Two Norwegian shipping firms have overcome a further legal hurdle in their quest to secure derogations from the Irish Central Bank to sanctions preventing the release of security interests held by a Kremlin-controlled funder in three vessels.
The Irish High Court’s Mr Justice Brian Cregan made orders on Tuesday recognising and enforcing a judgment of the High Court of England and Wales in relation to a vessel called the Castor.
He was told the orders in the case against GTLK Asia Limited were required by HK Ship II AS and Havila Castor AS, which are part of the Norwegian Havila group, as part of their application to the Central Bank for derogations to sanction regulations introduced last April by the EU against Russian state-owned entities due to the country’s invasion of Ukraine.
The derogation application is being pursued with the aim of enabling various GTLK entities, including Hong Kong-based GTLK Asia, to release security interests in three vessels.
The court was told previously that Ireland is the appropriate jurisdiction for the derogation application due to an associated entity, GTLK Europe DAC, being based in Dublin.
Mr Justice Cregan previously made orders recognising and enforcing the English court’s December 2022 orders relating to the Polaris and the Pollux ships.
The English proceedings were fully contested by the Irish-registered defendants, STLC Europe Twenty Three Leasing Limited and STLC Europe Thirty Four Leasing Limited, which are subsidiaries of GTLK Europe.
Investment
In its ruling, the London court said another Havila entity, Havila Kystruten Operations AS, claims it invested some €54 million in building the four ships, with indirect subsidiaries of GTLK providing the balance of funds under cross-collateralised financing arrangements.
The ships, built or being built at a Turkish shipyard, were commissioned for use as coastal passenger transport services under long-term charters to the Norwegian Minister of Transport, the judge said.
Havila’s claims concerning the Castor were also determined in that December judgment, with the English court declaring the contractual position as between the Havila firms and GTLK Asia, which was not a party to those proceedings.
The court held that a “global termination sum” needed to be paid to a frozen bank account under bareboat charterparty agreements relating to the Polaris, Pollux, Castor and another ship called the Capella. This is to buy out GTLK’s security in the assets.
Marcus Dowling SC, instructed by William Fry solicitors, told the Irish High Court on Tuesday that the Central Bank, in assessing the derogation application, had raised a concern that GTLK Asia had not been a party in the English proceedings.
Due to the Central Bank’s objection, further English proceedings were brought last month concerning the Castor vessel.
Security
The London High Court made a further order, declaring that GTLK Asia shall have no security or interest over the Castor once the termination sum is paid.
The Norwegian firms were now seeking an order in this jurisdiction recognising and enforcing that order in this jurisdiction. The order will be relied upon in the existing application to the Central Bank, said Mr Dowling.
He said the English court’s judgment stipulates that, in order for any of the security interests to be released, all the security interests in the Polaris, Pollux and Castor must be released.
He stressed there was an urgency to the matter, as the Pollix is ready for delivery. The Castor was already delivered, he added.
He said GTLK Asia was served with these Irish proceedings. It did not appear in court.
Mr Justice Cregan said he was satisfied it was appropriate to make the order enforcing the judgement and orders made by the English High Court on February 27th.
