Havila Wins Norwegian Court Ruling for Forced Use of Cruise Ship

Havila wins forced use of cruise ship
Havila Capella has been out of service since April as it was caught in the Russian sanctions (Havila)

Published Jun 22, 2022 5:13 PM by The Maritime Executive

Norway’s Havila Kystruten won a key decision in a Norwegian court reporting yesterday that it has taken the first steps to extracate its first cruise ship, the Havila Capella, from issues related to the European sanctions against Russia. The company had been forced to suspend the ship’s operations on April 12 and cancel six round trips from Bergen due to uncertainties created by the sanctions.

Havila was operating the cruise ships under long-term charters from the Russian finance company GTLK and its subsidiaries. While the company argues the ships are extensively Norwegian except for the charter payments to the Russian company, they were forced to suspend cruises aboard the Havila Capella after the EU listed GTLK in the sanctions in early April and its insurance companies withdraw the general liability policy citing the sanctions.

Recently, the company announced that it was seeking court rulings in both the UK and Norway in an effort to resolve the situation. Under the sanctions, Havila is prevented from completing the acquisition of the Havila Capella because it can not make payment to GTLK and the Russian company was not willing to accept the payment being deposited to a blocked account that would be released when the sanctions are lifted.

The Hordaland District Court in Norway yesterday granted Havila Kystruten an arrest for the Havila Capella, and the right to forced use for a period of up to two years. The company believes that this will clear the way for the cruise ship to resume service sailing along with its sister ship Havila Castor, which it took delivery on in early May after receiving a bridge loan from the shipyard so that it could purchase the ship without GTLK’s involvement.

"We are of course very pleased with this decision from Hordaland District Court, which gives us the opportunity to put Havila Capella back into operation along the Norwegian coast as soon as insurance of the ship is finally clarified," says Bent Martini, CEO of the company. “This is a very important decision for Havila Kystruten, for the coastal community, and for all our employees who look forward to contributing to memorable experiences for our travelers.”

The company reported that it is working to restore the insurance coverage and expects the ship will return to service shortly. It had been scheduled to depart from Bergen on June 17 on its 12-day coastal voyage. 

“We have worked with various alternatives to get Havila Capella back into operation, also on a political level, and we are very happy that we have now found a solution that allows us to operate the ship if we get the insurance in place, until we take over the ownership of the ship,” said Martini.

Several shipping companies have found themselves caught up in the sanctions imposed against Russia after the invasion of Ukraine. Havila said that it would seek to refinance its cruise ships while expedition cruise line Swan Hellenic said it would exercise its purchase option from GTLK, but is now having to bid for its second cruise ship from Helsinki Shipyard. Tradewind Voyages reported it was pausing voyage sales and expected voyage cancelations as it attempted to resolve issues related to its financing from Russian-headquartered VTB bank.