Where a procedure of auction based on a maritime lien has been completed, whether the other maritime lien has been extinguished or not.

The ship creditor with a preferential right has the right to demand a public auction under Article 869 of the Commercial Act, so in principle, he may exercise the right to demand a public auction regardless of the change of ship ownership. Therefore, even if the change of ownership is made through an auction, the lien may be asserted against the successful bidder. However, once when the auction procedure is completed by exercising the right to demand a public auction, all the lien existing on the ship until the completion of the auction price, which is the time of transfer of ownership, shall be extinguished.

§ 861, 866, 867, 868, 869 of the Commercial Act, Article 3 of the Auction Act

Maximum Britain et al. and six others

Busan District Court (Law Firm 1760 delivered on April 1, 200)

Each appeal shall be dismissed.

The gist of the grounds for appeal is that the appellant filed an application for voluntary auction on the instant vessel under Article 861 (1) 5 of the Commercial Act by entering into a contract for repair construction works for the instant vessel or for supply of various vessel supplies from September 15, 1986 to November 27, 1986, when the appellant was at anchor in a wooden port or blacksando Port other than the port of registry (hereinafter referred to as the “instant vessel”) and the captain of the instant vessel, which had been at anchor of the instant vessel, and thereby, he/she acquired the claim with the maritime lien under Article 861 (1) 5 of the Commercial Act, but the court of auction at the original court dismissed the said application for auction on the ground that the appellant extinguished the aforementioned lien due to the termination of the auction procedure after filing an application for voluntary auction by the creditors of the vessel having the other maritime lien on the instant vessel. It is unreasonable to do so by misapprehending the legal principles on the right to estimate maritime lien.

Therefore, it is reasonable as a general theory that, in principle, a ship creditor with a lien has the right to demand an auction regardless of the change of a shipowner, and in case the change of ownership is made through an auction, the successful bidder can claim the lien. However, in case where the auction procedure is completed by exercising the right to demand an auction and the auction procedure is completed by the ship creditor, all the lien attached on the ship until the successful bid price is paid in full, the time of the transfer of ownership shall be deemed to be extinguished. The first reason is that Article 3 (2) of the Auction Act, which provides that all the mortgage existing on the ship at the time of the auction shall be extinguished by the reason of the mortgage, may be applied mutatis mutandis to the above lien, and second, if it is not seen above, it is possible to sell without the lien at the time, so it would seriously undermine the safety of transaction and trust in the auction procedure, as well as trust in the court, and if the ship price is fully satisfied, each of the lien shall obtain the entire priority provisions of the Commercial Act in order.

In light of the record, the National Federation of Fisheries Cooperatives filed an application for voluntary auction on March 16 of the same year with respect to the ship of this case on March 12, 1987 by the National Federation of Fisheries Cooperatives (No. 87l3691), and the decision of commencement of the auction on March 16 of the same year was made by the National Federation of Fisheries Cooperatives (No. 87l3691). On July 4, 1987, non-applicants and 25 crews of this case filed an application for voluntary auction on the basis of wage claim with priority under Article 861 (1) 2 of the Commercial Act against the ship of this case, and attached the record on July 6 of the same year to the above case on July 30 of the same year, the National Federation of Fisheries Cooperatives (the National Federation of Fisheries Cooperatives) acquired the ownership of the ship of this case on July 30 of the same year by completely paying the auction price on the ship of this case on August 25, 1987.

Thus, insofar as it is evident that the creditors with the lien already exercised the right to claim an auction before the appellant's request for auction of this case, and the auction procedure was completed by exercising the right to claim an auction, and all of the creditors with the lien of this case incurred prior to the date of the full payment of the successful bid price, as seen earlier, the appellant shall lose all the lien upon termination of the previous auction procedure on the ship of this case, and therefore, the appellant's request for auction of this case constitutes a case where there is no underlying security right. Therefore, the original decision dismissing the appeal of this case is just, and the appeal of this case by the appellant is without merit, and it is so dismissed as per Disposition.

Judges Kim Jong-soo (Presiding Judge)