SUPREME COURT OF CYPRUS
JURISDICTION NAFTODIKEIOU
(Education Naftodikeiou No. 14/2011)
January 12, 2012
[EROTOKRITOU, D / facturer]
THE ROYAL BANK OF SCOTLAND N . V .,
Claimant,
- And -
THE SHIP " Kalia ",
Defendant.
Application dated. 12.9.2011 for sale of ship pendente lite
Acis Montanios with P. Iacovidis, for the Applicant, Applicant.
G. John, the respondent requested Defendant-Vessel.
A P P A A A The
EROTOKRITOU, D. : The respondent board " Kalia " owned by Kalia Maritime Company Limited , a subsidiary of Ocean Tankers Holdings Public CompanyLimited . The Applicant, Applicant Bank's action against the defendant-respondent, the application board, claiming the sum of U.S. $ 328,961,757.51, plus interest, which it claims is based on current account and loan agreements signed 2007, between Haiti and the parent company Ocean Tankers HoldingsCompany Limited , hereinafter "the borrower" . According to the indictment warrant, the current account loan was secured between warranties and other agreements with two institutional mortgages on the vessel, registered in the Register of Cyprus Ships. In 2009, the borrower failed to pay the installments of the loan, so the Applicants to terminate all contracts between the parties and to declare all loans and interest payable. Then, they moved several lawsuits in other countries and all ships in the borrowing company, were arrested.
The defendant ship, which was inactive by 23.7.2009 and decommissioned in Limassol Port, arrested on 23.8.2011 under this treatment. Despite his arrest, there was no appearance on behalf of, when the decree became absolute. The Court has set a condition for his release, registration by or on behalf of a guarantee amounting to € 1.000.000. The defendant owns the ship, so far there has cared for his release and has since remained under arrest at the port of Limassol.
Applicants with a hearing by calling in an application dated. 12.9.2011, requested the Court, inter alia, to appoint Officer Naftodikeiou to make a valuation of the respondent board and the realization, pending proceedings ( pendente lite ).
They claim that there 23.7.2009 indifference on the part of the owning company in respect of the ship, which stems from the difficult financial situation and inability to take advantage and chartered the ship. Precisely because of this economic downturn as the owner and general borrowing and group companies, the Applicant Bank as a mortgage lender forced the ship to make up the crew earned wages from April 2011 until July 2011, which anerchonto the amount of U.S. $ 18180.96 to protect the ship, which was for this lien. Also the agent of the ship had to pay various amounts for other accommodations for the crew. Every day, the date of the seizure of the ship, accumulate costs as paying wages and feeding the crew, payments for the water supply board, and for their insurance. All these expenses precedent in common law, against the mortgage seekers, thus limiting the possibility of recovering debts for mortgage lenders. Also, the ship is subject to daily port dues, fees and refuse collection costs of electricity, which continuously charge the Cyprus Ports Authority. From May 2010 until August 2011 the debt to the Cyprus Ports Authority, amounted to € 76.370,90, plus interest. Specifically, the monthly charges Ports Authority as a result of the continued stay of the ship at Limassol port, amounted to € 3.000-€ 4.000. As a result of the above debt, the Ports Authority on 18.8.2011, after the electricity stopped the ship proceeded to an administrative seizure.
Further, the applicant-Applicant Bank argues that since 2009 the ship is decommissioned at Limassol port, has not received any maintenance, inspection and dry dock, so there is constant wear and consequent loss of value. The 15 ships of the group's borrowing, according to a report prepared by a specialist firm of marine consultants estimated the amount of U.S. $ 134,600,000, while the value of the defendant ship, calculated by the same firm at U.S. $ 5,250,000.
In view of above, the Applicant argues that the value of the collateral, which is affected by the mortgage of the ship is reduced on a daily basis. Given that the amount of the claim of the Plaintiffs and Haiti was more than twice the total value of the entire fleet of the group's borrowing company, any delay in the sale of the ship, means a reduction of the collateral. He claims further that they have good chances to succeed in their action, that any version of the requested Ordinance appreciation and sale of ship pendente lite , it will not affect in any way the interests of any person concerned in the impounded ship, since it as resconverted after ekpoiitiki process, a fund under the control of the Court ( " Fund in Court " ), pending the final outcome of the process.
The respondent filed an application board a written objection, objection on three grounds that: - (1) the application for appraisal and sale of the ship is an abuse of process, (2) the applicant-Applicant Bank has violated the rules of natural justice, since, although the court APPLIED unilaterally, but did not disclose all material facts and (3) The affidavit accompanying the application, is irregular.
In an affidavit accompanying the complaint mentioned in relation to the abuse of process, that legal proceedings in England against the parent company and subsidiary shipowning companies. In this process, however, registered a counterclaim against the plaintiff bank. Upon successful completion of the counterclaim, the damage that would result from the sale of the ship, would be disproportionate. The process in England is the main process, which will be heard the claims of the applicant and the parent company of the ship. Therefore, it is reasonable to expect the outcome of this process, before taking any other action against the ship. Regarding the non-disclosure by the party against whom the application board is alleged that the applicants failed to report the existence of a new agreement between the parties dated. 21.4.2011, which replaced all previous agreements between them. Finally, it is claimed that the last time the carrier has made a number of actions aimed at restoration of the ship, to render it suitable for commercial exploitation. Any version of the requested decree will undoubtedly affect not only the interests of the parent company and subsidiary company owner, as if the counterclaim success in pending legal proceedings in England, the damage which would result from the sale of the ship will be return.
We then examine the three reasons for objection. The first implication relates to the merits of the application, while the other two relate to procedural matters.
We start with the second reason for objection to the issue of non-disclosure of the last days. 21.4.2011 which, according to allegations made by the person against whom the application board, replaces all previous agreements and was therefore absolutely necessary discovery. The specific reason for objection is not valid. The relevant authority imposes an obligation of full and frank disclosure of all material facts, applies to proceedings where one party unilaterally seek treatment. In this case, the proceedings before the Court is not unilateral, as erroneously claimed by the side of the defendant-respondent requested the ship after the request was from the beginning by calling, so to follow the performance of the application on the other side. But they were different things, the alleged agreement appears not to be a contract, since not only without injury entitled "summary sentence" ( " summary Proposal " ), but it was conditional upon signing a binding agreement.
In its third ground of objection raised irregularity on the affidavit, but claim to be explained in the affidavit accompanying the complaint. Neither the oral pleading before the Court mentioned anything that sheds light on alleged irregularity in the affidavit accompanying the application. Therefore, this ground of objection is unrealistic.
In the first ground of objection, alleging that the application is an abuse of process. As suggested by counsel for the defendant requested the ship, the abuse is related to the fact that in Cyprus began proceedings against the ship, pending the main process in England, between the plaintiff bank and the parent company of the ship, which raised a counterclaim . Furthermore, the parent company was not party to the proceedings in Cyprus.
I do not agree. Unlike the English process by which the documents appear to be in personam , the process in Cyprus is in REM and relates solely to the ship. Not in my opinion, an abuse of process, where the law entitles the applicant-Applicant Bank to sue in REM against the ship and without making either the owner or the parent company by parties. Therefore, neither this reason objection upheld.
The Court's power to issue decrees and sale estimate ship, pending the proceedings, comes from 74 institutions, 75 and 76 of the Supreme Court (Jurisdiction Naftodikeiou) Procedural Rules. This is a discretion which is exercised in favor of the claimant if revealed "good reason" to justify taking this measure. As explained on the assumption Vector Onega AG V . Onboard MV / Girvas etc. (No. 4) (1998) 1 (C) AA D 1411 : -
'Good reason can be seen that promotes the purpose for which power is supplied, which is none other than the protection of the object of arrest, the ship from damage cause by the time and costs for storage and is idle.
The sale of the vessel pending trial of an exceptional measure, as noted in Williams & Glyn's Bank Ltd. v. Ship 'Maria' (1,983) 773 CLR the 1st , (Decision Savvides, D.), in which the Court deals with an area of the principles governing the exercise of power supplied by K. 74 - (see also Almyr Maritime SA V. The Cargo on Board The Ship 'Almyrta ' (one thousand nine hundred and seventy-five) the 1st CLR 116 , one hundred eighteen, (Case A. Loizou, D.), and V Kyrmizoudes. Ship 'Philipoupolis ' (1,978) one five hundred twenty-six CLR , (Decision Triantafyllidis, P .). The sale of the ship is not the natural consequence of his arrest or detention of the prospect for any length of time. It is, however, so far as admissible, if disclosed reasons for that, to preserve the value of the ship.
Failure of the owner of the ship to release it, and indifference to his fate and is under arrest, are factors tending in favor of the sale pending the trial. The costs of maintenance during the same period, in relation to the value of the ship, are another factor that tends to justify the sale . especially where showing that their treatment would substantially reduce the net value of the ship. And this is always in proportion to the amount of the claim of the plaintiffs, who, in this case far exceeds the one million U.S. dollars. "
In this case met all the conditions necessary for a positive exercise of the discretion of the court. The ship is under arrest for some time without the owners to pay the specified warranty for release or take other measures to show that care deeply for the situation or in general about his whereabouts. Due to the continued detention of the ship and increasing damage created by the inaction of the continuous depreciation is inevitable. Given that the value of the ship is not enough to satisfy the demands against him, the ship should in my view be sold in order to limit further damage and reduce its value.
In view of above, issued as paragraph 1 (a) - (c) of the application: -
(A) a decree appointing the officer Naftodikeiou to make an estimate of the value of the defendant ship, who is under arrest at the port of Limassol and the pending sale process ( pendente lite ) , provided they notify the applicant the amount of such assessment and the intended sale of at least 14 days before that.
(B) Order which mandates the Naftodikeiou officer, immediately after completion of the assessment of the defendant ship registered in the Registry statement signed by that person, showing the value of the defendant ship as estimated, and the amount of the royalties, costs and expenses paid or performed by that person during the execution of the decree of the Court.
(C) Order which mandates Naftodikeiou the officer to pay to the Court immediately after the completion of ekpoiitikis process, the full realization of the defendant's product and ship to enter the Registry statement signed by that person, showing the amount of money paid to the Court and the amount of the royalties, costs and expenses paid or performed by such person during the execution of the decree of the Court, together with relevant evidence.
Also awarded in favor of Plaintiffs-Seekers and against the defendant-respondent, the application board, the costs of the application. These will be calculated by the Registrar and approved by the Court.
(Min.) C. Erotokritou, D.
