Case concerning the arrest of the tanker “M/V NERISSA” (2019) Lu 72 Cai Bao No. 108

　　【Basic Facts】

　　The Liberian applicant applied to the Qingdao Maritime Court for the seizure of the 300,000-ton Marshallian tanker M/V NERISSA, before the arbitration of London and requested to provide a 5 million USD guarantee, due to the Singapore shipowner’s violation of the sales contract to sell the vessel to different buyers. The Qingdao Maritime Court detained the tanker in Qingdao. The tanker was originally planned to discharge more than 130,000 tons crude oil in Qingdao and continue its voyage to Tianjin for discharge of the remaining 170,000 tons of crude oil. If it was unable to discharge the crude oil in Tianjin as scheduled, it would result in demurrage fees of 30,000 USD/day and the delay in delivery and the suspension in production of the factory. In order to avoid the expansion of losses and prevent the occurrence of serial disputes, the judge followed Article 27 of theSpecial Maritime Procedure Law of the People’s Republic of China, boarded the tanker four times and coordinated the dispute between parties across the oceans, and successfully reached the reconciliation to settle the dispute instead of the London arbitration. The seizure of the tanker was lifted, so the tanker was permitted to discharge in Tianjin. And the parties agreed to continue with the original vessel sales contract and sell the vessel to the applicant. Therefore, all disputes were resolved in a package.

　　【Judgement】

　　On 11 March 2019, the Qingdao Maritime Court made the civil verdict, (2019) Lu 72 Cai Bao No. 108, the contents of which are as follows: 1. The application for maritime claims preservation raised by the applicant Skyline International Corp. is affirmed; 2. To seizure the Marshallian tanker “M/V NERISSA” in Qingdao Port (an anchorage) owned or operated by shipowner and/or bareboat charterer; 3. To request the shipowner and/or bareboat charterer to provide a guarantee in amount of 5 million USD in cash or provide other reliable guarantee; 4. The applicant shall file a lawsuit or arbitration within 30 days. If the applicant fails to sue or arbitrate within limited period, the Court will lift the maritime claim preservation. The Court issued an order of arrest and arrested the tanker in Qingdao Port on the same day.

　　On 9 April 2019, the Qingdao Maritime Court made a civil verdict, (2019) Lu 72 Cai Bao No. 108-1, the contents of which are as follows: 1. To permit the Marshallian tanker “M/V NERISSA” owned by offshore Holding Company Pte. Ltd. to continue its operation and complete the voyages from Qingdao Port of the People’s Republic of China via Tianjin Port to Qinhuangdao Port; 2. The Marshallian tanker “M/V NERISSA” owned by the offshore Holding Company Pte. Ltd. would be detained at Qinhuangdao Port. On the same day, the Court issued an order of arrest, (2019) Lu 72 Cai Bao No. 108-1, and continued with the arrest of the tanker in Qinhuangdao Port on 20 April 2019.

　　On 25 April 2019, the Qingdao Maritime Court made the civil verdict, (2019) Lu 72 Cai Bao No. 108, to release the tanker from arrest.

　　【Significance】

　　The Court flexibly applied in this case Article 27 of the Special Maritime Procedure Law of the People’s Republic of China. It is a special case where the vessel was permitted to continue its operation after arrest and then lifted the seizure which actively promoted the rule of law, helped to create a business-friendly environment which is international, legal and convenient, and protected foreign parties and their legitimate rights and interest.

　　The successful settlement of the case ensured the celebration of the Navy Day, and avoided the huge loss of the cargo owner, the charterer, mortgagor and other parties of interest from Greece, Singapore, India, Dubai, Brazil, China and other counties along the “Belt and Road” and BRICS countries, resolved the risk of serial litigations and won compliments and respect of international society. The new shipowner deliberately renamed the tanker with “RESPECT” to show high respect for Chinese judges and the rule of law in China!

　　The successful settlement of the case shows that in the new era of comprehensive reform and resolution, and under government of the country in accordance with the rule of law, Chinese maritime judges dare to take responsibilities and work hard to protect fairness and justice and the legitimate rights and interest of the foreign parties and put into practice the spirit of guidance mentioned by President Jinping Xi that “the legality is the best business environment”, which shows their professionalism, dedication and efficiency, and also shows the responsibility and function of maritime courts for the construction of the “Belt and Road” and the maritime powerful country. The case also benefits the establishment of a good international image of the China’s maritime courts and the demonstration of the international credibility and influence of China’s maritime justice.

　　(The Civil Verdict is attached below for reference.)

　　Case Editor: ZhangBo, Shidao Tribunal of Qingdao Maritime Court

　　Qingdao Maritime Court of the People’s Republic of China

　　Civil Verdict

　　(2019) Lu 72 Cai Bao No. 108

　　Applicant: Skyline International Corp. Residence: 80 Broad Street, Monrovia, Liberia.

　　Representative: Evangelos Bairakaris, president, secretary, finance/independent director of the company.

　　Respondent: shipowner and/or bareboat charterer of “M/V NERISSA”.

　　The applicant Skyline International Corp. filed an application for maritime claim preservation with the Qingdao Maritime Court on 11 March 2019, requesting the arrest of the respondent’s Marshallian tanker “M/V NERISSA” berthing at Qingdao Port  of the People’s Republic of China and a guarantee of 5 million USD in cash or other reliable guarantee on the grounds that the dispute over the sales of the vessel “M/V NERISSA” might cause loss of approximately 5 million USD. The applicant provided a guarantee for insurance letter of the liability of litigation preservation issued by Qingdao Branch of China People’s Insurance Co., Ltd. with an insurance amount of 8 million RMB.

　　After review, the Court held that the disputes between the applicant and the respondent arising from the vessel sales contract belongs to maritime claims where Article 21(22) of the Special Maritime Procedure Law of the People’s Republic of China on the arrest of vessels shall apply. Therefore, the application for the arrest of the vessel owned or operated by the respondent is in accordance with the laws and thus the Court affirmed. Pursuant to Articles 12, 13, 14, 17 and 21(22) of the Special Maritime Procedure Law of the People’s Republic of China, the rulings are as follows:

　　1. The applicant’s application for maritime claim preservation was affirmed;

　　2. From this date on, to detain the respondent’s Marshallian tanker “M/V NERISSA” berthing at Qingdao Port of the People’s Republic of China;

　　3. To order the respondent, the shipowner and/or bareboat charterer of “M/V NERISSA” to provide a guarantee of 5 million USD in cash or other reliable guarantees.

　　4. The Applicant shall file a lawsuit or arbitration within 30 days. In failure to sue or arbitrate within the limited period, the Court will lift the maritime claim preservation.

　　Against this verdict, the applicant or respondent may apply to the Qingdao Maritime Court for review within five days from the date of receipt of the verdict. Execution of the verdict shall not be suspended during the period of review.

　　ChiefJudge SongJunwen

　　Judge ZhangBo

　　Judge LiJunfeng

　　11 March，2019

　　Assistant of Judge QuYanjun

　　Court Clerk  SunPing