High Court orders have been made permitting a Cypriot shipping firm and its related entities to purchase vessels it currently leases from an Irish-registered company that is ultimately owned by the Russian state – before the looming deadline of international economic sanctions against Russia for its invasion of Ukraine.
Mr Justice Mark Sanfey had been told that the shipping companies concerned were entitled to buy out the chartered vessels in an arrangement similar to the leasing entitlements of Irish motorists to complete lease-purchase agreements by striking a lump sum deal with their finance company.
The proceedings were taken in a bid to beat the US department of the treasury’s September deadline on deals with sanctioned companies and a later EU deadline.
Applications for orders and reliefs had been brought by Pola Logistics Limited and its companies, which are not the subject of any international sanctions, against leasing companies GTLK Europe and GTLK Malta Four with addresses in Hume Street, Dublin, and Malta respectively, which are subject to sanctions.
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The Cypriot firms had sought court orders directing specific performance of their leasing contracts that will now, as a result of Judge Sanfey’s orders, allow them to complete a multimillion-euro deal to buy the ships, barges and tugs leased from GTLK.
The ships had been leased by Cypriot-based Gravelor Shipping Shipping Limet and Avonberg Finance Limited and its shareholders Capstan Holdings Limited and Valbridge Limited.
The court was told that GTLK Europe, which leases out aircraft and marine vessels, is ultimately owned by the Russian state transport authority which became the subject of international sanctions introduced following Russia’s invasion of Ukraine in February last.
Mr Justice Sanfey directed that under the terms of the leasing agreements the applicants were entitled to purchase the vessels which were still in their possession. Without court orders the applicant companies could face sanctions themselves if they were to do any business with GTLK after the US deadline expired.
The Central Bank of Ireland, which regulates sanctions taken against Russian-linked entities in the State, has also been listed as a defendant in the case, but counsel for the Cypriot firm and its related entities told Mr Justice Sanfey his clients were not proceeding against the bank for reliefs already sought in the proceedings.
Mr Justice Sanfey had been told that the defendants in the case were not opposing sale and purchase of the vessels and prices for the ships had already been agreed. A proposed case against the Central Bank, which would have had to approve any acquisition of any of GTLK’s assets, was not pursued and Pola, Capstan Holdings and Valbridge had undertaken to meet the bank’s legal costs.
