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6 maltatoday | SUNDAY • 28 MARCH 2021 NEWS MATTHEW AGIUS A Maltese judge has ruled that a case filed by Sberbank, a lead- ing Russian bank registered in Moscow, against a number of Maltese shipping companies, can be decided in the Maltese jurisdiction. The case involves an Istan- bul-based shipping conglomer- ate based in Malta for the last 20 years, which is also the subject of a massive asset freeze after owner Mübariz Mansimov, an Azeri-Turkish billionaire, was imprisoned over links to a coup in Turkey. Mübariz Mansimov Gurbano- glu was arrested back in March over alleged Gulen links. He had based his shipping empire almost in entirety in Malta for its friendly tax laws for the mar- itime industry. Mansimov was arrested in one of the highest-profile deten- tions of a crackdown against suspects linked to the 2016 coup by a network tied to U.S.- based Muslim cleric Fethullah Gulen, which President Tayyip Erdogan blames for the failed putsch in which about 250 peo- ple died. Sberbank case Sberbank had made four loans to two Russian companies – Palmali Caspian Offshore Pro- ject and Palmali Company, which loans were secured by Palmali Holding (PHL). The bank had accepted the guarantee as it was aware that PHL had several subsidiary companies in the maritime field and indirectly owned sev- eral ships. These companies included the PHL and a host of pthers, such as Palmali Interna- tional Holding, Palmali Inter- national Holding Two, Palmali Logistics, Palriver Shipping, Palocean Shipping and Palsea Shipping. In turn, these companies had other subsidiary companies. The loan had been granted as it was well known that the fi- nancial position of the guaran- tors was "steady and substan- tial." As security for the Russian companies' loans, Sberbank obtained a personal guarantee from Mansimov, his Turkish companies, as well as 47 naval hypothecs in the Russian mari- time registry over ships belong- ing to Palmali. Eventually, the principal debt- ors defaulted on the loan and Sberbank turned to the guaran- tor to pay the €164 million bal- ance. But this was never repaid. As a result of this, Sberbank obtained precautionary war- rants from the Maltese courts, seizing shares owned by Palmali in its direct subsidiaries. On 16 April 2018 Sberbank opened arbitration proceedings in Lon- don. Those proceedings are still ongoing. During the arbitration pro- cess, Sberbank was informed that a few days after the precau- tionary warrants were issued, Palmali Holding transferred all its shares in its direct subsidi- aries, in favour of Mansimov's Turkish company Gunesli. his decimated the finances of Pal- mali Holding. In turn, Gunesli's shares were acquired by another Mansi- mov-controlled company, Pal- mali Holding AS in Turkey, just a few days after Sberbank filed proceedings in Malta and arbi- tration proceedings in London. Sberbank argues that this was a fraudulent transfer intended to diminish the capital of Pal- mali's direct subsidiaries. To add insult to injury, said the lawyers, 35 vessels regis- tered in Malta and belonging to the Palmali group were trans- ferred to the indirect possession of Gunesli. In January 2019, Palmali and 56 of its companies changed their legal address to an office in Santa Venera, but failed to inform the London tribunal of this, in what the lawyers de- scribed as an "obvious attempt" to prevent or lengthen notifica- tion procedures relating to the arbitration decision. Sberbank argues that all this was done in bad faith, illicitly and with fraudulent intent, aimed at pre- venting Sberbank from recover- ing the debts due. Palmali has argued that Mal- tese courts have no competence to deal with the case, and re- jected any allegation of fraud or bad faith, and that Sberbank lacked juridical interest in the case. The bank could not, hav- ing failed to impose limitations on the transfer of shares during the negotiation period, exercise this right now, argued the de- fendants. They also said the transfers were part of a re-structuring of the group aimed at obtain- ing refinancing from Turkish banks. Mr Justice Joseph Zammit McKeon observed that in Oc- tober 2010, all the defendant's lawyers had dropped the brief and that despite being given time to engage new lawyers, nothing had been done. While defendant Mubariz Mansimov is not a Maltese citizen or dom- iciled in Malta, and although Gunesli was incorporated in Turkey, these had shares in Maltese companies in such a way as to be indirect owners of the Malta-flagged ships. Mubariz Mansimov had pre- sented an affidavit, as he was currently detained in a Turk- ish prison, stating that neither he nor the Turkish companies had ever agreed to be subjected to the Maltese jurisdiction, and that he was surprised at how the case had been filed against Palmali despite an agreement stipulating London as the juris- diction for arbitration proceed- ings. The judge said the case in Mal- ta was not filed over a breach of contract but a crime, which was aimed at making it harder for Sberbank to recover the money owed to it. The judge noted that although the onus was on the defendant to prove that Malta was not the applicable jurisdiction, they had not brought evidence to sustain this defence. The merits of the case, said the judge, dealt with the transfer of shares of a Malta registered company to the detriment of Sberbank, and that Maltese law extended the jurisdiction of the court not only to Maltese com- panies, but also to those regis- tered in Turkey, as well as over Mansimov in his actions as ulti- mate beneficiary of the Maltese companies. "Maltese law regulates the transfer of shares between com- panies," said the judge. "Once that amongst the defendants there are companies registered in Malta, their workings are subjected to Maltese law. Once the transfer of shares took place in Malta…[Maltese law] is the proper law regulating the issue between the parties." For more information on the role, eligibility criteria, and how to apply please visit our Facebook page or contact Mr John Farrugia on john.b.farrugia@gov.mt or call on 2598 3325 Full-Time Clerical Officer/Clerk (Jobsplus permit 4/2021) (Jobsplus permit 652/2018) Part-Time Nwar Tutors Application deadline - Wednesday, 14th April 2021 at noon We are recruiting! Bank's claim on Turkish shipping group to be heard in Malta Malta court will hear Russian bank's claims on Turkish shipping empire's alleged fraudulent transfer of ships Palmali owner Mubariz Mansimov is imprisoned in Turkey over suspected links to the Gulen coup in 2016