Hanjin in container leasing dispute

Hanjin in container leasing dispute    Hanjin Shipping on Thursday refuted reports suggesting it has defaulted on payments for 5,900 shipping containers it had leased from an Ireland-based company called Unitas.
   Media reports this week said Sumitomo Mitsui Banking Corp. (SMBC), the first-lien holder on the containers, had filed cases against Hanjin in district courts in California, New Jersey, Washington and Virginia.
   The maritime news outlet Fairplay reported that SMBC alleges Hanjin 'failed to make final balloon payments on two equipment leases from 2001-2009 ' (and) neither paid its bills nor redelivered the leased containers.' The report said Hanjin has filed its own lawsuit against Unitas.
   Hanjin issued a statement Thursday saying the problem is merely a contractual dispute between Hanjin, Unitas and SMBC and is not a reflection of financial difficulties the carrier might be facing.
   'In 2001, Hanjin and Unitas entered into contract to lease 5,900 units of containers for eight years,' from 2001 to 2009, the statement said. 'The buying obligation for Hanjin was to purchase those containers paying the balloon payment of contractually agreed amount upon the 32nd installment. SMBC financed the production of the containers for Unitas given the mortgage rights.
   'However, when Hanjin intended to make the balloon payment upon the 32nd installment, Unitas argued that the balloon payment was only part of the lease payment and that they were not obliged to give the ownership to HJS. Unitas argued that if Hanjin wanted to purchase the containers, Hanjin needed to pay the balloon payment once more, which is against contract.
   'As Unitas intentionally violated the contract, in October 2009 Hanjin raised litigation against Unitas in England over the ownership of the containers and compensation of the damages caused by Unitas' actions. Hanjin’s damage claims amount to $11 million.
   'Concerned that Hanjin's payment for those containers might not reach SMBC, Hanjin and SMBC discussed the possibility of direct payment. However, it failed due to serious objection raised by Unitas. And as the contract between Unitas and SMBC defaulted, SMBC exercised their mortgage rights and arrested the containers.'
   Hanjin said it is planning to 'work closely with all parties to settle the dispute based on mutual understanding and cooperation.'