Ilyashev & Partners Secures USD 2.5M Settlement for Steel Manufacturers in Cross Border Maritime Dispute

The team of Odesa office of Ilyashev & Partners Law Firm successfully defended the interests of Ukrainian steel manufacturers in a dispute arising from the international sea transportation of metal products.

Thanks to the strategy developed by the Ilyashev & Partners team, which combined ship arrests with initiating arbitration proceedings for claims totaling USD 2.5 million, the shipowner agreed to a settlement amount that fully satisfied the applicants.

The maritime claim of the Ukrainian enterprises arose from a contract for the carriage of goods by sea involving over 4,400 metric tons of steel transported aboard a Panamanian-flagged vessel from Turkey to Ukraine under charterparty bills of lading. As a result of delays in delivery and damage to part of the cargo, the Ukrainian manufacturers suffered substantial financial losses, including penalties, liquidated damages owed to counterparties for late delivery, and additional financing costs.

During the analysis of the case, Ilyashev & Partners’ attorneys established that the vessel was actually unseaworthy, and a significant number of technical deficiencies had been detected during a port state control inspection in Turkey, which led to the vessel’s detention and a material deviation from the agreed delivery schedule.

In order to secure the maritime claim, the team of Odesa office of Ilyashev & Partners prepared and sequentially filed applications for the arrest of the vessel within the shortest possible timeframe, having previously initiated a 72-hour detention of the vessel by order of the harbor master. The Commercial Court of Odesa Region agreed with the lawyers’ legal position and granted the applications for the ship’s arrest, banning it from leaving the waters of Reni Sea Port. Subsequently, the shipowner repeatedly attempted to lift the arrests through the courts of first instance and appeal, but the applicants’ position was upheld.

In parallel with maintaining the vessel’s arrest in the national court, Ilyashev & Partners’ attorneys promptly prepared and filed statements of claim with the London Maritime Arbitrators Association (LMAA) to resolve the dispute on the merits.

Taking into account the legal positions of the parties and the vessel’s demurrage for about 6 months, the shipowner directly approached Ukrainian manufacturers with a proposal to settle the dispute without waiting for arbitral awards. The parties entered into a settlement agreement under the terms of which the shipowner transferred the settlement amount, following which the arrests were immediately lifted and the vessel departed from the port.

The project was handled by Sergey Nedelko, Attorney, Counsel, Head of Odesa Office of Ilyashev & Partners, Marina Riashchenko, Attorney, Counsel, and Nataliia Kyreieva, Attorney.