News / Hanjin under fire in US court over lack of liability insurance for chassis

© Ilfede

Hanjin has come under fire again in a US court for failure to pay insurance premiums and “egregious” stalling tactics.

Chassis lessor Flexi-Van has urged the US bankruptcy court to cancel all Hanjin’s chassis pool user agreements in the US.

Owed $3m when Hanjin filed for bankruptcy, Flexi-Van says its main concern is in fact liability insurance.

Hanjin was insured by the TT Club for the chassis, but the policy terminated on 10 October following Hanjin’s failure to pay – thus breaching its agreement with Flexi-Van which requires liability insurance.

While Hanjin is no longer delivering cargo beyond ports, many chassis “remain in the field” but are now uninsured against any liability.

A provisional relief order in September prevented companies from cancelling contracts with Hanjin, so Flexi-Van has requested an exemption.

It says: “Simply put, without liability insurance coverage on the chassis, Hanjin and Flexi-Van will be directly exposed to significant liability risks should Hanjin choose to resume delivery obligations.”

Along with cancelling the agreements, Flexi-Van is also calling on the judge to order Hanjin  to pay for and reinstate its insurance policies, “due to the tremendous liability risk”.

“Aside from the obvious benefits of protecting Hanjin and Flexi-Van from immeasurable exposure … it will also provide a level of security to all creditors.”

In a separate case, fuel supplier OceanConnect (OCM) has reacted angrily to Hanjin’s attempt to have OCM found in contempt of court and pay damages for attempting to arrest a ship.

OCM, owed some $840,000 for fuel on the Seaspan Efficiency, accuses Hanjin of “dilatory tactics”, alleging that the line was refusing to tell creditors when ships went off-charter.

The court had ruled that creditors would be unable to arrest any vessel, or enforce the lien, while the ships remained under charter to Hanjin. However, claims OCM, it has not been made clear by Hanjin when vessels come off-charter.

As OCM notes, however, Hanjin has been ordered to cancel charter agreements on any vessel which has discharged.

The court asked OceanConnect  to supply evidence of the charter status – but it says that “as a result of the dilatory tactics of counsel for [a] foreign administrator, this information … has been impossible for OCM to obtain except through external sources”.

OCm added: “[The] foreign administrator has simply refused continually to provide the requested information regarding the plans for the off-hire charter status of the vessel.”