Agreh LAD (Attorney Kim Hong-hoon, Counsel for the plaintiff-appellant)

Heung Sea Co., Ltd. and four others (Attorneys Park Byung-chul et al., Counsel for the plaintiff-appellant)

May 15, 2015

Suwon District Court Decision 2013Gahap441 Decided August 8, 2014

1. The judgment of the court of first instance is modified as follows.

A. It is confirmed that the maritime lien on the Defendants’ vessel listed in the separate sheet No. 1 against the Plaintiff does not exist in excess of the claims stated in the separate sheet No. 2.

B. The plaintiff's remaining claims are dismissed.

2. Of the total litigation costs, 20% is borne by the Plaintiff, and the remainder is borne by the Defendants, respectively.

1. Purport of claim

It is confirmed that there is no maritime lien on the Plaintiff’s vessel listed in the [Attachment 1] List against the Defendants (hereinafter “instant vessel”).

2. Purport of appeal

The judgment of the first instance is revoked. The plaintiff's claim is dismissed.

1. Basic facts

A. Status of the parties

1) The instant vessel has been loaded in Liberia.

2) Sky Glory Limited (hereinafter “Sky Glory”) was registered as a corporation incorporated in Liberian State as the owner of the instant vessel.

3) The Plaintiff is a legal entity incorporated in accordance with the Hong Kong law of the People’s Republic of China (hereinafter “China”), and China’s Hong Kong law (hereinafter “ Hong Kong law”). On November 28, 2012, the Plaintiff entered into a sales contract with Switzerland to purchase the instant vessels in USD 4,116,362 in USD 4,16,362, and was handed over on December 15, 2012.

4) The Cian Marar (Tianjin Co., Ltd., Limited, hereinafter “Tian Marar”) is a legal entity established in accordance with the Chinese law, which has its head office in the Chinese tenan. The Plaintiff is the subsidiary company of Marin.

5) The Defendants asserted maritime lien on the instant vessel after providing the instant vessel with the service at Pyeongtaek Port of the Republic of Korea, as seen below (C).

B. The time charter between the plaintiff and the tents

1) As above, on December 15, 2012, the date of delivery of the instant vessel, the Plaintiff concluded a time charter with the content of the time charter for one year of the instant vessel on December 15, 2012 (hereinafter “instant time charter”).

2) The instant time charter was concluded using the standard form of New York Product Exchange (New York Ex 1946 Amendment Form) contract (Evidence A 3) in 1946.

3) 이 사건 정기용선계약서 제18항(용선계약서 제112 내지 113행) 및 정기용선계약서에 첨부된 약관 제104조는 ‘용선자는 선박소유자의 선박에 대한 소유권이나 권리를 해치는 어떠한 선박우선특권이나 담보권 등을 설정·실행되지 않도록 한다(Charterers will not suffer, nor permit to be continued any lien or encumbrance incurred by them or their agents which might have priority over the title and interest of the Owners in the vessel.)’고 규정한다. 그 중 약관 제104조는 이에 덧붙여 아래와 같은 내용을 추가하고 있다(이하 정기용선계약 제18항 및 약관 제104조를 모두 합하여 ‘이 사건 선박우선특권금지조항’이라고 한다).

Article 104 of the Terms and Conditions (BIMCO Nron-Liuse)

No charterer shall enter into a contract for supply of goods, services, etc. necessary for the navigation of a ship without a prior written consent from the provider of goods, services, etc. necessary for the navigation of the ship to receive such goods, services, etc. from the charterer on the responsibility of the charterer, and no shipowner shall bear any responsibility therefor and no shipowner shall claim a maritime lien on the ship).

C. The Defendants’ claim on the instant vessel

1) From November 8, 2012 to July 21, 2013, Defendant Heung Sea Co., Ltd. (hereinafter the Defendants’ marks are omitted) provided tugboats services equivalent to KRW 68,376,148 in total with the instant vessels at Pyeongtaek Port.

2) From November 8, 2012 to March 6, 2013, Defendant Pyeongtaek-jin provided 1,643,900 won in total to the instant vessel at Pyeongtaek-si navigation services.

3) From December 14, 2012 to July 21, 2013, Defendant Daeyang provided the instant vessel with contact security assistance equivalent to KRW 6,800,000 in total.

4) From November 8, 2012 to July 21, 2013, Defendant Jeong Jong-do provided the instant vessel with container tamping services of a total amount of KRW 24,263,000 to the instant vessel, as well as KRW 24,263,00.

5) From November 8, 2012 to July 21, 2013, Defendant Seocho Shipping provided each of the instant vessels with customs clearance services equivalent to KRW 12,060,00,00 in total as to the instant vessel at Pyeongtaek Port, including entry into ports equivalent to KRW 16,20,00,00 in total, securing of stone, pilots’ interference, and support for unloading and loading of cargo, and the instant vessel at Pyeongtaek Port from January 1, 2013 to July 22, 2013 (hereinafter “instant service claim”).

6) Meanwhile, among the service claims of the Defendants in this case, the part arising before the date of the time charter ( December 15, 2014) is as indicated in the separate sheet 2 attached hereto.

D. The Defendants filed an application for two vessel auction with respect to the instant vessel with the Plaintiff as the debtor and owner, and received a decision to commence each auction procedure on July 30, 2013 and August 1 of the same year (the Suwon District Court Decision 2013No. 12288, 2013, 12400, Suwon District Court Decision 201No. 12400).

[Reasons for Recognition] Unsatisfy, Gap evidence 1 to 4 (including each number, hereinafter the same shall apply), Eul evidence 5, the purport of the whole pleadings

2. Summary of the parties' arguments

A. The plaintiff

1) Of the instant service claims, the part arising after the date of the conclusion of the instant time charter contract ( December 15, 2012), regardless of the Plaintiff, is the part arising out of the charterer, and thus, the Plaintiff, the shipowner, does not assume the responsibility for the Plaintiff (the Plaintiff came to the first instance, and the Plaintiff recognized the maritime lien on the instant service claims as indicated in the attached Table 2, which occurred before the conclusion of the instant time charter contract).

2) In addition, Article 114(3) of the Liberian Maritime Law imposes a reasonable duty of investigation on suppliers of goods, services, etc. necessary for the navigation of a ship in the instant time charter. Since the Defendants provided services, etc. as seen earlier without performing the said duty, the Defendants cannot claim for maritime lien.

B. The Defendants

1) Both the Plaintiff and Scar letters are merely a document company, and the actual owner of the instant vessel is the stude. Upon applying for the auction of the instant vessel, the Defendants filed the instant lawsuit by ex post facto writing the instant sales contract and the time charter, etc. Even if the said contract or time charter was duly established, the clause prohibiting maritime lien (Article 104 of the Terms and Conditions) is ex post forged.

2) Even if the time charter of this case, including the prohibition clause on maritime lien, was duly established, the Defendants have the maritime lien under Article 114(1) of the Liberian Maritime Law.

A) Article 30 of the Liberian Maritime Law declares that the General Maritime Law of the United States applies mutatis mutandis to the Liberian Maritime Law, and Article 973 of the Liberian Maritime Law was deleted in 1971, and accordingly, the U.S. Supreme Court has interpreted that there is no duty to investigate whether the goods or services supplier of the vessel is the owner of the vessel or the owner of the vessel or not the owner of the vessel or the owner of the vessel is the owner of the vessel or not the owner of the vessel or the owner of the goods or services is the owner of the vessel or the owner of the goods or services is the owner of the vessel or the owner of the goods or services is the owner of the vessel or the owner of the vessel is the owner of the goods or services

B) Therefore, the service supplier, such as the Defendants, does not bear the duty of investigation as alleged by the Plaintiff.

C) At the time of providing the instant vessel with the service related to the instant service claim, the Defendants did not know of the terms of the contract, such as the prohibition of maritime lien between the Plaintiff and the time charterer, which is the shipowner and could not be known. Therefore, the Defendants had a maritime lien as to the instant service claim under Article 114(1) of the Liberian Maritime Law.

3. Determination

A. Order of determination

First of all, we examine whether the contract between the Plaintiff and Scaria was established and whether the time charter contract between the Plaintiff and Scaria was established, and then examine whether the Defendants’ maritime lien was established (to the extent of supplement in case of the allegations and materials submitted by the Plaintiff and the Defendants after the closing of argument in the trial).

B. Determination on the establishment of a sales contract and a time charter, and the fabrication of a time charter

1) The governing law of determination

A) The issue of whether the sales contract between the Plaintiff established under the Hong Kong law and Switzerland established under the laws of the State of Liberia and the establishment of a time charter between the Plaintiff and Switzerland established under the laws of the State of Liberia is a foreign element and the governing law of the determination under the Private International Act should be determined.

B) According to the written evidence Nos. 3 and 4, it is recognized that the governing law in the sales contract of the Plaintiff and Scarri is China law, and the governing law in the time charter contract between the Plaintiff and Scarri is stipulated in the English law. As such, the Plaintiff and Scarri’s claims contract are concluded with the Plaintiff and Scarri’s claims contract, and the establishment, validity, etc. of the contract and the time charter contract between the Plaintiff and Scarri are determined as the governing law in accordance with Articles 29 and 25 of the Private International Act.

2) Determination

In full view of the statements in Eul evidence Nos. 7 through 10 and the purport of the entire pleadings, the instant vessel was registered in Liberia and registered in the name of Liberia, but Liberia managed the instant vessel since August 6, 199. The Plaintiff was established pursuant to the Hong Kong Act, but the Plaintiff owned 9 weeks out of the total number of issued and outstanding shares of which was 100, and it was recognized that the Plaintiff was introducing the Plaintiff as its subsidiary. At the first instance court, it was recognized that the Defendants requested the Plaintiff to submit to the Plaintiff the sales contract between Liber and Liberia, the relevant documents that the Defendants concluded the time charter between Liber and Liber, and the documents that the Plaintiff did not comply with the request, but the fact that the Plaintiff did not comply with the request is apparent in the record.

However, in full view of the following circumstances that are acknowledged by comprehensively taking account of the purport of the entire arguments as a whole, the following circumstances can be sufficiently recognized to establish a sales contract between the Plaintiff and Scarri, the establishment of a time charter between the Plaintiff and Scarri, and the authenticity of each contract. The above circumstances or the grounds cited by the Defendants alone are insufficient to reverse it, and no other counter-proof exists.

① There is no ground to view that there is no special procedure or form for the establishment of a vessel sales contract or a time charter contract between the Plaintiff and Scarei, China, which is the governing law of the sales contract between the Plaintiff and Scari, and the United Kingdom, which is the governing law of the time charter between the Plaintiff and Scari.

② The instant vessel was originally registered in Switzerland’s name, but its registration was changed to the Plaintiff’s name on January 201, 2013. As can be seen, the fact that the registration was changed to the Plaintiff’s name with respect to the instant vessel is also recorded in the European Ship Information System (Equasis and Equas No. 7), which asserts that the Defendants themselves use the largest number of people engaged in the maritime industry. Furthermore, the instant vessel was sailing. Furthermore, the Defendants also filed an application for auction on the instant vessel with the instant vessel by taking the instant service claim into account the instant service claim, where the Plaintiff was the owner of the instant vessel, and the Defendants requested the Defendants to provide the instant vessel with the instant service upon obtaining lawful authority from the Plaintiff and requesting the Defendants to provide the instant vessel. This fact can be known to the effect that the vessel sales contract between the Plaintiff and Switzerland and the time charter between the Plaintiff and Maman.

③ There is no evidence to deem that Switzerland is merely a document company for the registration of the instant vessel in Liberia, and even if Switzerland is merely a document company, there is no evidence to deem that Switzerland is also a de facto owner of the instant vessel.

④ In addition, even though Ten percent of the Plaintiff’s shares were owned by the Plaintiff’s mother company, such circumstance alone does not necessarily mean that the Plaintiff’s shares were denied the Plaintiff’s legal personality under the Hong Kong law or the law of China, a Chinese law, a Chinese law, a Chinese law, a Chinese law, that established the Plaintiff’s parent company, and therefore, tents cannot be deemed to be the owner of the instant vessel despite the instant sales contract.

⑤ During the instant lawsuit, the Defendants did not dispute the authenticity of the sales contract or the time charter, and only the interpretation of the maritime lien provision under Liberia Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime. However, the Defendants, at the appellate trial, denied all the premise of the judgment of the court of first instance, and demanded the Plaintiff to submit various data upon the Plaintiff’s submission of the evidence. However, the Defendants did not explain the following grounds: (a) in general, there are several negotiations on the sales contract of the vessel or the time charter; (b) the conclusion of the said contract requires several times of negotiations; (c) so, there is no signature or seal of the parties. However, it is difficult to accept the Defendants’ assertion that the Plaintiff did not comply with the Defendants’ request in light of such circumstances.

(6) Meanwhile, the Defendants stated that Article 29 through 86 of the terms and conditions of the time charter are attached to the terms and conditions of the time charter submitted by the Plaintiff. Since Articles 29 through 113 of the terms and conditions of the time charter submitted by the Plaintiff are attached, at least, the prohibition of maritime lien under Article 104 of the terms and conditions of the time charter was

However, Article 18 (No. 112 or 113 of the Charter) provides that "the charterer shall not establish and enforce any maritime lien or security right which damages the shipowner's ownership or right to the ship." In light of the above, even if Article 29 or 86 of the Terms and Conditions of the Charter are attached to the Terms and Conditions of the Charter, it cannot be deemed that Article 104 of the Terms and Conditions of the Charter does not exist after being attached to the Terms and Conditions of the Charter. Even if Article 104 of the Terms and Conditions of the Charter is attached after the fact, it is difficult to accept the Defendants' assertion that there was no provision prohibiting maritime lien of the charterer under Article 18 of the Terms and Conditions of the Charter.

C. Determination as to the establishment of maritime lien under Article 114 of the Liberian Maritime Law

1) The governing law of determination

A) The instant lawsuit, for which the Plaintiff established under the Hong Kong law seeking, against the Defendants established under the laws of the Republic of Korea, the absence of maritime lien on the instant vessel of Liberian registry, is a foreign element, and the governing law of determination under the Private International Act should be determined.

B) Article 60 Subparag. 1 of the Act on Private International Law provides that ownership and mortgage of a ship, maritime lien, and other real rights on a ship shall be governed by the law of the country of registry. Thus, the law of the country of registry of the ship of this case shall be the law of the Republic of Liberia as the country of registry. Therefore, whether the Defendants acquired a maritime lien on the ship of this case shall be determined by the law of the Republic of Liberia.

(ii) a provision relating to Liberia Maritime Law;

가) 제30조: 미국 일반 해상법 준용 - 본 법의 다른 규정과 충돌하지 않는 한 성문화되지 않은 미국의 일반 해상법이 라이베리아국 일반 해상법으로 준용/적용되는 것임을 선언한다(§30. Adoption of American General Maritime Law. - Insofar as it does not conflict with any other provisions of this Title, the non-statutory General Maritime Law of the United States of America is hereby declared to be and is hereby adopted as the General Maritime Law of the Republic of Liberia.).

B) Article 114

Paragraph 1: Paragraph 1 of this Article: any person who, at the order of the shipowner or a person authorized by the shipowner, supplies a foreign or domestic ship's repair, parts, tugboat, or vessel's shipbuilding stand or at the maritime storage stand, or other essential goods to the ship's vessel shall have a maritime lien on the ship (§ 114 (1) Whoeververververververver furter, supp, toage, Use dryd Dryd Dryd Road, eceleway, eceleththth, eththor Do, eththor Do, or Dom Domor Domor Domor Domor Domor Dom Domor Domor Dom Dom Domn Dom Dom Dom Dom nel, sallh hir hire hir h.

Paragraph 2: A shipowner, a person who is authorized to manage a ship at a port where the goods of the ship were procured (including a charterer, a temporary shipowner, or a person appointed by the buyer) is presumed to have been authorized by the shipowner to lawfully order the ship in order to supply the essential goods of the ship: Provided, That a person who illegally acquired the possession or right of the ship does not have the authority to bound the ship (§ 114(2)). A person who illegally obtains the possession or right of the ship shall not have the authority to bound the ship (§ 114(2)). A person shall be deemed to have been authorized to do so; a husband, a husband, a Dom, or a Dom. Dom. Dom. Dom. Dom. Dom. Dom. Dom. Dom. Dom. Dom. Dom. Domm. Dom. Domm. Dom. Dom. Dom. Domm. Dom.

제3항: 물품공급자가 용선계약상의 계약조항이나 선박의 매매계약상 합의 또는 다른 이유를 통해 선박에 물품공급을 주문한 자가 선박을 기속할 권한을 가지지 않고 있음을 알았거나 합리적인 조사를 통해 이를 알 수 있었을 경우에는 본 조항에 따른 우선특권은 발생하지 아니한다(§114. (3) This Section shall not confer a lien when the furnisher knew, or by exercise of reasonable diligence could have ascertained, that because of the terms of a charter party, agreement for sale of the vessel, or for any other reason, the person ordering necessaries was without authority to bind the vessel therefor.).

3) Interpretation of Article 114(3) of Liberian Maritime Law

A) In a case where the content and meaning of a foreign law applicable to a legal relationship containing foreign elements are determined and interpreted, such foreign law should be interpreted and applied in accordance with the actual meaning, content, etc. of the foreign law in its home country. Only if it is impossible to confirm the content because data on the foreign precedents or interpretation standards are not submitted during the litigation process, the meaning and content of the law can be determined in accordance with the general legal interpretation standards (see Supreme Court Decision 2008Da54587, Jan. 28, 2010, etc.).

B) However, with respect to the interpretation of Article 114(3) of the Liberian Maritime Law, the provision that “if a supplier might have known that he/she would not have the right to speed the ship through a reasonable investigation, no lien shall be granted” is submitted to Liberian Maritime State until the trial is held, and its specific contents cannot be confirmed differently. Therefore, in this case, the meaning and contents of the above provision shall be determined in accordance with the general legal interpretation standards in accordance with the above legal doctrine.

C) In full view of the following circumstances acknowledged by comprehensively taking account of the purport of the arguments as a whole, it is reasonable to interpret Article 114(3) of the Liberian Maritime Law as follows: “A supplier of goods or services necessary for the operation of a ship is obligated to inquire and investigate whether or not he/she charters the ship and the charterer is authorized to bind the ship, and a supplier shall not claim a maritime lien unless he/she performs such obligation.”

(1) Article 114(1) through (3) of Liberian Maritime Law provides that Articles 971 through 973 of title 46 (S section 971-973) of title 46 shall be the same as that of the United States Code, and Section 971-973 of title 46 shall be the United States Code, and Section 971-973 shall be the same as Section 46 of title 46 (S section 971 to 973 of the United States Obstruction Commercial Act).

However, with the amendment of the U.S. Law in 1971, Article 973 of the Liberian Maritime Law was deleted. On the other hand, Article 114(3) of the Liberian Maritime Law has been maintained until now without deletion or revision.

(2) Meanwhile, Article 30 of Liberian Maritime Law provides that, unless it conflicts with other provisions of Liberian Maritime Law, the General Maritime Law of the United States shall apply mutatis mutandis to non-sexd non-legal provisions of the General Maritime Law of the United States. Thus, the Maritime Law of the United States shall be an important court for interpretation of Article 114(3) of Liberian Maritime Law.

(3) With respect to “reasonable investigation” under Article 973 of the former Obstruction Act before the amendment in 1971, the Supreme Court of the United States v.S. Supreme Court of the United States (260 U.S. 482(1922)) held that in the case of a charter contract, if a supplier of goods or services agreed that a vessel may not have a security right, a charterer may not claim a maritime lien unless the supplier of goods or services was aware of the existence of such a security prohibition clause. Since the amendment in 1971, the court of the United States changed its attitude to the position of not imposing a duty of investigation prior to the previous precedents to the supplier instead of the previous precedents.

(4) In the application of the case of this case to the U.S. courts since 1971, where Article 973 of the U.S. Obstruction Commercial Act was deleted, which did not impose the duty of investigation on the suppliers, this is not only inconsistent with the current Liberian Maritime Law Article 114(3) but also is clear that the legislative intent of the above provision is going against.

(5) Therefore, it is the most reasonable interpretation that Article 114(3) of the Liberian Maritime Law is in accordance with the case law of the U.S. court (the previous case before 1971) at the time when Article 973 of the former Maritime Law of the United States exists.

4) Whether the Defendants perform their duty of reasonable investigation

As seen earlier, Article 114(3) of the Liberian Maritime Law provides that the Defendants shall have the duty of reasonable investigation to the suppliers claiming the maritime lien and shall actually confirm it. The Defendants, prior to the provision of services, etc. as seen in the underlying facts of the instant vessel, provided services, etc. to the lusian Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime Maritime

4. Conclusion

Thus, the plaintiff's claim of this case shall be accepted only for the part that occurred after the date of the conclusion of the time charter of this case ( December 15, 2012), and the remainder of the claim shall be dismissed as it is without merit. The judgment of the court of first instance shall be modified as above, and it is so decided as per Disposition.

[Attachment]

Judges Noh Tae-tae (Presiding Judge)

주1) In no event shall Charterers procure, or permit to be procured, for the vessel, any supplies, necessaries or service without previously obtaining a statement signed by an authorized representative of the furnisher thereof, acknowledging that such supplies, necessaries or services are being furnished on the credit of the Charterers and not on the credit of the vessel or of her Owners, and that the furnisher claims no maritime lien on the vessel therefore.

2) The U.S. courts have interpreted this equally with respect to Article 114(3) of the Liberian Maritime Law in 1971. In other words, where the interpretation of Article 114(3) of the Liberian Maritime Law was at issue after the deletion of Article 973 of the U.S. Maritime Law in 1971, the U.S. District Court of America held that on April 3, 1998, Article 114(3) of the Liberian Maritime Law is entirely identical with Article 973 of the Liberian Maritime Law before the amendment in 1971, the District Court of Liberian Maritime Affairs has a duty to reasonably investigate whether the supplier who claims maritime lien is chartered of the ship and whether the charterer has the power to bind the ship, and that maritime lien cannot be claimed if the supplier fails to perform this duty (Article 114(3) of the Liberian Maritime Law of 3 April 1998).