Claim No: CL-2023-000687 - [2025] EWHC 1157 (Comm)

It is the Claimants’ case that the Second Claimant (“Nixie”) replaced Virgo pursuant to a contractual right of substitution in the MOA, and that Virgo’s rights under the MOA were novated to Nixie on 22 September 2022. Those contentions are disputed, it being RSUK’s contention that its only contractual or other legal relationship is with Virgo.

On 29 September 2022, Virgo was designated by the US Office of Foreign Assets Control (“OFAC”) under US Executive Order 13846. The following day, RSUK contacted Barclays informing them that Virgo had been added to the US sanctions list and asked Barclays “to block all amounts received from Virgo”.

On 1 October 2022, RSUK (acting for Kibaz) informed Virgo that the MOA was being terminated for repudiatory breach by reason of the designation of Virgo by OFAC. The Vessel appears to have been sold thereafter to another buyer.

In correspondence sent on 15 November 2022, RSUK stated that it had concluded that it was subject to EO 13846 because it was a “US person” for the purposes of that provision.

On 3 March 2023, RSUK informed Barclays that it no longer considered itself a “US person” for the purposes of EO 13846. On 23 March 2023, RSUK informed the Claimants’ solicitors that it was prepared to instruct Barclays to return the Balance to Virgo, subject to receiving certain information and signed documents. Exchanges between the Claimants’ solicitors and RSUK followed.

On 9 August 2023, RSUK instructed Barclays to repay the Balance to Virgo (there is an ongoing dispute between the Claimants and Kibaz as to who is entitled to the Deposit, which remains in the Escrow Account pending the resolution of an arbitration between them). Barclays has refused to follow that instruction on the basis (among other matters) that this might cause “US persons to violate US sanctions”.