The 'SANKO MINERAL' – Claim In Rem Issued Following A Court Order To Sell Vessel Held To Be Valid

A party with a statutory right to an admiralty claim in rem, which had issued its claim after the Admiralty court had ordered the sale of a vessel, did not lose its right to enforce the claim1. The claim in rem could be enforced against the sale proceeds provided that the person liable in personam was the beneficial owner of the sale proceeds.

Facts

The Defendant, Sanko Mineral (Sanko), owner of the MV "SANKO MINERAL" (the Vessel), applied for the strike out or withdrawal of a caution against release of the sale proceeds of the Vessel, which had been requested by Glencore, and for payment out of the same proceeds of sale.

The Vessel was the subject of various attachments, in Baltimore, by Sanko's creditors , and was thus delayed on her voyage from Bulgaria to New Orleans, whilst carrying Glencore's cargo. On 7 May 2012, while the Vessel was delayed, Glencore commenced a claim in the local court for breach of contract of carriage. It was Glencore's position that, as a consequence, it obtained a maritime lien over the Vessel. Pursuant to the charterparty, any claim would be deemed to be absolutely disbarred unless made to an arbitrator within 12 months of cargo discharge. Such claim was never made. The Vessel was released from its attachments on 2 August 2012, having been delayed by almost four months.

Meanwhile, Sanko petitioned in Tokyo for the commencement of insolvency proceedings and, thereafter, entered into reorganisation proceedings on 23 July 2012. The English court recognised those proceedings as the main foreign proceedings under the Cross-Border Insolvency Regulations 2006. Glencore subsequently submitted two claims in those proceedings which were rejected by Sanko's Trustee. Glencore petitioned against that decision, and these petitions remained outstanding at the time of this hearing.

A reorganisation plan was approved on 17 October 2013, under which the Trustee was to sell Sanko's vessels, and the proceeds of sale were then to be paid in satisfaction of the secured reorganisation claims. Glencore's claims were, at the time of the hearing, still pending, and as such Glencore had not yet accrued a right to be paid out of the proceeds of sale.

In 2014, the Bank of Tokyo-Mitsubishi UFJ Ltd (the Bank), which held a mortgage on the Vessel, issued an in rem claim in the English Admiralty court, and the Vessel was arrested in May 2014. The Bank subsequently obtained judgment on its claim, and the sale of the Vessel was advertised.

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