August, 2025 - Sanctions, Screening, and Shipowner Risk: Tonzip Maritime Ltd v 2Rivers PTE Ltd
The Commercial Court’s decision in Tonzip Maritime Ltd v 2Rivers PTE Ltd [2025] EWHC 2036 (Comm) examined whether a shipowner was entitled to refuse to load cargo based on sanctions concerns, and whether its reliance on a sanctions clause was objectively reasonable. The ruling provides guidance on the interpretation of sanctions clauses, the evidentiary burden on shipowners, and the limits of commercial discretion in the face of geopolitical risks and deceptive shipping practices.
On 5th November, 2021, Tonzip Maritime Ltd (“Tonzip”), a Liberia-registered shipowner, chartered the CATALAN SEA to 2Rivers PTE Ltd (“2Rivers”), a Singapore-based oil trader, for a voyage from Primorsk, Russia to Aliaga, Turkey. The oil cargo was to be shipped FOB by Neftisa, a company associated with Russian businessman Mr Mikail Gutseriev. The charterparty incorporated the Eastern Pacific Voyage Charter Trade and Economic Compliance Clause (“EPS Sanctions Clause”). Under this clause the charterer warranted that performance of the charter would not expose the shipowner to any sanctions. The clause was also designed to allow a shipowner to refuse orders that, in its “reasonable judgment,” would expose it or the ship to sanctions risks.
Mr Gutseriev had been sanctioned by the EU in June, 2021 and by the UK in August, 2021 due to his ties to the Belarusian regime and therefore Tonzip’s internal sanctions screening flagged Neftisa as a potential sanctions risk. Relying on the EPS Sanctions Clause in the charterparty, Tonzip refused to load the cargo and requested alternative voyage orders. 2Rivers argued that the refusal was unjustified and on 24th November, 2021 it purported to cancel the charterparty. Tonzip treated this as a repudiatory breach and terminated the contract, subsequently claiming damages. 2Rivers counter-claimed for wrongful termination.
Mr Justice Hochhauser KC, sitting as Deputy Judge, ruled in favour of 2Rivers, holding that Tonzip was not entitled to refuse to load the cargo, had wrongfully terminated the charterparty and that 2River’s counter-claim was successful.
The court held that as a clause that permitted a party to withhold performance, the EPS Sanctions Clause was subject to the principle of contra proferentem—ambiguities were resolved against the party seeking to rely on it i.e. Tonzip, which bore the burden of proving that its refusal was based on an objectively reasonable judgment. The court emphasized that “reasonable judgment” required more than subjective belief or speculation; it demanded a decision that a reasonable shipowner could have reached in the same circumstances.
The court noted Tonzip’s reliance on screening tools like Refinitiv/World-Check which flagged Neftisa’s links to Mr Gutseriev, but held that Tonzip had failed to properly consider contrary evidence.
2Rivers had pointed to a letter from Neftisa dated 16th November, 2021 stating that Mr Gutseriev was not the controlling person of Neftisa and was not a board member. The letter stated that it was based on information provided by the sole shareholder of Neftisa. It did not elaborate on that information nor attach or refer to any instrument of resignation or any other contemporaneous documents showing that Mr Gutseriev had resigned from Neftisa’s board. There were no references to or copies of any documentation from the Russian equivalent of Companies House.
Tonzip rejected 2Rivers’ reliance upon a Russian newspaper article dated 22nd July, 2021 which stated that Mr Gutseriev had transferred control of Neftisa to his brother (Mr Salam-Sait Gutseriev), had stepped down as chairman and indirectly owned 7% of the company through a family member.
2Rivers also relied upon three opinion letters from two London law firms. Two of these letters were dated in July, 2021 and one was dated 17th November, 2021. They stated, in part, that Mr Gutseriev indirectly owned no more than 6.75% of Neftisa shares, that the majority shareholder was his brother and that he was not a director. Tonzip argued that these opinion letters could not be relied upon as they were explicitly subject to certain key factual assumptions including an assumption that various individuals including Mr Gutseriev’s brother and son held their shares for their sole benefit and received no instructions from Mr Gutseriev.
Finally, 2Rivers pointed to an Infospectrum report dated 16th July, 2021 in relation to PAO Russneft, described as an associated company of Neftisa. That report referred to it being widely reported that Mr Gutseriev had stood down from the board of that company. That report had not been made available to all of the relevant decision makers at Tonzip at the material time. Nonetheless, it is not entirely clear what weight can be attached to a report from July, 2021 on a separate company, which did not categorically state that Mr Gutseriev had stood down and entirely divested his interests, as providing suitable information upon Mr Gutseriev’s interests in Neftisa in November, 2021.
The court found that Tonzip had not made a reasonably objective decision for a number of reasons. Tonzip relied upon Refinitiv screening reports but those reports contained nothing evidencing Mr Gutseriev’s ownership or control of Neftisa in November, 2021 and that Tonzip was not able to confirm whether Mr Gutseriev had de facto control over Neftisa. The court did not agree with Tonzip’s argument that it was entitled to rely upon the Refinitiv reports such that the evidentiary burden was shifted to 2Rivers. The judgment held that the documents put forward by 2Rivers including the newspaper article “was material which could and should have been taken properly into account when [Tonzip] reached its decision…”.
It is understood that permission to appeal has been granted.
Commentary
The judgment does not provide clear guidance as to exactly what documents a shipowner should seek and rely upon when making time-critical decisions in relation to potential counterparties or the lawfulness of their orders whilst being cognisant of the use of deceptive, manipulative and self-serving practices in relation to sanctions evasion used by bad actors.
For example, in this case it can be presumed that Neftisa could have easily produced board minutes proving Mr Gutseriev’s involvement in the operation of the company until the date that he resigned, together with a copy of his letter of resignation and Board resolutions relating to it and his replacement. The judgment also does not state that owners in these circumstances could and should seek copies of a charterer’s audited report and accounts and auditor’s statements as providing further proof of a director’s or shareholder’s withdrawal from the company. Finally, in this case, it would seem that no proof was put forward by Neftisa as to the apparently ‘at arm’s length’ sale or transfer of Mr Gutseriev’s shares to his brother, son and other associates.
In practical terms it is unlikely that all or indeed any of these documents will be made available by charterers and therefore it is difficult to say exactly what will constitute sufficient evidence to justify an objectively reasonable decision to refuse orders and subsequently terminate a charter in these circumstances.
It is not clear from the judgment whether Tonzip had sought legal advice before terminating the charter with 2Rivers. Members are recommended to seek specialist legal advice before making decisions relating to refusing orders and the termination of a charter. Members are also recommended to review their charters to ensure that they contain fit for purpose sanctions provisions.
A September, 2023 judgment by the European Court of Justice held that Mr Gutseriev retained control of Neftisa notwithstanding his apparent divestment in June, 2021 although that judgment does not spell out the position in November, 2021. It is noted that Mr Mikail Gutseriev remains sanctioned by the UK and EU. 2Rivers was added to the UK Sanctions list on 17th December, 2024 and was sanctioned by the EU on 18th July, 2025. Mr Gutseriev’s son and brother, Mr Said Gutseriev and Mr Salam-Sait Gutseriev, were sanctioned by the UK on 29th June, 2022. Of course, most of these events post-date Tonzip’s decision in November, 2021 but they do highlight the risks that owners face when dealing with sanctions issues.
Members which have any questions in relation to the above issues are invited to contact the Club for further information.