Turkey-based Palmali Loses London Lawsuit Against Lukoil Trading Arm

Turkey-based tanker operator Palmali faced a setback on Friday as it lost its London lawsuit against the trading arm of Russian oil producer Lukoil over a deal related to the supply of oil products. Palmali, controlled by Azerbaijan-born businessman Mubariz Mansimov, had initially sued Lukoil’s Swiss subsidiary Litasco at the High Court in 2017, seeking nearly $2 billion.

However, the value of Palmali’s case was significantly reduced after Litasco successfully had a large portion of the lawsuit dismissed in 2020. By the time of the trial earlier this year, Palmali was seeking just over $120 million for Litasco’s alleged breach of obligations to supply up to 700,000 metric tons of cargoes per month.

Unfortunately for Palmali, Judge Mark Pelling dismissed the lawsuit in a written ruling on Friday. The judge deemed the contract between Palmali and Litasco as void due to a conflict of interest involving Litasco’s then chief executive Valery Golovushkin at the time the contract was agreed upon.

In addition to dismissing Palmali’s claims, the judge upheld Litasco’s counterclaim for the repayment of a loan and payments made to Palmali that were intended for third parties. Litasco’s lawyer Craig Morrison stated that the parties had agreed on a value of around $14.8 million for the counterclaim, including interest.

Both Palmali and Litasco refrained from providing immediate comments following the ruling.

This legal battle between Palmali and Litasco highlights the complexities and challenges that can arise in the oil trading industry. It serves as a reminder of the importance of ensuring transparency and avoiding conflicts of interest in business dealings to prevent costly legal disputes.

For more updates on legal proceedings and developments in the oil and gas sector, stay tuned for further news and analysis.

(Reuters/Reporting by Sam Tobin; Editing by Kirsten Donovan)