IN THE HIGH COURT OF JUSTICE BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES COMMERCIAL COURT (QBD)
Claim No. CL-2024-000487
BETWEEN:
THALASSA SHIPPING & LOGISTICS SA Claimant/Applicant
— and —
KORINTHIAN MARITIME HOLDINGS LTD. Defendant/Respondent
FIRST WITNESS STATEMENT OF NIKOLAOS PAPADIMITRIOU
Filed in support of:
(1) Application for permission to enforce LCIA Award No. 224718 as a judgment pursuant to section 66 of the Arbitration Act 1996; and
(2) Application for a Worldwide Freezing Order.
Date: 15 July 2024
Solicitors for the Claimant:
Calderwood & Harkness LLP 45 Moorgate London EC2R 6AR United Kingdom
Ref: SC/NP/TSL-KMH/2024
1. INTRODUCTION AND CREDENTIALS
1. I, NIKOLAOS PAPADIMITRIOU, of 14 Akti Miaouli, 4th Floor, Piraeus 185 35, Greece, the principal office of Thalassa Shipping & Logistics SA ("TSL" or the "Claimant"), will say as follows.
2. I am the Chairman and Chief Executive Officer of TSL, a position I have held since 2003. Prior to assuming the role of Chairman, I served as Managing Director of TSL from 1995 to 2003, having joined the company's commercial department in 1989 following my graduation from the Athens University of Economics and Business and the completion of a Master's degree in Maritime Law and Policy at the London School of Economics. I have over 35 years of experience in the international shipping industry, with particular expertise in chartering, fleet management, and commercial operations.
3. I am duly authorised to make this witness statement on behalf of TSL in connection with these proceedings. The Board of Directors of TSL passed a resolution on 10 July 2024 authorising me to act on the company's behalf in all matters relating to Claim No. CL-2024-000487, including the making of this witness statement and the bringing of the applications described herein.
4. The facts set out in this witness statement are within my own knowledge and are true. Where I refer to facts which are not within my own direct knowledge, I have identified the source of my information and belief, and I believe such facts to be true. In particular, certain matters relating to the forensic asset tracing investigation are within the knowledge of Hartwell Pemberton LLP and its partners, and I have been briefed on their findings by Rebecca Saunders, Partner at Hartwell Pemberton LLP, and by my solicitors at Calderwood & Harkness LLP. Certain financial and operational details are within the knowledge of TSL's Chief Financial Officer, Elena Stavridis, and TSL's Head of Chartering & Operations, Captain Dimitrios Kouretas, both of whom have briefed me in connection with the preparation of this statement.
5. This witness statement is made in support of TSL's applications for:
(a) permission to enforce LCIA Award No. 224718 (the "Award") in the same manner as a judgment of the Court, pursuant to section 66 of the Arbitration Act 1996 (the "Act"); and
(b) a Worldwide Freezing Order against Korinthian Maritime Holdings Ltd. ("KMH" or the "Defendant/Respondent") to restrain the disposal, dissipation, dealing with, or diminution of the value of KMH's assets worldwide up to the value of £108,600,000, together with accruing post-award interest.
6. This witness statement is filed in proceedings bearing Claim No. CL-2024-000487 in the Commercial Court of the Business and Property Courts of England and Wales.
7. There is exhibited to this witness statement a paginated exhibit bundle comprising exhibits marked "NP1" through "NP14". References in this witness statement to exhibits are to documents in that bundle, the contents of which are set out in the schedule of exhibits at Section 14 below.
8. This witness statement comprises 14 sections, and the structure is as follows: Section 2 provides background on TSL; Section 3 provides background on KMH and its corporate structure; Section 4 describes the three charter-party agreements at the centre of the dispute; Section 5 sets out KMH's repudiatory breaches; Section 6 describes the LCIA arbitration and the Award; Section 7 addresses KMH's failure to satisfy the Award; Section 8 addresses the need for enforcement under section 66 of the Act; Section 9 sets out the case for a Worldwide Freezing Order; Section 10 provides a summary of KMH's known assets; Section 11 addresses the need for an ancillary disclosure order; Section 12 addresses the duty of full and frank disclosure; Section 13 proposes a return date; and Section 14 lists the exhibits.
2. BACKGROUND TO THE CLAIMANT — THALASSA SHIPPING & LOGISTICS SA
9. TSL is a Société Anonyme (SA) organised and existing under the laws of the Hellenic Republic (Greece). Its registered and principal office is located at 14 Akti Miaouli, 4th Floor, Piraeus 185 35, Greece. TSL is registered with the General Electronic Commercial Registry (G.E.MI.) and holds Greek Tax Identification Number (AFM): EL-801456729.
10. TSL was founded in 1987 by my late father, Georgios Papadimitriou, and other members of the Papadimitriou family. Since its inception, TSL has grown from a modest owner-operator of a small fleet of Mediterranean coastal vessels into a significant participant in the international dry-bulk and tanker trades. Over the past 37 years, the company has built a reputation for reliability, operational excellence, and sound commercial practices in the global shipping markets.
11. TSL currently operates a fleet of 34 vessels, comprising a diversified mix of bulk carriers (including Capesize, Panamax, Supramax, and Handymax units), product and chemical tankers, and container feeders. The fleet is deployed across TSL's core trading areas, which include the Mediterranean Sea, the Black Sea, the Arabian Gulf, and, increasingly, the Indian Ocean and Southeast Asian regions. TSL provides integrated shipping and logistics services, including time chartering, voyage chartering, ship management, and freight forwarding.
12. For the financial year ended 31 December 2023, TSL reported consolidated annual revenues of approximately €620 million. The company maintains a strong balance sheet and has consistently generated positive operating cash flows throughout its history, including during periods of significant market volatility in the international shipping industry.
13. TSL is a privately held company. Approximately 72% of its issued share capital is held by the Papadimitriou Family Trust, a discretionary trust established under Guernsey law, of which I and my immediate family members are the principal beneficiaries. The remaining 28% is held by Aegean Capital Partners SA, an institutional investment firm based in Athens, Greece, which acquired its stake in 2016 as part of a capital raising exercise undertaken to fund fleet expansion.
14. I have served as Chairman and Chief Executive Officer of TSL since 2003, and in that capacity I have personal oversight of the company's chartering and commercial operations. I am involved on a day-to-day basis in the negotiation and approval of significant charter-party agreements, including the three charter-party agreements that are the subject of these proceedings.
15. The key personnel who were involved in the events giving rise to this dispute, and who have provided me with information relevant to this witness statement, are:
(a) Elena Stavridis — Chief Financial Officer of TSL, who has been responsible for TSL's financial management since 2014 and who has direct knowledge of the hire payments, financial losses, and accounting treatment of the charter-party disputes with KMH;
(b) Captain Dimitrios Kouretas — Head of Chartering & Operations at TSL, who negotiated and managed the three charter-party agreements on a day-to-day basis and who has direct knowledge of the operational circumstances surrounding KMH's breaches, including the redelivery of M/V Aegean Fortuna, the non-payment of hire on M/V Crimson Horizon, and the fabricated off-hire deductions on M/V Volga Spirit; and
(c) Ioanna Christodoulou — General Counsel of TSL, who has had conduct of TSL's legal response to KMH's breaches from the outset, including the management of the LCIA arbitration proceedings and the instruction of external counsel.
3. BACKGROUND TO THE RESPONDENT — KORINTHIAN MARITIME HOLDINGS LTD.
16. KMH is a private limited company incorporated in the Republic of Cyprus under the Companies Law, Cap. 113, bearing Registration No. HE 387421. Its registered address is 28 Themistokli Dervi Avenue, Suite 601, Nicosia 1066, Cyprus.
17. KMH is a vessel-owning and chartering company that, at the material times, controlled a fleet of approximately 18 dry-bulk carriers. KMH operates its fleet through a network of single-purpose vehicle ("SPV") subsidiaries incorporated in various jurisdictions, including the British Virgin Islands ("BVI"), Singapore, and Cyprus. KMH acts as disponent owner of its vessels, entering into charter-party agreements with charterers such as TSL whilst the registered ownership of the individual vessels is held by the relevant SPVs.
18. KMH is beneficially owned by the Volkov family through a series of BVI and Cypriot holding structures. The ultimate beneficial owner ("UBO") of KMH is Mr. Andrei Volkov, a Russian national resident in Limassol, Cyprus. Mr. Volkov is, to the best of my knowledge and belief based on publicly available information and the findings of the forensic investigation described below, the de facto director and controlling mind of KMH, notwithstanding that he does not appear on the Cyprus Registrar of Companies records as a director of KMH.
19. Mr. Sergei Volkov, the son of Andrei Volkov, is a director of KMH and is listed as such on the Cypriot company register. Other key personnel at KMH include Ms. Marina Kazakova, who serves as Chief Financial Officer, and Mr. Alexei Demidov, who serves as Director of Fleet Operations.
20. Based on publicly available information, industry intelligence, and the preliminary asset tracing report prepared by Hartwell Pemberton LLP (exhibited at "NP10"), the estimated pre-dispute net asset value of KMH and its associated entities was approximately USD $280 million. This estimate was calculated by reference to the aggregate fleet value of KMH's vessels (based on broker valuations and comparable transaction data), together with estimated liquid assets, receivables, and balances held across the KMH group's various bank accounts and subsidiaries.
21. KMH was the disponent owner of the three vessels at the centre of the charter-party dispute which gave rise to the LCIA arbitration and the Award: M/V Aegean Fortuna, M/V Crimson Horizon, and M/V Volga Spirit.
3.1 KMH's Corporate Structure and Subsidiaries
22. KMH operates through a complex multi-jurisdictional corporate structure. Based on information available to TSL, including the corporate structure chart prepared by Hartwell Pemberton LLP (exhibited at "NP11"), the principal entities within the KMH group are as follows:
(a) Korinthian Bulkers (Singapore) Pte. Ltd. — This is a Singapore-incorporated subsidiary of KMH, with its registered office at 80 Robinson Road, #14-02, Singapore 068898. This entity was the registered owner of M/V Crimson Horizon at the time of the charter-party and, upon information and belief, held proceeds from the subsequent sale or sub-charter of that vessel. It maintains accounts at Pinnacle Bank (Singapore) Ltd., 6 Battery Road, #20-01, Singapore 049909.
(b) Dnepr Shipholding Inc. — This is a company incorporated in the British Virgin Islands, bearing Company No. 2014876. Its registered agent is Vantage Corporate Services Ltd., Road Town, Tortola, BVI. Dnepr Shipholding Inc. is the registered owner of both M/V Aegean Fortuna and M/V Volga Spirit. It is an SPV within the KMH group, ultimately controlled by the Volkov family through the intermediate holding structures described below.
(c) Korinthian DMCC — This is a company established in the Dubai Multi Commodities Centre ("DMCC") free zone in the United Arab Emirates, with its registered office at Unit 3407, Almas Tower, Jumeirah Lakes Towers ("JLT"), Dubai, UAE. Upon information and belief, Korinthian DMCC holds operational funds and receivables generated from KMH's trading activities in the Middle East and the Arabian Gulf region. It maintains accounts at Emirates Gulf Commercial Bank PJSC, Gate Village 3, DIFC, Dubai, UAE.
(d) Oceangate Ventures Ltd. — This is a company incorporated in Cyprus, bearing Registration No. HE 401293, with its registered office at 28 Themistokli Dervi Avenue, Suite 604, Nicosia 1066, Cyprus — the same building as KMH's own registered office. Oceangate Ventures Ltd. serves as an intermediate holding company within the KMH group, holding the shares in fleet SPVs including, upon information and belief, Dnepr Shipholding Inc. and other vessel-owning entities.
23. The corporate structure of the KMH group is set out in greater detail in the corporate structure chart prepared by Hartwell Pemberton LLP, which is exhibited at "NP11". I also refer the Court to the Cyprus Registrar of Companies extracts for KMH and Oceangate Ventures Ltd., exhibited at "NP13", and the BVI company search results for Dnepr Shipholding Inc., exhibited at "NP14".
4. THE CHARTER-PARTY AGREEMENTS
24. The dispute between TSL and KMH arises out of three time charter-party agreements entered into between the parties between 2019 and 2021 in the ordinary course of TSL's shipping and chartering business. Each of the three charter-party agreements is governed by English law and contains an identical LCIA arbitration clause providing for disputes to be resolved by arbitration in London under the LCIA Arbitration Rules. I address each charter-party in turn below.
4.1 Charter of M/V *Aegean Fortuna*
25. On 15 March 2019, TSL (as charterer) and KMH (as disponent owner) entered into a time charter-party agreement in respect of the vessel M/V Aegean Fortuna (IMO No. 9784521), a Supramax Bulk Carrier of 58,200 DWT, flagged in the marshall Islands (the "Aegean Fortuna Charter"). The registered owner of M/V Aegean Fortuna is Dnepr Shipholding Inc., a BVI-incorporated SPV within the KMH group, as described in paragraph 22(b) above.
26. The Aegean Fortuna Charter was based on a standard NYPE 2015 form, as amended by the parties' rider clauses. The charter period was 36 months, with an option to extend for a further 12 months at the charterer's election. The daily hire rate was agreed at USD $14,750 per day, with periodic escalation provisions. The charter included the usual provisions for off-hire, maintenance, and redelivery, and was negotiated on behalf of TSL by Captain Dimitrios Kouretas.
27. Clause 46 of the Aegean Fortuna Charter contained the governing law and arbitration provision, which provided, in material part:
"This Charter Party shall be governed by and construed in accordance with English law. Any dispute arising out of or in connection with this Charter Party, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the LCIA Arbitration Rules, which rules are deemed to be incorporated by reference into this Clause. The number of arbitrators shall be three. The seat, or legal place, of arbitration shall be London, England."
28. A true copy of the Aegean Fortuna Charter is exhibited at "NP1".
4.2 Charter of M/V *Crimson Horizon*
29. On 22 January 2020, TSL (as charterer) and KMH (as disponent owner) entered into a time charter-party agreement in respect of the vessel M/V Crimson Horizon (IMO No. 9801334), a Handymax Bulk Carrier of 37,500 DWT, flagged in Liberia (the "Crimson Horizon Charter"). The registered owner of M/V Crimson Horizon is Korinthian Bulkers (Singapore) Pte. Ltd., a Singapore-incorporated subsidiary within the KMH group, as described in paragraph 22(a) above.
30. The Crimson Horizon Charter was likewise based on a standard NYPE 2015 form with bespoke rider clauses negotiated between the parties. The charter period was 24 months, with an option to extend for a further 12 months. The daily hire rate was agreed at USD $12,500 per day, subject to adjustment provisions linked to the Baltic Handymax Time Charter Average. The charter was negotiated on behalf of TSL by Captain Dimitrios Kouretas, with the financial terms reviewed and approved by Elena Stavridis.
31. The Crimson Horizon Charter contained an identical governing law and arbitration clause to that in the Aegean Fortuna Charter, as set out in paragraph 27 above, providing for English law and LCIA arbitration seated in London.
32. A true copy of the Crimson Horizon Charter is exhibited at "NP2".
4.3 Charter of M/V *Volga Spirit*
33. On 10 June 2021, TSL (as charterer) and KMH (as disponent owner) entered into a time charter-party agreement in respect of the vessel M/V Volga Spirit (IMO No. 9756892), a Panamax Bulk Carrier of 76,400 DWT, flagged in Cyprus (the "Volga Spirit Charter"). The registered owner of M/V Volga Spirit is Dnepr Shipholding Inc., the same BVI-incorporated SPV that owns M/V Aegean Fortuna.
34. The Volga Spirit Charter was negotiated during a period of rising freight rates in the dry-bulk market, and the daily hire rate reflected the prevailing market conditions at the time of fixing. The charter period was 24 months, with an option to extend. The daily hire rate was agreed at USD $18,250 per day, reflecting the significantly larger carrying capacity of the Panamax vessel and the favourable market conditions at the time of conclusion.
35. As with the other two charters, the Volga Spirit Charter contained an identical governing law and arbitration clause, providing for English law and LCIA arbitration seated in London, in the terms set out in paragraph 27 above.
36. A true copy of the Volga Spirit Charter is exhibited at "NP3".
4.4 Key Terms Common to All Three Charters
37. The following features were common to all three charter-party agreements:
(a) All three charter-parties were governed by English law;
(b) All three contained identical LCIA arbitration clauses providing for arbitration in London under the LCIA Arbitration Rules, with a panel of three arbitrators and London as the seat of arbitration;
(c) All three were entered into in the ordinary course of TSL's chartering and commercial operations, as part of TSL's strategy to expand its time-chartered-in fleet to service growing demand in its core trading areas;
(d) In each case, TSL was the charterer and KMH was the disponent owner, with the registered ownership of the relevant vessel held by an SPV subsidiary of KMH;
(e) All three charters were based on the standard NYPE 2015 form, as amended by bespoke rider clauses negotiated between the parties; and
(f) Each charter contained standard provisions governing hire payment, off-hire, maintenance, performance warranties, redelivery, and the charterer's right of withdrawal in the event of non-payment.
38. TSL performed its obligations under all three charters in full and on time. At no point during the currency of any of the three charters did KMH raise any complaint regarding TSL's performance. The disputes which gave rise to the LCIA arbitration were caused entirely by KMH's repudiatory breaches, to which I now turn.
5. KMH'S REPUDIATORY BREACHES
39. Beginning in mid-2022, KMH engaged in a pattern of repudiatory breach across all three charter-party agreements. The breaches were deliberate, unjustified, and caused TSL substantial financial loss. The Tribunal in the LCIA arbitration found, after a full evidentiary hearing, that each of the breaches described below was established and that KMH's conduct was repudiatory. I set out the three categories of breach below.
5.1 Wrongful Early Redelivery of M/V *Aegean Fortuna*
40. On 18 June 2022, KMH wrongfully redelivered M/V Aegean Fortuna to TSL approximately 14 months prior to the contractual redelivery date under the Aegean Fortuna Charter. The charter-party provided for a minimum charter period of 36 months commencing from the date of delivery of the vessel, and at the time of the wrongful redelivery, only approximately 22 months of the charter period had elapsed.
41. The early redelivery was not agreed to by TSL. TSL did not consent to the redelivery and expressly objected to it in contemporaneous correspondence. KMH offered no valid justification for the redelivery. It did not invoke any contractual right of early termination, nor did it identify any alleged breach by TSL that could have entitled it to terminate the charter. The redelivery was, in substance, an arbitrary and unilateral decision by KMH to walk away from a charter-party that had become commercially unfavourable to it in the prevailing market conditions.
42. As a consequence of the wrongful redelivery, TSL was compelled to seek alternative employment for M/V Aegean Fortuna in a depressed market. The vessel was eventually re-chartered at a significantly lower hire rate, resulting in substantial losses to TSL over the remaining 14 months of what should have been the original charter period. The Tribunal quantified TSL's losses arising from the wrongful redelivery at £42,300,000, reflecting the difference between the contractual hire rate and the rate at which TSL was able to re-charter the vessel, together with associated costs and losses.
43. The correspondence relating to the wrongful redelivery, including KMH's redelivery notice, TSL's objection, and the parties' subsequent exchanges, is exhibited at "NP4".
5.2 Non-Payment of Hire on M/V *Crimson Horizon*
44. From 1 July 2022, KMH ceased making hire payments under the Crimson Horizon Charter. The hire was payable semi-monthly in advance, and KMH failed to make any hire payment from 1 July 2022 onwards. No prior notice of non-payment was given, and KMH provided no adequate explanation or justification for its decision to withhold hire.
45. Over the period from 1 July 2022 to 15 September 2022, hire arrears of £4,280,000 accrued under the Crimson Horizon Charter. TSL sent multiple notices to KMH demanding payment in accordance with the charter-party terms, including the contractual anti-technicality notice required before the exercise of the charterer's right of withdrawal.
46. Having received no payment and no satisfactory response from KMH, TSL exercised its contractual right to withdraw M/V Crimson Horizon from the charter on 15 September 2022, in accordance with Clause 11 of the Crimson Horizon Charter, as amended by the rider clauses. KMH was duly notified of the withdrawal.
47. The Tribunal found that KMH's non-payment of hire constituted a repudiatory breach of the Crimson Horizon Charter, and awarded TSL the outstanding hire of £4,280,000 together with loss of bargain damages of £23,870,000, reflecting the hire that TSL would have earned over the unexpired period of the charter at the contractual rate less the hire achievable on the open market at the date of withdrawal.
48. The hire payment records and the withdrawal notice are exhibited at "NP5".
5.3 Fabricated Off-Hire Deductions on M/V *Volga Spirit*
49. During the currency of the Volga Spirit Charter, KMH made a series of off-hire deductions from hire payments, totalling approximately £2,740,000. Under the terms of the Volga Spirit Charter, the charterer was entitled to place the vessel off-hire in specified circumstances — principally, where the vessel was unable to perform its service due to deficiency of crew, breakdown of machinery, or similar causes attributable to the owner. However, the off-hire deductions made by KMH were not referable to any genuine off-hire events.
50. The Tribunal, after careful examination of the evidence, found that the off-hire deductions were fabricated. This finding was based on a comprehensive review of contemporaneous vessel logs, Automatic Identification System ("AIS") tracking data, port records, loading and discharge reports, and other operational documentation which demonstrated that M/V Volga Spirit was fully operational and performing its service during the periods for which KMH claimed off-hire. The AIS data, in particular, showed that the vessel was trading normally during the alleged off-hire periods, calling at ports and completing voyages in a manner wholly inconsistent with the off-hire events claimed by KMH.
51. The Tribunal described KMH's conduct in fabricating the off-hire deductions in strong terms, finding that the claims were "manufactured" and "unsupported by any credible evidence". This finding of dishonest conduct in the underlying commercial relationship is, I respectfully submit, of particular significance in the context of the present application for a Worldwide Freezing Order.
52. The off-hire deduction notices issued by KMH, together with the vessel operational records, AIS data, and port records which contradict KMH's claims, are exhibited at "NP6".
6. THE LCIA ARBITRATION
6.1 Commencement and Constitution of the Tribunal
53. On 14 November 2022, TSL filed a Request for Arbitration with the London Court of International Arbitration ("LCIA"), commencing LCIA Case Reference No. 224718. TSL's Request for Arbitration sought damages arising from KMH's repudiatory breaches of all three charter-party agreements, as described in Section 5 above.
54. In accordance with the LCIA Arbitration Rules, the Tribunal was constituted on 8 February 2023. The Tribunal comprised three arbitrators, each of whom is a distinguished practitioner in the fields of international commercial arbitration and maritime law:
(a) Presiding Arbitrator: Sir Malcolm Fenton-Clarke — appointed by the LCIA Court. Sir Malcolm is a retired High Court Judge (Queen's Bench Division, Commercial Court) and a former chairman of the London Maritime Arbitrators Association. He is widely recognised as one of the foremost authorities on international maritime arbitration;
(b) Co-Arbitrator (nominated by TSL): Professor Athena Drakopoulos — Professor of International Commercial Law at University College London, and a practising arbitrator with over 25 years' experience in shipping and commodities arbitration; and
(c) Co-Arbitrator (nominated by KMH): Dr. Henrik Dalmqvist — a Swedish national and partner at Dalmqvist & Söderström Advokatbyrå in Stockholm, specialising in maritime and trade law, with extensive experience as an arbitrator in LCIA and ICC proceedings.
55. The Tribunal Secretary was Ms. Fiona Beckett, a senior case manager at the LCIA.
56. TSL's Request for Arbitration and the notice of constitution of the Tribunal are exhibited at "NP7".
6.2 The Arbitral Proceedings
57. The arbitration was conducted in accordance with the LCIA Arbitration Rules, with London as the seat of arbitration. The proceedings were conducted in English.
58. Both parties were fully represented by experienced solicitors and counsel throughout the proceedings. TSL was represented by Calderwood & Harkness LLP, the firm which has conduct of the present proceedings. KMH was represented by Harkness Whitford & Co. (12 Fetter Lane, London EC4A 1JP; SRA No. 614823), with Ms. Catherine Whitford serving as lead counsel for KMH.
59. The proceedings followed the procedural timetable established by the Tribunal in Procedural Order No. 1, dated 15 March 2023. The principal stages of the proceedings were as follows:
(a) Exchange of Statements of Case: TSL served its Statement of Claim on 17 April 2023. KMH served its Statement of Defence and Counterclaim on 12 June 2023. TSL served its Reply and Defence to Counterclaim on 10 July 2023. KMH served its Rejoinder on 7 August 2023.
(b) Document disclosure: The parties exchanged disclosure of documents in accordance with Procedural Order No. 2, which adopted a modified Redfern Schedule approach. Two rounds of disclosure were completed between May and August 2023.
(c) Witness evidence: Both parties served written witness statements. TSL served statements from myself, Elena Stavridis, Captain Dimitrios Kouretas, and two additional witnesses of fact. KMH served statements from Sergei Volkov, Marina Kazakova, Alexei Demidov, and one further witness.
(d) Expert evidence: Both parties served expert reports on the quantum of TSL's claims and the issue of market damages. TSL's expert was Mr. Jonathan Fairclough of Maritime Advisory Partners LLP, a well-known shipping economist and expert witness. KMH's expert was Mr. Stephen Rutherford of Howe Robinson Maritime Consultants.
(e) The evidentiary hearing took place over 10 hearing days, from 11 September 2023 through 22 September 2023, at the International Dispute Resolution Centre ("IDRC"), 70 Fleet Street, London EC4Y 1EU. Both parties called and cross-examined witnesses of fact and expert witnesses. KMH participated fully in the hearing and had every opportunity to present its case, examine TSL's witnesses, and challenge TSL's evidence.
(f) Post-hearing briefs were exchanged simultaneously on 20 October 2023, and reply post-hearing briefs were exchanged on 10 November 2023.
60. I wish to emphasise that KMH participated fully in the arbitral proceedings at every stage. KMH filed its Statement of Defence and Counterclaim, called witnesses, cross-examined TSL's witnesses, served expert evidence, and made full written and oral submissions. There is no basis on which KMH can contend that it was denied an opportunity to present its case or that the proceedings were in any way procedurally deficient.
6.3 The Final Award
61. The Tribunal issued its Final Award on 28 June 2024 (the "Award"). The Award is a comprehensive document running to 187 pages, in which the Tribunal addressed each of TSL's claims and KMH's defences and counterclaim in meticulous detail.
62. A certified copy of the Award (LCIA Award No. 224718, dated 28 June 2024) is exhibited at "NP8".
63. The Tribunal dismissed KMH's counterclaim in its entirety and awarded TSL the following sums:
64. At the prevailing exchange rate of £1 = USD $1.2441 as of the date of the Award (28 June 2024), the total Award of £96,450,000 is equivalent to approximately USD $120,000,000.
65. In addition to the substantive award of damages, the Tribunal ordered KMH to bear 85% of the costs of the arbitration, comprising:
(a) LCIA administrative and tribunal costs: £3,240,000;
(b) TSL's legal costs (including solicitors' fees, counsel fees, expert fees, and disbursements): £8,910,000;
(c) Total costs ordered to be paid by KMH: £12,150,000.
66. The grand total of the Award and costs ordered to be paid by KMH is therefore £108,600,000.
67. The Tribunal further ordered that post-award interest shall accrue at the rate of 5.25% per annum simple on all unpaid sums from 29 June 2024 (i.e., the day following the date of the Award) until payment.
Key Findings of the Tribunal
68. I summarise below the key findings of the Tribunal in relation to each head of claim:
(a) M/V *Aegean Fortuna* — Wrongful Early Redelivery (£42,300,000): The Tribunal found that KMH's redelivery of M/V Aegean Fortuna on 18 June 2022 was wrongful and constituted a repudiatory breach of the Aegean Fortuna Charter. The Tribunal found that there were 14 months remaining on the charter period at the date of redelivery, and that the loss of bargain to TSL was to be assessed by reference to the difference between the contractual hire rate and the market rate at which TSL was able to re-charter the vessel. The damages of £42,300,000 represent an implied loss of approximately £3,021,429 per month over the unexpired 14-month charter period, inclusive of associated losses.
(b) M/V *Crimson Horizon* — Non-Payment of Hire (£28,150,000): The Tribunal found that KMH's failure to pay hire from 1 July 2022 onwards constituted a repudiatory breach of the Crimson Horizon Charter, which TSL was entitled to and did accept by withdrawing the vessel on 15 September 2022. The Tribunal awarded TSL the outstanding hire of £4,280,000 and loss of bargain damages of £23,870,000, the latter representing the difference between the contractual hire rate and the rate achievable on the open market over the unexpired period of the charter, applying the methodology established in The Golden Victory [2007] UKHL 12 as adapted by the Tribunal to the specific facts.
(c) M/V *Volga Spirit* — Fabricated Off-Hire Deductions (£2,740,000): The Tribunal found that the off-hire deductions totalling £2,740,000 made by KMH on M/V Volga Spirit were fabricated and wholly unsupported by evidence. The Tribunal noted that the AIS data, vessel logs, and port records unequivocally demonstrated that the vessel was fully operational during the periods for which KMH had claimed off-hire. The Tribunal awarded restitution of the full amount of the fabricated deductions.
(d) Loss of Profit / Market Differential Damages (£16,480,000): The Tribunal awarded additional loss of profit and market differential damages of £16,480,000, assessed across all three charters, reflecting the broader financial losses suffered by TSL as a consequence of KMH's repudiatory breaches. These damages were assessed by reference to the expert evidence of Mr. Jonathan Fairclough and took into account the depressed market conditions prevailing at the time of the breaches and the costs incurred by TSL in mitigating its losses.
(e) Pre-Award Interest (£6,780,000): The Tribunal awarded pre-award interest at the rate of 5.25% per annum simple, calculated from the various breach dates to the date of the Award (28 June 2024), blended across the three charters. The rate of 5.25% was determined by the Tribunal to be appropriate having regard to the rate of interest applicable to commercial judgments in England and Wales and the prevailing Bank of England base rate during the relevant period.
7. KMH'S FAILURE TO SATISFY THE AWARD
69. The Award was communicated to both parties and their respective legal representatives on 28 June 2024. In particular, the Award was communicated to KMH's solicitors, Harkness Whitford & Co., at 12 Fetter Lane, London EC4A 1JP, by the LCIA Secretariat in accordance with the LCIA Arbitration Rules.
70. Despite the passage of more than two weeks since the Award was issued, KMH has made no payment whatsoever toward satisfaction of the Award. Not a single pound has been paid or tendered.
71. On 8 July 2024, TSL's solicitors, Calderwood & Harkness LLP, wrote to Harkness Whitford & Co. on behalf of TSL demanding payment of the full amount of the Award, inclusive of costs, being £108,600,000, together with post-award interest accruing at 5.25% per annum simple from 29 June 2024. The letter called upon KMH to make payment within 14 days (i.e., by 22 July 2024 at the latest) and stated that, in the absence of payment, TSL would take all necessary steps to enforce the Award, including applications to this Court.
72. The 14-day deadline stipulated in the demand letter has now expired. KMH has made no payment. KMH has not responded substantively to the demand letter. There has been no indication from KMH or from Harkness Whitford & Co. that KMH intends to comply with the Award or to pay any part of the sums due.
73. Post-award interest continues to accrue at the rate of 5.25% per annum simple on the unpaid sum of £108,600,000, amounting to approximately £15,621 per day (or approximately £5,701,500 per annum).
74. The demand letter from Calderwood & Harkness LLP to Harkness Whitford & Co. dated 8 July 2024 is exhibited at "NP9".
8. NEED FOR ENFORCEMENT UNDER SECTION 66 OF THE ARBITRATION ACT 1996
75. TSL seeks the Court's permission to enforce LCIA Award No. 224718 in the same manner as a judgment or order of the Court to the same effect, pursuant to section 66(1) of the Arbitration Act 1996 (the "Act").
76. Section 66(1) of the Act provides:
"An award made by the tribunal pursuant to an arbitration agreement may, by leave of the court, be enforced in the same manner as a judgment or order of the court to the same effect."
77. The requirements for enforcement under section 66 are well established. The applicant must demonstrate: (a) that there is a valid arbitration agreement; (b) that the award is a final award; and (c) that there are no grounds for refusing enforcement. I address each requirement in turn.
78. Valid arbitration agreement. Each of the three charter-party agreements contained an identical LCIA arbitration clause providing for the resolution of disputes by arbitration under the LCIA Arbitration Rules, with London as the seat. The arbitration agreement is in writing and satisfies the requirements of sections 5 and 6 of the Act. The existence and validity of the arbitration agreement were not disputed by KMH during the arbitral proceedings, and KMH participated fully in the arbitration on the basis of those agreements.
79. Final award. The Award is a final award within the meaning of section 58 of the Act. It disposes of all of the claims and counterclaims advanced by the parties and makes final determinations as to liability, quantum, interest, and costs. The Tribunal described the Award as its "Final Award" and stated that it disposed of all matters in dispute between the parties.
80. No grounds for refusal. To the best of my knowledge and belief, there are no grounds on which enforcement of the Award could properly be refused. KMH has not, as of the date of this witness statement, made any application to challenge the Award, whether under section 67 (substantive jurisdiction), section 68 (serious irregularity), or section 69 (appeal on a point of law) of the Act. The 28-day time limit for any application under section 68 of the Act runs from the date of the Award (28 June 2024) and will expire on 26 July 2024. The time limit for any application under section 69 is the same. I am not aware of any basis on which any such application could properly be made.
81. The sum sought to be enforced is £96,450,000 (the Award) plus £12,150,000 (costs), totalling £108,600,000, together with post-award interest at the rate of 5.25% per annum simple on all unpaid sums from 29 June 2024 until payment.
82. TSL respectfully submits that the requirements of section 66 are plainly satisfied, and that the Court should grant permission to enforce the Award as a judgment of the Court.
9. THE NEED FOR A WORLDWIDE FREEZING ORDER
83. In addition to its section 66 application, TSL applies for a Worldwide Freezing Order against KMH, restraining KMH from removing from the jurisdiction, or in any way disposing of, dealing with, or diminishing the value of, its assets worldwide up to the value of £108,600,000 (together with accruing post-award interest). The requirements for the grant of a freezing order are: (a) a good arguable case; (b) that the respondent has assets within or outside the jurisdiction; and (c) a real risk of dissipation of assets. I address each requirement in turn.
9.1 Good Arguable Case
84. TSL has a good arguable case — indeed, substantially more than a good arguable case — as it holds a final and binding LCIA award in its favour for £96,450,000 plus costs of £12,150,000. The Award was rendered by a properly constituted Tribunal of three distinguished arbitrators after a full evidentiary hearing in which both parties participated fully and had every opportunity to present their case.
85. The Commercial Court has consistently recognised that an unsatisfied arbitral award provides a strong basis for demonstrating a good arguable case in support of a freezing order application. In circumstances where the applicant already holds a final award, the good arguable case threshold is met, and the Court's attention properly focuses on the questions of dissipation risk and the balance of convenience. I respectfully submit that this threshold is comfortably exceeded in the present case.
9.2 Assets Within and Outside the Jurisdiction
86. KMH maintains assets both within England and Wales and internationally, dispersed across multiple jurisdictions through its network of subsidiaries and SPVs. I provide a detailed summary of KMH's known assets in Section 10 below, but address the jurisdictional spread in outline here.
87. Within the jurisdiction: KMH holds bank accounts at Meridian Trust Bank Ltd., 50 Lombard Street, London EC3V 9EA. Based on intelligence gathered by Hartwell Pemberton LLP, the balances held in these accounts are believed to be in excess of £18,000,000. However, these funds are plainly insufficient to satisfy the Award and costs of £108,600,000. A freezing order confined to assets within the jurisdiction would therefore be inadequate to protect TSL's interests.
88. Internationally: KMH's assets are dispersed across multiple jurisdictions through its network of subsidiaries and SPVs, including:
(a) Cyprus: KMH's own registered office and accounts; and the shares in and accounts of Oceangate Ventures Ltd. (HE 401293);
(b) Singapore: Korinthian Bulkers (Singapore) Pte. Ltd. holds accounts at Pinnacle Bank (Singapore) Ltd. (6 Battery Road, #20-01, Singapore 049909) and owns/owned M/V Crimson Horizon;
(c) BVI: Dnepr Shipholding Inc. (Company No. 2014876) owns M/V Aegean Fortuna and M/V Volga Spirit, which together have an estimated combined market value in excess of USD $60,000,000 based on current broker valuations; and
(d) UAE: Korinthian DMCC (Unit 3407, Almas Tower, JLT, Dubai) holds operational funds and receivables at Emirates Gulf Commercial Bank PJSC (Gate Village 3, DIFC, Dubai, UAE).
89. Given the multi-jurisdictional nature of KMH's asset base and the inadequacy of its assets within England and Wales to satisfy the Award, a Worldwide Freezing Order is both necessary and appropriate.
9.3 Real Risk of Dissipation
90. There is a real risk that KMH will dissipate its assets so as to frustrate enforcement of the Award. This is not a case in which the risk of dissipation is speculative or based on mere assertion. The evidence supporting this risk is substantial and falls under four heads, which I address in turn.
9.3.1 KMH's History of Dishonest Conduct
91. The Tribunal found, as a matter of fact, that KMH fabricated off-hire deductions totalling £2,740,000 on M/V Volga Spirit. This was not a finding of mere error, miscalculation, or contractual disagreement. It was a finding that KMH manufactured false claims in order to withhold sums properly due to TSL. The Tribunal found that the off-hire events claimed by KMH simply did not occur, and that the AIS data and contemporaneous records unequivocally contradicted KMH's position.
92. A finding of dishonesty in the underlying commercial relationship is well established in the authorities as a factor that is highly relevant to the assessment of dissipation risk. Where a party has been found to have engaged in dishonest conduct, the Court is entitled to infer that such a party is more likely to seek to frustrate the enforcement of a judgment or award against it by dishonest means, including the dissipation of assets. The reasoning is straightforward: a party that has demonstrated a willingness to fabricate claims and act dishonestly in its commercial dealings cannot be trusted to preserve its assets for the benefit of its creditors.
93. In addition to the fabrication finding, KMH's repudiatory breaches across all three charters demonstrate a pattern of bad faith conduct. KMH walked away from the Aegean Fortuna Charter without justification, ceased paying hire on the Crimson Horizon Charter without explanation, and fabricated off-hire deductions on the Volga Spirit Charter. This pattern of conduct, taken as a whole, demonstrates a willingness on the part of KMH and its principals to act in blatant disregard of their contractual obligations when it suits their commercial interests to do so.
9.3.2 Complex International Corporate Structure Designed to Obscure Ownership
94. KMH holds its fleet and assets through multiple layers of SPVs and holding companies in Cyprus, the BVI, Singapore, and the UAE. Whilst the use of SPVs in the shipping industry is common and is not, in itself, evidence of impropriety, the particular features of KMH's corporate structure give rise to serious concern about the ease with which assets could be moved beyond the reach of creditors.
95. The use of BVI-incorporated entities, in particular Dnepr Shipholding Inc. (Company No. 2014876), to hold the two most valuable vessels in the dispute (M/V Aegean Fortuna and M/V Volga Spirit) is notable. The BVI is a jurisdiction with limited transparency requirements and is well-known as a jurisdiction that can be used to place assets beyond the practical reach of enforcement proceedings. The registered agent for Dnepr Shipholding Inc. is Vantage Corporate Services Ltd. in Road Town, Tortola, BVI — a corporate services provider that administers the entity on behalf of the Volkov family.
96. The chain of holding companies — from the Volkov family, through BVI entities and Oceangate Ventures Ltd. (a Cypriot intermediate holding company), to the fleet SPVs — creates multiple layers of corporate separation between the Volkov family's beneficial ownership and the underlying assets. This structure makes beneficial ownership opaque and facilitates the rapid restructuring and transfer of assets between entities and jurisdictions.
97. The corporate structure chart prepared by Hartwell Pemberton LLP, exhibited at "NP11", illustrates the complexity of the KMH group structure and the number of intermediate entities interposed between the ultimate beneficial owners and the fleet assets.
9.3.3 Post-Award Asset Movements and Attempted Dissipation
98. I have been briefed by Calderwood & Harkness LLP on the findings of Hartwell Pemberton LLP, the forensic accounting and investigative firm instructed on TSL's behalf to conduct an urgent asset tracing exercise following the issue of the Award on 28 June 2024. The findings are set out in the preliminary asset tracing report prepared by Rebecca Saunders (Partner, Forensic & Investigative Services) and Mark Huxley (Director), which is exhibited at "NP10".
99. The Hartwell Pemberton investigation has revealed that, in the period since the Award was issued on 28 June 2024, KMH and its principals have taken steps to shift assets in a manner consistent with a deliberate strategy to dissipate assets ahead of enforcement proceedings. In particular:
(a) Attempted transfer of funds from London accounts: intelligence obtained by Hartwell Pemberton LLP indicates that KMH has attempted to transfer substantial funds from its accounts at Meridian Trust Bank Ltd. (50 Lombard Street, London EC3V 9EA) to accounts in jurisdictions not readily accessible to enforcement. The precise destination accounts have not been fully identified, but the transfers appear to be directed to accounts held by entities associated with the Volkov family in jurisdictions with limited transparency and enforcement mechanisms;
(b) Discussions regarding sale of M/V *Crimson Horizon*: Hartwell Pemberton LLP has identified market intelligence indicating that Korinthian Bulkers (Singapore) Pte. Ltd. has been in discussions with potential purchasers regarding the sale of M/V Crimson Horizon. These discussions appear to have commenced shortly after the Award was issued and do not appear to be in the ordinary course of KMH's business. The sale of M/V Crimson Horizon would remove a significant asset from the reach of enforcement; and
(c) Restructuring of Cypriot holding entities: Hartwell Pemberton LLP has identified recent changes to the directorship and shareholding of Oceangate Ventures Ltd. (HE 401293), the intermediate holding company within the KMH group. These changes appear to have been made in the period immediately following the issue of the Award and may be designed to alter the corporate structure in a manner that would make enforcement against the underlying fleet SPVs and their assets more difficult.
100. These post-Award asset movements are, I respectfully submit, precisely the type of conduct that a Worldwide Freezing Order is designed to prevent. They are consistent with a deliberate and concerted effort by KMH and its principals to place assets beyond the reach of TSL and to frustrate the enforcement of the Award.
9.3.4 Failure to Engage or Offer Any Payment
101. As set out in Section 7 above, KMH has not offered to pay any part of the Award. It has not responded substantively to the demand letter dated 8 July 2024 from Calderwood & Harkness LLP. It has not proposed any form of payment plan, partial payment, or security for the Award. Its silence is complete.
102. This failure to engage, when viewed alongside the evidence of post-Award asset movements described above, strongly indicates that KMH is not merely unwilling to pay the Award but is actively seeking to frustrate collection. A party acting in good faith that was genuinely unable to make immediate payment of a substantial award would be expected, at a minimum, to engage with its creditor, to acknowledge the obligation, and to propose some mechanism for payment. KMH has done none of these things.
9.4 Amount to be Restrained
103. The Worldwide Freezing Order should restrain disposal of KMH's assets up to the value of £108,600,000, being the full amount of the Award (£96,450,000) plus the costs ordered by the Tribunal (£12,150,000), together with accruing post-award interest at the rate of 5.25% per annum simple from 29 June 2024 until payment. This figure represents the maximum sum to which TSL is entitled under the Award and the Tribunal's costs order, and the freezing order should be in this amount to ensure that KMH is not permitted to dissipate assets below the level required for full satisfaction of the Award.
9.5 Undertaking as to Damages
104. TSL is prepared to give the standard cross-undertaking in damages in the form customarily required by the Commercial Court as a condition of the grant of a freezing order. TSL recognises that the cross-undertaking is a necessary safeguard and is willing to provide it.
105. TSL is a substantial company with ample means to satisfy any liability that might arise under the cross-undertaking. TSL reported annual revenues of approximately €620 million for the financial year ended 31 December 2023 and operates a fleet of 34 vessels. TSL maintains significant cash reserves and credit facilities, and its financial position is such that it can readily meet any claim that might be made under the cross-undertaking. The Court can have confidence that the cross-undertaking is not an empty one.
10. ASSETS KNOWN TO TSL — SUMMARY FOR THE COURT
106. For the assistance of the Court, I set out below a summary of KMH's known assets by jurisdiction, based on information available to TSL and the findings of Hartwell Pemberton LLP.
10.1 England & Wales
107. KMH holds bank accounts at Meridian Trust Bank Ltd., 50 Lombard Street, London EC3V 9EA. Based on intelligence gathered by Hartwell Pemberton LLP, the balances held in these accounts are believed to be in excess of £18,000,000. However, as noted in paragraph 99(a) above, there is evidence that KMH has been attempting to transfer funds out of these accounts since the Award was issued.
10.2 Cyprus
108. KMH's registered office is located at 28 Themistokli Dervi Avenue, Suite 601, Nicosia 1066, Cyprus. KMH holds a 100% shareholding in Oceangate Ventures Ltd. (Registration No. HE 401293), whose registered office is at 28 Themistokli Dervi Avenue, Suite 604, Nicosia 1066, Cyprus. Oceangate Ventures Ltd. is an intermediate holding company that holds the shares in fleet SPVs within the KMH group, including, upon information and belief, Dnepr Shipholding Inc. KMH also maintains bank accounts in Cyprus, the details of which are not fully known to TSL.
10.3 Singapore
109. Korinthian Bulkers (Singapore) Pte. Ltd. is a Singapore-incorporated subsidiary of KMH with its registered office at 80 Robinson Road, #14-02, Singapore 068898. This entity holds accounts at Pinnacle Bank (Singapore) Ltd., 6 Battery Road, #20-01, Singapore 049909. Korinthian Bulkers (Singapore) Pte. Ltd. is the registered owner of M/V Crimson Horizon (IMO No. 9801334), a Handymax Bulk Carrier of 37,500 DWT, flagged in Liberia. As noted above, there is intelligence suggesting that discussions are underway regarding the sale of this vessel.
10.4 BVI
110. Dnepr Shipholding Inc. (Company No. 2014876) is a BVI-incorporated SPV within the KMH group. Its registered agent is Vantage Corporate Services Ltd., Road Town, Tortola, BVI. Dnepr Shipholding Inc. is the registered owner of two vessels: