Lloyd's Maritime and Commercial Law Quarterly
NAVIGATING THE WATERS BETWEEN ADMIRALTY AND CROSS-BORDER INSOLVENCY: A COMPARISON OF THE AUSTRALIAN, GERMAN AND FRENCH POSITIONS
Mohammud Jaamae Hafeez-Baig *
One of the unresolved issues arising out of the interaction of admiralty law and cross-border insolvency law is the extent to which local maritime claimants can arrest ships and thereby have their claims satisfied despite the existence of foreign insolvency proceedings against the defendant shipowner. This article examines the nature of the security interest held by a maritime claimant that arrests or attaches a ship in Australia, Germany or France, and considers how those interests are treated under the cross-border insolvency regimes of those jurisdictions. It concludes with several recommendations for reform of Australian law.
I. INTRODUCTION
On 31 August 2016 Hanjin Shipping Co Ltd, South Korea’s largest and one of the world’s top ten container lines, filed for bankruptcy in Seoul.1 This immediately sparked a worldwide scramble to issue arrest proceedings against its ships in other jurisdictions, given South Korean law’s notorious hostility towards maritime claims in rem. There are even reports that a number of Hanjin ships have been instructed to circle the globe, rather than put into a port and risk arrest.2 Much like the downfall of STX Pan Ocean in 2013, the
* University of Queensland. I am indebted to Professor Sarah Derrington, who supervised me during my preparation of an earlier version of this article as part of a research project at the University of Queensland. I would also like to thank Professor Nick Gaskell, Peter McQueen, Eloise Gluer, Samuel Walpole, the anonymous referee and the editor for their comments on an earlier version of this article. All errors remain my own.
The following abbreviations are used:
Berlingieri: Francesco Berlingieri, Berlingieri on Arrest of Ships, 5th edn (Informa, 2011);
Fletcher: Ian Fletcher, Insolvency in Private International Law, 2nd edn (Oxford University Press, 2005;
Jackson: David Jackson, Enforcement of Maritime Claims, 4th edn (LLP, 2005);
Tetley, “Arrest”: William Tetley, “Arrest, Attachment, and Related Maritime Law Procedures” (1999) 73 Tulane Maritime LJ 1895;
Tetley, IMAL : W Tetley, International Maritime and Admiralty Law (International Shipping Publications, 2002);
Tetley, “Mixed Jurisdictions”: W Tetley, “Mixed Jurisdictions: Common Law v Civil Law (Codified and Uncodified)” (2000) 60 Louisiana L Rev 677;
Tetley, MLC: W Tetley, Maritime Liens and Claims, 2nd edn (International Shipping Publications, 1998).
1. MariCom Law, Arrest of ships and insolvency: the “affaire Hanjin”, Institute of International Shipping and Trade Law, available at https://iistl.wordpress.com/2016/09/09/arrest-of-ships-and-insolvency-the-affaire-hanjin/.
2. Ibid.
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