Russian lender Sberbank has been cleared to go after debts owed by subsidiaries of Turkish tanker owner Palmali Holding through the Maltese courts.
A Maltese judge has ruled that the case can be decided in domestic courts, despite ongoing arbitration in London.
The decision is another legal headache for Palmali owner Mubariz Mansimov, who is facing a trial in Turkey on allegations of aiding a terrorist organisation.
Malta Today reported that Sberbank awarded four loans to two Russian companies, Palmali Caspian Offshore Project and Palmali Company, which were guaranteed by Palmali against vessels allegedly registered in Malta.
Sberbank is chasing the €164m ($194m) loan balance. The bank had opened arbitration proceedings in London in 2018.
Share transfers
The lender has accused Mansimov of transferring shares in Maltese subsidiaries to other companies linked to him.
Palmali LLC, the bankrupt Russian subsidiary of Palmali, saw its 46-ship fleet sold off to creditor Sberbank in 2020.
In the current case, Palmali has argued that Maltese courts have no jurisdiction, and rejected any allegation of fraud or bad faith.
The bank could not, having failed to impose limitations on the transfer of shares during the negotiation period, exercise this right now, the company's lawyers said.
The shipowner said the transfers were part of a restructuring of the group aimed at obtaining refinancing from Turkish banks.
London jurisdiction?
Palmali believes it had an agreement stipulating London as the jurisdiction for arbitration proceedings.
However, the judge said the case in Malta was not filed over a breach of contract but over a "crime" aimed at making it harder for Sberbank to recover the money owed to it.
"Maltese law regulates the transfer of shares between companies," the ruling said.
"Once that amongst the defendants there are companies registered in Malta, their workings are subjected to Maltese law. Once the transfer of shares took place in Malta…[Maltese law] is the proper law regulating the issue between the parties."
Arbitration battles lost
Palmali is already facing payouts of $244.5m after losing three UK arbitration battles against Azerbaijan oil company Socar over charter deals.
But the Turkish tanker owner still has a chance to raise the arbitration money and far more in another legal action in London.
Palmali is awaiting a new trial date in its $1.9bn legal battle against Russian charterer Litasco, after a hearing was scrapped last year.
The two sides were due to meet in the High Court but agreed that this was no longer viable due to arguments over the amount claimed by Palmali.
In March, Mansimov was released from a Turkish jail under judicial supervision after spending a year behind bars.
He is accused of links to an outlawed group headed by Fethullah Gulen — an opponent of Turkish President Recep Tayyip Erdogan. Mansimov denies the charges.
In 2015, Mansimov was listed by Forbes as being worth $1.3bn, with a portfolio including dairy products, media, resorts and planes, as well as tankers.
