PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP 45 Moorgate, London EC2R 6AR, United Kingdom Tel: +44 (0)20 7496 8200
MEMORANDUM
To: Andreas Kyprianos, Senior Partner, and Nadia Makrides, Partner Kyprianos Makrides & Partners 15 Grivas Digenis Avenue Nicosia 1066, Cyprus
From: Hannah Brinkley, Lead Associate, Calderwood & Harkness LLP (Reviewed by Samuel Eklund, Responsible Partner)
Date: 28 September 2024
Re: Thalassa Shipping & Logistics SA v. Korinthian Maritime Holdings Ltd. — Response to KMH's Opposition to Recognition and Enforcement Application, Nicosia District Court, Case No. 2247/2024
Reference: LCIA Arbitration No. 224718; England Commercial Court Claim No. CL-2024-000487
1. Purpose and Summary
This memorandum has been prepared by Calderwood & Harkness LLP ("C&H") for the use of Kyprianos Makrides & Partners ("KM&P"), our local instructing counsel in the Republic of Cyprus, in connection with the opposition filed by Vassiliadis & Economou LLC ("V&E") (7 Stasinou Avenue, 3rd Floor, Nicosia 1060, Cyprus; Georgios Vassiliadis, Managing Partner; Eleni Economou, Partner) on behalf of Korinthian Maritime Holdings Ltd. ("KMH") (Registration No. HE 387421, 28 Themistokli Dervi Avenue, Suite 601, Nicosia 1066, Cyprus) in Case No. 2247/2024 before the Nicosia District Court. The purpose of this memorandum is to provide a detailed analysis of each ground of opposition raised by KMH, to identify the factual and legal deficiencies in KMH's position, and to propose reply points and supporting evidence for deployment by KM&P in the Cyprus proceedings.
By way of brief procedural background, Thalassa Shipping & Logistics SA ("TSL") filed its application for recognition and enforcement of the Final Award dated 28 June 2024 (the "Award") rendered in LCIA Arbitration No. 224718 on 9 August 2024, supported by the affidavit of Elena Stavridis, Chief Financial Officer of TSL, together with certified copies of the Award, the underlying charter-party agreements containing the arbitration clauses, and a certificate from the LCIA Registrar. On 12 August 2024, the Nicosia District Court granted an ex parte freezing injunction over KMH's shareholding in Oceangate Ventures Ltd. (HE 401293) and KMH's Cyprus bank accounts, thereby securing assets pending determination of the enforcement application.
KMH's opposition was served on or about 18 September 2024, as reported by KM&P to C&H. The opposition raises four grounds under Article V of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 10 June 1958) (the "New York Convention"), as implemented in Cyprus law through the International Commercial Arbitration Law (Law 101/1987) and the provisions of the Cyprus Arbitration Law, Cap. 4. The four grounds are: (i) Article V(1)(b) — alleged lack of proper notice of the arbitration proceedings or inability to present its case; (ii) Article V(1)(c) — alleged excess of arbitral jurisdiction; (iii) Article V(1)(d) — alleged irregularity in the composition of the tribunal or the arbitral procedure; and (iv) Article V(2)(b) — alleged contravention of Cyprus public policy.
Our summary conclusion is that every ground raised by KMH is without merit. Each is either factually unsupported, contradicted by the contemporaneous procedural record of the LCIA arbitration, or legally deficient as a matter of established New York Convention jurisprudence. This memorandum analyzes each ground in detail and proposes specific reply points and supporting affidavit evidence for KM&P to incorporate into its reply submission before the Nicosia District Court.
2. Background
2.1 The Underlying Dispute and Arbitration
The dispute between TSL and KMH arises from three time charter-party agreements for dry-bulk carriers entered into between the parties over the period from March 2019 to June 2021. Each charter-party was negotiated and executed on an arm's-length basis in the context of a broader commercial relationship between TSL, a substantial Greek shipowner and logistics provider, and KMH, a Cyprus-incorporated shipping company with operations across the Eastern Mediterranean, the Black Sea, and Southeast Asia. The three charter-parties are as follows:
(a) M/V *Aegean Fortuna* Charter-Party. Signed on 15 March 2019. The vessel is a Supramax dry-bulk carrier, IMO No. 9784521, of 58,200 DWT. The charter-party provided for a time charter period of approximately 60 months at agreed hire rates with market-linked escalation provisions. The charter-party was governed by English law and contained an LCIA arbitration clause providing for arbitration under the LCIA Rules, with the seat of arbitration in London.
(b) M/V *Crimson Horizon* Charter-Party. Signed on 22 January 2020. The vessel is a Handymax dry-bulk carrier, IMO No. 9801334, of 37,500 DWT. The charter-party was similarly governed by English law with an LCIA arbitration clause, seat in London.
(c) M/V *Volga Spirit* Charter-Party. Signed on 10 June 2021. The vessel is a Panamax dry-bulk carrier, IMO No. 9756892, of 76,400 DWT. As with the other two charter-parties, the agreement was governed by English law with an LCIA arbitration clause, seat in London.
KMH committed serious breaches of each of the three charter-parties. In summary:
(a) KMH wrongfully redelivered M/V Aegean Fortuna on 18 June 2022, approximately 14 months before the expiry of the charter period, in breach of the charter-party's redelivery provisions. The wrongful early redelivery deprived TSL of the benefit of hire income at above-market rates during a period of favorable market conditions.
(b) KMH failed to pay hire on M/V Crimson Horizon from 1 July 2022, accumulating arrears of £4,280,000 before TSL exercised its contractual right of withdrawal on 15 September 2022 after proper notices had been served. TSL's withdrawal gave rise to a claim for loss of bargain in addition to the outstanding hire.
(c) KMH fabricated off-hire deductions on M/V Volga Spirit, improperly deducting a total of approximately £2,740,000 from hire payments by reference to purported off-hire events that either did not occur or were grossly overstated. The tribunal found that these deductions were without basis and constituted a deliberate scheme by KMH to reduce its charter-party liabilities.
TSL filed its Request for Arbitration with the LCIA on 14 November 2022, commencing LCIA Arbitration No. 224718. The Request for Arbitration was served on KMH at its registered address in Nicosia in accordance with the LCIA Rules and was additionally copied to KMH's then-instructed London solicitors.
The arbitral tribunal was constituted on 8 February 2023 and comprised the following members:
• Presiding Arbitrator: Sir Malcolm Fenton-Clarke, appointed by the LCIA Court;
• Co-Arbitrator: Professor Athena Drakopoulos, nominated by TSL (claimant);
• Co-Arbitrator: Dr. Henrik Dalmqvist, nominated by KMH (respondent);
• Tribunal Secretary: Fiona Beckett.
A comprehensive procedural timetable was agreed between the parties and the tribunal at the first procedural conference. The arbitration proceeded through full written submissions, extensive documentary disclosure (conducted by reference to the IBA Rules on the Taking of Evidence in International Arbitration (2020 edition), as agreed by both parties), witness statements, and expert reports. A full evidentiary hearing took place over ten sitting days from 11 to 22 September 2023 at the International Dispute Resolution Centre (IDRC), Fleet Street, London. Both parties were represented by experienced counsel and solicitors, and each had full opportunity to present its case, including the examination and cross-examination of factual and expert witnesses and the making of closing oral and written submissions.
The tribunal issued its Final Award on 28 June 2024. The total amount awarded to TSL is as follows:
The Award also provides for post-award interest at the rate of 5.25% per annum simple on the principal sum of £96,450,000 from 29 June 2024 until the date of payment.
2.2 Enforcement Proceedings — Multi-Jurisdictional Context
The Cyprus enforcement application forms part of a coordinated multi-jurisdictional enforcement campaign being conducted by C&H on behalf of TSL. KMH maintains assets across multiple jurisdictions, and TSL's enforcement strategy is designed to locate, preserve, and realize KMH's assets wherever they may be found in order to satisfy the Award. The current status of enforcement proceedings in each relevant jurisdiction is as follows:
England and Wales. TSL filed an application under Section 66 of the Arbitration Act 1996 for leave to enforce the Award as a judgment of the Commercial Court on 15 July 2024 (Claim No. CL-2024-000487). Permission to enforce was granted by Mr. Justice Ashworth on 2 August 2024. On 16 July 2024, the English Commercial Court granted a worldwide freezing order ("WFO") on an ex parte basis, which was subsequently continued with modifications at the return date hearing on 30 July 2024. The WFO contains standard undertakings by TSL, including undertakings to give credit for sums recovered in other jurisdictions and to inform the English court of any material developments in enforcement proceedings worldwide.
KMH subsequently filed a set-aside application under Sections 68 and 69 of the Arbitration Act 1996 on 19 August 2024. That application remains pending before the Commercial Court at the time of writing. We note, for KM&P's information, that we anticipate the set-aside application will be determined in due course, but its pendency does not affect the enforceability of the Award in other New York Convention jurisdictions.
A third-party debt order was obtained against Meridian Trust Bank Ltd. (50 Lombard Street, London EC3V 9EA), where KMH maintained accounts. An interim order was granted on 5 August 2024, and the final order was made on 3 September 2024, yielding a recovery of £18,720,000.
Singapore. TSL filed an enforcement application (Originating Summons No. 872/2024) in the Singapore High Court on 14 August 2024. Leave to enforce the Award was granted on 6 September 2024. In addition, M/V Crimson Horizon, which was present in the port of Singapore, was arrested on 20 August 2024 pursuant to an in rem action brought in support of the enforcement.
United Arab Emirates. TSL filed an enforcement application (Case No. 1893/2024) before the Dubai courts on 22 August 2024. A precautionary attachment was granted on 28 August 2024 over the accounts of Korinthian DMCC (a KMH subsidiary) held at Emirates Gulf Commercial Bank PJSC.
Cyprus (the present proceedings). As set out above, the enforcement application was filed on 9 August 2024, and the freezing injunction was obtained on 12 August 2024.
It is important that the Nicosia District Court understand the Cyprus proceedings in this broader multi-jurisdictional context. KMH's opposition to recognition and enforcement in Cyprus is not an isolated challenge: it forms part of a broader pattern of obstructive litigation across multiple fora, all aimed at delaying and frustrating TSL's legitimate efforts to collect on a valid and enforceable arbitral award. KMH's strategy of fighting on every available front simultaneously is consistent with the asset dissipation conduct identified in the asset tracing investigations conducted by Hartwell Pemberton LLP (discussed further at Section 6.2 below).
2.3 Procedural History in Cyprus
The application for recognition and enforcement of the Award in Cyprus was filed by KM&P on behalf of TSL on 9 August 2024 (Case No. 2247/2024, Nicosia District Court). The application was supported by the following materials:
(a) The sworn affidavit of Elena Stavridis, Chief Financial Officer of TSL, dated 7 August 2024, setting out the background to the dispute, the arbitration proceedings, and the terms of the Award, and deposing to the grounds for recognition and enforcement under the New York Convention;
(b) A duly certified copy of the Final Award issued in LCIA Arbitration No. 224718, dated 28 June 2024;
(c) Duly certified copies of the three charter-party agreements (M/V Aegean Fortuna, M/V Crimson Horizon, and M/V Volga Spirit), each containing the LCIA arbitration clause;
(d) A certificate from the LCIA Registrar confirming the arbitration reference number, the constitution of the tribunal, and the issuance of the Award.
On the basis of these materials, the Nicosia District Court granted a freezing injunction on 12 August 2024, restraining KMH from dealing with or disposing of its shares in Oceangate Ventures Ltd. (HE 401293, registered at 28 Themistokli Dervi Avenue, Suite 604, Nicosia 1066, Cyprus) and any funds standing to the credit of KMH's Cyprus bank accounts, pending the determination of the recognition and enforcement application.
KMH's opposition to the recognition and enforcement application was filed by V&E on or about 18 September 2024, as reported to C&H by KM&P. C&H has reviewed the opposition papers as transmitted by KM&P and has prepared this memorandum setting out its analysis and recommendations for the reply.
3. KMH's Opposition Grounds — Overview
KMH's opposition raises four grounds, all purportedly based on Article V of the New York Convention, as implemented in Cyprus law. It is important to note at the outset that Article V places the burden of proof squarely on the party opposing recognition and enforcement. KMH bears the burden of establishing each of the grounds it raises, and it must do so by clear and convincing evidence. As will be demonstrated below, KMH has failed to discharge this burden on any ground.
The four grounds raised are:
1. Article V(1)(b) — Alleged lack of proper notice of the arbitration proceedings or inability to present its case;
2. Article V(1)(c) — Alleged excess of arbitral jurisdiction (i.e., that the Award deals with matters beyond the scope of the submission to arbitration);
3. Article V(1)(d) — Alleged irregularity in the composition of the arbitral tribunal or the arbitral procedure;
4. Article V(2)(b) — Alleged contravention of Cyprus public policy.
Each of these grounds is analyzed in detail in Section 4 below.
4. Analysis and Proposed Reply Points — Ground by Ground
4.1 Article V(1)(b): Alleged Lack of Proper Notice / Inability to Present Case
4.1.1 KMH's Argument
KMH contends that it was not given "proper notice" of the appointment of arbitrators or of the arbitral proceedings, and/or was "otherwise unable to present its case," within the meaning of Article V(1)(b) of the New York Convention. The opposition papers filed by V&E advance two specific allegations in support of this ground:
(a) V&E allege that the LCIA's notification of the Request for Arbitration was deficient in some unspecified respect; and
(b) V&E allege that KMH had insufficient time to prepare for the evidentiary hearing held from 11 to 22 September 2023.
No particulars are given as to what was deficient about the LCIA's notification, nor is any evidence adduced in support of either allegation. V&E's submissions in this regard are entirely bare and conclusory.
4.1.2 Analysis — This Ground is Without Merit
This ground is wholly without merit and is, respectfully, disingenuous. The contemporaneous procedural record of the LCIA arbitration conclusively demonstrates that KMH received full and proper notice of the arbitration at every stage and participated actively and without reservation throughout the proceedings. Specifically:
(a) Service of the Request for Arbitration. TSL filed its Request for Arbitration with the LCIA on 14 November 2022. The LCIA served the Request for Arbitration on KMH at its registered address (28 Themistokli Dervi Avenue, Suite 601, Nicosia 1066, Cyprus) in accordance with Article 1.3 of the LCIA Rules. Service was confirmed by the LCIA Registrar. There is no basis for the assertion that this notification was deficient.
(b) KMH's appearance and participation. KMH appeared in the arbitration through its instructed London solicitors, Harkness Whitford & Co. (12 Fetter Lane, London EC4A 1JP, SRA Registration No. 614823; lead partner: Catherine Whitford). The appointment of Harkness Whitford & Co. was notified to the LCIA and to TSL's legal representatives promptly following receipt of the Request for Arbitration. From that point onward, all communications in the arbitration were served on Harkness Whitford & Co. in the ordinary course.
(c) Nomination of co-arbitrator. KMH exercised its right under the LCIA Rules to nominate its own co-arbitrator, Dr. Henrik Dalmqvist. Dr. Dalmqvist's nomination was accepted by the LCIA Court, and the tribunal was constituted on 8 February 2023 with the full participation and agreement of both parties. The fact that KMH actively nominated its own arbitrator is fatal to any suggestion that KMH did not receive notice of the arbitration or the appointment of arbitrators.
(d) Substantive participation. KMH filed a Response to the Request for Arbitration, a Statement of Defence, witness statements from multiple witnesses, and expert reports. KMH's counsel made submissions at procedural conferences and at the evidentiary hearing. KMH cross-examined TSL's witnesses and made full oral closing submissions over the course of the ten-day hearing (11–22 September 2023) at the IDRC, London.
(e) Agreed procedural timetable. The procedural timetable for the arbitration, including the dates for the evidentiary hearing, was the subject of discussion and agreement between the parties and the tribunal at the first procedural conference and in subsequent procedural orders. KMH did not raise any objection to the hearing dates at the time they were fixed, nor did it assert that the timetable was in any way inadequate for the preparation of its case.
The notice argument is directly contradicted by the overwhelming weight of the contemporaneous procedural record. Under established New York Convention jurisprudence, a party that fully participates in an arbitration, nominates its own arbitrator, files substantive pleadings, calls and cross-examines witnesses, and makes oral and written submissions cannot subsequently claim, at the enforcement stage, that it was not given proper notice or was unable to present its case. Such a claim would render Article V(1)(b) into an instrument for strategic opportunism entirely divorced from its protective purpose, which is to safeguard parties who have genuinely been denied due process.
It is also notable that KMH's own English set-aside application, filed under Sections 68 and 69 of the Arbitration Act 1996 on 19 August 2024 before the Commercial Court in London, does not rely on any notice deficiency or due process complaint. Harkness Whitford & Co., who actually conducted the arbitration on KMH's behalf and are best placed to assess the procedural fairness of the proceedings, evidently did not consider this ground to be tenable. The fact that V&E have raised it in the Cyprus proceedings — presumably at the instruction of KMH's principals rather than its English legal advisers — suggests that this ground has been advanced for purposes of delay rather than as a genuine legal challenge.
4.1.3 Proposed Reply Points
We recommend that KM&P's reply submission address this ground as follows:
(a) Exhibit the LCIA's confirmation of service of the Request for Arbitration on KMH at its registered address, including any relevant correspondence from the LCIA Registrar.
(b) Exhibit the notification from Harkness Whitford & Co. to the LCIA confirming their appointment as KMH's legal representatives in the arbitration.
(c) Exhibit KMH's nomination of Dr. Henrik Dalmqvist as its co-arbitrator and the LCIA Court's confirmation of appointment.
(d) Exhibit the agreed procedural timetable, including the directions setting the hearing dates.
(e) Exhibit KMH's substantive pleadings (Statement of Defence, witness statements) and the transcript or hearing bundle index from the evidentiary hearing, to the extent necessary to demonstrate KMH's active participation.
(f) Cite the LCIA Rules on notice and service (Articles 1.3, 4, and 5) and confirm compliance.
(g) Argue that KMH's full participation in the arbitration estops it from raising this ground, and that its conduct constitutes a waiver of any notice objection. We will provide KM&P with relevant Cyprus and international authorities on this point, including decisions of the ICCA Guide to the Interpretation of the New York Convention, the Yearbook of Commercial Arbitration, and analogous decisions of Cyprus courts.
4.2 Article V(1)(c): Alleged Excess of Arbitral Jurisdiction
4.2.1 KMH's Argument
KMH argues that the Award deals with matters "not contemplated by or not falling within the terms of the submission to arbitration," within the meaning of Article V(1)(c) of the New York Convention. V&E's opposition papers advance two specific allegations in this regard:
(a) V&E allege that the loss of profit and market differential damages component of the Award (£16,480,000) exceeds the scope of the arbitration clause because, according to V&E, the arbitration clauses in the charter-parties do not extend to consequential or indirect loss claims; and
(b) V&E allege that the consolidation of claims arising from three separate charter-parties into a single arbitration was improper and that the tribunal lacked jurisdiction to determine claims under all three contracts in a single proceeding.
4.2.2 Analysis — This Ground is Without Merit
Both limbs of this argument are without merit.
Loss of profit / market differential damages. The arbitration clauses in all three charter-parties are broadly drawn LCIA arbitration clauses, each providing that "any dispute arising out of or in connection with" the relevant charter-party shall be referred to and finally resolved by arbitration under the LCIA Rules. Such broad-form arbitration clauses are routinely interpreted to encompass all categories of claim that have a sufficient connection to the contract, including claims for loss of profit and market differential damages. These are standard and well-recognized heads of loss in charter-party disputes under English law, which governs the substantive rights and obligations under each of the three charter-parties.
The tribunal addressed its jurisdiction at the outset of the proceedings. At the preliminary jurisdictional phase, the tribunal issued a ruling confirming its jurisdiction over all heads of claim advanced by TSL, including the loss of profit and market differential claim. KMH participated in the jurisdictional phase of the proceedings and made submissions through Harkness Whitford & Co. Following the tribunal's jurisdictional ruling, KMH did not challenge the ruling or seek to have it set aside or reviewed. Having failed to challenge the tribunal's jurisdiction at the appropriate time, KMH cannot now seek to re-litigate the jurisdictional question at the enforcement stage.
Moreover, the characterization of loss of profit and market differential damages as falling outside the scope of the arbitration clause is simply wrong as a matter of English law. Under the established principles set out in The Achilleas [2008] UKHL 48, The Golden Victory [2007] UKHL 12, and the broader framework of Hadley v. Baxendale damages, loss of profit and market differential damages are well within the contemplation of parties to a time charter-party and are routinely awarded in charter-party arbitrations. The arbitration clause does not need to specifically enumerate every head of loss that may be claimed — it need only be sufficiently broad to encompass disputes "arising out of or in connection with" the contract, which these clauses plainly do.
Consolidation issue. The three charter-parties each contained separate LCIA arbitration clauses, but all three were entered into between the same parties (TSL as owner and KMH as charterer), were governed by the same governing law (English law), and concerned related subject matter (time charter-parties for dry-bulk carriers in overlapping trading areas). The LCIA Court authorized the consolidation of the three sets of claims into a single arbitration proceeding pursuant to Article 22.1(x) of the LCIA Rules, which grants the tribunal and the LCIA Court broad powers of consolidation where claims arise out of the same or related transactions between the same parties.
Critically, when the tribunal invited comments from the parties on the proposed consolidation, KMH did not object. Harkness Whitford & Co. were given the opportunity to raise any jurisdictional reservation in respect of consolidation at that stage and elected not to do so. KMH then participated in the consolidated proceedings without reservation for the entirety of the arbitration. Having participated without jurisdictional reservation, KMH is deemed to have waived any objection to consolidation under both the LCIA Rules and the English Arbitration Act 1996 (which governs procedural matters given that London was the seat of the arbitration). Section 73 of the Arbitration Act 1996 provides that a party who takes part in proceedings without making a timely objection on the ground of lack of jurisdiction or procedural irregularity loses the right to raise that objection subsequently.
Even in the unlikely event that the court were to find that any portion of the Award exceeded the scope of the submission to arbitration — which it should not — Article V(1)(c) itself provides a mechanism for partial enforcement. The second sentence of Article V(1)(c) states that "if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be recognized and enforced." The heads of claim that are most directly and unambiguously within the scope of the arbitration clauses — the charter-party damages for wrongful early redelivery (£42,300,000), the hire arrears and loss of bargain on M/V Crimson Horizon (£28,150,000), and the restitution of fabricated off-hire deductions on M/V Volga Spirit (£2,740,000) — constitute the vast majority of the Award and are clearly separable. Even on KMH's own case, enforcement should be granted in respect of those amounts.
4.2.3 Proposed Reply Points
We recommend that KM&P's reply submission address this ground as follows:
(a) Exhibit the LCIA arbitration clauses from each of the three charter-parties, demonstrating the broad "arising out of or in connection with" language.
(b) Exhibit the LCIA Court's consolidation order and the correspondence demonstrating KMH's failure to object to consolidation when given the opportunity to do so.
(c) Exhibit the tribunal's jurisdictional ruling confirming jurisdiction over all heads of claim.
(d) Argue waiver: KMH's failure to raise jurisdictional objections during the arbitration at the time and in the manner required by the LCIA Rules and Section 73 of the Arbitration Act 1996 precludes it from raising them for the first time at the enforcement stage under Article V(1)(c).
(e) Cite relevant authorities on the broad interpretation of "arising out of or in connection with" arbitration clauses and the scope of consolidation powers under the LCIA Rules.
(f) In the alternative, argue partial enforcement under the second sentence of Article V(1)(c), identifying the clearly separable and uncontroversially within-scope heads of claim and demonstrating that enforcement should be granted at a minimum in respect of those amounts.
4.3 Article V(1)(d): Alleged Irregularity in Tribunal Composition or Procedure
4.3.1 KMH's Argument
KMH alleges that the arbitral procedure "was not in accordance with the agreement of the parties" within the meaning of Article V(1)(d) of the New York Convention. V&E's opposition papers identify two specific complaints:
(a) V&E allege that the tribunal issued a document production order that was overly broad and placed an undue burden on KMH; and
(b) V&E allege that the tribunal unfairly refused KMH's request for an adjournment of the evidentiary hearing.
4.3.2 Analysis — This Ground is Without Merit
Article V(1)(d) is a narrowly drawn provision. It requires the party opposing enforcement to demonstrate either (i) that the composition of the arbitral tribunal was not in accordance with the agreement of the parties, or (ii) that the arbitral procedure was not in accordance with the agreement of the parties or, failing such agreement, the law of the country where the arbitration took place (in this case, England). Routine case management decisions by the tribunal do not engage this ground. Each of KMH's complaints is addressed in turn.
Document production. The tribunal's document production orders were made in accordance with the LCIA Rules and the IBA Rules on the Taking of Evidence in International Arbitration (2020 edition), which the parties had expressly agreed would apply to the conduct of the arbitration. Under those rules, the tribunal has broad discretion to order the production of documents that are relevant to the case and material to its outcome, subject to considerations of proportionality, privilege, and burden. The tribunal's document production orders were narrowly tailored to specific and relevant categories of documents and were fully reasoned. If KMH considered the orders to be overly broad, its proper recourse was to raise objections before the tribunal at the time, which it had the opportunity to do under the IBA Rules framework. Any such objections were heard and ruled upon by the tribunal in the ordinary course of the proceedings.
In any event, the breadth or narrowness of document production orders is a matter of the tribunal's case management authority and does not constitute an "irregularity in procedure" within the meaning of Article V(1)(d). Courts in both common law and civil law jurisdictions have consistently held that disagreements with the tribunal's exercise of its procedural discretion do not engage Article V(1)(d), which is concerned with structural defects in the arbitral process — not with the merits of individual procedural rulings.
Adjournment refusal. KMH's counsel, Harkness Whitford & Co., made an application for an adjournment of the evidentiary hearing approximately four weeks before the hearing was scheduled to commence. The tribunal considered the application, received submissions from both parties, and refused the adjournment on the basis that KMH had had adequate time to prepare for the hearing under the agreed procedural timetable and that a further adjournment would cause undue prejudice to TSL, which had prepared for the hearing, arranged for the attendance of witnesses, and incurred costs in reliance on the scheduled hearing dates. The tribunal's reasoning was set out in a detailed procedural order.
The decision whether to grant or refuse an adjournment is quintessentially a matter within the tribunal's procedural discretion. Section 34 of the English Arbitration Act 1996 — the law of the seat of the arbitration — grants the tribunal wide discretion over procedural and evidential matters, including the timing and format of hearings. The tribunal's refusal to grant the adjournment was well within the bounds of proper tribunal conduct, was fully reasoned, and did not deprive KMH of the ability to present its case. KMH was represented at the hearing by experienced counsel and solicitors, examined and cross-examined witnesses, and made full oral and written submissions. There is nothing to suggest that the refusal of the adjournment caused any prejudice to KMH's ability to participate in the hearing or to present its defense.
As to the composition of the tribunal, KMH's opposition papers do not appear to challenge the composition as such, but this ground should be addressed briefly for completeness. The tribunal was constituted in full compliance with the LCIA Rules: Sir Malcolm Fenton-Clarke was appointed by the LCIA Court as presiding arbitrator; Professor Athena Drakopoulos was nominated by TSL; and Dr. Henrik Dalmqvist was nominated by KMH itself. The tribunal was constituted on 8 February 2023, and KMH at no point raised any challenge to the composition of the tribunal during the arbitral proceedings. KMH cannot now challenge the composition of a tribunal that it helped to constitute by nominating its own co-arbitrator.
4.3.3 Proposed Reply Points
We recommend that KM&P's reply submission address this ground as follows:
(a) Exhibit the parties' agreement on applicable procedural rules (the LCIA Rules and the IBA Rules on the Taking of Evidence in International Arbitration), demonstrating that the agreed procedural framework conferred broad case management discretion on the tribunal.
(b) Exhibit the tribunal's procedural orders on document production, highlighting that the orders were reasonable, proportionate, and within the scope of the agreed procedural rules.
(c) Exhibit the tribunal's procedural order ruling on the adjournment application, demonstrating that the application was heard, considered, and refused on reasoned grounds.
(d) Cite authorities on the narrow scope of Article V(1)(d), emphasizing that this provision is concerned with structural defects in the arbitral process, not with the exercise of procedural discretion, and that case management decisions do not engage this ground.
(e) Cite Section 34 of the English Arbitration Act 1996 on the tribunal's procedural discretion, confirming that the arbitral procedure was conducted in accordance with the law of the seat.
(f) Emphasize that KMH nominated its own co-arbitrator (Dr. Henrik Dalmqvist) and participated without challenge to the tribunal's composition throughout the arbitration, precluding any challenge at this stage.
4.4 Article V(2)(b): Alleged Contravention of Cyprus Public Policy
4.4.1 KMH's Argument
KMH argues that enforcement of the Award would be "contrary to the public policy" of the Republic of Cyprus, within the meaning of Article V(2)(b) of the New York Convention. V&E advance two allegations in support of this ground:
(a) V&E allege that the quantum of the Award — £96,450,000 in damages and interest (approximately USD $120,000,000 at the prevailing exchange rate of approximately £1 = USD $1.2441) — is "disproportionate" and constitutes punitive damages that would be contrary to Cypriot public policy; and
(b) V&E allege that TSL's simultaneous enforcement of the Award in multiple jurisdictions (England, Singapore, the UAE, and Cyprus) creates a "risk of over-recovery" that would be contrary to public policy.
4.4.2 Analysis — This Ground is Without Merit
The public policy exception under Article V(2)(b) of the New York Convention is the most restrictive ground for refusing enforcement and is reserved for cases where enforcement would violate the most fundamental principles of the enforcing State's legal order. The international consensus — reflected in the jurisprudence of courts in virtually every New York Convention signatory State, including Cyprus — is that the public policy exception is to be construed narrowly and applied only in exceptional circumstances. A mere disagreement with the quantum of damages or the merits of the award does not engage the public policy exception. Both limbs of KMH's argument are addressed below.
Quantum / "punitive damages" argument. The characterization of the Award as imposing "punitive damages" is flatly incorrect and is contradicted by the text of the Award itself. The Award is entirely compensatory in nature. The tribunal explicitly calculated each head of loss by reference to the established English law measure of damages for breach of charter-party agreements, applying conventional principles of contract law that are recognized in virtually every commercial legal system, including that of Cyprus. The specific methodology adopted by the tribunal for each head of claim was as follows:
(a) M/V *Aegean Fortuna* (£42,300,000): The tribunal calculated damages for wrongful early redelivery by reference to the difference between the contractual charter rate and the prevailing market rate for a comparable Supramax vessel over the 14-month remaining charter period. This yielded a monthly differential of approximately £3,021,429, which the tribunal applied over the 14-month period. This is the standard measure of damages for early redelivery of a time-chartered vessel under English law and is well established in maritime arbitration practice.
(b) M/V *Crimson Horizon* (£28,150,000): The tribunal awarded the outstanding hire arrears of £4,280,000, being the unpaid hire from 1 July 2022 to the date of TSL's withdrawal on 15 September 2022, together with £23,870,000 in loss of bargain damages reflecting the value of the charter-party for the remaining period after withdrawal. Again, this is a conventional measure of contractual loss.
(c) M/V *Volga Spirit* (£2,740,000): The tribunal ordered restitution of the fabricated off-hire deductions that KMH had improperly withheld from hire payments. This is a straightforward restitutionary award requiring KMH to repay amounts wrongfully retained.
(d) Loss of profit / market differential (£16,480,000): The tribunal awarded additional damages reflecting the loss of profit and market differential suffered by TSL across all three charter-parties as a consequence of KMH's breaches, calculated by reference to the difference between the contracted hire rates and the spot market rates at the time of the breaches. This head of loss was pleaded by TSL, addressed in evidence by both parties' expert witnesses, and determined by the tribunal on the basis of the evidence before it.
(e) Pre-award interest (£6,780,000): Interest was awarded at the rate of 5.25% simple per annum from the respective dates of breach. This is a modest and conventional rate of interest that reflects no punitive element.
No element of punitive or exemplary damages was sought by TSL at any stage of the arbitration, and no such damages were awarded by the tribunal. The Award expressly states that the damages are compensatory in nature and have been calculated in accordance with the applicable principles of English contract law. The fact that the quantum is substantial reflects the scale of the commercial relationship between the parties, the magnitude of KMH's breaches, and the prevailing market conditions at the time of those breaches — not any punitive intent.
For context, KMH's pre-dispute net asset value was approximately USD $280,000,000, inclusive of its fleet interests, shareholdings in subsidiaries, and cash holdings. The Award, at approximately USD $120,000,000, represents approximately 43% of KMH's pre-dispute net asset value. While substantial, this is proportionate to the scale of the losses caused by KMH's serious and deliberate breaches of three separate charter-party agreements.
The public policy exception under Article V(2)(b) does not empower the enforcement court to conduct a de novo review of the quantum of the award or to substitute its own assessment of damages for that of the tribunal. To invoke the public policy exception, KMH would need to demonstrate that the Award offends against the most basic notions of morality and justice of the Cypriot legal system — a standard that a compensatory award calculated in accordance with English contract law principles manifestly does not meet. Cyprus courts have consistently applied this narrow interpretation, consistent with the guidance of the ICCA Guide to the Interpretation of the New York Convention and the prevailing international consensus.
Multiple-jurisdiction enforcement / over-recovery risk. KMH's second argument — that simultaneous enforcement in multiple jurisdictions creates a "risk of over-recovery" — is not a valid public policy objection. There is no principle of the New York Convention or of Cypriot law that restricts a successful award creditor to enforcement in a single jurisdiction. On the contrary, the multi-jurisdictional enforceability of arbitral awards is one of the core benefits of the New York Convention system and a fundamental reason for the Convention's existence. TSL is entitled to enforce the Award in every jurisdiction where KMH has assets, and the New York Convention framework is specifically designed to facilitate precisely this.
The "risk of over-recovery" is a red herring. Any such risk is managed through well-established mechanisms:
(a) TSL is subject to a worldwide freezing order granted by the English Commercial Court (Mr. Justice Ashworth, 16 July 2024, continued 30 July 2024) that contains standard undertakings requiring TSL to give credit for all sums recovered in any jurisdiction and to inform the English court of material recoveries;
(b) TSL, through its solicitors C&H, maintains a multi-jurisdictional recovery tracker that records all recoveries and credits them against the outstanding balance of the Award;
(c) As at 3 September 2024, TSL had recovered £18,720,000 through the English third-party debt order, leaving a substantial outstanding balance against the total Award of £108,600,000 (plus continuing post-award interest). There is no present risk of over-recovery — rather, there is a substantial deficit of recovery;
(d) TSL has expressly committed to all enforcement courts, including the Cyprus court, that it will give credit for recoveries in other jurisdictions and will not enforce the Award for more than its full outstanding balance.
The Cyprus court should take comfort from these safeguards. The risk of over-recovery is theoretical, not actual, and is in any event adequately managed by the mechanisms already in place. This argument does not come close to engaging the public policy exception.
4.4.3 Proposed Reply Points
We recommend that KM&P's reply submission address this ground as follows:
(a) Exhibit the relevant sections of the Award setting out the tribunal's damages analysis for each head of loss, demonstrating the compensatory methodology and the absence of any punitive element.
(b) Provide expert evidence or a detailed legal submission (which C&H can assist in preparing) confirming that the damages awarded are conventional compensatory damages under English law, which governs the charter-parties and was applied by the tribunal.
(c) Cite Cyprus authorities and international authorities (including the ICCA Guide) on the narrow scope of the public policy exception under Article V(2)(b), emphasizing that the exception is reserved for cases of fundamental incompatibility with the most basic notions of morality and justice, and that disagreement with quantum does not suffice.
(d) Address the over-recovery argument by exhibiting or referencing the English WFO and its standard undertakings (from Claim No. CL-2024-000487), and by confirming TSL's commitment and obligation to give credit for all recoveries across jurisdictions.
(e) Provide the court with an updated recovery schedule, noting the £18,720,000 recovered as at 3 September 2024 and the resulting outstanding balance, to demonstrate that there is no risk of over-recovery.
(f) Emphasize that KMH bears the burden of proof on all Article V grounds and has not come close to discharging that burden. KMH's public policy argument amounts to nothing more than dissatisfaction with the outcome of the arbitration, which is not a recognized ground for refusing enforcement under the New York Convention.
5. General Observations on KMH's Opposition Strategy
Before turning to the proposed reply affidavit and next steps, we offer the following general observations on KMH's opposition strategy, which we recommend KM&P consider incorporating into its reply submissions to assist the court in understanding the broader context in which the opposition has been brought.
Overlap with English set-aside application. KMH's opposition arguments in the Cyprus proceedings overlap substantially with — and in several respects are weaker than — the grounds raised in its English set-aside application under Sections 68 and 69 of the Arbitration Act 1996 (filed 19 August 2024 in the Commercial Court, Claim No. CL-2024-000487). KMH is running parallel challenges in multiple jurisdictions, deploying slightly different combinations of arguments in each forum in what appears to be a strategy of maximum obstruction. The fact that the notice argument under Article V(1)(b) was not raised in the English set-aside application — where it would have been subject to scrutiny by the supervisory court of the seat of arbitration — is particularly telling and suggests that KMH's own English lawyers did not consider it viable.
No supporting affidavit evidence. KMH's opposition is based on legal argument alone. V&E have not filed any supporting affidavit from KMH's directors (Andrei Volkov and Sergei Volkov) or officers (Marina Kazakova, General Manager; Alexei Demidov, Chief Financial Officer), nor from any representative of Harkness Whitford & Co. who would be in a position to give direct evidence of the alleged procedural deficiencies. This is significant. The factual assertions underlying KMH's opposition — regarding the alleged deficiency of notice, the alleged insufficiency of preparation time, the alleged excessiveness of document production, and the alleged unfairness of the adjournment refusal — are bare, unsupported, and conclusory. By contrast, TSL's enforcement application is supported by the detailed sworn affidavit of Elena Stavridis, which sets out the procedural history of the arbitration in comprehensive detail.
Pattern of delay and asset dissipation. KMH's opposition should be understood in the context of a broader pattern of obstructive conduct and asset dissipation that has been identified by the asset tracing investigations conducted by Hartwell Pemberton LLP on behalf of TSL. The preliminary asset tracing report (dated 15 August 2024) identifies evidence that KMH has, in the period following the issuance of the Award, taken steps to transfer assets out of the reach of enforcement, including through its subsidiary structure (Korinthian Bulkers (Singapore) Pte. Ltd., Dnepr Shipholding Inc. (BVI Company No. 2014876), Korinthian DMCC, and Oceangate Ventures Ltd.). The opposition in Cyprus is part of a multi-front strategy to delay enforcement for as long as possible while KMH continues to dissipate and disperse its assets.
6. Proposed Reply Affidavit Points
6.1 Proposed Deponent
We recommend that a supplemental reply affidavit be filed in support of TSL's position. The most appropriate deponent, in our view, would be Ioanna Christodoulou, General Counsel of TSL (14 Akti Miaouli, 4th Floor, Piraeus 185 35, Greece), who has first-hand knowledge of the arbitration proceedings, the enforcement campaign, and TSL's recovery position across jurisdictions. Alternatively, a further affidavit from Elena Stavridis (CFO, TSL) could be prepared if it is considered more efficient to use the same deponent who supported the original enforcement application. C&H will prepare a draft of the reply affidavit for KM&P's review and comment before finalization and filing. The draft will be circulated in sufficient time to allow KM&P to review it for compliance with Cyprus procedural requirements and to arrange for the affidavit to be sworn.
6.2 Key Points for Reply Affidavit
The reply affidavit should address the following key points, each of which is directed at one or more of the opposition grounds analyzed in Section 4 above:
1. Full participation by KMH. The deponent should confirm, based on her personal knowledge and review of the arbitration file, that KMH appeared in the LCIA arbitration through leading London solicitors Harkness Whitford & Co. (Catherine Whitford, Partner) and participated actively in all procedural stages. KMH nominated its own co-arbitrator (Dr. Henrik Dalmqvist), filed a comprehensive Statement of Defence, submitted factual witness statements and expert reports, cross-examined TSL's witnesses at the evidentiary hearing, and made full oral and written submissions. KMH's participation was extensive, substantive, and unqualified — at no point during the arbitration did KMH raise any complaint about notice, procedural fairness, or the adequacy of the timetable.
2. Notice. The deponent should exhibit LCIA records demonstrating that all communications in the arbitration — including the Request for Arbitration, procedural orders, the notice of constitution of the tribunal, and the Award itself — were served on KMH at its registered address and on its legal representatives (Harkness Whitford & Co.) in accordance with the LCIA Rules. The deponent should confirm that neither KMH nor its legal representatives raised any issue regarding the adequacy of notice at any stage.
3. Jurisdiction and consolidation. The deponent should exhibit the LCIA Court's order authorizing consolidation of the claims arising under the three charter-parties into a single arbitration, together with any correspondence demonstrating that KMH was invited to comment on the proposed consolidation and did not object. The deponent should also exhibit or reference the tribunal's jurisdictional ruling confirming jurisdiction over all heads of claim, including the loss of profit and market differential claim.
4. Procedural fairness. The deponent should exhibit the agreed procedural timetable, the tribunal's case management orders (including those on document production and the adjournment application), and should confirm that the ten-day evidentiary hearing provided both parties with equal and adequate opportunity to present their cases, to call and examine witnesses, and to make oral and written submissions.
5. Compensatory nature of the Award. The deponent should attach or reference the relevant sections of the Award in which the tribunal sets out its analysis and calculation of each head of damages, confirming that all damages are compensatory in nature, calculated in accordance with English law principles, and that no element of punitive or exemplary damages was sought by TSL or awarded by the tribunal.
6. Over-recovery safeguards. The deponent should confirm that TSL is committed to giving credit for all recoveries obtained across jurisdictions and that this obligation is enforceable under the terms of the English WFO. The deponent should reference the multi-jurisdictional recovery tracker maintained by C&H and should provide up-to-date recovery figures, noting the £18,720,000 recovered in England as at 3 September 2024 and confirming the outstanding balance. The deponent should state TSL's express commitment not to enforce the Award for more than its full outstanding balance.
7. KMH's obstructive conduct and asset dissipation. The deponent should reference the evidence of post-award asset dissipation identified in the preliminary asset tracing report prepared by Hartwell Pemberton LLP (dated 15 August 2024, prepared by Rebecca Saunders, Partner, and Mark Huxley, Director). Without disclosing the full details of the asset tracing work (which may be subject to ongoing investigations), the affidavit should reference the key findings, including evidence of post-award transfers of funds and assets through KMH's subsidiary structure: Korinthian Bulkers (Singapore) Pte. Ltd. (Singapore), Dnepr Shipholding Inc. (BVI Company No. 2014876), Korinthian DMCC (Dubai), and Oceangate Ventures Ltd. (HE 401293, Cyprus). This evidence is relevant to the court's assessment of KMH's credibility and the bona fides of its opposition, and supports the maintenance of the freezing injunction pending determination of the enforcement application.
7. Recommended Next Steps
In light of the foregoing analysis, we recommend the following next steps to be taken in a coordinated manner by KM&P and C&H:
1. Reply submission. KM&P should prepare and file the reply submission to KMH's opposition, incorporating the analysis and arguments set out in Sections 4.1 through 4.4 above, adapted as necessary for Cyprus procedural requirements and the court's expectations. C&H will provide KM&P with a detailed draft of the substantive arguments in a form suitable for adaptation.
2. Reply affidavit. C&H will prepare a draft reply affidavit from Ioanna Christodoulou (or, alternatively, Elena Stavridis) covering the key points set out in Section 6.2 above. The draft will be circulated to KM&P for review, comment, and any amendments necessary to ensure compliance with Cyprus procedural requirements, before being finalized and sworn.
3. Cyprus law authorities. KM&P should gather and compile the relevant Cyprus law authorities on (a) the narrow interpretation of each Article V ground under the New York Convention as applied by Cyprus courts, (b) the pro-enforcement bias of the New York Convention, and (c) the burden of proof resting on the party opposing enforcement. C&H will supplement these with relevant international authorities and decisions from other New York Convention jurisdictions.
4. Additional exhibits. C&H will provide KM&P with certified copies of any additional exhibits required to support the reply submission and reply affidavit, including: LCIA procedural orders; the LCIA Court's consolidation order; the tribunal's jurisdictional ruling; the English WFO and associated orders; and the Hartwell Pemberton LLP preliminary asset tracing report (to the extent considered appropriate for disclosure in the Cyprus proceedings).
5. Filing deadline. The reply should be filed within the time prescribed by the Nicosia District Court's procedural directions. KM&P is requested to confirm the applicable deadline at the earliest opportunity so that C&H can ensure all materials are provided in sufficient time.
6. Hearing date. KM&P is requested to keep C&H informed of any hearing date set by the court for oral argument on the opposition, and to consult with C&H in advance of any hearing regarding the preparation of oral submissions. If KM&P considers it desirable, C&H is prepared to arrange for attendance at the hearing by a representative of TSL and/or to participate remotely in any preparatory discussions.
8. Conclusion
Every ground raised by KMH under Article V of the New York Convention is without merit. The opposition is a transparent attempt to delay and frustrate TSL's enforcement of a valid and binding arbitral award and should be dismissed by the Nicosia District Court.
The Award was rendered by a properly constituted LCIA tribunal (LCIA Arbitration No. 224718, Presiding Arbitrator Sir Malcolm Fenton-Clarke, Co-Arbitrators Professor Athena Drakopoulos and Dr. Henrik Dalmqvist) following full and fair proceedings in which KMH participated actively through experienced London solicitors. KMH nominated its own co-arbitrator, filed substantive pleadings, examined and cross-examined witnesses at a ten-day evidentiary hearing, and made comprehensive oral and written submissions. There was no deficiency of notice, no excess of jurisdiction, no procedural irregularity, and no contravention of public policy.
The Award is compensatory in nature, calculated in accordance with established English law principles governing charter-party damages, and does not contain any element of punitive or exemplary damages. The quantum reflects the scale of the commercial relationship and the severity of KMH's deliberate breaches. TSL is entitled to enforce the Award in every jurisdiction where KMH has assets, and appropriate safeguards against over-recovery are in place through the English WFO and TSL's own multi-jurisdictional recovery tracking.
The Republic of Cyprus is a signatory to the New York Convention and applies a strong pro-enforcement presumption, consistent with its obligations under the Convention and its commitment to upholding the international arbitral framework. The burden of establishing grounds for refusal of recognition and enforcement under Article V rests squarely on KMH, and it has failed to discharge that burden on any of the four grounds it has raised. The opposition is unsupported by affidavit evidence, contradicted by the contemporaneous procedural record, and legally misconceived.
We recommend that KM&P pursue a vigorous reply aimed at securing a prompt hearing and the dismissal of the opposition in its entirety. The successful disposition of the opposition will clear the path for execution against the assets secured under the freezing injunction of 12 August 2024, namely KMH's shareholding in Oceangate Ventures Ltd. (HE 401293) and funds standing to the credit of KMH's Cyprus bank accounts.
We remain at KM&P's disposal for any further assistance required in connection with the Cyprus proceedings and stand ready to provide the draft reply affidavit and supporting materials on an expedited basis.
9. Distribution and Confidentiality Notice
This memorandum is protected by legal professional privilege and constitutes attorney work product prepared in anticipation of litigation and for the purpose of providing legal advice. Its contents are strictly confidential and must not be disclosed to any third party without the prior written consent of both Calderwood & Harkness LLP and Thalassa Shipping & Logistics SA.
Distribution is limited to the following individuals:
• Andreas Kyprianos, Senior Partner, Kyprianos Makrides & Partners
• Nadia Makrides, Partner, Kyprianos Makrides & Partners
• Samuel Eklund, Responsible Partner, Calderwood & Harkness LLP
• Linda Osei, Senior Associate, Calderwood & Harkness LLP
• Hannah Brinkley, Lead Associate, Calderwood & Harkness LLP
• Patrick Gallagher, Associate, Calderwood & Harkness LLP
• Ioanna Christodoulou, General Counsel, Thalassa Shipping & Logistics SA — copy for information
Any recipient who receives this memorandum in error should notify Calderwood & Harkness LLP immediately and destroy all copies.
Prepared by:
________________________________________
Hannah Brinkley Lead Associate Calderwood & Harkness LLP 45 Moorgate, London EC2R 6AR Tel: +44 (0)20 7496 8247