IN THE DISTRICT COURT OF NICOSIA REPUBLIC OF CYPRUS
Case No. 2247/2024
EX PARTE APPLICATION FOR INTERIM FREEZING INJUNCTION (Mareva-Type Relief)
Filed in connection with the substantive application for recognition and enforcement of LCIA Award No. 224718 filed on 9 August 2024
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
— and —
KORINTHIAN MARITIME HOLDINGS LTD. a private limited company incorporated in the Republic of Cyprus, Registration No. HE 387421, with registered address at 28 Themistokli Dervi Avenue, Suite 601, Nicosia 1066, Cyprus
Respondent
Filed by:
Kyprianos Makrides & Partners Advocates & Legal Consultants 15 Grivas Digenis Avenue Nicosia 1066, Cyprus Tel: +357 22 810 200
Fax: +357 22 810 210
Email: akyprianos@kmp-law.com.cy / nmakrides@kmp-law.com.cy
Andreas Kyprianos, Senior Partner Nadia Makrides, Partner, Litigation & Enforcement
Acting as local counsel for the Applicant on the instructions of:
Calderwood & Harkness LLP Lead Enforcement Counsel for the Applicant 45 Moorgate London EC2R 6AR United Kingdom Tel: +44 20 7628 4500
Email: s.eklund@calderwoodharkness.com / h.brinkley@calderwoodharkness.com
Samuel Eklund, Responsible Partner Hannah Brinkley, Lead Associate
Date of Filing: 12 August 2024
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I. INTRODUCTION AND SUMMARY OF APPLICATION
1. This is an ex parte application by the Applicant, Thalassa Shipping & Logistics SA ("TSL" or the "Applicant"), for an interim freezing injunction (Mareva-type relief) prohibiting the Respondent, Korinthian Maritime Holdings Ltd. ("KMH" or the "Respondent"), from disposing of, dealing with, diminishing, or encumbering certain identified assets located in the Republic of Cyprus.
2. The specific assets in respect of which the freezing injunction is sought are:
(a) KMH's entire shareholding (being 100% of the issued share capital) in Oceangate Ventures Ltd., a private limited company incorporated in the Republic of Cyprus under Registration No. HE 401293, with registered address at 28 Themistokli Dervi Avenue, Suite 604, Nicosia 1066, Cyprus (hereinafter "Oceangate"); and
(b) All funds, balances, deposits, securities, and other assets held in any bank accounts in the Republic of Cyprus in the name of Korinthian Maritime Holdings Ltd. (HE 387421) or in the name of Oceangate Ventures Ltd. (HE 401293).
3. This application is made in connection with and in support of the enforcement of LCIA Award No. 224718, a Final Award rendered on 28 June 2024 (the "Award") by a tribunal duly constituted under the Rules of the London Court of International Arbitration (the "LCIA"). Pursuant to the Award, the tribunal ordered KMH to pay to TSL the following sums:
(a) Total damages and pre-award interest in the amount of £96,450,000 (ninety-six million four hundred and fifty thousand pounds sterling);
(b) Costs of the arbitration in the amount of £12,150,000 (twelve million one hundred and fifty thousand pounds sterling), being 85% of the total costs allocated to KMH;
(c) Grand Total: £108,600,000 (one hundred and eight million six hundred thousand pounds sterling), which, at the exchange rate prevailing on 28 June 2024 of £1 = USD $1.2441, is equivalent to approximately USD $120,000,000 (one hundred and twenty million United States dollars); and
(d) Post-award interest 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.
4. An application for recognition and enforcement of the Award under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 10 June 1958 (the "New York Convention"), as implemented in the Republic of Cyprus by the Cyprus Arbitration Law, Cap. 4, was filed in this Honourable Court on 9 August 2024 and assigned Case No. 2247/2024 (the "Enforcement Application").
5. The present application for interim freezing relief is necessitated by a real and demonstrable risk that KMH will dissipate, transfer, encumber, or otherwise deal with its Cyprus-based assets for the purpose of frustrating enforcement of the Award. As will be set out in detail below, since the Award was issued on 28 June 2024, KMH has engaged in a pattern of post-award asset-shifting, including the attempted sale of vessels, the restructuring of Cypriot entities, and the movement of funds through its multi-jurisdictional corporate network. These actions, when considered alongside KMH's complex corporate structure, its failure to make any voluntary payment toward the Award despite a formal demand, and the finding by the tribunal of dishonest conduct in the underlying dispute, establish a compelling basis for the relief sought.
6. It should be noted that on 16 July 2024, Mr. Justice Ashworth of the Commercial Court of England and Wales (Queen's Bench Division) granted, without notice to KMH, a Worldwide Freezing Order (the "WFO") restraining KMH from disposing of or dealing with any of its assets worldwide up to the value of £108,600,000. That order was continued with modifications on the return date of 30 July 2024 after KMH appeared and was heard through counsel. The present application for local freezing relief in Cyprus is complementary to and consistent with the WFO and is necessitated by the practical reality that enforcement of an English freezing order requires the cooperation and support of local courts in the jurisdictions where assets are situated.
7. The application is made on an urgent ex parte basis. The Applicant respectfully submits that prior notice to KMH of this application would defeat its purpose, given the demonstrated risk that KMH will take immediate steps to dissipate or relocate the Cyprus-based assets if alerted to the application before an order is made. The Applicant undertakes, however, to notify KMH and its Cyprus legal representatives of the terms of any order forthwith upon its being granted, and KMH will have liberty to apply to vary or discharge the injunction on appropriate notice.
II. THE PARTIES
A. The Applicant — Thalassa Shipping & Logistics SA
8. The Applicant, Thalassa Shipping & Logistics SA, is a Société Anonyme (SA) organized and existing under the laws of the Hellenic Republic, with its registered and principal offices at 14 Akti Miaouli, 4th Floor, Piraeus 185 35, Greece. Its Tax Identification Number (Arithmos Forologikou Mitroou, or AFM) is EL-801456729.
9. TSL was founded in 1987 by the Papadimitriou family and has since grown into one of the most significant privately held shipping and logistics enterprises operating in the Eastern Mediterranean basin and beyond. TSL currently operates a diversified fleet of thirty-four (34) vessels, comprising bulk carriers, tankers, and container feeders. In addition to its fleet operations, TSL provides integrated logistics services, including port agency, freight forwarding, ship management, and supply chain consultancy, across the Mediterranean Sea, the Black Sea, and the Arabian Gulf.
10. TSL's annual revenues for the financial year ending 31 December 2023 were approximately €620 million, reflecting the scale and commercial significance of its operations. TSL is a well-established and financially sound enterprise with substantial resources and a demonstrated track record in international shipping.
11. TSL's ownership structure is as follows: approximately 72% of the share capital is held by the Papadimitriou Family Trust (a trust established under Greek law for the benefit of the descendants of the company's founder), and the remaining 28% is held by Aegean Capital Partners SA, a reputable Greek investment firm with offices in Athens and Thessaloniki.
12. The key personnel of TSL relevant to this application are as follows:
(a) Nikolaos Papadimitriou — Chairman and Chief Executive Officer. Mr. Papadimitriou is the son of the company's founder and has served as CEO since 2005. He has overall responsibility for the strategic direction of TSL and its subsidiary operations.
(b) Elena Stavridis — Chief Financial Officer. Ms. Stavridis has served as CFO of TSL since 2018 and is the deponent of the principal supporting affidavit filed in connection with this application. She has direct knowledge of the financial aspects of the charter-party disputes, the arbitration proceedings, and the post-award enforcement efforts.
(c) Captain Dimitrios Kouretas — Head of Chartering and Operations. Captain Kouretas was directly responsible for the management of the three charter-parties at the centre of the underlying dispute and provided witness evidence in the LCIA arbitration.
(d) Ioanna Christodoulou — General Counsel (in-house). Ms. Christodoulou has coordinated TSL's legal strategy in connection with the arbitration and enforcement proceedings across multiple jurisdictions.
B. The Respondent — Korinthian Maritime Holdings Ltd.
13. The Respondent, Korinthian Maritime Holdings Ltd., is a private limited company incorporated in the Republic of Cyprus under Registration No. HE 387421, with its registered address at 28 Themistokli Dervi Avenue, Suite 601, Nicosia 1066, Cyprus.
14. KMH operates as a vessel-owning and chartering company. It controls a fleet of approximately eighteen (18) dry-bulk carriers through a network of single-purpose vehicle (SPV) subsidiaries incorporated in various jurisdictions, including the British Virgin Islands, Singapore, and Cyprus. KMH was the disponent owner of the three vessels at the centre of the underlying charter-party dispute that gave rise to the LCIA arbitration and the Award.
15. KMH is beneficially owned by the Volkov family through a series of holding structures involving entities incorporated in the British Virgin Islands and the Republic of Cyprus. The ultimate beneficial owner of KMH is Andrei Volkov, a Russian national resident in Dubai, United Arab Emirates, who exercises de facto control over KMH and its subsidiary entities. The estimated pre-dispute net asset value of KMH, inclusive of its fleet assets, was approximately USD $280 million. However, as will be demonstrated in greater detail below, significant asset-shifting has occurred in the wake of the Award, such that the current value of assets available for enforcement is substantially uncertain and potentially diminishing.
16. The key personnel of KMH relevant to this application are as follows:
(a) Andrei Volkov — Ultimate Beneficial Owner and de facto director. Mr. Volkov controls the KMH group through his beneficial ownership of the holding structures above KMH. Although he does not hold formal directorship of KMH itself, the evidence demonstrates that he exercises effective control over the company's affairs and decision-making.
(b) Sergei Volkov — Director. Sergei Volkov is the son of Andrei Volkov and serves as a registered director of KMH. He is involved in the day-to-day management of the company's fleet operations and corporate affairs.
(c) Marina Kazakova — Chief Financial Officer. Ms. Kazakova is responsible for the financial management of KMH and its subsidiary entities.
(d) Alexei Demidov — Director of Fleet Operations. Mr. Demidov manages the operational aspects of KMH's fleet, including vessel scheduling, maintenance, and crewing.
C. KMH's Counsel
17. In the underlying LCIA arbitration and in the enforcement proceedings in England and Wales, KMH has been represented by Harkness Whitford & Co., a law firm based in London, England, with offices at 12 Fetter Lane, London EC4A 1JP (SRA Registration No. 614823). The key personnel at Harkness Whitford & Co. involved in this matter are Richard Harkness (Senior Partner), Catherine Whitford (Partner, International Arbitration), and James Thornbury (Associate).
18. In Cyprus, KMH is represented by Vassiliadis & Economou LLC, Advocates, with offices at 7 Stasinou Avenue, 3rd Floor, Nicosia 1060, Cyprus. The key personnel at that firm are Georgios Vassiliadis (Managing Partner) and Eleni Economou (Partner). This is the firm to which the Applicant proposes to effect service of this application and any order made hereon, as KMH's identified Cyprus legal representatives.
III. THE ASSETS SUBJECT TO THIS APPLICATION
A. KMH's Shareholding in Oceangate Ventures Ltd.
19. Oceangate Ventures Ltd. ("Oceangate") is a private limited company incorporated in the Republic of Cyprus under Registration No. HE 401293, with its registered address at 28 Themistokli Dervi Avenue, Suite 604, Nicosia 1066, Cyprus. As confirmed by the extract from the Cyprus Registrar of Companies annexed as Exhibit D, KMH holds 100% of the issued share capital of Oceangate.
20. Oceangate functions as an intermediate holding company within the KMH group corporate structure. It does not itself engage in operational shipping activities. Rather, Oceangate holds shares in fleet SPV entities — single-purpose companies that are the registered owners of individual vessels in the KMH fleet. Through this intermediate holding structure, KMH exercises control over significant fleet assets while maintaining a layer of corporate separation between the parent entity and the vessel-owning SPVs.
21. The fleet SPV entities held through Oceangate include, but are not limited to:
(a) Dnepr Shipholding Inc., a company incorporated in the British Virgin Islands (Company No. 2014876), with its registered agent at Vantage Corporate Services Ltd., Road Town, Tortola, British Virgin Islands. Dnepr Shipholding Inc. is the registered owner of:
(i) M/V *Aegean Fortuna* (IMO 9784521), a Supramax Bulk Carrier of 58,200 DWT, flying the flag of the Republic of the marshall Islands; and
(ii) M/V *Volga Spirit* (IMO 9756892), a Panamax Bulk Carrier of 76,400 DWT, flying the flag of the Republic of Cyprus.
22. The Oceangate shares therefore represent a substantial asset in themselves and, critically, constitute the gateway through which KMH controls its fleet SPVs and the underlying vessel assets. The value of the Oceangate shares is directly linked to, and derived from, the market value of the vessels owned by the SPVs held through Oceangate, as well as any charter income, receivables, and other assets held at the SPV level.
23. The significance of the Oceangate shareholding as an enforcement target cannot be overstated. If KMH were permitted to transfer, encumber, or otherwise deal with its Oceangate shares — for example, by transferring them to another entity within the Volkov family's network of holding structures — the entire downstream chain of fleet assets would be placed beyond TSL's reach in so far as enforcement through the Cypriot corporate structure is concerned.
24. The existence and structure of KMH's ownership of Oceangate has been confirmed by asset tracing work conducted by Hartwell Pemberton LLP, a firm of forensic accountants and asset tracing specialists with offices at 25 Old Broad Street, London EC2N 1HN. Hartwell Pemberton was engaged by TSL to map KMH's corporate structure and identify assets available for enforcement. Their preliminary asset tracing report, dated 15 August 2024 and prepared by Rebecca Saunders (Partner) and Mark Huxley (Director), confirms the 100% ownership chain from KMH to Oceangate and from Oceangate to the fleet SPVs. The report is annexed as Exhibit E.
B. KMH's Cyprus Bank Accounts
25. KMH maintains one or more bank accounts in the Republic of Cyprus in the name of Korinthian Maritime Holdings Ltd. (HE 387421). The Applicant believes and avers, on the basis of the asset tracing work conducted by Hartwell Pemberton LLP, that these accounts hold material balances and are used in connection with KMH's shipping operations, including the receipt and disbursement of charter hire, operational expenditures, and intercompany transfers.
26. Similarly, Oceangate Ventures Ltd. (HE 401293) maintains one or more bank accounts in the Republic of Cyprus. As the intermediate holding company for the fleet SPVs, Oceangate's accounts may receive dividends, intercompany payments, and other funds from the downstream entities.
27. At this stage, the Applicant has not been able to identify the specific banks, branch locations, or account numbers at which KMH's and Oceangate's Cypriot accounts are held. The preliminary asset tracing report of Hartwell Pemberton LLP has identified the existence of these accounts and confirmed that material balances are held therein, but the precise details remain within the exclusive knowledge of KMH and its officers. For this reason, the Applicant respectfully requests that the freezing injunction be drafted to cover all accounts held in the name of either entity at any bank in the Republic of Cyprus, and further requests that an ancillary disclosure order be made requiring KMH to identify all such accounts, together with their balances, within a specified period.
28. The preservation of these bank account balances is essential. Without freezing relief, KMH could easily and rapidly transfer funds from its Cyprus accounts to accounts in other jurisdictions — particularly jurisdictions in which enforcement may be more difficult, such as the British Virgin Islands, the United Arab Emirates, or the Russian Federation — or to entities nominally unconnected to KMH but beneficially controlled by the Volkov family.
IV. BACKGROUND TO THE UNDERLYING DISPUTE AND THE LCIA AWARD
A. The Charter-Party Agreements
29. The underlying dispute arises from three time charter-party agreements entered into between TSL (as charterer) and KMH (as disponent owner) between 2019 and 2021 for the charter of three dry-bulk carriers. Each of the three charter-parties was governed by English law and contained an arbitration clause providing for the resolution of disputes by arbitration under the LCIA Rules, with London as the seat of arbitration.
30. The three charter-parties were as follows:
(a) Charter 1 — M/V *Aegean Fortuna: A time charter-party dated 15 March 2019 for the charter of the vessel M/V Aegean Fortuna* (IMO 9784521), a Supramax Bulk Carrier of 58,200 DWT flying the flag of the Republic of the marshall Islands. The SPV owner of the vessel was Dnepr Shipholding Inc. (BVI Company No. 2014876). The charter was for a period of three years with options for extension, at a daily hire rate reflecting prevailing market conditions at the time of fixing.
(b) Charter 2 — M/V *Crimson Horizon: A time charter-party dated 22 January 2020 for the charter of the vessel M/V Crimson Horizon* (IMO 9801334), a Handymax Bulk Carrier of 37,500 DWT flying the flag of the Republic of Liberia. The SPV owner of the vessel was Korinthian Bulkers (Singapore) Pte. Ltd. (80 Robinson Road, #14-02, Singapore 068898). The charter was for a period of two years with options, at agreed hire rates.
(c) Charter 3 — M/V *Volga Spirit: A time charter-party dated 10 June 2021 for the charter of the vessel M/V Volga Spirit* (IMO 9756892), a Panamax Bulk Carrier of 76,400 DWT flying the flag of the Republic of Cyprus. The SPV owner of the vessel was also Dnepr Shipholding Inc. (BVI Company No. 2014876). The charter was for a minimum period of two years at agreed hire rates.
31. Certified copies of each of the three charter-party agreements, including the LCIA arbitration clauses contained therein, are annexed as Exhibit B.
B. KMH's Breaches
32. Beginning in mid-2022, KMH engaged in a pattern of repudiatory breach of each of the three charter-parties. The nature and chronology of these breaches, as found by the LCIA tribunal in its Final Award, are summarized as follows:
(a) M/V *Aegean Fortuna* — Wrongful Early Redelivery: KMH wrongfully redelivered the M/V Aegean Fortuna to TSL on 18 June 2022, some fourteen (14) months prior to the earliest permissible redelivery date under the charter-party. KMH purported to exercise a right of early redelivery that did not exist under the terms of the charter, and the tribunal found that the redelivery was without contractual basis and constituted a repudiatory breach. This wrongful redelivery caused TSL to suffer significant loss, as the charter-party rate was substantially above the prevailing spot market rate at the time of redelivery, resulting in a loss of bargain that the tribunal quantified at £42,300,000.
(b) M/V *Crimson Horizon* — Failure to Pay Hire: From 1 July 2022 onward, KMH failed to make timely payment of hire for the M/V Crimson Horizon. Hire arrears accumulated to the sum of £4,280,000 before TSL exercised its contractual right to withdraw the vessel on 15 September 2022. The tribunal found that KMH's failure to pay hire was deliberate and without justification, and constituted a repudiatory breach entitling TSL to damages for loss of bargain in addition to the outstanding hire.
(c) M/V *Volga Spirit* — Fabricated Off-Hire Deductions: KMH made off-hire deductions from the hire payments due under the charter-party for the M/V Volga Spirit, purporting that the vessel had been off-hire for periods during which it was, in fact, fully operational and trading. The tribunal found that the off-hire deductions, totaling approximately £2,740,000, were fabricated — that is to say, the tribunal found as a matter of fact that KMH had knowingly and dishonestly asserted off-hire periods that had not occurred. This finding is of particular significance for the purposes of the present application, as it demonstrates a propensity for dishonest conduct on the part of KMH and its controllers.
33. The tribunal's findings in respect of these breaches are set out at length in the Award and are summarized in the affidavit of Elena Stavridis (Exhibit G). The cumulative effect of KMH's breaches was to deprive TSL of the benefit of three substantial charter-party contracts during a period of historically high freight rates, causing losses that the tribunal quantified in excess of £96 million inclusive of pre-award interest.
C. The LCIA Arbitration
34. TSL commenced arbitration proceedings against KMH by filing a Request for Arbitration with the LCIA on 14 November 2022 (LCIA Case Reference No. 224718). The Request for Arbitration invoked the LCIA arbitration clauses contained in each of the three charter-parties and sought damages for KMH's repudiatory breaches.
35. The tribunal was constituted on 8 February 2023 and comprised the following members:
(a) Sir Malcolm Fenton-Clarke — Presiding Arbitrator, appointed by the LCIA Court pursuant to Article 5.8 of the LCIA Rules. Sir Malcolm is a retired judge of the English Commercial Court and a highly experienced maritime arbitrator.
(b) Professor Athena Drakopoulos — Co-Arbitrator, nominated by TSL (the Claimant in the arbitration). Professor Drakopoulos is a professor of international commercial law at the University of Athens and a practising arbitrator.
(c) Dr. Henrik Dalmqvist — Co-Arbitrator, nominated by KMH (the Respondent in the arbitration). Dr. Dalmqvist is a Swedish maritime lawyer and arbitrator based in Stockholm.
(d) Ms. Fiona Beckett — Tribunal Secretary, appointed by the LCIA to assist the tribunal in the administration of the proceedings.
36. The arbitration proceeded through the full procedural stages contemplated by the LCIA Rules, including written submissions, disclosure of documents, witness statements, expert reports, and an oral evidentiary hearing. The evidentiary hearing took place from 11 September 2023 through 22 September 2023, a total of ten (10) hearing days, at the International Dispute Resolution Centre (IDRC) in London. Both parties were fully represented at the hearing — TSL by Calderwood & Harkness LLP, and KMH by Harkness Whitford & Co. (with the participation of Catherine Whitford, Partner, and James Thornbury, Associate, among other counsel).
37. It is an important feature of this application that KMH participated fully in the LCIA arbitration through experienced and reputable counsel. KMH nominated its own co-arbitrator, filed extensive written submissions and evidence, cross-examined TSL's witnesses, and presented its own case at the evidentiary hearing. The Award is therefore the product of a fully contested arbitration in which both parties had every opportunity to present their case.
D. The Award
38. The tribunal issued its Final Award on 28 June 2024. In a comprehensive and detailed award running to 187 pages, the tribunal found in favour of TSL on all material issues and awarded the following sums:
(a) Damages for wrongful early redelivery of M/V *Aegean Fortuna*: £42,300,000 (forty-two million three hundred thousand pounds sterling), representing TSL's loss of bargain as a result of the wrongful redelivery fourteen months before the earliest permissible date;
(b) Outstanding hire and damages for M/V *Crimson Horizon*: £28,150,000 (twenty-eight million one hundred and fifty thousand pounds sterling), comprising:
(i) Outstanding hire of £4,280,000; and (ii) Loss of bargain damages of £23,870,000;
(c) Restitution of fabricated off-hire deductions for M/V *Volga Spirit*: £2,740,000 (two million seven hundred and forty thousand pounds sterling);
(d) Loss of profit / market differential damages across all three charters: £16,480,000 (sixteen million four hundred and eighty thousand pounds sterling), reflecting the differential between the contractual hire rates and the rates at which TSL was able to re-let the vessels in the spot market following KMH's breaches;
(e) Pre-award interest: £6,780,000 (six million seven hundred and eighty thousand pounds sterling), calculated at 5.25% per annum simple from the respective dates of breach to the date of the Award;
(f) Total Award: £96,450,000 (ninety-six million four hundred and fifty thousand pounds sterling), which at the exchange rate prevailing on 28 June 2024 (£1 = USD $1.2441) is equivalent to approximately USD $120,000,000 (one hundred and twenty million United States dollars).
39. In respect of the costs of the arbitration, the tribunal ordered that costs be allocated 85% to KMH and 15% to TSL, reflecting TSL's near-total success on the merits. The costs allocation resulted in the following:
(a) LCIA administrative and tribunal costs: £3,240,000 (allocated 85% to KMH);
(b) TSL's legal costs (Calderwood & Harkness LLP and associated counsel): £8,910,000 (recovered in full from KMH);
(c) Total Costs: £12,150,000 (twelve million one hundred and fifty thousand pounds sterling).
40. The Grand Total of the Award inclusive of costs is therefore £108,600,000 (one hundred and eight million six hundred thousand pounds sterling).
41. Additionally, the tribunal ordered that post-award interest shall accrue at the rate of 5.25% per annum simple on the unpaid principal sum of £96,450,000 from 29 June 2024 (the day following the date of the Award) until the date of payment. At this rate, post-award interest accrues at approximately £13,874 per day, or approximately £5,064,000 per annum.
42. A certified copy of the Award is annexed as Exhibit A.
V. ENFORCEMENT PROCEEDINGS IN OTHER JURISDICTIONS
A. England and Wales
43. Following the issuance of the Award on 28 June 2024, TSL promptly initiated enforcement proceedings in England and Wales, the seat of the arbitration and the jurisdiction in which the most immediate enforcement tools are available. A summary of those proceedings, which are directly relevant to the present application, is set out below.
44. Application to Enforce Under Section 66 of the Arbitration Act 1996: On 15 July 2024, TSL filed an application in the Commercial Court of England and Wales (Queen's Bench Division) for permission to enforce the Award as a judgment of the court, pursuant to section 66 of the Arbitration Act 1996. The application was assigned Claim No. CL-2024-000487.
45. Worldwide Freezing Order: On 16 July 2024, Mr. Justice Ashworth of the Commercial Court granted, without notice to KMH, a Worldwide Freezing Order (the "WFO") restraining KMH from disposing of or dealing with any of its assets worldwide up to the value of £108,600,000. The WFO was granted on the basis that TSL had established both a good arguable case (in this instance, a final arbitral award in its favour) and a real risk of dissipation of assets.
46. The WFO was served on KMH at its London solicitors, Harkness Whitford & Co. A return date was set for 30 July 2024. On the return date, KMH appeared through counsel and opposed the continuation of the WFO. After hearing argument from both sides, Mr. Justice Ashworth continued the WFO with modifications, including the insertion of ordinary course of business exceptions and certain carve-outs for KMH's legal costs. The fact that the WFO was continued after contested argument — and not merely on an ex parte basis — is of significant relevance to this application, as it demonstrates that the English Commercial Court, having heard from both sides, was satisfied that there existed a real risk of dissipation warranting the continuation of worldwide freezing relief.
47. Permission to Enforce: On 2 August 2024, Mr. Justice Ashworth granted TSL permission to enforce the Award as a judgment of the Commercial Court pursuant to section 66 of the Arbitration Act 1996.
48. Interim Third-Party Debt Order: On 5 August 2024, an interim third-party debt order was granted against Meridian Trust Bank Ltd. (50 Lombard Street, London EC3V 9EA) in respect of accounts held at that bank in the name of KMH. This order was made in connection with the enforcement proceedings and is a further step in TSL's efforts to realize the sums due under the Award.
49. Ancillary Disclosure Provisions: The WFO includes ancillary disclosure provisions requiring KMH to disclose, within a specified period, all assets exceeding £25,000 in value held by KMH worldwide. Compliance with these disclosure provisions is relevant to TSL's ability to trace and preserve KMH's assets across jurisdictions. KMH's response to the disclosure provisions has, to date, been incomplete, a matter that is the subject of ongoing applications before the Commercial Court.
50. KMH's Set-Aside Application: On 19 August 2024, KMH filed an application to set aside or vary the Award under sections 68 and 69 of the Arbitration Act 1996, alleging serious irregularity and error of law. TSL's position is that the set-aside application is without merit and may itself constitute a delaying tactic designed to defer enforcement while KMH continues to restructure its assets. In any event, the filing of a set-aside application does not automatically stay enforcement, and the Commercial Court has not granted any stay of enforcement.
51. A certified copy of the WFO granted by Mr. Justice Ashworth on 16 July 2024, as continued on 30 July 2024, is annexed as Exhibit C.
B. Significance of the WFO for This Application
52. The existence of the WFO granted by the English Commercial Court is of direct and substantial significance for the present application. In granting and continuing the WFO, Mr. Justice Ashworth necessarily found, on the basis of the evidence before him, that:
(a) TSL has a good arguable case — indeed, more than a good arguable case, given the existence of a final and binding arbitral award in TSL's favour; and
(b) There exists a real risk of dissipation of KMH's assets, sufficient to justify the extraordinary remedy of a worldwide freezing order up to £108,600,000.
53. While this Honourable Court is of course not bound by the findings of the English Commercial Court, the existence of the WFO is a powerful indicator that the conditions for freezing relief are met. The same evidence of dissipation risk that persuaded Mr. Justice Ashworth to grant and continue the WFO is before this Court, supplemented by additional evidence specific to the Cyprus-based assets.
54. Moreover, the existence of the WFO demonstrates a practical and procedural need for complementary local freezing relief in Cyprus. Although the WFO is worldwide in scope and purports to restrain KMH's assets wherever situated, the practical reality is that a freezing order made by the English Commercial Court cannot, without more, be enforced against assets located in the Republic of Cyprus. Cypriot financial institutions, the Cyprus Registrar of Companies, and other third parties in Cyprus are not directly bound by an English court order. To give effect to the WFO in respect of KMH's Cyprus-based assets — in particular, the Oceangate shares and the Cyprus bank accounts — a local freezing order made by this Honourable Court is required.
55. The grant of local freezing relief in support of a worldwide freezing order made in the jurisdiction of the seat of arbitration is a well-recognized practice in international enforcement, and is precisely the type of complementary relief that the courts of Cyprus have jurisdiction and authority to grant.
VI. GROUNDS FOR THE FREEZING INJUNCTION
A. Good Arguable Case / Merits
56. The first requirement for the grant of a freezing injunction is that the applicant demonstrate a good arguable case on the merits of the underlying claim. In the present case, this threshold is more than satisfied.
57. TSL does not merely have a good arguable case; it holds a final and binding arbitral award in the sum of £96,450,000 plus costs of £12,150,000, rendered by a duly constituted tribunal of three eminent arbitrators under the LCIA Rules, with the seat of arbitration in London. The Award is subject to recognition and enforcement in the Republic of Cyprus under the New York Convention, as implemented by the Cyprus Arbitration Law, Cap. 4. An application for such recognition and enforcement has been filed in this Court (Case No. 2247/2024).
58. It is well established in Cypriot and English jurisprudence that a final, unreversed arbitral award from a reputable international arbitral institution constitutes the strongest possible basis for the "good arguable case" requirement. The existence of the Award means that the merits of TSL's claim have already been determined in its favour by an independent tribunal, after a fully contested hearing at which KMH was represented by experienced counsel and had every opportunity to present its case. The merits threshold for a freezing injunction is accordingly satisfied with room to spare.
59. The Award has not been set aside or varied by any court. While KMH has filed a set-aside application under sections 68 and 69 of the Arbitration Act 1996 in England, that application is at an early stage, no stay of enforcement has been granted, and TSL's position is that the set-aside application is without merit. In any event, the pendency of a set-aside application does not diminish the good arguable case established by the Award, particularly where no stay of enforcement has been granted.
60. KMH participated fully in the arbitration through its counsel, Harkness Whitford & Co., including through the active involvement of Catherine Whitford (Partner, International Arbitration) and James Thornbury (Associate). KMH nominated its own co-arbitrator, Dr. Henrik Dalmqvist, filed extensive written submissions and evidence, cross-examined TSL's witnesses at the evidentiary hearing, and made closing submissions. The Award is the product of a fair, transparent, and fully contested arbitral process.
B. Real Risk of Dissipation
61. The second and most critical requirement for the grant of a freezing injunction is that the applicant demonstrate a real risk that the respondent will dissipate, transfer, or otherwise deal with its assets so as to render any future judgment or enforcement order nugatory. The Applicant relies on the following grounds, both individually and cumulatively, to establish such a risk.
1. Pattern of Repudiatory Conduct and Dishonesty
62. The LCIA tribunal found, as a matter of fact, that KMH's underlying breaches of the charter-party agreements were not merely commercial defaults, but involved elements of dishonesty. In particular, the tribunal found that KMH had fabricated off-hire deductions totaling approximately £2,740,000 on the charter of the M/V Volga Spirit, asserting that the vessel had been off-hire for periods during which it was, in reality, fully operational and trading.
63. The tribunal's finding of fabrication — a finding made on the balance of probabilities after consideration of all the evidence and after KMH had the opportunity to respond — is not merely a finding of contractual breach. It is a finding that KMH, acting through its officers and agents, knowingly and dishonestly asserted false facts in order to obtain a financial advantage (namely, the reduction of its hire obligations to TSL). This finding demonstrates a propensity for dishonest conduct that is directly relevant to the assessment of dissipation risk.
64. It is well established in the jurisprudence that evidence of dishonesty or bad faith in the underlying transaction supports an inference that the respondent may be willing to act dishonestly in dealing with its assets to frustrate enforcement. A party that has been found to have fabricated claims for financial advantage cannot be trusted to act honestly in preserving its assets for the benefit of a judgment creditor. The tribunal's finding of fabrication accordingly constitutes powerful evidence in support of the risk of dissipation.
2. Complex Multi-Jurisdictional Corporate Structure Designed to Obscure Ownership
65. KMH holds its assets through a layered and complex corporate structure spanning multiple jurisdictions, designed to obscure the true beneficial ownership of the assets and to facilitate the rapid movement of assets between entities and jurisdictions. The jurisdictions in which KMH and its related entities are incorporated and operate include:
(a) British Virgin Islands: Dnepr Shipholding Inc. (Company No. 2014876), the SPV owner of the M/V Aegean Fortuna and the M/V Volga Spirit, is incorporated in the BVI — a jurisdiction known for its opacity and the difficulty of obtaining information about corporate structures and beneficial ownership.
(b) Singapore: Korinthian Bulkers (Singapore) Pte. Ltd., the SPV owner of the M/V Crimson Horizon, is incorporated and registered at 80 Robinson Road, #14-02, Singapore 068898.
(c) United Arab Emirates: Korinthian DMCC, a further entity within the KMH group, is registered at Unit 3407, Almas Tower, Jumeirah Lakes Towers (JLT), Dubai, UAE. The UAE is the jurisdiction in which Andrei Volkov, the ultimate beneficial owner of KMH, is understood to be resident.
(d) Cyprus: Oceangate Ventures Ltd. (HE 401293), the intermediate holding company discussed in Section III above, is incorporated in Cyprus.
66. The Volkov family — specifically Andrei Volkov (the ultimate beneficial owner) and Sergei Volkov (a registered director of KMH) — exercises beneficial ownership and control over the entire KMH group through a series of BVI and Cypriot holding structures. These structures are not designed for any legitimate commercial purpose that would require such complexity; rather, they are designed to obscure the ownership trail and to provide multiple mechanisms for the transfer and concealment of assets.
67. The existence of such a complex, multi-jurisdictional corporate structure is recognized in the jurisprudence as a factor that supports an inference of dissipation risk. Where a respondent holds its assets through a network of SPVs, holding companies, and trusts across multiple jurisdictions — particularly offshore jurisdictions with limited transparency — the court is entitled to infer that the respondent has both the means and the opportunity to dissipate assets rapidly and covertly, and that the risk of such dissipation is real and not merely theoretical.
3. Post-Award Asset Shifting
68. The evidence before this Court demonstrates that since the Award was issued on 28 June 2024, KMH has engaged in a pattern of active asset-shifting designed to place its assets beyond the reach of TSL's enforcement efforts. The specific instances of post-award asset-shifting relied upon by TSL include the following:
(a) Post-Award Transfers from KMH and Subsidiary Accounts: The preliminary asset tracing report of Hartwell Pemberton LLP (Exhibit E), dated 15 August 2024, has identified post-award transfers of funds from accounts held by KMH and its subsidiary entities to entities connected to Andrei Volkov that are not part of the KMH group. The report provides details of the transfers identified to date. The timing of these transfers — occurring after the issuance of a £96.45 million award against KMH — is highly suggestive of a deliberate campaign to dissipate assets in anticipation of enforcement.
(b) Attempted Sale of M/V *Crimson Horizon: Following the issuance of the Award, Korinthian Bulkers (Singapore) Pte. Ltd. — the SPV owner of the M/V Crimson Horizon* — made efforts to sell the vessel. TSL became aware of these efforts and was compelled to initiate emergency arrest proceedings in Singapore. The vessel was arrested on 20 August 2024 and remains under arrest. The attempted sale of a vessel that was the subject of the very charter-party dispute giving rise to the Award, occurring within weeks of the Award, is a clear and unambiguous indication of KMH's intention to dissipate its assets.
(c) Restructuring of Cypriot Entities and Re-Flagging of Vessels: The Applicant has obtained evidence, as set out in the asset tracing report of Hartwell Pemberton LLP and in the affidavit of Elena Stavridis, indicating that KMH has taken steps to restructure its Cypriot corporate entities and to re-flag certain of its vessels — that is, to change the flag state under which vessels are registered. The re-flagging of vessels is a technique commonly employed by vessel owners seeking to evade arrest or enforcement in a particular jurisdiction, as the flag state of a vessel may affect the jurisdictions in which the vessel can be arrested and the priority of maritime liens.
69. These post-award actions, taken individually and cumulatively, demonstrate an active and ongoing campaign by KMH and its controllers to place assets beyond the reach of TSL's enforcement efforts. They provide the most direct and compelling evidence of dissipation risk, going beyond mere inference and demonstrating that dissipation is not merely a risk but is already occurring.
4. Failure to Satisfy the Award Voluntarily
70. On 8 July 2024 — ten days after the Award was issued — Calderwood & Harkness LLP, acting on behalf of TSL, sent a formal demand for payment to Harkness Whitford & Co., acting on behalf of KMH. The demand letter (annexed as Exhibit F) called upon KMH to pay the full sums due under the Award, including the award of £96,450,000, costs of £12,150,000, and accruing post-award interest. The letter afforded KMH a reasonable period within which to respond and indicated that enforcement proceedings would be commenced in the event of non-payment.
71. As of the date of this application, KMH has failed to make any voluntary payment whatsoever toward the Award. KMH has not responded to the demand letter with any proposal for voluntary satisfaction, whether in whole or in part. KMH has not offered any form of security for the sums due. KMH has not proposed any payment plan or schedule. Instead, KMH has adopted a posture of complete non-payment while simultaneously engaging in asset-shifting activities and filing a set-aside application in England.
72. KMH's set-aside application, filed on 19 August 2024 under sections 68 and 69 of the Arbitration Act 1996, does not constitute a good reason for non-payment. The filing of a set-aside application does not automatically stay enforcement of an arbitral award, and no stay has been granted. The set-aside application may itself be a delaying tactic, designed to buy time for KMH to continue restructuring its assets and placing them beyond TSL's reach. In the absence of any voluntary payment, any offer of security, or any engagement with the demand for payment, KMH's conduct is consistent only with an intention to resist enforcement by all available means.
5. Significant Value of Assets at Stake in Cyprus
73. The assets at stake in Cyprus are of very substantial value. The Oceangate shares — representing KMH's 100% shareholding in the intermediate holding company that controls fleet SPVs owning multiple vessels — constitute one of the most valuable assets in the KMH corporate structure. The vessels owned by the SPVs held through Oceangate include the M/V Aegean Fortuna (58,200 DWT Supramax Bulk Carrier) and the M/V Volga Spirit (76,400 DWT Panamax Bulk Carrier), each of which has a market value in the tens of millions of United States dollars.
74. KMH's Cyprus bank accounts also contain material balances, as confirmed by the asset tracing work of Hartwell Pemberton LLP. These accounts represent liquid assets that can be transferred within minutes through electronic banking systems, making them particularly vulnerable to dissipation.
75. Without freezing relief, KMH could take any number of steps to remove these assets from the reach of enforcement, including:
(a) Transferring the Oceangate shares to another entity within the Volkov family's network of holding structures, or to a nominee;
(b) Liquidating or winding up Oceangate Ventures Ltd. and distributing its assets to entities beyond TSL's reach;
(c) Causing Oceangate to transfer its shareholdings in the fleet SPVs to other entities;
(d) Encumbering the Oceangate shares with security interests in favour of related parties or compliant lenders;
(e) Transferring funds from KMH's and Oceangate's Cyprus bank accounts to accounts in other jurisdictions, including offshore jurisdictions or jurisdictions in which enforcement would be impracticable.
76. The estimated pre-dispute net asset value of KMH was approximately USD $280 million. However, significant asset-shifting has already occurred post-award, and the value of remaining assets available for enforcement is uncertain and potentially declining. The preservation of every identifiable enforcement target — including, critically, the Cyprus-based assets — is therefore essential to ensure that TSL is able to recover even a portion of the sums due under the Award.
6. WFO in England Confirms Risk
77. As set out in Section V above, the Commercial Court of England and Wales has already found, on the basis of the same evidence now before this Court (and supplemented by additional evidence in the case of the Cyprus-specific matters), that there is a real risk of dissipation sufficient to justify a worldwide freezing order up to £108,600,000. That finding was made initially without notice on 16 July 2024 by Mr. Justice Ashworth, and was confirmed on the return date of 30 July 2024 after KMH had appeared and argued against the continuation of the WFO.
78. While this Court is not bound by the findings of the English Commercial Court, the fact that a senior judge of one of the world's leading commercial courts has found a real risk of dissipation — and has continued that finding after contested argument — is a matter of considerable weight. It provides independent corroboration of the risk that TSL identifies in this application and reinforces the need for local freezing relief in Cyprus.
C. Balance of Convenience / Justice of the Case
79. The third requirement for the grant of a freezing injunction is that the balance of convenience and the overall justice of the case favour the grant of relief. TSL submits that the balance decisively favours the grant of the injunction sought.
80. TSL is a substantial commercial enterprise operating a fleet of thirty-four vessels with annual revenues of approximately €620 million. It is not a speculative or vexatious litigant. It has obtained a final arbitral award in its favour from a highly respected international arbitral institution, after a fully contested arbitration before a distinguished tribunal. It is entitled to enforce that award and to take all lawful steps to preserve assets against which enforcement may be levied.
81. The injunction sought is protective in nature. It does not seek to dispose of any asset or to give TSL an advantage over other creditors. It merely seeks to preserve the status quo pending the determination of the Enforcement Application (Case No. 2247/2024). If the Enforcement Application succeeds — as TSL is confident it will, given the strength of the Award and the absence of any ground for refusal of enforcement under the New York Convention — the frozen assets will be available to satisfy the Award. If, for any reason, the Enforcement Application does not succeed, the freezing injunction will be discharged, and KMH will be entitled to deal with its assets as it pleases, subject to any undertaking as to damages.
82. KMH will suffer no prejudice from the grant of a freezing injunction, provided that the order includes appropriate exceptions. TSL acknowledges that the order should include reasonable exceptions for ordinary course business expenditure, payment of legal fees in connection with the enforcement proceedings and the set-aside application, and other matters necessary for the continued operation of KMH's business. TSL does not seek to paralyze KMH's operations; it seeks only to prevent KMH from transferring, encumbering, or dissipating the specific assets identified in this application so as to frustrate enforcement.
83. By contrast, the prejudice to TSL of not granting the injunction is severe and potentially irreversible. If KMH is permitted to transfer the Oceangate shares, liquidate or restructure its Cypriot entities, or move funds from its Cyprus bank accounts, the enforcement of the Award in Cyprus — and potentially the enforcement of the Award generally, given that Cyprus is one of the jurisdictions where significant assets are located — will be rendered nugatory. TSL will be left with a paper judgment of no practical value, having been deprived of its right to enforce a lawful arbitral award through the deliberate actions of a recalcitrant judgment debtor.
84. The justice of the case also favours the grant of relief. The tribunal found that KMH's breaches involved dishonesty; KMH has failed to make any voluntary payment toward the Award; KMH has engaged in post-award asset-shifting; and a worldwide freezing order is already in force in England. In these circumstances, it would be unjust to refuse local freezing relief in Cyprus and thereby to permit KMH to continue to erode the pool of assets available for enforcement.
85. TSL is prepared to give an undertaking as to damages in accordance with applicable Cyprus civil procedure, as set out in Section VIII below. This undertaking provides KMH with adequate protection in the event that the injunction is subsequently found to have been wrongly granted.
VII. SPECIFIC RELIEF SOUGHT
A. Orders Requested
86. For the reasons set out above, TSL respectfully requests that this Honourable Court make the following orders:
1. Freezing Injunction: An interim freezing injunction prohibiting KMH (Cyprus Registration No. HE 387421) and any person acting on its behalf, on its instructions, or in concert with it, from selling, transferring, assigning, charging, encumbering, pledging, diminishing, or otherwise disposing of or dealing with the following assets:
(a) KMH's entire shareholding (being 100% of the issued share capital) in Oceangate Ventures Ltd. (Cyprus Registration No. HE 401293), including without limitation any rights to dividends, distributions, capital returns, or voting rights attached to such shares, and any rights under any shareholders' agreement or articles of association relating thereto;
(b) All monies, funds, deposits, balances, securities, investments, and other assets held in any bank account, investment account, custody account, or other financial account in the Republic of Cyprus in the name of Korinthian Maritime Holdings Ltd. (HE 387421), whether held solely or jointly, and whether in pounds sterling, euros, United States dollars, or any other currency;
(c) All monies, funds, deposits, balances, securities, investments, and other assets held in any bank account, investment account, custody account, or other financial account in the Republic of Cyprus in the name of Oceangate Ventures Ltd. (HE 401293), whether held solely or jointly, and whether in pounds sterling, euros, United States dollars, or any other currency.
2. Notification to the Registrar of Companies: An order that the Registrar of Companies of the Republic of Cyprus be notified of this injunction and be directed not to register any transfer, charge, pledge, encumbrance, or other dealing in respect of the shares of Oceangate Ventures Ltd. (HE 401293) without the prior leave of this Honourable Court.
3. Disclosure Order: An order requiring KMH, within fourteen (14) days of service of this order, to file and serve on the Applicant's legal representatives an affidavit verified on oath disclosing all assets held by KMH (HE 387421) and Oceangate Ventures Ltd. (HE 401293) in the Republic of Cyprus, including without limitation:
(a) All bank accounts (including the name of each bank, the branch, the account number, the currency, and the current balance);
(b) All shareholdings (including the name of each company, the registration number, the number and class of shares held, and the estimated value);
(c) All receivables, debts due, and contractual entitlements;
(d) All real property, vehicles, and other tangible assets; and
(e) Any other property or asset of any nature and description.
4. Liberty to Apply: Liberty to KMH to apply to vary or discharge this injunction on giving not less than forty-eight (48) hours' written notice to the Applicant's legal representatives at Kyprianos Makrides & Partners, 15 Grivas Digenis Avenue, Nicosia 1066, Cyprus.
5. Costs: The costs of and incidental to this application to be reserved to the hearing of the Enforcement Application (Case No. 2247/2024) or further order of this Honourable Court.
B. Maximum Value of Restrained Assets