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Ilyashev & Partners Defend the Interests of a Turkish Shipowner in a Dispute with a Charterer and a Cargo Owner

News date: 11 October 2022

The team of maritime lawyers of the Odesa Office of Ilyashev & Partners Law Firm successfully defended the interests of a Turkish shipowner in a legal dispute with a charterer and a cargo owner and managed to settle a dispute in the out-of-court manner against a fair amount of compensation due to the actual termination of the charter.

After the start of a full-scale invasion of the Russian Federation into Ukraine, about 85 foreign flagged ships were blocked in Ukrainian ports for an indefinite period. Of the beginning of the armed aggression, many of these ships had fully or partly completed loading operations with agricultural goods, metallurgical products, fertilizers, etc. for export. However, with the start of the aggression it became impossible to leave the ports due to safety reasons. Consequently, cargo owners urgently started looking for alternative logistical ways to export goods from Ukraine.

In this matter, the ship was loaded with ferroalloys, the master issued bills of lading, but the ship did not have enough time to leave the port because of the start of military aggression. The charterer referred to the force-majeure circumstances and requested shipowner to urgently open the holds and allow the cargo discharge. At the same time, the charterer refused to pay the freight and settle shipowner’s costs and expenses due to the ship’s demurrage. The charter was governed by English law and contained no force-majeure or war cancellation clauses releasing the charterer from the obligation to settle the freight or dead freight. The shipowner offered the charterer to negotiate a settlement agreement and the option to discharge the cargo against a fair compensation of shipowner’s costs and expenses, but the offer was rejected. Instead, the cargo owner that was neither party to the charter nor had any formal relations with the shipowner, entered the negotiations. Despite the intense pressure on the ship’s crew and even attempts to seize the cargo by force the shipowner held a strong position and did not release the goods.

Well-timed involvement, as well as an active, competent, and well-coordinated legal assistance of the maritime lawyers of the Odesa Office of Ilyashev & Partners Law Firm made it possible to resolve the dispute shortly under the favorable terms for the shipowner. The negotiation process became more complicated due to distrust between the parties, which plays a key role in resolving disputes of such kind. Nevertheless, the attorneys managed to develop and coordinate with all parties involved a schedule plan for cargo discharge against the transfer of installments to the shipowner’s account. Terms and conditions of the settlement have been duly reflected in the tripartite agreement executed. All the provision of the agreement were duly fulfilled by the parties with the assistance and under coordination of the attorneys. In the end the ship successfully sailed from the Ukrainian port with a cargo of agricultural products on board once the “grain initiative” was launched.