The line had been granted an application by Norway’s Ministry of Foreign Affairs to sail Capella for six months - despite the vessel being financed by Russian-owned company GTLK, which has been hit with EU sanctions.

Havila has pledged to refinance the ship - the only one of its fleet funded by a Russian company - and "break all ties" with the sanctioned firm.

However, it has now emerged the exemption from the Ministry of Foreign Affairs did not include the right to insure the ship and on Monday (9 May) the line’s insurance application was rejected. 

Havila Voyages chief executive Bent Martini said the company had “no choice” but to cancel Capella’s next sailing scheduled to depart Bergen on Sunday (15 May) and passengers due to sail would be rebooked on sister ship Havila Castor or given a full refund.

Castor is unaffected by the legal dispute will sail its next planned departure from Bergen on Tuesday (10 May). 

“We are very sorry for the situation that has arisen beyond our control, and for the consequences this means for the coastal population, our passengers, employees and suppliers,” said Martini.

He described how the line has been “confused” by the Ministry of Foreign Affairs’ decision, adding: “As the sanctions are set up, any insurance payment will not benefit the ship’s registered owner. In the event of a total breakdown, other parties will receive the insurance payment. We can do nothing but accept the authorities’ assessment, but disagree with the decision.”

“We will not give up and will strive to find a possible way out of a very demanding situation. Until we have clarified the room for manoeuvre we are facing, it is difficult to provide any more information at this time,” Martini added.