ASSET WONDER LTD v. STELLAR SHIPPING CO LLC, THE BAREBOAT CHARTERER OF THE SHIP‘RUBY STAR’

HCAJ 129/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY ACTION NO 129 OF 2013

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Admiralty action in rem against the ship or vessel

‘RUBY STAR’ (IMO No 9516703, Call Sign VREW7)

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D E C I S I O N
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1.  This is the plaintiff’s application by notice of motion under Order 75 rule 22 for orders that the plaintiff’s judgment dated 2 December 2013 (“the judgment”) do have first priority against the remaining sum held by this court in respect of proceeds of sale of the vessel ‘Ruby Star’, the bunkers thereon and the interest thereon; the entire remaining proceeds of sale of the vessel and her bunkers together with interest thereon presently held by the court be paid out to the solicitors for the plaintiff in partial satisfaction of the judgment.

2.  The plaintiff holds the only judgment against the vessel and her proceeds of sale.

The legal principles

3.  As summarised in Mason on Admiralty Jurisprudence and Practice (3^rd ed) at paragraph 6.37 to 6.49, there is a well-settled order of priorities which is regularly applied by the court, although this order is only a prima facie ranking, subject to the court’s equitable jurisdiction. 

4.  Mr Toms, solicitor for the plaintiff, has ably summarised the order as follows:  (a) the court’s bailiff fees for the arrest, preservation and sale of the vessel; (b) the expenses of arrest, preservation and sale pendente lite; (c) the costs of the arresting party; (d) maritime liens attached to the ship, not the sister ship, to which the claim arose; (e) secured maritime claims; and (f) unsecured maritime claims.

Application of the principles

5.  The bailiff’s fees and expenses have already been paid out from the proceeds of sale of the vessel.  The plaintiff’s costs for arrest, preservation and sale pendente lite and its party and party costs in respect of arrest and sale pendente lite have been agreed by Clyde & Co, solicitors for a former caveator, Stellar Shipping Company LLC (“SSC”) in the sum of HK$300,000.

6.  In respect of claims in rem against the vessel:

(a) SSC, being the defendant and a former caveator in this action does not have a claim against the vessel and the proceeds of sale.  SSC has admitted this by its letter dated 20 April 2015 to this court.

(b) Stellar Ocean Transport, a former caveator, has had its writ set aside by the Court of Appeal by judgment dated 23 December 2014.  Ince & Co, its solicitors, has confirmed to this court by letter this morning that it does not have a claim over the vessel or the proceeds.

7.  The plaintiff therefore holds the only judgment against the vessel.  The plaintiff has confirmed by a check on the caveator on 21 April that there is no valid caveat against release and payment out of proceeds of sale of the vessel. 

8.  The amount of the judgment is US$17,076,846.79. It exceeds the remaining amount of proceeds of sale of the vessel held by the court, ie US$16,041,788.64.  There is no reason why this court should depart from the prima facie order of priorities set out in paragraph 5 above.

9.  I am satisfied that the plaintiff should be paid the entire remainder of the proceeds of sale held by the court together with interest thereon in satisfaction of the plaintiff’s party and party costs of the arrest and sale pendente lite and in partial satisfaction of the plaintiff’s judgment.

10.  I make an order in terms of the draft order attached to the skeleton submission.