—— Case on Arrest and Judicial Sale of the M/V X

Key Word：Hazardous chemical vessel; Arrest and judicial sale; Discharge & tank cleaning relocation; Crew repatriation; Yangtze ecological security

Facts：

The M/V X is a Hong Kong-registered hazardous chemical ship. Due to the shipowner’s default on a loan of over RMB 45 million to a financial company, the company latter applied for the arrest of the ship. On December 8, 2020, the Court granted the application. When the ship was seized, there were 19 crew members still on board, including 5 Myanmar nationals. The ship was also carrying over 1,600 tons of hazardous chemical acetyl butyl ester, which has flammable properties. During the subsequent legal proceeding over the dispute, the financial company applied for the judicial sale of the ship on the grounds that the shipowner had failed to provide security upon the expiration of the arrest period, and that the judicial sale of the ship was necessary to prevent the escalation of costs and depreciation of the ship’s value during the extended arrest, thereby facilitating the prompt realization of the interests of all parties involved. The shipowner also explicitly expressed its inability to continue maintaining custody of the ship and submitted a letter of consent to judicial sale. On August 20, 2021, the Court allowed the judicial sale of M/V X. On April 19, 2022, the ship was successfully sold for RMB 26 million.

Result：

Due to the absence of a designated anchorage for chemical ships in the Jingjiang Port area of the Yangtze River, after the arrest of ship, the Court actively coordinated with the owner of the hazardous chemicals, the terminal company, the tank cleaning company, border inspection authority, customs, and other relevant departments to relocate the ship. The ship was first moved to a terminal company in Changshu Port for cargo discharge and tank cleaning, and subsequently relocated to a dangerous goods anchorage in Taicang Port for safekeeping. Concurrently, the Court considered the welfare of the Myanmar crew members, such as the provision of essential supplies and ensuring the payment of outstanding wages. Facing challenges including the lack of a designated crew-change port within Jiangsu Province and no direct flights to Myanmar, the Court contacted the maritime safety administration, border inspection authority, foreign affairs department, and etc. to develop and execute a plan for the crew change and eventual repatriation of the seafarers. Following the successful judicial sale of M/V X, the Court approved, upon the buyer’s application, the ship’s further relocation to Zhenjiang Wufengshan Shipyard for its final delivery. On May 12, 2022, the Court coordinated the buyer, the former shipowner, and the custodian company for the handover of the ship’s certificates, remaining bunkers, sewage, and etc., and the physical transfer of the ship was also supervised by the Court remotely. The parties were also guided to sign a handover confirmation, and an online record of the delivery.

Typical Significance：

The Yangtze River, as the mother river of the Chinese nation, is a vital strategic water source, a significant ecological treasure, and a golden waterway in China. In this case, the prolonged detention of a foreign ship carrying hazardous chemicals posed a direct threat to the ecological security and environmental protection of the Yangtze River waters. During the proceedings, the Court actively sought support from multiple departments, promptly implemented safety management and emergency response measures, thereby avoiding the significant safety hazards associated with the long-term storage of hazardous chemicals on board. Addressing the challenges of crew rotation and repatriation for foreign seafarers, the Court actively explored several mechanisms: a humanitarian assistance mechanism, a cash security mechanism for foreign crew wages, and a government-judiciary coordination mechanism. These efforts were aimed at safeguarding the interests of the foreign crew members to the greatest extent possible, demonstrating the compassion toward them. By upholding the principles of good-faith and civilized justice to protect public safety and prevent accidents in accordance with the law, this case also effectively safeguarded the security of the Yangtze River waters. It stands as a concrete practice of the People’s Courts in providing judicial services for the “greater protection of the Yangtze River” and facilitating the green development of the Yangtze River Basin. This case was selected as one of the Top Ten Typical Cases of the High People’s Court of Jiangsu Province in 2021.