A Greek shipowner has won a $5.8m claim against a Nigerian company relating to the arrests of four of his tankers in a cargo row.
The judgement by Justice Stephen Males at the UK high court hinged on whether IMS principal Captain George Gialozoglou had signed a deed of settlement agreement with Patrick Ubah, CEO of Capital Oil and Gas Industries, in 2013.
The deal called for Capital to pay $6m to settle losses incurred by IMS.
Capital did pay $200,000 to IMS, but the balance remained unpaid.
The Nigerian company denied liability, contending that the agreement was never executed by IMS and therefore remained only a draft.
The parties began doing business together in 2010, with Capital chartering IMS ships to load oil products by ship-to-ship transfer offshore for delivery to the Capital terminal at Apapa.
The vessels were named as Rofos, Xifias, Heli and Panther.
The short voyages meant that original bills of lading would not normally be available at the discharge berth.
Accordingly, the charterparties included terms providing for delivery without bills of lading and the provision of letters of indemnity by Capital.
It appears, however, that although the charterparties required letters of indemnity to be provided, this did not happen. Nevertheless cargoes were delivered in accordance with Capital's instructions, the ruling said.
Claim for misdelivery
In the summer and autumn of 2011, six bills of lading were issued relating to cargoes carried on the four tankers which in April 2012 gave rise to claims by financier Access Bank for misdelivery by IMS.
This led IMS to seek appropriate letters of indemnity from Capital, which Ubah signed at a meeting between the parties in May 2012, the judgement said.
Proceedings at the UK high court were brought by Access Bank against IMS, Capital and Ubah personally.
The claims amounted to $133m in total.
Three of the tankers were arrested in Nigeria and South Africa, but an attempt on Rofos in South Africa was unsuccessful.
Access Bank also obtained a freezing order in Greece against a company associated with IMS.
At no stage did Capital deny that it was its responsibility to procure the vessels' release.
Nevertheless the tankers remained under arrest for some time: Heli and Xifias until January 2013 and Panther until February 2013.
That same January, Access Bank made an offer to IMS to release them from the proceedings for the sum of $5m and the provision of documentation showing what had happened to the cargoes.
Captain Gialozoglou gave evidence that he met Ubah in his hotel in Lagos on the morning of 23 January 2013.
Ubah did not dispute Capital's liability to pay compensation, Gialozoglou claimed.
He said Ubah told him that Capital's current value was about $2bn and that he was going to stand for election as the governor of Anambra state, which would require him to leave the management of Capital.
According to Captain Gialozoglou, Ubah's position was that he could pay $6m immediately in settlement of the IMS' claims and would compensate them for the balance of their losses through future business.
Document was signed
His evidence was that an agreement to this effect was signed on behalf of both parties, with nothing being said to indicate that it was anything other than immediately binding and effective in accordance with its terms.
In particular, it was not an agreement merely "in principle".
Ubah, on the other hand, said that the discussion at the meeting was concerned with whether there were outstanding freight payments or fees due to IMS and the need for a reconciliation of accounts, as well as discussion of the possible purchase of three IMS vessels by Capital.
Ubah said he signed one copy of the document which had been prepared and gave it to Captain Gialozoglou. However, Captain Gialozoglou did not sign any version of the document, he claimed.
Males said: "I have no hesitation in finding that Captain Gialozoglou did sign the agreement as he said in his evidence.
"There was no reason for Captain Gialozoglou not to sign the agreement. He had gone to Lagos to negotiate a settlement of the shipowning companies' claims.
"That was a settlement which he needed urgently in view of the losses being incurred and the pressure being brought to bear by IMS's banks.
"It is abundantly clear from the exchanges between the parties after conclusion of the agreement that the claimants understood that the agreement was valid and binding and that payment was due under it on 24 February 2013."
Capital's failure to suggest even the slightest doubt about the valid and binding nature of the agreement demonstrates that it shared this understanding, the judge added.
Ubah did not have a satisfactory explanation for his failure to say otherwise. "This constitutes powerful evidence that Capital knew. If it had not been, Capital would have said so," Males said.
The fact that its denial that the agreement had been signed by IMS only emerged much later, in response to legal proceedings, is telling, he added.
IMS was awarded $5.8m together with interest since 24 February 2013 at US dollar LIBOR rates plus an uplift of 1%, as well as court costs.
