PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION
CALDERWOOD & HARKNESS LLP Solicitors & International Arbitration Counsel 45 Moorgate, London EC2R 6AR, United Kingdom Tel: +44 (0)20 7496 8000
27 September 2024
Reference: Matter No. SC/ENF/2024-1847 / LCIA No. 224718
From: Hannah Brinkley, Lead Associate, Calderwood & Harkness LLP
Reviewed by: Samuel Eklund, Responsible Partner, Calderwood & Harkness LLP
To: Ioanna Christodoulou, General Counsel Thalassa Shipping & Logistics SA 14 Akti Miaouli, 4th Floor Piraeus 185 35, Greece
CC: Nikolaos Papadimitriou, Chairman & CEO, Thalassa Shipping & Logistics SA Elena Stavridis, CFO, Thalassa Shipping & Logistics SA
Re: Bi-Weekly Status Report #1 — Multi-Jurisdictional Enforcement of LCIA Award No. 224718 (*Thalassa Shipping & Logistics SA v. Korinthian Maritime Holdings Ltd.*)
Reporting Period: 12 September 2024 – 27 September 2024 (with background summary covering enforcement activity from July 2024)
Dear Ioanna,
We are pleased to deliver our first Bi-Weekly Status Report in connection with the multi-jurisdictional enforcement of LCIA Award No. 224718 in favour of Thalassa Shipping & Logistics SA ("TSL") against Korinthian Maritime Holdings Ltd. ("KMH"). This report is issued in accordance with the reporting protocol agreed at our kick-off meeting on 12 September 2024 and is intended to provide TSL's management and legal team with a comprehensive overview of enforcement progress across all relevant jurisdictions. The contents of this report are subject to attorney-client privilege and should be treated as strictly confidential.
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1. Executive Summary
Calderwood & Harkness LLP ("C&H") was formally engaged by Thalassa Shipping & Logistics SA on 12 September 2024 to lead and coordinate the multi-jurisdictional enforcement of the Final Award dated 28 June 2024 (the "Award") issued by the tribunal constituted under the auspices of the London Court of International Arbitration ("LCIA") in LCIA Arbitration No. 224718, in favour of TSL and against KMH. Prior to our formal engagement, certain preliminary enforcement steps were taken by TSL's prior English counsel, and we have assumed conduct of all pending proceedings in England and are coordinating with local counsel firms in Cyprus, Singapore, and the United Arab Emirates.
The Award orders KMH to pay TSL the aggregate sum of £96,450,000 in damages, restitution, interest, and other relief. In addition, the tribunal allocated £12,150,000 in costs to KMH, comprising £3,240,000 in LCIA institutional costs and £8,910,000 in TSL's legal costs. The total amount payable by KMH pursuant to the Award is therefore £108,600,000. Post-award interest continues to accrue at 5.25% per annum simple on the principal sum of £96,450,000 from 29 June 2024. The USD equivalent of the total amount due at the date of the Award was approximately $120,000,000, calculated at the prevailing exchange rate of £1 = USD $1.2441 as of 28 June 2024.
This first report provides a consolidated summary of all enforcement activity already undertaken across four jurisdictions — England & Wales, Cyprus, Singapore, and the United Arab Emirates — since the Award was issued on 28 June 2024, together with a detailed account of developments during the current reporting period from 12 to 27 September 2024. We note that much of the activity described herein predates our formal engagement, but we have verified all relevant filings, orders, and court documents and have assumed responsibility for ongoing conduct of the proceedings.
KMH, a company incorporated in the Republic of Cyprus (Registration No. HE 387421) with its registered office at 28 Themistokli Dervi Avenue, Suite 601, Nicosia 1066, Cyprus, has failed to make any voluntary payment of the sums due under the Award. Instead, KMH has filed an application in the English Commercial Court to set aside the Award under Sections 68 and 69 of the Arbitration Act 1996, which C&H considers to be without merit and which is addressed in detail in Section 3.4 below.
Notwithstanding KMH's non-payment and obstructive posture, significant progress has been achieved in the enforcement campaign. The key developments may be summarized as follows:
• England & Wales: Permission to enforce the Award as a judgment of the High Court has been granted pursuant to Section 66 of the Arbitration Act 1996. A worldwide freezing order up to £108,600,000 is in force against KMH. An interim third-party debt order has been granted against Meridian Trust Bank Ltd. in respect of KMH's accounts, with estimated funds in excess of £18,000,000. A final hearing on the third-party debt order is imminent.
• Cyprus: An application for recognition and enforcement under the New York Convention has been filed in the Nicosia District Court. A freezing injunction has been granted over KMH's shares in its intermediate holding company, Oceangate Ventures Ltd., and over KMH's Cyprus bank accounts. No opposition has been filed by KMH to date.
• Singapore: An application for leave to enforce the Award has been filed in the Singapore High Court. In a critical development, the M/V Crimson Horizon (IMO 9801334, Handymax Bulk Carrier, 37,500 DWT, Liberian flag) has been arrested in Singapore waters, where it remains at anchorage. KMH has not offered security for the vessel's release.
• UAE: An application for enforcement has been filed in the Dubai Court of First Instance. A precautionary attachment has been granted over the accounts of Korinthian DMCC at Emirates Gulf Commercial Bank PJSC.
The C&H enforcement engagement team comprises: Samuel Eklund (Responsible Partner), Linda Osei (Billing Partner), Hannah Brinkley (Lead Associate), and Patrick Gallagher (Working Associate). We are further supported by the forensic and asset tracing team at Hartwell Pemberton LLP and by local counsel firms in each of the three non-English jurisdictions, as detailed below.
2. Background: The Award
For the avoidance of doubt, and for the benefit of this report as a standalone reference document, we set out below a brief summary of the underlying dispute and the Award.
2.1 The Underlying Dispute
The dispute between TSL and KMH arises out of three time charter-party agreements entered into between the parties between 2019 and 2021 for the employment of three dry bulk carrier vessels in TSL's fleet:
(a) M/V *Aegean Fortuna* — Time charter-party executed on 15 March 2019 between TSL (as disponent owner) and KMH (as charterer) for a period of approximately 60 months;
(b) M/V *Crimson Horizon* — Time charter-party executed on 22 January 2020 between TSL (as disponent owner) and KMH (as charterer) for a period of approximately 48 months; and
(c) M/V *Volga Spirit* — Time charter-party executed on 10 June 2021 between TSL (as disponent owner) and KMH (as charterer) for a period of approximately 36 months.
All three charter-party agreements were governed by English law and contained identical LCIA arbitration clauses providing for arbitration under the LCIA Rules, with the seat of arbitration in London.
2.2 KMH's Breaches
Beginning in mid-2022, KMH engaged in a pattern of repudiatory breach across all three charters, the details of which were fully canvassed before the tribunal and are set out in the Award. In summary:
(a) M/V *Aegean Fortuna* — Wrongful early redelivery. KMH wrongfully redelivered the vessel on 18 June 2022, approximately 14 months before the contractual redelivery date, in breach of its obligation to employ the vessel for the full charter period. TSL accepted the redelivery as a repudiation of the charter.
(b) M/V *Crimson Horizon* — Failure to pay hire. KMH ceased paying hire under the charter from 1 July 2022, allowing arrears of £4,280,000 to accumulate. TSL issued anti-technicality notices in accordance with the charter terms and ultimately withdrew the vessel on 15 September 2022 following KMH's continued failure to pay.
(c) M/V *Volga Spirit* — Fabricated off-hire deductions. KMH made unauthorized and fabricated off-hire deductions from hire payments totalling approximately £2,740,000, claiming various periods of off-hire that were found by the tribunal to have no contractual or factual basis.
2.3 The Arbitration
TSL filed its Request for Arbitration with the LCIA on 14 November 2022. The tribunal was constituted on 8 February 2023, comprising:
• Sir Malcolm Fenton-Clarke — Presiding Arbitrator
• Professor Athena Drakopoulos — Claimant-nominated Arbitrator
• Dr. Henrik Dalmqvist — Respondent-nominated Arbitrator
• Fiona Beckett — Tribunal Secretary
The arbitration proceeded through pleadings, disclosure, factual and expert witness statements, and a 10-day evidentiary hearing held from 11 to 22 September 2023 at the International Dispute Resolution Centre ("IDRC") in London. Both parties were represented by experienced counsel and had full opportunity to present their respective cases.
2.4 The Award
The tribunal issued its Final Award on 28 June 2024. The tribunal found comprehensively in TSL's favour on all material issues and awarded the following:
Post-award interest accrues at a rate of 5.25% per annum simple on the principal sum of £96,450,000 from 29 June 2024 until the date of payment, as provided in the Award.
3. Enforcement Proceedings: England & Wales
England is the jurisdiction of the seat of arbitration and therefore represents the primary enforcement jurisdiction. It is also the jurisdiction in which any challenge to the validity of the Award must be brought. We summarize below the current status of all English proceedings.
3.1 Application to Enforce Under Section 66 of the Arbitration Act 1996
An application for permission to enforce the LCIA Award as a judgment of the High Court was filed on 15 July 2024 in the Commercial Court, Queen's Bench Division, under Claim No. CL-2024-000487. The application was made pursuant to Section 66 of the Arbitration Act 1996, which provides the mechanism for converting an arbitral award into an enforceable judgment.
The application was supported by the witness statement of Nikolaos Papadimitriou, Chairman and CEO of TSL, which exhibited the original Award, the arbitration agreements contained within the three charter-party agreements, and the LCIA Registrar's certificate confirming the Award as final and binding.
Permission to enforce the Award as a judgment of the court was granted on 2 August 2024 by Mr. Justice Ashworth sitting in the Commercial Court. The order was drawn up and sealed on the same date. As a consequence of this order, the Award is now enforceable as a judgment of the High Court of England and Wales, with all the attendant enforcement mechanisms available under the Civil Procedure Rules. This includes the ability to pursue writs of control, third-party debt orders, charging orders, and other execution remedies against KMH's assets within the jurisdiction.
3.2 Worldwide Freezing Order
Contemporaneously with the Section 66 application, an application for a worldwide freezing order ("WFO") was filed without notice on 15 July 2024 and was heard by Mr. Justice Ashworth on the following day.
The WFO was granted ex parte by Mr. Justice Ashworth on 16 July 2024 in the sum of £108,600,000, being the full amount of the Award inclusive of costs. The order was made in the standard Commercial Court form and contains the following key provisions:
(a) KMH is restrained 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 the jurisdiction or elsewhere, up to the value of £108,600,000;
(b) An ancillary asset disclosure provision requiring KMH to disclose, by way of affidavit, all of its assets worldwide exceeding £25,000 in value, whether in its own name or not and whether solely or jointly owned, within 7 days of service of the order;
(c) Provisions for notification to third parties, including banks and financial institutions;
(d) Standard exceptions for ordinary course of business expenditure and reasonable legal costs, subject to notification to TSL's solicitors.
The sealed order was served on Harkness Whitford & Co. ("HW"), KMH's English solicitors (Catherine Whitford, Partner, acting for KMH; 12 Fetter Lane, London EC4A 1JP; SRA No. 614823), on 17 July 2024 by hand delivery and by email.
The return date for the WFO was listed for 30 July 2024. At the return date hearing, the WFO was continued by Mr. Justice Ashworth with minor modifications to the wording of the ordinary course of business exception, which were not material to the substantive scope of the order. KMH, through HW, did not apply to discharge the order at the return date hearing. The WFO remains in full force and effect as of the date of this report.
Pursuant to the ancillary disclosure obligation, HW provided an asset disclosure affidavit on behalf of KMH within the prescribed timeframe. C&H has reviewed this disclosure and considers its adequacy to be questionable. The disclosure appears to omit or understate certain asset categories, including receivables from sub-charterers and the full extent of KMH's interests in related entities. Hartwell Pemberton LLP has been engaged to cross-reference the disclosure against their independent asset tracing findings, and we anticipate being in a position to identify specific deficiencies in the near term. If material deficiencies are confirmed, we will consider an application for further and better disclosure and, if warranted, contempt proceedings for non-compliance with the WFO's disclosure requirements.
3.3 Third-Party Debt Order Against Meridian Trust Bank Ltd.
On 5 August 2024, an application for an interim third-party debt order ("TPDO") was filed in the Commercial Court under CPR Part 72 against Meridian Trust Bank Ltd. (50 Lombard Street, London EC3V 9EA) in respect of accounts held by KMH at that institution.
The application was supported by the witness statement of Hannah Brinkley (Lead Associate, C&H), which attested to the existence of KMH's accounts at Meridian Trust Bank Ltd. based on information obtained through Hartwell Pemberton's asset tracing work and confirmed by information obtained from the WFO disclosure.
The interim TPDO was granted on 5 August 2024, with the effect that funds standing to the credit of KMH's accounts at Meridian Trust Bank Ltd. are frozen pending the final hearing. The interim order prevents Meridian Trust from making any payment out of the relevant accounts and prevents KMH from drawing on those accounts.
The final hearing for the TPDO is listed for 3 October 2024. At the final hearing, the court will determine whether to make the interim TPDO absolute, which would result in the third-party debtor (Meridian Trust Bank Ltd.) being required to pay the frozen funds directly to TSL in partial satisfaction of the judgment debt. C&H anticipates that the final TPDO will be made absolute at that hearing, as we are not aware of any basis on which KMH or Meridian Trust could successfully resist the application. The outcome of the final hearing will be reported in our next Bi-Weekly Status Report.
Based on Hartwell Pemberton's intelligence and the information disclosed by KMH, the estimated funds held in KMH's accounts at Meridian Trust Bank Ltd. are believed to be in excess of £18,000,000. If realized, this would represent the first significant recovery for TSL in the enforcement campaign and approximately 16.4% of the outstanding judgment debt (excluding accrued post-award interest).
3.4 KMH Set-Aside Application (Sections 68 and 69, Arbitration Act 1996)
On 19 August 2024, KMH, acting through Harkness Whitford & Co. (Richard Harkness, Senior Partner), filed an application in the Commercial Court to set aside the Award under Sections 68 and 69 of the Arbitration Act 1996.
The grounds advanced by KMH in the application may be summarized as follows:
(a) Section 68 — Serious Irregularity:
KMH contends that the tribunal committed a serious irregularity causing substantial injustice within the meaning of Section 68(2) of the Arbitration Act 1996 in two respects:
(i) Failure to deal with issues: KMH alleges that the tribunal failed to deal with certain issues properly put to it in KMH's submissions, specifically relating to the calculation of loss of bargain damages on the M/V Crimson Horizon charter and the applicable discount rate for future earnings;
(ii) Irregularity in treatment of evidence: KMH alleges that the tribunal acted irregularly in its treatment of documentary evidence relating to the off-hire deductions on M/V Volga Spirit, claiming that the tribunal failed to give adequate weight to certain classification society records and survey reports that, according to KMH, supported a genuine basis for the deductions.
(b) Section 69 — Appeal on Point of Law:
KMH seeks permission to appeal under Section 69 on the grounds that the tribunal allegedly erred in law in its assessment of the measure of damages for wrongful early redelivery of M/V Aegean Fortuna. Specifically, KMH contends that the tribunal applied an incorrect legal test in calculating loss of bargain damages by reference to the date of the wrongful redelivery rather than the contractual redelivery date, and that this error is one which the tribunal was "obviously wrong" about within the meaning of Section 69(3)(c)(i).
C&H's Preliminary Risk Assessment: We have conducted a thorough preliminary analysis of KMH's set-aside application and consider the grounds to be weak. Our assessment may be summarized as follows:
(i) The threshold for a successful challenge under Section 68 is exceptionally high. The applicant must demonstrate both a serious irregularity falling within the closed list of grounds in Section 68(2) and that the irregularity has caused or will cause substantial injustice. The Court of Appeal has repeatedly emphasized that Section 68 is designed as a long-stop safeguard and is not a mechanism for rehearing the merits of the arbitration (Lesotho Highlands Development Authority v. Impregilo SpA [2005] UKHL 43; RAV Bahamas Ltd v. Therapy Beach Club Inc [2021] EWCA Civ 867).
(ii) The tribunal, chaired by Sir Malcolm Fenton-Clarke, an arbitrator of the highest standing and experience, conducted a thorough 10-day evidentiary hearing in which both parties had full opportunity to present their cases, call witnesses, and make submissions. The Award runs to some 287 pages and addresses all material issues in comprehensive detail. The suggestion that the tribunal "failed to deal with" issues put to it is, in our assessment, unsustainable on a fair reading of the Award.
(iii) The Section 69 ground faces the additional hurdle that permission to appeal must first be obtained, and such permission will only be granted where the decision of the tribunal on the question of law is "obviously wrong" or, if the question is one of general public importance, "at least open to serious doubt." The tribunal's approach to the measure of damages for wrongful early redelivery is well-supported by authority and consistent with established principles in shipping law, including the decision of the Supreme Court in The New Flamenco [2017] UKSC 43.
(iv) Estimated risk of set-aside: less than 10%. While we take any challenge to the Award seriously and will prepare a robust defence, our considered view is that the application is without merit and represents a tactical attempt by KMH to delay enforcement.
C&H is currently preparing a comprehensive skeleton argument in opposition to the set-aside application. The hearing is expected to be listed before a Commercial Court judge in October 2024. We will file our skeleton argument well in advance of the hearing and will seek directions for the matter to be heard expeditiously.
It is important to note that the filing of a set-aside application under the Arbitration Act 1996 does not operate as an automatic stay of enforcement proceedings. Enforcement proceedings in all jurisdictions are therefore continuing in parallel without interruption. If the set-aside application is dismissed, as we anticipate, C&H will seek an order for indemnity costs against KMH on the basis that the application was brought without merit and for the improper purpose of delaying enforcement.
4. Enforcement Proceedings: Cyprus
Cyprus is of particular strategic importance in the enforcement campaign because KMH is incorporated in that jurisdiction and holds significant assets there, including its shareholding in the intermediate holding company, Oceangate Ventures Ltd.
4.1 Application for Recognition and Enforcement
Kyprianos Makrides & Partners ("KM&P") (Andreas Kyprianos, Senior Partner; Nadia Makrides, Partner) were instructed by C&H on behalf of TSL on 6 August 2024 to act as Cyprus local counsel for the purposes of enforcement.
An application for recognition and enforcement of the LCIA Award was filed by KM&P on 9 August 2024 in the Nicosia District Court under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) (the "New York Convention") and the Cyprus Arbitration Law (Cap. 4), bearing Case No. 2247/2024.
The application was supported by the affidavit of Elena Stavridis, CFO of TSL, which sets out the factual background to the dispute and confirms that the Award remains unsatisfied. Certified copies of the LCIA Award, the three charter-party agreements containing the relevant arbitration clauses, and all supporting materials were filed in accordance with the procedural requirements of the Nicosia District Court and the New York Convention.
KMH is registered in Cyprus (HE 387421), and service of the application was effected at its registered address at 28 Themistokli Dervi Avenue, Suite 601, Nicosia 1066, Cyprus, through the process server retained by KM&P. KM&P has confirmed that proper service has been achieved in accordance with Cypriot procedural rules.
KMH's Cyprus local counsel are Vassiliadis & Economou LLC ("V&E") (Georgios Vassiliadis, Managing Partner; Eleni Economou, Partner), located at 7 Stasinou Avenue, 3rd Floor, Nicosia 1060, Cyprus. V&E entered an appearance on behalf of KMH but, as of the date of this report, no opposition has been filed. The deadline for KMH to file a response is pending, and KM&P is monitoring the position closely. We will report immediately upon receipt of any opposition filing.
4.2 Cyprus Freezing Injunction
Contemporaneously with the enforcement application, KM&P filed an application for a freezing injunction in the Nicosia District Court. The application was granted on 12 August 2024, and the injunction covers the following assets:
(a) KMH's shares in Oceangate Ventures Ltd. (Cyprus, Registration No. HE 401293, registered at 28 Themistokli Dervi Avenue, Suite 604, Nicosia 1066, Cyprus). Oceangate is the intermediate holding company through which KMH holds its fleet of special purpose vehicles ("SPVs"), including Dnepr Shipholding Inc. (incorporated in the British Virgin Islands, Company No. 2014876), which in turn owns two of the three vessels that were the subject of the charter-party agreements;
(b) KMH's Cyprus bank accounts, the details of which were identified through KM&P's inquiries and cross-referenced with the preliminary findings of Hartwell Pemberton LLP.
The risk of dissipation — a necessary precondition for the grant of a freezing injunction under Cypriot law — was established by reference to the evidence relied upon in the English WFO application, including Hartwell Pemberton's preliminary asset tracing report which documented post-award transfers and corporate restructuring activity consistent with asset dissipation. The Nicosia District Court accepted these materials as providing a sufficient basis for the grant of interim relief.
Upon the grant of the enforcement order by the Nicosia District Court, KM&P will move to execute against the Oceangate shares and the frozen bank accounts. The forced sale of shares in a Cypriot company will require a court-ordered valuation and the commencement of execution procedures under Cypriot law, which KM&P is preparing for in advance.
4.3 Asset Identification in Cyprus
Hartwell Pemberton LLP ("HP") (Rebecca Saunders, Partner, and Mark Huxley, Director) has undertaken a detailed mapping of KMH's Cyprus corporate structure as part of its broader global asset tracing engagement. The key findings relevant to Cyprus are:
(a) Oceangate Ventures Ltd. (HE 401293) is a Cyprus-incorporated company that functions as the intermediate holding company for KMH's fleet SPVs. Oceangate is wholly owned by KMH;
(b) Oceangate in turn holds 100% of the shares in several fleet SPVs, the most significant of which is Dnepr Shipholding Inc. (BVI, Company No. 2014876), which is the registered owner of both M/V Aegean Fortuna (IMO 9784521) and M/V Volga Spirit (IMO 9756892);
(c) The estimated value of the Oceangate shares is significant but remains under ongoing assessment by HP. The value is fundamentally a function of the value of the underlying fleet assets held through the SPV structure, net of any encumbrances. HP is conducting further inquiries into the mortgage and lien position of the vessels held by Dnepr Shipholding Inc.;
(d) KMH's Cyprus bank accounts have been frozen under the injunction granted on 12 August 2024. The balances in these accounts are being verified and are expected to be confirmed in the context of the enforcement proceedings.
We note that any forced sale of the Oceangate shares will necessarily involve a court-supervised process including independent valuation and an auction or sealed bid procedure in accordance with Cypriot execution law. KM&P has advised that this process can be expected to take several months following the grant of an enforcement order, but preparation is already underway.
5. Enforcement Proceedings: Singapore
Singapore is a critical jurisdiction in the enforcement campaign because KMH operates a Singapore subsidiary that owns one of the three vessels the subject of the underlying dispute, and because of the availability of highly effective admiralty arrest and garnishment mechanisms under Singapore law.
5.1 Application for Leave to Enforce
Straits Meridian LLP ("SM") (David Teo Wei Lin, Partner; Priya Subramaniam, Senior Associate) were instructed by C&H on behalf of TSL on 10 August 2024 to act as Singapore local counsel for the purposes of enforcement.
An Originating Summons was filed by SM on 14 August 2024 in the Singapore High Court, bearing OS No. 872/2024, seeking leave to enforce the LCIA Award as a judgment of the Singapore High Court under Section 19 of the International Arbitration Act (Cap. 143A). The application was supported by the affidavit of Captain Dimitrios Kouretas, Head of Chartering and Operations at TSL, which exhibits the Award, the arbitration agreements, and confirms that the Award remains unsatisfied.
As of the date of this report, leave to enforce has not yet been granted, but SM advises that the application is proceeding through the court's administrative processes and that an order granting leave is anticipated imminently. We will report the outcome as soon as the order is obtained.
KMH's Singapore subsidiary, Korinthian Bulkers (Singapore) Pte. Ltd., is registered at 80 Robinson Road, #14-02, Singapore 068898. This entity is the registered owner of M/V Crimson Horizon and holds operational accounts at Pinnacle Bank (Singapore) Ltd., as described further below.
5.2 Arrest of M/V *Crimson Horizon*
In what represents one of the most significant enforcement actions taken to date, SM filed an in rem writ of summons in the Singapore High Court (Admiralty Division) seeking the arrest of M/V *Crimson Horizon* (IMO 9801334, Handymax Bulk Carrier, 37,500 DWT, Liberian flag).
The vessel is owned by Korinthian Bulkers (Singapore) Pte. Ltd. Beneficial ownership has been traced through Oceangate Ventures Ltd. to KMH, establishing the requisite chain of ownership for the purposes of the admiralty claim. The arrest was sought on the basis that the claim arises out of the charter-party agreement for the vessel and that the vessel's owner is liable on the Award.
M/V *Crimson Horizon* was arrested in Singapore waters on 20 August 2024 by the Sheriff of the Supreme Court of Singapore. The arrest was executed while the vessel was at anchorage in the Singapore Strait. KMH was notified of the arrest through its Singapore agents and through service on V&E and HW in Cyprus and England respectively.
As of the date of this report, KMH has not offered any security for the release of the vessel. The vessel remains at Singapore anchorage under arrest, incurring berthing and maintenance costs. C&H has instructed SM to maintain the arrest and to resist any application for release unless adequate security is provided in the full amount of TSL's claim.
Northcape Maritime Advisory Ltd. ("Northcape") (Captain Ian Forsyth, Managing Director) has been instructed to provide an independent valuation of M/V Crimson Horizon on both a fair market value and a forced sale (judicial sale) basis. This valuation will be essential if it becomes necessary to proceed with an application for the appraisement and judicial sale of the vessel. Northcape is a well-recognized firm of ship valuers and we anticipate their report within the coming weeks.
If security is not posted by KMH within a reasonable period, C&H and SM will apply to the Singapore High Court for an order for appraisement and judicial sale of the vessel. Based on SM's experience, the process from the filing of the judicial sale application to completion of the sale typically takes 2 to 3 months from the date of the application. The proceeds of any judicial sale would be paid into court and distributed in accordance with the court's determination of priorities among claimants.
5.3 Garnishee Proceedings Against Pinnacle Bank (Singapore) Ltd.
SM has prepared an application for a garnishee order to show cause against Pinnacle Bank (Singapore) Ltd. (6 Battery Road, #20-01, Singapore 049909) in respect of accounts held by Korinthian Bulkers (Singapore) Pte. Ltd. at that institution. This application is the Singapore equivalent of the third-party debt order mechanism in England and, if successful, would result in the garnished funds being paid directly to TSL in satisfaction of the judgment debt.
The filing of the garnishee application is contingent on the enforcement order being granted by the Singapore High Court (i.e., the grant of leave to enforce under OS No. 872/2024). SM has confirmed that the application is fully prepared and will be filed immediately upon receipt of the order granting leave to enforce.
Intelligence from Hartwell Pemberton indicates that substantial funds — estimated to be in excess of SGD $30,000,000 (approximately £18,000,000 at current exchange rates) — are held in the accounts of Korinthian Bulkers (Singapore) Pte. Ltd. at Pinnacle Bank. If these funds are confirmed and successfully garnished, this would represent a further significant recovery for TSL.
6. Enforcement Proceedings: United Arab Emirates
The United Arab Emirates is relevant to the enforcement campaign because KMH operates a Dubai-based subsidiary, Korinthian DMCC, through which operational funds and sub-charter receivables are processed.
6.1 Application for Enforcement
Al-Rashid Hatem & Associates ("ARH") (Tariq Al-Rashid, Managing Partner; Leila Hatem, Partner, Dispute Resolution) were instructed by C&H on behalf of TSL on 18 August 2024 to act as UAE local counsel for the purposes of enforcement. ARH's offices are located at Office 1802, Emirates Financial Towers (South Tower), DIFC, Dubai.
An application for enforcement of the LCIA Award was filed by ARH on 22 August 2024 in the Dubai Court of First Instance, bearing Case No. 1893/2024. The application was made under UAE Federal Law No. 6 of 2018 (the UAE Arbitration Law) and the New York Convention, to which the UAE is a signatory.
A comprehensive supporting documentation package was prepared by C&H and submitted through ARH, comprising: certified copies of the LCIA Award; the arbitration agreements contained within the three charter-party clauses; the LCIA Rules; a certificate from the LCIA Registrar confirming the Award as final and binding; and certified Arabic translations of all documents. All translations were prepared by a certified legal translator and legalized through the UK Foreign, Commonwealth & Development Office and the UAE Embassy in London, in accordance with the procedural requirements for enforcement in the UAE courts.
The target entity for enforcement in the UAE is Korinthian DMCC, registered at Unit 3407, Almas Tower, Jumeirah Lake Towers, Dubai. This entity is a wholly-owned subsidiary of KMH and functions as the Dubai-based operational hub for KMH's commercial activities in the Middle East and Indian subcontinent.
An enforcement order has not yet been granted by the Dubai Court of First Instance. ARH advises that the typical timeline for the processing and determination of enforcement applications under UAE law is approximately 2 to 3 months from the date of filing, depending on the court's caseload and whether any opposition is filed. KMH may oppose the enforcement application, and ARH is assessing the likely grounds of any such opposition under UAE law. To date, no opposition has been filed.
6.2 Precautionary Attachment
Contemporaneously with the enforcement application, ARH filed an application for a precautionary attachment (حجز تحفظي) over the accounts of Korinthian DMCC held at Emirates Gulf Commercial Bank PJSC ("EGCB") (Dubai branch: Gate Village 3, DIFC, Dubai).
The precautionary attachment was granted on 28 August 2024 by the Dubai Court. The order has the effect of freezing all funds and receivables standing to the credit of Korinthian DMCC's accounts at EGCB pending the determination of the enforcement application. EGCB has been served with the attachment order and has confirmed receipt.
ARH reports that the precise quantum of funds under attachment remains to be assessed. Further investigation is underway into the extent of Korinthian DMCC's receivables from sub-charterers and other contractual counterparties, which may constitute additional attachable assets. We will report on the results of this investigation in due course.
7. Asset Tracing and Forensic Work
A critical component of the enforcement strategy is the comprehensive global asset tracing and forensic analysis being conducted by Hartwell Pemberton LLP ("HP"), a specialist forensic investigations firm with extensive experience in multi-jurisdictional asset tracing in the maritime and international trade sectors.
HP was formally engaged by C&H on behalf of TSL to conduct global asset tracing and forensic analysis in connection with the enforcement of the Award. The HP team is led by Rebecca Saunders (Partner, Forensic & Investigative Services) and Mark Huxley (Director), and is based at 25 Old Broad Street, London EC2N 1HN.
7.1 Preliminary Asset Tracing Report
HP delivered its preliminary asset tracing report on 15 August 2024. The report identifies KMH's global corporate structure and the location and estimated value of its principal assets. The key findings are summarized below:
KMH Corporate Structure:
(a) Korinthian Maritime Holdings Ltd. (Cyprus, HE 387421) — the ultimate parent company and judgment debtor. Registered at 28 Themistokli Dervi Avenue, Suite 601, Nicosia 1066, Cyprus.
(b) Oceangate Ventures Ltd. (Cyprus, HE 401293) — an intermediate holding company, wholly owned by KMH, registered at 28 Themistokli Dervi Avenue, Suite 604, Nicosia 1066, Cyprus. Oceangate functions as the holding company for KMH's fleet SPVs.
(c) Dnepr Shipholding Inc. (British Virgin Islands, Company No. 2014876; registered agent: Vantage Corporate Services Ltd., Road Town, Tortola, BVI) — a fleet SPV wholly owned by Oceangate. Dnepr is the registered owner of:
• M/V Aegean Fortuna (IMO 9784521, Supramax Bulk Carrier, 58,200 DWT, marshall Islands flag)
• M/V Volga Spirit (IMO 9756892, Panamax Bulk Carrier, 76,400 DWT, Cyprus flag)
(d) Korinthian Bulkers (Singapore) Pte. Ltd. — a Singapore-incorporated subsidiary, wholly owned by KMH (directly or through Oceangate). Korinthian Bulkers is the registered owner of M/V Crimson Horizon (IMO 9801334, Handymax Bulk Carrier, 37,500 DWT, Liberian flag), currently under arrest in Singapore.
(e) Korinthian DMCC — a Dubai-incorporated subsidiary registered at Unit 3407, Almas Tower, JLT, Dubai. Korinthian DMCC holds operational funds and processes receivables from sub-charterers and other commercial counterparties in the Middle East.
7.2 Evidence of Post-Award Asset Dissipation
HP's report has also identified evidence of post-award asset dissipation by KMH, which is of significant concern. Specifically, HP has identified:
(a) Transfers of funds from KMH's accounts to entities connected to Andrei Volkov, who has been identified as the ultimate beneficial owner and de facto director of KMH, and to Sergei Volkov, a director of KMH and a member of the Volkov family;
(b) Restructuring of Cypriot entities within the KMH group, including changes to the shareholding and directorship of Oceangate Ventures Ltd. and related SPVs, which appear designed to place assets beyond the reach of creditors;
(c) Re-flagging of vessels, including the re-registration of one or more vessels under different flag states, which may be indicative of an attempt to complicate enforcement and arrest proceedings.
This evidence was relied upon in support of the WFO application in England and has been provided to local counsel in Cyprus, Singapore, and the UAE to support the respective freezing and attachment applications in those jurisdictions. The evidence of dissipation underscores the urgency of the enforcement campaign and the importance of maintaining pressure across all jurisdictions simultaneously.
7.3 Updated Report and Ongoing Work
An updated asset tracing report is expected from HP by early October 2024. The updated report will contain further detail on:
(a) Receivables and third-party debts owed to KMH and its subsidiaries, including sub-charter hire receivables;
(b) The mortgage and lien position of the vessels owned by KMH group entities, which is relevant to the determination of priority in any judicial sale;
(c) Additional bank accounts and financial holdings, including any accounts identified through the WFO disclosure process;
(d) The personal assets of Andrei Volkov and Sergei Volkov, to the extent relevant to potential contempt proceedings or piercing the corporate veil.
HP's total fee estimate for the global asset tracing engagement is £345,000, which has been approved within the overall enforcement engagement budget. Fees incurred to date are approximately £120,000, as detailed in the financial summary below.
8. Respondent's Position and Anticipated Defenses
KMH, acting through its legal advisors in multiple jurisdictions — Harkness Whitford & Co. in England and Vassiliadis & Economou LLC in Cyprus — is actively resisting enforcement. While no opposition has yet been filed in Singapore or the UAE, we anticipate that KMH will seek to resist enforcement in all jurisdictions to the extent possible.
The current status of KMH's position in each jurisdiction is as follows:
(a) England: As detailed in Section 3.4 above, KMH has filed a set-aside application under Sections 68 and 69 of the Arbitration Act 1996 on 19 August 2024. C&H considers the grounds to be weak and assesses the risk of the Award being set aside at less than 10%.
(b) Cyprus: No opposition to the enforcement application has been filed to date. V&E has entered an appearance on behalf of KMH but the response deadline remains pending. V&E may seek to raise objections under Article V of the New York Convention, potentially including arguments based on public policy or alleged lack of proper notice. Any such objections would, in our assessment, be without merit given the circumstances of the arbitration.
(c) Singapore: No opposition to the enforcement application has been filed to date. KMH has not offered any security for the release of M/V Crimson Horizon, which may suggest either a lack of available resources or a strategic calculation that opposing the arrest is unlikely to succeed.
(d) UAE: The enforcement application remains pending. No opposition has been filed to date, but ARH anticipates that KMH may seek to oppose enforcement. The grounds for any such opposition under UAE law are limited and would likely mirror the New York Convention defenses.
Overall Assessment: KMH's strategy appears to be fundamentally delay-oriented, coupled with ongoing efforts to dissipate assets beyond the reach of TSL's enforcement measures. The substantive merits of any opposition to enforcement under the New York Convention are considered weak, given that the LCIA Award is a valid and binding award issued by a properly constituted tribunal at a London seat, following full adversarial proceedings in which KMH participated. The grounds for refusing enforcement under Article V of the New York Convention are narrow and exhaustive, and we do not consider that KMH can establish any of them on the facts of this case.
C&H remains vigilant for any indication that KMH is contemplating a settlement approach. To date, no settlement overture has been made by KMH or its advisors. Our current recommendation is to continue pressing enforcement vigorously in all jurisdictions, and to consider a structured settlement approach only once significant initial recoveries have been achieved and TSL is negotiating from a position of maximum strength. This recommendation is addressed further in Section 13 below.
9. Coordination with Local Counsel
A distinguishing feature of this enforcement campaign is its simultaneous pursuit across four jurisdictions, which requires careful coordination to ensure that progress is maintained on all fronts, that court orders and evidence are shared efficiently, and that the risk of double recovery is managed.
C&H is serving as the central coordinating counsel for all enforcement activity. We maintain regular and structured communication with each of the local counsel firms engaged in the enforcement:
• Kyprianos Makrides & Partners (Cyprus) — Andreas Kyprianos and Nadia Makrides. Communication by weekly conference calls and email correspondence as needed. KM&P participates in monthly cross-jurisdictional coordination calls.
• Straits Meridian LLP (Singapore) — David Teo Wei Lin and Priya Subramaniam. Communication by bi-weekly conference calls (accounting for time zone differences) and regular email updates. SM is providing real-time updates on the M/V Crimson Horizon arrest and any developments with the enforcement application.
• Al-Rashid Hatem & Associates (UAE) — Tariq Al-Rashid and Leila Hatem. Communication by weekly conference calls and email correspondence. ARH is maintaining liaison with EGCB regarding the precautionary attachment and investigating Korinthian DMCC's receivables.
Each local counsel firm has been provided with copies of all court orders obtained in the other jurisdictions, including the English WFO, the Cyprus freezing injunction, and the UAE precautionary attachment. These materials serve both as cross-referencing tools for local applications and as evidence of the global scope of the enforcement effort, which can be persuasive to local courts when considering interim relief or expedition of proceedings.
C&H is maintaining a multi-jurisdictional recovery tracker, which is a living document updated on a rolling basis as developments occur. The tracker monitors:
(a) Cumulative amounts recovered in each jurisdiction;
(b) Amounts frozen, attached, or otherwise restrained;
(c) The current status of each enforcement application and associated interim orders;
(d) Upcoming hearings, deadlines, and milestones.
The tracker ensures that, as recoveries begin to materialize, each court is informed of amounts recovered in other jurisdictions in compliance with any disclosure obligations and to avoid the risk of over-recovery. A summary of the tracker is attached as Appendix B to this report.
10. Financial Summary
10.1 Amounts Due
The following table sets out the total amounts due from KMH to TSL under the Award, inclusive of post-award interest accrued to the date of this report:
Post-award interest will continue to accrue at the rate specified in the Award until payment in full. The interest calculation has been verified by C&H and will be updated in each subsequent Bi-Weekly Status Report.
10.2 Amounts Recovered to Date
No funds have been received by TSL to date. The enforcement campaign is at a relatively early stage and the first material recovery opportunity is the final TPDO hearing in England on 3 October 2024, at which we anticipate making the interim order against Meridian Trust Bank Ltd. absolute and thereby securing payment of in excess of £18,000,000.
Recoveries from the Cyprus, Singapore, and UAE enforcement proceedings are at earlier stages of development and are not yet realized. However, significant assets have been identified, frozen, and attached across all four jurisdictions, providing a strong foundation for future recovery. The current status of frozen/attached assets is summarized in the multi-jurisdictional recovery tracker at Appendix B.
10.3 Fee Position
The following table summarizes the fee position as of the date of this report:
The success fee agreed under the engagement letter is calculated at 2.5% of amounts recovered in excess of £80,000,000. This fee is contingent on the achievement of the recovery threshold and will be calculated and invoiced in accordance with the terms of the engagement letter upon realization of recoveries.
All fee estimates are preliminary and subject to adjustment. A detailed fee statement will be provided with each Bi-Weekly Status Report. C&H is managing expenditure carefully within the agreed fee cap and will notify TSL promptly if it appears that the cap may be approached.
11. Key Upcoming Milestones and Next Steps
The following table sets out the key milestones and action items for the period ahead:
C&H will provide detailed updates on each of these milestones in our next Bi-Weekly Status Report, scheduled for delivery on or about 11 October 2024.
12. Risk Factors
While we are pleased with the progress achieved to date and remain confident in the overall enforcement strategy, we consider it important to draw TSL's attention to the following risk factors that may affect the enforcement campaign: