Tugboat Sakhalin – Kommersant

The operator of the Sakhalin-2 project, Sakhalin Energy, faced the threat of a disruption in shipments after its contractor Svitzer (a structure of the largest container operator Maersk), citing force majeure, unexpectedly decided to suspend the tug charter contract. In order to prevent the four Svitzer tugs from leaving, Sakhalin Energy secured their arrest through the courts. Lawyers admit that Sakhalin Energy may later file property claims against Svitzer in order to later try to foreclose on tugboats.

Sakhalin Energy (the operator of Sakhalin-2) obtained through the court the arrest of four tugboats of the Dutch Svitzer, which were involved in the project. These are the Svitzer Aniva, Svitzer Sakhalin, Svitzer Busse and Svitzer Korsakov vessels (owned by Svitzer Sakhalin BV). The Arbitration Court of the Sakhalin Region issued a decision to arrest the courts immediately on April 24 – the same day that Sakhalin Energy filed a lawsuit against the Russian structure of Svitzer LLC Svitzer Sakhalin Terminal Tower. The reason for the lawsuit was that on April 17, Svitser Sakhalin unexpectedly notified Sakhalin Energy about the “suspension of the execution of the contract with immediate effect” with reference to force majeure. So, it follows from the documents of the court, Svitzer Sakhalin explained the termination of the existing charter agreement (on the terms of a bareboat charter) by the requirement of the Dutch Svitzer to change the flag of the ships and withdraw them from the territorial waters of the Russian Federation within a week. The duration of the bareboat charter agreement is not specified in the documents. Sakhalin Energy and Svitzer did not answer “Kommersant”.

Svitzer is part of the Danish conglomerate Maersk, the world’s largest container operator. Svitzer has a fleet of 440 vessels and operates in more than 30 countries. Back in March 2022, Maersk himself decided to leave the Russian Federation after it began hostilities in Ukraine. So, in August last year, APM Terminals, which is part of Maersk, withdrew from port assets in the Russian Federation by selling 30.75% of Global Ports to the Delo group of Sergey Shishkarev (see Kommersant dated August 29, 2022). Sakhalin-2 has been implemented since 1994 on the basis of a production sharing agreement. The shareholders of Sakhalin Energy, in addition to Gazprom (50%), are the Japanese Mitsui (12.5%) and Mitsubishi (10%). NOVATEK is preparing to acquire the remaining stake in Shell (27.5%). The project ships LNG and Sakhalin Blend oil.

As early as April 18, Sakhalin Energy informed Svitser Sakhalin that it was unlawful to suspend the treaty, citing the fact that EU sanctions do not prevent it. The operator of Sakhalin-2 also referred to the provision of the agreement, according to which “the implementation of lease payments deprives the defendant of the right to invoke force majeure circumstances” to terminate the agreement. The very next day, Svitzer sent a request to the port of Korsakov to terminate the certificate of navigation of tugs under the contract, after which the Sakhalin-2 operator applied to the court with a request for interim measures. The court concluded that “Svitser Sakhalin’s actual refusal to perform the contract could create a threat to production activities” and entail “enormous losses.” As interim measures, the court decided to transfer the property for storage to SIP Management LLC with the right to use tugboats, while Sakhalin Energy is obliged to file a lawsuit by May 18 to challenge the refusal to fulfill the contract. SIP Management is a joint venture between Sakhalin-Shelf-Service (25%) and UK Project Group (75%). The owners of UK Project Group are Nikolay and Andrey Pokasi (35% each) and Elena Ryabova. Sakhalin-Shelf-Service is controlled by the ex-head of Rosneft Sergey Bogdanchikov (52.6%), 25.8% by the Japanese Marubeni, 21.6% by the American International Development Services.

If Sakhalin Energy does not file a lawsuit before May 18, then the interim measures will be canceled, but for now the tugboats remain arrested in the Russian Federation, explains Konstantin Krasnokutsky, head of the law firm Navicus.Law. If the plaintiff loses in court, the tugs will need to be returned, but if the company wins, it will have the right to use the tugs until the expiration of the contract, adds Elena Mende, lawyer of the Anatoly Sobchak Baltic Bar Association. At the same time, Mr. Krasnokutsky notes that it is not clear exactly what circumstances Svitzer considered force majeure, but “as a general rule, a force majeure circumstance does not give the party the right to refuse to perform it, but only relieves such a person of responsibility for violation.”

Based on the ruling of the court, the claim will be filed to challenge the unilateral refusal of the defendant from the contract. But, according to lawyers, Sakhalin Energy may find an opportunity to present property claims against the defendant. For example, if the plaintiff proves that the refusal of the contract by the shipowner was illegal, then this can be regarded as a material breach of the contract and grounds for its termination, which allows claiming damages or paying interest, Mr. Krasnokutsky believes. If the plaintiff insists on maintaining the contract, he may demand the return of advance payments or the recovery of damages for downtime if it arose through the fault of the defendant, the lawyer adds, specifying that much depends on the terms of the contract and applicable law. Ms. Mende does not rule out that the satisfaction of the court’s monetary claims against the defendant may lead to the fact that, as part of the execution of the judgment, the tugboats as the property of the defendant may be foreclosed and they may be sold.

Dmitry Kozlov, Anna Zanina