Hanjin vessels could be arrested in SA

SA court precedents and

the laws and rulings on

which they are based would

seem to indicate that any

Hanjin vessels that try to

take refuge here could be

arrested, according to an

extensive analysis conducted

by Edmund Greiner, partner

in the

international

transport,

trade & energy

department

at Shepstone

& Wylie

Attorneys.

The case he

presented for

this is pretty

complex,

but there are

certain points

that would

appear to

confirm this presumption.

The first is probably the

clearest ruling in favour of

the arrest of a ship despite

foreign rehabilitation

proceedings. According

to Greiner, and separately

confirmed by Peter Lamb,

senior associate at legal firm,

Norton Rose Fulbright, this

is contained in section 10 of

the Admiralty Jurisdiction

Regulation Act 105 of 1983.

This provides that “no

admiralty proceedings in

respect of arrested property

will be stayed by reason of

any judicial management

(insolvency proceedings –

local or foreign) of the ship

owner”.

And a second is the

circumstances

in which

protection

was afforded

to Hanjin by a

Seoul court.

In this,

Hanjin

successfully

applied for

and obtained

an order

where it was

placed under

rehabilitation.

This order was

obtained within 24 hours

of the company making

application to the Korean

court, without notice or

input from other interested

parties, most notably Hanjin’s

creditors.

And, Greiner pointed out,

the receiver appointed by

the Korean court was the

company’s CEO, Tae Su Seok.

It basically “provided

for a stay of proceedings

(whether already commenced

or contemplated) against

the company until at least

November 25 – which is the

deadline for the submission

of a draft rehabilitation plan

for the company. “In the

meantime,” said Greiner, “the

company will continue to

operate under the auspices

of its current management

team.”

But whether this would

be acceptable in SA appears

doubtful, as court precedents

have found against a number

of the conditions under which

the Seoul judgement was

made.

Also, although SA is

a signatory to the UN

Convention on Cross Border

Insolvency, the provisions

of that convention have not

been given effect in SA. The

result of this, Greiner added,

“is that there is no automatic

recognition of the Korean

proceedings. In order for

them to be recognised in SA,

the receiver would have to

formally make application to

the SA court for recognition.”

Both Greiner and Lamb

pointed out that the recent

judgment in the Western

Cape court in the matter

of the MV Kenanga might

provide further arguments

against recognition of the

Hanjin Korean proceedings.

Said Greiner: “The court

accepted that enforcement

of such proceedings

needed to

meet the

requirements

for the

recognition

and

enforcement

of foreign

judgments.

Amongst these

requirements

is: The need for

international

jurisdiction;

finality of the

judgment; and that

the judgment is

not contrary to public policy.

“Clearly the Korean

proceedings would not

meet the first two of these

requirements, but it may be

that the facts in this matter

are distinguishable.”

Until a recognition

application is

successfully brought

in this country,

if any Hanjin

vessels enter

an SA port

for succour,

they may not

find it a safe

haven. Rather,

they could be

arrested and

sold.

INSERT & CAPTION

If any Hanjin vessels

enter an SA port for

succour, they may not

find it a safe haven.

Rather, they could be

arrested and sold.

– Edmund Greiner