Information on litigations involving PAO Sovcomflot

As a global shipping company, the Company operates in various jurisdictions and is involved in court/arbitration proceedings relating to cargo transportation by sea. The Company’s third-party liability is, as a rule, insured with international mutual insurance clubs, which assist the Company in the settlement of court/arbitration disputes.

In addition, in carrying out its activities the Company is governed by the requirements of anti-corruption laws and the highest corporate and ethical standards, the principles of fair and faithful conduct of business, and expects compliance with such standards from its business partners.

As part of the policies and procedures applied by the Company to counter fraud and corruption in any form, during the period between 2005 and 2007 the Company initiated certain legal proceedings. In particular, in late 2005 the Group investigated a number of transactions which involved the former management of Novoship (UK) Ltd (“NOUK”). NOUK and its subsidiaries filed claims at the Commercial Court in London in December 2006. Judgment was handed down on 14 December 2012. The Group was initially successful on all claims in the court of first instance, but after appeal unsuccessful on some claims against certain defendants. In 2014 those defendants have indicated an intention to pursue the Group for damages in respect of $90 million of security provided during the litigation. No claim has yet been filed for damages.

On 23 April 2018, the Dorogomilovo Court of Moscow adjudged Yuri Nikitin, Dmitry Skarga and TagirIzmaylov guilty of having committed a number of crimes during the period 2000-2005 and causing damage to the Group amounting to over $300 million. The guilt of the accused for the crimes charged was fully proved during the trial and the accused were sentenced to long terms of imprisonment. In addition, the property of the convicted is subject to confiscation.

After reviewing the appeals filed by the convicted persons, on 2 April 2019 the Moscow City Court issued an appellate ruling upholding the sentence imposed by the Dorogomilovo Court of Moscow on 23 April 2018. The sentence has entered into legal force.

Investigation into other illegal acts by Yuri Nikitin, Dmitry Skarga and TagirIzmaylov against SCF Group companies, which have not yet been subjected to judicial review, continues. The Company is taking all necessary actions to protect its interests.