PRIVILEGED AND CONFIDENTIAL — SUBJECT TO LEGAL PROFESSIONAL PRIVILEGE
CALDERWOOD & HARKNESS LLP Solicitors and International Arbitration Counsel 45 Moorgate London EC2R 6AR United Kingdom
Tel: +44 (0)20 7496 8200
Fax: +44 (0)20 7496 8201
www.calderwoodharkness.com
6 August 2024
By Email and International Courier
Mr. Andreas Kyprianos Senior Partner Kyprianos Makrides & Partners 15 Grivas Digenis Avenue Nicosia 1066 Cyprus
Re: Enforcement of LCIA Award No. 224718 — *Thalassa Shipping & Logistics SA v. Korinthian Maritime Holdings Ltd.* — Instruction for Cyprus Recognition, Enforcement, and Interim Relief
Dear Mr. Kyprianos,
1. Introduction and Purpose of This Letter
We write to you on behalf of our client, Thalassa Shipping & Logistics SA ("TSL"), a Société Anonyme organised under the laws of the Hellenic Republic, with its registered and principal offices at 14 Akti Miaouli, 4th Floor, Piraeus 185 35, Greece (Tax Identification Number / AFM: EL-801456729). Calderwood & Harkness LLP ("C&H") acts as TSL's international counsel and has done so throughout the underlying arbitration and the post-award enforcement proceedings described in this letter.
By way of brief background, TSL is a privately held strategic shipping and logistics company founded in 1987 by the Papadimitriou family. TSL operates a modern and diversified fleet of thirty-four (34) vessels, comprising bulk carriers, tankers, and container feeders, and reported annual revenues of approximately €620 million for the financial year ending 31 December 2023. TSL's shares are held 72% by the Papadimitriou Family Trust (a discretionary trust established under the laws of Guernsey) and 28% by Aegean Capital Partners SA, a Greek institutional investor. TSL is a well-established and reputable participant in the international shipping market, and its enforcement of the award described below is pursued in the ordinary course of protecting its commercial interests and contractual rights.
The purpose of this letter is to formally instruct Kyprianos Makrides & Partners ("KM&P") as our Cyprus local enforcement counsel to pursue, on an urgent basis, the following objectives:
(a) the recognition and enforcement in the Republic of Cyprus of the Final Award dated 28 June 2024 issued by the arbitral tribunal in LCIA Case No. 224718 (the "Award"), in favour of TSL and against Korinthian Maritime Holdings Ltd. ("KMH");
(b) the obtaining of interim freezing relief (mareva-type injunction) over KMH's Cyprus-based assets, including in particular its shareholding in Oceangate Ventures Ltd. and its Cyprus bank accounts; and
(c) the planning and preparation for execution against KMH's Cyprus assets once the enforcement order has been obtained.
The instruction is given in circumstances of considerable urgency. As set out in greater detail below, there is compelling evidence that KMH is actively dissipating assets in order to frustrate enforcement of the Award. The English Commercial Court has already found a real risk of dissipation and has granted a Worldwide Freezing Order ("WFO") restraining KMH's assets globally. We are gravely concerned that, absent immediate protective measures in Cyprus, KMH will seek to restructure or strip its Cypriot holding structures, thereby rendering the Award unenforceable against assets within your jurisdiction.
For purposes of day-to-day coordination, TSL's key contacts for this matter are as follows:
• Ioanna Christodoulou, General Counsel, Thalassa Shipping & Logistics SA (in-house), email: i.christodoulou@thalassashipping.gr, tel: +30 210 4291 580;
• Samuel Eklund, Responsible Partner, Calderwood & Harkness LLP, email: s.eklund@calderwoodharkness.com, tel: +44 (0)20 7496 8210;
• Hannah Brinkley, Lead Associate, Calderwood & Harkness LLP (primary contact for day-to-day coordination), email: h.brinkley@calderwoodharkness.com, tel: +44 (0)20 7496 8237; and
• Patrick Gallagher, Working Associate, Calderwood & Harkness LLP, email: p.gallagher@calderwoodharkness.com, tel: +44 (0)20 7496 8245.
KM&P has been recommended and selected as Cyprus local counsel for this matter on the basis of your firm's well-regarded expertise in international enforcement proceedings and Cyprus commercial litigation. This engagement is to be coordinated through and under the direction of Calderwood & Harkness LLP, and all substantive steps and filings should be approved by C&H before submission to any court or delivery to any opposing party.
2. Background to the Dispute and Arbitration
We set out below a detailed summary of the factual and procedural background to the dispute. This summary is intended to provide KM&P with sufficient context to prepare the enforcement and freezing applications. The full evidentiary record is contained in the Award itself and the supporting documentation enclosed with this letter.
2.1 The Charter-Party Agreements
TSL entered into three separate time charter-party agreements with Korinthian Maritime Holdings Ltd. ("KMH"), a private limited company incorporated in Nicosia, Cyprus, bearing Registration Number HE 387421, with its registered office at 28 Themistokli Dervi Avenue, Suite 601, Nicosia 1066, Cyprus. KMH is beneficially owned by the Volkov family through a network of British Virgin Islands and Cypriot holding structures. Andrei Volkov is the ultimate beneficial owner ("UBO") of KMH and is understood to exercise de facto control over the company's affairs, notwithstanding that he does not hold any formal directorship. Sergei Volkov, Andrei Volkov's son, serves as a director of KMH and is involved in its day-to-day management alongside other key personnel identified at Section 4.3 below.
The three charter-party agreements at the centre of the dispute are as follows:
(i) M/V *Aegean Fortuna (IMO No. 9784521, Supramax Bulk Carrier, 58,200 DWT, flag state: Republic of the marshall Islands): Time charter-party dated 15 March 2019, entered into between TSL as charterer and KMH as disponent owner, for a period of sixty (60) months at a daily hire rate of USD $18,750 (the "Aegean Fortuna Charter*").
(ii) M/V *Crimson Horizon (IMO No. 9801334, Handymax Bulk Carrier, 37,500 DWT, flag state: Republic of Liberia): Time charter-party dated 22 January 2020, entered into between TSL as charterer and KMH as disponent owner, for a period of thirty-six (36) months at a daily hire rate of USD $14,250 (the "Crimson Horizon Charter*").
(iii) M/V *Volga Spirit (IMO No. 9756892, Panamax Bulk Carrier, 76,400 DWT, flag state: Republic of Cyprus): Time charter-party dated 10 June 2021, entered into between TSL as charterer and KMH as disponent owner, for a period of forty-eight (48) months at a daily hire rate of USD $22,100 (the "Volga Spirit Charter*").
All three charter-party agreements are governed by English law. Each contains a materially identical dispute resolution clause providing for arbitration under the rules of the London Court of International Arbitration ("LCIA"), with the seat of arbitration in London, England. KMH acted as the disponent owner of all three vessels, having sub-chartered them to TSL from the respective registered owning companies (vessel-owning special purpose vehicles held through the intermediate holding company Oceangate Ventures Ltd., as described in further detail at Section 4.2 below).
2.2 KMH's Breaches
Beginning in mid-2022, KMH engaged in a course of conduct constituting repudiatory breach of all three charter-party agreements. The breaches, as found by the Tribunal and reflected in the Award, may be summarised as follows:
(a) Wrongful early redelivery of M/V *Aegean Fortuna*: On or about 18 June 2022, KMH wrongfully and without contractual justification effected an early redelivery of the M/V Aegean Fortuna to TSL, approximately fourteen (14) months before the contractual redelivery date. The early redelivery was not consented to by TSL and was carried out in breach of the minimum period and redelivery notice provisions of the Aegean Fortuna Charter. The Tribunal found that this constituted a renunciatory breach and that KMH had no legitimate basis for the early redelivery.
(b) Failure to pay hire on M/V *Crimson Horizon*: KMH ceased making hire payments due under the Crimson Horizon Charter from 1 July 2022 onwards. Despite repeated demands from TSL, hire arrears of £4,280,000 accrued before TSL exercised its contractual right to withdraw the vessel on 15 September 2022. The Tribunal found KMH's non-payment to be deliberate and without justification.
(c) Fabricated off-hire deductions on M/V *Volga Spirit*: KMH purported to make off-hire deductions totalling approximately £2,740,000 under the Volga Spirit Charter, claiming that the vessel was off-hire for alleged mechanical deficiencies and port delays. The Tribunal found, on the basis of the expert evidence and contemporaneous documentary record, that these off-hire deductions were fabricated and that the underlying claims of mechanical deficiency were unsupported by any credible evidence. The Tribunal characterised KMH's conduct as a "cynical attempt to manufacture deductions to offset its own financial difficulties."
The Tribunal's findings on liability were emphatic and unequivocal. KMH's breaches were found to be deliberate, calculated, and part of a broader strategy to extract itself from contractual commitments that had become commercially unfavourable to it.
2.3 The LCIA Arbitration
TSL filed its Request for Arbitration with the LCIA on 14 November 2022, commencing LCIA Case No. 224718. All three charter-party disputes were consolidated into a single arbitration by agreement of the parties. The arbitral tribunal was constituted on 8 February 2023, comprising the following members:
• Presiding Arbitrator: Sir Malcolm Fenton-Clarke (appointed by the LCIA Court);
• Co-Arbitrator (Claimant-nominated): Professor Athena Drakopoulos;
• Co-Arbitrator (Respondent-nominated): Dr. Henrik Dalmqvist; and
• Tribunal Secretary: Ms. Fiona Beckett.
The arbitration proceeded through a full exchange of written pleadings, factual and expert witness statements, and document production. The evidentiary hearing took place over ten (10) hearing days, from 11 to 22 September 2023, at the International Dispute Resolution Centre ("IDRC") in London. Both parties were fully represented throughout the proceedings and had ample opportunity to present their respective cases.
KMH was represented throughout the arbitration by Harkness Whitford & Co., solicitors, of 12 Fetter Lane, London EC4A 1JP (SRA Registration No. 614823), with Catherine Whitford (Senior Partner) and Richard Harkness (Partner) serving as lead counsel. KMH's legal team was present and actively participated at every stage of the proceedings, including the filing of a detailed Statement of Defence and Counterclaim, the submission of factual and expert witness evidence, extensive cross-examination at the evidentiary hearing, and post-hearing written submissions. There is no question whatsoever that KMH was afforded full due process and had every opportunity to present its case before the Tribunal.
2.4 The Final Award
The Final Award was issued by the Tribunal on 28 June 2024. The Tribunal found unanimously in favour of TSL on all heads of claim and dismissed KMH's counterclaim in its entirety. The amounts awarded to TSL are as follows:
At the prevailing exchange rate as of the date of the Award (£1 = USD $1.2441 on 28 June 2024), the Total Award is equivalent to approximately USD $120,000,000.
In addition, the Tribunal allocated 85% of the costs of the arbitration to KMH, awarding TSL the following sums:
The Grand Total of the Award, inclusive of damages, interest, and costs, is therefore £108,600,000.
The Award further provides for post-award interest at a rate of 5.25% per annum simple on all unpaid sums from 29 June 2024 until the date of payment. We note that, as of the date of this letter, post-award interest is accruing at a rate of approximately £13,878 per day on the principal damages award alone.
A certified copy of the Award is enclosed with this letter as Enclosure 1.
3. Enforcement Actions Already Commenced in Other Jurisdictions
TSL is pursuing a comprehensive, multi-jurisdictional enforcement strategy, coordinated centrally by C&H from London, in order to maximise the prospects of full recovery of the amounts due under the Award. Enforcement proceedings are being commenced or prepared simultaneously in the following jurisdictions:
(a) England and Wales; (b) Republic of Cyprus (the subject of this instruction); (c) Republic of Singapore; and (d) United Arab Emirates.
This approach is dictated by the geographic spread of KMH's known assets and the urgent need to prevent further dissipation.
3.1 England and Wales
The English enforcement proceedings are the most advanced. The following steps have already been taken:
(i) On 15 July 2024, TSL filed an application for permission to enforce the Award as a judgment of the court under section 66 of the Arbitration Act 1996, in the Commercial Court of the Queen's Bench Division of the High Court of Justice (Claim No. CL-2024-000487).
(ii) On 16 July 2024, TSL obtained, without notice to KMH, a Worldwide Freezing Order ("WFO") from Mr. Justice Ashworth in the Commercial Court, restraining KMH from removing from England and Wales, or in any way disposing of, dealing with, or diminishing the value of, its assets worldwide up to the value of £108,600,000. The WFO was granted on the basis of evidence demonstrating a real risk of dissipation, including evidence of post-award transfers of funds and the attempted sale of the M/V Crimson Horizon. The return date for the WFO was set for 30 July 2024.
(iii) On 30 July 2024, at the return date hearing, the WFO was continued by Mr. Justice Ashworth following a contested hearing at which KMH appeared through Harkness Whitford & Co. and opposed the continuation of the WFO. The court found that the risk of dissipation was amply demonstrated and that there was no proper basis for discharging or varying the order.
(iv) On 2 August 2024, Mr. Justice Ashworth granted permission to enforce the Award as a judgment of the Commercial Court, pursuant to section 66 of the Arbitration Act 1996.
(v) On 5 August 2024, the Commercial Court granted an interim third-party debt order against Meridian Trust Bank Ltd. (50 Lombard Street, London EC3V 9EA) in respect of bank accounts held by KMH at that institution. The interim order freezes the funds standing to the credit of KMH's accounts at Meridian Trust Bank and prohibits Meridian Trust Bank from making any payment out of the accounts pending the final determination of the third-party debt order application.
As of the date of this letter, KMH has not voluntarily satisfied any part of the Award. It has not made any payment, offered any security, or indicated any willingness to engage constructively on the question of satisfaction. The urgency of the Cyprus filing is underscored by strong evidence of post-award asset dissipation, as detailed in the enclosed preliminary Asset Tracing Report prepared by Hartwell Pemberton LLP, forensic accountants (25 Old Broad Street, London EC2N 1HN). We draw KM&P's attention in particular to the report's findings concerning transfers of funds from KMH accounts to entities controlled by the Volkov family, and the restructuring of Cypriot holding entities, in the period immediately following the issuance of the Award.
3.2 Singapore and the United Arab Emirates
Enforcement instructions are being prepared in parallel for Singapore and the UAE. Straits Meridian LLP has been engaged as local counsel in Singapore, and Al-Rashid Hatem & Associates has been engaged as local counsel in the UAE. In Singapore, an application for the arrest of the M/V Crimson Horizon (which was berthed in Singapore at the relevant time) has already been made. In the UAE, enforcement proceedings will target KMH's known banking relationships in Dubai. C&H is coordinating the timing and sequencing of all jurisdictional filings to ensure maximum impact and to prevent KMH from engaging in forum-shopping or pre-emptive asset-shifting.
4. Identification of KMH's Cyprus Assets — Targets for Enforcement
The following section identifies the principal Cyprus-based assets against which enforcement is to be pursued. The information set out below is derived from publicly available corporate registry records, the Hartwell Pemberton asset tracing report, and TSL's own commercial knowledge.
4.1 Korinthian Maritime Holdings Ltd. — Direct Cyprus Presence
KMH is itself a Cyprus-incorporated company (Registration No. HE 387421), with its registered office at 28 Themistokli Dervi Avenue, Suite 601, Nicosia 1066, Cyprus. As a Cypriot-registered entity, KMH is directly subject to the jurisdiction of the Cypriot courts for purposes of recognition, enforcement, and execution.
KMH is understood to hold bank accounts in Cyprus at one or more Cypriot banking institutions. Specific account details — including the identities of the banks, account numbers, and approximate balances — are the subject of ongoing tracing work being conducted by Hartwell Pemberton LLP. Preliminary findings are set out in the enclosed interim Asset Tracing Report (Enclosure 8), and we expect further and more specific information to be available within the coming weeks. As soon as account details are confirmed, we will provide them to KM&P for inclusion in the freezing injunction application and for purposes of subsequent garnishment proceedings.
We note that KMH's Cyprus counsel is understood to be Vassiliadis & Economou LLC ("V&E"), with offices at 7 Stasinou Avenue, 3rd Floor, Nicosia 1060, Cyprus. The key personnel at V&E are Georgios Vassiliadis (Managing Partner) and Eleni Economou (Partner). V&E is expected to be instructed by KMH to oppose the enforcement application and the freezing injunction application. We ask that KM&P confirm whether V&E has already been placed on notice of the English WFO or any other aspect of the enforcement proceedings.
4.2 Oceangate Ventures Ltd.
Oceangate Ventures Ltd. ("Oceangate") is a Cyprus-incorporated private limited company (Registration No. HE 401293), with its registered office at 28 Themistokli Dervi Avenue, Suite 604, Nicosia 1066, Cyprus — the same building as KMH's registered office, but a different suite. Oceangate is wholly owned by KMH and serves as an intermediate holding company within the KMH group structure, sitting between KMH and the individual vessel-owning special purpose vehicles ("SPVs") that hold title to the vessels in KMH's fleet.
The SPVs held through Oceangate include, among others:
• Dnepr Shipholding Inc., a British Virgin Islands company (BVI Company No. 2014876), which is the registered owner of the M/V Aegean Fortuna (IMO 9784521) and the M/V Volga Spirit (IMO 9756892); and
• Other fleet SPVs whose identities and details are currently being confirmed through Hartwell Pemberton's ongoing tracing work.
KMH's shares in Oceangate represent a significant and highly valuable enforcement target. The underlying vessel assets held through Oceangate's subsidiaries are substantial. We have instructed Northcape Maritime Advisory Ltd., a specialist maritime valuation firm, to provide formal vessel valuations in respect of the vessels held through the Oceangate structure, and we expect their report to be available within the next two to three weeks. On a preliminary basis, and drawing on publicly available market data and broker estimates, we estimate the aggregate value of the fleet assets underlying the Oceangate shareholding to be well in excess of USD $150,000,000. A forced sale of KMH's shares in Oceangate, or the appointment of a receiver over those shares, would therefore provide a meaningful avenue for recovery of a substantial portion of the amounts due under the Award.
We wish to emphasise the importance of securing a freezing order over the Oceangate shares as a matter of the highest urgency. If KMH is permitted to transfer its shares in Oceangate — whether to another Volkov-controlled entity or to a third party — the value of this enforcement target will be lost.
4.3 KMH's Key Personnel in Cyprus
The following individuals are known to be key personnel of KMH and are believed to be based in or regularly present in Cyprus:
• Marina Kazakova, Chief Financial Officer of KMH;
• Alexei Demidov, Director of Fleet Operations of KMH; and
• Sergei Volkov, Director of KMH (son of Andrei Volkov, UBO).
These individuals may need to be served with court documents, or may be relevant for purposes of disclosure or examination proceedings (for example, oral examination as to assets). We would be grateful if KM&P could advise on the availability of such procedures under Cypriot law and on the practical steps required to compel the attendance and cooperation of these individuals.
5. Instructions — Application for Recognition and Enforcement
5.1 Legal Basis
The recognition and enforcement application should be filed on the basis of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 10 June 1958) (the "New York Convention"), as implemented in the domestic law of the Republic of Cyprus through the International Commercial Arbitration Law of 1987 (Law 101/1987) and the relevant provisions of the Cyprus Arbitration Law, Cap. 4 (as amended).
The Award is a foreign arbitral award within the meaning of the New York Convention. The seat of the arbitration was London, England, and the Award was made in the territory of a state (the United Kingdom) other than the state where recognition and enforcement is sought (the Republic of Cyprus). Both the United Kingdom and the Republic of Cyprus are Contracting States to the New York Convention. There are no reservations applicable to the recognition and enforcement of this Award.
The application should seek recognition and enforcement of the full amount of the Award and costs, namely £108,600,000, together with post-award interest at the rate of 5.25% per annum simple on the principal sum of £96,450,000, running from 29 June 2024 until the date of full payment. We request that KM&P confirm whether the Cypriot courts will enforce the Award in pounds sterling or whether conversion to euros will be required, and if so, at what exchange rate and as of what date.
5.2 Court and Filing
We understand that the appropriate court for the filing of the recognition and enforcement application is the Nicosia District Court, given that KMH's registered office is within the Nicosia district. Please confirm that this is correct and advise on any procedural requirements specific to the Nicosia District Court, including filing fees and any particular formatting or documentary requirements.
We request that the application be filed as promptly as possible, and ideally no later than 9 August 2024. Given the evidence of ongoing asset dissipation and the urgency of the matter, every day of delay increases the risk of further prejudice to TSL's enforcement prospects.
We understand that, under Cypriot procedure, the recognition and enforcement application may be made ex parte in the first instance, with notice to KMH (or its counsel at V&E) to be given thereafter. Please confirm the procedural sequence, including the period within which KMH will be permitted to file any opposition, and the timeline for the hearing of any such opposition.
5.3 Required Documentation
Enclosed with this letter (via international courier, expected to arrive by 8 August 2024) are the following certified documents for use in the enforcement application:
1. Certified copy of LCIA Final Award No. 224718, dated 28 June 2024, bearing the signatures of the three arbitrators and certified by the LCIA Registrar (Enclosure 1);
2. Certified copies of the three charter-party agreements containing the LCIA arbitration clauses, dated 15 March 2019, 22 January 2020, and 10 June 2021, respectively (Enclosure 2);
3. Certificate from the LCIA Registrar confirming the authenticity of the Award and its issuance in accordance with the LCIA Rules (Enclosure 3);
4. Certified English-to-Greek translations of the Award and the arbitration agreements, prepared by an accredited translator — please confirm whether such translations are required by the Nicosia District Court, or whether the English originals will be accepted without translation (if translations are not required, we will withdraw this enclosure to avoid unnecessary expense) (Enclosure 10, if applicable);
5. Sealed copy of the Worldwide Freezing Order granted by Mr. Justice Ashworth on 16 July 2024 in the Commercial Court (CL-2024-000487) (Enclosure 4);
6. Preliminary Asset Tracing Report from Hartwell Pemberton LLP dated approximately 1 August 2024 (for information and for use in the freezing injunction application — an interim version is enclosed; the final version, incorporating the most recent tracing findings, will follow under separate cover) (Enclosure 8).
Please advise at the earliest opportunity if any additional documentation, legalisation, apostille, or translation is required under Cypriot procedural rules for the enforcement application. All enclosed documents have been apostilled in accordance with the Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents, but we wish to confirm that this is sufficient and that no further consularisation or certification is needed.
5.4 Anticipated Opposition
We anticipate that KMH, acting through Vassiliadis & Economou LLC, will vigorously oppose the recognition and enforcement application. Based on our experience in the arbitration and the post-award English proceedings, we expect the likely grounds of opposition to include one or more of the following, all of which we consider to be without merit:
(a) Article V(1)(b) — Lack of proper notice or inability to present its case: KMH may argue that it was not given proper notice of the arbitral proceedings or was otherwise unable to present its case. Any such argument would be entirely without foundation. KMH was represented throughout the arbitration by experienced and well-regarded English solicitors (Harkness Whitford & Co.) and participated fully and actively in every stage of the proceedings, including a ten-day evidentiary hearing at which KMH called factual and expert witnesses and conducted extensive cross-examination of TSL's witnesses.
(b) Article V(1)(c) — Excess of tribunal jurisdiction: KMH may contend that the Award deals with matters not falling within the terms of the submission to arbitration or exceeds the scope of the arbitration agreement. The Tribunal considered and rejected KMH's jurisdictional objections in the Award, and the consolidation of the three charter disputes was effected by agreement of the parties.
(c) Article V(2)(b) — Public policy: KMH may attempt to invoke the public policy defence, arguing that enforcement of the Award would be contrary to the public policy of the Republic of Cyprus. This ground is narrowly construed and is reserved for cases involving the most fundamental principles of the forum state. There is nothing in the Award or the underlying proceedings that could conceivably engage this defence.
We consider all such grounds to be manifestly without merit. KMH was afforded full due process throughout the arbitration, the Tribunal was properly constituted in accordance with the LCIA Rules, and the Award is the product of a fair, balanced, and thorough adjudicative process. We will provide detailed written submissions on each anticipated ground of opposition once KMH's actual objections are known and filed.
Please advise on the expected timeline for the opposition process and the hearing of any contested enforcement application before the Nicosia District Court, including typical timeframes for filing of opposition, exchange of evidence, and the hearing itself.
6. Instructions — Freezing Injunction Application (Interim Relief)
6.1 Scope of Freezing Relief Sought
Simultaneously with, or immediately following the filing of, the enforcement application, we instruct KM&P to apply for an interim freezing injunction (mareva-type order) in the Nicosia District Court, restraining KMH from dealing with, disposing of, transferring, charging, encumbering, or otherwise diminishing the value of the following Cyprus-based assets:
(a) All shares held by KMH, whether directly or indirectly, in Oceangate Ventures Ltd. (Registration No. HE 401293), together with any dividends, distributions, or other proceeds derived from those shares;
(b) All bank accounts held by KMH in the Republic of Cyprus, at any Cypriot banking institution, including without limitation current accounts, deposit accounts, savings accounts, and any other form of account in any currency — the specific account details of which are being confirmed from the ongoing Hartwell Pemberton tracing exercise and will be communicated to KM&P as soon as available;
(c) Any other assets of KMH within the jurisdiction of the Republic of Cyprus, whether in its own name or held through nominees, agents, or otherwise for its benefit.
The freezing order should restrain KMH from dealing with the foregoing assets up to the full value of the Award, costs, and accruing post-award interest — that is, up to the value of £108,600,000 plus accruing post-award interest at 5.25% per annum simple from 29 June 2024. We understand that the Cypriot court may express the value ceiling in euros; if so, please convert at the prevailing exchange rate on the date of filing.
6.2 Grounds for Freezing Relief
The application for freezing relief is supported by compelling evidence of a real and substantial risk of dissipation. The grounds for the application may be summarised as follows:
(a) Post-award transfers of funds: Evidence gathered by Hartwell Pemberton LLP indicates that, in the period immediately following the issuance of the Award on 28 June 2024, significant sums were transferred from KMH's bank accounts to entities controlled by the Volkov family. The nature, timing, and destinations of these transfers are consistent with a deliberate strategy to place assets beyond the reach of TSL's enforcement efforts.
(b) Attempted sale of M/V *Crimson Horizon*: Following the issuance of the Award, KMH (through its fleet SPV) took steps to sell the M/V Crimson Horizon to an unrelated third party. The vessel was arrested in Singapore by Straits Meridian LLP on behalf of TSL, thereby preventing the sale from completing. The attempted disposal of a major fleet asset in the immediate aftermath of the Award is powerful evidence of an intention to dissipate.
(c) Restructuring of Cypriot holding entities: Hartwell Pemberton has identified evidence suggesting that KMH has been taking steps to restructure its Cypriot holding entities, including Oceangate Ventures Ltd., potentially with a view to transferring the ownership of vessel SPVs out of the existing corporate structure. The details of these restructuring steps are set out in the enclosed preliminary Asset Tracing Report.
(d) The Worldwide Freezing Order granted in England: The WFO granted by Mr. Justice Ashworth on 16 July 2024, and continued on the return date of 30 July 2024, constitutes strong and directly relevant supporting evidence. In granting and continuing the WFO, the English Commercial Court found that there was a real risk of dissipation on the part of KMH. The reasoning and findings of the English court should carry significant weight with the Cypriot court.
(e) Failure to satisfy the Award: The amount of the Award (£108,600,000, approximately USD $135,000,000 with accruing interest) is very substantial. KMH has taken no steps whatsoever to satisfy any part of the Award, has offered no payment or security, and has not engaged in any negotiations regarding satisfaction. This inaction, combined with the evidence of affirmative steps to dissipate assets, amply demonstrates that KMH does not intend to honour the Award.
(f) Decline in asset base: KMH's estimated pre-dispute net asset value was approximately USD $280,000,000. However, significant asset-shifting has occurred in the post-award period, and we are concerned that KMH's net asset base within reach of TSL's enforcement proceedings has been materially depleted.
6.3 Supporting Evidence
We will prepare a supporting affidavit of Elena Stavridis (Chief Financial Officer of TSL), who has direct knowledge of the commercial relationship between TSL and KMH, the amounts owed under the Award, and the evidence of dissipation. Please advise on the required form and content of such an affidavit under Cypriot civil procedure rules, including:
• whether the affidavit must be sworn before a particular officer or notary;
• whether it must be in Greek or whether an English-language affidavit with a certified translation is acceptable;
• any specific requirements as to exhibits and their authentication; and
• whether a statement of truth or declaration may be substituted for a sworn affidavit.
In addition to the Stavridis affidavit, we will provide the following supporting evidence for the freezing injunction application:
• Extracts from the Hartwell Pemberton Asset Tracing Report, documenting the post-award fund transfers and restructuring activities described above;
• A certified copy of the Worldwide Freezing Order granted by the English Commercial Court on 16 July 2024 and continued on 30 July 2024;
• A copy of the judgment or transcript of Mr. Justice Ashworth's reasons for granting and continuing the WFO, to the extent available; and
• Such further evidence as KM&P may advise is necessary or desirable to support the application under Cypriot law.
6.4 Service on KMH
For purposes of service of the enforcement application and the freezing injunction application, we note the following registered addresses:
• KMH: 28 Themistokli Dervi Avenue, Suite 601, Nicosia 1066, Cyprus; and
• Oceangate Ventures Ltd.: 28 Themistokli Dervi Avenue, Suite 604, Nicosia 1066, Cyprus.
We expect that Vassiliadis & Economou LLC (7 Stasinou Avenue, 3rd Floor, Nicosia 1060, Cyprus) will accept service on behalf of KMH, and we would be grateful if KM&P could confirm whether this can be arranged. If V&E is unwilling or unable to accept service, please advise on the appropriate alternative method and timing for effecting service on KMH at its registered address, including any requirements for personal service on a director or officer, and the applicable periods of notice.
In the event that the freezing injunction is sought on an ex parte basis (which we consider appropriate given the risk of dissipation), please advise on the court's requirements for subsequent service and for the listing of any return date or inter partes hearing.
7. Execution and Forced Sale Mechanism
Looking beyond the recognition and enforcement stage, and in anticipation of the enforcement order being granted, we wish to understand and plan for the execution phase — that is, the process by which the judgment resulting from the enforcement of the Award will be executed against KMH's Cyprus assets.
We would be grateful if KM&P could provide a preliminary memorandum at your earliest convenience addressing the following matters under Cyprus law:
(a) Forced sale of shares: What is the procedure for the forced sale of KMH's shares in Oceangate Ventures Ltd.? In particular:
(i) What court orders are required to authorise the seizure and sale of shares in a Cypriot private limited company?
(ii) Is a valuation of the shares required before a forced sale can be conducted, and if so, who appoints the valuer?
(iii) What is the role of the court bailiff (if any) in the seizure and sale process?
(iv) Is the sale conducted by public auction or by private treaty? What procedural safeguards exist to ensure a fair market price?
(v) What is the typical timeline for the forced sale process, from the granting of the execution order to the completion of the sale and distribution of proceeds?
(vi) Are there any restrictions under the Oceangate articles of association (or under the Cyprus Companies Law, Cap. 113) on the transfer of shares that could impede a forced sale?
(b) Garnishment of bank accounts: What is the procedure for the garnishment or attachment of KMH's Cyprus bank accounts?
(i) Is this achieved by a garnishee order (or equivalent) directed to the relevant bank?
(ii) What are the procedural steps and typical timeline?
(iii) Are there any minimum thresholds or exemptions applicable to garnishment orders in Cyprus?
(c) Priority and preferential claims: Are there any categories of priority or preferential claims (for example, tax claims, employee claims, or secured creditor claims) that may take precedence over TSL's judgment and affect the distribution of proceeds from any forced sale or garnishment?
(d) Appointment of a receiver: Is it possible, under Cypriot law, to apply for the appointment of a receiver over KMH's shares in Oceangate or over KMH's other Cyprus assets, as an alternative or supplement to a forced sale? If so, what are the requirements and what powers would such a receiver have?
We recognise that the execution phase may involve complex procedural and practical considerations, and we look forward to receiving KM&P's guidance on the most effective enforcement strategy in the Cyprus context.
8. Coordination and Reporting
As noted above, this enforcement campaign is being coordinated centrally by Calderwood & Harkness LLP from London, with enforcement actions proceeding in parallel across multiple jurisdictions. Effective coordination between all counsel teams is critical to the success of the campaign and to the avoidance of inconsistent or duplicative steps.
We therefore request that KM&P observe the following coordination and reporting protocols:
(a) Regular updates: KM&P shall provide regular written updates on the progress of the Cyprus proceedings, at intervals of no less than once per week during active phases (e.g., filing, opposition, hearings) and at least fortnightly during quieter periods.
(b) Confirmation of filings: KM&P shall promptly confirm all filing dates and case numbers, and shall provide copies of all filed documents (in their filed form) and all court orders as issued.
(c) Advance review of filings: All substantive filings, including applications, affidavits, submissions, and skeleton arguments, shall be provided to C&H in draft form with sufficient time for review and approval prior to submission to the court. As a general guideline, we would request at least three (3) business days' notice for review of substantive filings, or such shorter period as the urgency of the circumstances may require.
(d) Hearings: KM&P shall provide advance notice of all scheduled hearings and shall afford C&H the opportunity to attend (by telephone or video link, if in-person attendance is not practicable) and to provide input on oral submissions.
(e) Opposition filings: KM&P shall immediately notify C&H of any opposition filings, applications, or other steps taken by KMH or V&E, and shall provide copies of all such documents as soon as they are received.
(f) Unexpected developments: KM&P shall immediately notify C&H of any unexpected developments, including but not limited to: any indication that KMH is taking steps to transfer, encumber, or dissipate its Cyprus assets; any third-party claims or competing enforcement actions; any adverse procedural rulings; or any contact from KMH or V&E suggesting settlement discussions.
(g) Correspondence with opposing counsel: Copies of all correspondence with V&E, or with any other party or counsel in connection with these proceedings, shall be forwarded to C&H promptly.
The primary contact at Calderwood & Harkness for day-to-day coordination is:
Hannah Brinkley, Lead Associate Calderwood & Harkness LLP 45 Moorgate, London EC2R 6AR
Email: h.brinkley@calderwoodharkness.com
Tel: +44 (0)20 7496 8237
All correspondence should be copied to Samuel Eklund (Responsible Partner, email: s.eklund@calderwoodharkness.com) and Patrick Gallagher (Working Associate, email: p.gallagher@calderwoodharkness.com).
We reiterate that all substantive filings should be approved by C&H prior to submission to the court or delivery to any opposing party. This requirement is essential to ensure consistency across the multiple jurisdictions in which enforcement is being pursued and to avoid any inadvertent inconsistency or disclosure that could be exploited by KMH.
9. Fees and Billing
Please provide your fee proposal for this engagement at the earliest opportunity. The fee proposal should address the estimated fees for each of the following phases:
(a) the enforcement (recognition) application, including preparation, filing, and any ex parte hearing;
(b) the freezing injunction application, including preparation, filing, and any ex parte and inter partes hearings;
(c) opposition proceedings (i.e., responding to KMH's anticipated opposition to the enforcement and/or freezing applications), including written submissions and any contested hearings;
(d) execution and forced sale proceedings (preliminary advice and, in due course, the execution phase itself); and
(e) any ancillary matters, including service, translations, and court fees.
For budgeting purposes, we have provisionally estimated Cyprus local counsel fees at approximately €285,000 for the full scope of the engagement as described above, inclusive of VAT and disbursements. Please confirm whether this estimate is broadly in line with your fee expectations, or whether an adjustment is required.
All invoices should be directed to Calderwood & Harkness LLP at the address set out at the head of this letter, marked for the attention of Samuel Eklund. Invoices should be rendered monthly and should itemize work by phase (enforcement application, freezing injunction, opposition response, execution, and any other phase as applicable), with sufficient narrative detail to enable cost allocation and reporting to the client.
Please also confirm your engagement terms and whether you require a retainer deposit in advance of commencing work. If a retainer is required, please specify the amount and the bank account to which it should be remitted.
10. Enclosures
Enclosed with this letter (via international courier, expected delivery 8 August 2024) are the following documents:
1. Certified copy of LCIA Final Award No. 224718, dated 28 June 2024;
2. Certified copies of the three charter-party agreements dated 15 March 2019, 22 January 2020, and 10 June 2021;
3. LCIA Registrar's certificate confirming the authenticity of the Award;
4. Sealed copy of the Worldwide Freezing Order (CL-2024-000487, dated 16 July 2024, as continued on 30 July 2024);
5. Sealed copy of the section 66 Application Notice (CL-2024-000487, dated 15 July 2024);
6. Order granting permission to enforce the Award as a judgment (dated 2 August 2024);
7. Interim third-party debt order against Meridian Trust Bank Ltd. (dated 5 August 2024);
8. Preliminary Asset Tracing Report from Hartwell Pemberton LLP (interim version; final version to follow under separate cover);
9. Corporate registry extracts for Korinthian Maritime Holdings Ltd. (HE 387421) and Oceangate Ventures Ltd. (HE 401293), obtained from the Cyprus Department of Registrar of Companies and Official Receiver; and
10. Certified English-to-Greek translations of the Award and arbitration agreements (if applicable — see our request for confirmation at Section 5.3 above as to whether translations are required by the court; if not, this enclosure will be withdrawn).
Please confirm receipt of all enclosures upon delivery.