Tonzip Maritime Ltd v. 2Rivers Pte Ltd (formerly Coral Energy Pte Ltd) [2025] EWHC 2036 (Comm)

A. Key facts

On 5 November 2021, Tonzip Maritime Ltd (Owners), owner of the vessel CATALAN SEA (the Vessel), entered into a voyage charterparty with 2Rivers Pte Ltd (formerly Coral Energy Pte Ltd) (2Rivers) for the carriage of oil from Primorsk, Russia, to Aliaga, Turkey (the Charterparty).

The events took place prior to Russia’s invasion of Ukraine and subsequent trade sanctions on Russian oil and UK and EU asset freeze restrictions imposed on 2Rivers on 17 December 2024 and 18 July 2025, respectively.

On 16 November 2021, three draft bills of lading were presented to Owners, naming JSC Neftyanaya Kompaniya Neftisa (Neftisa) as shipper. 2Rivers issued orders for the loading of the associated oil cargo (the Neftisa Cargo).

A dispute arose when Owners refused to load the cargo, citing a Refinitiv sanctions screening report which identified Mikhail Gutseriev (Mr Gutseriev) as Neftisa’s indirect owner from July 2015 to July 2021. No ownership information was listed from August 2021 onwards. Mr Gutseriev had been designated under EU and UK sanctions earlier in 2021. As a result, he and any entities he owned or controlled were subject to asset freeze restrictions.

In response to Owners’ refusal, 2Rivers provided a letter from Neftisa and legal opinions asserting that Mr Gutseriev no longer owned or controlled Neftisa, having transferred his majority stake to his brother, Saint-Salam Gutseriev, who also replaced him as chairman.

Despite this, Owners maintained their refusal and requested alternative voyage orders. On 24 November 2021, 2Rivers purported to cancel the Charterparty, which Owners treated as a repudiatory breach and accepted the termination.

Owners subsequently brought a claim for damages of US$1.02 million. 2Rivers counterclaimed for losses of US$233,600 incurred in fixing a replacement vessel.

The Sanctions Clause

The central issue to the case was whether Owners were entitled to reject 2Rivers’ voyage orders under the Charterparty’s sanctions clause (the Sanctions Clause). The relevant provision stated:

“…(C) THE OWNERS SHALL NOT BE OBLIGED TO COMPLY WITH ANY ORDERS FOR THE EMPLOYMENT OF THE VESSEL IN ANY CARRIAGE, TRADE, VOYAGE, SHIP-TO-SHIP TRANSFER OPERATION OR OTHER SERVICE WHICH IN THE REASONABLE JUDGEMENT OF THE OWNERS, IS PROHIBITED BY SANCTIONS OR WILL EXPOSE THE OWNERS, THE VESSEL OR ITS MANAGERS, CREW, THE VESSEL’S INSURERS OR REINSURERS TO SANCTIONS. IN THE EVENT THAT SUCH RISK ARISES IN RELATION TO A VOYAGE THE VESSEL IS PERFORMING, THE OWNERS SHALL BE ENTITLED TO REFUSE FURTHER PERFORMANCE AND THE CHARTERERS SHALL BE OBLIGED TO PROVIDE ALTERNATIVE VOYAGE ORDERS.”

The UK High Court held:

  1. The Sanctions Clause was a constraint on 2Rivers’ right to direct the vessel and must be construed narrowly and contra proferentem.
  2. It entitled Owners to refuse orders if, in their reasonable judgment, performance would expose them (or the relevant specified parties) to sanctions, or a risk of such exposure arose. The risk needed to be more than speculative – though certainty of a breach was not required.
  3. “Reasonable judgment” was to be assessed objectively, by reference to a reasonable shipowner acting in good faith under commercial time pressure.
  4. Owners bore the burden of proving such a risk, based on an objectively reasonable assessment. If established, it was then for 2Rivers to rebut.

Ownership and control of Neftisa

The principal question for the Court was whether, at the time of 2Rivers’ orders, Owners could reasonably conclude that Mr Gutseriev owned or controlled Neftisa, thereby triggering a risk of sanctions exposure.

Owners’ case was based on Mr Gutseriev’s alleged control of Neftisa. The Court noted that the standard for “control” under UK sanctions law was well-established following a number of recent authorities, such as Mints (Mints v. PJSC National Bank Trust [2023] EWCA Civ 1132; [2024] K.B. 559), Litasco (Litasco v. Der Mond Oil [2023] EWHC 2866 (Comm); [2024] 1 All ER (Comm) 1044), Hellard (Hellard v. OJSC Rossiysky [2024] EWHC 1783 (Ch)) and Vneshprombank (Vneshprombank LLC v. Bedzhamov [2024] EWHC 1048 (Ch)).

Importantly, the Court emphasised that its assessment must be confined to material available to Owners at the relevant time – even if not all of it was actually considered by them. Later evidence was inadmissible.

The material included:

  • The Refinitiv report
  • The letter from Neftisa
  • The legal opinions from 2Rivers
  • An Infospectrum report on a Neftisa affiliate – which had been downloaded by Owners, but for reasons that were unclear, had not been shown to all its key decision-makers

The Infospectrum report stated:

“Mr Gutseriev has been placed on the EU’s sanctions list in June 2021…Mr Gutseriev is widely reported as having stood down from the board of the company, with the likely intention of giving the company the freedom to manoeuvre in the manner to which it is accustomed.”

Owners’ witness evidence confirmed that if this report had been made available to key decision-makers:

“It would have helped [Owners] come to the conclusion that there was nothing to be concerned about with the Neftisa cargo.”

The Court held that there was nothing within the Refinitiv report which evidenced Mr Gutseriev owned or controlled Neftisa in November 2021 and any evidence that he did was based on mere speculation. Accordingly, Owners were not entitled to refuse 2Rivers orders to load the Neftisa Cargo under the Sanctions Clause.

C. Conclusions

This case continues the judicial development of the concept of “control” under UK sanctions law, aligning with authorities such as Mints, Litasco, Hellard, and Vneshprombank. It confirms that control must be established on the facts, and that the opacity of ownership structures alone is insufficient.

The judgment underlines the importance of thorough, evidence-based due diligence when invoking sanctions clauses. It also highlights the significant commercial and legal risks of acting on incomplete or speculative information.

Although the decision offers welcome guidance on the operation of sanctions clauses, challenges will undoubtedly continue to arise in their application, particularly given increasingly intricate ownership structures designed to circumvent restrictions.

With some irony, that point was underlined by a judgment handed down the same day in LLC Eurochem North-West-2 and another v Société Générale S.A. and others [2025] EWHC 1938 (Comm), where Mr Justice Bright addressed the sanctions status of the Eurochem Group—an issue well known to practitioners in the sanctions field.