September 1, 2016
Hanjin Bankruptcy Impact and Guidance
Avalon is aware of public reports regarding the insolvency of vessel operator Hanjin. This situation is resulting in a disruption to affected cargoes (see WSJ, 31 August 2016). This is a developing matter however, significant theoretical risks we presently foresee are: (1) expenses incurred for recovering abandoned cargoes and for on-carriage; and/or (2) expenses incurred for satisfying liens asserted on cargoes by unpaid vendors of Hanjin. Any liability that you may have arising out of these risks will depend on your role in the transaction, the terms and conditions of your services, the Bill of Lading terms, whose decision was it to use Hanjin, whether Hanjin successfully prevails in a force majeure declaration, etc. Should you have specific legal questions, as customary, we recommend that you consult with your legal counsel. If you do not have legal counsel available, please let us know so we can provide you with a list of law firms that you may wish to hire.
From an insurance perspective, there are too many variables for us to provide you with a definite coverage position for every possible scenario, especially when no specific claim has been made. In certain instances, however, should you be assessed or otherwise incur extra expenses to accomplish delivery and release of your customers' cargo as a result of this situation, you may have coverage for reimbursement as provided under certain terms and conditions of your CTL or cargo insurance policies. You should seek approval of charges in advance since coverage will depend on the specific circumstances of the transaction. We continue to assess the situation and will make every effort to provide you with further guidance as appropriate.
Please contact your local Avalon representative with any questions or to request a list of law firms.