Contract analysis

Section 1: Introduction and Qualifications

1. My full name is Hannah Brinkley. I am a Lead Associate in the Litigation (General) department of Calderwood & Harkness LLP, a law firm authorised and regulated by the Solicitors Regulation Authority, with offices at 45 Moorgate, London EC2R 6AR. I have been qualified as a solicitor of England and Wales since 2016 and have practised in the field of international commercial litigation and enforcement throughout my c

2. I have day-to-day conduct of the enforcement proceedings brought by Thalassa Shipping & Logistics SA ("TSL" or the "Claimant") against Korinthian Maritime Holdings Ltd. ("KMH" or the "Defendant") in these proceedings. I work under the supervision of Samuel Eklund, the Responsible Partner with overall supervisory conduct of the matter, and Linda Osei, the Billing Partner. I am further assisted by Patrick Gallagher,

3. I make this witness statement in support of TSL's application for an interim third-party debt order (an "Interim TPDO") pursuant to CPR Part 72 against Meridian Trust Bank Ltd. ("Meridian Trust" or the "Third Party"), which holds debts owed to KMH in the form of account balances standing to the credit of KMH's accounts at Meridian Trust's London branch.

4. The facts stated in this witness statement are within my own knowledge, save where I indicate otherwise. Where the matters stated are not within my own knowledge, they are derived from documents in the files of Calderwood & Harkness LLP, from information provided by TSL and its officers, from documents produced in the course of the LCIA arbitration proceedings described below, from information provided by Hartwell

5. I confirm that I understand the duty of a witness to assist the court and that I have complied with that duty. I confirm that the contents of this witness statement are true to the best of my knowledge and belief.

6. There is now produced and shown to me an exhibit bundle marked "HB-1" through "HB-7" consisting of the documents to which I refer in this witness statement. Where I refer to page numbers in the exhibits, I refer to the internal pagination of the exhibit bundle prepared for the purposes of this application.

Section 2: The Parties 2.1 The Claimant — Thalassa Shipping & Logistics SA

7. Thalassa Shipping & Logistics SA ("TSL") is a société anonyme organised under the laws of the Hellenic Republic (Greece), with its registered office at 14 Akti Miaouli, Piraeus 185 35, Greece. TSL's Greek Tax Identification Number (AFM) is EL-801456729.

8. TSL is a strategic private shipping and logistics company, founded in 1987 by the Papadimitriou family. It has grown over the past three and a half decades into one of the most significant privately held shipping enterprises operating in the eastern Mediterranean and globally. TSL operates a fleet of 34 vessels, which comprises a diversified portfolio of bulk carriers, tankers, and container feeders engaged in int

9. TSL's ownership structure is as follows: approximately 72% of its issued share capital is held by the Papadimitriou Family Trust, a discretionary trust established under Greek law, the beneficiaries of which are members of the Papadimitriou family. The remaining 28% is held by Aegean Capital Partners SA, a Greek-incorporated investment vehicle.

10. The principal officers of TSL relevant to these proceedings are: (a) Mr. Nikolaos Papadimitriou, Chairman and Chief Executive Officer; (b) Ms. Elena Stavridis, Chief Financial Officer; (c) Captain Dimitrios Kouretas, Head of Chartering and Operations; and (d) Ms. Ioanna Christodoulou, General Counsel.

11. TSL is the award creditor in respect of LCIA Award No. 224718 dated 28 June 2024, the enforcement of which is the subject of these proceedings. 2.2 The Defendant — Korinthian Maritime Holdings Ltd.

12. Korinthian Maritime Holdings Ltd. ("KMH") is a private limited company incorporated in Nicosia, Cyprus, under the Companies Law, Cap. 113 of the Laws of the Republic of Cyprus, with company registration number HE 387421. KMH's registered address is 28 Themistokli Dervi Avenue, Suite 601, Nicosia 1066, Cyprus.

13. KMH is a vessel-owning and chartering company which, at the material times, controlled a fleet of approximately 18 dry-bulk carriers through a network of single-purpose vehicle ("SPV") subsidiaries registered in various jurisdictions, including the British Virgin Islands, Singapore, and Cyprus. KMH acted as the disponent owner of the vessels in question, entering into charter-party agreements with charterers such

14. KMH is beneficially owned by the Volkov family through a series of British Virgin Islands and Cypriot holding structures. The ultimate beneficial owner of KMH is Mr. Andrei Volkov, who, as I shall explain below, acts as a de facto director of KMH and exercises substantial operational control over the company and its subsidiaries, notwithstanding that he is not formally registered as a director in the Cypriot comp

15. Prior to the dispute giving rise to the LCIA arbitration, KMH had an estimated net asset value of approximately USD $280 million. I make this observation on the basis of financial information disclosed by KMH during the LCIA arbitration proceedings and the preliminary analysis carried out by Hartwell Pemberton LLP.

16. KMH is the award debtor and, following the grant of permission to enforce the award as a judgment on 2 August 2024, it is the judgment debtor in these proceedings.

17. KMH's solicitors on record in these proceedings are Harkness Whitford & Co. (SRA No. 614823), of 12 Fetter Lane, London EC4A 1JP. The matter is handled at Harkness Whitford by Mr. Richard Harkness (Senior Partner), Ms. Catherine Whitford (Partner), and Mr. James Thornbury (Associate). 2.3 The Third Party — Meridian Trust Bank Ltd.

18. Meridian Trust Bank Ltd. ("Meridian Trust") is a bank incorporated in England and Wales as a private company limited by shares, with its principal office at 50 Lombard Street, London EC3V 9EA, United Kingdom. Meridian Trust is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

19. Meridian Trust serves as KMH's primary London correspondent bank. As I shall explain in greater detail below, KMH maintains at least one active sterling-denominated account and at least one active US dollar-denominated account at Meridian Trust's London branch. These accounts are used for the receipt of charter hire, freight revenues, and trade receivables arising from KMH's international shipping operations. Mer

Section 3: Background to the Dispute and the LCIA Award 3.1 The Charter-Party Agreements

20. The underlying dispute between TSL and KMH arises out of three time charter-party agreements (the "Charters") entered into between TSL (as charterer) and KMH (as disponent owner) between 2019 and 2021. The Charters relate to the following vessels: (a) M/V *Aegean Fortuna — IMO Number 9784521; vessel type: Supramax Bulk Carrier; deadweight tonnage: 58,200 DWT; flag state: Republic of the marshall Islands; SPV owne

21. All three Charters were governed by English law. Each Charter contained an arbitration clause providing for the resolution of disputes by arbitration under the Rules of the London Court of International Arbitration ("LCIA"), with London as the seat of arbitration. The inclusion of these arbitration clauses in each Charter was consistent with standard market practice in the international shipping industry and refl

22. Under each of the three Charters, KMH acted as disponent owner. The vessels were owned by KMH's SPV subsidiaries, Dnepr Shipholding Inc. and Korinthian Bulkers (Singapore) Pte. Ltd., but were let to TSL on time charter through KMH in its capacity as the contracting entity within the KMH group. The Charters were negotiated over a period of several years during which the commercial relationship between TSL and KMH

23. Beginning in mid-2022, KMH engaged in a pattern of repudiatory breach of the three Charters. The breaches in respect of each vessel were as follows: (a) M/V *Aegean Fortuna* — Wrongful Early Redelivery. On 18 June 2022, KMH wrongfully redelivered the M/V Aegean Fortuna to TSL approximately 14 months prior to the contractual redelivery date. This early redelivery was effected without contractual justification and

24. The combined effect of these breaches was to deprive TSL of a very substantial proportion of the commercial benefit it was entitled to derive from the three Charters. The circumstances strongly suggested a coordinated and deliberate course of conduct by KMH designed to extract itself from its charter obligations at a time when prevailing market rates for dry-bulk tonnage had declined, making the Charters commerci

25. In light of KMH's repudiatory breaches, TSL commenced arbitration proceedings under the LCIA Rules. A Request for Arbitration was filed with the LCIA on 14 November 2022, bearing LCIA Case Reference No. 224718.

26. The arbitral tribunal (the "Tribunal") was constituted on 8 February 2023. The members of the Tribunal were as follows: (a) Presiding Arbitrator: Sir Malcolm Fenton-Clarke, appointed by the LCIA Court; (b) Co-Arbitrator (nominated by TSL as Claimant): Professor Athena Drakopoulos; and (c) Co-Arbitrator (nominated by KMH as Respondent): Dr. Henrik Dalmqvist.

27. Ms. Fiona Beckett was appointed as Tribunal Secretary. The Tribunal's appointment was confirmed by the LCIA Court without challenge from either party, and both parties confirmed the Tribunal's jurisdiction.

28. The proceedings advanced through written submissions, documentary disclosure, and witness evidence over the course of several months. An evidentiary hearing took place from 11 September 2023 through 22 September 2023, a period of ten hearing days, at the International Dispute Resolution Centre ("IDRC") in London. During the hearing, the Tribunal heard from factual witnesses called by both parties, including witne

29. Following post-hearing submissions and a period of deliberation, the Tribunal issued its Final Award on 28 June 2024 (the "Award"). A copy of the Award is exhibited at Exhibit HB-3. 3.4 The Award

30. The Tribunal found in favour of TSL on all heads of claim and rendered the Award in TSL's favour, as follows: (a) Damages for wrongful early redelivery of M/V *Aegean Fortuna*: £42,300,000. This sum represented the net present value of the hire and other contractual payments that TSL would have received over the unexpired period of the Aegean Fortuna Charter, less the costs saved by TSL and any mitigation achieve

31. The total sum awarded to TSL in damages and pre-award interest was accordingly £96,450,000. At the prevailing exchange rate as of 28 June 2024 (approximately £1 = USD $1.2441), this equated to approximately USD $120,000,000.

32. The Tribunal further ordered that the costs of the arbitration be allocated as to 85% to KMH and as to 15% to TSL, reflecting TSL's near-complete success on all issues. The costs were assessed as follows: (a) LCIA administrative charges and tribunal fees and expenses: £3,240,000 (85% = £2,754,000 payable by KMH); and (b) TSL's legal costs (including solicitors' and counsel's fees, expert fees, and disbursements):

33. The total costs allocation against KMH was accordingly £12,150,000 (being 85% of the combined costs of £12,150,000), with the result that the grand total of the Award (including costs) was £108,600,000.

34. The Tribunal further ordered that post-award interest should run at the rate of 5.25% per annum simple on unpaid sums from 29 June 2024 (the day following the date of the Award) until the date of payment or further order.

Section 4: The Enforcement Proceedings in England and Wales 4.1 Application Under Section 66 of the Arbitration Act 1996

35. On 15 July 2024, TSL filed an application in the Commercial Court of the Business and Property Courts of England and Wales to enforce the Award as a judgment of the court, pursuant to section 66 of the Arbitration Act 1996. The application was issued under Claim No. CL-2024-000487.

36. The application was supported by my second witness statement (filed in those proceedings) and by the exhibits thereto, which included the Award itself and evidence establishing that the requirements for enforcement under section 66 were satisfied. In particular, the evidence demonstrated that the Award was a valid and binding LCIA award, that it was made at a London seat, that it was a final award disposing of al

37. On 2 August 2024, Mr. Justice Ashworth granted permission to enforce the Award as a judgment of the Commercial Court. A sealed copy of the order of Mr. Justice Ashworth dated 2 August 2024 is exhibited at Exhibit HB-1. The effect of that order is that the Award is now enforceable as a judgment of the Commercial Court for the sum of £108,600,000, together with post-award interest at the rate of 5.25% per annum sim

38. In parallel with the section 66 application, TSL applied to the Commercial Court for a worldwide freezing order (a "WFO") against KMH. The application was made without notice to KMH, supported by evidence establishing a good arguable case on the merits (namely, the Award itself), a real risk of dissipation of assets, and the existence of assets against which the order could bite.

39. On 16 July 2024, Mr. Justice Ashworth granted a worldwide freezing order restraining KMH from removing from England and Wales, or in any way disposing of, dealing with, or diminishing the value of, any of its assets whether located within or outside the jurisdiction of this Court, up to the value of £108,600,000. A sealed copy of the WFO dated 16 July 2024 is exhibited at Exhibit HB-2.

40. The WFO was served on KMH through its solicitors, Harkness Whitford & Co., on 17 July 2024. KMH filed evidence in response and the WFO came back before the court on the return date of 30 July 2024. On that occasion, Mr. Justice Ashworth continued the WFO with certain modifications which are not material to this application. The order made on the return date, dated 30 July 2024, is also exhibited at Exhibit HB-2.

41. The WFO includes ancillary asset disclosure provisions, pursuant to which KMH was required to disclose, by way of affidavit sworn by a responsible officer, all of its assets worldwide exceeding £25,000 in value, whether in its own name or not, and whether solely or jointly owned. The disclosure was required to include, inter alia, the nature, value, and location of each asset, the identity of any bank or financia

42. As I describe in greater detail below at Section 6 of this statement, KMH's compliance with the asset disclosure order has been incomplete and delayed. 4.3 KMH's Non-Compliance and Failure to Pay

43. Despite the grant of permission to enforce the Award as a judgment and the existence of the WFO, KMH has not made any voluntary payment whatsoever toward satisfaction of the Award or the enforcement judgment.

44. A pre-enforcement demand letter was sent by Calderwood & Harkness LLP to KMH's solicitors, Harkness Whitford & Co., on 8 July 2024. The letter demanded payment of the full amount of the Award within 14 days. A copy of that letter is exhibited at Exhibit HB-4. The 14-day deadline expired on 22 July 2024 without any payment being made and without any substantive response from Harkness Whitford indicating an intenti

45. KMH has indicated, through correspondence from Harkness Whitford & Co., that it intends to challenge the Award pursuant to sections 68 and/or 69 of the Arbitration Act 1996. Section 68 provides for challenge on the ground of serious irregularity, and section 69 provides for appeal on a point of law. As at the date of this witness statement, 4 August 2024, no such application has been filed by KMH. I note for the

46. In these circumstances, TSL is entitled to take all available steps to execute against KMH's assets in satisfaction of the enforcement judgment.

Section 5: Information Regarding KMH's Accounts at Meridian Trust Bank Ltd. 5.1 Identification of Accounts

47. Through investigations conducted on behalf of TSL, it has been ascertained that KMH maintains at least one active sterling-denominated account and at least one active US dollar-denominated account at Meridian Trust Bank Ltd., 50 Lombard Street, London EC3V 9EA. As stated above, Meridian Trust serves as KMH's primary London correspondent bank for the receipt of charter hire, freight revenues, and trade receivables

48. The investigations to which I refer have been carried out by Hartwell Pemberton LLP ("Hartwell Pemberton" or "HP"), a firm of forensic accountants with offices at 25 Old Broad Street, London EC2N 1HN. Hartwell Pemberton was engaged by Calderwood & Harkness LLP on behalf of TSL for the specific purposes of tracing KMH's global assets, mapping KMH's corporate structure, and identifying assets against which the enfo

49. The information regarding KMH's accounts at Meridian Trust was obtained through the following sources: (a) Documents produced in the LCIA arbitration. During the course of the LCIA arbitration, KMH produced a substantial body of documentation pursuant to the Tribunal's disclosure orders. Among the documents produced were charter-party hire payment instructions and bank statements which identified Meridian Trust B

50. Based on the foregoing sources, taken together, I believe that substantial sums are standing to the credit of KMH's accounts at Meridian Trust Bank Ltd. at the date of this statement. 5.2 Estimated Balances

51. Based on the information available to Calderwood & Harkness and Hartwell Pemberton, the combined balances across KMH's accounts at Meridian Trust Bank Ltd. are believed to be in excess of £18,000,000 at the date of this statement. While this sum represents only a fraction of the total enforcement judgment (£108,600,000 plus post-award interest), it constitutes a very significant sum which would represent a materi

52. The basis for this estimate is as follows: (a) Pattern of charter hire receipts. Hartwell Pemberton's analysis of the historical transaction flow through KMH's accounts at Meridian Trust, derived from the arbitration disclosure materials, demonstrates that the accounts have consistently received substantial inflows of charter hire and freight revenues. The analysis of transaction patterns over the period 2019–202

53. The precise balance standing to the credit of KMH's accounts at Meridian Trust will be ascertained and confirmed upon service of the interim third-party debt order on Meridian Trust Bank Ltd. Meridian Trust will at that point be required to confirm the balance and to freeze the relevant sums.

Section 6: Evidence of Risk of Dissipation and Urgency 6.1 KMH's Pattern of Asset Dissipation

54. Since the issuance of the Final Award on 28 June 2024, KMH has engaged in what I can only describe as a concerted and systematic pattern of asset-shifting, evidently designed to frustrate TSL's enforcement of the Award. I set out the relevant evidence below.