Successful Resolution of Dispute under Foreign-related Ship Mortgage Contract with a Value of Subject Matter of CNY 275 Million
In recent days, Haikou Maritime Court has successfully mediated in and resolved a dispute under a contract for ship mortgage between BNP Paribas and Brightoil Gem Tanker Ltd. with a value of subject matter of CNY 275 million. The foreign plaintiff, BNP Paribas, opted to bring the action before Haikou Maritime Court among its other options of competent courts because of its recognition of and trust in Haikou Maritime Court and the law-governing business environment in Hainan. Haikou Maritime Court properly resolved the dispute on the principle of fair protection, thus protecting the lawful rights and interest of both litigants.
On 4 January 2019, BNP Paribas applied to Haikou Maritime Court for pre-trial maritime attachment and requested to arrest the vessel “Brightoil Gem” which was owned by Brightoil Gem Tanker Ltd. on the grounds that Brightoil Gem Tanker Ltd. had failed to repay a loan on time. BNP Paribas subsequently brought an action and during the proceedings applied to auction off the vessel. The vessel “Brightoil Gem” has a loading capacity of up to 300,000 tons odd and a value of approximately USD 60 million some. She is the vessel of the greatest tonnage and highest value that has been arrested by Haikou Maritime Court since its founding. The vessel is currently put up on Taobao Judicial Auction Online Platform for auction with a starting price of CNY 390 million. She is so far the vessel of the highest value to be auctioned off on the said platform. By 10 October, the auction has attracted 32,000 some spectators, and 370 some people have set up a reminder for it.
On 9 May, Haikou Maritime Court held a public hearing of the case. At the hearing, the defendant, Brightoil Gem Tanker Ltd., admitted that it had defaulted on the repayment of the loan but claimed that this was due to difficulties in its operations; the litigants also differed greatly over the calculation of interest on the loan, the apportionment of the attachment costs, attorney fees and relevant expenses, and the application of law.
Through the hearing and subsequent repeated efforts in mediation, the litigants willingly reached a settlement agreement through negotiations presided over by Haikou Maritime Court. They signed a settlement agreement in the courtroom after reaching agreement on the amount of the loan in dispute, the means of repayment, the scope of the ship mortgage, the apportionment of subsequent expenses, and other issues. Haikou Maritime Court issued a Civil Mediation Agreement at the litigants’ application and served the same on the litigants on 8 October. The case was thus successfully resolved.
The proper conclusion of the case has won recognition from both litigants and boosted the fair, efficient and authoritative image of Chinese maritime courts. It has significantly improved the international credibility of Chinese maritime justice. It mirrors Haikou Maritime Court’s commitment to providing high-quality and high-standard services in support of major national strategies such as the maritime power objective and the building of a free trade zone and a free trade port. It also shows the court’s efforts in creating a law-governing, international and convenient business environment.