A Maltese court has turned down the appeal of the founder of Palmali International Holding Company, billionaire Mubariz Mansimov, whose shipping empire is being targeted by creditors since his arrest in 2020 in Türkiye in connection with the Fatullah Gulen coup, Report informs via MaltaToday.
The court upheld a decision by the Malta Arbitration Centre, to enforce the decision of its London counterpart in a claim brought by SOCAR, the Azerbaijani state-owned gas company, against Palmali International Holding Company.
SOCAR demanded the enforcement of a London arbitration decision of 2021 to force Mubariz Mansimov to pay over $240 million in compensation over a failed joint venture with Palmali. Mansimov appealed the request to enforce the decision in Malta, in the Maltese courts.
Turkish-naturalized Mansimov based his shipping empire almost in entirety in Malta for its friendly tax laws for the maritime industry. Since then his assets in Malta were also placed under an asset freeze in another injunction filed by creditors Sberbank, of Russia.
In 2023, the London Arbitration Centre rejected Mansimov’s appeal and ordered the registration of its arbitration decision in Malta. Mansimov followed up with an appeal in the Malta Arbitration Centre, which he lost, and then in the Maltese Appeals Court, claiming he was denied a fair hearing in London.
According to MaltaToday, Mansimov’s Malta-based companies are dozens of ships and major holding companies such as the Palmali International Holding Company, Palmali International Holding Two, Palmali Logistics, Palocean Shipping, Paloffshore Oil Services, Palriver Shipping, Palsea Shipping, Tampal Trade, Pal Food, Palchem Holding, Palmali Dry Cargo, Palmali Voyager, Caspian Holding, Pal Air, Pal Gas Holdling, Barge Oil Services, GMM Shipping & Trading, and GMM Holding.
In 2023, a Maltese judge found in favor of Sberbank against a number of Maltese shipping companies owned by the Palmali shipping group.
The court found that Palmali had carried out bad faith transactions in a bid to fraudulently bankrupt the shipping companies in Malta, in a bid not to repay a series of Sberbank loans, and called out the malicious scheming of Mansimov in the entire saga.
As security for the loans, Sberbank obtained a personal guarantee from Mansimov, his Turkish companies, as well as 47 naval hypothecs in the Russian maritime registry over ships belonging to Palmali.
Eventually, Palmali defaulted on the loan and Sberbank turned to the guarantor to pay the 164 million euros balance. But this was never repaid.
As a result of this, Sberbank obtained precautionary warrants from the Maltese courts, seizing shares owned by Palmali in its direct subsidiaries, as well as opening an arbitration in London courts.
But it was here that Sberbank learned that a few days after the precautionary warrants were issued, Palmali Holding transferred all its shares in its direct subsidiaries, in favor of Mansimov’s Turkish company Gunesli. This effectively decimated the finances of Palmali Holding.
In turn, Gunesli’s shares were acquired by another Mansimov-controlled company, Palmali Holding AS in Turkey, just a few days after Sberbank filed proceedings in Malta.
Sberbank successfully argued that had been a fraudulent transfer intended to diminish the capital of Palmali’s direct subsidiaries, with 35 Malta-flagged ships being transferred to the indirect possession of Gunesli.
Sberbank said that Palmali’s deregistration of its 56 companies in Malta had been an “obvious attempt” to prevent or lengthen notification procedures, done in bad faith, illicitly and with fraudulent intent, to prevent Sberbank from recovering the debts due.