THE BANK OF TOKYO-MITSUBISHI UFJ LTD V OWNERS OF THE MV SANKO MINERAL AND ANOTHER

[2014] EWHC 3927 (Admlty), Queen's Bench Division, Admiralty Court, Mr Justice Teare, 28 November 2014

Admiralty practice - Caution against release of proceeds from judicial sale of vessel - Insolvency proceedings in place - Effect of arbitration clause - Time bar - Senior Courts Act 1981, section 21(4)

Glencore had requested a caution against the release of the sale proceeds of from the sale of MV Sanko Mineral. This was Sanko's (the former vessel owner) request for strike-out or withdrawal of that caution and for payment out of the proceeds of the sale. Sanko had entered into insolvency proceedings and Reorganisation in Japan in July 2012 (recognised as foreign main proceedings). Glencore claimed to be the owner of a cargo shipped on board, the discharge of which had been substantially delayed in New Orleans and had, it claimed, secured a lien against the vessel as a matter of US law, as a result of a claim filed in Baltimore. Glencore's claims in respect of the cargo submitted in the Japanese Reorganisation proceedings had been rejected, and the rejection was currently under challenge. No arbitration had been commenced per the charterparty. Discharge had taken place in September 2012 and the one-year time bar for commencing arbitration had therefore expired in September 2013. The vessel had been arrested and sold in respect of a claim in rem of the Bank of Tokyo and the proceeds remained in court. Glencore took the view that its claim took priority over the bank's mortgage.