Background
NICO, subsidiaries of the National Iranian Oil Company, sued G. L. Greenland Ltd (formerly Ferland) for unpaid crude-oil invoices and sued Vitaly Sokolenko over alleged promises that specified assets would be used exclusively to meet Ferland’s debts. NICO alleged that more than €28.4 million remained due.
The defendants later issued a separate claim alleging that NICO had promised to continue hiring the tanker Alexandra I, continue the Shah Deniz trade, and write off Ferland’s debts in return for Ferland entering a delegation agreement. They sought to have that claim proceed as a counterclaim. NICO also challenged the court’s jurisdiction over the new claim. Before the hearing, Ferland had been dissolved in Cyprus, leaving the applications to be considered only as against Mr Sokolenko.
The Court’s Holding
Louise Hutton KC held that the defendants’ new claim disclosed no claim with a real prospect of success. The contemporaneous documents did not support the alleged binding promises: they recorded efforts to sell or arrange a possible charter of Alexandra I, NICO’s continuing reservation of its rights against Ferland, and its unwillingness to resume trading while the debt remained unpaid.
The court also found that Mr Sokolenko’s evidence did not substantiate the pleaded contractual promises. His alternative reliance on an expectation of continued trading, coupled with alleged misrepresentation, was neither properly pleaded nor supported by the evidence. The judge therefore did not decide the limitation arguments, regarding them as hypothetical once the claims had failed the merits threshold, and directed a consequential hearing on relief.
Key Takeaways
- A proposed late counterclaim must have a real, rather than fanciful, prospect of success.
- The court may reject allegations contradicted by contemporaneous documents without conducting a mini-trial.
- Discussions about possible future commercial arrangements do not, without more, establish binding commitments or actionable representations.
Why It Matters
The decision illustrates the Commercial Court’s willingness to test the coherence of a proposed counterclaim at an early stage. Where alleged multi-million-dollar commitments are absent from the written record and conflict with signed meeting minutes and later correspondence, a party cannot rely on broad assertions of commercial expectation to obtain a trial.