The High Court has ruled that a dispute over the stranded cruise ship SH Minerva should not be decided through a separate application for directions in the liquidation of GTLK Europe DAC. Mr Justice Michael Quinn upheld the joint liquidators’ preliminary objection, finding that the questions raised belong in an existing plenary action involving Swan Hellenic Cruises Limited, GTLK Europe and STLC Europe Nine Leasing Limited (STLC).
The ruling does not decide the underlying contractual or sanctions issues. The judge said those issues would require a plenary hearing involving pleadings, evidence and contractual interpretation, and that nothing in this judgment could bind the court at the substantive hearing of that action.
The Minerva has remained in Uruguay since scheduled maintenance after sanctions affecting its Russian-controlled registered owner disrupted services needed to operate it. Swan Hellenic says the vessel cannot be used commercially and has claimed losses and expenses. The judgment records a claim first notified at $16.262 million and later said to be quantified at $32 million; the liquidators dispute the damages claim. The judge described Swan Hellenic’s aim of acquiring the ship or STLC as a commercial objective, while noting the liquidators reserved their position on whether all applicants had standing as creditors. He did not decide that issue.
The applicants asked the court to determine whether GTLK Europe and its subsidiaries could recover lease-related payments for periods when sanctions prevented use of an asset; whether GTLK entities should be identified with the Russian Federation when assessing liability for sanctions-related breaches; and whether the liquidators could require enhanced due diligence absent a prima facie basis for alleging a sanctions breach.
The judge found the first question was bound up with the charter, the facts and issues of English law, and was already capable of being addressed in the plenary action. He considered the proposed identification of the companies with the Russian Federation a substantial issue requiring fuller factual and legal examination. The due-diligence question was also tied to the contractual claims and the other disputed issues. The judge said the Central Bank protocol itself was not alleged to be unlawful or improper.
The plenary action, issued in August 2022, originally sought specific performance of a purchase option and damages. A draft amended claim later proposed claims concerning the charter’s quiet-enjoyment terms and charter payments. No defence had been delivered, and the judge noted that little progress had been made in the action. He said the separate directions process could run alongside it without resolving all disputes or showing a benefit to the liquidation as a whole.
The court had already granted leave on 23 November 2023 for the applicants to continue the plenary action against GTLK Europe under section 678 of the Companies Act 2014. No such leave was needed for STLC. The judge said there was no reason the action should not now be progressed expeditiously.