Turkish owner Palmali Holding's $1.9bn legal battle against Russian charterer Litasco is no nearer to a conclusion after a trial date next year was scrapped.
The two sides were set for a hearing at the UK High Court in February, but have agreed that this date is no longer viable due to arguments over the amount claimed by Palmali.
This was revealed in a judgment by Justice David Foxton, who was hearing a bid by Litasco to have the case kicked out and an application by Palmali to amend its claim.
Foxton said a further one-day hearing should be fixed in the case before 21 December to consider the future progress of the action.
Lukoil chartering arm Litasco wants the court to refuse to relist the case on the basis that a fair trial is no longer possible, the judgment said.
"The facts in this case are hotly disputed," said Foxton.
Palmali argues that a contract of affreightment (COA) with Litasco gave it the exclusive right to carry oil products in the Mediterranean, Caspian and Black seas up to a total monthly volume of 700,000 tonnes.
The term was 10 years, but Palmali said both sides had agreed to extend it for another five years. Litasco denies the deal was stretched.
The contract obliged Litasco to ship a minimum monthly quantity of 400,000 tonnes, Palmali claimed.
Implausible deal?
Litasco denies that the COA is enforceable, pointing to what it says are a series of "commercially implausible" features.
Palmali sued in 2017. A trial of up to seven weeks was set for June 2020, but this was adjourned and moved to February.
"Following supplemental disclosure by Palmali, issues arose as to the basis on which Palmali had pleaded its claim for damages, which led to Litasco's reverse summary judgment application," Foxton said.
The court had ruled in June that Palmali had not pleaded a claim for damages under the minimum cargo terms of the charter. Palmali is appealing this decision.
Palmali wants compensation for the loss of the profit which the company "would have achieved if Litasco had provided up to 700,000 tonnes of cargo per month".
Litasco accepted the possibility that a "very much smaller loss" might be recoverable if other elements of the claim are established.
But it wanted the case kicked out based on the current amount of Palmali's claim.
'Defective' calculation
Foxton said there is no "substantial dispute" that the current formulation of Palmali's claim is defective.
"It certainly does not reflect what Palmali now says is the underlying position, and to that extent it cannot go to trial in its current form, and will require an attempt at re-pleading," the judge added.
Litasco claims Palmali has failed to reflect the money it would have had to pay the owners of vessels employed to carry the oil.
Palmali accepts it would be liable for these sums, but argued that "in practice" it was never required to pay the invoices as they were classed as inter-company debt.
Foxton said Palmali's evidence fell "very far short" of establishing that it could keep all the cash, however.
Quadrant Chambers, representing Palmali, said it could not give any further information on the case.
Fountain Court Chambers, for Litasco, has been contacted for comment.
Tribunal case lost
Palmali suffered a separate legal blow this month when Azerbaijani national oil company Socar won a $49.5m arbitration award against it at the London Court of International Arbitration in another charter row.
The court also dismissed in its entirety a multimillion-dollar counterclaim by Palmali.
Two other arbitration cases remain outstanding.
Last month, a company linked to Russian creditor Sberbank bought the tanker and tank barge fleet of Palmali's bankrupt Russian subsidiary.
Owner under arrest
The 46 vessels were acquired at auction after the bank failed to find any other buyer.
Palmali's ultimate owner and principal witness, Mubariz Mansimov, was arrested and imprisoned in Turkey in March.
Foxton said it now appears unlikely that he will be able to give evidence at the trial.
Turkish prosecutors have accused Mansimov of links to an outlawed organisation headed by Fethullah Gulen, an opponent of President Recep Tayyip Erdogan.
Palmali said in June that "there is no evidence to support these false claims", which Mansimov "emphatically denies".
