A subsidiary of China’s ICBC Leasing has won twin court victories in Tianjin and Hong Kong in a case centred on a supramax that was repossessed after its time charter arrangements fell apart and its newbuilding deal was renegotiated.
The Hong Kong High Court has ruled against Zhoushan and Shanghai shipowner Ma Buzheng and two companies he controls.
Ma, his Shanghai Yinpu Shipping and the special purpose vehicle that formerly controlled the 53,200-dwt Everwin (built 2012) have been ordered to pay $17m of the remaining principal and penalty interest on the bulker. The defendants did not appear in court in the Hong Kong action.
The ruling by High Court Judge Anthony Chan follows a Tianjin Maritime Court decision in March in which another Ma entity, Shanghai Huimao Industrial, lost an attempt to have the terms of the original financial leasing contract lifted because of a subsequent refinancing agreement.
The Everwin was originally ordered from China State Shipbuilding Corp in 2006 by Shanghai Weiyuda Electric Power Engineering for CNY 230m (then worth $29.4m). Ownership was transferred to Shanghai Yinpu in 2010 and then to a special purpose vehicle controlled by ICBC, a major lease financier.
Shanghai Yinpu had lined up time charter employment with Shanghai Time Shipping carrying coal for the charterer’s state-owned parent, electric power giant Huaneng. But before the ship was delivered in December 2012, Shanghai Time had already cancelled the time charter.
Contract renegotiated
During that year, the newbuilding contract was renegotiated to $26.2m, with new financing with ICBC Leasing corresponding to the new dollar-denominated deal and an 85% to 15% earnings split between lessor and lessee.
By April 2014, however, ICBC Leasing had repossessed the ship over an alleged failure to pay charter hire and sold it for $20m to an undisclosed financial owner. It then sued in Hong Kong for the balance not covered by the sales proceeds.
Chan has ordered Ma and his company to pay $8.26m plus more than four years’ interest at 19.7%, which would have come to more than $17m in April this year.
Today, the ship sails in the operated fleet of Chinese-Polish joint venture operator Shanghai CP International Shipping.
Shanghai Yinpu and associated Shanghai Yindong Shipping could not be reached for comment. Representatives of ICBC Leasing declined to comment.
