Hanjin, South Korea’s largest sea container shipping company and the sixth largest container operator in the world, collapsed last week and has filed for bankruptcy protection in various jurisdictions around the world.
On 1 September the Korean authorities attempted to inject some much needed stability into the Hanjin saga. Hanjin has formally entered rehabilitation proceedings in Korea in an attempt to protect itself from its creditors. Similar proceedings are now expected in other jurisdictions to enable Hanjin to operate vessels that are stuck outside port limits.
The Hanjin collapse has sent shivers through the global logistics and cargo markets. Hanjin ships have been denied access to ports or have been detained upon arrival at ports. Cargoes have been and still are ‘stuck’ on Hanjin vessels across the world, risking massive losses and insurance liabilities. IY LEGAL has been consulting with a number of US law firms who represent logistics companies and with traders which have cargoes stuck on board Hanjin vessels. We have been able to provide English law assistance and advice on sale and purchase contracts, and retention of title and cargo ownership issues, to assist efforts to secure cargoes and tranship these to their final destinations, in some cases before they perish.
Whilst the intervention of the Korean authorities is welcomed, Hanjin’s creditors are circling and the decline of such a major operator is leaving a gap in servicing many routes, with associated upwards pressure on shipment costs. One leading logistics company has already obtained an ‘anti-gouging’ order to prevent other container operators taking advantage of the volume shortage to hike prices in a specific market.
Whether Hanjin can be rehabilitated will in large part depend upon how successfully it can protect itself from its creditors around the world. For now, the immediate priority remains to secure and achieve delivery of cargoes on board Hanjin ships.
For more information about steps that can be taken to obtain physical delivery of cargoes on board detained vessels and problems faced by cargo interest caused by Hanjin’s collapse, please visit www.iylegal.com or call us on +44 (0)207 1007714.