Ilyashev & Partners Secured the Withdrawal of Claims Filed by the State Environmental Inspectorate Against the Shipowner of the New Challenge Bulk Carrier

10/ 12/ 2020

The team of Odesa office of Ilyashev & Partners Law Firm managed to persuade the State Environmental Inspectorate of Ukraine to withdraw its claims against the shipowner of the NEW CHALLENGE Bulk Carrier as related to the pollution of the Port of Mykolaiv resulting from an incident taking place during cargo handling in the Port of Mykolaiv in July 2020. Within a framework of the pre-trial resolution of the potential dispute, the attorneys of Ilyashev & Partners addressed the State Environmental Inspectorate of Ukraine with a statement to cancel and withdraw the claims secured by a letter of guarantee of one of the British P&I Clubs. One of the key arguments presented within the pre-trial resolution process was the recent judgment of Zavodskyi District Court of Mykolaiv, which cancelled the unlawful order of the inspector of the State Environmental Inspectorate in Mykolaiv Region and closed the case on bringing the captain of the NEW CHALLENGE to the administrative responsibility in the absence of components of offence on his part. Moreover, another reason for the withdrawal of the claim was the erroneous application of the provisions of substantive law to the shipowner, inter alia, the Methodology for Calculation of Damage Compensation, approved by the Order of the Ministry of Environmental Protection No. 389 dated 20 July 2009. Thus, the withdrawal of claims became the final element of a comprehensive strategy to protect the interests of both the shipowner and the P&I Club. As a result, the team of Odesa office of Ilyashev & Partners Law Firm managed to resolve the dispute in a pre-trial procedure, avoiding a lengthy legal action against the State Environmental Inspectorate. Moreover, when handling this unique case – for the first time in Ukraine – the firm’s attorneys managed to persuade the State Environmental Inspectorate to accept the P&I Club’s undertaking as a sufficient and only security in respect of the maritime claim, which allowed to release the vessel promptly and avoid huge losses to the shipowner, even in the face of four maritime claims filed against the vessel at once. It will be recalled that on 12 July 2020, when unloading a 16-ton forklift from the cargo hold of m/v New Challenge, due to a breakage of the rope on a ship’s crane hook, the forklift fell on the berth from a height of 4 meters, which resulted in a significant damage of the berth and a pipeline of the neighboring oil terminal. As a result, about 10 tons of sunflower oil spilled on the berth, some of which got into the port water area, which led to the New Challenge captain being held administratively liable for the environmental pollution, as well as to filing a claim against the shipowner in the amount exceeding UAH 5 million. The total amount of claims against the vessel amounted to about UAH 13.5 million. Founded in 1997, Ilyashev & Partners is one of the most prominent law firms in the Eastern European region. Today, Ilyashev & Partners employs more than 120 people in Ukraine, Russia and Estonia with its offices and representatives in Kyiv, Moscow, Tallinn, Dnipro, Simferopol, Odesa and Kharkiv. The firm has been recognized by the most prestigious legal market research guides, according to which it occupies a leading position in the markets of Ukraine, Russia and Estonia.

Within a framework of the pre-trial resolution of the potential dispute, the attorneys of Ilyashev & Partners addressed the State Environmental Inspectorate of Ukraine with a statement to cancel and withdraw the claims secured by a letter of guarantee of one of the British P&I Clubs.

One of the key arguments presented within the pre-trial resolution process was the recent judgment of Zavodskyi District Court of Mykolaiv, which cancelled the unlawful order of the inspector of the State Environmental Inspectorate in Mykolaiv Region and closed the case on bringing the captain of the NEW CHALLENGE to the administrative responsibility in the absence of components of offence on his part. Moreover, another reason for the withdrawal of the claim was the erroneous application of the provisions of substantive law to the shipowner, inter alia, the Methodology for Calculation of Damage Compensation, approved by the Order of the Ministry of Environmental Protection No. 389 dated 20 July 2009.

Thus, the withdrawal of claims became the final element of a comprehensive strategy to protect the interests of both the shipowner and the P&I Club. As a result, the team of Odesa office of Ilyashev & Partners Law Firm managed to resolve the dispute in a pre-trial procedure, avoiding a lengthy legal action against the State Environmental Inspectorate.

Moreover, when handling this unique case – for the first time in Ukraine – the firm’s attorneys managed to persuade the State Environmental Inspectorate to accept the P&I Club’s undertaking as a sufficient and only security in respect of the maritime claim, which allowed to release the vessel promptly and avoid huge losses to the shipowner, even in the face of four maritime claims filed against the vessel at once.

It will be recalled that on 12 July 2020, when unloading a 16-ton forklift from the cargo hold of m/v New Challenge, due to a breakage of the rope on a ship’s crane hook, the forklift fell on the berth from a height of 4 meters, which resulted in a significant damage of the berth and a pipeline of the neighboring oil terminal. As a result, about 10 tons of sunflower oil spilled on the berth, some of which got into the port water area, which led to the New Challenge captain being held administratively liable for the environmental pollution, as well as to filing a claim against the shipowner in the amount exceeding UAH 5 million. The total amount of claims against the vessel amounted to about UAH 13.5 million.

Founded in 1997, Ilyashev & Partners is one of the most prominent law firms in the Eastern European region. Today, Ilyashev & Partners employs more than 120 people in Ukraine, Russia and Estonia with its offices and representatives in Kyiv, Moscow, Tallinn, Dnipro, Simferopol, Odesa and Kharkiv. The firm has been recognized by the most prestigious legal market research guides, according to which it occupies a leading position in the markets of Ukraine, Russia and Estonia.