The "Sahand" - High Court (Quentin Loh J) - 31 January 2011

(2011) 822 LMLN 4

Admiralty jurisdiction - Iranian vessels arrested by French bank - Shipowners asserting that bank had been fully paid all sums due - Shipowners applying for release of vessels - Whether vessels affected by United Nations sanctions against Iran - Whether vessels subject to UN Security Council freeze on Iranian assets

The plaintiff, a French Bank, arrested the vessels Sahand, Salaban and Tuchal in Singapore. The owners of the vessels (the corporate defendants in the relevant actions) were companies which were wholly owned subsidiaries of the Islamic Republic of Iran Shipping Lines (“IRISL”). The plaintiff had provided loan finance to the defendants in respect of the building of the vessels under an agreement which also provided for possible interest rate swap transactions between various swap banks and the defendants for the latter to hedge against their exposure to interest rate fluctuations under the loan agreement. The plaintiff alleged that the defendants had failed to pay various sums due under the loan agreement and/or two International Swaps and Derivatives Association Master Agreements.