Clyde & Co has failed to dismiss allegations against a client accused of deliberately scuttling a vessel to recover $22m (£17m) in insurance.
Ahmet Ali Agaoglu, the sole shareholder and director of Kairos Shipping, was found by Mr Justice Teare to have ordered members of his crew to start a fire and sink Atlantik Confidence, a geared bulk carrier that sunk in 2013 on course from Ukraine to Oman via Turkey.
Holman Fenwick, which acted for the defendants and insurers of the vessel, argued that there was a conspiracy to sink the ship between senior members of the crew, including the captain, to divert the ship’s course so that it travelled in deep water, thereby flooding its engine room.
The claimants had argued that they diverted the course of the ship because of piracy concerns, but this was dismissed by Teare J.
He ruled: “The vessel was deliberately sunk by the master and chief engineer at the request of Mr Agaoglu, the alter ego of the owners. In those circumstances the loss of the cargo resulted from his personal act committed with the intent to cause such loss.
“The loss of the cargo was the natural consequence of his act as he must have appreciated. There can be no doubt that he intended the cargo to be lost just as much as he intended the vessel to be lost. It follows that the owners’ claim for a limitation decree must be dismissed.”
Quadrant Chambers was involved in both sides of the dispute, with Robert Thomas QC, Thomas Macey-Dare and Koye Akoni taking instruction from Clyde & Co on behalf of the defendants, and Nigel Jacobs QC and Ruth Hosking taking instruction from Holman Fenwick Willan.
The judge concluded that Agaoglu’s “poor financial situation” was one of the motives behind the conspiracy.
“Mr Agaoglu had a motive to arrange the sinking of the vessel. His companies were in real financial difficulty and it is likely that he was under pressure from his bank. He would alleviate both by his bank recovering the insurance proceeds of US$22m. There was no evidence as to when Mr Agaoglu or those acting on his behalf asked the master and chief engineer to sink the vessel or why they agreed to do so but Mr Agaoglu must have had the opportunity to make, or more likely arrange, such a request.”
He continued: “Before reaching these conclusions I have asked myself whether there is a real or substantial, as opposed to a remote or fanciful, possibility that the sinking of the vessel was accidental, which Cargo [the defendants] have been unable to exclude. I do not consider that there is. ”
Shipping and maritime disputes are strong areas for both Clydes and Holman Fenwick, with the former having more than 150 lawyers in its marine group worldwide.
In June, Clydes hired Eversheds Sutherland’s entire marine team in Newcastle, with former senior partner Stephen Mackin taking the lead alongside fellow partner Jessica Maitra.
The two firms also led the way for UK firms’ expansion in the US. HFW’s November 2016 merger with Texas litigation boutique Legge Farrow Kimmitt McGrath & Brown was the only instance of a transatlantic merger to take placel, while Clydes saw the greatest proportional expansion with a 41.1 per cent increase in partner headcount.
For the claimant, Kairos Shipping LTD and Standard Club Europe
Quadrant Chambers’ Robert Thomas QC, Thomas Macey-Dare and Koye Akoni, instructed by Clyde & Co partner Ed Mills-Webb
For the defendant, Enka & Co LLC and AXA Insurance (Gulf) BSC
Quadrant Chambers’ Nigel Jacobs QC and Ruth Hosking, instructed by Holman Fenwick Willan’s James Gosling and Rory Butler