Contract analysis

I. INTRODUCTION AND PURPOSE OF STATEMENT This confidential pre-mediation statement is respectfully submitted by Thalassa Shipping & Logistics SA ("Thalassa," "TSL," or "Defendants") and its wholly owned subsidiary, Aegean Fortuna Shipholding Ltd. ("Aegean Fortuna"), for the exclusive use of the Honorable Gerald K. Fitzpatrick (Ret.) in connection with the mediation ordered by Justice Lorraine K. Chen on September 27,

II. BACKGROUND OF THE PARTIES A. Thalassa Shipping & Logistics SA Thalassa Shipping & Logistics SA is a Greek Société Anonyme (SA), organized and existing under the laws of the Hellenic Republic, with its principal office and headquarters located at 42 Akti Miaouli, Piraeus 185 38, Greece. TSL's Greek Tax Identification Number (AFM) is 998342671. TSL is registered with the General Commercial Registry of Greece (GEMI)

III. SUMMARY OF THE DISPUTE A. The Charter-Party The dispute arises from a time charter-party entered into between Aegean Fortuna Shipholding Ltd. (as "Owner") and Northwind Maritime Corporation (as "Charterer") for the vessel M/V Aegean Fortuna. The principal terms of the Charter-Party are as follows: • Form: NYPE 2015 (New York Produce Exchange Form), as amended by Rider Clauses and Addenda agreed between the parti

Clause 2/6 (Owner's Maintenance and Seaworthiness Obligations): The Owner is required to maintain the vessel in a thoroughly efficient state of hull, machinery, and equipment for the service contemplated under the Charter-Party, including compliance with all GMCB classification requirements and applicable international maritime safety standards. This is the primary obligation that Northwind alleges was breached.

Clause 5 (Trading Limits): The vessel was authorized for worldwide trading, excluding OFAC-sanctioned ports and territories, London Joint War Committee Listed Areas, and ice-bound waters north of 68°N latitude. Northwind alleges that the Maputo call violated the spirit, if not the letter, of the trading provisions.

Clause 11 (Off-Hire): Standard NYPE off-hire provisions, under which the vessel goes off-hire during periods when it is not available for the charterer's service due to mechanical breakdowns, drydocking, or other specified events. The off-hire provisions are central to the quantification of Northwind's damages.

Clause 28 (Liquidated Damages): This clause provides that, upon the Owner's material breach of its maintenance and seaworthiness obligations under Clauses 2 and 6, the Charterer shall be entitled to liquidated damages equal to 150% of the aggregate off-hire days multiplied by the daily hire rate, subject to a cap of $4,500,000 for any single continuous period of breach. The interpretation of this cap—specifically, wh

IV. PROCEDURAL HISTORY The following is a summary of the significant procedural events in this litigation: • October 2, 2023: Northwind Maritime Corporation files its verified complaint against Thalassa Shipping & Logistics SA and Aegean Fortuna Shipholding Ltd. in the Supreme Court of the State of New York, New York County, Commercial Division, asserting claims for breach of the Charter-Party, breach of the implied

V. THALASSA'S DEFENSES — DETAILED ANALYSIS TSL presents the following detailed analysis of its defenses for the Mediator's consideration. This analysis is intended to be candid and to assist the Mediator in evaluating the relative merits of the parties' positions. A. Liquidated Damages Cap — Single Cap for Entire Charter Period TSL's central defense to Northwind's most significant damages category is the interpretati

Clause 28 provides that, upon the Owner's material breach of its obligations under Clauses 2 and 6, the Charterer shall be entitled to liquidated damages equal to 150% of the aggregate off-hire days multiplied by the daily hire rate, "subject to a cap of $4,500,000 for any single continuous period of breach." The critical interpretive question is whether the phrase "any single continuous period of breach" means: (a)

VI. ANALYSIS OF NORTHWIND'S CLAIMED DAMAGES A. Damages Breakdown Table The following table summarizes Northwind's claimed damages across nine categories, alongside TSL's assessment of its realistic exposure in each category based on its defenses and the expert analysis conducted by Dr. Constance Albright: B. Key Observations on Damages Several important observations emerge from the damages analysis: First, Dr. Consta

VII. CANDID ASSESSMENT OF STRENGTHS AND WEAKNESSES In the spirit of candor and to assist the Mediator in formulating settlement proposals, TSL offers the following honest assessment of its litigation strengths and weaknesses. A. TSL's Strengths

1. Liquidated Damages Cap: TSL has a strong legal position on the interpretation of the Clause 28 liquidated damages cap. Northwind has already conceded that only a single aggregate cap of $4,500,000 applies to the entire charter period—abandoning its earlier position that three separate caps could apply. TSL's pending partial summary judgment motion on this issue has good prospects for success, and a favorable rulin

2. Latent Defect Defense (Incident 1): TSL's latent defect defense for the March 2022 turbocharger failure is well supported by Dr. Sørensen's expert testimony, which provides a persuasive metallurgical and engineering analysis of the manufacturing flaw. If credited, this defense eliminates 22 of 68 off-hire days and the associated damages. The latent defect doctrine is well established in New York maritime law, and

3. Charterer Causation (Incident 2): TSL has a credible causation theory attributing the BWTS malfunction to contaminated ballast loaded by Northwind's agents. Chief Engineer Vlahos's deposition testimony provides a compelling firsthand account of the contamination evidence, and Dr. Sørensen's expert report corroborates the causation theory. If credited, this defense eliminates another 21 off-hire days and critically

4. Master's Discretion (Maputo Deviation): TSL's defense that the Maputo call was within the Master's reasonable discretion is supported by weather data and Captain Giannopoulos's deposition testimony. The defense is legally well grounded in established maritime law principles regarding the Master's navigational discretion.

5. Partial Motion to Dismiss Success: TSL has already achieved a partial litigation victory through the dismissal of Count V (unjust enrichment) and the narrowing of Count III (third-party shipper claims). This demonstrates the Court's receptivity to TSL's arguments regarding the scope of Northwind's recoverable damages.

6. Valid Counterclaim ($1,620,000): TSL's counterclaim for improperly withheld hire payments provides both a recovery vehicle and significant settlement leverage. The counterclaim is well founded, as Northwind's withholding exceeded any legitimate off-hire deduction and was based on unliquidated claims.

7. Strong Expert Team: TSL's experts—Dr. Sørensen (maritime engineering) and Dr. Albright (damages economics)—are highly credentialed, persuasive, and have produced well-supported reports that effectively challenge Northwind's claims.

8. Weaknesses in Northwind's Damages: Northwind's damages calculations contain identifiable weaknesses and overstatements, including inflated substitute charter costs, speculative third-party claims, and the improper inclusion of legal fees as contract damages. These vulnerabilities have been thoroughly documented in Dr. Albright's expert report and TSL's rebuttal. B. TSL's Weaknesses / Risks

1. Incident 3 Concession: TSL concedes that the November 2022 cylinder liner failure (Incident 3) was a maintenance failure attributable to the Owner. This concession creates undeniable liability for at least 25 off-hire days and the associated damages. While TSL disputes the quantum of damages, the existence of conceded liability weakens TSL's overall negotiating position and may influence a factfinder's assessment

2. Maputo Deviation Documentary Risk: While the Maputo deviation is defensible, the existence of certain internal TSL communications that reference TSL's commercial interest in loading cargo at Maputo could undermine the weather and routing justification at trial. Although Captain Giannopoulos has consistently testified that his routing decision was made independently based on weather conditions, the documents create

3. Jury Risk: Maritime disputes are inherently complex, involving technical engineering evidence, intricate charter-party provisions, and industry-specific concepts that may be difficult for a lay jury to fully appreciate. There is a risk that a jury may not credit TSL's technical defenses regarding latent defects or BWTS contamination, and may instead sympathize with a charterer facing significant commercial losses.

4. Litigation Costs: Even with strong defenses, the ongoing costs of litigation are substantial. TSL has already invested approximately $2.8 million in legal fees and costs through the current stage. Proceeding through trial would add an estimated $1.5 to $2.5 million in additional fees and costs. These expenditures must be weighed against the potential savings from settlement.

5. Summary Judgment Uncertainty: TSL's pending partial summary judgment motion, while meritorious, is not guaranteed. Justice Chen could deny the motion in whole or in part, which would require TSL to proceed to trial on all issues, including the liquidated damages cap interpretation and the deviation claim. A denial of summary judgment, while not dispositive, would be a setback that could affect settlement dynamics.

6. Maintenance Communications: discovery has revealed some internal TSL communications regarding maintenance scheduling that, while not directly damaging, are not entirely favorable. These communications suggest that there were internal discussions at TSL about deferring certain maintenance activities for cost reasons—discussions that, taken out of context, could be used by Northwind to paint a picture of deferred ma

7. Northwind's Expert Credibility: Northwind's expert on maritime operations, Captain Julian Blackmore (Ret.), is a retired Master with decades of operational experience on bulk carriers. His credentials are impressive, and his testimony on seaworthiness standards and maintenance best practices could resonate with a factfinder. While TSL's expert Dr. Sørensen has stronger technical credentials, Captain Blackmore's pr

8. Residual Count III Exposure: Although Count III (third-party shipper claims) was narrowed by Justice Chen's March 8, 2024 ruling, it was not entirely dismissed. Northwind can still pursue recovery for certain direct third-party claims where Northwind has an existing indemnification obligation. While the residual exposure on Count III is significantly less than the $5,634,400 originally claimed, it is not zero, and

VIII. INSURANCE AND FINANCIAL CONSIDERATIONS A. P&I Coverage TSL maintains Protection and Indemnity ("P&I") coverage through the Oceanus Mutual Protection & Indemnity Club (Bermuda) under Policy No. OCE-P&I-2020-TSL-0047. The claims handler assigned to this matter is David Okafor at Oceanus. TSL's P&I coverage may extend to certain categories of third-party liabilities arising from vessel operations, including potent

Section 8.14 of the Credit Agreement, dated April 1, 2019 (as amended), requires TSL to provide written notification to Meridian Capital Bank AG of any material litigation settlements exceeding $5,000,000 within five (5) business days of execution of the settlement agreement. While the anticipated settlement range discussed in this statement falls below the $5,000,000 threshold on a net basis after the counterclaim o

IX. SETTLEMENT POSTURE AND PROPOSED RESOLU