KIAP’s client is a leading coal supplier. The client entered into a series of contracts for the sale of coal with an Asian counterparty. In 2018, in the course of the load of the coal on the vessel provided by the buyer the vessel crane collapsed, causing damage to the chartered vessel. Said incident resulted in a dispute between the buyer and the vessel owners in a London-seated ad hoc arbitration. The buyer tried to unilaterally set off the damages claimed by the vessel owners for the crane’s failure against its obligations before KIAP’s client under the other sales contract.
To recover the unlawfully retained amount, KIAP assisted the client to initiate an arbitration under the auspices of HKIAC. In response, the buyer initiated a parallel arbitration; consequently, both arbitrations were consolidated.
The dispute involved complex issues of Russian foreign currency regulations, unilateral set-off and indemnity under English law, correlation of dispatch and demurrage. KIAP acted together with a leading UK law firm; one Russian and two British technical experts prepared reports in relation to the client’s case; around eight witnesses were prepared for witness examination. In addition to English and Russian law, in the course of arbitration KIAP analysed Hong Kong and Liberian law.
Over several sets of pleadings’ exchanges, voluminous document production and joint expert statement, at the very backdrop of the hearings KIAP’s client and the Asian buyer entered into a detailed settlement agreement in the client’s favour. The settlement was complicated by risks of the payment being frozen: to resolve this issue, KIAP and partnering UK law firm developed a mechanism of terminating the arbitration under the condition of successful payment in favour of the client by one of several means set up in the settlement agreement. Since the payment was successful, the arbitration was terminated and the client received a part of the arbitration fees due to early termination of the arbitration.
In course of the HKIAC arbitration, the client was represented by KIAP’s international commercial arbitration practice: associates Anastasiya Ryabova and Rostislav Kats, as well as Stepan Sultanov, head of practice. Other KIAP’s lawyers assisting the matter were Maria Krasnova, partner of the maritime law practice, and Roman Suslov, senior associate of the corporate law practice.