- Registration now open for the FFABA Tanker Freight Derivatives Forum
Coinciding with IP Week, the Tanker Freight Derivatives Forum is the world’s largest FFA gathering for the tanker market.
Hosted annually by the Baltic Exchange and FFA Brokers Association, the Forum features freight market insight and discussions.
Agenda Time Activity 13.30 Registration coffee 14.00 Opening remarks – Angus Procter, FFABA Wet Chair (Braemar ACM-GFI) 14.05 Market services update – Mark Jackson, CEO, Baltic Exchange 14.25 Oil and bunker markets outlook – Mike Davis, Director, Head of Market Development – ICE Futures Europe 15.00 Coffee break 15.20 Tanker market outlook & Sulphur Cap 2020 – Henry Curra, Head of Research, Braemar ACM 15.55
Panel discussion: Sulphur Cap 2020, volumes vs cargo flows, new contracts & benchmarks updates with:
Adrian Wooldridge, CCO, Navios Maritime
Angus Procter, Wet FFABA Chairman (Braemar ACM-GFI)
Chris Hudson, Senior Broker, FIS Fuel Oil
Simon Newman, Marine Strategy & Freight Trading, Phillips 66
James Pendered, Senior Freight Reporter, Baltic Exchange
17.00 Drinks hosted by the FFABA at Punchbowl
The event is free to attend for freight and derivative traders and those interested in trading exposure to tanker rates.
- Member update: 16 January
The following company has applied for Corporate Membership:
Company Individual Concord Maritime LLC Mr J Hurley Olympia Shipbroking Inc Mr C Lymperopoulos
The following individuals have applied for membership of an existing member company:
Company Individual BACA – The Baltic Air Charter Association
Mr C Lietaert Mr E Costa Mr W Barrett Clarksons Platou Miss N Topalovic Clyde & Co LLP
Mr C Wang Miss E Steel Mrs M Karali
Mrs N Kanavou International Association of Independent Tanker Owners Mr D Dimopoulos Fearnleys A/S Mr D Kilen
Any comments should be passed to Karen Karanicholas by 23 January 2019.
- Can an arresting party freely-release an arrested vessel?
The Singapore High Court held in The “Long Bright”  SGHC 216 that where the court has ordered the sale of an arrested vessel, the arresting party is not entitled to release and stop the judicial sale of the vessel as a matter of right. It must apply to the court for a discharge of the sale order before releasing the vessel.
This case provides helpful guidance on the Singapore approach in determining whether or not to discharge a sale order for an arrested vessel. In a simple case where there is only one claimant against the vessel, an application for the discharge of the sale order may likely to be straightforward.
However, such an application may be more challenging where interests of multiple claimants against the vessel have to be considered. If all the claimants (other than the arresting party) unanimously oppose the application and they can show that their interests would be significantly prejudiced by the discharge of the sale order, these factors may well weigh heavily with the court against discharging the sale order, even if the arresting party’s claim has been paid.
The plaintiff shipyard arrested the vessel Long Bright in Singapore for its claim against her owners, and obtained an order for the vessel to be sold pendente lite. There were other claimants with claims against the vessel. After the vessel had been advertised for sale, the shipyard filed an application to discharge the sale order and to release the vessel. In this regard, the shipyard made, inter alia, the following submissions:
- The shipyard’s claim had been settled by the mortgagee of the vessel and therefore, the shipyard no longer had any claim against the vessel or her owners. Further, the mortgagee planned to commence a separate in rem action to arrest the vessel for its own claim;
- Where a plaintiff or arresting party seeks the release of an arrested vessel following the settlement of its claim, the release is as of right, and is not conditional upon the discharge of the sale order; and
- Since the shipyard was entitled to discontinue the action without leave (given that no defence had been filed), the sale process could not continue once it filed a notice of discontinuance. Therefore, the release of the vessel could not be conditional on the sale order being discharged.
The court made clear that there are limits to an arresting party’s freedom to release an arrested vessel where a judicial sale order of the vessel has been made
The Singapore High Court rejected the shipyard’s afore-said submissions and held:
The limits to an arresting party’s freedom to release an arrested vessel
An order for the sale of an arrested vessel would have to be first discharged before the arrested vessel may be released, even if the party seeking the release is the arresting party. It is not entitled to unilaterally stop the sale without going back to the court to seek a discharge of the sale order.
A judicial sale is not halted simply by the arresting party filing a notice of discontinuance. In any event, the court may, if necessary, set aside the notice of discontinuance filed.
Considerations relevant to the discharge of the sale order
In deciding whether to discharge an order for sale, the court takes into account the interests of all persons with in rem claims against the vessel, including the following matters:
- Whether the other claimants against the vessel oppose the discharge of the sale order;
- The delay and costs involved in discharging the sale order and restarting the sale process (i.e. for the vessel to be released and re-arrested by another claimant in Singapore); and
- Whether any advantages would be gained by discharging the sale order and restarting the sale process.
Having considered the facts of the case, the Court in The “Long Bright” exercised its discretion to discharge the sale order. In doing so, the court considered the fact that if vessel were released and re-arrested by the mortgagee, there would likely be a delay of three months or more in payment out of proceeds of sale to the claimants. However, the vessel was only six years old and there was no evidence that the anticipated delay would result in a significant erosion of the vessel’s value. Moreover, if the sale process was restarted, the priorities and recovery prospects of the other claimants would not be impacted and the vessel might possibly obtain a higher price.
In The “Long Bright“, the court made clear that there are limits to an arresting party’s freedom to release an arrested vessel where a judicial sale order of the vessel has been made. It does not follow as a matter of course that the arrested vessel will be released simply because the arresting party’s claim has been settled and it is the party seeking the release of the vessel. It would be prudent for the arresting party to apply to the Court to discharge the sale order before seeking to release the vessel.
In The “Long Bright“, the court also clarified that it may allow (i) the sale process to proceed; and (ii) applications to be made for payment out of the vessel’s proceeds of sale, in the arresting party’s in rem action even if the arresting party no longer has a claim against the vessel. In that event, it would be prudent for the arresting party to apply to the court for directions to be given to safeguard its interests, such as to make provisions for the costs and expense of keeping the vessel under arrest until the completion of the sale.
Ik Wei Chong and Eric Wong are Partner/managing director for Asia and Associate respectively at Clyde & Co, a global law firm that focuses on five core sectors: transport, trade and commodities, insurance, infrastructure and energy. Contact Mr Chong at firstname.lastname@example.org or on +86 21 6035 6100.
The Baltic Exchange will hold its next Freight Derivatives & Shipping Risk Management course on March 11 and 12 in London in the UK. More information can be found here.
- Baltic Exchange quiz night
The next Baltic Exchange quiz night takes place on 7 February at Balls Brothers Adams Court.
The event is capped at 80 people and regularly sells out so we recommend attendees book early.
Tickets are priced at £15 per person, 6 people per team.
For more information or to book your tickets, click here.
- Baltic Irish Society needs you!
Members under 40 with Irish connections and an interest in having a more active role in the Baltic Irish Society are invited to contact Colm Nolan.
The Baltic Irish Society, Irish night, is one of the most popular events of the Baltic’s social calendar. Held each March on the evening of the closest Thursday to St Patricks Day, it is regularly attended by over 500 people.