Contract analysis

I. BACKGROUND AND SUMMARY OF THE CLAIM A. The Underlying Dispute TSL is a Greek transportation and logistics company organized as a Société Anonyme under the laws of the Hellenic Republic, registered with the Piraeus Commercial Registry under No. 78214/06/B/09/42, and headquartered at 47 Akti Miaouli, 185 35 Piraeus, Greece. Founded in 2009, TSL has grown to employ approximately 1,450 people across its Greek operatio

1. Contract HHI-TSL-2019-001, dated January 15, 2019: 12 ship-to-shore (STS) gantry cranes, model QC-65, with a declared CIF customs value of €38,400,000 (€3,200,000 per unit).

2. Contract HHI-TSL-2019-002, dated March 22, 2019: 18 rubber-tired gantry (RTG) cranes, with a declared CIF customs value of €25,200,000 (€1,400,000 per unit).

3. Contract HHI-TSL-2020-003, dated June 10, 2020: 8 automated stacking crane (ASC) systems, model ASC-40R, with a declared CIF customs value of €28,800,000 (€3,600,000 per unit).

4. Contract HHI-TSL-2021-004, dated February 28, 2021: a bundled package of spare parts, software licenses, and commissioning services, with a declared CIF customs value of €5,600,000. The total declared CIF customs value across all four contracts was €98,000,000. All equipment was imported through the Port of Piraeus and cleared through Greek customs by TSL's licensed customs broker, Peloros Customs Agency S.A. (EOR

II. THE OCEANOS RESERVATION OF RIGHTS — SUMMARY Oceanos's RoR Letter of November 22, 2022, acknowledges receipt of TSL's notice of claim but purports to reserve Oceanos's rights to deny coverage on two grounds: First, Oceanos reserves the right to deny coverage under Policy Section 4.3(a), the "willful non-compliance" exclusion. Oceanos asserts that TSL's classification of the STS gantry cranes and ASC systems under

III. THE "WILLFUL NON-COMPLIANCE" EXCLUSION (SECTION 4.3(a)) DOES NOT APPLY A. Policy Language and Burden of Proof Policy Section 4.3(a) provides that the Policy does not cover Loss arising from: "Fraud, willful non-compliance, or deliberate evasion of any tax, duty, or customs obligation by the Insured or any officer or director of the Insured acting in such capacity." The Policy defines "Fraud" as: "any dishonest,

IV. THE "DELIBERATE UNDERVALUATION" EXCLUSION (SECTION 4.3(b)) DOES NOT APPLY A. Policy Language Policy Section 4.3(b) provides that the Policy does not cover Loss arising from: "the Insured's deliberate undervaluation of imported goods for the purpose of reducing customs duties payable." This exclusion has two distinct elements, both of which must be present for the exclusion to apply. First, the undervaluation must

1. Technology License Fees (€4,900,000). TSL paid €4,900,000 to Hailong under a Technology License Agreement ("TLA") dated January 10, 2019. The TLA grants TSL a non-exclusive license to use the HaiControl Suite v4.2 crane control software, together with associated predictive maintenance algorithms and technical documentation, for a term of 10 years. TSL excluded the license fees from the declared customs value of th

2. Procurement Coordination Fee (€2,940,000). TSL paid €2,940,000 to Nereus Maritime Advisory Limited ("Nereus") under a Procurement Services Agreement ("PSA") dated December 1, 2018. TSL characterized the Nereus fee as a buying commission, which is deductible from customs value under Article 72(a) of the UCC. That provision states that "[c]ommission and brokerage, except buying commissions" shall be included in cust

3. Commissioning Services (€2,100,000). TSL excluded €2,100,000 in commissioning services from the declared customs value of the imported equipment. TSL's position was based on Article 72(e) of the UCC, which expressly permits the exclusion from customs value of: "charges for construction, erection, assembly, maintenance or technical assistance, undertaken after importation." The commissioning services at issue were

Section 4.3(b) is inapplicable to the facts of this claim, and Oceanos's reservation under this provision is without foundation and should be withdrawn.

V. THE POLICY PROVIDES CLEAR COVERAGE FOR THIS CLAIM A. The Insuring Clause Is Satisfied Having demonstrated that neither of the exclusions invoked by Oceanos applies, we turn to the affirmative case for coverage. The Policy's insuring clause is clearly satisfied. Policy Section 2.4 provides coverage for: "Loss, including Defense Costs and Assessed Amounts, incurred by the Insured arising from a Tax or Regulatory Aut

VI. REQUESTS In light of the foregoing, TSL respectfully requests that Oceanos take the following actions:

1. Withdraw the Reservation of Rights to the extent it relies on the willful non-compliance exclusion (Section 4.3(a)) and the deliberate undervaluation exclusion (Section 4.3(b)), as neither exclusion applies on the facts of this matter. The factual record demonstrates that TSL acted in good faith, in reliance on professional advice, consistent with published EU precedent, and without any motive for duty evasion.

2. Confirm coverage under Section 2.4 of the Policy for both Defense Costs and Assessed Amounts arising from the AADE customs classification and valuation dispute, subject to the Policy's sublimit of €3,000,000 (Section 3.2(d)) and retention of €250,000 (Section 3.3).

3. Commence advancement of Defense Costs as incurred, as required by Section 5.3 of the Policy. TSL has been incurring defense costs since September 2022, when it first retained legal counsel and expert advisors in connection with the AADE assessment. These costs are ongoing and will continue to accrue as TSL defends the administrative objections, the BTI application, and the DG TAXUD consultation process. TSL reques

4. Provide a written coverage determination within thirty (30) days of the date of this letter — that is, by no later than January 11, 2023 — confirming the foregoing. TSL requires prompt certainty regarding its insurance coverage in order to manage its defense strategy effectively and to avoid unnecessary prejudice from Oceanos's continued reservation.

VII. RESERVATION OF RIGHTS TSL reserves all rights under the Policy, at law, and in equity, including without limitation the following: (a) The right to recover all Defense Costs and Assessed Amounts within the Policy sublimit and in accordance with the Policy's terms and conditions; (b) The right to pursue a claim for breach of the insurance contract if Oceanos improperly denies or unreasonably delays coverage to wh

VIII. CONCLUSION The facts of this matter overwhelmingly demonstrate that TSL acted in good faith at all times. TSL classified the imported equipment in a manner consistent with a published BTI ruling issued by the Netherlands customs authority (NL-BTI-2021-01234). TSL relied on a licensed and experienced Greek customs broker, Peloros Customs Agency S.A., to prepare and file its customs declarations. TSL declared a c