We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Monday, 09 March 15
CHINA'S SUPREME COURT ISSUES NEW JUDICIAL INTERPRETATION ON SHIP ARREST AND JUDICIAL SALE OF SHIPS - GARD
 KNOWLEDGE TO ELEVATE
China is not traditionally a popular jurisdiction for ship arrest. However, Members and clients with ships calling at ports in China should be aware of this development. This guidance is aimed at clarifying ship arrest and sale procedure in the Chinese maritime courts which could lead to more frequent vessel arrests in China.
This Insight is a brief commentary on a new judicial interpretation1 issued by China’s Supreme Court. It covers a number of issues relating to ship arrest and the judicial sale of ships (the Interpretation) that came into force on 1 March 2015.
Provision of counter-security for arrest
It is normal practice for a claimant to provide counter-security when arresting in China. Article 76 of the Special Maritime Procedure Law 1999 (SMPL 1999)2 provides that the amount of counter-security should be equivalent to the probable loss the arrest would cause to the party whose vessel is arrested. Over the years, the practice of the Chinese maritime courts has varied depending on the facts of the case and different approaches by individual judges. In some cases, the counter-security amount was equivalent to 30 days’ hire of the vessel, whilst in others an amount equal to the claim in respect of which the vessel was arrested.
The Interpretation sets out in Article 5 a mechanism to calculate the security amount based on the aggregate of:
- the maintenance expenses of the vessel during the period of arrest
- the loss of use resulting from the arrest
- the cost to the party whose vessel had been arrested (the respondent) to provide security to release the vessel.
This is the same formula used for assessing the losses resulting from wrongful arrest, as set out in Article 24 of the Supreme Court’s judicial interpretation of 2003 relating to application of the SMPL 1999.3
A number of factors remain unclear, however, such as:
- the level of maintenance to be carried out during the arrest period
- the applicable rate of hire while under arrest
- the scope of security costs – in practice, the maritime courts have generally only included the commission payable by the respondent to provide a bank guarantee.
Furthermore, at the time the arrest application is made – and counter-security is assessed – the respondent will not have an opportunity to substantiate or challenge the evidence submitted relating to maintenance, hire and security costs. That said, once counter security has been provided following the vessel’s arrest, the owners may apply for the amount of security to be increased in the event it can be shown that the original amount is insufficient to cover the owners’ likely losses if the arrest proves wrongful.
Although Article 5 still leaves some open questions, at least it sets out a formula to be followed.
A further clarification relating to counter-security is set out in Article 4. This provides that the maritime courts have a discretion not to request counter-security if the arrest relates to a claim for personal injury at sea or a claim arising under a crew service contract.
Multiple arrests of the same vessel
Article 2 of the Interpretation allows multiple claimants to arrest the same vessel as security for their respective claims. Further, if a claimant has made an arrest application but not applied for a judicial sale, then any subsequent claimant making an arrest application may apply for judicial sale of the vessel according to Article 28 of SMPL 1999.
The Interpretation does not, however, tackle the issue of whether each claimant having arrested the vessel must provide counter-security to the full extent of their respective claims.
Judicial sale and procedure
There are several provisions relating to the judicial sale of vessels:
- Article 11 provides that the judicial sale of a vessel is to be organized by a ship auction committee (comprising judges, auctioneers and surveyors, normally three or five persons, as per Article 34 SMPL 1999)
- Article 13 states that in the event of two failed judicial auctions, the sale price of a ship can be reduced – but not to less than 50 per cent of its assessed value
- Article 14 provides that if a ship has still not been sold after a price reduction, the court may lower the price below 50 per cent of its assessed value provided consent is given by creditors representing two thirds or more of the registered creditors’ claims. In the event a sale is still unsuccessful, the court may release the vessel from arrest
- Article 16 requires creditors to register their claims within 60 days after the court’s announcement for the first judicial auction.
Release of counter-security
The practice of the Chinese maritime courts relating to release or return of counter-security has been a concern for claimants in the past. Counter-security could be held up to two years after the claim had been settled on the basis that it represented security for a possible, subsequent wrongful arrest claim brought by the respondent.
Article 6 of the Interpretation will no doubt be welcomed by claimants. It provides that counter-security should be returned to the claimant forthwith:
- if the respondent agrees, or
- if the claimant requests its return, supported by a valid judicial instrument affirming that the respondent is liable for the claim and the awarded amount is approximately equivalent to the amount of security.
In addition, when a claim has been finally concluded, the claimant can apply to the maritime court for return of the security. The court will notify the respondent and allow them to bring any wrongful arrest claim within 30 days, failing which the security will be returned to the claimant.
Arrest and judicial sale of bareboat chartered vessels
Article 23 of SMPL 1999 allows a claimant to apply to arrest a vessel where its bareboat charterer may be liable for a maritime claim and the ship is under bareboat charter at the time of arrest. However, it has not been clear whether the claimant could apply for judicial sale of the vessel following the arrest.
This is now resolved by Article 3 of the Interpretation, which provides that the claimant is entitled to apply (under Article 29 SMPL 1999) for a judicial sale of the vessel to recover a maritime claim for which the bareboat charterer is liable.
This provision is likely to expose head owners to the possibility of their vessel being subjected to a judicial sale through no fault of their own. This might be of significant interest to a shipowner who finances a bareboat charterer to purchase a vessel.
Miscellaneous
Article 7 provides that the shipowner or bareboat charterer is to remain in charge of management of the vessel while under arrest. Should they fail to do so, the maritime court may appoint the claimant or a third party to manage the ship. In which case, the management costs are to be borne by the shipowner or bareboat charterer, or to be paid out of the proceeds of a judicial sale of the vessel.
Under Article 9, the maritime court must terminate the arrest order in the event that it is impossible to enforce the arrest for “objective reasons”. It has not been defined what amounts to “objective reasons”. One possibility could be that the vessel is no longer within the jurisdiction of the Chinese maritime courts, another that the vessel has become a total loss.
The Interpretation should result in a more common approach to arrest and judicial sale by the Chinese maritime courts. However, some issues arising under the SMPL 1999 remain to be resolved, such as whether insolvency of an owner of an arrested ship should take priority over a maritime lien. Nevertheless it is expected that this Interpretation will be generally welcomed by the maritime courts and parties involved in maritime claims.
Acknowledgement: Thanks to Wang Jing & Co for use of their in-house English translation of the Interpretation, in which further details of the changes can found.
Questions or comments concerning this Gard Insight article can be e-mailed to the Gard Editorial Team.
Source: Gard | Hellenic Shipping
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Friday, 13 March 15
U.S. COAL PRODUCTION UP 2.3% WEEK OVER WEEK
COALspot.com – United States the world's one of the largest coal producers, produced approximately 17.5 million short tons (mmst) of coal ...
Friday, 13 March 15
ADARO RECORDED A 7% INCREASE IN EBITDA OF $877 MILLION IN 2014
“Coal market continues to be difficult and challenging” – Adaro Energy
The world’s Top 5 thermal coal exporter, ...
Thursday, 12 March 15
CAPESIZE : ACTIVITY IS LOW; PANAMAX: BIT MORE ACTIVITY; HANDY: A FIRMING WEEK
Handy
It has been a firming week in both hemispheres this week and especially in the Pacific, says Fearnleys AS in its week's week report.
...
Thursday, 12 March 15
COAL MINERS REMAIN UNDER PRESSURE AS GLUT CONTINUES - THE JAKARTA POST
Indonesia’s major coal miners reported a significant drop in their earnings last year as the sharp drop in the global demand, mainly from Chi ...
Thursday, 12 March 15
FOB INDONESIA COAL SWAP DROP TO $47.33 A TON IN THE WEEK ENDED MAR.6
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 drop month on month and week over week.
The Q2 swap fell US$ 0.37 (0.78%) month ...
|
|
|
Showing 3141 to 3145 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Jindal Steel & Power Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Romanian Commodities Exchange
- Samtan Co., Ltd - South Korea
- Renaissance Capital - South Africa
- Price Waterhouse Coopers - Russia
- Edison Trading Spa - Italy
- CNBM International Corporation - China
- Videocon Industries ltd - India
- Grasim Industreis Ltd - India
- Electricity Authority, New Zealand
- Globalindo Alam Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- Vedanta Resources Plc - India
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Sidhee Cement - India
- Banpu Public Company Limited - Thailand
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Kaltim Prima Coal - Indonesia
- ASAPP Information Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Riau Bara Harum - Indonesia
- PNOC Exploration Corporation - Philippines
- Indonesian Coal Mining Association
- Australian Coal Association
- The State Trading Corporation of India Ltd
- Ceylon Electricity Board - Sri Lanka
- Agrawal Coal Company - India
- Sinarmas Energy and Mining - Indonesia
- Australian Commodity Traders Exchange
- LBH Netherlands Bv - Netherlands
- SN Aboitiz Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Goldman Sachs - Singapore
- Indian Energy Exchange, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Attock Cement Pakistan Limited
- Kideco Jaya Agung - Indonesia
- Mercuria Energy - Indonesia
- Bhatia International Limited - India
- MS Steel International - UAE
- Bulk Trading Sa - Switzerland
- GMR Energy Limited - India
- Kartika Selabumi Mining - Indonesia
- Chamber of Mines of South Africa
- Gujarat Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Simpson Spence & Young - Indonesia
- Therma Luzon, Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Iligan Light & Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Star Paper Mills Limited - India
- Xindia Steels Limited - India
- Minerals Council of Australia
- The University of Queensland
- Larsen & Toubro Limited - India
- Maheswari Brothers Coal Limited - India
- Posco Energy - South Korea
- Directorate Of Revenue Intelligence - India
- OPG Power Generation Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- IEA Clean Coal Centre - UK
- Siam City Cement - Thailand
- SMG Consultants - Indonesia
- Central Electricity Authority - India
- Bukit Makmur.PT - Indonesia
- Singapore Mercantile Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercator Lines Limited - India
- SMC Global Power, Philippines
- Thiess Contractors Indonesia
- Mjunction Services Limited - India
- Semirara Mining and Power Corporation, Philippines
- Carbofer General Trading SA - India
- Timah Investasi Mineral - Indoneisa
- McConnell Dowell - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bangladesh Power Developement Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Kumho Petrochemical, South Korea
- Bhushan Steel Limited - India
- Coastal Gujarat Power Limited - India
- Lanco Infratech Ltd - India
- IHS Mccloskey Coal Group - USA
- Chettinad Cement Corporation Ltd - India
- Marubeni Corporation - India
- Eastern Energy - Thailand
- Uttam Galva Steels Limited - India
- Oldendorff Carriers - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Energy Development Corp, Philippines
- Siam City Cement PLC, Thailand
- Meralco Power Generation, Philippines
- Bayan Resources Tbk. - Indonesia
- Georgia Ports Authority, United States
- Baramulti Group, Indonesia
- Vizag Seaport Private Limited - India
- London Commodity Brokers - England
- Dalmia Cement Bharat India
- Ministry of Finance - Indonesia
- Borneo Indobara - Indonesia
- Thai Mozambique Logistica
- Ministry of Transport, Egypt
- Aboitiz Power Corporation - Philippines
- Barasentosa Lestari - Indonesia
- ICICI Bank Limited - India
- International Coal Ventures Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Metalloyd Limited - United Kingdom
- Tata Chemicals Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Energy Link Ltd, New Zealand
- Pendopo Energi Batubara - Indonesia
- Petron Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- White Energy Company Limited
- Ind-Barath Power Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Savvy Resources Ltd - HongKong
- Standard Chartered Bank - UAE
- Sindya Power Generating Company Private Ltd
- Krishnapatnam Port Company Ltd. - India
- Kalimantan Lumbung Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Latin American Coal - Colombia
- Rio Tinto Coal - Australia
- Straits Asia Resources Limited - Singapore
- Coalindo Energy - Indonesia
- Coal and Oil Company - UAE
- Gujarat Mineral Development Corp Ltd - India
- Sical Logistics Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- Independent Power Producers Association of India
- India Bulls Power Limited - India
- Indika Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Trasteel International SA, Italy
- Parry Sugars Refinery, India
- Salva Resources Pvt Ltd - India
- The Treasury - Australian Government
- Meenaskhi Energy Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GVK Power & Infra Limited - India
- Indian Oil Corporation Limited
- South Luzon Thermal Energy Corporation
- Kapuas Tunggal Persada - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- CIMB Investment Bank - Malaysia
- Heidelberg Cement - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bharathi Cement Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Deloitte Consulting - India
- Orica Mining Services - Indonesia
- Eastern Coal Council - USA
- San Jose City I Power Corp, Philippines
- Central Java Power - Indonesia
- Global Coal Blending Company Limited - Australia
- Jaiprakash Power Ventures ltd
- TeaM Sual Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Bhoruka Overseas - Indonesia
- Wood Mackenzie - Singapore
- Aditya Birla Group - India
- Ministry of Mines - Canada
- Economic Council, Georgia
- Global Business Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Kobexindo Tractors - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Interocean Group of Companies - India
- Makarim & Taira - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indogreen Group - Indonesia
- Formosa Plastics Group - Taiwan
- Tamil Nadu electricity Board
- Planning Commission, India
- Anglo American - United Kingdom
- PTC India Limited - India
- PowerSource Philippines DevCo
- Medco Energi Mining Internasional
- Sakthi Sugars Limited - India
- Ambuja Cements Ltd - India
- Bukit Baiduri Energy - Indonesia
- Merrill Lynch Commodities Europe
- Altura Mining Limited, Indonesia
- European Bulk Services B.V. - Netherlands
- Sojitz Corporation - Japan
- Kepco SPC Power Corporation, Philippines
- Commonwealth Bank - Australia
- VISA Power Limited - India
- Parliament of New Zealand
- Toyota Tsusho Corporation, Japan
- TNB Fuel Sdn Bhd - Malaysia
- Wilmar Investment Holdings
- GAC Shipping (India) Pvt Ltd
- Miang Besar Coal Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- New Zealand Coal & Carbon
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Madhucon Powers Ltd - India
- Cement Manufacturers Association - India
|
| |
| |
|
