YANG MING MARINE TRANSPORT CORPORATION AND ANOTHER v. THE OWNERS AND/OR DEMISE CHARTERERS OF THE SHIP OR VESSEL "DONG YUN 419"

HCAJ341/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY ACTION NO. 341 OF 2001

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Admiralty action in rem against :
The ship or vessel "Dong Yun 419" (Chinese flag)

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J U D G M E N T

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1. This is an application by the plaintiffs for sale pendente lite of "Dong Yun 418" ("the Vessel"). The Vessel has been under arrest for over a month and it is likely to remain under arrest for some time because there is, at the moment, a substantial dispute on jurisdiction between the plaintiffs and the defendant.

2. The matter had been first heard last week and the parties will be coming back later this week for further directions on the question of proper resolution of jurisdictional issue. I suspect that it is going to take little bit of time before it can be resolved, and there may be also a question of viva voce evidence being given and also of discovery. So, it is not likely, it seems to me, that the jurisdictional dispute is going to be resolved in anything less than, at least, three months if not longer.

3. There is no doubt that this Vessel, this small vessel, is a wasting asset. I have been told that the monthly costs of the arrest run at about $50,000. The value of the Vessel is estimated to be no more than $1.5 million. The claim exceeds the value of the Vessel. It is therefore a classic case of the court being asked and often making an order of sale pendente lite because it is a wasting asset and proper protection of the plaintiffs requires the Vessel to be sold as soon as possible.

4. The defendant shows its strong opposition to the Vessel being sold. They ask for more time to consider the application. I am not even told, whether there is a serious possibility of their being able to put up security if more time is given.

5. As far as I can see, in the circumstances of this case, there is really no point in further delaying the decision as to the sale of the Vessel. I think the Vessel should be ordered to be sold today pendente lite. It normally takes not less than four weeks, if not more, for the Vessel to be advertised and for interested potential purchasers to put in their bids under the public tender.

6. At any time before the acceptance of the tender, the order for sale can be rescinded if proper security is put up by the defendant. I therefore see no merit in delaying the matter further. Proper protection of the defendant can be achieved, normally, in the most economic way, by the defendant putting up interim security right away, or as soon as they can. The alternative, of course, is for the Vessel to be sold pendente lite, and the whole proceeds of sale (representing the value of the Vessel without deduction of expenses or costs of arrest) would be held in court and, if the defendant should win the jurisdiction fight, then the whole of the proceeds of sale representing the value of the Vessel will be paid out to the defendant.

7. I do not see how the defendant can lose out. In effect, the longer the delay, the greater the value of the Vessel would be diminished by the costs of arrest. I see everything pointing towards the merit of having the sale take place as soon as possible.

8. I therefore make the order as requested by the plaintiffs.