Sberbank’s claim against Turkish shipping group Palmali will be heard in Malta

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A Maltese judge has ruled that a case filed by Sberbank, a leading Russian bank registered in Moscow, against a number of Maltese shipping companies, can be decided by Maltese jurisdiction.

The case concerns an Istanbul-based, Malta-based shipping conglomerate for 20 years, which is also subject to a massive asset freeze after owner Mübariz Mansimov, an Azeri-Turkish billionaire, was jailed over links with a coup in Turkey.

Mübariz Mansimov Gurbanoglu was arrested in March for alleged links to Gulen. He had based his maritime empire almost entirely in Malta for its tax laws favorable to the maritime industry.

Mansimov was arrested in one of the most publicized detentions in a crackdown on suspects linked to the 2016 coup by a network linked to US-based Muslim cleric Fethullah Gulen, whom President Tayyip Erdogan blames for the failure of the putsch in which around 250 people died.

Sberbank case

Sberbank had made four loans to two Russian companies – Palmali Caspian Offshore Project and Palmali Company, which loans were guaranteed by Palmali Holding (PHL).

The bank had accepted the guarantee because it knew that PHL had several subsidiaries in the maritime sector and indirectly owned several ships. These companies included PHL and a host of phthers, such as Palmali International Holding, Palmali International Holding Two, Palmali Logistics, Palriver Shipping, Palocean Shipping, and Palsea Shipping.

In turn, these companies had other subsidiaries.

The loan was granted because it was well known that the financial situation of the guarantors was “stable and substantial”.

As collateral for loans from Russian companies, Sberbank obtained a personal guarantee from Mansimov, his Turkish companies, as well as 47 naval mortgages in the Russian maritime register on ships owned by Palmali.

Eventually, the main debtors defaulted on the loan and Sberbank turned to the guarantor to pay the balance of 164 million euros. But it was never refunded.

As a result, Sberbank obtained precautionary warrants from the Maltese courts, seizing shares held by Palmali in its direct subsidiaries. On April 16, 2018, Sberbank opened arbitration proceedings in London. These procedures are still ongoing.

During the arbitration procedure, Sberbank was informed that a few days after the issuance of the conservatory warrants, Palmali Holding transferred all its shares in its direct subsidiaries, in favor of the Turkish company Gunesli de Mansimov. he decimated the finances of Palmali Holding.

In turn, Gunesli’s shares were acquired by another company controlled by Mansimov, Palmali Holding AS in Turkey, just days after Sberbank filed proceedings in Malta and arbitration proceedings in London.

Sberbank argues that this was a fraudulent transfer intended to decrease the capital of the direct subsidiaries of Palmali.

To top it off, the lawyers said, 35 vessels registered in Malta and belonging to the Palmali group were transferred into indirect possession of Gunesli.

In January 2019, Palmali and 56 of its companies changed their legal address to an office in Santa Venera, but failed to notify the London court, in what lawyers called a “clear attempt” to prevent or lengthen notification procedures relating to the arbitral award. Sberbank maintains that all of this was done in bad faith, unlawfully and with fraudulent intent, with the aim of preventing Sberbank from collecting the debts owed.

Palmali argued that the Maltese courts had no jurisdiction to deal with the case and dismissed any allegations of fraud or bad faith, and that Sberbank had no legal interest in the case. The bank could not, not having imposed limitations on the transfer of shares during the negotiation period, exercise this right now, the defendants argued.

They also said the transfers were part of a restructuring of the group aimed at securing refinancing from Turkish banks.

Judge Joseph Zammit McKeon observed that in October 2010, all of the accused’s lawyers dropped out of the case and despite the time they had to hire new lawyers, nothing had been done. While the defendant Mubariz Mansimov is not a Maltese citizen nor domiciled in Malta, and although Gunesli was incorporated in Turkey, they held shares in Maltese companies so as to be the indirect owners of Maltese flag vessels .

Mubariz Mansimov had presented an affidavit, as he was currently being held in a Turkish prison, stating that neither he nor Turkish companies had ever agreed to be subject to Maltese jurisdiction, and that he was surprised at how whose case had been filed against Palmali. despite an agreement stipulating London as the jurisdiction for arbitration proceedings.

The judge said the Malta case was not filed for breach of contract but for a crime, which aimed to make it harder for Sberbank to recover the money it was owed.

The judge noted that although the onus was on the defendant to prove that Malta was not the applicable jurisdiction, he had not produced any evidence to support this defense.

The merits of the case, the judge said, concerned the transfer of shares in a company registered in Malta to the detriment of Sberbank, and Maltese law extended the jurisdiction of the court not only to Maltese companies, but also to those registered in Turkey. , as well as on Mansimov in his actions as the ultimate beneficiary of the Maltese companies.

“Maltese law regulates the transfer of shares between companies,” said the judge. “Once among the defendants there are companies registered in Malta, their activities are subject to Maltese law. Once the shares have been transferred to Malta …[Maltese law] is the appropriate law governing the matter between the parties.

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