[1] In a case where Russia is a party to an international treaty on maritime lien, whether the international treaty takes precedence over Russia's domestic law on maritime lien for Russia's nationality (affirmative)

[2] Whether the interpretation of the International Convention of 1993 on Maritime Lien and Mortgage recognizes the maritime lien on the claims against the time charterer (negative)

[1] Whether a maritime lien is established, whether a certain claim is secured by a maritime lien, and the scope of the subject matter on which a maritime lien may be affected by a maritime lien shall be the law of the country of registry in accordance with Article 60 subparag. 1 of the Private International Act. In addition, Article 15(4) of the Russian Constitution provides, “The generally approved principles, international law, and international treaties of the Russian federal shall form part of the legal system of the Russian federal. If an international treaty of the Russian federal provides otherwise, the international treaty shall apply.” Thus, in cases where Russia is a party to an international treaty on maritime lien, the international treaty shall take precedence over Russian domestic law with respect to maritime lien on the Russian national vessel.”

[2] The removal of maritime lien on the claims against the “other charterer” recognized by the International Convention, 1967 on Maritime Lien and Mortgages (hereinafter “1967 Convention”) from the “Convention, 193” (hereinafter “Convention, 1993 Convention”). The removal of maritime lien from the “Convention, 1993,” in the context of maritime lien, can be preferentially paid out the mortgage even if the mortgage was established on the ship, and thus, the right of the mortgagee may be infringed even if the mortgage was established on the ship, so that the right of the mortgagee may be reasonably reduced and adjusted to strengthen the status of the mortgagee and facilitate the financing of the ship, thereby excluding the debareboat charterer and the charterer who externally assume the same responsibilities with the shipowner, excluding the debareboat charterer and the charterer’s claims.

In addition, under the premise that the 1993 Convention lists the operator and only the de facto charterer out of the charterer as the secured obligor of the maritime lien, based on the premise that the operator and charterer are separate concepts, the “time charterer” who charters and uses the ship for a given period does not constitute “operator” as prescribed in Article 4(1) of the 1993 Convention.

In full view of the above provisions of Article 7(1) of the 1967 Convention, Article 4(1) of the 1993 Convention, the background and content of the amendment in the 1993 Convention, and the fact that the concept of “operator” is not included in the concept of “operator” under the 1993 Convention, the interpretation of the 193 Convention does not recognize maritime lien as to the claims against the time charterer.

[1] Article 77 of the Commercial Act; Article 60 subparag. 1 of the Private International Act; Article 15(4) of the Russian Constitution; Article 4(1) of the International Convention 1993 Concerning Maritime Lien and Mortgages / [2] Article 7(1) of the International Convention 1967 Concerning Maritime Lien and Mortgages; Article 4(1) of the International Convention 1993 Concerning Maritime Lien and Mortgages

[1] Supreme Court Decision 2005Da39617 decided July 12, 2007 (Gong2007Ha, 1241)

Gaun Shipping Co., Ltd. (Law Firm Samyang, Attorneys Noh Jeong-soo et al., Counsel for the plaintiff-appellant)

Busan District Court Order 2008Ra420 dated July 29, 2013

The reappeal is dismissed.

The grounds of reappeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. Whether maritime lien is established, whether certain claims are secured by maritime lien, and the scope of the subject matter on which maritime lien is affected by maritime lien is the law of the country of registry according to Article 60 subparag. 1 of the Private International Act (see Supreme Court Decision 2005Da39617, Jul. 12, 2007).

In addition, Article 15(4) of the Russian Constitution provides that "generally approved principles, international law, and international treaties of the Russian federal shall form part of the legal system of the Russian federal. If the international treaties of the Russian federal are otherwise provided for in the law, the international treaties shall apply." Thus, if Russia is a party to the international treaties concerning maritime lien, the international treaties shall take precedence over the Russian domestic law with respect to maritime lien on the Russian flag vessel.

2. According to the reasoning of the order of the court below and the record, the re-appellant, who runs the ship agency business in Korea, concluded the ship agency contract with the debtor as the time charterer as stated in the judgment of the court below (hereinafter "the ship of this case"). The re-appellant agreed to pay in preference to the debtor expenses incurred at the time of entry and departure of the ship of this case on behalf of the debtor. The re-appellant, from February 28, 2006 to July 30, 2006, applied for auction of this case to the ship of this case 9,905,497 won (hereinafter "the ship of this case") on behalf of the debtor 9,909,905,97 won (the "the port expenses of this case, etc. of this case, etc. of this case"), 99, Busan Port Corporation, etc., and 99, Busan District Court's voluntary auction of the ship of this case on behalf of the debtor.

3. We examine the above facts in light of the legal principles as seen earlier.

Whether a maritime lien on the instant vessel is established is determined by the Russian law, the country of registry, and Russia is a contracting party to the 1993 Convention. Thus, whether a claim, such as the instant port expenses, which is a claim against a time charterer, is secured by a maritime lien is determined depending on whether the said claim is determined as a secured claim for a maritime lien under the 1993 Convention.

Since the International Convention on Maritime Lien and Mortgage was enacted in 1926 in 1926, it was amended twice in 1967 and 1993. In the past, Article 7(1) of the International Convention on 1967 on Maritime Lien and Mortgages (hereinafter “1967 Convention”) recognized the “ship owner, ship manager, ship manager, and ship operator” as the debtor of the claim arising from the maritime lien. Article 4(1) of the 1993 Convention amended the 1967 Convention to remove “the other charterer” among the above debtors.

As such, it is reasonable to view that the maritime lien on the claims against the “other charterer”, which was recognized in the 1967 Convention, was deleted from the 1993 Convention, to exclude the claims against the time charterers and the navigation charterers, other than the de facto charterers, from the scope of the claims secured by the maritime lien, in order to strengthen the status of the mortgagee and facilitate ship financing by reasonably reducing and adjusting the claims secured by the maritime lien, thereby excluding the claims against the time charterers and the navigation charterers within the scope of the claims secured by the maritime lien.

In addition, under the premise that the 1993 Convention is separate between the operator and the charterer, it is reasonable to view that the time charterer who charters and uses the ship for a certain period does not fall under the “operator” as prescribed in Article 4(1) of the 1993 Convention, in light of the fact that the charterer and the de facto charterer are listed in the charterer as the secured debtor of the maritime lien.

E. In full view of the above provisions of Article 7(1) of the 1967 Convention, Article 4(1) of the 1993 Convention, the circumstances leading up to and content of the amendment of the 1993 Convention, and the circumstances such as the fact that “the time charterer” is not included in the concept of “operator” under the 1993 Convention, the interpretation of the 1993 Convention should be construed as not to recognize the maritime lien on the claims against the time charterer.

4. The court below's dismissal of the Re-Appellant's application for auction of this case on the ground that maritime lien is not recognized under the 1993 Convention with respect to the claims for navigation expenses, etc. of this case, which are claims against the time charterers. There is no error of law by misunderstanding the legal principles as to the interpretation of the 1993 Convention, which affected the conclusion

5. Therefore, the reappeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee In-bok (Presiding Justice)