Hanjin Shipping In Receivership - What Happens Now?

Hanjin Shipping In Receivership What Happens Now? Hanjin Shipping went into receivership on 31st August 2016 and it is likely that containers will be held for some time as part of a complicated insolvency process. There are reports that vessels may have already been arrested and the receivers will need to address the position of this as soon as possible. Whether goods are on board vessels or in the loading or discharge ports, cargo owners could face considerable delays in obtaining delivery of their goods.

Responsibilities of goods’ owners Goods’ owners will need to assess their responsibilities to customers in line with their contract of sale. If sales were under a timed delivery arrangement, it may be that the goods’ owners will need to look at the possibility of replacement shipments to avoid penalties being incurred. Putting cargo insurers on notice If the goods have been insured the matter should be reported to the Marine All Risks Insurers so that the position of cover available can be assessed. Most insurance will be arranged under Institute Cargo Clauses (A) which contains an exclusion for loss caused by delay, even if caused by a “risk insured against”. Delay does not in itself cause physical loss of or damage to cargo which would trigger a claim under the insurance. ICC (A) also contains an insolvency exclusion where claims would be excluded if the assured has knowledge of an impending insolvency which would affect the voyage. This requires investigation as to whether the assured knew, or should have known, that the insolvency would cause a loss before the exclusion can be applied. If the transit terminates at a port other than was originally intended, the ICC (A) contains a forwarding costs provision.

Forwarders’ liability For forwarders who trade under the British International Freight Association (BIFA) conditions, the holding of containers by a shipping line is an event that a BIFA member could not have avoided. Similarly, BIFA members would be unable to prevent some of the consequences of this event by exercise of reasonable diligence. Please refer to BIFA Clause 24(B). BIFA Clause 25 also relieves the BIFA member of responsibility with regard to any failure to adhere to agreed departure or arrival dates of goods, unless special arrangements have been previously made in writing. Further information is available online at www.bifa.org/news The way forward Customers and their appointed forwarders will need to liaise closely in deciding on the course of action to be taken, having first considered the contract of sale responsibilities and the possible effects of the delay in the release of the cargo. They will need to contact the receivers as soon as possible to seek guidance as to how they may gain release of containers; it is likely to be some time before the receivers are in a position to provide detailed information whilst they assess the full position of the insolvency. The possibility must be considered that even though delivery charges have been prepaid for services at the discharge port, these costs may need to be paid again in order to gain release of goods.

For further information, please contact Hazel Downes - Freight & Marine Manager e-mail: [email protected]

T: +44 (0)1628 532613 E: [email protected]

www.peterlole.co.uk