Attachments: (1) Opposition Filing — V&E on behalf of KMH (Case 2247-2024).pdf; (2) Supporting Affidavit of Georgios Vassiliadis.pdf
Dear Hannah,
I write to inform you of a significant development in the above-referenced proceedings.
**Background**
As you will recall, we filed the enforcement application on 9 August 2024 in the Nicosia District Court (Case No. 2247/2024), seeking recognition and enforcement of LCIA Award No. 224718 dated 28 June 2024 under the New York Convention as implemented in Cyprus law pursuant to the Arbitration Law, Cap. 4. The ex parte freezing injunction over the shares in Oceangate Ventures Ltd. (Registration No. HE 401293) and KMH's Cyprus bank accounts was granted on 12 August 2024 and remains in full force.
**Opposition Filed**
I can now report that Vassiliadis & Economou LLC, acting on behalf of Korinthian Maritime Holdings Ltd. (Registration No. HE 387421, registered at 28 Themistokli Dervi Avenue, Suite 601, Nicosia 1066), has today filed a formal opposition to the enforcement application. I attach herewith (1) the opposition filing itself and (2) the supporting affidavit of Mr. Georgios Vassiliadis, Managing Partner of Vassiliadis & Economou LLC, sworn in support of the opposition.
**Summary of the Opposition Grounds**
KMH raises two principal grounds under Article V of the New York Convention, which I summarise below together with my preliminary observations.
*Ground 1 — Public Policy (Article V(2)(b))*
KMH contends that enforcement of the award would be contrary to the public policy of Cyprus. Specifically, V&E argues that the quantum of damages awarded — £96,450,000 in total, including £42,300,000 for the M/V *Aegean Fortuna* wrongful early redelivery and £16,480,000 in loss of profit and market differential — is "grossly disproportionate" and constitutes what they characterise as a "penal" or "punitive" award. KMH further argues that the tribunal's allocation of 85% of the arbitration costs to KMH (comprising £3,240,000 in LCIA costs and £8,910,000 in TSL's legal costs, totalling £12,150,000) was so one-sided as to offend fundamental notions of fairness.
I would observe that this is a high threshold under established Cypriot case law. The public policy exception is interpreted very narrowly by the Cyprus courts, consistently with prevailing international practice, and mere disagreement with the quantum of an award has not historically been accepted as a basis for refusing enforcement. That said, the sums involved are substantial and we should ensure our reply addresses the point thoroughly.
*Ground 2 — Alleged Lack of Proper Notice (Article V(1)(b))*
KMH alleges that it was not given proper notice of the arbitral proceedings or was otherwise unable to present its case. More specifically, V&E contends that KMH's former counsel received inadequate notice of a change in the hearing schedule during the evidentiary hearing (which, as you know, ran over 10 hearing days from 11 to 22 September 2023 at the IDRC in London), and that this caused material prejudice to KMH's ability to present certain factual witnesses.
The supporting affidavit of Mr. Vassiliadis attaches correspondence said to evidence a scheduling conflict affecting one of KMH's witnesses. However, I consider this ground to be weak. The tribunal — presided over by Sir Malcolm Fenton-Clarke, with co-arbitrators Professor Athena Drakopoulos and Dr. Henrik Dalmqvist — addressed matters of procedural fairness expressly in the award itself. Moreover, KMH was represented throughout the arbitration by Harkness Whitford & Co. in London, led by Ms. Catherine Whitford, and there is no suggestion in the opposition that KMH was at any point unrepresented or denied a meaningful opportunity to participate.
**Additional Observations**
I draw your attention to the following further points arising from my review of the opposition:
1. V&E has not challenged the freezing injunction separately. The opposition is directed solely at the enforcement application, and the injunction accordingly remains undisturbed.
2. The court has now set a timetable for the reply: KM&P's response is due within 21 days from today, i.e., by **Wednesday, 9 October 2024**. A hearing is likely to be listed in late October.
3. It is notable that KMH has not raised any ground under Article V(1)(a) (invalidity of the arbitration agreement) or Article V(1)(c) (award beyond the scope of submission to arbitration). These are typically among the stronger grounds available, and their absence is significant.
4. The opposition makes no reference to, and does not acknowledge, the parallel English Commercial Court proceedings (Claim No. CL-2024-000487), in which permission to enforce the award was granted on 2 August 2024 by Mr. Justice Ashworth and in which a worldwide freezing order up to £108,600,000 remains in force.
5. As you will be aware, KMH's application to set aside the award under sections 68 and 69 of the Arbitration Act 1996 was filed on 19 August 2024 in England and has not yet been determined. The Cyprus court may wish to be informed of this parallel challenge, and I would welcome your views on whether and how we should address this in our reply. In my assessment, the set-aside application is unlikely to succeed, but its pendency is a fact that we should consider addressing proactively rather than allowing V&E to raise it at a later stage.
**Request for Your Input**
Given the 9 October deadline, I would be grateful for Calderwood & Harkness's analysis and guidance on the following matters:
(a) Your views on the public policy argument (Ground 1), particularly in light of the fact that the charterparties are governed by English law and the arbitration was seated in London. I anticipate that the strength of the tribunal's reasoning on quantum will be central to our response.
(b) Any materials from the LCIA arbitration record that bear on the scheduling and notice issue raised under Ground 2. I am thinking in particular of any procedural orders or correspondence from the tribunal secretary, Ms. Fiona Beckett, confirming that both parties had adequate notice of any schedule changes and a full opportunity to present their evidence and arguments.
(c) Your guidance on whether our reply should cross-reference the English enforcement proceedings and KMH's pending set-aside application, and if so, how this should be framed.
(d) As you will recall, the supporting affidavit of Ms. Elena Stavridis (TSL's CFO), filed with our original enforcement application, addresses the factual background to the dispute and the award. However, a supplemental affidavit may be needed to respond specifically to the notice allegations raised in Mr. Vassiliadis's affidavit. I would welcome your views on this.
Finally, it would be helpful to know whether you would prefer KM&P to prepare the first draft of the reply for your review, or whether Calderwood & Harkness will provide a draft for us to adapt to Cypriot procedural requirements. Either approach works well from our side — we simply wish to ensure we make the most efficient use of the time available.
I would suggest we arrange a call to discuss the foregoing at your earliest convenience. Nadia and I are available on **Friday, 20 September**, or early the following week. Please let us know what suits.
In the meantime, we will continue to monitor the freezing injunction and any further steps taken by Vassiliadis & Economou on behalf of KMH, and will revert immediately if there are any additional developments.
Kind regards,
**Andreas Kyprianos** Partner Kyprianos Makrides & Partners 15 Grivas Digenis Avenue Nicosia 1066, Cyprus T: +357 22 760 400 M: +357 99 612 185 E: a.kyprianos@kmp-law.com.cy www.kmp-law.com.cy
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