A Chinese-owned livestock carrier deemed abandoned by its owners in Australia is to be sold by the Federal Court of Australia.
Justice J Stewart, in a ruling issued on Tuesday, said that Soar Harmony Shipping, the registered owners of the 11,670-gt Yangtze Fortune (built 2005), had not provided any affidavit or submissions opposing the judicial sale of the vessel, and had not appeared at the hearing, despite being given ample time to do so.
Meanwhile, the judge said, a large crew on board the ship was going unpaid, and the costs of supporting them, and keeping the ship afloat, were mounting.
The court has ordered an appraisal of the ship, after which a date for the judicial sale will be set.
The Yangtze Fortune has been languishing at Portland, in the State of Victoria, since the end of September. Its crew reported a crack in the hull after it arrived from China to load 5,200 head of breeder livestock, but with repairs slow in coming, livestock exporter Australasian Global Exports filed a $2.96m claim against the ship for the breach of a booking note.
Shortly thereafter the Singapore arm of Danish bunker supplier Dan-Bunkering filed a $549,000 claim for bunkers supplied to the ship in June.
Other subsequent claims and caveats were filed against the ship by China Merchants Energy Trading for bunkers, RMS Marine & Offshore Service for supplies, and UMMS Projects and Livestock (UMMSPL) for technical management and crew fees.
Industry sources said that UMMSPL took over the technical management of the vessel from Chinese manager Accord Ship Management in July 2021, although this change has yet to be reflected in the ship’s listing in S&P Global’s International Ships Register.
The writs named Yangtze Fortune Co as the entity in control of the ship. That company told the court that it was the bareboat charterer, but had terminated the bareboat charter party in mid-November 2022 and was no longer in possession or control of the vessel.
Creditors moved to arrest the Yangtse Fortune on 11 December. The ship, which had been anchored off Portland, was subsequently docked at a lay-by berth in the port.
The Yangtze Fortune, together with its identical sister ship Yangtze Harmony (built 2004), were converted from container vessels in 2017 by Sinomarine Livestock Carriers, a joint venture between Sinotrans and CSC. They were used to launch an export trade of live cows from Australia to China.
TradeWinds was unable to ascertain whether Sinomarine Livestock Carriers still has any links to the pair.
The Yangtze Harmony has been under arrest in Singapore since 25 October.
Justice Stewart said there was an urgency to sell the Yangtze Fortune because the 36 crew members on board had not been paid for the past two months and were unlikely to want to be repatriated until they receive their wages in full.
Furthermore, the judge noted that the owners of the ship had not been provisioning the vessel, requiring the admiralty marshal to purchase bunker fuel as well as victuals.
The marshal’s expenditure on maintaining the custody of the vessel amounted to approximately $270,000 on Tuesday, plus a further approximately $700 per day in respect of the marshal’s liability insurance.
“Further costs are likely to mount quickly in the coming weeks,” the judge said.
In addition, while the crew made temporary repairs to the hull crack, the judge was concerned that the vessel’s marine hull and machinery insurance was set to expire on 31 December, which would imperil all claimants’ security.
Justice Stewart said the deterioration of the ship whilst under arrest, and the erosion of the security that it offers to creditors by the mounting costs of maintaining it while under arrest, are also pressing considerations.
“The vessel has all but been abandoned. It continues to deteriorate and the expenses to maintain it continue to mount. It seems that its sale at some point is inevitable, and the sooner that that is ordered and done the better for all concerned... The number and nature of the proceedings against the vessel and caveats against its release from arrest is notable. Clearly, the vultures are circling… I am satisfied that there should be orders for the sale of the vessel. I see no other available course,” the judge concluded.
