Icelandic liner and logistics group Eimskip has seen a key part of a long-running ship sale investigation fall away, after prosecutors dropped the case against its chief operating officer.

The Icelandic District Prosecutor has discontinued its investigation into the executive Hilmar Pétur Valgardsson, ending his status as a defendant in a probe that dates back to 2020 and centres on the sale of 1,465 teu pair Goðafoss and Laxfoss later suspected of heading for demolition.

The case stems from a complaint filed by the Environment Agency of Iceland, which raised concerns that the ships may ultimately have been sold for scrapping under conditions that could breach environmental rules. Authorities later escalated the matter, including a high-profile raid on Eimskip’s offices as part of the investigation into potential illegal ship recycling practices.

While the individual case has now been closed, prosecutors are moving ahead with charges against Eimskipafélag Íslands and its subsidiary Eimskip Ísland.

According to the company, the prosecutor is seeking convictions against the entities, including the payment of legal costs.

Eimskip said it complied with all applicable laws during the sales process, maintaining the vessels were sold for continued trading and not with the intention of recycling.

The company added that it welcomed the end of uncertainty for staff following the decision to drop the case against its COO, but confirmed it will now defend its position in court as the corporate proceedings move forward.

The development marks a new phase in a case that has put a spotlight on end-of-life vessel sales and the responsibilities of owners once ships leave their fleets.