Hanjin Shipping, one of the world’s top ten container carriers has this month applied for a Court rehabilitation order in South Korea.
Hanjin Shipping, one of the world’s top ten container carriers transporting over 100 million tons of cargo annually on 141 ships, has this month applied for a Court rehabilitation order in South Korea, after reportedly having lost the support of its bankers.
The purpose of the rehabilitation order is to prevent creditors enforcing their claims against Hanjin’s assets while a rehabilitation plan is formulated and approved by the South Korean Court, with a view to enabling it to continue to trade.
Hanjin has moved swiftly in obtaining orders from other Courts around the world recognising the protection under the South Korean Court orders. Recognition of the South Korean rehabilitation proceeding has been obtained in the United States, United Kingdom and Japan, but the position remains unclear in other shipping hubs such as Singapore and Hong Kong.
There are however, containers on stranded Hanjin vessels around the world which have been refused entry to their destination ports. There are also reports of the arrest of Hanjin ships. Although Hanjin has not serviced New Zealand directly since last year, some New Zealand importers and exporters with cargo on Hanjin ships have been caught up in the situation.
Our clients with cargo on Hanjin ships should do the following:
notify your Broker as soon as possible and request a continuation of cover if carriage of cargo is terminated anywhere other than at the intended port of destination.
supply your Broker with the standard commercial documents to review the claim and advise us whether the cargo has been paid for by the buyer.
in the meantime, continue to act to minimise or avert any loss payable under the policy.
If there is any discharge of cargo prior to the intended port of destination, freight pre-paid to Hanjin should be treated as lost and clients may have trans-shipment costs to ensure delivery in accordance with the contract of sale or purchase.
Many policies will provide limited cover for additional expenses incurred for forwarding the cargo to its original or substitute destination, as a result of insolvency or financial default of carriers, such as in the case of Hanjin.
If you have any questions, please contact your Marine Insurance Broker.