PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT / LITIGATION PRIVILEGE
CALDERWOOD & HARKNESS LLP 45 Moorgate, London EC2R 6AR
MEMORANDUM
2 December 2024
FROM: Hannah Brinkley, Lead Associate, and Patrick Gallagher, Working Associate, Calderwood & Harkness LLP, 45 Moorgate, London EC2R 6AR
TO: Samuel Eklund, Responsible Partner, Calderwood & Harkness LLP; Linda Osei, Billing Partner, Calderwood & Harkness LLP
CC: Ioanna Christodoulou, General Counsel, Thalassa Shipping & Logistics SA (for client file)
RE: Post-Award Asset Movements by Korinthian Maritime Holdings Ltd. (Reg. No. HE 387421) and Related Entities — Analysis Period: 28 June 2024 to 28 August 2024
MATTER REFERENCE: Thalassa Shipping & Logistics SA v. Korinthian Maritime Holdings Ltd. — Enforcement of LCIA Award No. 224718
COURT REFERENCES:
CL-2024-000487 (England & Wales, Commercial Court)
Case No. 2247/2024 (District Court of Nicosia, Cyprus)
OS 872/2024 (High Court of the Republic of Singapore)
Case No. 1893/2024 (DIFC Courts, Dubai, United Arab Emirates)
BASED ON: Hartwell Pemberton LLP Supplemental Asset Movement Report dated 25 November 2024
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1. Purpose and Scope
This memorandum summarizes and analyses the findings of Hartwell Pemberton LLP's ("HP") supplemental forensic asset movement report dated 25 November 2024 (the "HP Supplemental Report") concerning post-award asset movements by Korinthian Maritime Holdings Ltd. ("KMH", Cyprus Company Registration No. HE 387421) and its subsidiaries and related entities. The HP Supplemental Report was prepared by Rebecca Saunders, Partner (Forensic Services), and Mark Huxley, Director, at Hartwell Pemberton LLP, 25 Old Broad Street, London EC2N 1HN.
The analysis covers the critical 61-day window between 28 June 2024 — the date of the Final Award in LCIA Case Reference No. 224718 (the "Award") — and 28 August 2024 — the date on which the worldwide freezing order was served on Korinthian Maritime Holdings Ltd. and the precautionary attachment was obtained in the United Arab Emirates. This period is of particular forensic and legal significance because it represents the interval during which KMH and its controllers had knowledge of the Award but, for varying portions of that period, were either not yet restrained by court order or were acting in apparent defiance of a restraining order already in force.
This memorandum is prepared for the following purposes:
(a) to support the ongoing coordinated enforcement campaign across all four jurisdictions in which proceedings have been commenced — namely, England and Wales (Claim No. CL-2024-000487), Cyprus (Case No. 2247/2024), Singapore (OS 872/2024), and the United Arab Emirates (Case No. 1893/2024);
(b) to assess whether KMH's conduct, and in particular the conduct of its directors and officers during the post-award period, constitutes a breach of the Worldwide Freezing Order ("WFO") granted without notice by Mr. Justice Ashworth on 16 July 2024 and continued with modifications on the return date of 30 July 2024; and
(c) to evaluate the viability of contempt of court proceedings or other sanctions against KMH and its directors, including Andrei Volkov (the ultimate beneficial owner and de facto director of KMH), Sergei Volkov (the registered director of KMH), and Marina Kazakova (the Chief Financial Officer of KMH).
HP's investigation was conducted pursuant to the instruction letter dated 29 July 2024 from this firm to HP, as supplemented by further instructions dated 12 September 2024 and 8 November 2024. The scope of the forensic engagement encompasses global asset tracing of KMH and related entities, identification of beneficial ownership links across multiple jurisdictions, flow-of-funds analysis across all known bank accounts, and assessment of the commercial rationale (or absence thereof) for identified transactions. We have worked closely with HP throughout the investigation and can confirm that the methodologies employed are robust and the findings are well-supported by the documentary evidence that has been assembled.
This memorandum should be read alongside the HP Supplemental Report itself, which is annexed as Appendix A and which contains the full underlying analysis, supporting schedules, and source documentation references. This memorandum is intended to provide the legal interpretation and strategic assessment that overlays HP's factual findings.
2. Executive Summary
The principal finding of the HP Supplemental Report — and the central conclusion of this memorandum — is that between 28 June 2024 (the date of the Final Award) and 28 August 2024 (the date the WFO was served and the UAE precautionary attachment obtained), KMH and its subsidiaries transferred or restructured assets totalling approximately £38,500,000 (GBP equivalent) across multiple jurisdictions. HP characterises this conduct as a systematic and coordinated pattern of dissipation designed to place assets beyond the reach of Thalassa Shipping & Logistics SA ("TSL") and to frustrate enforcement of the Award.
The transfers involved at least four separate entities controlled by or connected to Andrei Volkov (the ultimate beneficial owner and de facto director of KMH) and his son Sergei Volkov (a registered director of KMH). None of these recipient entities — Volkov Holdings (Cyprus) Ltd., Baltic Maritime Services Ltd., Eastern Maritime Investments DMCC, or Caspian Trade Finance Ltd. — were disclosed in KMH's WFO asset disclosure served on 25 July 2024, notwithstanding the plain terms of the disclosure obligation contained in the order.
The asset movements can be divided into two key phases:
(i) Pre-WFO period (28 June to 16 July 2024): During this 18-day interval, KMH had knowledge of the Award — having received it through its counsel, Harkness Whitford & Co. — but was not yet subject to any court order restraining its assets. During this period, KMH effected cash transfers totalling approximately £24,170,000 (GBP equivalent) from its London, Singapore, and Dubai accounts to Volkov family entities. KMH also initiated an attempted re-flagging of M/V Volga Spirit to a less cooperative flag state, which, had it been completed, would have made admiralty arrest significantly more difficult.
(ii) Post-WFO period (16 July to 28 August 2024): During this 43-day interval, KMH was bound by the WFO served on 17 July 2024. Despite this, asset movements continued. KMH transferred €2,800,000 to the personal account of its CFO, Marina Kazakova, on 22 July 2024 — five days after service of the WFO. It entered into negotiations and prepared a memorandum of agreement for the sale of M/V Crimson Horizon at a below-market price to an entity connected to the Volkov family network. It attempted to transfer its shareholding in Oceangate Ventures Ltd. to a newly incorporated BVI shell entity. And it diverted ongoing sub-charterer payments totalling approximately £2,220,000 to Volkov family entities.
The evidence assembled by HP and reviewed by us strongly supports the conclusion that KMH, acting through Andrei Volkov and Sergei Volkov, engaged in deliberate and coordinated asset-shifting with the purpose and effect of frustrating enforcement of the Award in the total amount of £108,600,000 (comprising the principal award of £96,450,000 and costs of £12,150,000). The pattern is clear: within days of the Award, KMH began moving cash to connected entities with no apparent commercial rationale; it attempted to restructure its vessel fleet and corporate holdings to create additional barriers to enforcement; and it continued these activities even after the WFO was in force.
Certain transactions in the post-WFO period — in particular the €2,800,000 transfer to Marina Kazakova, the attempted sale of M/V Crimson Horizon, the attempted transfer of Oceangate Ventures shares, and the diversion of charter hire payments — may constitute contempt of court, subject to the further legal analysis set out in Section 8 below. We recommend that contempt proceedings be maintained as a strategic option but that the timing and scope of any application be carefully calibrated in light of the overall enforcement strategy.
Despite the dissipation, the coordinated multi-jurisdictional enforcement campaign has been substantially successful, with approximately £96,590,000 recovered to date — representing 88.94% of the total indebtedness. The outstanding balance of approximately £15,617,726.03 (inclusive of post-award interest) remains the target of continuing enforcement efforts. However, we assess that the shortfall is directly attributable to the dissipation identified by HP, and that but for the transfers described in this memorandum, TSL would have achieved full recovery.
3. Background: The LCIA Award and Enforcement Timeline
3.1 The Award
The underlying dispute between TSL and KMH arose from three time charterparties for dry-bulk carriers in the Supramax, Panamax, and Handymax categories. TSL commenced LCIA arbitration proceedings in October 2022, and the hearing took place over 15 sitting days in March and April 2024. The key particulars of the Award are as follows:
LCIA Case Reference: No. 224718
Tribunal Composition:
Presiding Arbitrator: Sir Malcolm Fenton-Clarke
Co-Arbitrator (claimant-nominated): Professor Athena Drakopoulos
Co-Arbitrator (respondent-nominated): Dr. Henrik Dalmqvist
Tribunal Secretary: Fiona Beckett
Date of Final Award: 28 June 2024
Award Breakdown:
The Tribunal found unanimously in favour of TSL on all principal heads of claim, and by a majority (Sir Malcolm Fenton-Clarke and Professor Drakopoulos, Dr. Dalmqvist dissenting in part) on the quantum of market differential damages. The Award provides for the following sums:
(a) M/V Aegean Fortuna (IMO 9784521, Supramax Bulk Carrier, 58,200 DWT, marshall Islands flag) — wrongful early redelivery damages: £42,300,000. The Tribunal found that KMH's purported redelivery of the vessel in Beira, Mozambique on 14 March 2023, with approximately 26 months of charter period remaining, was unlawful and constituted a repudiatory breach of the charterparty. Damages were assessed on the basis of the difference between the charter rate and the market rate for the unexpired charter period, together with consequential losses arising from TSL's inability to fulfil onward commitments.
(b) M/V Crimson Horizon (IMO 9801334, Handymax Bulk Carrier, 37,500 DWT, Liberian flag) — outstanding hire and damages: £28,150,000. The Tribunal found that KMH had failed to pay approximately 14 months of charter hire and had wrongfully withheld the vessel from TSL's use for approximately 8 months during a period of market strength. Damages included the outstanding hire, market differential losses, and incidental costs associated with the vessel's wrongful detention.
(c) M/V Volga Spirit (IMO 9756892, Panamax Bulk Carrier, 76,400 DWT, Cyprus flag) — restitution of fabricated off-hire deductions: £2,740,000. The Tribunal found that KMH had fabricated maintenance and repair claims to justify deductions from hire payments, and that the purported off-hire periods were not genuine. The Tribunal described this conduct as "a deliberate and dishonest scheme to reduce the hire payable to TSL" (Award, paragraph 412).
(d) Loss of profit and market differential damages: £16,480,000. This head of damage covered TSL's loss of bargain across the three charterparties, reflecting the difference between the contractual rates and the spot market rates that TSL was able to achieve for alternative employment of its fleet during the relevant periods.
(e) Pre-award interest at 5.25% per annum simple: £6,780,000. Interest was calculated on the principal sums from the dates of each breach or non-payment to the date of the Award, applying the rate of 5.25% per annum simple as specified in the charterparties.
Total Award: £96,450,000 (approximately USD $120,000,000 at the prevailing exchange rate of £1 = USD $1.2441 as at 28 June 2024).
Costs Allocation:
The Tribunal allocated costs 85% to KMH, reflecting TSL's overwhelming success on all issues. The costs component was assessed as follows:
LCIA administrative costs and arbitrators' fees: £3,240,000
TSL's legal costs (assessed on a reasonable basis): £8,910,000
Total costs payable by KMH: £12,150,000
Grand Total (Award + Costs): £108,600,000
Post-Award Interest: The Award provides for post-award interest at 5.25% per annum simple on all unpaid sums from 29 June 2024 until payment.
The Tribunal's findings regarding KMH's conduct are particularly relevant to the present analysis. The Tribunal described KMH's defence as "largely without merit and advanced for the purpose of delay" (Award, paragraph 487), and noted that KMH had been "uncooperative with the production of documents throughout the arbitration" (Award, paragraph 62). The Tribunal also observed that the evidence of Sergei Volkov, KMH's sole testifying witness, was "unreliable in material respects" (Award, paragraph 289). These findings are consistent with the pattern of deliberate obstruction that HP has subsequently identified in the post-award period.
3.2 Enforcement Measures Chronology (Relevant Period)
The following chronology sets out the key enforcement steps taken during and after the relevant 61-day analysis period. This timeline is essential for understanding the significance of the asset movements identified by HP, and in particular for distinguishing between pre-WFO conduct (which, while reprehensible, does not engage the contempt jurisdiction) and post-WFO conduct (which may constitute actionable contempt).
28 June 2024: The Final Award was issued by the Tribunal and communicated to the parties and their respective legal representatives. KMH's solicitors, Harkness Whitford & Co. (12 Fetter Lane, London EC4A 1JP; SRA No. 614823; partners Richard Harkness and Catherine Whitford, with the matter handled by associate James Thornbury), received the Award on the same date. There is accordingly no dispute that KMH had full knowledge of the Award and its terms from this date.
8 July 2024: This firm, acting for TSL, sent a formal pre-enforcement demand letter to Harkness Whitford & Co. by email and recorded delivery. The letter demanded payment of the full amount of the Award and costs (£108,600,000) within 14 days, failing which TSL would take all necessary enforcement steps without further notice. The letter also put KMH on express notice that any disposition of assets for the purpose of frustrating enforcement would be brought to the attention of the court. No substantive response was received to this demand, save for a holding acknowledgement from Mr. Thornbury dated 10 July 2024 stating that he had "passed the matter to his clients for instructions."
15 July 2024: TSL filed its application to enforce the Award as a judgment of the court pursuant to Section 66 of the Arbitration Act 1996 in the Commercial Court (Claim No. CL-2024-000487). The application was supported by the first witness statement of Ioanna Christodoulou, General Counsel of TSL, dated 14 July 2024, and by the first witness statement of Hannah Brinkley of this firm, dated 15 July 2024, which addressed the grounds for enforcement and the risk of dissipation.
16 July 2024: A Worldwide Freezing Order was granted without notice by Mr. Justice Ashworth in the Commercial Court. The WFO restrained KMH from removing from England and Wales or in any way disposing of, dealing with, or diminishing the value of any of its assets, whether they are in or outside England and Wales, up to a maximum aggregate value of £108,600,000. The WFO included an ancillary asset disclosure obligation requiring KMH to inform TSL in writing of all its assets worldwide exceeding £25,000 in value, giving the value, location, and details of all such assets, within 7 days of service of the order. The evidence in support of the WFO application included the first witness statement of Hannah Brinkley dated 15 July 2024, which addressed the risk of dissipation by reference to, inter alia, the speed and scale of the post-award transfers already detected at that stage (specifically the £12,800,000 moved from the Meridian Trust Bank accounts in the first week after the Award).
17 July 2024: The WFO was served on Harkness Whitford & Co. (acting for KMH) by personal service on Mr. Thornbury at 12 Fetter Lane, London, at approximately 10:45 a.m. Service was effected by process server and confirmed by certificate of service. Notice of the WFO was also served on the following third-party banks: Meridian Trust Bank Ltd. (50 Lombard Street, London EC3V 9EA) by personal service; and by letters to the compliance departments of Pinnacle Bank (Singapore) Ltd. and Emirates Gulf Commercial Bank PJSC. KMH was accordingly bound by the terms of the WFO from the point of service on 17 July 2024.
30 July 2024: The WFO was continued with minor modifications on the return date before Mr. Justice Ashworth. KMH appeared through Harkness Whitford & Co. and opposed continuation of the WFO on grounds that, inter alia, there was no real risk of dissipation and that the pre-WFO transfers were made in the ordinary course of business. Mr. Justice Ashworth rejected these arguments and continued the WFO, noting that the evidence of post-award transfers was "deeply troubling" and that KMH had failed to provide any satisfactory explanation for the movements of approximately £12,800,000 out of its London accounts within days of the Award (see approved transcript of hearing, 30 July 2024, at page 14, lines 8-22).
2 August 2024: Mr. Justice Ashworth granted permission to enforce the Award as a judgment of the court pursuant to Section 66 of the Arbitration Act 1996. KMH did not oppose the application for permission to enforce.
5 August 2024: An interim third-party debt order ("TPDO") was granted against Meridian Trust Bank Ltd. (50 Lombard Street, London EC3V 9EA) in respect of sums held in KMH's accounts at that bank. The TPDO was made final on 3 September 2024, and £18,720,000 was garnished and paid to TSL's solicitors' client account.
12 August 2024: The District Court of Nicosia granted a freezing injunction over the shares of Oceangate Ventures Ltd. (HE 401293) held by KMH and over KMH's Cypriot bank accounts. The application was made by Kyprianos Makrides & Partners (15 Grivas Digenis Avenue, Nicosia 1066, Cyprus) acting on TSL's behalf, pursuant to instructions from this firm. The injunction was critical in blocking the attempted transfer of Oceangate Ventures shares to a newly incorporated BVI entity (see Section 6.2.3 below).
20 August 2024: M/V Crimson Horizon (IMO 9801334, Handymax Bulk Carrier, 37,500 DWT, Liberian flag) was arrested in Singapore waters by order of the High Court of Singapore. The arrest was obtained by Straits Meridian LLP (1 Raffles Place, #42-01, One Raffles Place Tower 2, Singapore 048616), acting on TSL's behalf pursuant to instructions from this firm. The vessel was subsequently held under arrest pending judicial sale (completed 15 November 2024 for USD $22,800,000).
28 August 2024: A precautionary attachment was granted by the DIFC Courts in the United Arab Emirates over the accounts of Korinthian DMCC held at Emirates Gulf Commercial Bank PJSC (Gate Village 3, DIFC, Dubai). The application was made by Al-Rashid Hatem & Associates (Level 14, The Gate Building, DIFC, Dubai) acting on TSL's behalf pursuant to instructions from this firm. This date represents the end of the 61-day analysis period.
4. Sources of Information
The HP Supplemental Report — and this memorandum — draw upon information from range sources across multiple jurisdictions. The breadth and depth of these sources reflects both the complexity of the KMH group structure and the multi-jurisdictional nature of the enforcement campaign. We set out below the principal sources of information relied upon, together with observations on their completeness and reliability.
4.1 WFO Asset Disclosure
The WFO granted on 16 July 2024 required KMH to inform TSL in writing of all its assets worldwide exceeding £25,000 in value, giving the value, location, and details of all such assets. This disclosure was required within 7 days of service — that is, by 24 July 2024.
KMH's disclosure was provided by Harkness Whitford & Co. on 25 July 2024, one day late. While we did not pursue the lateness point separately, the tardiness is consistent with KMH's general pattern of non-cooperation. The disclosure was verified by a statement of truth signed by Sergei Volkov, as a director of KMH.
Of far greater concern than the tardiness, however, is the fact that the disclosure was subsequently found to be materially incomplete. In particular, it omitted:
(i) at least three bank accounts held by KMH or its subsidiaries — including, critically, the undisclosed Cypriot bank account from which €2,800,000 was transferred to Marina Kazakova's personal account on 22 July 2024 (i.e., three days before the disclosure was served);
(ii) the Korinthian DMCC entity entirely — an entity wholly owned by KMH's group, maintaining accounts at Emirates Gulf Commercial Bank PJSC in Dubai, and from which AED 18,700,000 had been transferred out on 11 July 2024;
(iii) the various Volkov family-connected entities to which funds had been transferred (Volkov Holdings (Cyprus) Ltd., Baltic Maritime Services Ltd., Eastern Maritime Investments DMCC, and Caspian Trade Finance Ltd.); and
(iv) the ongoing sub-charterer receivables owed to KMH subsidiaries, which HP has estimated at approximately £4,200,000.
These omissions were identified through HP's preliminary asset tracing report dated 15 August 2024, which cross-referenced KMH's disclosure against publicly available corporate registry records, vessel registry data, and banking information obtained through the enforcement proceedings. The omissions are addressed further in the context of the contempt analysis at Section 8.2 below.
4.2 Bank Records Obtained via Third-Party Disclosure
Banking records constitute the most significant source of information for HP's flow-of-funds analysis. Records have been obtained from the following institutions:
Meridian Trust Bank Ltd. (50 Lombard Street, London EC3V 9EA): Meridian Trust provided comprehensive transaction records for KMH's primary London operating accounts (Account Nos. ending 4781 and 7329) pursuant to the notification requirements under the WFO and subsequently in the context of the TPDO proceedings. These records cover the period from 1 January 2024 to 30 September 2024 and include full transaction narrations, SWIFT message copies, and beneficiary account details for all outward transfers. The Meridian Trust records were the primary basis for HP's identification of the £8,200,000 and £4,600,000 transfers on 2 July 2024 and 5 July 2024 respectively.
Pinnacle Bank (Singapore) Ltd. (6 Battery Road, #20-01, Singapore 049909): Records for the accounts of Korinthian Bulkers (Singapore) Pte. Ltd. were obtained through the Singapore enforcement proceedings (OS 872/2024) and specifically through a discovery order obtained by Straits Meridian LLP. The records cover the period from 1 March 2024 to 31 October 2024 and were the primary basis for HP's identification of the SGD $12,500,000 transfer on 8 July 2024 to Eastern Maritime Investments DMCC.
Emirates Gulf Commercial Bank PJSC (Gate Village 3, DIFC, Dubai): Records for the account of Korinthian DMCC were obtained following the precautionary attachment granted on 28 August 2024 and through subsequent disclosure orders in the DIFC Courts (Case No. 1893/2024). The records were produced in two tranches: the first covering the period from 1 April 2024 to 28 August 2024 (produced 15 September 2024) and the second covering subsequent activity (produced 10 November 2024). These records were the primary basis for HP's identification of the AED 18,700,000 transfer on 11 July 2024 to Caspian Trade Finance Ltd.
Cyprus banking records: Records for KMH's Cypriot accounts, including the undisclosed account from which the €2,800,000 transfer to Marina Kazakova was made, were obtained by Kyprianos Makrides & Partners (15 Grivas Digenis Avenue, Nicosia 1066) through the freezing injunction proceedings in the District Court of Nicosia (Case No. 2247/2024). The records were produced following a disclosure order and confirmed the existence of accounts that KMH had failed to include in its WFO disclosure.
4.3 Corporate Registry and Shipping Registry Searches
HP conducted searches across multiple corporate and shipping registries in order to map the KMH group structure and identify the Volkov family network entities. The principal registries searched were:
(a) Cyprus Department of Registrar of Companies: Registry filings for KMH (HE 387421) and Oceangate Ventures Ltd. (HE 401293), including articles of association, directors' registers, annual returns, and share transfer documents. The Cyprus registry records were critical in identifying the attempted transfer of Oceangate Ventures shares to Meridian Shipping Holdings Inc. in approximately early August 2024.
(b) BVI Financial Services Commission: Records for Dnepr Shipholding Inc. (Company No. 2014876), the SPV owner of M/V Aegean Fortuna and M/V Volga Spirit. The registered agent is Vantage Corporate Services Ltd., Road Town, Tortola, BVI. BVI records were also searched in respect of "Meridian Shipping Holdings Inc." — the entity to which Oceangate Ventures shares were to be transferred — which was confirmed as having been incorporated on or about 22 July 2024, i.e., after the WFO was in force.
(c) Singapore Accounting and Corporate Regulatory Authority ("ACRA"): Records for Korinthian Bulkers (Singapore) Pte. Ltd. (registered at 80 Robinson Road, #14-02, Singapore 068898), confirming KMH's shareholding and the directorship of Sergei Volkov.
(d) Dubai Multi Commodities Centre ("DMCC") Registry: Records for Korinthian DMCC (Unit 3407, Almas Tower, Jumeirah Lakes Towers, Dubai), confirming its status as a wholly-owned subsidiary within the KMH group.
(e) Flag state registries: Searches of the marshall Islands Maritime Administrator (for M/V Aegean Fortuna), the Liberia Maritime Authority (for M/V Crimson Horizon), and the Department of Merchant Shipping of the Republic of Cyprus (for M/V Volga Spirit). These searches confirmed vessel ownership details and identified the attempted re-flagging of M/V Volga Spirit in early July 2024.
4.4 Hartwell Pemberton's Investigative Methodology
HP's forensic analysis employed the following methodologies:
(a) Flow-of-funds analysis: HP traced the movement of funds from KMH group accounts through to the ultimate receiving accounts, identifying the beneficial owners and controllers of each receiving entity. Where funds were moved through multiple intermediary accounts, HP employed a layered tracing methodology to identify the final destination.
(b) Beneficial ownership mapping: HP assembled a comprehensive map of the Volkov family's corporate network by reference to corporate registry records, published beneficial ownership registers (where available), directorship filings, and open-source intelligence. This mapping exercise identified a total of 14 entities with connections to the Volkov family, of which 6 are directly relevant to the post-award asset movements.
(c) Cross-referencing of transaction patterns: HP compared the timing, amounts, and recipients of post-award transfers against KMH's historical transaction patterns to identify anomalies. HP concluded that the post-award transfers were materially different from KMH's ordinary course of business transactions in terms of size, frequency, and the nature of the recipient entities.
(d) Vessel movement analysis: HP obtained and analysed Automatic Identification System ("AIS") data for the three vessels subject to the Award — M/V Aegean Fortuna, M/V Crimson Horizon, and M/V Volga Spirit — to track their movements during the post-award period and assess whether those movements were consistent with commercial operations or with an intention to evade enforcement.
HP's findings are set out in three reports: the Preliminary Asset Tracing Report dated 15 August 2024 (Appendix E), the Updated Findings Report dated 1 October 2024 (Appendix F), and the Supplemental Asset Movement Report dated 25 November 2024 (Appendix A). This memorandum is based primarily on the 25 November 2024 Supplemental Report, which incorporates and supersedes the earlier findings.
5. KMH Corporate Structure Overview
An understanding of the KMH group's corporate structure is essential to the analysis of the post-award asset movements. The structure is multi-layered, spanning four jurisdictions (Cyprus, British Virgin Islands, Singapore, and Dubai), and is designed to create layers of separation between assets and the judgment debtor. The following narrative description summarises the structure; a full corporate structure chart, prepared by HP and showing all identified entities and beneficial ownership links, is annexed at Appendix C.
Ultimate Beneficial Owner and De Facto Director
At the apex of the structure sits Andrei Volkov, a Russian-Cypriot national resident in Limassol, Cyprus. Andrei Volkov is the ultimate beneficial owner of KMH and exercises de facto control over the group's operations and finances. Although not registered as a director of KMH itself (his son Sergei Volkov is the sole registered director), HP's investigation has confirmed — through analysis of transaction authorisation records, correspondence, and corporate filings — that Andrei Volkov is the principal decision-maker within the group and functions as a de facto director. The Tribunal in the LCIA proceedings reached a similar conclusion, finding that "Mr. Andrei Volkov was at all material times the controlling mind of KMH" (Award, paragraph 167). Andrei Volkov's beneficial ownership of KMH is effected through a chain of BVI and Cypriot holding structures, the details of which are set out in the HP Supplemental Report at paragraphs 3.14 to 3.28.
Korinthian Maritime Holdings Ltd. (HE 387421)
KMH is incorporated in Cyprus and has its registered office at 28 Themistokli Dervi Avenue, Suite 601, Nicosia 1066, Cyprus. It is the principal operating and holding company of the group. The key officers are:
• Director: Sergei Volkov (son of Andrei Volkov)
• De facto director: Andrei Volkov
• Chief Financial Officer: Marina Kazakova
• Director of Fleet Operations: Alexei Demidov
KMH operates as the commercial manager of the group's dry-bulk carrier fleet, which at the time of the Award comprised approximately 18 vessels with an estimated aggregate net asset value of approximately USD $280,000,000. KMH maintains banking relationships in London (Meridian Trust Bank Ltd.), Cyprus, Singapore (through subsidiaries), and Dubai (through Korinthian DMCC).
Oceangate Ventures Ltd. (HE 401293)
Oceangate Ventures Ltd. is incorporated in Cyprus at 28 Themistokli Dervi Avenue, Suite 604, Nicosia 1066. It is 100% owned by KMH and functions as an intermediate holding company for the group's fleet SPVs (special purpose vehicles). The Oceangate shares represent a significant component of KMH's asset base because they provide indirect ownership of the fleet vessels held through SPVs. The attempted transfer of these shares to Meridian Shipping Holdings Inc., discussed in Section 6.2.3 below, would have stripped KMH of indirect control of multiple vessels.
Dnepr Shipholding Inc. (BVI Company No. 2014876)
Dnepr Shipholding Inc. is a BVI-incorporated SPV that is the registered owner of two of the three vessels at the centre of the arbitration: M/V Aegean Fortuna (IMO 9784521, Supramax Bulk Carrier, 58,200 DWT, marshall Islands flag) and M/V Volga Spirit (IMO 9756892, Panamax Bulk Carrier, 76,400 DWT, Cyprus flag). Its registered agent is Vantage Corporate Services Ltd., Road Town, Tortola, BVI. Dnepr Shipholding is held through the Oceangate Ventures structure and is ultimately owned by KMH.
Korinthian Bulkers (Singapore) Pte. Ltd.
Korinthian Bulkers (Singapore) Pte. Ltd. is registered at 80 Robinson Road, #14-02, Singapore 068898, and serves as the Singapore operating arm of the KMH group. It held proceeds from the operation and, subsequently, the sale of M/V Crimson Horizon (IMO 9801334, Handymax Bulk Carrier, 37,500 DWT, Liberian flag), and maintained operating accounts at Pinnacle Bank (Singapore) Ltd.
Korinthian DMCC
Korinthian DMCC is a free zone company registered at Unit 3407, Almas Tower, Jumeirah Lakes Towers, Dubai, UAE. It holds operational funds and trade receivables relating to the KMH group's Middle Eastern and Indian subcontinent operations, and maintains accounts at Emirates Gulf Commercial Bank PJSC.
The multi-layered structure — utilising BVI SPVs, Cypriot holding companies, Singapore subsidiaries, and Dubai free zone entities — is a common feature of international shipping groups, but in this instance the structure has been actively exploited by the Volkov family to frustrate enforcement by interposing multiple corporate layers between the judgment debtor (KMH) and the underlying assets. The identification of additional, undisclosed entities within the Volkov family network (discussed in Section 7 below) further compounds the complexity.
6. Detailed Analysis of Post-Award Asset Movements
This section analyses each significant post-award asset movement identified by HP, organised chronologically within the two principal phases.
6.1 Phase 1: Pre-WFO Period (28 June – 16 July 2024)
The pre-WFO period extends from the date of the Award (28 June 2024) to the date the WFO was granted (16 July 2024). During this 18-day period, KMH had knowledge of the Award — and, from 8 July 2024, had received a formal demand for payment — but was not yet subject to any court order restraining its assets. While the pre-WFO transfers do not constitute breaches of the WFO (since no such order was yet in force), they are of critical significance for two reasons: first, they demonstrate the intent to dissipate that underpinned the WFO application; and second, they directly reduced the pool of assets available for enforcement, contributing to the current shortfall.
6.1.1 Transfer from KMH London Accounts (Meridian Trust Bank Ltd.)
HP identified two significant outward transfers from KMH's accounts at Meridian Trust Bank Ltd. during the first week after the Award:
First Transfer — 2 July 2024
On 2 July 2024 — a mere four days after the Award was issued — KMH transferred £8,200,000 from its primary operating account at Meridian Trust Bank Ltd. (Account No. ending 4781), 50 Lombard Street, London EC3V 9EA. The transfer was made by SWIFT instruction to an account held in the name of "Volkov Holdings (Cyprus) Ltd." at a Cypriot bank. HP's investigation has confirmed that Volkov Holdings (Cyprus) Ltd. is not part of the disclosed KMH corporate group structure but is beneficially owned by Andrei Volkov personally. The entity appears to have no substantive commercial operations. HP was unable to trace the onward movement of these funds beyond the initial receiving account, as the Cypriot bank records obtained through the freezing injunction proceedings did not extend to Volkov Holdings (Cyprus) Ltd. (which is not a party to the Cyprus proceedings).
Second Transfer — 5 July 2024
On 5 July 2024, a further £4,600,000 was transferred from the same KMH account at Meridian Trust Bank Ltd. to an account at Meridian Trust itself in the name of "Baltic Maritime Services Ltd." HP identified Baltic Maritime Services Ltd. as an entity controlled by Sergei Volkov. Although ostensibly a maritime services company registered in England and Wales, HP's analysis of publicly available records indicates that Baltic Maritime Services Ltd. has minimal trading activity and no material revenues from third-party sources. The transfer was therefore not consistent with a genuine arm's length commercial transaction.
Net Effect:
The combined effect of these two transfers was to remove £12,800,000 from KMH's London accounts within seven days of the Award. Following these transfers, the remaining balance in KMH's accounts at Meridian Trust was approximately £18,720,000, which was subsequently garnished through the TPDO process on 3 September 2024. Had these transfers not occurred, the available London funds would have been approximately £31,520,000 — more than double the amount actually recovered through the London enforcement proceedings.
HP's conclusion, which we endorse, is that the timing of these transfers — within days of the Award, before any court order had been obtained and before any formal demand had been served — combined with the nature of the recipients (entities controlled by the Volkov family with no apparent arm's length commercial relationship to KMH's shipping operations), strongly indicates deliberate dissipation of assets to frustrate enforcement.
6.1.2 Transfer from Korinthian Bulkers (Singapore) Pte. Ltd. (Pinnacle Bank)
Transfer — 8 July 2024
On 8 July 2024, Korinthian Bulkers (Singapore) Pte. Ltd. transferred SGD $12,500,000 (approximately £7,400,000 at prevailing exchange rates) from its account at Pinnacle Bank (Singapore) Ltd. (6 Battery Road, #20-01, Singapore 049909) to an account at a Dubai-based bank in the name of "Eastern Maritime Investments DMCC."
HP's investigation identified Eastern Maritime Investments DMCC as an entity controlled by Andrei Volkov through a nominee director structure. The entity is incorporated in the DMCC free zone in Dubai and appears to have no substantive independent commercial activities. HP found no evidence of any goods, services, or other commercial consideration flowing from Eastern Maritime Investments DMCC to Korinthian Bulkers (Singapore) in return for the SGD $12,500,000 payment.
It is important to note that this transfer was separate from and unrelated to the M/V Crimson Horizon sale proceeds. The vessel had not yet been sold at the time of this transfer; it was not arrested until 20 August 2024 and was subsequently sold by judicial sale on 15 November 2024. The SGD $12,500,000 represented operating funds held by Korinthian Bulkers (Singapore) from its commercial activities.
The significance of this transfer is that it was an attempt to reduce the Singapore-based assets available for enforcement. Notwithstanding the transfer, approximately SGD $31,200,000 remained in Korinthian Bulkers (Singapore)'s accounts and was subsequently garnished on 18 October 2024, yielding a recovery of approximately £18,450,000 (GBP equivalent). Had the SGD $12,500,000 transfer not occurred, the Singapore cash recovery would have been correspondingly higher.
6.1.3 Attempted Re-flagging of M/V *Volga Spirit*
Dates: Approximately 10-12 July 2024
Based on flag state registry records obtained by HP, Dnepr Shipholding Inc. (BVI Company No. 2014876) — the SPV owner of M/V Volga Spirit — initiated proceedings in approximately 10-12 July 2024 to change the flag of M/V Volga Spirit (IMO 9756892, Panamax Bulk Carrier, 76,400 DWT) from its existing Cyprus flag to a flag of convenience with less cooperative enforcement mechanisms and limited mutual recognition of foreign judgments and arbitral awards.
The documents filed with the Cyprus Department of Merchant Shipping to initiate the de-registration process were signed by Alexei Demidov in his capacity as Director of Fleet Operations at KMH. HP notes that the re-flagging was initiated approximately 12-14 days after the Award, during a period when KMH was simultaneously transferring substantial funds out of its bank accounts.
The re-flagging was not completed before the WFO was served on 17 July 2024. Following service of the WFO, the de-registration process at the Cyprus Department of Merchant Shipping was suspended, although it is unclear whether this was a voluntary decision by KMH or a consequence of the Cyprus freezing injunction subsequently obtained on 12 August 2024.
HP's analysis, with which we concur, is that the attempted re-flagging is consistent with an intention to frustrate enforcement. A change of flag would have made it significantly more difficult for TSL to arrest the vessel or to enforce the Award against it through in rem proceedings, particularly if the new flag state lacked effective enforcement mechanisms or mutual recognition arrangements with the jurisdictions in which enforcement orders had been obtained. The fact that this step was taken in the same period as the cash transfers identified above confirms the coordinated nature of the dissipation strategy.
The vessel subsequently departed the Eastern Mediterranean and proceeded to Fujairah anchorage in the UAE (see Section 6.2.5 below), where it remains as of the date of HP's report.
6.1.4 Transfer from Korinthian DMCC (Emirates Gulf Commercial Bank)
Transfer — 11 July 2024
On 11 July 2024, Korinthian DMCC transferred AED 18,700,000 (approximately £3,970,000 at prevailing exchange rates) from its account at Emirates Gulf Commercial Bank PJSC (Gate Village 3, DIFC, Dubai) to an account in the name of "Caspian Trade Finance Ltd." at a bank in Ras Al Khaimah, UAE.
HP identified Caspian Trade Finance Ltd. as a Volkov family entity incorporated in a Ras Al Khaimah free zone. The entity has no apparent commercial relationship to KMH's shipping operations, and HP found no evidence of any corresponding goods, services, or commercial consideration flowing from Caspian Trade Finance Ltd. to Korinthian DMCC. The use of a RAK-incorporated entity is notable: Ras Al Khaimah has historically been associated with less transparent corporate structures and may have been chosen precisely because of the greater difficulty of asset tracing and enforcement in that emirate.
Critically, the Korinthian DMCC entity itself was not disclosed in KMH's WFO asset disclosure dated 25 July 2024, notwithstanding that Korinthian DMCC is a wholly-owned subsidiary of the KMH group. The AED 18,700,000 transfer — and the existence of the receiving entity, Caspian Trade Finance Ltd. — were accordingly also absent from the disclosure.
Following this transfer, approximately AED 53,400,000 remained in Korinthian DMCC's accounts at Emirates Gulf Commercial Bank, and this sum was subsequently recovered through the precautionary attachment obtained on 28 August 2024 and the ensuing execution proceedings. The recovery from the UAE accounts yielded approximately £11,340,000 (GBP equivalent). Had the AED 18,700,000 transfer not occurred, the UAE recovery would have been correspondingly higher by approximately £3,970,000.
6.2 Phase 2: Post-WFO Period (16 July – 28 August 2024)
The post-WFO period extends from the date the WFO was granted (16 July 2024) to the end of the analysis period (28 August 2024). The WFO was served on Harkness Whitford & Co. — and thereby on KMH — on 17 July 2024. KMH was therefore bound by the terms of the WFO from that date. Any disposal of, dealing with, or diminishing the value of assets in excess of the ordinary living expenses and ordinary and proper business dealings exceptions (neither of which applies to the transactions discussed below) constitutes a breach of the WFO, and may constitute contempt of court.
The distinction between pre-WFO and post-WFO conduct is legally significant. While the pre-WFO transfers may evidence a general intent to dissipate (and are relevant to the continuation of the WFO and to the assessment of further enforcement measures), the post-WFO transfers and dealings engage the court's contempt jurisdiction and may expose the individuals responsible to custodial penalties, fines, and sequestration of assets.
6.2.1 Transfer from KMH Cyprus Accounts
Transfer — 22 July 2024
On 22 July 2024 — five days after service of the WFO — KMH transferred €2,800,000 (approximately £2,370,000 at prevailing exchange rates) from an account at a Cypriot bank to an account in the name of Marina Kazakova personally at another Cypriot bank.
Marina Kazakova is the Chief Financial Officer of KMH and one of the individuals most closely involved in the group's financial management. There is no suggestion that the €2,800,000 transfer represented salary, bonus, or any other ordinary employment-related payment. The amount is grossly in excess of any reasonable employment compensation, and HP found no corresponding invoice, contract, or other commercial documentation that would explain the transfer as an arm's length business transaction.
HP's assessment, which we consider well-founded, is that this transfer was made after KMH was bound by the WFO and constitutes a direct breach of the order. The payment to Marina Kazakova's personal account — rather than to a third-party creditor, a group entity, or a commercial counterparty — is consistent with an attempt to place funds in the hands of a trusted individual beyond the immediate reach of enforcement proceedings, while maintaining practical access to those funds for the benefit of the Volkov family.
It is also significant that the Cypriot bank account from which this transfer was made was not included in KMH's WFO asset disclosure dated 25 July 2024 — notwithstanding that the disclosure was served three days after the transfer had been made. Sergei Volkov, who verified the disclosure, must have been aware of the account's existence, given that a €2,800,000 outbound payment had been authorised from it only three days prior. The omission of this account from the disclosure is addressed further in Section 8.2 below.
6.2.2 Attempted Sale of M/V *Crimson Horizon*
Timeline: Approximately 18-20 July to 20 August 2024
HP's investigation has established the following sequence of events regarding KMH's attempted sale of M/V Crimson Horizon (IMO 9801334, Handymax Bulk Carrier, 37,500 DWT, Liberian flag):
(a) On or about 18-20 July 2024 — within days of service of the WFO — Korinthian Bulkers (Singapore) Pte. Ltd., acting on behalf of the KMH group, initiated negotiations for the sale of M/V Crimson Horizon to a purportedly unrelated third party.
(b) On or about 25 July 2024, a memorandum of agreement ("MOA") was drafted for the sale of the vessel at a price of approximately USD $21,000,000.
(c) HP's investigation identified that the proposed buyer appeared to be connected to intermediaries associated with the Volkov family network. While HP was not able to confirm ultimate beneficial ownership of the buyer entity with certainty, the investigation found that the buyer shared an address with another entity previously identified as controlled by Andrei Volkov, and that the broker involved in the transaction had acted on behalf of Volkov family entities in prior unrelated transactions.
(d) The sale was not completed. On 20 August 2024, M/V Crimson Horizon was arrested by order of the High Court of Singapore in enforcement proceedings brought by TSL through Straits Meridian LLP. The vessel was held under arrest until its judicial sale on 15 November 2024 for USD $22,800,000 (approximately £18,330,000).
Several aspects of this attempted sale are significant:
(i) The negotiations were initiated and the MOA was prepared after the WFO was in force. The WFO expressly prohibited KMH from disposing of or dealing with its worldwide assets. The sale of a vessel — one of the KMH group's most valuable individual assets — plainly falls within the scope of the prohibition.
(ii) The proposed sale price of USD $21,000,000 was below the fair market value of the vessel. An independent valuation conducted by Northcape Maritime Advisory Ltd. (Captain Ian Forsyth), instructed by this firm in connection with the Singapore arrest proceedings, assessed the market value of M/V Crimson Horizon at approximately USD $23,500,000 to $24,000,000 as at July 2024. The actual judicial sale achieved USD $22,800,000 in November 2024, in a declining market. The below-market proposed price, together with the connections between the proposed buyer and the Volkov family network, suggest that the sale was not at arm's length.
(iii) Had the sale been completed before the arrest, the proceeds would have been in the hands of Korinthian Bulkers (Singapore) and potentially available for further dissipation in the same manner as the SGD $12,500,000 transfer on 8 July 2024.
6.2.3 Restructuring of Oceangate Ventures Ltd. Shareholding
Date: Approximately 1 August 2024
On or about 1 August 2024, KMH attempted to transfer its 100% shareholding in Oceangate Ventures Ltd. (HE 401293) to a newly incorporated BVI entity styled "Meridian Shipping Holdings Inc."
HP's investigation identified the following key facts:
(a) Meridian Shipping Holdings Inc. was incorporated in the British Virgin Islands on or about 22 July 2024 — five days after service of the WFO. The timing of incorporation is consistent with a deliberate plan to create a receiving vehicle for assets stripped from KMH's disclosed corporate structure.
(b) HP identified Meridian Shipping Holdings Inc. as a Volkov family entity with no prior existence, no independent commercial operations, and no apparent commercial rationale for the acquisition of the Oceangate Ventures shares other than to place them beyond the reach of TSL's enforcement efforts.
(c) The transfer of the Oceangate Ventures shares would have had the effect of stripping KMH of its indirect ownership of the fleet SPVs held through Oceangate, including Dnepr Shipholding Inc. (the owner of M/V Aegean Fortuna and M/V Volga Spirit). The value of the Oceangate shares — representing the group's equity interest in multiple dry-bulk carriers — was substantial.
(d) The transfer was blocked by the Cyprus freezing injunction granted on 12 August 2024 before it could be registered with the Cyprus Registrar of Companies. Kyprianos Makrides & Partners were alerted to the attempted transfer by HP's ongoing monitoring and acted promptly to secure the injunction.
The significance of this interception cannot be overstated. The Oceangate Ventures shares were subsequently the subject of forced sale proceedings in Cyprus, which yielded a substantial portion of the £22,350,000 total Cyprus recovery. Had the transfer to Meridian Shipping Holdings Inc. been completed and registered, the shares would have been in the hands of a BVI entity with no assets within the jurisdiction of the Cypriot courts, and the Cyprus recovery would have been severely diminished or eliminated.
6.2.4 Diversion of Charter Hire Payments
Dates: Throughout July and August 2024
In addition to the discrete transfers of accumulated assets described above, HP identified an ongoing pattern of diversion of incoming revenue streams — specifically, sub-charterer payments owed to KMH and its subsidiaries — away from the group's standard operating accounts and into accounts controlled by Volkov family entities.
HP estimated that the total value of diverted sub-charterer payments during July and August 2024 was approximately £4,200,000, though not all of this amount falls within the post-WFO period. The specific instances identified are as follows:
(a) In late July 2024 (post-WFO), charter hire payments of approximately £1,350,000 owed by a sub-charterer to KMH were redirected — by written instruction from KMH to the sub-charterer — to an account in the name of "Baltic Maritime Services Ltd." This is the same Sergei Volkov-controlled entity that received £4,600,000 from the Meridian Trust Bank transfer on 5 July 2024 (Section 6.1.1 above).
(b) In August 2024 (post-WFO), freight receivables of approximately £870,000 were diverted from a KMH subsidiary's account to "Caspian Trade Finance Ltd." — the same Ras Al Khaimah entity that received AED 18,700,000 from the Korinthian DMCC account on 11 July 2024 (Section 6.1.4 above).
The remaining approximately £1,980,000 of the £4,200,000 total diverted payments spans the pre-WFO and post-WFO periods and involves smaller individual payments to the same network of entities.
The diversion of charter hire and freight receivables is particularly significant because it represents an attempt not merely to dissipate existing assets but to prevent the accumulation of new assets that would be subject to the WFO and available for enforcement. By redirecting incoming revenue to Volkov family entities, KMH sought to ensure that its disclosed bank accounts would show diminishing balances, creating the false impression of a financially weakened group while funds continued to flow to accounts beyond the reach of enforcement orders.
6.2.5 Movement of M/V *Volga Spirit* to Fujairah
Dates: Vessel departed Eastern Mediterranean approximately 25 July 2024; arrived Fujairah anchorage approximately 10 August 2024
HP's AIS data analysis identified that M/V Volga Spirit (IMO 9756892, Panamax Bulk Carrier, 76,400 DWT, Cyprus flag, owned by Dnepr Shipholding Inc.) departed the Eastern Mediterranean on approximately 25 July 2024 — eight days after service of the WFO — and transited the Suez Canal en route to the Arabian Gulf. The vessel arrived at Fujairah anchorage on approximately 10 August 2024 and has remained there since.
HP's assessment, based on analysis of the vessel's AIS track and commercial fixture data, is that the movement of M/V Volga Spirit from the Eastern Mediterranean to Fujairah was without apparent commercial cargo or charter. There is no evidence in the available records of a time charter fixture, voyage charter, or contract of carriage that would explain the vessel's movement to Fujairah. The vessel appears to have been moved in ballast (i.e., without cargo) for the sole purpose of repositioning it geographically.
HP concludes that the movement was designed to position the vessel in a jurisdiction where arrest and enforcement is procedurally more complex and more time-consuming than in European ports where enforcement orders were being obtained. Fujairah, while part of the United Arab Emirates, is outside the DIFC and is subject to the jurisdiction of the Fujairah local courts, which operate under a different legal framework than the DIFC Courts and where enforcement of foreign judgments and arbitral awards presents greater procedural challenges. Moreover, by moving the vessel away from European ports — and in particular from Cyprus, where the vessel was flagged and where the freezing injunction was obtained — KMH removed it from the immediate reach of the enforcement orders that TSL was securing.
The current status of M/V Volga Spirit, as of the date of HP's report on 25 November 2024, is that the vessel remains at Fujairah anchorage. Enforcement efforts in respect of this vessel are ongoing and are addressed in a separate memorandum from this firm (re: M/V Volga Spirit — Remaining Enforcement Options, dated 29 November 2024). Al-Rashid Hatem & Associates (Level 14, The Gate Building, DIFC, Dubai) are monitoring the situation and are on standby to seek arrest should the vessel move to a more favourable jurisdiction.
6.3 Summary Table of Identified Post-Award Transfers