Flish L&C (Law Firm Samyang, Attorneys Song Woo-won, Counsel for the plaintiff-appellant)

1. The term “res and conditions” means “res and conditions prescribed by the Presidential Decree” means “res and conditions prescribed by the Ordinance of the Ministry of Strategy and Finance.”

May 20, 2009

1. Ascertainment that there is no maritime lien on the claims listed in Attachment 1.

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Basic facts

The following facts are not in dispute between the parties, or may be recognized by considering the whole purport of the pleadings in each entry in Gap evidence 1 to 4 (including paper numbers), Eul evidence 1 to 9 (including paper numbers), and there is no counter-proof.

A. The Plaintiff Company is the owner of a vessel listed in the [Attachment 2] List 2 (hereinafter “the instant vessel”), who is a corporation belonging to Belgium, and the Defendant Company is a corporation belonging to Singapore.

B. On March 29, 2007, Nonparty 1: (a) purchased fuel oil for the instant vessel from the Defendant Company in USD 176,970; (b) paid the price within 30 days from the date of receipt of the Defendant Company’s written claim for payment; and (c) agreed to pay the payment in addition to delay damages at the rate of 2% per month in the event of delay in payment.

In addition, on April 27, 2007, the non-party companies purchased fuel oil for the ship of this case from the defendant company at US$ 256,250, and agreed that the price shall be paid within 30 days from the date of receipt of the written claim for payment by the defendant company, and the delay damages shall be paid in addition to the rate of 2% per month if the payment is delayed.

C. Accordingly, on April 1, 2007 and May 1, 2007, the Defendant Company supplied the instant vessel with fuel oil under each of the above agreements on the front and rear Sea of Singapore, and sent each of the above agreements to the Nonparty Company on the date of supply to the Nonparty Company by facsimile, but the Nonparty Company did not pay fuel oil under each of the above agreements to the Defendant Company.

D. Accordingly, on September 18, 2008, the Defendant Company filed an arbitral award with the non-party company against the New York arbitrator located in New York, and received an arbitral award stating that “the non-party company will pay USD 577,402.86 (hereinafter “the fuel price claim”) to the Defendant for fuel oil payment and its delay damages, etc.” from the above arbitrator.

E. After that, the Defendant Company applied for an auction to the Ulsan District Court on November 18, 2008 for the execution of the above maritime lien on the ground that there was a maritime lien under Article 1507 subparagraph 8 of the Commercial Code of the Republic of Pakistan, which provides the above fuel oil payment claim as the secured claim on the instant vessel, and the above auction procedure was commenced on the ground that it applied for an auction to exercise the above maritime lien to the Ulsan District Court on November 18, 2008.

F. Meanwhile, the Plaintiff Company purchased the instant vessel on February 28, 2008, prior to the commencement of the above auction procedure, and completed the registration of change of vessel ownership on March 12 of the same year, and received the said vessel on April 1 of the same year.

2. Both parties’ assertion and judgment

(a) Contents of the assertion;

(1) Plaintiff

The plaintiff asserts that the maritime lien should be executed within one year from May 1, 2007 and May 31 of the same year, because Article 786 of the Korean Commercial Code provides that the maritime lien shall be extinguished unless it is executed within one year from the date of the occurrence of the claim, even though the defendant company has a maritime lien under Article 1507 subparagraph 8 of the Korean Commercial Code of Pakistan, which provides that the above fuel oil payment claim and the above fuel oil payment claim as the secured claim shall be executed with respect to the ship of this case, and that the above maritime lien shall be executed within one year from the date of the expiration of the above fuel payment claim, namely, when the above fuel oil payment claim occurred, the above fuel oil payment claim shall be executed within one year from the date of expiration of the due date of the above fuel oil payment claim. The defendant company asserted that the above maritime lien had already been executed at the Busan District Court on Nov. 18, 2008.

(2) Defendant

In regard to this, the defendant has a maritime lien on the ship of this case as the secured claim, and Article 60 subparagraph 1 of the Private International Act provides that the ownership and mortgage of the ship on the sea, maritime lien and other real rights on the ship shall be governed by the law of the country of registry. Thus, the extinction of the above maritime lien held by the defendant company shall be governed by the Commercial Act of the Republic of Pakistan, a corporation of the country of registry. Since the Commercial Act of the Republic of Pakistan does not explicitly provide for the exercise period of the above maritime lien, the exercise period of the maritime lien (Article 1651 (1) of the Commercial Act of the Republic of Pakistan) is applied and if the above maritime lien is not exercised within one year, the exercise period of the secured claim should be terminated. However, on December 19, 2007, the extinctive prescription period of the above maritime lien was suspended by approving the above fuel oil payment obligation on the ground that the above maritime lien had not been exercised on November 1, 2008.

B. Determination

However, Article 60 subparag. 1 of the Act on Private International Law provides that the ownership and mortgage of the ship on the sea, maritime lien and other real rights on the ship shall be governed by the law of the country of registry. However, the provision on the exercise period of the maritime lien is a procedural provision related to the method of the exercise of the maritime lien, and if the maritime lien is exercised in Korea, it shall be governed by the procedural law of Korea (the Commercial Code of the Republic of Pakistan, a country of registry, has no provision regarding the exercise period of the maritime lien). Article 786 of the Commercial Code of Korea provides that the maritime lien of the ship creditor shall be extinguished if it is not executed within one year from the date when the above claim has occurred. Thus, the plaintiff company shall exercise the maritime lien on the ship of this case within one year from the date when the above claim for fuel oil payment occurred, that is, the date when the above claim for fuel oil payment became due, and that the above claim for the maritime lien had already been filed before the above auction period of the court of registry.

3. Conclusion

Therefore, it is clear that there is no maritime lien on the above fuel oil payment claim, and as long as the defendant contests this issue, the plaintiff has a benefit to seek confirmation. Therefore, the plaintiff's claim of this case is justified and it is so decided as per Disposition.

[Attachment]

Judges Kim Ho-ho (Presiding Judge)