GREAT PACIFIC NAVIGATION (HOLDINGS) CORPORATION LIMITED Vs. M.V. TONGLI YANTAI, (AND HER OWNERS AND ALL ORS. PERSONS)

JUDGEMENT

(1.) This it the Defendant's Notice of Motion to have an order of arrest dated 9th December, 2010, of the Defendant-vessel, vacated and for an order directing the Plaintiffs to pay damages towards losses suffered due to the wrongful arrest. I have not considered the claim for damages. The Defendant is at liberty to raise the claim at the appropriate stage by a separate application.

(2.) The suit was filed essentially for security in respect of the Plaintiff's claim pending an arbitration between itself and Tongli Samoa Shipping Company Limited, Samoa (hereinafter referred to as "Tongli Samoa") and Tongli Shipping Company Limited, China (hereinafter referred to as "Tongli China"). The Plaintiff has also sought a decree in the sum of US $56.06 million, which was enhanced by an amendment to US $72.59 million together with interest at 12% per annum. The decree, however, was sought without prejudice to the arbitration. This is clear from paragraph 73 of the plaint where it is clarified that the Plaintiff is merely seeking security for its claim against the Defendant in arbitration at London pursuant to a clause in a charter party, by means of the arrest of the Defendant-vessel. It is clarified that the suit is not and cannot be deemed to be a submission by the Plaintiff to have the merits of the disputes determined in this Court.

(3.) The Plaintiff's case is this. The Plaintiff is a Hong Kong Company. The Defendant is a vessel beneficially owned and controlled by Tongli China incorporated in the People's Republic of China. Tongli China has incorporated a group of shell companies and entities in various jurisdictions, including Samoa and Hong Kong that are, in fact, agents and/or alter egos of itself. The Defendant-vessel, though nominally owned by one Halcyon Ocean Shipping Limited (hereinafter referred to as "Halcyon") is, in fact, beneficially owned and controlled by Tongli China. (The present Notice of Motion has been taken out by Halcyon who claims to be not merely the registered, but the true owner of the Defendant-vessel.)