A UK Court of Appeal decision has clarified how much certainty owners need before refusing cargo over sanctions concerns, in a ruling that carries implications for sanctions screening practices across the shipping and bunkering sectors, according to Ship & Bunker.
The case, Tonzip Maritime (Singapore) Pte Ltd v 2 Rivers Pte Ltd (The Catalan Sea) [2026] EWCA Civ 641, centred on a tanker chartered to carry Russian crude oil. According to Ship & Bunker, the charter allowed owners to refuse orders that, in their reasonable judgment, were prohibited by sanctions or would expose the owners, vessel, managers, crew or insurers to sanctions liability.
What Happened in the Dispute
Screening flagged a possible link between the shipper, Neftisa, and sanctioned businessman Mikhail Gutseriev, prompting the owners to refuse loading, Ship & Bunker reports. The charterers responded with corporate assurances and legal opinions arguing that Gutseriev had transferred control of Neftisa to his half-brother. When owners maintained their refusal, the charterers cancelled the charter.
At first instance, the owners lost, with the judge finding insufficient factual basis for believing Gutseriev retained control, according to the report. The Court of Appeal reversed this, focusing on the word “expose” in the charter clause. Per Ship & Bunker, the court held that owners did not need to prove an actual sanctions breach, or even that a breach was more likely than not — a reasonable judgment that performance created a real risk of sanctions liability could suffice.
Limits of the Ruling
The article, written by Paul Henty, Partner at Beale & Co, notes that the decision does not give owners unrestricted licence to reject any cargo following a screening hit. The test remains objective: whether a reasonable owner could conclude, based on available material, that a real sanctions risk existed.
In this case, according to the report, the surrounding facts supported the owners’ concern — a majority stake had reportedly been transferred to the designated person’s half-brother after his designation, with no disclosed consideration, while screening material continued to associate Neftisa with him.
Henty writes that the court did not dismiss legal opinions outright, but found that opinions built on unverified assumptions about who truly controlled the company failed to remove the underlying risk, since they relied heavily on assumptions about the very issue in dispute.
Does This Matter to You?
According to Ship & Bunker, the article notes that bunker suppliers, traders and terminal operators increasingly perform their own sanctions screening before supplying fuel, access or services, and face similar challenges: ambiguous ownership links, incomplete information, and pressure to decide quickly.
The ruling suggests that parties conducting screening should treat a screening hit as the start of an enquiry rather than the end, seeking current evidence of ownership and control rather than relying solely on self-certification, per the report. Henty also stresses that contemporaneous records — documenting what was known, what was asked, and why a judgment was reached — may prove more valuable in any future dispute than explanations prepared after the fact.
The direct legal impact for parties outside charterparty disputes is not further detailed in the source material.
Gulf Bunkering does not provide operational or security guidance. This article is for informational purposes only. Operators should consult flag state authorities, P&I clubs, and relevant advisories for decisions relating to transit planning.
Sources: Ship & Bunker
