Sanko Succeeds in Obtaining Release of M/V Sanko Mineral

August 7, 2012

On 2 August, 2012, Sanko has succeeded in obtaining the immediate release of its vessel, M/V Sanko Mineral, which had been the subject of attachment and arrest proceedings in Baltimore, Maryland (USA).

By way of background, certain shipowners had commenced so-called "Rule B" attachment proceedings under US maritime law against Sanko and the vessel in the United States District Court of the District of Maryland (the "US District Court"), which lead to the vessel's detention in Baltimore in early May 2012. Sanko soon after joined Western Bulk Carriers AS (the "WBC"), the charterer of the vessel in requesting the US District Court for an order vacating the purported Rule B attachments based on futility and other equitable grounds.

On 27 July 2012, the US District Court granted the WBC’s emergency motion and ordered, among other things, that the process of Rule B maritime attachment and arrest previously issued by the court against the Sanko Mineral were vacated. More specifically, the US District Court recognized the effect of the intervening corporate reorganisation proceedings and the proceedings under Chapter 15 of the United States Bankruptcy Code involving Sanko as filed in Japan and New York on 2 July 2012 and held that maintaining the Rule B attachments and detention of the vessel would be both futile and inequitable. The US District Court further exercised its authority based on reported case decisions and vacated the Rule B attachments.

Sanko is pleased with this result which, while expected in the circumstances, did not require Sanko to post security or otherwise agree to prefer the claims of the Rule B attaching shipowners. In the meantime, Sanko will focus on the work ahead to develop a proposed plan of reorganisation, which is expected to be proposed in the first quarter of 2013. Sanko remains grateful for the continued support of Sanko's many creditors and trading partners.

The Sanko Steamship Co., Ltd. press release