Eurobank SA v Momentum Maritime SA & Ors [2024] EWHC 210 (Comm) (29 January 2024)

Facts · 事实

[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] [DONATE] England and Wales High Court (Commercial Court) Decisions You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Eurobank SA v Momentum Maritime SA & Ors [2024] EWHC 210 (Comm) (29 January 2024) URL: https://www.bailii.org/ew/cases/EWHC/Comm/2024/210.html Cite as: [2024] EWHC 210 (Comm) [New search] [Printable PDF version] [Help] Neutral Citation Number: [2024] EWHC 210 (Comm) No.CL-2021-000638 IN THE HIGH COURT OF JUSTICEBUSINESS AND PROPERTY COURTS OF ENGLAND AND WALESCOMMERCIAL COURT (KBD) Rolls BuildingFetter LaneLondon, EC4A 1NL 29 January 2024 B e f o r e : HIS HONOUR JUDGE PELLING KC(Siting as a High Court Judge) ____________________ EUROBANK S.A. Claimant - and - (1) MOMENTUM MARITIME S.A.(2) TITAN MARITME LTD(3) MAXIMUM MARINE LTD(4) ALEXANDROS E. TSAKOS(5) PANGIOTIS I. MERAMVELIOTAKIS(6) IOANNIS P. MERAMVELIOTAKIS Defendants ____________________ Transcribed by Opus 2 International LimitedOfficial Court Reporters and Audio Transcribers5 New Street Square, London, EC4A 3BFTel: 020 7831 5627 Fax: 020 7831 7737civil@opus2.digital ____________________ MR J ROBINSON (instructed by Watson Farley & Williams LLP) appeared on behalf of the Claimant. MR T STEWARD (instructed by Preston Turnbull LLP) appeared on behalf of the Defendants. ____________________ HTML VERSION OF JUDGMENT ____________________ Crown Copyright © JUDGE PELLING : This is an application for summary judgment by the claimant bank against the borrowers and the guarantors of the obligations of the borrowers. The first to third defendant borrowers are each one-ship companies. The fourth to sixth defendants are each guarantors of the loans. The fourth and sixth defendants are respectively the 51 per cent and 49 per cent shareholders in the first to third defendants. The loan agreement provided for a facility of just over $12 million to the borrowers, and for which the first to third defendants were jointly and severally liable. The loan was secured by the personal guarantees of the fourth to sixth defendants, as I have said, by mortgages over vessels owned respectively by the first to third defendants. It is common ground that, in breach of contract under the loan agreement, the borrowers failed to make two payments, and various insurance policies that the borrowers had covenanted to maintain were terminated for non-payment of premiums. These were events of default under the loan agreement that entitled the claimant to accelerate the repayment of the sums lent, which is what it did on 18 October 2019 when it demanded repayment of the sums then outstanding of about $4.7 million, plus interest and expenses. It made demand of the fifth and sixth defendants under the guarantees. None of the sums outstanding have been paid by the borrowers and, aside from a payment made by a corporate guarantor, nothing has been paid generally. In the result, I am told (and it does not appear to be in dispute) that there is currently due and owing to the claimant $4,233,780.90, �186,327.50, and �59,373.54. None of this, as I say, is in dispute. There was a concern expressed in the course of the hearing that the lender's interest was held in several shares by the by the claimant and one of its associated companies. However, that ceased to be a problem because of an undertaking offered by the claimant, the effect of which would be to account to all those entitled to recover the sums lent, in the event it succeeds in obtaining judgment. A concern that credit would not be given for all sums received from third parties in respect of the debts (to the extent that was required) ceased to be a problem as well because of an undertaking offered by the claimant to give credit as appropriate and inform the defendants of all sums received. Two of the vessels the subject of the mortgages were, from June 2019, arrested in Djibouti by various third-party creditors. One of the vessels was the subject of ten different arrests from various trade creditors, and the other was subject to eight different trade creditor arrests. The vessels were abandoned by their owners on or about 15 September 2019 and then, or thereafter, the ships were arrested by or on behalf of the Djibouti Port Authority. In February 2020, the claimant arrested the vessels at a time when the vessels were each subject to multiple prior arrests. The Djibouti Port Authority applied to the courts in Djibouti for an order requiring the forced sale of the vessels out of court by the Port Authority. On 5 March 2020 that application was granted, and on 28 April 2020 the Djibouti Port Authority announced an auction of the vessels pursuant to the first instance court's order. Concerned at the effect that such a sale might have on its security, the claimant appealed that order, and on 1 June 2020 the Djibouti Court of Appeal set aside the order for sale for want of jurisdiction; ordered the Djibouti Port Authority to pay the costs of the appeal, but authorised the sale of the vessels by a court-supervised process, as is more conventional following the arrest of vessels. Thereafter the Djibouti Port Authority attempted to organise auctions of the vessels at various stages down to October 2020. It is suggested that this was contrary to the requirements of the Djibouti Court of Appeal, but whether that is so or not does not matter for present purposes. On a date unknown, the Djibouti Port Authority arranged a private sale of the vessels. The claimant maintains it first discovered that this was so on 11 November 2020. The sale was at a price of $3.2 million-odd to an intermediary based in Dubai, who thereafter sold the vessels for scrap to a ship scrapping operation based in Pakistan. The claimant maintains it had no prior notice of the sale, and details of when and how the sale was brought about is said by the claimant to be unknown to it. The claimant says it has received nothing from the sale. These proceedings were commenced in November 2021, with the defendants defending the claim by pleading at para.18 of their defence that the claimant borrowers had an equitable duty (1) to act reasonably in the realisation of any mortgage property, and/or (2) to obtain a true market price for the mortgaged property, namely the vessels. Their pleaded case as to the breach of these alleged duties involves them alleging that the claimant arrested the vessels, and then asserting that the sale to which I have referred was "... conducted at its behest ...", and that as a result the claimant failed to obtain the vessels' true market value, as it was obliged to do. The test to be applied on the summary judgment application is well known, and is that set out in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch). If permission to defend the claim is to be given, I must be satisfied that the defendants have a real, as opposed to a fanciful, prospect of success, and whilst a court should not carry out a mini-trial in deciding applications for summary judgment, that does not mean that a judge must accept at face value everything a defendant says, but at the same time should refuse summary judgment if there are reasonable grounds for believing that at a trial other evidence may be available which might alter the outcome and the perception as it is at the time the summary judgment application is being determined. The critical first point to make is that the only step that the claimant took in relation to the vessels � at any rate on the evidence that is available � was to arrest them, and they did so after a number of other trade creditors had taken the same steps. Although it is alleged in the defence that the claimant was responsible for the sale that eventually took place, ultimately resulting in the vessels being scrapped, that is fanciful on the factual material that is available. That material includes not merely the court orders from the Djibouti first instance and Court of Appeal to which I referred earlier in this judgment, but to third party narrative documents as well, being principally the ILO documentation, but there are others that are material. Where all that a marine mortgagee does is to exercise a power of arrest, the sole duty of the party effecting arrest is to do so in good faith for the purpose of obtaining repayment under the loan agreement secured by the mortgage. The contrary is not, and could not be, suggested. That this was the claimant's purpose of the exercise is consistent with (a) the claimant's appeal against the first instance decision permitting the Djibouti Port Authority to sell the vessels otherwise than under the supervision of the Djibouti court, and (b) the attempts made to stop the vessels being broken up once it became apparent to the claimant that they had been sold for that purpose. It is only if a mortgagee either takes possession of the mortgaged property or exercises a power of sale in respect of it that more complex duties arise. A mortgagee has, however, no duty to take possession or sell. If a mortgagee takes possession, then it assumes a duty to take reasonable care of the property: see Silven Properties v RBS [2004] 1 WLR 997, per Lightman J at [13]. However, there is no basis, on the evidence that is available to me, that the claimant took any form of possession of the vessels. Arresting a vessel is not to take possession of it. It is only when a mortgagee decides to exercise a power of sale that a mortgagee comes under any equitable duties concerning how that sale is to be conducted, and the duty is confined to a duty to obtain the true market price at the date of the sale. There are numerous authorities to this effect which were adopted and applied in respect of a marine mortgage in The Tropical Reefer [2004] 1 All ER (Comm) 904 at [19]. Returning to the facts of this case, there is no evidence whatsoever that the sale about which complaint is made by the defendants was a sale by or behalf of the claimant. The sale was a private sale by the DPA. The claimant did not have any prior notice of the sale and did not discover that it had occurred until after it had taken place. There is no evidence to contrary effect, and no reason for supposing that evidence to contrary effect will emerge if only the claim is allowed to proceed to trial. There is no reasonable or indeed any ground for thinking the evidence on this critical point will alter. As I have said, and repeat, the suggestion is inconsistent with both the claimant's appeal to the Djibouti Court of Appeal and its attempts to prevents the ships being broken up once it became aware of the sale of the vessels. It was submitted on behalf of the defendants that it was more than fanciful that the equitable duties that arise when effecting an arrest should be viewed as sufficiently flexible so that the scope of any duty, beyond a duty to act in good faith, should be viewed as ultimately depending on the facts and therefore that there should be atrial at which the allegedly relevant facts can be found. The defendants relied for this proposition on Medforth v Blake [2000] Ch 87 at [102]. In my judgment, that authority has no application in the circumstances of this case. It was precisely the argument advanced by the defendants in this case that was rejected at first instance in The Tropical Reefer (ibid) per Nigel Teare QC (as he then was) at paras.33 to 34, where it was pointed out that the context in which the statement relied on made was wholly different to that which applied in that case (and this), being an allegation that receivers had negligently conducted the business of which they had been appointed receivers. It has no impact either on the duty which arises when a marine mortgagee effects arrest, nor has it any impact on the duties that can arise only if and when a mortgagee exercises a power of sale. It was suggested that there was arguably a duty to force a sale where offers had been r

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