Shipowner George Logothetis has won a first victory in a continuing dispute with a former friend who had invested in some of Lomar Shipping's containerships.
The High Court in London on Friday ruled in favour of Logothetis and his companies Lomar Corp, Lomar Shipmanagement and parent group Libra Holdings in an interim judgment.
The decision orders claimants Victor Pisante and two of his companies to post security for the defendants' costs in the court fight.
The ruling does not examine the merits of the underlying case, but shines some light on the dispute so far.
Last year, Pisante and his vehicles BCA Shipping Investment and Swindon Holdings & Finance brought a claim for commercial fraud against Logothetis and his companies.
A further claim by Pisante's company Castor Navigation has already been settled.
The Pisante side allege they are owed over $14m on allegations that they were fraudulently induced to enter vessel transactions.
Logothetis and his co-defendants have strongly denied the allegations, calling the claim "a classic case of buyer's remorse" due to the depressed containership market.
The dispute with Pisante hits close to home for Logothetis.
Reacting to the judgment, a spokesman for the Libra Group stated: "We are aware of the recent ruling in our favour in this case. This is an ongoing case so it would not be appropriate to comment further beyond saying that we believe the claims made against us are entirely without merit and we are confident we shall prevail."
Neither Pisante nor his lawyers responded to a request for comment. He is represented by law firm Debevoise & Plimpton, while Campbell Johnston Clark is acting for Logothetis.
The pair were introduced to each other by their wives in the Hamptons during early 2013. Pisante and his wife are godparents to Logothetis' daughter.
Underlying case
The case concerns a complex series of transactions involving four small boxships that Lomar ordered at a Chinese yard in 2013.
Pisante claimed that Logothetis proposed in May 2013 that they both enter into a 50:50 joint venture to acquire two of the containerships.
Pisante's company BCA and Logothetis' Lomar Shipmanagement subsequently became joint shareholders in the JV company Netley Holdings, which has become the centre of the ongoing dispute.
Netley was, at the time of the deal, sole shareholder in the four vessel-owning companies that had ordered the 2,194-teu boxships Barry Trader and Kimolos Trader (both built 2014), Kalamata Trader (built 2015) and Kea Trader (built 2017).
ICBC Leasing later bought and leased back the Barry Trader and Kimolos Trader.
A Lomar JV with a fund managed by American investment giant KKR later acquired Netley's ownership of the Kalamata Trader and the Kea Trader, among other assets.
Pisante's interest in the four vessels was bought out by the defendants in order to put in place the transactions with ICBC and KKR.
In simple terms, Pisante claimed he was misled by Logothetis, who he said represented that Lomar would contribute $40m to $45m in assets to the JV with KKR.
He has claimed that, had it not been for this "misrepresentation", his companies would be owed money in distributions from vessel sales and from a final equity tracker fee agreement (ETFA) that remains in place.
Logothetis' lawyers called this "simply wrong" and state in defence documents that "there was no misrepresentation, still less a fraudulent one".
They claimed that Pisante has been trying to exit the final ETFA for four years and has resorted to alleging fraud in order to do so.
'Lack of frankness'
Judge Andrew Henshaw criticised Pisante and his co-claimants for a "lack of frankness" in disclosures made in response to the defendants' application for security for their costs.
The claimants claimed they have been reticent to disclose information on where Pisante owns enforceable assets, but Henshaw was not satisfied with this.
In his judgment, he criticised Pisante for not being fully transparent about where he resides, among other things.
Pisante provided evidence of his Swiss residency, but it turned out to be a temporary tax arrangement that expires at the end of 2020, Henshaw noted.
Henshaw also criticised Pisante, BCA and Swindon for failing to give a picture of their net assets where they did not disclose liabilities or provide certain documentary evidence to support their assertions.
Prior to the judgment, Pisante and his co-claimants had previously negotiated — and then reneged on — an agreement to post £750,000 ($1m) in security.
Judge Henshaw ordered BCA and Swindon to pay £805,000, which equates to just under two-thirds of the defendants' estimated £1.3m legal costs.
TradeWinds understands the claimants intend to appeal the interim judgment.
The case is still ongoing, with a trial expected in July next year.
