Bimco names Grand China for flouting court order

The 'messy' corporate ownership structure of China's HNA Group has hampered efforts to encourage it to pay $31m awarded to Norway's Spar Shipping

International shipowners’ organisation Bimco is publicly reporting China’s Grand China Logistics (GCL) for ignoring court orders to pay more than $31m in an arbitration award and court judgment in favour of Norway's Spar Shipping.

But sources close to Bimco tell TradeWinds that its efforts on behalf of member Spar have been hampered by the complicated legal status and shareholding of GCL and its ties to other entities within Chinese conglomerate HNA Group, all of which they characterise as "messy".

They note that Bimco's circular to members on GCL's non-payment of the court judgment does not target the currently active shipping entities within the HNA group, from which GCL is legally separate.

Parent HNA is one of China's most high-profile non-state owned companies, with massive recent investments in foreign corporate acquisitions, including a large stake in Deutsche Bank.

But within the HNA Group, the formerly high-profile containership, tanker and bulker owner GCL is now a relatively inactive entity.

HNA Group shipowning and ship trading activities have subsequently passed to entities including Fuk Hing Steamship, HNA Logistics, Tianjin Maritime, GC Tankers, Yukong Shipping and Zhijing Ship Management. More recently shipping has been split from logistics and included in the portfolio of a newer subsidiary, HNA Technology.

3eb7c06355c3649948a343f4473abd5b HNA Group's head office in Haikou in Hainan province  Photo: HNA

HNA interests in shipping also include Jinhai Intelligent Manufacturing (the shipyard formerly known as Jinhai Heavy Industry) and Oslo-based containership owner SinOceanic Shipping.

Sources close to Bimco say that its efforts on behalf of Spar have also been complicated by the failure of HNA Group representatives to respond to enquiries having to do with the GCL matter, and by the inactive membership status of HNA's shipping unit. Formerly a member, HNA has been in effect suspended from Bimco pending payment of back dues.

The much-reported underlying dispute concerned an arbitration claim for unpaid hire on three supramax bulkers after the Chinese owner defaulted on charter hire in 2012. The legal action to recover losses and damages commenced after Spar took back the 58,000-dwt Spar Capella and Spar Vega (both built 2011) with nearly five years to go on their charters and the 53,000-dwt Spar Draco (built 2006) with a year to go.

More recently, in pursuit of the judgment debt, it has seized GCL's shares in Arne Blystad’s heavylift company Offshore Heavy Transport (OHT). GCL holds one-third of the shares in OHT.

GCL representatives have fought the claims but in its circular to members, Bimco notes that London's Commercial Court decided in favour of Spar as far back as 18 March 2015 and ordered GCL Holding to pay $25.308m plus costs. The charterer appealed the decision but on 7 October last year the Court of Appeal dismissed the appeal.

In its circular to members the organisation says its secretariat has been advised that despite repeated requests and reminders, the Chinese company has to date ignored the court order and has yet to pay the judgement debt, which as of 1 September 2017 amounts to a total of $30.3m plus £757,700.

In the Court of Appeal, GCL's Chen Xiaomin said that given the uncertainty of the market, he did not expect China’s maritime and logistics industry would revive.

The company is working with existing clients on a number of projects and he said when they were finalised that he expected GCL's financial position to improve and it would eventually be able to pay the outstanding sums.