World Fuel Services Gets Green Light Over Hanjin Vessel Arrest, Paves Way for Further Bunker Bill Recovery Claims

Korea's Changwon District Court has upheld its decision to allow World Fuel Services to arrest the Hanjin Xiamen

Korea's Changwon District Court has upheld its decision to allow World Fuel Services (WFS) to arrest the Hanjin Xiamen over unpaid bunker bills, rejecting an appeal made by Hanjin Shipping (Hanjin) over the court's earlier decision on the matter.

Hanjin filed for court protection on August 31, 2016, and since then bunker suppliers have run into difficulties in their efforts to collect on some $64 million in unpaid bunker bills.

The U.S. and Singapore, for example, have both made rulings protecting tonnage operated by Hanjin, but not technically owned by them.

However, the original Korean court protection did not specify whether both owned and beneficially owned vessels were covered, and as Ship & Bunker reported earlier this month, the Changwon District Court decision to allow the Hanjin Xiamen arrest came after WFS argued that the vessel was not technically "owned" by Hanjin and therefore could not be considered an asset; rather, the vessel was only "beneficially owned" by them and registered to a special purpose entity established in Panama.

"Hanjin Shipping made a contract with a Panama SPC to take over the ownership of Hanjin Xiamen when the company fully pays the charter fee by the end of the contract. Since the contract term is valid until March 2019, Panama SPC must be considered as the owner of the vessel," Changwon judges said Monday in their appeal verdict.

The decision could now pave the way for further Hanjin operated vessels to be arrested, industry observers have noted.

Overall, World Fuel Services has lodged a claim against Hanjin for a total of KRW 24,461,629,837 ($21,728,413) in unpaid bills.