UK High Court Issues Judgment on Impact of Sanctions on Obligations to Pay Sanctioned Parties
The U.K. Commercial Court released a judgment in a case concerning vessels financed by the Russian transport ministry. The proceeding deals with a Cypriot charterer, Garvelor, which claimed specific performance of obligations it was owed under a bareboat charterparty by…
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the vessel owners -- subsidiaries of sanctioned company GTLK. The subsidiaries provided for Gravelor to make payments for the vessels and for the title of the vessels to be transferred to them when the charterparty was terminated. However, sanctions made it illegal for Gravelor to pay the subsidiaries in U.S. dollars, which the charterparties required. The Commercial Court held that tendering payment in euros to a frozen account filled the contractual obligation to pay, granting an order to transfer the title of the vessels to Gravelor after considering the sanctions impact.