Havila Kystruten’s new cruise ferry has been grounded again after Norway refused any exemption from Russian sanctions for insurance.

The Oslo-listed Saevik family-controlled shipowner said on Tuesday the ministry of foreign affairs has rejected its application.

Domestic insurer Gard dropped its cover of the 15,500-gt Havila Capella (built 2021) last month after the ship’s lease financier, Russia’s GTLK Asia, was sanctioned over the war in Ukraine.

The ministry had earlier granted the owner an exemption from the sanctions to operate Havila Capella for six months, but this did not include insurance.

The government ruled that taking out cover would entail assets being made available to a sanctioned registered owner, Havila Kystruten said.

“The refusal means a continuing unresolved situation for Havila Capella,” the company added.

The firm has been forced to cancel an upcoming round trip along the coast that should have started in Bergen on 15 May.

“The company deeply regrets the situation that has arisen, and the consequences for tourists and other passengers, employees, the coastal population and the company’s suppliers,” it said.

Havila Kystruten continues its efforts to find a possible way out of a particularly demanding situation, the company added.

It is trying to establish what “room for manoeuvre” it has.

TradeWinds has previously reported that a legal bind, not a lack of financial options, was keeping Havila Kystruten from operating the vessel.

Purchase option is complicated

The company’s planned escape hatch in case of sanctions was a purchase option in the bareboat charter.

The problem is that any buyout payment to free the ship from sanctions would also be sanctioned.

Non-EU member Norway is also bound by EU sanctions, and that is reportedly what inspired Gard to pull its cover ahead of a planned 14 April sailing from Bergen to the northern terminus of Kirkenes.

Gard’s thumbs-down idled what Havila calls the world’s most environmentally-friendly passenger ship, whose 6.1-MW battery pack is the largest in operation.