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Samsung seeks court order to remove goods from Hanjin vessels

Friday, September 9, 2016 - 08:48
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Samsung Electronics Co Ltd on Thursday asked a US judge to allow the South Korean company to pay cargo handlers to remove its goods from Hanjin Shipping Co Ltd's vessels stationed near US ports after the world's seventh-largest container carrier filed for bankruptcy.

[WILMINGTON] Samsung Electronics Co Ltd on Thursday asked a US judge to allow the South Korean company to pay cargo handlers to remove its goods from Hanjin Shipping Co Ltd's vessels stationed near US ports after the world's seventh-largest container carrier filed for bankruptcy.

Hanjin's collapse last week came during the peak shipping period ahead of the year-end holiday season, stranding cargo for the likes of HP Inc and Samsung.

Around US$14 billion of cargo has been tied up globally as ports, tug boat operators and cargo handling firms refuse to work for Hanjin because they fear they will not be paid due to uncertainty over plans to provide new financing.

Samsung said an order this week by a US bankruptcy judge did not encourage the Hanjin ships to enter US ports as intended, which the company blamed on a misunderstanding of maritime law, the bankruptcy code and Korean law.

The maker of electronic goods including Galaxy smartphones said the judge should issue an order barring the seizure of ships and allow it and other cargo owners to retrieve their goods by paying cargo handlers, who have been demanding payment guarantees.

"There's no earthly reason why these parties should not be permitted to cut their own deals," Samsung said in a Thursday court filing with the US Bankruptcy Court in Newark, New Jersey.

Cargo handler Maher Terminals LLC, which operates a container terminal in the Port of New York and New Jersey, backed the plan to let owners of cargo pay for handling. But it urged the court in a filing not to protect Hanjin vessels from seizure without also considering the rights of suppliers.

"Maher is currently being victimised by having hundreds of Hanjin containers clogging up its facility and impeding the ability of Maher to properly service its other customers," the company said in court papers on Thursday.

Nothing in the court order "should be deemed to compel parties like Maher to continue to provide services without receiving payment or adequate assurance of such payment," it added.

Total Terminals International LLC, a West Coast marine terminal operator partly owned by Hanjin, earlier in the week cautioned the court that a plan was needed to pay for several levels of port services, such as tug boats and stevedores, and to ensure Hanjin vessels would be able to refuel and leave port.

"This lack of a short term plan for these vessels will lead to mayhem," it said in the filing.

An attorney for Hanjin, Ilana Volkov, did not immediately respond to a request for comment.

One Hanjin ship, the Hanjin Scarlet, is in Canada's Port of Prince Rupert, where it is being unloaded, with cargo owners covering charges, port spokesman Kris Schumacher said.

It remains unclear if the vessel would proceed to stops in Vancouver, British Columbia, and Seattle, he added.

"... All the supply chain partners - the pilots, the tug boat operators, the marine terminals operators, railroads and trucking companies - are saying they want a guarantee they will be paid," said Tara Mattina, a spokeswoman for The Northwest Seaport Alliance, a partnership between the ports of Seattle and Tacoma, Washington, that manages their cargo terminal leases.

The US judge, John Sherwood, will hear the request on Friday.

As of Thursday afternoon, two Hanjin ships were near the Port of Long Beach, according to the Marine Exchange of Southern California, which tracks cargo ship traffic. One of the ships, the Hanjin Boston, is scheduled to head into the port on Friday afternoon for re-fuelling.

A third ship, the Hanjin Greece, was off the shore of Mexico, where it could avoid US anti-pollution regulations that require use of low-sulfur fuel, the tracking group said. Many ships carry only a limited supply of low-sulfur fuel.

Some cargo owners have already paid fees to terminal operators to allow the release of Hanjin containers held up on the docks, according to a Port of Oakland spokesman.

The Seoul Central District Court is presiding over the receivership filed by Hanjin last week. A foreign representative of the shipping line has filed for so-called Chapter 15 bankruptcy with the Newark court.

Chapter 15 is meant to allow a company to seek recognition by US courts of orders issued overseas and to ask US judges to assist in a foreign corporate debt restructuring.

REUTERS