—— Series of Cases on Coordinated Execution and Bankruptcy Reorganization of Taizhou Port Ship Co., Ltd.

Key Word：Good-faith civilized enforcement; Coordinated bankruptcy reorganization; Delivery of vessels under construction; Conversion to purchase price; Court-government coordination 

Case Summary:

Taizhou Port Ship Co., Ltd. (hereinafter referred to as Port Co., Ltd.) was previously among the top ten private shipbuilding enterprises in China and the first large-scale private shipbuilding company in Jiangsu Province to obtain the "Four Permits" from relevant authorities. In recent years, the company faced severe operational and management difficulties due to fluctuations of the international shipping market, leading to a significant amount of debt disputes. In early 2020, various creditors filed multiple lawsuits and applied for property preservation in Shanghai Jing'an District People's Court, Taizhou Intermediate People's Court, Taizhou Gaogang District People's Court, and Nanjing Maritime Court. Nanjing Maritime Court handled 82 lawsuits and 58 enforcement cases, with the total amount in dispute reaching as high as CNY 590 million. Simultaneously, based on applications for preservation and in compliance with other courts’ instructions, Nanjing Maritime Court lawfully seized four vessels under construction owned by the Port Co., Ltd.. Subsequently, the Port Co., Ltd. applied to Nanjing Maritime Court, stating that its TK0630 vessel had met the delivery standard to the shipowner, However, due to judicial detention, it could not be delivered. If the vessel were not delivered on time, the Port Co., Ltd. would need to compensate the shipowner with over 8 milliondollars, including the prepayment and interest. Additionally, it incurred daily maintenance costs of approximately CNY 20,000 . The Port Co., Ltd. specifically requested, under the court's supervision, to proceed with the delivery and change the execution target from "vessel" to "purchase price."

Judgment:

Nanjing Maritime Court attached great importance to the Port Co., Ltd.'s application. It immediately formed a special task force to research the necessity and feasibility of adjusting the preservation measures. Through various investigations, the court discovered that timely delivery could not only reduce the depreciation of the vessel's value but also secure payments from foreign shipowners and benefit from export tax rebates. This approach would more broadly safeguard the legitimate interests of the shipowners, the Port Co., Ltd., and all creditors. In order to reduce the company's losses, preserve asset value, and protect the rights and interests of creditors, Nanjing Maritime Court legally approved the Port Co., Ltd.'s application and actively coordinated with relevant parties to formulate a comprehensive and detailed vessel delivery plan. In the end, in collaboration with the Taizhou Gaogang District People's Court, which received the Port Co., Ltd.'s bankruptcy application, Nanjing Maritime Court successfully completed the actual delivery and subsequent matters of vessels such as TK0630, helping the Port Co., Ltd. get the full purchase price from the foreign shipowners. After the Port Co., Ltd. and its related entities entered the bankruptcy proceedings, Nanjing Maritime Court, based on the bankruptcy administrator's application, promptly released the vessels under detention and efficiently concluded 44 related enforcement cases, actively supporting the consolidation and reorganization of the companies involved in the cases to quickly restore their production capacity.

Significance:

Jiangsu is a major shipbuilding province, with ship completions accounting for nearly half of the national total each year. Currently, it has developed a billion-dollar shipbuilding industry chain, with private shipbuilding enterprises playing a crucial role in driving rapid industry growth. This case represents a successful practice by Nanjing Maritime Court, demonstrating good-faith and civilized enforcement to establish connection between the enforcement procedure and the bankruptcy procedure, facilitating the bankruptcy reorganization and swift recovery of production capacity of private shipbuilding companies. During the case's adjudication, Nanjing Maritime Court diligently implemented the Central Committee's "Opinions on Strengthening Comprehensive Management and Effectively Resolving Enforcement Difficulties at the Source" and the Provincial Committee's implementation guidelines, along with relevant documents from the Supreme People's Court. The court actively explored enforcement measures involving "prior disposition for preserving purchase prices." ensuring that detained vessels were smoothly transferred and purchase prices were efficiently delivered, while simultaneously aiding the recovery of the companies' reputation. In full protection of the applicant's rights, the court minimized the impact of the enforcement on the production and lives of the executed parties. Through a series of good-faith and civilized enforcement measures, the court allowed private enterprises to go through the bankruptcy reorganization process in a stable and orderly manner, fostering a sense of judicial compassion within the enforcement process for private enterprises.