question of law r

37. It is fundamental that questions of fact, or questions of mixed fact and law that are predominantly factual, are not appealable under section 69. The court has no jurisdiction under section 69 to interfere with the tribunal's findings of fact.

IV. KMH'S GROUNDS OF CHALLENGE AND TSL'S RESPONSE A. Ground 1 (Section 68): Alleged Failure to Deal with an Essential Issue — Quantum of M/V *Aegean Fortuna* Damages KMH's Contention.

38. KMH contends that the Tribunal failed to deal with an essential issue put to it within the meaning of section 68(2)(d) of the Act. Specifically, KMH argues that the Tribunal failed to deal with KMH's argument that the market rate for Supramax bulk carriers had declined significantly in the period following the wrongful early redelivery of M/V Aegean Fortuna on 18 June 2022, such that the £42,300,000 damages figur

39. This ground is wholly without merit. The Tribunal dealt with this issue expressly and at length. The Tribunal's treatment of the question of quantum for the wrongful early redelivery of M/V Aegean Fortuna occupies paragraphs 142 to 198 of the Award, spanning some 20 pages of detailed analysis. The Tribunal addressed KMH's market evidence head-on and rejected it.

40. At paragraphs 176 to 183 of the Award, the Tribunal specifically considered the market data and fixture evidence relied upon by KMH's expert, Mr. Derbyshire. The Tribunal found, in terms, that: (a) Mr. Derbyshire's comparables were "not properly comparable" to M/V Aegean Fortuna, being based on fixtures for vessels of different specifications, different trade routes, and different charter periods (Award, §178); (

41. Having considered and rejected KMH's market evidence, the Tribunal accepted TSL's expert evidence on the applicable market differential and calculated damages over the 14-month remaining charter period based on the difference between the contractual charter rate and the market rate as established by Mr. Briggs's evidence. This was a classic exercise of the Tribunal's fact-finding function.

42. The legal principles governing a challenge under section 68(2)(d) are well-established. A "failure to deal with" an issue means a failure to address an issue at all — it does not encompass a situation in which the tribunal has addressed the issue but reached a conclusion with which the applicant disagrees. As Gloster J (as she then was) held in Petrochemical Industries Co (KSC) v Dow Chemical Co [2012] EWHC 2739

43. Similarly, in Hussman (Europe) Ltd v Al Ameen Development & Trade Co [2000] 2 Lloyd's Rep 83, the court held that a tribunal is not required to set out every step of its reasoning or to address every sub-argument or piece of evidence advanced by a party. What is required is that the tribunal address the essential issues in the case. This the Tribunal plainly did.

44. KMH's real complaint is that the Tribunal preferred TSL's market evidence to KMH's. That is not a ground for challenge under section 68. The Tribunal weighed the competing expert evidence, assessed the credibility and reliability of the experts, and reached a reasoned conclusion. The court cannot and should not intervene simply because KMH would have wished the Tribunal to reach a different conclusion.

45. Even if this court were to find (which TSL denies) that the Tribunal had failed to deal with some aspect of KMH's market evidence, there is no basis for concluding that substantial injustice has been caused. The Tribunal gave detailed reasons for rejecting KMH's market data as unreliable and non-comparable. There is no realistic prospect that, had the Tribunal considered KMH's alternative market evidence more ful

46. Ground 1 accordingly fails on both limbs: there was no failure to deal with an essential issue, and no substantial injustice has been demonstrated. B. Ground 2 (Section 68): Alleged Procedural Unfairness — Exclusion of Late Evidence on M/V *Volga Spirit* Off-Hire Deductions KMH's Contention.

47. KMH contends that the Tribunal acted in breach of its general duty under section 33 of the Act and in a manner giving rise to serious irregularity under section 68(2)(a) by refusing to admit late-filed documents that KMH argued showed the off-hire deductions on M/V Volga Spirit were legitimate. KMH argues that the exclusion of these documents deprived it of a reasonable opportunity to put its case on this issue.

48. This ground is similarly without merit. The Tribunal's decision to exclude KMH's late evidence was a proper exercise of the Tribunal's case management powers, made after careful consideration of the competing interests of both parties, and well within the range of decisions that a reasonable tribunal might make in the circumstances.

49. The relevant procedural history is as follows. The procedural timetable agreed by both parties and set out in Procedural Order No. 1 (dated 3 March 2023) provided for the exchange of documentary evidence by 30 June 2023, with witness statements to follow by 31 July 2023 and expert reports by 18 August 2023. KMH complied with these deadlines and produced its documents and witness evidence accordingly.

50. On 4 September 2023 — a mere seven days before the commencement of the 10-day evidentiary hearing — KMH applied to the Tribunal for permission to introduce a set of additional documents, described by KMH as "recently located" vessel maintenance and classification records, which KMH contended supported the legitimacy of the off-hire deductions it had applied to M/V Volga Spirit.

51. The Tribunal heard submissions from both parties on 6 September 2023 and issued a detailed ruling in Procedural Order No. 4, dated 7 September 2023. The Tribunal refused KMH's application on three independent grounds: (a) No satisfactory explanation for late disclosure. KMH had failed to provide any adequate explanation for why the documents had not been produced during the ordinary disclosure phase. The document

52. This was a quintessential case management decision, squarely within the Tribunal's discretion. The Tribunal was exercising its powers under Article 14 of the LCIA Rules and its general duty under section 33 of the Act, which requires the tribunal to adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary delay or expense, and to give each party a reasonable opportunity of putti

53. The principles governing the court's review of a tribunal's case management decisions under section 68 were considered by the Court of Appeal in Westvale & Co. AG v Vorchmeld Airport GmbH [2006] 2 Lloyd's Rep 1, where the court held (per Tomlinson LJ at [72]) that a tribunal's procedural and case management decisions are reviewable under section 68 "only in extreme cases where the decision is so far removed from

54. The present case is far from the "extreme case" that section 68 is designed to address. The Tribunal considered the competing interests carefully, gave both parties an opportunity to be heard, and reached a balanced decision that respected the procedural timetable agreed by the parties while protecting TSL from the prejudice that would have resulted from the late introduction of unverified documents.

55. Moreover, even if the documents had been admitted, there is no basis for concluding that the outcome would have been substantially different. The Tribunal's finding that the off-hire deductions on M/V Volga Spirit were fabricated rested on multiple independent lines of evidence, including: (a) The testimony of Captain Dimitrios Kouretas, who gave detailed evidence that the vessel was fully operational during the

56. The excluded documents — even assuming they were genuine — were internal KMH records that would have been assessed in the context of all this other evidence. There is no realistic prospect that they would have altered the Tribunal's finding that the off-hire events were fabricated.