In International Shipping News 03/10/2016
About 6km off the east coast of Singapore is a ship that has been anchored for more than a month. The Hanjin Rome was arrested on Aug 29 after its owner, South Korea’s Hanjin Shipping, was sued for owing its creditors $7.3 billion.
A ship arrested in Singapore must remain in its waters until there is a resolution. Since the arrest, the container ship’s 24 crew members – 11 South Koreans and 13 Indonesians – have been stuck on board with no idea of when they can go home. On Tuesday, Captain Moon Kwon Do and four of his crew – two South Koreans and two Indonesians – were granted permission to be repatriated. Although he was relieved to go home, Captain Moon, 36, told The New Paper that he was worried about the crew members still onboard.
When he steered his ship into Singapore waters on Aug 29, he thought it would be another routine call to port, where it would refuel and replenish cargo before departing to the Middle East, where its cargo was bound. But at 9.20pm, he received news that his ship had been arrested. Captain Moon spoke to TNP while he and his two compatriots were heading to Changi Airport from the PSA Building on Alexandra Road at 8pm on Tuesday.
He said he was allowed to leave the ship only because of a family emergency at home. “I found out my grandmother has intestinal cancer. My uncle told me that she does not have more than a week to live,” he said, adding that his thoughts were with his grandmother, wife and eight year-old twin daughters back in South Korea. “Every day, I call and talk to my wife and my daughters.”
STUDENTS
The two South Korean crew members said they were allowed to leave because they are university students doing their apprenticeship. The reasons for the repatriation of the two Indonesians are not known. Responding to TNP’s queries, the Sheriff of the Supreme Court said arrangements were made for the repatriation of five crew members on Sept 26 and they were allowed to disembark the next day. The Sheriff’s Office added that the order of arrest applies only to the vessel, not to its crew. It is therefore common practice for the crew to request to be repatriated.
The arrested vessel must maintain the minimum manning requirements of the Maritime and Port Authority of Singapore. Captain Moon said he was shocked to find out his ship had been arrested because he and his crew had no idea their employer was in deep financial trouble. He said: “In my 16 years with Hanjin, never did I imagine that this would happen to my company. “I immediately called the headquarters in Busan for help.” Hanjin filed for bankruptcy two days later on Aug 31. “It became clear that we were going to be here for the next one, two, who knows, six months,” said Captain Moon, who told his crew not to give up hope. He tried to keep up a brave front and cracked jokes during dinner to lighten the mood.
But when he was alone in his cabin, he said, “there were times I felt like bursting open the windows and doors”. In the month after its arrest, the crew survived on two shipments of food supplied by a ship chandler, one on Aug 29 and another on Sept 17, worth about $5,400 and $ 6,800, respectively. “There was Indonesian food, meat, lamb. Also, Korean ramyun (instant noodles), of course,” said Captain Moon.
TENSE
The atmosphere on the ship, however, remained tense. “It was uncomfortable being on the ship for so long,” said Captain Moon. “The crew members were nervous about their future and the company’s future. They did not know when they would be able to go home to see their families.” One of the two Mokpo Maritime University students, Mr Kim Seon Kuk, 21, was glad to be going home. The apprentice engineer said he called his family once a week. “They told me to cheer up, not to fall ill and to eat well,” he added. His varsity mate, Mr Byeon Dae Seung, 21, said: “Food and the conditions on board were good, but mentally, I felt trapped. “I feel sorry for those who remained behind, unsure of when they would be able to see their families.”
Captain Moon told TNP that his No. 2, Captain Kim Young Woo, has been put in charge of the ship. Despite Hanjin’s uncertain future, Captain Moon is determined to remain with the company. He said: “When I joined Hanjin in 2000, I was determined to stay with the company for life.” His parting words to his crew were: “So long, we will meet on another Hanjin ship.” Ripple effect The Hanjin Rome was arrested on Aug 29, after Hanjin Shipping company was sued by German shipowner Rickmers for owing its creditors some $7.3 billion. When Hanjin Shipping and Company, the world’s seventh-largest carrier, filed for bankruptcy on Aug 31, it created a ripple effect that stranded more than 80 Hanjin vessels around the globe. This is one of the biggest bankruptcies in the shipping industry and has affected global supply chains. The New Paper understands that these vessels carry a wide range of cargo. Nanyang Technological University Maritime Associate Professor Lam Siu Lee said: “If the cargoes are consumer goods, the impact would be larger and more direct on consumers. Impacts include delay of goods, disruption of shipping imports. “If the cargoes are components for manufacturing, manufacturers’ supply chain and production schedule would be delayed.”
But she added that consumers would probably not notice a major shortage in supply because “retailers and distributors usually have some safety inventory to deal with uncertainties”.
FROZEN
The Straits Times reported on Sept 16 that the High Court had temporarily frozen all Singapore proceedings against Hanjin Shipping and its Singapore subsidiaries, pending a full hearing for all parties here on whether the freeze should continue until next January. For now, Hanjin vessels are allowed into Singapore ports to unload cargo, assuming it is able to pay port and handling fees to do so. Since then, it has been reported that at least two other Hanjin vessels – Hanjin Argentina and Hanjin Jebel Ali – had berthed at Tanjong Pagar Terminal and likely to have unloaded cargo.
Singapore is one of three countries that have approved an interim stay order recognising Hanjin Shipping’s rehabilitation proceedings in the Seoul courts on Sept 16, the other two being the UK and the US. When a ship is arrested… What does it mean when a ship is arrested? Mr Eugene Cheng, 29, an associate specialising in shipping litigation at Gurbani and Co LLC, said: “Claimants must first have a claim against the shipowner. They then file an application for a warrant of arrest in court. “When a ship is arrested, it means that it is unable to leave Singapore waters.
“The arrest does not apply to the crew members, who may be repatriated by the arresting party.” Why are ships arrested? Though there are varying reasons, Mr Cheng said it is usually because of marine related claims and the purpose of arresting a ship is to force the shipowner to appear in court and settle the claim. Nanyang Technological University Associate Professor Lam Siu Lee said: “Another reason is that Singapore has port state control, and has the right to inspect and arrest foreign ships in Singapore waters.”
How many other arrested ships are on Singapore shores? The Hanjin Rome is not the only arrested vessel in Singapore waters. As of yesterday, there are seven others, the longest being the Ocean Mare, which has been unable to leave Singapore waters since April. The map above shows their positions, according to marinetraffic.com Mr Cheng said it is not uncommon for ships to be arrested in Singapore waters because our admiralty laws grant claimants the right to do so. Mr S Mohan, Managing Director of Resource Law LLC, said: “Given the sheer number of vessels that call at Singapore coupled with its efficient legal system, it is common for ships to be arrested in Singapore.” What happens to arrested ships? Mr Cheng said it is unlikely that ships would be arrested for more than a year.
He said: “The arresting party would usually apply for a sale of the ship to prevent it from becoming a wasting asset because expenses such as port dues and crew wages will reduce the value of the ship.” What happens to the crew onboard an arrested ship? According to the Maritime Port Authority of Singapore, once a ship is arrested, anything that enters or leaves the ship has to be approved by the Supreme Court. This includes the change of crew. Crew members would have to apply for permission from the Sheriff of the Supreme Court to be repatriated. In an arrested ship, at least half the number of officers, engineers and crew (or watchmen/security guards) must be onboard at all times to meet the minimum manning requirement.
A mid-sized cargo vessel like the Hanjin Rome requires a skeleton staff of about 12 to 15 operational employees – half its original crew size – given its current circumstance. Mr Cheng said: “The humanitarian thing is to repatriate and replace the old crew or change the crew on board the ship when it was arrested. “This is because the crew did not sign up to stay in Singapore for an unknown period of time.”
Source: The New Paper
