A Xihe Group-linked shipowner claimed that HSBC holds legal responsibility for the welfare of crew on a floating storage production and offloading vessel that the bank arrested off Malaysia.
The 298,300-dwt Sea Coral (built 1996) was arrested by HSBC after a Malaysian High Court order last November as part of the bank's recovery action against the collapsed Xihe company Hin Leong Trading.
A crew of 25 have since been stranded on the vessel without pay at the Johor Bahru anchorage. Measures to prevent the spread of coronavirus are among the reasons crew members have not been able to leave the ship.
Tension running high
Tension is reportedly running high on the vessel.
However, legal representatives for An Zhong Shipping — a special purpose vehicle (SPV) of Hin Leong founder Lim Oon Kuin that owns the vessel — told TradeWinds it is “gravely concerned” about the welfare of the crew. In a letter, the company said HSBC holds legal responsibility for their welfare and repatriation.
An Zhong said: “Under the Malaysian rules of court, it is for the arresting party, in this case HSBC, to look after the crew if necessary and repatriate crew members back to their home countries pursuant to any order including any order for sale of the vessel and this has not been done since the vessel’s arrest in November 2020.”
However, HSBC said that the shipowner and its protection and indemnity insurer should pay and repatriate the crew.
"The crew has been abandoned by the owner of the ship Sea Coral, An Zhong Shipping Pte Ltd and or the bareboat charterers of the vessel, who employed the present crew on board the vessel," the bank told TradeWinds.
"Gard P&I Bermuda is the insurer in respect of the shipowner’s liability, Gard is obliged to pay the outstanding wages and repatriate the crew in accordance with Regulation 2.5 of Maritime Labour Convention 2006."
An Zhong chartered the Sea Coral to Hin Leong before the oil trader hit financial difficulties last year. Hin Leong is now under the judicial management of PricewaterhouseCoopers.
Hin Leong had appointed its related company Ocean Tankers as technical manager of the Sea Coral. Ocean Tankers, which had hired the crew, is now under the judicial management of accountancy firm EY.
An Zhong said responsibility for crew payment lay with the technical manager and charterer.
“The crew wages and well-being of the crews on board the vessel is the responsibility of Ocean Tankers and Hin Leong Trading. In this regard, the owners understand that Ocean Tankers and Hin Leong Trading have failed to pay the crew members their wages for several months,” An Zhong said.
EY and Ocean Tankers declined to comment.
High Court hearing
As things have developed, it appears the crew will be paid and repatriated though Maritime Labour Convention insurance cover provided by Gard.
A hearing at the Malaysian High Court scheduled for 8 February is due to settle the matter.
An Zhong said it is willing to give the crew assistance despite its own financial difficulties.
“Owners are most concerned about the welfare and safety of the crew members on board the vessel," the company said.