IN THE DISTRICT COURT OF NICOSIA
REPUBLIC OF CYPRUS
Case No. 2247/2024
APPLICATION FOR RECOGNITION AND ENFORCEMENT OF A FOREIGN ARBITRAL AWARD
Pursuant to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 10 June 1958) as implemented by the International Commercial Arbitration Law of Cyprus (Law 101/1987) and the Cyprus Arbitration Law, Cap. 4
BETWEEN:
THALASSA SHIPPING & LOGISTICS SA
a Société Anonyme organized under the laws of the Hellenic Republic, with registered and principal offices at 14 Akti Miaouli, 4th Floor, Piraeus 185 35, Greece Tax Identification Number (AFM): EL-801456729
Applicant (Award Creditor)
— and —
KORINTHIAN MARITIME HOLDINGS LTD.
a private limited company incorporated in the Republic of Cyprus, Registration No. HE 387421, with registered office at 28 Themistokli Dervi Avenue, Suite 601, Nicosia 1066, Cyprus
Respondent (Award Debtor)
Date of Filing: 9 August 2024
Filed by:
Kyprianos Makrides & Partners Advocates & Legal Consultants 15 Grivas Digenis Avenue Nicosia 1066, Cyprus Tel: +357 22 760 400
Fax: +357 22 760 401
Email: akyprianos@kmp-law.com.cy / nmakrides@kmp-law.com.cy
Andreas Kyprianos, Senior Partner Nadia Makrides, Partner, Litigation & Enforcement
Acting as instructed counsel for the Applicant
Prepared by and in coordination with:
Calderwood & Harkness LLP International Arbitration & Enforcement Group 45 Moorgate London EC2R 6AR, United Kingdom Tel: +44 (0)20 7832 5000
Fax: +44 (0)20 7832 5001
Email: s.eklund@calderwoodharkness.com / h.brinkley@calderwoodharkness.com
Samuel Eklund, Responsible Partner Hannah Brinkley, Lead Associate
Lead enforcement counsel for the Applicant
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I. INTRODUCTION AND RELIEF SOUGHT
1.1 Nature of the Application
1. The Applicant, Thalassa Shipping & Logistics SA ("TSL" or the "Applicant"), a Société Anonyme organized and existing under the laws of the Hellenic Republic, respectfully applies to this Honourable Court for an order recognizing and enforcing a final arbitral award (the "Award") rendered on 28 June 2024 in LCIA Arbitration No. 224718, seated in London, England, United Kingdom.
2. The Award was rendered by a three-member tribunal constituted under the Rules of the London Court of International Arbitration (the "LCIA Rules") in favour of the Applicant and against the Respondent, Korinthian Maritime Holdings Ltd. ("KMH" or the "Respondent"), a private limited company incorporated and registered in the Republic of Cyprus under Registration No. HE 387421, with its registered office at 28 Themistokli Dervi Avenue, Suite 601, Nicosia 1066, Cyprus.
3. The Award was made in the total sum of £96,450,000 (ninety-six million four hundred and fifty thousand pounds sterling) in respect of damages, interest, and restitutionary sums arising from KMH's repudiatory breaches of three time charter-party agreements. In addition, the Tribunal awarded costs in the sum of £12,150,000 (twelve million one hundred and fifty thousand pounds sterling) in favour of TSL, bringing the grand total to £108,600,000 (one hundred and eight million six hundred thousand pounds sterling). The Award further provides for post-award interest at the rate of 5.25% per annum simple on unpaid sums from 29 June 2024 until the date of full payment.
4. For the Court's reference, the United States dollar equivalent of the total Award and costs, calculated at the exchange rate prevailing on the date of the Award (£1 = USD $1.2441), is approximately USD $135,120,060. The equivalent in euros at the exchange rate prevailing on the same date (£1 = EUR €1.1652) is approximately EUR €126,539,520. These figures are provided for illustrative purposes only; the Award is denominated in pounds sterling, and the Applicant seeks enforcement in that currency.
5. This application is brought pursuant to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York on 10 June 1958 (the "New York Convention"), as implemented in the Republic of Cyprus by the International Commercial Arbitration Law of 1987 (Law 101/1987) and supplemented by the Cyprus Arbitration Law, Cap. 4. Both the Republic of Cyprus and the United Kingdom of Great Britain and Northern Ireland are contracting states to the New York Convention. The conditions for recognition and enforcement set out in Articles III and IV of the New York Convention are satisfied, and none of the exhaustive grounds for refusal of recognition and enforcement enumerated in Article V are present.
1.2 Orders Sought
6. The Applicant respectfully seeks the following orders from this Honourable Court:
(a) An order recognizing the Award dated 28 June 2024, rendered in LCIA Arbitration No. 224718, as a valid and binding arbitral award within the meaning of the New York Convention and the International Commercial Arbitration Law (Law 101/1987);
(b) An order declaring the Award enforceable in the Republic of Cyprus as if it were a judgment of this Honourable Court, in the total sum of £108,600,000 (being £96,450,000 in respect of the Award and £12,150,000 in respect of costs), together with post-award interest at the rate of 5.25% per annum simple on the sum of £96,450,000 from 29 June 2024 until the date of full payment;
(c) An order granting leave to the Applicant to execute against the assets of the Respondent situated within the Republic of Cyprus, including but not limited to:
(i) the Respondent's entire shareholding (100%) in Oceangate Ventures Ltd., a Cyprus-incorporated private limited company bearing Registration No. HE 401293, registered at 28 Themistokli Dervi Avenue, Suite 604, Nicosia 1066, Cyprus;
(ii) all funds, deposits, securities, and other financial assets held by the Respondent in bank accounts and investment accounts maintained in the Republic of Cyprus, including without limitation at Vireo Savings Bank and Sundial Trust Bank;
(iii) any other assets, tangible or intangible, of the Respondent located within the territory of the Republic of Cyprus;
(d) An order for payment by the Respondent to the Applicant of all sums awarded, together with post-award interest continuing to accrue in accordance with the terms of the Award;
(e) An order that the Respondent pay the Applicant's costs of and incidental to this application, to be assessed by this Court if not agreed; and
(f) Such further or other relief as this Honourable Court deems just and appropriate in the circumstances.
II. THE PARTIES
2.1 The Applicant — Thalassa Shipping & Logistics SA
7. The Applicant, Thalassa Shipping & Logistics SA ("TSL"), is a Société Anonyme organized and existing under the laws of the Hellenic Republic, with its registered and principal offices located at 14 Akti Miaouli, 4th Floor, Piraeus 185 35, Greece. TSL's Greek tax identification number (Αριθμός Φορολογικού Μητρώου, or AFM) is EL-801456729.
8. TSL was founded in 1987 by the Papadimitriou family and has grown over nearly four decades into one of the leading independent shipping and logistics enterprises in the Eastern Mediterranean and wider region. TSL currently operates a diversified fleet of thirty-four (34) vessels, comprising bulk carriers, product and chemical tankers, and container feeder vessels. The company provides integrated shipping, chartering, and logistics services across the Mediterranean Sea, the Black Sea, and the Arabian Gulf, serving a client base that includes major commodity trading houses, oil majors, and state-owned enterprises.
9. For the financial year ended 31 December 2023, TSL reported consolidated revenues of approximately €620 million. The company employs approximately 2,400 personnel worldwide, including seafaring crew and shore-based staff.
10. The ownership structure of TSL is as follows: approximately 72% of the issued share capital is held by the Papadimitriou Family Trust, a trust established under Hellenic law for the benefit of the members of the Papadimitriou family; and the remaining approximately 28% is held by Aegean Capital Partners SA, a Hellenic investment firm.
11. The key officers and personnel of TSL relevant to this application are:
(a) Chairman and Chief Executive Officer: Mr. Nikolaos Papadimitriou;
(b) Chief Financial Officer: Ms. Elena Stavridis, who has sworn the supporting affidavit filed herewith;
(c) Head of Chartering and Operations: Captain Dimitrios Kouretas, who was the principal TSL representative responsible for managing the charter-party relationships at the centre of the underlying dispute; and
(d) General Counsel: Ms. Ioanna Christodoulou, who has oversight of TSL's legal affairs and coordinated with external counsel throughout the arbitration proceedings and the enforcement campaign.
2.2 The Respondent — Korinthian Maritime Holdings Ltd.
12. The Respondent, Korinthian Maritime Holdings Ltd. ("KMH"), is a private limited company incorporated in the Republic of Cyprus under Registration No. HE 387421, with its registered office at 28 Themistokli Dervi Avenue, Suite 601, Nicosia 1066, Cyprus. KMH was incorporated on or about 12 September 2014 and has at all material times maintained its registered office and carried on business activities in the Republic of Cyprus.
13. KMH is a vessel-owning and chartering company that controls a fleet of approximately eighteen (18) dry-bulk carriers through a network of single-purpose vehicle subsidiaries ("SPVs") incorporated in various jurisdictions, including the British Virgin Islands and Singapore. KMH functions as the group's principal holding and management entity, entering into charter-party agreements and managing commercial operations for the fleet through its Cyprus-based offices.
14. KMH is beneficially owned by the Volkov family through a layered holding structure involving British Virgin Islands and Cypriot entities. The ultimate beneficial owner and de facto controller of KMH is Mr. Andrei Volkov, who exercises effective management control over KMH and its subsidiaries notwithstanding that he does not hold a formal directorship in KMH. The directors and officers of KMH relevant to this application are:
(a) Mr. Sergei Volkov — Director (and son of Andrei Volkov), who acts as the formal signatory for KMH in corporate and commercial transactions;
(b) Ms. Marina Kazakova — Chief Financial Officer, responsible for the financial management of KMH and its group companies; and
(c) Mr. Alexei Demidov — Director of Fleet Operations, responsible for the technical and operational management of KMH's fleet.
15. Prior to the dispute giving rise to the Award, the estimated net asset value of the KMH group was approximately USD $280 million, comprising the value of its fleet of vessels, its shareholdings in SPV and holding company subsidiaries, cash balances, and other assets.
16. KMH was the disponent owner, either directly or through its wholly-owned SPV subsidiaries, of the three dry-bulk carriers at the centre of the charter-party dispute that gave rise to the Award: the M/V Aegean Fortuna, the M/V Crimson Horizon, and the M/V Volga Spirit.
2.3 Related Entities of the Respondent Within the Republic of Cyprus
17. Of particular relevance to this enforcement application is Oceangate Ventures Ltd., a private limited company incorporated in the Republic of Cyprus under Registration No. HE 401293, with its registered office at 28 Themistokli Dervi Avenue, Suite 604, Nicosia 1066, Cyprus. Oceangate Ventures Ltd. is 100% owned by KMH and serves as an intermediate holding company within the KMH group structure. Through Oceangate Ventures Ltd., KMH holds its interests in fleet SPVs, including Dnepr Shipholding Inc. (British Virgin Islands Company No. 2014876), which is the registered owner of the M/V Aegean Fortuna (IMO No. 9784521) and the M/V Volga Spirit (IMO No. 9756892).
18. The shares in Oceangate Ventures Ltd. held by KMH constitute a significant and valuable asset of the Respondent located within the jurisdiction of this Court. The value of these shares derives from the underlying asset value of the vessels and other assets held through the SPV structure beneath Oceangate Ventures Ltd.
19. In addition, KMH maintains bank accounts in the Republic of Cyprus, including accounts with major Cypriot banking institutions. These bank accounts and the funds held therein constitute assets of the Respondent that are amenable to execution proceedings following recognition and enforcement of the Award.
20. The certificates of registration for both KMH (HE 387421) and Oceangate Ventures Ltd. (HE 401293), obtained from the Cyprus Registrar of Companies, are annexed hereto as Exhibit G and Exhibit H, respectively.
III. JURISDICTIONAL AND LEGAL BASIS FOR THE APPLICATION
3.1 The New York Convention
21. The Republic of Cyprus acceded to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York on 10 June 1958 (the "New York Convention"), and the Convention entered into force with respect to the Republic of Cyprus on 29 March 1981. Cyprus did not make either the reciprocity reservation or the commercial reservation upon accession.
22. The United Kingdom of Great Britain and Northern Ireland, the state in which the Award was rendered (the seat of arbitration being London, England), is also a contracting state to the New York Convention. The New York Convention entered into force with respect to the United Kingdom on 23 December 1975.
23. The Award is therefore a "foreign arbitral award" within the meaning of Article I of the New York Convention, having been made in the territory of a state other than the state where recognition and enforcement are sought.
24. Under Article III of the New York Convention, each Contracting State "shall recognize arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon, under the conditions laid down in the following articles." Article III further provides that there "shall not be imposed substantially more onerous conditions or higher fees or charges on the recognition or enforcement of arbitral awards to which this Convention applies than are imposed on the recognition or enforcement of domestic arbitral awards."
25. In accordance with Article IV of the New York Convention, the Applicant has supplied with this application: (i) a duly authenticated original or certified copy of the Award; and (ii) the original or certified copies of the arbitration agreements under which the Award was made. The Applicant has also provided certified translations of these documents into the Greek language, the official language of the Republic of Cyprus, ex abundanti cautela. These documentary requirements are addressed in greater detail in Section VII below.
26. The conditions for recognition and enforcement under Articles III and IV of the New York Convention are fully satisfied, and the Applicant respectfully submits that this Court should grant recognition and enforcement of the Award.
3.2 Cyprus Implementing Legislation
27. The New York Convention is implemented in the domestic law of the Republic of Cyprus by the International Commercial Arbitration Law of 1987 (Law 101/1987) (ο περί Διεθνούς Εμπορικής Διαιτησίας Νόμος του 1987, Ν. 101/87). Law 101/1987 was enacted to give effect to the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration (1985) and to provide a comprehensive framework for the recognition and enforcement of foreign arbitral awards in the Republic of Cyprus in accordance with the New York Convention.
28. Pursuant to Law 101/1987, an arbitral award made in a foreign state that is a party to the New York Convention shall be recognized and enforced in the Republic of Cyprus upon application to the competent District Court, provided that the requirements of Articles IV and V of the New York Convention are satisfied.
29. Additionally, the Cyprus Arbitration Law, Cap. 4 (ο περί Διαιτησίας Νόμος, Κεφ. 4), which governs domestic arbitration in Cyprus, provides supplementary procedural provisions that support the enforcement of foreign arbitral awards as supplemented by Law 101/1987 and the New York Convention.
30. The Nicosia District Court has jurisdiction to hear and determine this application, as the Respondent, KMH, is incorporated, registered, and domiciled in Nicosia, Cyprus, with its registered office situated within the territorial jurisdiction of this Court. The Respondent's assets that are the subject of the enforcement application, including the shares in Oceangate Ventures Ltd. and the bank accounts maintained in Cyprus, are also located within this jurisdiction.
3.3 No Grounds for Refusal Under Article V
31. The Applicant respectfully submits that none of the exhaustive grounds for refusal of recognition and enforcement enumerated in Article V(1) or Article V(2) of the New York Convention are present in this case. The detailed analysis of each ground is set out in Section VIII below; the Applicant provides a summary here for the Court's convenience.
32. With respect to Article V(1), the Applicant submits:
(a) Article V(1)(a) — Validity of the Arbitration Agreement: The arbitration agreements contained in the three time charter-party agreements are valid and binding under English law, which is the governing law of both the charter-party agreements and the arbitration clauses, and the law of the seat of arbitration. Both TSL and KMH are entities with full legal capacity to enter into the agreements.
(b) Article V(1)(b) — Proper Notice and Ability to Present Case: KMH was given proper notice of the appointment of the arbitral tribunal and of all proceedings throughout the arbitration. KMH was represented at all times by experienced English solicitors, Harkness Whitford & Co., and fully participated in the evidentiary hearing and all procedural stages of the arbitration.
(c) Article V(1)(c) — Scope of the Award: The Award deals exclusively with matters falling within the scope of the submission to arbitration, namely the claims and counterclaims arising from the three charter-party agreements.
(d) Article V(1)(d) — Composition of the Tribunal and Procedure: The composition of the arbitral tribunal and the arbitral procedure were in full accordance with the LCIA Rules and the law of the seat of the arbitration (English law), as agreed by the parties.
(e) Article V(1)(e) — Award Not Set Aside or Suspended: The Award has not been set aside or suspended by a competent authority of the country in which, or under the law of which, the Award was made (England & Wales). Although KMH filed an application in the Commercial Court of England & Wales on 19 August 2024 (Claim No. CL-2024-000487) seeking to set aside the Award under Sections 68 and 69 of the Arbitration Act 1996, this application does not constitute a ground for refusal under Article V(1)(e), as the Award has not been set aside or suspended. Permission to enforce the Award in England & Wales was granted by Mr. Justice Ashworth on 2 August 2024 under Section 66 of the Arbitration Act 1996.
33. With respect to Article V(2), the Applicant submits:
(a) Article V(2)(a) — Arbitrability: The subject matter of the dispute — claims arising from time charter-party agreements for the hire of vessels — is capable of settlement by arbitration under the laws of the Republic of Cyprus.
(b) Article V(2)(b) — Public Policy: Recognition and enforcement of the Award is not contrary to the public policy of the Republic of Cyprus. The Award was rendered by a respected and well-established international arbitral institution (the LCIA) following a fair and transparent procedure that afforded both parties a full opportunity to present their cases.
IV. BACKGROUND FACTS — THE UNDERLYING DISPUTE
4.1 The Charter-Party Agreements
34. The dispute giving rise to the Award arose from three time charter-party agreements entered into between TSL, as charterer, and KMH, as disponent owner, for the time charter of three dry-bulk carriers. The essential details of each charter-party are as follows:
35. M/V *Aegean Fortuna* (IMO No. 9784521): This vessel is a Supramax Bulk Carrier of 58,200 deadweight tonnes ("DWT"), flagged in the marshall Islands. The registered owner of the vessel is Dnepr Shipholding Inc. (British Virgin Islands Company No. 2014876), a wholly-owned subsidiary of KMH held through Oceangate Ventures Ltd. The time charter-party for the M/V Aegean Fortuna was entered into on 15 March 2019 (the "Aegean Fortuna Charter") for a period of five (5) years, at a daily hire rate that reflected prevailing market conditions at the time of fixture. The charter was governed by English law, and Clause 72 thereof contained an arbitration agreement providing for the resolution of all disputes arising out of or in connection with the charter by LCIA arbitration seated in London, England, under the LCIA Rules.
36. M/V *Crimson Horizon* (IMO No. 9801334): This vessel is a Handymax Bulk Carrier of 37,500 DWT, flagged in Liberia. The registered owner is Korinthian Bulkers (Singapore) Pte. Ltd., a wholly-owned subsidiary of KMH. The time charter-party for the M/V Crimson Horizon was entered into on 22 January 2020 (the "Crimson Horizon Charter") for a period of four (4) years. As with the Aegean Fortuna Charter, the Crimson Horizon Charter was governed by English law and contained an LCIA arbitration clause in identical terms at Clause 72.
37. M/V *Volga Spirit* (IMO No. 9756892): This vessel is a Panamax Bulk Carrier of 76,400 DWT, flagged in the Republic of Cyprus. The registered owner is Dnepr Shipholding Inc., the same SPV that owns the M/V Aegean Fortuna. The time charter-party for the M/V Volga Spirit was entered into on 10 June 2021 (the "Volga Spirit Charter") for a period of three (3) years, at hire rates reflecting the recovering post-pandemic dry-bulk market. The Volga Spirit Charter was, like the other two charters, governed by English law and contained an LCIA arbitration clause at Clause 72.
38. Collectively, these three agreements are referred to herein as the "Charter-Parties." All three Charter-Parties were duly executed by authorized representatives of TSL and KMH, and performance commenced under each charter without dispute for a significant period prior to the events giving rise to the breaches described below.
4.2 KMH's Breaches
39. Beginning in or around mid-2022, KMH engaged in a pattern of serious and repudiatory breach across all three Charter-Parties. The specific breaches, as found by the Tribunal in the Award, are summarized below.
40. M/V *Aegean Fortuna* — Wrongful Early Redelivery: In breach of its obligations under the Aegean Fortuna Charter, KMH wrongfully redelivered the M/V Aegean Fortuna to TSL on 18 June 2022, approximately fourteen (14) months before the earliest permissible redelivery date under the charter. The Tribunal found that KMH's purported redelivery was not justified by any contractual entitlement and constituted a repudiatory breach of the charter. The wrongful early redelivery deprived TSL of the benefit of the remaining charter period at a time when the dry-bulk freight market had moved significantly in TSL's favour, resulting in substantial loss of bargain damages.
41. M/V *Crimson Horizon* — Failure to Pay Hire: KMH ceased making timely hire payments under the Crimson Horizon Charter from 1 July 2022 onwards. Despite repeated demands from TSL and a series of formal notices, KMH failed to pay outstanding hire in the amount of approximately £4,280,000. On 15 September 2022, having exhausted its contractual remedies, TSL exercised its right under the charter to withdraw the M/V Crimson Horizon from KMH's service. The Tribunal found that KMH's persistent failure to pay hire constituted a repudiatory breach entitling TSL to withdraw the vessel and claim damages for loss of bargain for the unexpired period of the charter.
42. M/V *Volga Spirit* — Fabricated Off-Hire Deductions: KMH made off-hire deductions from the hire payable under the Volga Spirit Charter totalling approximately £2,740,000, purportedly on the basis that the M/V Volga Spirit had been off-hire due to mechanical breakdowns and port delays. The Tribunal found, upon a detailed examination of the contemporaneous evidence, including vessel logs, port records, classification society reports, and the testimony of the chief engineer and the master of the vessel, that KMH's off-hire claims were fabricated and without legitimate basis. The Tribunal concluded that KMH had knowingly made false deductions in order to reduce its hire obligations, and ordered full restitution of the amounts improperly deducted.
43. In summary, the Tribunal found that KMH's conduct across all three Charter-Parties reflected a deliberate strategy to extract itself from commercially unfavourable chartering commitments, and that each of the breaches described above was repudiatory in nature.
4.3 The LCIA Arbitration
44. Following the breakdown in negotiations and after KMH failed to respond to TSL's formal pre-arbitration notice in a meaningful manner, TSL filed its Request for Arbitration with the London Court of International Arbitration on 14 November 2022, in respect of all three Charter-Parties. The case was registered under LCIA Case Reference No. 224718.
45. The arbitral tribunal (the "Tribunal") was constituted on 8 February 2023 in accordance with the LCIA Rules. The Tribunal comprised three distinguished arbitrators with extensive experience in international commercial and maritime arbitration:
(a) Presiding Arbitrator: Sir Malcolm Fenton-Clarke, appointed by the LCIA Court. Sir Malcolm is a former judge of the English High Court (Commercial Court) and a Fellow of the Chartered Institute of Arbitrators, with over thirty years of experience in maritime and shipping disputes.
(b) Co-Arbitrator (nominated by TSL): Professor Athena Drakopoulos, Professor of Maritime Law at University College London and an experienced arbitrator in LCIA and ICC proceedings.
(c) Co-Arbitrator (nominated by KMH): Dr. Henrik Dalmqvist, a Swedish-qualified lawyer and maritime arbitrator based in Stockholm, with particular expertise in charter-party and bill of lading disputes.
46. Ms. Fiona Beckett served as Tribunal Secretary throughout the proceedings, assisting the Tribunal with administrative and procedural matters.
47. Following the constitution of the Tribunal, a comprehensive procedural timetable was established by Procedural Order No. 1 dated 1 March 2023. The parties exchanged written submissions, witness statements (including statements from factual witnesses and expert reports from quantum and maritime experts), and documentary evidence in accordance with the timetable established by the Tribunal.
48. A ten-day evidentiary hearing took place at the International Dispute Resolution Centre ("IDRC"), 70 Fleet Street, London EC4Y 1EU, from 11 September 2023 to 22 September 2023 (the "Hearing"). The Hearing included the examination and cross-examination of factual witnesses, the presentation and testing of expert evidence, and closing oral submissions by both parties.
49. Both parties were fully represented throughout the entirety of the arbitration proceedings:
(a) TSL was represented by Calderwood & Harkness LLP (45 Moorgate, London EC2R 6AR), with Samuel Eklund as Responsible Partner and Hannah Brinkley as Lead Associate, together with a team of associates and paralegals.
(b) KMH was represented by Harkness Whitford & Co. (SRA Registration No. 614823), of 12 Fetter Lane, London EC4A 1JP, with Richard Harkness as Senior Partner and Catherine Whitford as Partner, together with their litigation team.
50. It is important to emphasize for the purposes of this enforcement application that KMH participated fully and voluntarily in all stages of the arbitral proceedings. KMH filed comprehensive written submissions, including a Statement of Defence and Counterclaim, a Rejoinder, witness statements from multiple factual witnesses (including Mr. Alexei Demidov and Ms. Marina Kazakova), and expert reports on quantum and maritime technical issues. KMH's counsel conducted extensive cross-examination of TSL's witnesses at the Hearing and presented KMH's case in full during both opening and closing submissions. At no point during the arbitration did KMH challenge the jurisdiction of the Tribunal or raise any procedural objection that has not been resolved.
51. Following the Hearing, the parties filed post-hearing briefs and costs submissions. The Tribunal reserved its decision and ultimately rendered the Award on 28 June 2024, as described in Section V below.
V. THE AWARD
5.1 Date and Form
52. The Final Award was issued on 28 June 2024 in London, England (the "Award"). The Award is in writing, extends to 247 pages, and is signed by all three members of the Tribunal — Sir Malcolm Fenton-Clarke (Presiding Arbitrator), Professor Athena Drakopoulos (Co-Arbitrator), and Dr. Henrik Dalmqvist (Co-Arbitrator). The Award bears the date of issue (28 June 2024) and the place of issue (London, England).
53. The Award is designated as the "Final Award" in LCIA Arbitration No. 224718 and, by its terms and pursuant to Article 26 of the LCIA Rules, is final and binding on both parties. Article 26.8 of the LCIA Rules provides that, by agreeing to arbitration under the LCIA Rules, the parties undertake to carry out any award immediately and without delay, and that the parties irrevocably waive their right to any form of appeal, review, or recourse to any state court or other judicial authority insofar as such waiver may be validly made.
54. A duly authenticated certified copy of the Award is annexed hereto as Exhibit A.
5.2 Amounts Awarded
55. The Tribunal made the following findings of liability and assessed damages as follows:
(a) Damages for wrongful early redelivery of M/V *Aegean Fortuna*: £42,300,000. The Tribunal calculated this sum on the basis of the unexpired charter period of approximately fourteen (14) months, multiplied by the difference between the charter hire rate and the market rate at the date of the breach, yielding an approximate monthly loss of £3,021,429 for the balance of the charter period. The Tribunal found that TSL had taken reasonable steps to mitigate its loss by re-employing the vessel on the spot market, and credited KMH with the earnings obtained on mitigation.
(b) Outstanding hire and damages for M/V *Crimson Horizon*: £28,150,000. This sum comprises:
(i) outstanding unpaid hire arrears of £4,280,000 accrued between 1 July 2022 and 15 September 2022 (the date of withdrawal); and
(ii) loss of bargain damages of £23,870,000 for the unexpired period of the charter following TSL's withdrawal of the vessel, calculated by reference to the differential between the contractual hire rate and the market rate prevailing at the date of withdrawal.
(c) Restitution of fabricated off-hire deductions for M/V *Volga Spirit*: £2,740,000. The Tribunal ordered KMH to repay in full the amounts improperly deducted from the hire payable under the Volga Spirit Charter, having found that the off-hire claims were fabricated and without legitimate basis.
(d) Loss of profit and market differential damages across all three charters: £16,480,000. This additional head of damages reflects the Tribunal's assessment of TSL's consequential losses arising from the disruption to its fleet deployment programme and the loss of sub-charter opportunities caused by KMH's breaches across all three vessels.
(e) Pre-award interest: £6,780,000. Interest was assessed at the rate of 5.25% per annum simple from the respective dates of each breach to the date of the Award (28 June 2024), in accordance with Section 49 of the English Arbitration Act 1996.
56. The total sum awarded in respect of the merits (comprising damages, restitution, and pre-award interest) is therefore £96,450,000 (ninety-six million four hundred and fifty thousand pounds sterling).
5.3 Costs Allocation
57. The Tribunal made a detailed costs order, allocating 85% of the total costs of the arbitration to KMH. The Tribunal found that KMH was the substantially unsuccessful party and that its conduct during the proceedings, including the advancing of knowingly false off-hire claims, warranted a significant costs order against it. The costs awarded against KMH are:
(a) LCIA administrative charges and Tribunal fees and expenses: £3,240,000;
(b) TSL's legal costs (being 85% of TSL's total legal fees and disbursements incurred in connection with the arbitration): £8,910,000.
58. The total costs awarded against KMH are therefore £12,150,000 (twelve million one hundred and fifty thousand pounds sterling).
59. The grand total of the Award and costs is £108,600,000 (one hundred and eight million six hundred thousand pounds sterling).
5.4 Post-Award Interest
60. The Award provides for post-award interest on the unpaid sums (excluding costs) at the rate of 5.25% per annum simple from 29 June 2024 (the day following the date of the Award) until the date of full payment. This rate reflects the prevailing Bank of England base rate at the time of the Award plus an appropriate commercial margin, as determined by the Tribunal.
61. As at the date of this application (9 August 2024), post-award interest in the approximate amount of £578,000 has accrued and continues to accrue on a daily basis at the rate of approximately £13,872 per day.
5.5 Status of the Award
62. The Award is final and binding upon both parties pursuant to Article 26 of the LCIA Rules and Section 58 of the English Arbitration Act 1996.
63. No application to set aside or suspend the Award has been granted in the courts of England & Wales, the country in which the Award was made and under the law of which it was rendered.
64. KMH filed an application in the Commercial Court of England & Wales on 19 August 2024 under Claim No. CL-2024-000487, seeking to challenge the Award under the following provisions of the Arbitration Act 1996:
(a) Section 68 — challenging the Award on the ground of alleged "serious irregularity affecting the tribunal, the proceedings or the award"; and
(b) Section 69 — seeking leave to appeal the Award on a question of law.
65. The Applicant respectfully submits that KMH's challenge application is entirely without merit. In respect of the Section 68 challenge, KMH has not identified any serious irregularity of the kind contemplated by the statute, and in respect of the Section 69 challenge, the Tribunal's findings on the issues of English law at stake were plainly correct and open to it on the evidence. In any event, the English court has not yet granted permission to proceed under Section 69, and the mere filing of a challenge application does not constitute a ground for refusal of enforcement under Article V(1)(e) of the New York Convention, which requires that the award has actually been "set aside or suspended" by a competent authority. No such order has been made, and the Award remains in full force and effect.
66. The Applicant further draws this Court's attention to the fact that permission to enforce the Award as a judgment in England & Wales was granted by Mr. Justice Ashworth on 2 August 2024 under Section 66 of the Arbitration Act 1996. The order of Mr. Justice Ashworth confirms the validity and enforceability of the Award in the jurisdiction of the seat.
67. The Applicant undertakes to inform this Court promptly of any material developments in the English proceedings, including in particular any order setting aside, suspending, or otherwise affecting the Award.
VI. THE RESPONDENT'S ASSETS IN CYPRUS — BASIS FOR ENFORCEMENT
6.1 KMH's Cyprus Domicile and Registration
68. The application is brought before this Court because the Respondent, KMH, is incorporated and registered in the Republic of Cyprus under Registration No. HE 387421, with its registered office at 28 Themistokli Dervi Avenue, Suite 601, Nicosia 1066, within the territorial jurisdiction of this Court.
69. As a company incorporated and domiciled in the Republic of Cyprus, KMH's corporate existence, its registered office, its corporate records, and its assets located within the Republic are amenable to the jurisdiction of the Cyprus courts and to execution and enforcement proceedings therein. The recognition and enforcement of the Award as a judgment of this Court will enable the Applicant to proceed with execution against KMH's Cyprus-situated assets, thereby giving effect to the binding obligations arising from the Award.
6.2 Shareholding in Oceangate Ventures Ltd.
70. As set out in Section II.3 above, KMH holds 100% of the issued share capital of Oceangate Ventures Ltd. (Cyprus Registration No. HE 401293), a private limited company registered at 28 Themistokli Dervi Avenue, Suite 604, Nicosia 1066, Cyprus.
71. Oceangate Ventures Ltd. serves as an intermediate holding company within the KMH corporate group. Through Oceangate, KMH holds its interests in various fleet SPV subsidiaries, including Dnepr Shipholding Inc. (British Virgin Islands Company No. 2014876), which is the registered owner of two of the three vessels at the centre of the underlying dispute: the M/V Aegean Fortuna and the M/V Volga Spirit. The value of the vessels held through the Dnepr Shipholding Inc. structure, together with the other assets held through Oceangate, is substantial. Based on publicly available vessel valuation data and the most recent financial information available to the Applicant, the estimated aggregate value of the assets held through Oceangate Ventures Ltd. exceeds USD $150 million.
72. The shares of Oceangate Ventures Ltd. held by KMH are assets situated in the Republic of Cyprus, as Oceangate is a Cyprus-incorporated company and the share register is maintained in Cyprus. These shares represent a significant and valuable asset of KMH against which execution may be levied following recognition and enforcement of the Award.
6.3 Bank Accounts
73. KMH maintains bank accounts in the Republic of Cyprus, including accounts with major Cypriot banking institutions. The Applicant has reason to believe, based on the investigations conducted by its advisors and the evidence set out in the supporting affidavit of Elena Stavridis (Exhibit D), that significant sums are or have been held in these accounts.
74. These bank accounts and the funds held therein constitute assets of the Respondent located within the Republic of Cyprus that are amenable to execution proceedings. Upon recognition and enforcement of the Award as a judgment of this Court, the Applicant will seek garnishee orders or other appropriate execution measures against these bank accounts.
6.4 Risk of Dissipation
75. The Applicant brings to this Court's attention the serious and real risk that KMH will dissipate, transfer, or otherwise deal with its Cyprus-situated assets in a manner designed to frustrate enforcement of the Award.
76. The evidence in support of this concern is set out in detail in the supporting affidavit of Elena Stavridis (Exhibit D). Without prejudice to the full contents of the affidavit, the principal grounds for this concern include the following:
(a) KMH's failure to make any payment whatsoever against the Award since it was rendered on 28 June 2024, despite repeated demands from TSL's solicitors;
(b) Evidence of KMH transferring funds out of its Cyprus bank accounts in the period following the rendering of the Award;
(c) intelligence gathered by TSL's advisors indicating that KMH has been exploring the sale or mortgage of fleet vessels through intermediary structures, which could diminish the value of the Oceangate shareholding;
(d) The layered and opaque corporate structure of the KMH group, involving BVI, Singaporean, and Cypriot entities, which facilitates the rapid movement of assets between jurisdictions;
(e) The conduct of KMH's ultimate beneficial owner, Mr. Andrei Volkov, whose previous involvement in disputes in other jurisdictions has been marked by evidence of asset dissipation and obstructive conduct.
77. This Court should note that the Commercial Court of England & Wales has already found sufficient grounds to grant a worldwide freezing order (commonly known as a "Mareva injunction") against KMH. The freezing order was granted by Mr. Justice Ashworth on 16 July 2024, restraining KMH from dealing with, diminishing the value of, or disposing of its assets worldwide up to the value of £108,600,000. The freezing order was continued with modifications at the return date hearing on 30 July 2024, at which KMH appeared and was heard. A sealed copy of the freezing order is annexed hereto as Exhibit F.
78. The existence of the English worldwide freezing order demonstrates that a court of competent jurisdiction, applying the Mareva test, has already determined that there is a real risk of dissipation of KMH's assets. The Applicant respectfully submits that this finding is relevant and should be taken into consideration by this Court in assessing the present application.
79. A separate application for a freezing injunction (παγωτικό διάταγμα) over the Oceangate shares and KMH's Cyprus bank accounts has been filed concurrently with this application before this Honourable Court, to which this Court's attention is respectfully drawn.
VII. COMPLIANCE WITH ARTICLE IV OF THE NEW YORK CONVENTION — DOCUMENTARY REQUIREMENTS
7.1 Documents Filed in Support
80. In strict compliance with Article IV of the New York Convention, the Applicant supplies the following documents with this application.
7.1.1 The Arbitral Award (Exhibit A)
81. Pursuant to Article IV(1)(a) of the New York Convention, the Applicant has supplied the duly authenticated original or, alternatively, a duly certified copy of the Final Award dated 28 June 2024 in LCIA Arbitration No. 224718.
82. The certified copy of the Award annexed hereto has been authenticated by the LCIA Registrar and bears the apostille required by the Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents (1961) for use in the Republic of Cyprus.
83. The Award is annexed hereto as Exhibit A.
7.1.2 The Arbitration Agreements (Exhibit B)
84. Pursuant to Article IV(1)(b) of the New York Convention, the Applicant has supplied the original or certified copies of the arbitration clauses contained in each of the three time charter-party agreements that form the basis of the arbitration:
(a) Exhibit B-1: Certified copy of the time charter-party agreement for the M/V Aegean Fortuna dated 15 March 2019, including the LCIA arbitration clause at Clause 72 thereof;
(b) Exhibit B-2: Certified copy of the time charter-party agreement for the M/V Crimson Horizon dated 22 January 2020, including the LCIA arbitration clause at Clause 72 thereof; and
(c) Exhibit B-3: Certified copy of the time charter-party agreement for the M/V Volga Spirit dated 10 June 2021, including the LCIA arbitration clause at Clause 72 thereof.
85. Each of the three Charter-Parties contains an identically-worded arbitration clause at Clause 72, providing as follows (reproduced from the M/V Aegean Fortuna Charter as representative):
"72.1 Any and all disputes arising out of or in connection with this Charter-Party, including any question regarding its existence, validity, or termination, shall be referred to and finally resolved by arbitration under the Rules of the London Court of International Arbitration ("LCIA Rules"), which Rules are deemed to be incorporated by reference into this Clause.
72.2 The seat, or legal place, of the arbitration shall be London, England.
72.3 The Tribunal shall consist of three (3) arbitrators, to be appointed in accordance with the LCIA Rules.
72.4 The language of the arbitration shall be English.
72.5 The governing law of this Charter-Party, including this arbitration clause, shall be the law of England and Wales."
86. The arbitration clauses are in writing and signed by duly authorized representatives of both TSL and KMH, satisfying the formal requirements of Article II of the New York Convention.
7.1.3 Certified Translations (Exhibit C)
87. Pursuant to Article IV(2) of the New York Convention, if the Award or the arbitration agreements are not made in an official language of the country in which recognition and enforcement is sought, the party applying for recognition and enforcement shall produce certified translations of these documents into such language.
88. The originals of the Award and the arbitration agreements are in the English language. The Applicant acknowledges that the official languages of the Republic of Cyprus are Greek and Turkish. While the Applicant respectfully submits that certified translations may not be strictly necessary given the widespread use of the English language in the courts of the Republic of Cyprus and the established practice of this Court in receiving and considering documents in English in international commercial matters, the Applicant has, ex abundanti cautela and out of an abundance of respect for the procedural requirements of this Court, arranged for and filed certified translations of the Award and the arbitration agreements into the Greek language.
89. The certified Greek translations have been prepared by Ms. Despina Andreou, a sworn translator authorized by the Ministry of Justice and Public Order of the Republic of Cyprus (Translator Registration No. MT-4721), and bear her certification and seal.
90. The certified translations are annexed hereto as Exhibit C.