Cyprus transshipment operator Pola Logistics has won an order from the High Court of Ireland that saves its small fleet from the threat of US sanctions against Russian entities.
The ruling also saves three other separate, similarly threatened fleets of Russian-financed ships controlled by two other companies.
The ruling, which has taken effect, came in the form of an order of “specific performance”, compelling Russia’s State Transport Leasing Co (GTLK) to honour the purchase options in a series of bareboat charter leasing contracts.
In fact, both lessor and lessee were eager to be ordered, according to Irish High Court judge Mark Sanfey, citing GTLK director Roman Lyadov. Otherwise, they faced legal and practical difficulties because of sanctions.
The High Court order issued on 25 August directly covered only Pola Logistics and five tugs and barges in its fleet, priced at $15.8m altogether under terms of their 10-year bareboat charters.
But three more legal proceedings with parallel issues at stake were awaiting the outcome.
Cyprus-based Pola Logistics operates its bauxite transshipment business at Taressa in Guinea for miner Compagnie des Bauxites de Dian-Dian, a subsidiary of aluminium giant Rusal. It shares directors with better-known namesake Pola Maritime.
Pola Logistics is ultimately controlled by Russian individuals as beneficial owners, but none of these owners are subject to sanctions in any jurisdiction, according to Pola Logistics director Dimo Marinov in an affidavit the judge cited.
The three other proceedings to order specific performance on vessel purchase options were brought by two shipowners, Gravelor Shipping and Avonburg Finance, over ships not mentioned in the Pola Logistics judgment.
TradeWinds reported the sale of the 37,700-dwt WL Murom, WL Palekh, WL Ladoga and WL Uglich (all built 2014), worth an estimated $75.5m, to Gravelor last week under a charter option, and a Gravelor spokesperson confirmed that the ships no longer had any connection to GTLK.
The other company benefiting from the ruling, Avonburg, is linked by reference source IHS Markit to handysize bulkers in the fleet of Pola Maritime.
Avonburg was in the news in March after overzealous French customs authorities detained the GTLK-financed, Avonburg-controlled 38,600-dwt handysize Pola Ariake (built 2019) over its Russian links. A French court found that GTLK was untainted by sanctions at that time and ordered the ship to be released.
Pola Logistics, Gravelor and Avonburg all leased vessels from GTLK entity GTLK Europe, which remained unsanctioned long after some of its group affiliates.
When it did find itself named this summer by the US Office of Foreign Assets Control, that made vessel sales urgent. But it made third parties, including insurers and financial and legal service providers, unwilling to handle the transactions to get the deals done.
In the case of Pola Logistics, the fear of sanctions had also made shipyards reluctant to touch its Russian steel, forcing its high-maintenance floating cranes to dry-dock in Dakar, Senegal, rather than European yards, according to Marinov in the affidavit the judge cited.
Service engineers from manufacturer Liebherr stopped responding to requests for maintenance, presumably due to the sanctions, Marinov said.
The sanctions “placed Pola Logistics in an impossible situation and … put its commercial viability at serious risk”, he wrote.
