Home News and Resources News News 28 May, 2026 The “CATALAN SEA” – Court of Appeal Clarifies the Sanctions Risk Threshold for Shipowners Tony Paulson Head of Asia & Corporate Director The English Court of Appeal has handed down an important judgment on sanctions clauses in voyage charterparties:  Tonzip Maritime (Singapore) Pte Ltd v 2 Rivers Pte Ltd, The "CATALAN SEA" [2026] EWCA Civ 641 . The decision confirms that where a charterparty sanctions clause is engaged by a shipowner’s “reasonable judgment”, the relevant threshold is a reasonable apprehension of a real risk of sanctions exposure not proof, on the balance of probabilities, that sanctions would in fact be breached. Download PDF Background In November 2021, the "CATALAN SEA" was fixed for a voyage from Primorsk, Russia, to the Mediterranean. When the vessel arrived at the load port, sanctions screening using Refinitiv World-Check flagged the nominated cargo shipper, Neftisa, as associated with Mr Mikhail Gutseriev, designated under EU and UK sanctions in 2021. The complication was that Mr Gutseriev had reportedly transferred his beneficial interest in Neftisa to his half-brother after his designation, retaining only a seven per cent shareholding leaving genuine uncertainty as to whether any residual control might expose owners and their insurers to sanctions risk. Owners refused to load, relying on the charterparty sanctions clause, which permitted refusal of any order which, in their reasonable judgment, was prohibited by sanctions or would expose owners, the vessel, its managers, crew, or insurers to sanctions. Charterers provided legal opinions in an attempt to reassure owners, but owners maintained their position. Both parties treated the other’s conduct as a repudiatory breach and claimed damages. The Decisions At first instance, the Commercial Court accepted owners’ construction of the clause - the threshold was a real risk of sanctions exposure, not a requirement to prove breach was more li