SOUTH KOREA Law and Practice Contributed by: Woorin Sung and Hee Kyung Jeong, D&A LLC
4.5 Time Bar for Filing Claims for Damaged or Lost Cargo The Commercial Act of South Korea provides that damage claims against a carrier arising from the loss of, damage to or delay in the delivery of goods shall be extinguished if no judicial claim is brought within one year from the date on which the cargo was delivered, or should have been delivered, to the consignee. This time bar reflects a partial adoption of the Hague-Visby Rules and is intended to ensure the swift conclusion of legal relations in marine transport. Although this period constitutes an exclusion period, it may be extended by agreement between the parties. 5. Maritime Liens and Ship Arrests 5.1 Ship Arrests South Korea is not a party to the International Conven - tion on Arrest of Ships (1999). In South Korea, ship arrest is effected pursuant to procedures for provi - sional attachment of vessels under the Civil Execu - tion Act. Such provisional attachment is conceptually distinct from the independent arrest action recognised under English law. Nevertheless, under South Korean civil law, a vessel may be arrested through general civil execution and preservative procedures provided for in Article 777 (1) of the Commercial Act of South Korea enumerates the types of claims that give rise to mari - time liens over vessels, which include the following: • litigation costs incurred for the common benefit of creditors, taxes imposed on the vessel in connec - tion with the voyage, pilotage dues, towage fees, and expenses for the maintenance and inspection of the vessel and its appurtenances after the final entry into a port; • claims arising out of employment contracts of crew members or other employees of the vessel; • salvage claims arising from maritime rescue opera - tions and claims relating to contributions in general average; and • claims for damages arising from collisions or other navigational accidents, damage to navigational facilities, port facilities or sea routes, and compen - the Civil Execution Act. 5.2 Maritime Liens
sation for death or personal injury suffered by crew members or passengers. Indemnities for injuries to crew members constitute claims giving rise to maritime liens over the vessel. However, as a general principle, claims arising out of a time charterparty do not give rise to maritime liens over the vessel. Claims giving rise to maritime liens take priority over other rights over the vessel, such as ship mortgages. However, other vessel-related claims that are not expressly enumerated by law are not accorded such priority. Claims giving rise to maritime liens may serve as a strong basis for ship arrest. By contrast, where a ship arrest is sought on the basis of a general maritime claim, the existence of the claim must be established, and the requirements under the Civil Execution Act or those applicable to other preservative measures must be satisfied. 5.3 Liability in Personam for Owners or Demise Charterers Provisional attachment is, by its nature, an execu - tion against an obligor’s property; accordingly, a pro - visional attachment over a vessel requires that the obligor be the owner of the vessel subject to ship arrest. However, in the enforcement of security inter - ests based on ship mortgages or maritime liens, the obligor’s personal liability is not determinative; rather, the key issue is whether the relevant security interest has been lawfully established over the vessel. Once a ship mortgage or maritime lien has been lawfully con - stituted over a vessel, neither the identity of the vessel owner nor the existence of the owner’s personal liabil - ity is taken into account. In particular, claims giving rise to maritime liens are understood as liabilities that are inseparably attached to a specific vessel. Accord - ingly, when a creditor exercises its rights under such a claim, the relevant vessel may be subject to enforce - ment regardless of whether the vessel owner bears any personal liability. 5.4 Unpaid Bunkers Bunker supply claims do not constitute claims giving rise to maritime liens under the Commercial Act of South Korea. Accordingly, it is generally not permitted to commence an auction immediately solely on the
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