Turkish shipowner Palmali Holdings has been allowed to proceed to trial at the UK High Court in a tanker charter dispute with Russian charter Litasco.

Justice David Foxton permitted the shipping company to amend its claim to pursue $151m in compensation from the unit of Russian energy company Lukoil, down from an original claim of $1.9bn.

A row over the amount of the claim led to a trial set for February this year being scrapped in October, after it had been adjourned from June.

The case arose out of contracts of affreightment (COAs) that Palmali argued gave it the exclusive right to carry oil products for Litasco in the Mediterranean, Caspian and Black seas up to a total monthly volume of 700,000 tonnes. The minimum amount was 400,000 tonnes, the shipowner said.

Extension disputed

The term was 10 years, but Palmali said both sides had agreed to extend it for another five years. Litasco denies the deal was stretched.

The charterer also denies that the COA is enforceable, citing what it says are a series of "commercially implausible" features.

Palmali wants compensation for the loss of the profit which the company "would have achieved if Litasco had provided up to 700,000 tonnes of cargo per month," the October judgment revealed.

Litasco claims, however, that Palmali has failed to reflect the money it would have had to pay the owners of vessels employed to carry the oil.

Palmali accepted it would be liable for these sums, but argued that "in practice" it was never required to pay the invoices as they were classed as inter-company debt.

But Foxton ruled that Palmali's evidence fell "very far short" of establishing that it could keep all the cash.

No allowance made for group ownership

The judge said Palmali had failed to allow for the costs the company had saved in not having to subcontract the voyages to other companies under the same beneficial ownership.

Litasco argued the $1.9bn claim had been advanced for three years "on a fundamentally false factual basis" and was "a dishonest attempt to inflate [Palmali's] claims".

The charterer claimed a fair trial was now not possible. But Foxton rejected this.

"I have concluded that it is not arguable that there has been conduct of sufficient seriousness to warrant striking out Palmali's claim even though it is arguable and can fairly be tried," the judge added.

He ordered that the long-standing action now proceed "expeditiously" to trial.

Palmali is already facing legal action in Malta, where Russian lender Sberbank has been cleared to go after $194m in debts owed by Palmali subsidiaries.

The shipowner has been ordered to pay $244.5m after losing three UK arbitration battles against Azerbaijan oil company Socar over charter deals.

To add to the group's problems, Palmali owner Mubariz Mansimov is facing a trial in Turkey on allegations of aiding a terrorist organisation, which he denies.