Maritime law is one of our main areas of practice.
As leading practitioners in this area,
we provide top quality information and professional service to our clients.
J. H. Choi served as the President of the Korea Maritime Law Association
from April 2014 to April 2016.
Bill of lading : One of the most difficult issues that Korean shipping companies encounter is a cargo delivery without the production of the original bill of lading that can be attributed to the outdated port management system. In the situation where a cargo has already been delivered to the importer who defaulted on the payment to the L/C issuing bank, the issuing bank, as the legitimate holder of the original B/L, generally seeks indemnity against the carrier. A recent representative case is where a Korean oil importer has gone bankrupt and defaulted on its payment of approximately US$200 million to several Korean issuing banks, and the issuing banks in turn brought lawsuits against several shipping companies who had delivered the cargoes to the importer without the production of the original B/L.
In such cargo misdelivery cases, the Korean courts hold that the carriers are liable, in principle, for the damages sustained by the issuing banks. The above position adopted by the Korean courts leads to an unfair result to carriers who consider themselves as having completed their contractual obligation as carriers in return for the freight. Such mishap recurs every 5 to 7 years and little proper administrative steps have been taken to rectify this problem.
CHOI & KIM has been involved in counseling shipping companies who encountered such misfortunate incidents through interpretation of the contract terms and the relevant laws. CHOI & KIM also seek to resolve the problem at the fundamental root level through our efforts to improve the port management system and relevant laws through various channels.
The most common type of disputes with regard to the carriage of goods by sea is a claim by the cargo interests against the carrier for the loss, damage, contamination and/or delay of the cargo. CHOI & KIM is known as the "Owners Lawyer" in Korea protecting the interests of the shipping companies and P&I clubs.
CHOI & KIM has been involved in a number of landmark court rulings with regard to significant issues arising out of bill of lading and other relevant laws, including identity of carrier clause, package/tonnage limitation, time bar, arbitration clause and Himalaya clause, etc.
CHOI & KIM handles various disputes arising from charterparties or fixture notes and also assists clients in drafting charterparties, a process that could prevent future disputes. It is often the case in maritime contracts that parties agree on English law as the governing law and the jurisdiction of London arbitration; based on our experience and expertise on various charterparty disputes, we also offer advice on matters involving English law and London arbitration.
The commonly disputed issues include the exercise of lien over a cargo, direct liability of a subcharterer to cargo owner, tort liability of space charterer, interpretation of charterparty clauses such as the FIO clause and the incorporation of arbitration clause, etc.
Due to our preeminence in the casualties filed CHOI & KIM have been involved in almost all important collision cases that occur in Korean waters. CHOI & KIM also offers advice on collision cases that occur outside of Korea in cooperation with foreign law firms, for example, a collision between "Kaminesan" and "Hyundai No. 105" off Singapore in 2004.
Since a collision is of a complex nature which includes various legal issues such as damage to vessel itself, damage to or loss of cargo, loss of life, oil pollution, salvage and arrest of vessel, etc., it is critical to secure professional advice from the outset for the prompt and reasonable solution of a collision case.
CHOI & KIM secured a landmark Korean court ruling on the issue of whether the clean-up cost is subject to the limitation of a shipowner's liability under the 1976 Convention; in that case, the Korean court held that the vessel causing the other vessel to sink and spill oil can limit its liability for the indemnity claim from the other vessel as to clean-up costs.
CHOI & KIM is currently representing the International Oil Pollution Compensation Fund (IOPC Fund) in Korea and is involved in almost all important oil pollution cases in Korean waters.
Representative oil pollution cases include the following: "Keum Dong", "Yuil No. 1", "Sea Prince" and "Honam Sapphire". The case of "Sea Prince", a Cypriot tanker of 144,567 GRT, is the largest oil spill case in Korean history. While "Sea Prince" was seeking refuge from the typhoon "Faye" in 1995, it went aground off Sorido Island, Yosu and spilt approximately 5,000 tons of Arabian crude oil. During the following weeks, small quantities of oil leaked from the half-submerged section of the tanker. Small quantities of oil even reached the Japanese islands. The amount of claim including clean-up costs that was filed in the limitation court was greater than US$100 million. This incident prompted the Korean government to set up the Korea Marine Pollution Response Corporation (KMPRC), a specialist oil pollution response corporation. The dispute involving "Sea Prince" finally ended though the court's mediation order in 2003.
The IOPC Fund is a part of an international regime for the compensation of oil pollution damages caused by oil spills from tankers, having its headquarters in London. The IOPC Fund generally appoints the most prominent law firm in a particular country as its corresponding lawyer. The IOPC Fund, with the assistance of CHOI & KIM, is handling two oil pollution cases in Korea caused by "Dukyang" and "Kyungwon" which sank/grounded due to the typhoon "Maemi" in 2003.
The incidents that arise from the regular occurrence of typhoons in Korea is another source of legal disputes. CHOI & KIM is currently handling various cases involving CY operators, shipowners and the IOPC Fund in respect of CY flooding, damage to aquaculture farms, damage to new shipbuildings and oil pollution incidents that were caused by the super class typhoon "Maemi" in 2003.
The issues in respect of typhoon damages include the exemption of liability based on the Act of God/force majeure defense, differentiation between the damage caused by a typhoon and one caused by a shipowner's fault, and method of calculating the amount of damages, etc.
Successful ship arrests and prompt subsequent legal actions are essential in securing early recovery of claims against vessels. A collision claim usually gives rise to a maritime lien on a vessel and leads to the auction of the vessel. CHOI & KIM has abundant experiences on auction of vessels based on a mortgage and maritime lien on vessels. CHOI & KIM has been involved in the largest auction case in Korean history in 2000, in which approximately US$1 billion was at stake.
As a method to resolve a charterparty dispute, exercising lien on the cargo is one of the options available to owners. It is a controversial issue whether the owner can exercise lien over a cargo before an arbitral award is obtained pursuant to an arbitration clause in a charterparty. CHOI & KIM has expertise and experience in this area as well.