Algyging Cambodia (Law Firm, Kim & Lee, Attorneys Gangnam-gu et al., Counsel for the plaintiff-appellant)

Dak Lone Star Shipping Co.

Escopd Raz ELC

Busan District Court Order 2007Ttagi580 dated July 10, 2008

1. The decision of the first instance shall be revoked;

2. This Court's decision to commence the auction of a vessel listed in the separate sheet shall be revoked on February 6, 2007 with respect to the vessel listed in the separate sheet No. 5839 on February 6, 2007.

3. The request for the auction of the ship of this case is dismissed.

4. This Court approves the stay of execution on September 18, 2008 with respect to the case where the suspension of the execution of the auction of the vessel (No. 5839) was applied for.

1. Basic facts

According to the records, the following facts are recognized.

A. The creditor is a domestic corporation operating a ship agency business, and the appellant (the appellant; hereinafter the appellant) is the owner of the ship listed in the annexed list (hereinafter the “instant ship”). The debtor is the charterer of the instant ship. Meanwhile, the port of registry of the instant ship is the port of registry.

B. From February 28, 2006 to July 30, 2006, the creditor paid 21,352,272 won (hereinafter “instant navigation expenses, etc.”) in total, including the entry and departure fees, anchorage fees, pilotage fees, pilotage fees, tugboat charges, towing charges, lecture charges, and pollution response expenses, etc., to the creditor, such as Busan Port Corporation, etc., on behalf of the debtor, who is the charterer of the instant vessel.

C. On February 5, 2007, the obligee filed an application for voluntary auction of the instant vessel with the above money claimed as the amount of debt secured by the maritime lien. On February 6, 2007, the instant court rendered a decision of voluntary auction of the instant vessel under No. 5839, Feb. 6, 2007. The appellant filed an objection against the decision of voluntary auction of the instant vessel. While the appellant filed an objection, the first instance court rejected the appellant’s objection.

2. Creditor's assertion;

A. The instant navigation expenses, etc. are the costs incurred in relation to the procedures enforced by the port authority at the time of entry and departure of the instant vessel, and the Russia's laws, the port authority of the instant vessel, recognize maritime lien on the instant cost claims.

B. The obligee entered into a contract with the obligor on behalf of the obligor, and paid the cost of the instant navigation expenses, etc. on behalf of the obligor according to the contract, etc. In addition, the obligee may subrogate the claim itself secured by maritime lien, and even if following the legal subrogation of the obligee under the law of Korea, the obligee may subrogate the Busan Port Corporation. Thus, the obligee has maritime lien on the instant vessel based on the claim for navigation expenses, etc. of this case.

3. Determination

(a) The applicable law of subrogation;

In order to secure a certain claim, maritime lien is specifically recognized by law, and it is difficult to exist or transfer independently from the secured claim. Thus, the issue of whether the maritime lien is valid or not can be discussed only when the transfer of the claim secured by the maritime lien is recognized. Thus, Article 60 subparag. 1 and subparag. 2 of the Private International Act provides that the maritime lien shall be governed by the law of the country of registry, whether a certain claim is secured by a maritime lien, the scope of the claims secured by a maritime lien, the priority order of the maritime lien, etc. Therefore, the matters concerning voluntary subrogation of the secured claim shall be governed by the law of the country of registry pursuant to Article 35(2) of the Private International Act, unless there are special circumstances (Supreme Court Decision 2005Da39617 Decided July 12, 2007).

In the case of this case, the governing law of claims, such as the navigation expenses of this case, shall be deemed to be the law of the Republic of Korea, so whether the subrogation of claims, such as the navigation expenses of this case, is recognized or not

B. Whether maritime lien is recognized upon subrogation of the person performing the obligation

(1) The term "person who has a legitimate interest in payment" in Article 481 of the Civil Act refers to a person who is legally entitled to benefit from performance. Meanwhile, the term "claim with a maritime lien" in Article 861 of the former Commercial Act means a claim with a maritime lien, if the shipowner or the ship operator has been provided with goods or expenses prescribed in each subparagraph of paragraph (1) of the same Article with respect to the ship and fails to perform his/her obligation due to the performance of obligations arising therefrom, is arising in order for the shipowner or the ship operator to be paid a priority over other claims by taking the ship as security, if he/she has paid the price to the provider of the effort, etc. as prescribed in each subparagraph of paragraph (1) of the same Article and has been provided with such effort, etc. (Supreme Court Decision 77Da1679 delivered on May 23, 1978).

In light of the above legal principles, even if the claims, such as navigation expenses, per se are secured by maritime lien, as alleged by the obligee, (i) the obligor, who is the charterer of the ship of this case, as a matter of principle; (ii) the obligee of Busan Port Corporation, etc., merely bears the above costs under the agreement with the obligor, and there is no legal obligation for the obligee to pay the port expenses, etc. in relation to Busan Port Corporation, etc., and there is no other evidence suggesting that the obligee would be legally damaged if the obligee would not pay the port expenses, etc. of this case on behalf of the obligor. Furthermore, the obligee cannot be deemed to have paid the port expenses of this case to the obligee of this case by subrogation in light of the fact that the obligee cannot be deemed to have paid the vessel expenses of this case to the obligee of this case by subrogation of the vessel’s duty and operation status (the port expenses, etc. of this case, which is to be paid on behalf of the obligee of this case in lieu of the vessel agency contract). Thus, the obligee of this case cannot be deemed to have paid damages to the obligee of this case.

(2) In addition, according to the records, it is recognized that the obligor paid USD 4,00,00,000,00,000,000,00,000,000 which is much more than the amount of the claim of this case to the obligee during the period in which the claim of this case occurred. In case where the obligor bears several obligations to the same obligee for the same kind, if the parties did not designate the obligation to be appropriated for the repayment, in the provision of performance, it shall be appropriated for the statutory performance pursuant to Article 477 of the Civil Act. In particular, according to Article 477 subparagraph 4 of the Civil Act, if the order of statutory performance is equal under Article 477 subparagraph 4 of the Civil Act, it shall be appropriated for the repayment of each obligation in proportion to the amount of each obligation. Thus, unlike the above proportional appropriation of payment by law, unlike the above proportional appropriation of payment, the obligor is liable to assert and prove the fact (see Supreme Court Decision 83Meu15639, Jan. 31, 1984).

Therefore, as seen above, the obligee should assert and prove that the money paid by the obligor was preferentially appropriated for the claim other than the claim of this case, etc., but there is no assertion or proof as to this, the obligee shall be deemed to have received reimbursement from the obligor, so long as there is no assertion or proof as to this, the obligee shall be deemed to have received reimbursement of the amount equivalent to the port expenses of this case, etc., which was paid by the obligee. In light of this point, it is difficult to view that

4. Conclusion

Therefore, the appellant's objection is justified, and the decision of the court of first instance is unfair, and the decision of the court of first instance is revoked, and the court of first instance revoked the decision to commence the auction of the vessel of this case as of February 6, 2007, 2007, 5839, and the creditor's request for auction of the vessel of this case is dismissed, and this court decides to authorize the suspension of execution of the auction of the vessel of this case as of September 18, 2008.

[Attachment]

Judges Lee Jong-soo (Presiding Judge)