Commercial Court dismisses long-running international oil freight claim

27/05/25

On 23 May 2025, the Commercial Court handed down judgment in Palmali Shipping SA v Litasco SA [2025] EWHC 1149 (Comm), dismissing Palmali’s claim for breach of a Contract of Affreightment (“CoA”) between the parties in its entirety. Meanwhile, Litasco’s counterclaim for unpaid debts and unjust enrichment  was allowed, leading to a judgment debt of around USD 15 million in its favour. 

Palmali, an international freight transportation group headquartered in Turkey, commenced proceedings in 2017, alleging that Litasco (the trading arm of Russian oil giant Lukoil) had failed to provide cargo owing to it under the CoA for shipment, causing it losses said to be worth almost USD 2 billion. Palmali’s claims were partly struck out by Mr Justice Foxton in 2020, with its repleaded case said to amount to USD 175 million.

Following a 6-week trial in January and February 2025, HHJ Pelling KC dismissed Palmali’s claim on three separate bases:  

1. The CoA had been concluded by Litasco’s then-CEO, Mr Golovushkin, in circumstances that gave rise to a conflict of interest, such that it would have been void under Swiss Law (which governed the issue of authority).
2. The CoA, as was known to Palmali, was contrary to Litasco’s best interests, such that it would have been void under Swiss Law. 
3. The CoA was not, as a matter of objective construction, intended by Litasco and Palmali to be binding.

At the subsequent consequentials hearing,  Litasco was awarded indemnity costs for the majority of the period of the proceedings.

The trial judgment is here.