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.
|
|
Wednesday, 21 January 15
SHIFT IN INTERNATIONAL COAL TRADE TO THE PACIFIC BASIN WILL CONTINUE - IMF
COALspot.com: The shift in international coal trade to the Pacific Basin will continue, IMF said in its latest Medium-Term Coal Market Report.
...
Wednesday, 21 January 15
MARKET INSIGHT - VASSILIS LOGOTHETIS, INTERMODAL
The World Bank has lowered its forecast for global growth in 2015 to 3% down from its previous level of 3.4% amid rising concerns over the economic ...
Wednesday, 21 January 15
THERMAL COAL PRICE OUTLOOK DEPENDENT ON INDIAN IMPORT DEMAND - MATTHEW BOYLE, CRU
COALspot.com: Supply and demand side developments in India will be an important determinant of future market dynamics and prices for thermal coal a ...
Wednesday, 21 January 15
PORT OF NEWCASTLE COAL EXPORTS JUMP 16.19% ON MONTH TO 15.80 MIL MT IN DECEMBER' 14
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped $1.136 billi ...
Tuesday, 20 January 15
INDIA TO SURPASS THE UNITED STATES AND BECOME THE SECOND-LARGEST COAL CONSUMER IN THE WORLD BY 2019 - IMF
COALspot.com: In 2013, coal added more primary energy than any other fuel and was the fastest-growing fossil fuel, enhancing its position as the se ...
|
|
|
Showing 3241 to 3245 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Ceylon Electricity Board - Sri Lanka
- Bhatia International Limited - India
- LBH Netherlands Bv - Netherlands
- Bulk Trading Sa - Switzerland
- Ministry of Mines - Canada
- Goldman Sachs - Singapore
- Singapore Mercantile Exchange
- Kumho Petrochemical, South Korea
- Mintek Dendrill Indonesia
- PowerSource Philippines DevCo
- Eastern Energy - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Wood Mackenzie - Singapore
- Interocean Group of Companies - India
- Ambuja Cements Ltd - India
- Agrawal Coal Company - India
- MS Steel International - UAE
- Oldendorff Carriers - Singapore
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- Bangladesh Power Developement Board
- Dalmia Cement Bharat India
- Standard Chartered Bank - UAE
- Africa Commodities Group - South Africa
- Madhucon Powers Ltd - India
- McConnell Dowell - Australia
- Commonwealth Bank - Australia
- Orica Australia Pty. Ltd.
- Latin American Coal - Colombia
- Chettinad Cement Corporation Ltd - India
- Straits Asia Resources Limited - Singapore
- Coal and Oil Company - UAE
- International Coal Ventures Pvt Ltd - India
- Mjunction Services Limited - India
- Posco Energy - South Korea
- Holcim Trading Pte Ltd - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Xindia Steels Limited - India
- Price Waterhouse Coopers - Russia
- Sojitz Corporation - Japan
- Bukit Makmur.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- GVK Power & Infra Limited - India
- Electricity Generating Authority of Thailand
- IHS Mccloskey Coal Group - USA
- Mercuria Energy - Indonesia
- Attock Cement Pakistan Limited
- Kepco SPC Power Corporation, Philippines
- Indika Energy - Indonesia
- The State Trading Corporation of India Ltd
- Indian Energy Exchange, India
- Wilmar Investment Holdings
- Vizag Seaport Private Limited - India
- Marubeni Corporation - India
- ASAPP Information Group - India
- GMR Energy Limited - India
- Bukit Baiduri Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Savvy Resources Ltd - HongKong
- PetroVietnam Power Coal Import and Supply Company
- Carbofer General Trading SA - India
- Ministry of Finance - Indonesia
- Siam City Cement - Thailand
- Aboitiz Power Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Essar Steel Hazira Ltd - India
- Semirara Mining Corp, Philippines
- London Commodity Brokers - England
- Malabar Cements Ltd - India
- Heidelberg Cement - Germany
- ICICI Bank Limited - India
- European Bulk Services B.V. - Netherlands
- SN Aboitiz Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Energy Link Ltd, New Zealand
- CIMB Investment Bank - Malaysia
- Indogreen Group - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Transport, Egypt
- Bhushan Steel Limited - India
- Deloitte Consulting - India
- Energy Development Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Coastal Gujarat Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- The University of Queensland
- Vedanta Resources Plc - India
- Trasteel International SA, Italy
- Toyota Tsusho Corporation, Japan
- Binh Thuan Hamico - Vietnam
- Eastern Coal Council - USA
- Aditya Birla Group - India
- Ind-Barath Power Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Romanian Commodities Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Georgia Ports Authority, United States
- Simpson Spence & Young - Indonesia
- Petron Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Sical Logistics Limited - India
- Bhoruka Overseas - Indonesia
- Independent Power Producers Association of India
- Meralco Power Generation, Philippines
- VISA Power Limited - India
- Tamil Nadu electricity Board
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bharathi Cement Corporation - India
- Tata Chemicals Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Riau Bara Harum - Indonesia
- Global Business Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Jindal Steel & Power Ltd - India
- India Bulls Power Limited - India
- Australian Commodity Traders Exchange
- Neyveli Lignite Corporation Ltd, - India
- Jaiprakash Power Ventures ltd
- Central Java Power - Indonesia
- Kaltim Prima Coal - Indonesia
- Thiess Contractors Indonesia
- Kartika Selabumi Mining - Indonesia
- Planning Commission, India
- Mercator Lines Limited - India
- Grasim Industreis Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- Renaissance Capital - South Africa
- PTC India Limited - India
- Intertek Mineral Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- Parliament of New Zealand
- Sree Jayajothi Cements Limited - India
- Globalindo Alam Lestari - Indonesia
- Baramulti Group, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Miang Besar Coal Terminal - Indonesia
- Cement Manufacturers Association - India
- Sindya Power Generating Company Private Ltd
- Larsen & Toubro Limited - India
- Cigading International Bulk Terminal - Indonesia
- Economic Council, Georgia
- Electricity Authority, New Zealand
- Gujarat Sidhee Cement - India
- Manunggal Multi Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Altura Mining Limited, Indonesia
- Videocon Industries ltd - India
- CNBM International Corporation - China
- GAC Shipping (India) Pvt Ltd
- Indonesian Coal Mining Association
- South Luzon Thermal Energy Corporation
- Makarim & Taira - Indonesia
- Rio Tinto Coal - Australia
- Maharashtra Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Minerals Council of Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PNOC Exploration Corporation - Philippines
- White Energy Company Limited
- Uttam Galva Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Parry Sugars Refinery, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The Treasury - Australian Government
- Meenaskhi Energy Private Limited - India
- Borneo Indobara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Star Paper Mills Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- IEA Clean Coal Centre - UK
- Lanco Infratech Ltd - India
- Central Electricity Authority - India
- Sarangani Energy Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Therma Luzon, Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Mining Services - Indonesia
- Samtan Co., Ltd - South Korea
- Edison Trading Spa - Italy
- New Zealand Coal & Carbon
- Global Green Power PLC Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- SMG Consultants - Indonesia
- SMC Global Power, Philippines
- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- Rashtriya Ispat Nigam Limited - India
- Kideco Jaya Agung - Indonesia
- Siam City Cement PLC, Thailand
- Kobexindo Tractors - Indoneisa
- Coalindo Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Indian Oil Corporation Limited
- Krishnapatnam Port Company Ltd. - India
- Banpu Public Company Limited - Thailand
- San Jose City I Power Corp, Philippines
- Australian Coal Association
- Antam Resourcindo - Indonesia
- Medco Energi Mining Internasional
|
| |
| |
|
