Vessel blocking at the Ukrainian sea ports

• Shipping
• Transport & Logistics

On February 24, 2022, the Russian Federation invaded the sovereign state of Ukraine. A tragic event shook the whole world. It was one of the cruelest military aggressions that violated international law and the territorial integrity of the independent state. 

Russian invasion affected the business processes, in particular, transport and trade. In fact, the operation of the Ukrainian sea ports was terminated just on the first day of the war; therefore, it was impossible to transport cargo by sea for a long time. Over 80 commercial vessels were blocked at the Ukrainian sea ports.

As shown by Interlegal poll results, most business representatives did not expect longstanding hostilities. Therefore, instructions on resuming cargo operations were issued in respect of most vessels that commenced cargo loading/discharge a few days before the outbreak of the war.

Market players commented:

“After the outbreak of the war, we believed that it should have been solved quickly (in a few days/weeks), we could not imagine that a full-scale war may commence in the center of Europe…”

“…Ports are operating regularly, so even after 24.02.2022 cargo operations were not suspended (a comment regarding Chornomorsk Sea Port”.

Later, a decision on resuming cargo operations found out to be erroneous both for buyers and for charterers, having caused the following questions: Is the carrier obliged to issue a bill of lading? Can the seller demand payment for the goods if the vessel is loaded but is unable to leave the port of departure? Has the charterer any reason for canceling the charter party?

Following 12 months after the outbreak of the war, insurance companies got concerned about vessels blocked at the sea ports, trying to receive answers to the following questions: Whether the vessels indeed unable to leave Ukraine? If so, can they be deemed as lost and can insurance indemnity be payable in such case?

WERE THE UKRAINIAN SEA PORTS CLOSED FOR DEPARTURE INDEED?

On February 24, 2022, at 12:00 PM, the Ministry of Infrastructure notified on its official Telegram channel: “Now most of the seaports are closed and we are coordinating our actions with the Armed Forces. No port infrastructure got damaged”.

On February 25, 2022, State Enterprise “Ukrainian Sea Ports Authority” (USPA) posted on its official Facebook account: “As reported by USPA traffic control service, as of 08:00 PM on 25.02.22 Skadovsk, Kherson, Mykolaiv, Olvia, Odesa, Chornomorsk, Pivdennyi, Bilgorod-Dnistrovskyi, Izmail, Reni, Ust-Dunaisk sea ports are closed, while Mariupol and Berdiansk sea ports are opened for call/departure. Cargo operations are suspended, while in Chornomorsk, Pivdennyi, Mykolaiv and Reni sea ports they are carried out partially”.

In accordance with Procedure for Opening and Closing Sea Ports No. 496 dated July 11, 2013, the decision on seaport closure shall be made by the Ministry of Infrastructure, under the application filed by the State Enterprise “Ukrainian Sea Ports Authority” and approved by the Shipping Authority. Such closure is based, inter alia, on the impossibility of facilitating proper navigation safety level.

Neither notices of the Ministry of Infrastructure nor USPA announcements met the above Procedure, nor they referred to decisions of competent bodies on closing seaports; so, they were announced mainly for informative purposes.

On March 03, 2022, USPA notified: “Ukrainian sea ports are closed for call/departure by Coastal Warnings of the Ukrainian Navy on mine safety No. 83-91/22, 96-97/22, Coastal Warnings of the State Hydrographic Service No. 92/22, No. 98- 99/22 on piracy threat by vessels of the Russian navy in the Black Sea and the Sea of Azov”.

At that time, Coastal Warnings of the State Hydrographic Service were the sole documents fixing certain prohibitions for navigation in the Ukrainian waters.

Just on April 29, 2022, by the Order of the Ministry of Infrastructure of Ukraine, the captured ports were closed, namely: Berdiansk, Mariupol, Skadovsk and Kherson. However, Pivdennyi, Odesa, Chornomorsk and Mykolaiv seaports were not closed officially. But were the blocked vessels able to depart from the aforesaid ports and to leave Ukraine?

We are sure that they were not. Both de jure and de facto vessel departure was impossible. The sole case took place when the vessel managed to leave one of the captured ports immediately after the Russian invasion, without issuing the required documents and bearing the risks to the lives of crew members. At that moment it was impossible to issue official documents for departure or even to facilitate towage/pilotage in most Ukrainian seaports.

HOW COULD COMMERCIAL VESSELS LEAVE THE UKRAINIAN SEA PORTS?

A so-called Grain Initiative was signed on July 22, 2022. This treaty between the UN, Turkey, Ukraine and Russia fixed sea corridors for the Ukrainian grain export from three Ukrainian sea ports – Odesa, Chornomorsk and Pivdennyi. M/v Razoni was the first vessel leaving Ukraine under the Grain Initiative on August 01, 2022. Later, several commercial vessels with non-grain cargo on board could discharge such cargo, followed by loading grain and leaving Ukraine along the Grain Corridor.

However, launching such a plan needs solving lots of legal & technical aspects; so, it cannot be treated as a standard and widespread instrument. The implementation of such a plan raised several questions. To answer them, active cooperation of all the parties to chain supply is required, namely:

a) Finding a terminal ready to accept cargo by its own capacities, with regards to all technical capabilities of both the terminal and the vessel herself;

b) Obtaining permission from the Military Administration for shifting the vessel, if she is not berthed;

c) Obtaining the cargo owner’s consent for shipment;

d) Fixing customs status of the cargo and those who will bear its storage costs.

Unfortunately, as shown by our experience, parties to such a process rarely get concerned of cargo shipment. There may be several grounds for such a decision, e.g. the cargo owner’s wish to receive insurance indemnity for allegedly lost cargo or the seller’s wish to prove fulfillment of its obligations upon cargo delivery and therefore to demand payment for cargo. In fact, we know that several vessels using such a scheme were able to discharge cargo and leave Odesa and Pivdennyi seaports with grain on board.

IS IT POSSIBLE NOW FOR VESSELS TO LEAVE THE UKRAINIAN SEA PORTS?

The Grain Initiative was terminated on July 17, 2023. Vessels neither were able to call/leave the Ukrainian sea ports nor receive appropriate confirmations just in June 2023. To resume navigation in the Black Sea Region, on August 09, 2023, Coastal Warning No. 122/2 was issued by the Order of the Ukrainian Navy at the Armed Forces of Ukraine, aimed to fix temporary routes for commercial vessels calling/leaving the Ukrainian Sea Ports. Also, on August 10, 2023, the Regulation on the Procedure for Passages to the Ukrainian Sea Ports through North-West Black Sea Region under Martial Law was approved by the Order of the Commander of Odesa Operational & Strategic Troops.

One of its key aspects provides for launching the plan for calling/leaving the Ukrainian sea ports, with regards to North-West Black Sea Region specifications under martial law and military threat by the Russian Federation. M/v Joseph Schulte was the first vessel leaving Ukrainian sea port after the termination of the Grain Initiative.

Karyna Gorovaya

gorovaya@interlegal.com.ua