HANJIN CRISIS: update

21/9/2016

Dear Valued customers,

Lloyd's List Australia has released the below article regarding Hanjin Milano,

FREE HANJIN CRISIS: legal mystery surrounds Hanjin Milano (plus status update)

https://www.lloydslistaustralia.com.au/lla/market-sectors/containers-and-container-shipping/FREE-HANJIN-CRISIS-legal-mystery-surrounds-Hanjin-Milano-plus-status-update-537251.html 

MARITIME lawyers in Australia are puzzled as to why Hanjin Shipping has not taken any legal moves in Australia to protect the vessel Hanjin Milano (IMO 9431680) from arrest.

Hanjin Milano was due, originally, to arrive at the Port of Melbourne for discharge on September 6. Shortly after the Korean bankruptcy was made public, the vessel changed its ETA to the 7. It then proceeded in an odd manner, speeding up and slowing down, in a southerly direction along the Australian East Coast.

It arrived on Tuesday September 13 but it appears that the ship was denied permission to dock by the South Korean government. The vessel, which at that point was a mere few kilometers from the Port of Melbourne and was in Port Phillip Bay, turned around and left the Bay.

It is currently (at 17:05, September 20, 2016) 80 nautical miles/148 kilometres south-by-east of Port of Melbourne.

It has been widely speculated, based on the unusual movement patterns of Hanjin vessels around the world, that vessels were being deliberately kept at sea to avoid arrest.

However, that is now confirmed in a judgment of the High Court of Singapore.

“[The Korean Bankruptcy Receiver]… stressed that at the time of the hearing, a number of Hanjin vessels were scheduled to call into Singapore very shortly and were already at the outer-port-limits of Singapore waters, but those vessels were not entering Singapore for fear of being arrested. The Applicant said that unless the vessels could enter Singapore without fear of being arrested, Hanjin’s business would be crippled,” said Judge Abdullar of the Singapore High Court in the case of Hanjin Shipping Co Ltd & Taisoo Suk (As foreign representative of Hanjin Shipping Co Ltd), which was heard on September 14, but only released more recently.

However, lawyers in Australia are puzzled as to why representatives of Hanjin have not yet sought an obvious legal avenue for relief from arrest for the Hanjin California (possibly) nor sought to prevent the arrest of the Hanjin Milano, especially as the latter vessel is fully loaded and waiting to discharge.

Around the world – the USA, the UK, Japan and, now, Singapore, Hanjin has been granted some protection from ship arrests.

This is because South Korea and many other countries around the world have signed up to the cross-border treaty on insolvent companies. Australia is a signatory too.

Under that treaty, once appropriate orders have been made in the home country (here, South Korea), the company can instruct lawyers around the world to seek protection or relief from ship arrest in local jurisdictions.

Lawyers here are surprised that hasn’t happened yet.

“I’m surprised it hasn’t happened before now. The only surprise is that it has taken so long so far,” said one well known maritime lawyer.

That view was backed up separately and independently by another lawyer who commented: “If you want to proceed with arrest you would need leave of court to make that arrest; in my view court would be unlikely to allow the arrest if they are following international treaty.”

Legal opinion seems to be in consensus that in the event of such an application the court would likely not stay the arrest against the Hanjin California (which is currently under arrest) but would probably refuse to allow any arrests against the Hanjin Milano (which has not been arrested).

However, there is a complicating factor in the interaction between the cross-border treaty and local law.

The problem is that, if an appropriate affidavit and writ has already been filed at the Federal Court, and if the Court has already made an order for arrest, would the court then stay an actual arrest if the Hanjin Milano then came into berth?

Unfortunately, there currently seems to be only one sure way to find out – and that’s for Hanjin to make the application, then order the ship to sail into, and berth at Melbourne… and then see what happens next.

 

If you have any questions please contact your BRi customer service representative.

 

Keeping you updated,

 

Shaun Azzopardi

National Customer Service Manager 

 

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