News date: 1 June 2025
Sergey Nedelko, Attorney at Law, Counsel, and Head of Ilyashev & Partners’ Odesa Office, delivered a speech at the conference “Current Issues of Maritime Law: Today’s Realities”, held on 23 May 2025 in Odesa. The event was organized by the Ukrainian Maritime Arbitration Commission (UMAC) under the Ukrainian Chamber of Commerce and Industry.
In his presentation titled “P&I Club’s Letters of Undertaking (LOU)”, Sergey Nedelko addressed the legal nature and practical application of Letters of Undertaking issued by P&I Clubs as instruments for securing maritime claims.
In addition, Sergey addressed the following key topics: the legal mechanism for issuing P&I Club’s Letters of Undertaking to prevent vessel arrest or facilitate their release; limitations of Ukrainian legislation regarding the recognition of such letters as the sole and appropriate form of security for a claim; practical examples of using Letters of Undertaking in disputes involving other parties to a sea carriage contract (such as cargo interests) and government authorities, particularly the Environmental Inspectorate; and current legislative initiatives aimed at legalizing the use of P&I Club’s Letters of Undertaking as a valid means of securing maritime claims in Ukraine.
Sergey Nedelko emphasized the need to amend the Commercial Procedure Code of Ukraine and the Merchant Shipping Code to recognise P&I Club’s Letters of Undertaking as an appropriate security for a claim. In particular, he referred to Draft Law No. 11341, which provides for the expansion of the list of acceptable forms of securing maritime claims.
“Providing an LOU issued by a P&I Club that is a member of the International Group of P&I Clubs and/or holds a high credit rating from reputable international rating agencies is widely regarded as a reliable and effective means of securing a maritime claim. When purchasing insurance from one of the world’s most reputable P&I Clubs, shipowners have every legitimate reason to expect that a Letter of Undertaking from such a club will be accepted as sufficient and appropriate security in most major maritime jurisdictions. The proper regulation of this issue in Ukraine would bring our country significantly closer to the cohort of developed maritime nations,” said Sergey Nedelko.
The event brought together leading maritime lawyers, arbitrators, government officials, and representatives of the international maritime community. Participants discussed the current challenges facing the maritime industry during wartime, the prospects for legislative reform, and practical aspects of maritime dispute resolution.
The Ukrainian Maritime Arbitration Commission (UMAC) at the Ukrainian Chamber of Commerce and Industry is an independent, permanent arbitration institution that has been resolving disputes in the field of merchant shipping in accordance with international standards since 1994.