US Court orders Polaris Bank to pay Danish firm $6.21m from frozen funds

A United States federal court has ordered the release of $6.21 million belonging to Polaris Bank Limited to settle a maritime dispute with Danish shipping company Dampskibsselskabet Norden A/S.

The payment is to be made from funds held by Standard Chartered Bank in New York, where Polaris Bank’s assets had been frozen under a judicial attachment order during proceedings over an unpaid shipping-related arbitration award.

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In an order dated November 5, 2026, the United States District Court for the Southern District of New York directed Standard Chartered to transfer $6,214,196.08 to an account designated by Norden no later than November 12.

The directive forms part of a settlement reached by the parties to resolve their dispute over freight charges, demurrage and other expenses arising from a 2021 shipment of gypsum to Nigeria.

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The court also ordered the case dismissed with prejudice, preventing the same claims resolved in the action from being brought again as a new lawsuit. However, Norden retains the right to return to court if Polaris Bank fails to comply with the settlement terms.

How the Dispute Started
The legal battle originated from a maritime transaction involving the vessel Lady Demet, which transported approximately 27,000 metric tonnes of gypsum from Safi, Morocco, to Lagos, Nigeria, in 2021.

The shipment was arranged for exporter Gypse Expo, while Quattro Marine and Petrochemical Nigeria Limited purchased the cargo for onward supply to Lafarge Africa Plc.

Polaris Bank supported the transaction by issuing a letter of credit.
Under a voyage charter agreement executed on June 28, 2021, the freight rate was set at $39.95 per metric tonne. The agreement also provided for demurrage charges of $35,000 daily when loading or discharge operations exceeded the agreed time.

The shipment subsequently encountered operational delays, resulting in substantial claims for unpaid freight, demurrage and other voyage-related expenses.

The disagreement eventually developed into an international commercial dispute involving arbitration proceedings in London and litigation in the United States.

London Arbitration Produced $1.05m Award
Norden, acting as the vessel’s disponent owner, commenced arbitration proceedings against Polaris Bank under the London Maritime Arbitrators Association on or around May 6, 2022.

On March 30, 2026, the tribunal issued a final partial award directing Polaris Bank to pay $1,052,692.50 in freight charges.

The award also provided for interest at five per cent annually, compounded quarterly, from September 25, 2021, until payment.
According to the court records, Norden had not received payment under the award when it subsequently approached the US court.
However, the freight award represented only part of the financial disagreement.

Additional claims amounting to $4,235,377.23 were also contested during the arbitration. These included demurrage charges of $1,553,261.11 at the loading port, $1,985,404.17 for delays during discharge operations in Lagos, and $811,586.81 at Calabar.

Other disputed expenses included additional freight costs, war-risk insurance, kidnap-related security charges and loss-of-hire claims. The parties also accounted for a partial payment of $400,000 in calculating the outstanding amounts.

The broader financial disagreement ultimately formed part of the negotiations that produced the $6.21 million settlement.

US Court Froze Polaris Bank’s Funds
After the arbitration award remained unpaid, Norden turned to the American financial system to secure funds belonging to Polaris Bank.
On June 22, 2026, the Danish shipping company filed a lawsuit before the US District Court for the Southern District of New York, seeking to attach the bank’s assets held within the jurisdiction.

Norden identified Citibank New York, Standard Chartered Bank New York and United Bank for Africa New York as third-party garnishees in its effort to locate and secure the funds.

Its application sought to recover the $1,052,692.50 arbitration award, with additional amounts covering the wider claims, interest, costs and legal expenses.

On June 25, the court granted an order authorising maritime attachment and garnishment against Polaris Bank’s assets.

The order permitted the attachment of the bank’s property and credits held by Standard Chartered Bank in New York, subject to specified limits. The court set an attachment limit of $6.001 million, with an overall ceiling of $6.4 million covering interest, costs and fees.
The attached funds were to remain frozen pending further judicial authorisation.

The order also covered funds held by other banks within the district when acting as agents or intermediaries for Polaris Bank’s transactions.

The arrangement effectively placed the bank’s affected US-held assets under court control while the dispute continued.

Polaris Bank Obtained Extensions but Filed No Answer
Court records indicate that Polaris Bank secured several extensions to respond to Norden’s complaint after the attachment order was issued.
The extensions were granted between July and October 2026, with the final deadline extended to November 11.

Despite the additional time, the bank did not file an answer to the complaint before the parties reached their settlement.

Standard Chartered Bank, however, filed a disclosure statement on August 7 in its capacity as a third-party garnishee, providing information about the assets covered by the proceedings.

The absence of a formal answer from Polaris Bank meant that the court record did not contain a substantive defence from the bank in response to Norden’s complaint.

Nevertheless, the dispute was ultimately resolved through a negotiated settlement rather than a final judgment determining the merits of all the underlying maritime claims.

Settlement Reached in October
The parties informed the court in October that they had reached an agreement in principle to resolve the dispute.

On October 27, the court issued a conditional order temporarily dismissing and discontinuing the action while allowing a 30-day period for the parties to seek its reopening if the settlement arrangements were not completed.

Both sides applied to reopen the case on October 28 to facilitate the settlement, the release of the attached funds and the lifting of the garnishment orders.

The court subsequently issued its November 5 directive establishing the payment mechanism.
Under the order, Standard Chartered Bank in New York was required to transfer $6,214,196.08 to an account nominated by Norden by November 12 and confirm receipt of the money.

Upon completion of the transfer, the attachments against Polaris Bank’s property and credits held by Standard Chartered and the other garnishee banks are to be lifted.

Standard Chartered was also discharged from its role as garnishee in the proceedings.
The court directed each party to bear its own legal costs.
However, the settlement order preserves Norden’s right to seek renewed attachment of Polaris Bank’s funds if the bank fails to meet its obligations under the agreement.

Why the $6.21m Settlement Matters
The amount covered by the settlement is substantially higher than the original $1.05 million freight award issued by the London arbitration tribunal.

The difference reflects the wider financial claims and the terms negotiated by the parties to bring the dispute to an end.

The settlement also highlights how international commercial disagreements can extend beyond the original transaction when unpaid freight charges, port delays, demurrage and related expenses accumulate.

For Polaris Bank, the case involved the attachment of assets held within the US financial system, creating a legal route through which Norden could pursue recovery of the disputed amounts.

Questions may also arise over the bank’s decision to obtain multiple extensions without filing a formal answer to the complaint, although the eventual settlement means the court did not proceed to a final trial on the underlying claims.

The original cargo transaction dates to 2021, before Kayode Lawal’s tenure as head of Polaris Bank. The arbitration award, US litigation, attachment proceedings and settlement, however, all took place in 2026.
The November 5 order provides the legal framework for concluding the dispute, with the release of the frozen funds tied to compliance with the agreed payment terms.

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