After a half century representing Liberia in Greece, the country's former shipowner-consuls are not giving up despite losing a US trial court battle over their rights to promote the Liberian flag in Greece.
The Republic of Liberia announced on 5 November it had relieved both Captain Nikolaos Soutos and son Alexandros Soutos of their honorary consular positions, one week after the defeat of Soutos family company Legality Holdings in the Eastern District of Virginia federal court by the Liberian International Ship and Corporate Registry (LISCR) over what Legality Holdings claimed were unpaid commissions for registrations.
Liberia's new consul, Captain Dimitrios Lemonidis, is head of Costamare-linked Element Shipmanagement.
Although defeated by summary judgment, Legality Holdings is appealing to the Fourth Circuit Court of Appeals.
The long-fought but unheralded legal case comes in the aftermath of the breakdown of a 20-year-long business partnership with Yoram Cohen family-controlled LISCR. Legality Holdings has disputed LISCR's termination of the partnership ever since its most recent contract ended on 31 December 2019.
The Soutos family’s ties to Liberia long predate the foundation of LISCR, which took on the flag's management in 2000.
The elder Soutos had been Liberia's honorary consul general in Greece from 1971 until his son succeeded him in 2019.
Captain Soutos had acknowledged but not substantively responded to a request for comment before TradeWinds went to press. LISCR co-chairmen Adam Cohen and Elan Cohen and former chief executive Scott Bergeron declined to comment for the record on ongoing litigation.
The Soutos and Cohen family companies have fought their battle quietly.
Many of the documents sealed or redacted by order of Judge Leonie Brinkema concern "business transactions between Captain Soutos and Yoram Cohen" beyond the LISCR-Legality Holdings' dispute, or "information [whose disclosure] would be highly likely to cause significant and substantial harm to the Liberian government and its diplomatic efforts".
However, some items of commercially sensitive information slipped through the court's fingers and entered the public record.
Departed LISCR CEO Bergeron has also provided statements about his management of the relationship and appeared as a third-party plaintiff to ask the court to keep confidential his contractual and termination arrangements with LISCR.
Until five years ago, the Soutos family was active as a shipowner, operating ferries and also bulkers up to panamax size under the name Samos Island Maritime. Currently, it is active in the sale, leasing and repair of containers through Piraeus and Thessaloniki-based Technopyr and Greek Container Services.
In 2000, soon after Virginia-based LISCR took over the operation of Liberia's registration business, the elder Soutos signed on with the new flag manager, promoting Liberian corporate registrations to shipowners and others not just in Greece but also in Turkey, the Balkans, Russia, Ukraine, Cyprus, and the entire Middle East except Israel.
Initially, LISCR paid the Soutoses' company a fee of $100 — later $50 — per registration, as well as $50 per year for each Liberia entity that continued to be registered with customers in those countries. That totalled to some $1.2m by October 2010.
That agreement was to have lasted "as long as the contract between LISCR and the Republic of Liberia remains in existence", according to contract terms cited in the court record. LISCR originally had a 10-year exclusive mandate to run the country's ship and corporate registries, but won a 10-year renewal in 2009.
As it developed its own marketing operation, LISCR came to find the original arrangement with its Greek representative not in its best interest, according to declarations by co-chairmen Adam and Elan Cohen and their father, founder Yoram Cohen. They renegotiated the contract with Legality Holdings first in 2011, and again in 2014.
The 2011 contract increased the commission for new registrations but eliminated the fees for ongoing registrations. The 2014 agreement changed the scheme to a $250,000 annual fee in quarterly installments. LISCR claimed business declined sharply around that time.
When the 2014 contract expired at the end of 2019, Legality Holdings took the position that it was still owed fees under the original agreement, but LISCR said the contract had been superseded.
The Virginia trial court judge agreed with LISCR's position. "Plaintiff LISCR has no remaining obligations to defendant Legality Holdings," she wrote.
Following its defeat, the Soutoses' Legality Holdings filed notice of appeal, but motions to delay the action have been granted, and at press time the company had no legal representation.
