Blueshell Shipping Ltd of Cyprus, the former owner of the 40,000-ton steel-made cargo ship, was taken to court by the United Kingdom Mutual Steam Ship Assurance Association (Bermuda), which said that the accused had failed to pay an insurance premium of US$750,000 by October this year.
The court (administration covers five provinces and one municipal city in Yangtze River valley) detained "Filoktitis", the ship that was unloading in Nanjing in East China's Jiangsu Province, and asked the accused to deposit a guarantee of US$1 million. After the accused failed to do so, the court ordered in October that the ship be sold by auction in accordance with article 30 of "Special Procedures Law of Admiralty Proceedings of the People's Republic of China".
It is learnt that there are three differences between this auction with the original auction of foreign ships:
First, different legal foundation applied.
Former cases based on related judicial explanation by the Supreme People's Court. This case, coming up after the promulgation of "Special Procedures Law of Admiralty Proceedings of the People's Republic of China", becomes the first one handled in accordance with the newly issued Law. Meanwhile, Auction of the People's Republic of China also applied to it.
Second, different personnel composed the Auction Committee.
In addition to executive official of the court and auditors of China Classification Society (CCS) who are supposed to be the members of the committee for former cases, the auctioneer was also added into the member list.
Former cases adopted floor price system with the reserve price closed. If bidding price failed to reach the level of reserve price, the auction will be replaced by realization of property only to be held privately. The case of Filoktitis adopted floor price system instead. Bidders can compete openly after the floor price is published. The one offers the highest price will become the buyer.
Several media had published the announcement of the auction inside or outside China for many times one month before the auction was held.
(People's Daily December 19, 2001)
