Supply firms face wait for payment on fuel bills
A mainland marine fuel supply company and other creditors owed more than US$9.7 million in unpaid bills by foreign ship owners face an indefinite wait for their cash following a ruling in the appeal court yesterday.
Chimbusco Pan Nation Petro-Chemical, which is part owned by Cosco and PetroChina, may also see any payment substantially cut.
This emerged after three appeal court judges said the Admiralty judge should have given Argentine ship owner Maruba more time to file a defence before a ship it owned was sold at auction to settle outstanding bills.
Law firm Kennedys, acting on behalf of Maruba, had appealed against two orders by Admiralty judge Anselmo Reyes not to grant the company an extension to lodge its defence and a ruling which led to the sale of the ship.
In a 15-page judgment, Mr Justice Peter Cheung Chak-yau said the ship, the 64,200 deadweight tonne Decurion, was initially arrested in May 2010 over outstanding bills totalling US$4.2 million for fuel supplied to Decurion and 10 other vessels. The actual cost of the fuel supplied to Decurion was just US$85,460.
Cheung said Reyes, in ruling in favour of Chimbusco at a hearing early last year, held that Maruba was in possession or in control of the 10 other vessels. This gave the impression Maruba owed much more money than it actually did and led to Decurion being appraised and sold for US$5.2 million last May.
Proceeds from the sale were deposited in an escrow account as security to allow time for Maruba's other creditors to lodge claims, which now total US$9.75 million.
But Cheung said Chimbusco failed to show Maruba owned or controlled these 10 other ships which were chartered to Clan, a Uruguayan shipping company. They were also managed by South Atlantic Container Lines, a company that had no connection with Maruba, but which supplied fuel to the ships.
Allowing Maruba's appeal, Cheung said the default judgment, which led to Decurion being sold, 'was obtained only because of the defendants [Maruba] not being able to obtain an extension of time to file their defence'.
Jenny Zhuang, a solicitor for Kennedy's, said the appeal court had given Maruba 14 days to lodge its defence against the original sale of Decurion and challenge whether Hong Kong's Admiralty Court was the right jurisdiction to hear the case.
She said Kennedy's needed to get instructions from Maruba before deciding what the company's next step would be.
Simon Baker, a partner for Clyde & Co which is acting on behalf of Chimbusco, said the appeal court's decision meant there was 'no early finality to the case'.
20
The number of unpaid fuel contracts owed to Chimbusco, according to the company's lawyers from Clyde & Co
