Sanctioned Dubai shipping company Virgo Marine is going to court in the UK to recover nearly £21m ($25.4m) from law firm Reed Smith in a dispute over a failed tanker deal.
Court documents filed at London’s High Court and seen by Law.com show that Virgo accuses Reed Smith of “negligently and wrongfully” breaching an agreement relating to a ship the company was trying to buy from Kibaz Shipping of the Marshall Islands.
Virgo’s law firm, Zaiwalla & Co, claims a deal was in place in July 2022.
But in September, Virgo was sanctioned by the US Office of Foreign Assets Control (Ofac) over Iranian trading.
Virgo’s lawyers claim that Reed Smith then took the position that it was required by US laws to withhold £13.4m in an escrow account with Barclays bank and no longer act for the United Arab Emirates company.
Virgo’s claim totals £20.73m.
Zaiwalla & Co alleges that Reed Smith made some form of notification to Barclays that Virgo had been designated in the US.
A Reed Smith spokesperson said: “We have been aware of this claim for some time. We have maintained throughout that it is without merit and deny all allegations of wrongdoing. Should the claim be pursued, we shall vigorously defend it.”
Virgo was sanctioned for its work with Iranian broker Triliance Petrochemical, which was already under US sanctions.
Ofac said at the time that Virgo Marine has “received the equivalent of millions of dollars from Triliance since early 2022 to arrange vessels for the storage and transportation of Iranian petrochemicals”.
“Virgo Marine has operated the liquid petroleum gas tanker Gas Allure [35,000 cbm, built 1997], which transported tens of thousands of metric tons of Iranian petrochemicals brokered by Triliance,” it added.
This ship is now called the Akoya Gas under unknown ownership. The LPG carrier was sold by Virgo in August 2022.
It bought the vessel from Belgium’s Exmar a year before that.
