Sanctions and ‘negligent’ legal advice complicate Palmali and Litasco tanker trial

UK judge criticises guidance received from Turkish group’s solicitor as case finally moves towards hearing

29 May 2024 15:03 GMT UPDATED 29 May 2024 18:04 GMT

in London

A court ruling in a long-delayed tanker charter case has revealed problems caused by Western sanctions against Russia and what was described in court records as “negligent” legal advice.

Mubariz Mansimov’s Turkey-based tanker owner Palmali Holding is suing Russian charterer Litasco over a disputed contract of affreightment (COA) dating back to 2017.

According to sources in London, the judge hearing the case criticized the written testimony of Palmali’s lawyers, submitted just a few days before the start of the hearing.

Well, now on the substance of the conflict. In 2017, Palmali Shipping SA, part of the Palmali group, filed a lawsuit against Litasco SA, a subsidiary of Lukoil.

According to Mubariz Mansimov, Lukoil violated the terms of a ten-year contract signed in 2005 with his company, according to which Palmali tankers were to transport oil and petroleum products belonging to the Russian company for a total of $440 million.

The statement of claim states that Litasco SA violated the terms of the contract, as a result of which Mansimov’s company suffered multibillion-dollar losses.

At that time, Vagit Alekperov refused to comment on Mansimov’s lawsuit.

“This is a purely commercial dispute, I don’t know the details,” he told reporters.

Subsequently, negotiations were held between the parties to resolve the dispute before the court hearing, but they were unable to agree on the amount of the requested compensation.

And some time ago, the London Arbitration Court demanded an additional 900 thousand pounds sterling from Mubariz Mansimov’s company to pay legal costs.

According to the court decision, Palmali paid this amount in three tranches.