The Four-Month Detention Saga 

Episode 1: Exclusion from the JCC list 

In October 2022, a Polish company chartered a bulk carrier with a deadweight of ~7,000 mt to transport Ukrainian grain from Chornomorsk, Ukraine, to Marmara, Turkey. The voyage was to be performed under the Black Sea Grain Initiative, which required the inspection of vessels by the Joint Coordination Centre (“JCC”). 

To comply with the unique requirements of the Grain Initiative, the parties made specific adjustments to the charter party. 

1. The shipowner had to tender the notice of arrival (“NOA”) at the Istanbul JCC inspection area between 8 and 12 October 2022. 

1. The vessel had to satisfy the requirements of the loading port. 

1. The charterer was to appoint a loading port agent. 

1. Detention at the Istanbul JCC inspection area was to be paid with the freight. 

The vessel arrived at the Istanbul JCC inspection area within the lay days in October 2022.  

However, the inspection, initially expected to proceed promptly, faced repeated postponements, eventually stretching into late November 2022. In December 2022, the situation escalated when the vessel was unexpectedly removed from the JCC inspection list.  

Although it was later reinstated to the waiting list, this did not last long. The vessel was repeatedly removed again without any explanation, further aggravating the delays and uncertainty.  

Episode 2: The Termination of the Charter Party 

In mid-January 2023, following the vessel's third exclusion from the JCC inspection list, the shipowner sought explanations for the repeated removals and demanded compensation for four months of detention. The charterer, however, rejected this claim, maintaining that any detention could be paid only after the shipowner earned the freight. 

The charterer then shifted the blame onto the shipowner, alleging that the vessel's exclusion resulted from its failure to meet the loading port's requirements. The charterer demanded compensation for the prolonged storage of the goods and losses incurred under their sale contract. 

When the shipowner rejected these claims, the charterer terminated the charter party because of "non-delivery of the vessel for loading". Left with no alternative, the shipowner initiated LMAA arbitration, seeking to recover $1 million in detention costs. 

Episode 3: The Vessel Arrest 

In July 2023, the charterer escalated the dispute by arresting the vessel at the Ukrainian port of Izmail. The arrest rendered the vessel unable to perform its intended voyage, prompting the shipowner to seek its immediate release.  

Acting on behalf of the shipowner, our team secured the vessel’s release by depositing the claimed amount into the court’s account. This solution provided us with the necessary time to challenge the validity of the arrest and return the shipowner’s deposit. 

What was the outcome of the dispute? 

The LMAA arbitration resulted in a victory for the Turkish shipowner. The tribunal awarded $1 million in demurrage and issued several key rulings for shipping practice. 

• The shipowner’s obligation was limited to delivering the vessel to the Istanbul JCC inspection area. Responsibility for arranging the JCC inspection and the vessel’s passage to Ukrainian ports rested with the agent appointed by the charterer. 

• The tribunal held that the charterer bore the risk of the vessel’s exclusion, as it had appointed the loading port agent. The charter party terms overrode typical shipping practices, where agents nominated by the charterer are still subordinate to the shipowner. 

• The termination of the charter party was wrongful, as the agent, acting on the charterer’s behalf, failed to arrange the vessel’s passage to the Chornomorsk port. 

• Although detention was to be settled together with freight under the charter party, this did not make detention conditional on the performance of the voyage. The shipowner retained the right to claim detention, even without earning the freight. 

Key takeaways! 

This case highlights several critical lessons for shipping practice.

• Entitlement to Detention vs. Timing of Payment. Distinguish between the accrual of detention and its payment. The timing of payment does not change the shipowner’s right to claim compensation for detention. 
• The Charter Party is the King! The charter party's wording is crucial. It can override both applicable law and established shipping practices, as demonstrated in this case, where the charter party terms determined the agent’s principal.  
• Lifting Vessel Arrest Through Court Deposits. In urgent situations, vessel arrest can be lifted by depositing the claimed amount into the court’s account. Once released, the validity of the arrest can be contested, and the deposit can be returned to the shipowner.

Stay tuned for our next publications, where we’ll explore more pivotal maritime disputes and their implications! 

AGA Partners successfully represented a leading Swiss trading company (seller) in London arbitration against a Romanian agricultural commodities supplier (buyer). 

This dispute arose out of a supply contract of Ukrainian corn on a FOB delivery basis. Upon the seller's shipment of the first parcel of the goods followed by service of all shipping documents, the buyer failed to pay the full price therefor. Moreover, the buyer failed to take delivery of the balance quantity of the goods. 

The Tribunal upheld the seller's position and obliged the buyer to pay the balance price of the delivered goods as well as damages for the buyer’s refusal to take the remainder of the goods. The awarded amount exceeded USD 450,000.00. 

The AGA Partners’ team was represented by partner Iryna Moroz, as well as a senior associate, Ievgen Boiarskyi, and an associate, Andrii Tantsiura. 

AGA Partners successfully represented a Ukrainian state-owned agricultural company in three London appeal arbitration proceedings against a Swiss-based buyer under three sale contracts with a total value of more than USD 46 mln. 

All three cases primarily concerned the buyer’s failure to pay the price of duly supplied goods of contractual quality and quantity. In addition, the seller claimed damages for the buyer’s failure to take balance quantity of the goods as well as dispatch costs for conducting prompt loading operations. 

In its defence, the buyer claimed frustration of all three contracts. In other words, the buyer claimed that it was entitled to take delivery of the goods and to refrain from paying therefor due to an alleged frustration. 

Both in the first tier and in the appeal proceedings, arbitrators ruled in favour of AGA Partners’ client by satisfying its claim in full. The total amount of the awarded sums under three arbitration awards is more than USD 24 mln. 

The successful outcome was achieved as a result of a the professionally coordinated performance of a partner Iryna Moroz, a senior associate Ievgen Boiarskyi and an associate Vasyl Radetskyi.  

AGA Partners successfully represented a major Ukrainian state-owned agricultural company in a dispute against its financial advisor. The dispute arose out of a financial services agreement with regard to the restructuring of debt under a loan agreement with an international bank.  

The client claimed that the counterparty committed fraudulent misrepresentation and unjustly enriched itself. In the course of SCC arbitration, AGA Partners argued for the return of the USD 1.5 million advance payment and reimbursement of legal and arbitration costs and fees.  

In written submissions, the claimant presented clear evidence and indisputable arguments confirming the financial advisor’s fraudulent misrepresentation committed with regard to the financial services agreement and opposed the multimillion counterclaim. Besides, AGA Partners participated in the oral hearings examining financial advisor’s witnesses. 

The arbitration resulted in full satisfaction of the client’s claims. The financial advisor was ordered to return the advance payment to the strategic Ukrainian state-owned company and cover arbitration costs, legal fees and interest thereon. 

The success was achieved through the professional coordination of AGA partner Iryna Moroz, counsel Pavlo Lebediev, and associates Anastasia Shevchuk and Vasyl Radetskyi. 

AGA Partners successfully represented a UAE-based trading company (Sellers) in London arbitration against an Egyptian company specializing in the distribution of agricultural commodities (Buyers) related to a claim for recovery of debt in the sum of USD 600,000.00.

The dispute arose from a contract for the delivery of 6,000 MT of Ukrainian corn under CIFFO terms to Egypt. Due to the Buyers' inability to make timely payment, the contract quantity of the goods was reduced to 3,000 MT, and partial payment was made. Despite repeated acknowledgments of the outstanding debt, the Buyers failed to settle the remaining balance, leading the Sellers to initiate arbitration proceedings.

In response to the Sellers’ claim, the Buyers submitted the documents indicating the full prepayment for the goods. The Sellers responded that the invoices did not reflect any actual prepayment. To strengthen their position, the Sellers submitted a disclosure request, seeking evidence of the alleged payment from the Buyers. However, the Buyers failed to produce any relevant documents.

As a result, the Tribunal concluded that the Buyers had failed to prove any prepayment for the goods and sided with the Sellers, fully upholding their claim. The Tribunal ordered the Buyers to pay the outstanding balance for the delivered goods, affirming the Sellers’ right to recover the full amount sought in the arbitration.

The AGA Partners’ team was represented by partner Ivan Kasynyuk, counsel Pavlo Lebediev, and associate Andrii Tantsiura.

AGA Partners successfully represented the Australian trading company during the enforcement proceedings of arbitral award in Switzerland against the Swiss company for the sum of USD 250,000.00. 

The case concerned the enforcement of the award rendered by the arbitral tribunal seated in London. Together with local counselors, AGA Partners successfully enforced the award of tribunal against the debtor.  

The Client obtained full reimbursement of the damages awarded by the arbitral tribunal for the sum of USD 250,000.00 as well as recovery of the legal-assistance costs suffered by the Client. 

The AGA Partners’ team was represented by partner Iryna Moroz as well as senior associate Yurii Bedenko. 

AGA Partners are glad to share that we successfully represented a major Turkish agricultural holding in London arbitration against the UAE leading grain, wheat, and sunflower oil suppliers.  

The essence of the dispute and contractual terms of Buyers’ remedies 

The dispute arose from a CIF contract for the delivery of Ukrainian milling wheat. Upon arrival at the port of discharge, the goods were found to be non-compliant with the contract’s quality specifications, specifically in terms of protein content, moisture level, and test weight under the agreed ‘min-max’ indicators. Notably, the protein content fell short of the contractual requirement by 0.02% and was specified in the contract description. 

To protect the buyer's interests, the contract included security provisions allowing our Сlient to pay 95% of the value of the goods upon presentation of all contractual shipping documents and to withhold 5% of the payment if the delivered goods failed to meet the required specifications after the respective quality checking. 

Failing to reach an amicable solution, our Client justifiably refused to pay for the 5% value of the delivered goods due to their non-contractual quality and above referred contractual provision. Meanwhile, the sellers commenced arbitration and pursued a demand for a 5% payment and reimbursement of damages for the claimed demurrage. 

Arbitral award in favour of the Сlient 

Bringing this case to arbitration, the sellers argued that the discrepancies in quality specifications were within acceptable commercial trade norms and that the goods were still contractual. They also sought compensation for demurrage, alleging that the buyers were unable to discharge the Vessel within the laytime prescribed in the Contract due to delays on the buyers’ part. 

However, the arbitrators upheld the Clients’ claim because the sellers breached the condition to deliver the goods of contractual quality, which entitled the buyers to withhold the payment for the 5% value of the goods with reference to the respective contractual provision. The Тribunal also pointed out that when purchasing goods afloat, it is reasonable to assume that buyers would like to ensure the proper quality of the goods and may provide for the terms of the payment of a certain part of the goods only if their contractual quality is confirmed. 

Additionally, the arbitrators found that whereas the protein was specified in the contract description, any breach of it, even if it did not reach 0.02% by the contractual indicator, was not slight but instead a serious breach of the contract. On this ground, the tribunal awarded the Client damages of around USD 230,000.00, together with the compounded interest and compensation of arbitration costs.  

Furthermore, through meticulous analysis and presentation of evidence, we successfully proved that the buyers discharged the goods within the agreed laytime. The only reason for the delay in discharging was the late tender of shipping documents by the sellers, and the buyers should not take responsibility for the sellers’ breach. 

The AGA Partners’ team was represented by partner Ivan Kasynyuk together with the associates Anastasiia Shevchuk and Maksym Fesenko. 

AGA Partners successfully represented a Turkish trading company (Buyer and/or Client) before a London arbitration in a multimillion dispute against a German company (Seller), which arose out of sale contract. 

The dispute concerned the Seller’s refusal to supply 45,000 MT of Argentinean goods into Middle East, inflicting thereby significant damages on the Buyers. The Buyer referred the matter to London arbitration. 

In its defense, the Seller argued that there was no binding contract between the parties because they had not exchanged the signed copies. With reference to applicable English law, the Buyer argued that both parties duly consented to enter into the contract and that, in any event, an exchange of signed copies was not required for the contract to be valid and binding.  

The proceedings lasted for more than two years. After careful consideration of voluminous case materials, the Tribunal sustained the Client’s claim and found that there was a valid and binding contract between the parties. The Tribunal also found that the Seller’s refusal to perform constituted a repudiatory breach of the contract, which entitled the Buyer to terminate it and claim damages. 

The AGA Partners’ team was represented by partners Ivan Kasynyuk and Iryna Moroz as well as by senior associates Ievgen Boiarskyi and Yurii Bedenko. 

The seminar brought together participants from various sectors — business, media, state, and NGOs — to discuss important issues related to changes in modern understanding families:
The importance of demarcation understanding "family", "family" and "marriage" for legal and social aspects.
Modern challenges and new forms of partnerships that require a review of family policy.
This program is implemented on the initiatives of the Office of the President of Ukraine, the Ministry of Social Policy of Ukraine, the Coordination Center for the Development of Family Education and supported by the EU and UNICEF in Ukraine.

Advisor Pavlo Lebediev acted as a speaker within the session "Prospects of the exit of Ukrainian flour, croup, pasta and bread products to the markets of the Western Balkans".
Thanks to the organizers of the event "Boroshnomela Union of Ukraine / Millers of Ukraine", Trend & Hedge Club and Agro Marketing Agency.
We continue to work together to strengthen the agro-business of Ukraine!

AGA Partners achieved the release of the Clent’s goods – more than 3,000 mt of barley – from the vessel M/V USKO MFU, which was arrested in the Reni port, Ukraine. The vessel was arrested at the request of the Office of the Prosecutor of Crimea and Sevastopol City due to the alleged voyages to the Russia-annexed Crimea.

The Client – a Greek trading company – was not aware of the possible prior voyages of the affreighted vessel to ports of the annexed Crimea, relying on the shipowners’ representation that there were no grounds for the vessel’s arrest or detention and that their business activities comply with the legislation combating the terrorism financing. 

Therefore, after the vessel was arrested, the Client became a hostage of this situation, risking to incur damages because of the deterioration of the grain in the vessel’s holds. However, thanks to the successful actions of AGA Partners, including applications to the court and law enforcement authorities, as well as negotiations with the sellers of the goods, shipowners, port harbour master, border guard service and other authorities, the goods were transhipped onto another vessel and delivered to the Client’s buyer under the relevant sale contract. Due to that, damages were avoided. 

The AGA Partners’ team was represented by Partner Ivan Kasynyuk, Senior Associate Yurii Bedenko and Associate Viktor Pasichnyk.