WIN MORE SHIPPING LTD V DIRECTOR OF MARINE

[2019] HKCFI 1137, HKSAR Court of First Instance, Hon Chow J, 2 May 2019

Administrative review – Sanctions – Flag state – Classification and statutory certificates withdrawn upon suspected breach of North Korea sanctions – Notification of deregistration by flag – United Nations Security Council Resolution 2397 (2017)

The applicant shipowner sought to challenge decisions by the Hong Kong Director of Marine (the Director) to close the registration of the Hong Kong-registered motor tanker Lighthouse Winmore; and to delay or refuse making a request to the United Nations Security Council Sanctions Committee for the release of the vessel from detention. The Lighthouse Winmore had been in class with Bureau Veritas to expire at the end of October 2019. In November 2017 the vessel had been detained in a South Korean port, initially for safety deficiencies but then for breach of UN sanctions against North Korea in connection with a suspected ship-to-ship transfer of petroleum products to a North Korean vessel in breach of UN Security Council Resolution 2375. The vessel remained impounded at the port. Soon thereafter, the insurers of the vessel cancelled hull and liability policies. On 3 February 2018, the recognised organisation Bureau Veritas had withdrawn class and cancelled the vessel's statutory certificates. The Director was informed of the decision. On 6 February 2018, the Director gave 90 days' notice of intention to close the vessel's registration (which in the event had not been actioned, pending judicial review). The applicant sought judicial review of that decision, and of the Director's failure to request the UN Security Council Sanctions Committee to release the vessel from detention. Paragraph 9 of Resolution 2397 provided that an impounded vessel could be released after six months upon the request of the flag state, provided adequate arrangements had been made to comply with the resolution. Such arrangements were proposed and on 4 February 2019 the Director submitted them to the Ministry of Foreign Affairs of the People's Republic of China, along with comments terming them "unconvincing". Meanwhile, on 1 August 2018, the applicant had sought judicial review of the Director's decision, alternatively her inaction. In January 2019, leave to join Bureau Veritas and to serve it out of the jurisdiction was granted, but this course had not been pursued.