The Hanjin Shipping collapse initially impacted Shippers and
Consignees, who had to navigate the waters of transhipment,
security arrangements for the release of Hanjin containers,
delivery of goods and return of containers to depots prepared to
Now there is the problem for container terminals and depots in
possession of Hanjin containers of what to do with those
containers. Many are owed considerable and growing storage charges,
in addition to maintenance, repair and storage charges in
But, before seeking to enforce any claim against Hanjin
containers, terminal and depot operators need to ask the following
Do you have a valid lien or security
You will need to check that your storage contract has a valid
and effective lien clause. Alternatively, consider whether you have
a statutory lien right for repairs and maintenance and/or warehouse
If you have a valid lien, you may be able to withhold possession
of the containers until you are paid. If your lien specifically
provides, you may even be able to sell the containers and apply the
proceeds towards any debt.
Does Hanjin own the containers?
If Hanjin owns the containers, the position is probably more
clear-cut. However, if a containers are leased to Hanjin or under
finance, the lessor or finance company may have a superior right to
possession of the containers. In Australia at least, this will
largely only occur if the lessor or finance company has registered
their interest on the Personal Property Securities Register, so you
may need to conduct searches of the register before taking any
When did you receive possession of the
Under the Personal Property Securities regime in Australia, you
will likely have a right to hold and enforce your lien against any
containers as long as you received them before Hanjin entered
Rehabilitation and/or the Rehabilitation was registered in
Australia. For any containers received after those dates, property
and the right to possession may have automatically vested in the
Liquidator and they may have a superior right which trumps any
Does the Hanjin bankruptcy process block you from
exercising your security rights against the
In insolvency situations, there is usually a moratorium on
enforcement action against a company/its assets during any period
of Administration, in order to preserve the status quo until it is
determined whether the company will go into liquidation. Here, the
Hanjin 'Rehabilitation proceedings' (equivalent to our
Administration) have been registered and recognised by the Federal
Court, which has ordered a moratorium on any person exercising any
rights against Hanjin's property.
That moratorium is lifted if a company goes into Liquidation.
Here, the South Korean Courts declared Hanjin Bankrupt (equivalent
to our Liquidation) on 17 February 2017. However, the transition
from Administration to Liquidation has not yet been registered with
the Federal Court, so the Court's moratorium orders remain in
place. The foreign Liquidator is required to register the
transition within one month. Once they do so, the Court is likely
to lift the moratorium, allowing anyone with a valid lien to
enforce it against the containers.
Alternatively and to speed things up, any lien holder could
write to the Liquidators (through their Australian lawyers) and
seek their consent to the sale of the containers now.
Whilst the commercial pressure is to act quickly in order to
stem any growing debt, you should work through the above four
questions carefully before taking action. You want to reduce any
accrued debt, not expose yourself to a claim from the Liquidator or
any container lessor or financier.
Our Transport team have helped a number of companies wade
through the turbulence left by the Hanjin collapse. Feel free to
get in touch if you need any assistance.
This publication does not deal with every important topic or
change in law and is not intended to be relied upon as a substitute
for legal or other advice that may be relevant to the reader's
specific circumstances. If you have found this publication of
interest and would like to know more or wish to obtain legal advice
relevant to your circumstances please contact one of the named
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