After more than ten days of its ships being stranded at sea, Hanjin Shipping finally saw a slight turnaround.
On September 12th, Beijing time, a container ship under Hanjin Shipping finally began unloading at Long Beach Port in Los Angeles after nearly 20 days of arrival, becoming the first Hanjin owned ship to unload at an overseas port since August 31st.
After South Korea entered the court takeover process, Hanjin Shipping is expanding its application for bankruptcy protection to 43 countries around the world to prevent its ships and cargo from being seized by creditors. According to estimates, Han Jin's ships currently trapped at sea are carrying approximately $14 billion worth of goods, implicated by manufacturers such as Samsung and Nike.
The New Jersey District Court of the United States Bankruptcy Court was the first to respond, ruling on September 9th local time to recognize the bankruptcy protection granted by South Korean courts to Hanjin Shipping, allowing Hanjin's four ships to safely unload at US ports.
On September 12th, Ji Yufeng, a partner of Shanghai Huiye Law Firm, introduced to 21st Century Economic Report reporters that both the United States and South Korea have signed cross-border bankruptcy laws for United Nations agencies, which is the basis for US courts to recognize South Korean rulings.
However, Han Jin ships along the coast of China are not so lucky. The 21st Century Economic Report reporter learned that more than ten ships with the name "Hanjin" have been stranded along the coast of China, with at least four ships in Shanghai, Xiamen, and Shenzhen having been detained.
Chen Youmu, a lawyer at Shanghai Yingtai Law Firm, told 21st Century Economic Report reporters that many ships with the name "Hanjin" are currently leased by Han Jin rather than owned by Han Jin, and even some have no connection with Han Jin's operations. Considering the cargo shared by the alliance on board, the handling of the situation after the seizure of the ship will still be very complex.
The most crucial thing is how to solve the dock fees and shipowner rent, "Chen Yumu said. Previously, Hanjin Group announced that it would raise 100 billion Korean won to resolve the current freight stalemate. However, the emergency funds were still not in place until September 12th, and the tug of war between Hanjin Group and the South Korean government continued.
Han Jin broke the game in the United States
The United States has become the "savior" for Han Jin to break through global port blockades. After the first Hanjin Greece to begin unloading on September 12th, Han Jin will have three container ships unloading at Long Beach Port in Los Angeles.
On September 10th, the New Jersey District Court of the United States Bankruptcy Court released the application documents submitted by Han Jin, which showed that Han Jin cited the judgment of the Seoul Central District Court approving his bankruptcy application as a basis for seeking court support.
There are actually two understandings for Han Jin seeking bankruptcy protection in other countries, one is to directly apply for bankruptcy protection, and the other is to seek local court recognition of the existing judgments of South Korean courts. "Ji Yufeng pointed out to 21st Century Economic Report reporters that Han Jin's application in the United States should be the second type.
Ji Yufeng explained that this is because both the United States and South Korea have signed the United Nations Commission on International Trade Law Model Law on Cross border Insolvency, and the Korean court's judgment granting Han Jin bankruptcy protection can only be recognized by the US court.
But apart from Long Beach Port in Los Angeles, there have been no reports of other ports in the United States accepting ships from Han Jin to dock. An important factor is that Hanjin Shipping itself is a major shareholder of Total Terminals International, the largest terminal at Long Beach Port.
According to previous plans, Hanjin Shipping will require bankruptcy protection in 43 countries worldwide. In countries such as the UK and Japan that have joined the Cross Border Insolvency Model Law, Han Jin's application may be more easily recognized by the court. In fact, there were reports on September 12th that Han Jin had also applied for bankruptcy protection in the UK, but there has been no official confirmation yet.
However, Chinese Mainland, Hong Kong, Singapore and other countries and regions have not signed the Model Law on Cross Border Insolvency. Han Jin is expected to face great obstacles in seeking legal protection in these places.
Ji Yufeng introduced that China has always followed the principle of reciprocity for judgments made by foreign courts that have legal effect in China, which means that they must be in accordance with international legal documents that China has participated in.
From the past cases of foreign shipping companies seeking legal protection in China after bankruptcy, Chinese courts have not recognized the precedent of overseas bankruptcy court judgments. Therefore, even if Han Jin files an application in China, it is difficult for Chinese courts to recognize the ruling of Korean courts, "Ji Yufeng said.
Creditors' seizure of ships urgently requires Han Jin's investment
As Han Jin intensifies his search for legal support, creditors are also launching ship seizures around the world.
The latest figures show that globally, more than 80 ships under the Han Jin flag have been stranded in ports or nearby coastal areas unable to load or unload, with at least a dozen of them stranded along the coast of China. Ports often detain ships on the grounds of defaulting on port fees. The 21st Century Economic Report reporter learned that at least four of these ships have been seized at ports such as Shanghai, Xiamen, and Shenzhen.
A person from Hanjin Shipping's agent company in China told 21st Century Economic Report that two ships, Hanjin Sooho and Hanjin Duesseldorf, have been seized at Shanghai Port. Hanjin Sooho, named after Han Jin's founder Zhao Xiuhao, was supposed to leave as early as September 2nd, but is still stuck in the Yangshan Port area to this day.
The impact of the seizure of Han Jin's ship on Chinese cargo owners and freight forwarders varies depending on the status of the goods. Ji Yufeng introduced that including return boxes that have already entered customs but have not yet been loaded on board and import boxes that have been unloaded but have not yet been cleared from customs, as long as they are on the ground, they are relatively easy to handle. Many port customs have put forward countermeasures specifically for how to clear Han's goods, "but those on board cannot be handled," he said.
But even if the goods are at the port, it is not easy to pick them up. According to a document seen by 21st Century Economic Report reporters, Shanghai Hanjin Freight Company requires that if you want to pick up a container, you must first pay a deposit for the container. The deposit will be refunded after one week, with the highest amount being 320000 yuan per container. Freight forwarders also face similar deposit requirements when picking up containers at other ports, but it is unknown whether the deposit can be returned on time.
China has not signed relevant cross-border bankruptcy laws, which is actually a great benefit for creditors. Chen Youmu, who provided legal services for the stranded "Snow Dragon", told 21st Century Economic Report reporters that according to the relevant provisions of the Maritime Law, creditors have the right to retain the goods in case of payment arrears.
However, the disposal after the arrest of the ship is very complex. Chen Youmu pointed out that many ships under Han Jin's flag are not owned by Han Jin, but are leased from third-party shipowners, and there are even some ships with Han Jin's name that are not actually related to Han Jin's operations.
According to the first quarter report of Han Jin, there are currently a total of 151 ships operated by Han Jin, of which only 60 are self owned, and over 60% are leased. The 21st Century Economic Report reporter learned that the Hanjin Sooho ship detained at Yangshan Port is not actually owned by Hanjin Shipping, and it only has operational rights.
Previously, Maersk also stated that although the Hanjin New Jersey and Hanjin Florida operated by Maersk had the name Han Jin, the ownership and operation of both ships were not related to Han Jin.
All eyes are focused on Hanjin Group, which promises to invest in rescuing the crisis. The 100 billion Korean won (approximately 90 million US dollars) promised by Hanjin Group to raise has still not been approved by the board of directors, and the personal contribution of 40 billion won proposed by the President of Hanjin Group has not been fully funded. On September 12th, Choi En ying, former president of Han Jin Shipping from the same family, also proposed a personal contribution of 10 billion Korean won, but it is still uncertain when these promised capital injections will be finalized.