On 22 May 2026, the Court of Appeal handed down its judgment in Tonzip Maritime (Singapore) Pte Ltd v. 2 Rivers Pte Ltd (The Catalan Sea), allowing the owners’ appeal and clarifying the evidential threshold that a charterparty sanctions clause imposes when it permits the refusal of orders that would “expose” the vessel or its insurers to sanctions. The court held that the clause requires no more than an objectively reasonable judgment of a real risk of sanctions liability, and that the trial judge had erred in demanding positive proof that the sanctioned beneficial owner of the cargo retained actual control.
Background
The dispute arose from a voyage charter dated 5 November 2021 for the carriage of a cargo of crude oil from the Russian Baltic ports of Ust-Luga and Primorsk to Aliağa in Turkey. The charter incorporated an amended sanctions clause under which the owners were not obliged to comply with employment orders that, in their reasonable judgment, were prohibited by sanctions or would “expose the owners, the vessel or its managers, crew, the vessel’s insurers or reinsurers to sanctions”, and under which the charterers warranted that no person with an interest in the cargo was a designated person. The named shipper was a Russian oil company, JSC Neftyanaya Kompaniya Neftisa (Neftisa), which the owners’ screening associated with Mr. Mikhail Gutseriev, an individual designated by the European Union on 21 June 2021 and by the UK on 9 August 2021 in connection with the situation in Belarus. Shortly before those designations, Mr. Gutseriev had transferred his majority interest in the relevant corporate chain to his brother, retaining a holding of approximately 7%.
The owners’ screening through a commercial sanctions database recorded Neftisa as “associated to sanctioned individual” and identified Mr. Gutseriev as an indirect owner until 2021. On that basis, the owners refused to load and called for alternative orders.
The charterers responded with a letter on Neftisa’s headed paper stating that Mr. Gutseriev was neither a board member nor the controlling person of the company, together with legal opinions from two international firms to the same effect; the charterers then purported to cancel the charter, and the owners terminated for repudiation on the same day. At first instance, the Commercial Court accepted that the clause required only a real risk of sanctions liability rather than proof of an actual breach, but held that no reasonable owner could have concluded that such a risk existed on the material before it, because that material did not establish that Mr. Gutseriev controlled Neftisa as of November 2021. The owners’ claim accordingly failed, and the charterers’ counterclaim succeeded.
