Irish company allegedly owned by Russia at the center of a case of concern over the breach of sanctions

An Irish company allegedly ultimately owned by the Russian state is at the center of a High Court case over sanctions-breaking concerns.

Priot registered companies involved in shipping have taken legal action over a number of shipping vessels which they leased from GTLK Europe Designated Activity Company, with its registered office at Hume Street, Dublin 2.

GTLK, which leases aircraft and marine vessels, is said to be ultimately owned by the transport authority of the Vladimir Putin regime, which became the target of international sanctions following the Russian invasion of Ukraine in February.

The Central Bank of Ireland is also a defendant in the proceedings.

The court heard that the Cypriot companies claim as part of the lease contracts that they have the right to buy the various vessels, worth millions of euros, from GTLK.

Several preliminary issues in the actions were briefly mentioned before the Court this week.

The actions will return to court early next week.

On Thursday, Marcus Dowling SC, appearing with Stephen Brittain Bl for Gravelor Shipping Limited, Cyprus-based Avonburg Finance Ltd, and their shareholders Capstans Holding Limited and Valbridge Ltd, said the cases their clients have brought are extremely complex and urgent.

The case of its clients is that they had entered into lease contracts for marine vessels with GTLK.

His clients are not subject to any international sanctions, however GTLK and related entities are, the lawyer said.

The lawyer said that, in the wake of the sanctions, they have filed lawsuits against GTLK and a related entity based in Malta called GTLK Malta, which is seeking to have sales of the vessels “made specifically”.

The lawyer said one of the main problems in the cases, when the proceedings were first brought up in court last month, was that the European Union had set a deadline of early December for such transactions to be completed.

However, the attorney said things became even more extreme and urgent when the US Treasury Department recently set a deadline of early September for deals with sanctioned entities like GTLK to be concluded.

The attorney said his clients could end up being penalized if they did business with GTLK after the deadlines expire.

His clients have also added the Central Bank of Ireland as a defendant in their proceedings.

He said that the Central Bank is the entity that regulates sanctions against Russia and entities linked to Russia in this jurisdiction.

The Central Bank would have to approve any acquisition of any of GTLK’s assets from Cypriot entities.

Although your client has written to the Central Bank about the matter, they have not received any meaningful response.

While it was accepted that the Central Bank is extremely busy, the lawyer said that its attitude towards issues raised by its clients is currently “unknown”.

However, he added that the Bank’s lawyers had indicated in correspondence that they did not believe that the actions of the Cypriot-based entities were something that could be summarily taken by the courts.

His clients are very concerned, especially about the imminent deadline imposed by the US authorities, and they want the cases to be resolved by the court as soon as possible.

Ruling on preliminary issues, Judge Carmel Stewart, ex parte, authorized the plaintiff companies to amend their summons to allow them to serve their proceedings on the Malta-based defendant.

Mr. Dowling stated that his client needed to apply due to an issue related to the correct address for that particular defendant.

The matters were adjourned until next Tuesday’s court session.

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