—— HK F Marine Co., Ltd. v. Liberia S Shipping and Trading Ltd. 

Key Word：Arbitration-related preservation; Ship arrest; Facilitating award compliance; Jurisdiction clause change

Facts：

In August 2021, Liberia S Shipping And Trading Ltd.(hereinafter “S Shipping”) and HK F Marine Co., Ltd. (hereinafter “F Marine”) entered into a voyage charter party. Subsequently, a dispute arose between the two parties concerning off-hire issues during the charter period, which was submitted to arbitration in London, England in accordance with the Rules of London Maritime Arbitrators Association (LMAA). In January 2023, the arbitration tribunal issued a Final Award in favor of F Marine, ordering S Shipping to immediately pay the charter hire and corresponding interest to F Marine. However, S Shipping failed to comply with the arbitral award. On March 8, 2023, M/V A, owned by S Shipping, arrived at Zhangjiagang to discharge. Upon learning of this, F Marine applied to the Court for ship arrest and provided a corresponding letter of guarantee and cash security.

Judgment：

Upon review, the Court held that F Marine’s application for ship arrest was complied with the statutory provisions. Accordingly, the Court ordered the arrest on the second day after receiving the application. Following the arrest of the M/V A, S Shipping proactively engaged with F Marine regarding the fulfillment of the arbitral award. Ultimately, under the Court’s guidance, the parties reached a settlement agreement and fully performed their obligations within one week, M/V A was released from arrest successfully. The parties mutually agreed within a settlement to amend the arbitration clause to institute legal proceedings in the Court for any future disputes.

Typical significance：

This case is a typical example about maritime “Fengqiao” Experience, which facilitates substantial settlement of international maritime disputes. The Court, in the absence of precedents to follow, conducted a systematic interpretation of the legal provisions concerning ship arrest and determined that the applicant is entitled to file an application for ship arrest to the Court at the place where the property is located, during the period between the rendering of a foreign arbitral award and the application to the Court for its recognition and enforcement. The ship arrest effectively advanced the substantive and efficient enforcement of the international maritime arbitral award. By effectively leveraging the unique advantages of mediation, known as Eastern Experience, the Court facilitated the parties’ expeditious consensus on the fulfillment of the arbitral award. This also promoted the parties who involved in international shipping disputes to realize their rights under the international arbitral award at a relatively low cost. The Court’s efficient and pragmatic attitude garnered the parties’ trust and fully extended the benefits of China’s diversified maritime dispute resolution system to both domestic and foreign parties alike. This case has significantly enhanced the credibility and international influence of China’s maritime adjudication and was selected as one of the Top Ten Typical Cases of the High People’s Court of Jiangsu Province in 2023.