Précis: The Federal Court permitted partial payment out of proceeds from the sale of a vessel after assessing the best reasonable cases of the various claimants.
Facts: As a consequence of the well publicized international insolvency of Hanjin Shipping Co. Ltd., one of its chartered vessels, the “Hanjin Vienna”, was arrested and later sold by order of the Federal Court for the sum of US$6,676,000. Her bunkers were sold for an additional US$939,000. Various claims were filed against against the vessel which totalled approximately US$3,600,000. In view of the fact that the proceeds of sales exceeded the claims, the former owner of the vessel moved for payment out of the surplus funds to it.
Decision: Motion granted, in part.
Held: The first issue to be determined is whether the proceeds from the sale of the bunkers should be taken into account in determining if there is a surplus. This depends on the ownership of the bunkers at the time of sale but the evidence of ownership is too unclear at the present time. Accordingly, the proceeds from the sale of the bunkers shall not be included in determining if there is a surplus.
All of the parties are agreed that sufficient funds must be retained in Court to secure the best reasonably arguable cases of the various claimants taking into account principal, interest and costs. Taking into account that as a simple rule of thumb a 30% markup is applied to the principal amount of a claim to take into account interest and costs, and further taking into account that interest in admiralty matters is a function of damages and is left to the discretion of the court, the owners are entitled to a surplus of US$1,855,908.