Sberbank claim on Turkish shipping group Palmali to be heard in Malta

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 in the Maltese jurisdiction.

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

Mübariz Mansimov Gurbanoglu was arrested back in March over alleged Gulen links. He had based his shipping empire almost in entirety in Malta for its friendly tax laws for the maritime industry.

Mansimov was arrested in one of the highest-profile detentions of a crackdown against suspects linked to the 2016 coup by a network tied to U.S.-based Muslim cleric Fethullah Gulen, which President Tayyip Erdogan blames for the failed putsch in which about 250 people died.

Sberbank case

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

The bank had accepted the guarantee as it was aware that PHL had several subsidiary companies in the maritime field and indirectly owned several ships. These companies included the PHL and a host of pthers, such as Palmali International Holding, Palmali International Holding Two, Palmali Logistics, Palriver Shipping, Palocean Shipping and Palsea Shipping.

In turn, these companies had other subsidiary companies.

The loan had been granted as it was well known that the financial position of the guarantors was “steady and substantial.”

As security for the Russian companies’ loans, Sberbank obtained a personal guarantee from Mansimov, his Turkish companies, as well as 47 naval hypothecs in the Russian maritime registry over ships belonging to Palmali.

Eventually, the principal debtors defaulted on the loan and Sberbank turned to the guarantor to pay the €164 million balance. But this was never repaid.

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

During the arbitration process, Sberbank was informed that a few days after the precautionary warrants were issued, Palmali Holding transferred all its shares in its direct subsidiaries, in favour of Mansimov’s Turkish company Gunesli. his decimated the finances of Palmali Holding.

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

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

To add insult to injury, said the lawyers, 35 vessels registered in Malta and belonging to the Palmali  group were transferred to the 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 inform the London tribunal of this, in what the lawyers described as an “obvious attempt” to prevent or lengthen notification procedures relating to the arbitration decision. Sberbank argues that all this was done in bad faith, illicitly and with fraudulent intent, aimed at preventing Sberbank from recovering the debts due.

Palmali has argued that Maltese courts have no competence to deal with the case, and rejected any allegation of fraud or bad faith, and that Sberbank lacked juridical interest in the case. The bank could not, having failed to impose limitations on the transfer of shares during the negotiation period, exercise this right now, argued the defendants.

They also said the transfers were part of a re-structuring of the group aimed at obtaining refinancing from Turkish banks.

Mr Justice Joseph Zammit McKeon observed that in October 2010, all the defendant’s lawyers had dropped the brief and that despite being given time to engage new lawyers, nothing had been done. While defendant Mubariz Mansimov is not a Maltese citizen or domiciled in Malta, and although Gunesli was incorporated in Turkey, these had shares in Maltese companies in such a way as to be indirect owners of the Malta-flagged ships.

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

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

The judge noted that although the onus was on the defendant to prove that Malta was not the applicable jurisdiction, they had not brought evidence to sustain this defence.

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

“Maltese law regulates the transfer of shares between companies,” said the judge. “Once that amongst the defendants there are companies registered in Malta, their workings are subjected to Maltese law. Once the transfer of shares took place in Malta…[Maltese law] is the proper law regulating the issue between the parties.”