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.
|
|
Sunday, 08 March 15
FREIGHT RATES FROM INDONESIA TO INDIA IS TRENDING UP
COALspot.com: The freight market continued to see gains this week and all the indices were rose except for Cape index. The BDI was increased 4.62 p ...
Friday, 06 March 15
BALTIC DRY INDEX: IS THIS POWERFUL INDICATOR SIGNALING A GLOBAL RECESSION? - STREET AUTHORITY
Although memories of the Great Recession linger, a case can be made that better days lie ahead.
That’s because central banks around the ...
Friday, 06 March 15
U.S. WEEKLY COAL PRODUCTION ROSE 3.5% WEEK ON WEEK
COALspot.com – United States the world's one of the largest coal producers, produced approximately 17.1 million short tons (mmst) of coal ...
Thursday, 05 March 15
PANAMAX : THE ATLANTIC ROUND IS NOW PAYING AROUND US$ 5K PER DAY
COALspot.com: Handy - The activity in the handy/supra segment is back. “ We see more fresh cargo in the market for 2nd half March dates ...
Thursday, 05 March 15
INDIA WILL BE THE LARGEST DRIVER OF GLOBAL SEABORNE COKING COAL DEMAND GROWTH IN 2015 - WOOD MACKENZIE
Global demand growth will remain weak because of China’s negative demand growth.
COALspot.com: At Coaltrans India, Wood Mackenzie says I ...
|
|
|
Showing 3156 to 3160 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Attock Cement Pakistan Limited
- Chamber of Mines of South Africa
- Wood Mackenzie - Singapore
- The University of Queensland
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Mines - Canada
- Sindya Power Generating Company Private Ltd
- Ceylon Electricity Board - Sri Lanka
- Georgia Ports Authority, United States
- Essar Steel Hazira Ltd - India
- Coal and Oil Company - UAE
- Larsen & Toubro Limited - India
- MS Steel International - UAE
- Price Waterhouse Coopers - Russia
- Economic Council, Georgia
- Gujarat Mineral Development Corp Ltd - India
- Manunggal Multi Energi - Indonesia
- PTC India Limited - India
- Timah Investasi Mineral - Indoneisa
- South Luzon Thermal Energy Corporation
- Uttam Galva Steels Limited - India
- Dalmia Cement Bharat India
- Videocon Industries ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Riau Bara Harum - Indonesia
- Borneo Indobara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Africa Commodities Group - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Iligan Light & Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Grasim Industreis Ltd - India
- Indonesian Coal Mining Association
- Bhushan Steel Limited - India
- Medco Energi Mining Internasional
- Orica Mining Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Electricity Authority, New Zealand
- Trasteel International SA, Italy
- Therma Luzon, Inc, Philippines
- Australian Commodity Traders Exchange
- Tata Chemicals Ltd - India
- Billiton Holdings Pty Ltd - Australia
- The Treasury - Australian Government
- Sinarmas Energy and Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Indian Energy Exchange, India
- Vizag Seaport Private Limited - India
- PowerSource Philippines DevCo
- Rashtriya Ispat Nigam Limited - India
- Samtan Co., Ltd - South Korea
- Goldman Sachs - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Meenaskhi Energy Private Limited - India
- SMC Global Power, Philippines
- Jindal Steel & Power Ltd - India
- Latin American Coal - Colombia
- Vijayanagar Sugar Pvt Ltd - India
- Deloitte Consulting - India
- Kobexindo Tractors - Indoneisa
- Marubeni Corporation - India
- Maheswari Brothers Coal Limited - India
- CIMB Investment Bank - Malaysia
- Indika Energy - Indonesia
- Electricity Generating Authority of Thailand
- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- Aditya Birla Group - India
- Bukit Baiduri Energy - Indonesia
- Romanian Commodities Exchange
- Jorong Barutama Greston.PT - Indonesia
- Planning Commission, India
- Anglo American - United Kingdom
- Meralco Power Generation, Philippines
- The State Trading Corporation of India Ltd
- Sojitz Corporation - Japan
- Gujarat Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- Sakthi Sugars Limited - India
- Orica Australia Pty. Ltd.
- New Zealand Coal & Carbon
- Kaltim Prima Coal - Indonesia
- Ministry of Finance - Indonesia
- Mercator Lines Limited - India
- Sical Logistics Limited - India
- ASAPP Information Group - India
- Eastern Coal Council - USA
- Thiess Contractors Indonesia
- Leighton Contractors Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Star Paper Mills Limited - India
- Wilmar Investment Holdings
- London Commodity Brokers - England
- Lanco Infratech Ltd - India
- TeaM Sual Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- GMR Energy Limited - India
- Indogreen Group - Indonesia
- Minerals Council of Australia
- White Energy Company Limited
- Singapore Mercantile Exchange
- Interocean Group of Companies - India
- Directorate General of MIneral and Coal - Indonesia
- GVK Power & Infra Limited - India
- McConnell Dowell - Australia
- Standard Chartered Bank - UAE
- Metalloyd Limited - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petron Corporation, Philippines
- Posco Energy - South Korea
- Chettinad Cement Corporation Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Karaikal Port Pvt Ltd - India
- Malabar Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Xindia Steels Limited - India
- ICICI Bank Limited - India
- IHS Mccloskey Coal Group - USA
- Bangladesh Power Developement Board
- Cigading International Bulk Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Oldendorff Carriers - Singapore
- IEA Clean Coal Centre - UK
- Mercuria Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Central Electricity Authority - India
- Barasentosa Lestari - Indonesia
- Energy Link Ltd, New Zealand
- Energy Development Corp, Philippines
- Eastern Energy - Thailand
- Mjunction Services Limited - India
- CNBM International Corporation - China
- Offshore Bulk Terminal Pte Ltd, Singapore
- OPG Power Generation Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Sree Jayajothi Cements Limited - India
- Straits Asia Resources Limited - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Agrawal Coal Company - India
- Australian Coal Association
- SN Aboitiz Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Parliament of New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Makarim & Taira - Indonesia
- Coalindo Energy - Indonesia
- Central Java Power - Indonesia
- Rio Tinto Coal - Australia
- Globalindo Alam Lestari - Indonesia
- Carbofer General Trading SA - India
- Independent Power Producers Association of India
- Formosa Plastics Group - Taiwan
- Indian Oil Corporation Limited
- GN Power Mariveles Coal Plant, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sarangani Energy Corporation, Philippines
- Altura Mining Limited, Indonesia
- Heidelberg Cement - Germany
- Antam Resourcindo - Indonesia
- Port Waratah Coal Services - Australia
- Merrill Lynch Commodities Europe
- Binh Thuan Hamico - Vietnam
- Commonwealth Bank - Australia
- Tamil Nadu electricity Board
- Bhoruka Overseas - Indonesia
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- Edison Trading Spa - Italy
- Siam City Cement PLC, Thailand
- Parry Sugars Refinery, India
- International Coal Ventures Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMG Consultants - Indonesia
- Aboitiz Power Corporation - Philippines
- India Bulls Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- GAC Shipping (India) Pvt Ltd
- San Jose City I Power Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Vedanta Resources Plc - India
- Ministry of Transport, Egypt
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Holcim Trading Pte Ltd - Singapore
- Bharathi Cement Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- VISA Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- Jaiprakash Power Ventures ltd
- LBH Netherlands Bv - Netherlands
- Ambuja Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Mintek Dendrill Indonesia
- Thai Mozambique Logistica
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- European Bulk Services B.V. - Netherlands
- Renaissance Capital - South Africa
- Siam City Cement - Thailand
- Kumho Petrochemical, South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Savvy Resources Ltd - HongKong
- Alfred C Toepfer International GmbH - Germany
- Global Business Power Corporation, Philippines
|
| |
| |
|
