Bhagwan Marine Pty Ltd v The Ship “Teras Bandicoot” (No 2)

The case involves Bhagwan Marine Pty Ltd, the plaintiff, and the Ship “Teras Bandicoot”, the defendant. The plaintiff claims damages for unpaid mooring fees and daily mooring charges incurred due to the Ship's continued use of the plaintiff’s cyclone mooring in Darwin Harbour. The Ship has been in a dead-ship status since February 2018 and was arrested following the plaintiff's claim. The Federal Court of Australia was required to decide on the application for the valuation and sale of the Ship pending the litigation.

The primary legal issue was whether the application for the judicial sale of the arrested Ship should be granted. The court considered the ongoing costs of mooring fees, external inspections, and the need for further maintenance on the Ship's hull. Additionally, the imminence of the cyclone season in Darwin raised concerns about the Ship's present mooring. The plaintiff argued that unless the Ship was sold, its claim would be diminished by the ongoing depreciation in value of the Ship and the continuing costs of maintaining the arrest, disadvantaging all parties interested in the Ship. The court concluded that the plaintiff's application for appraisal and sale was compelling and should be granted.

The Federal Court granted the plaintiff's application for the valuation and sale of the Ship. The court determined that the interests of creditors, the owner, and the claimants against the ship were best served by ordering appraisement and sale so that funds may be paid into the Court for the benefit of all parties interested in them. Orders were made for the Marshal to value and sell the Ship, with the method of sale to be determined by the Court. The court also directed the Marshal to engage a shipbroker and retain a solicitor experienced in the judicial sale of ships. The costs of the appraisement and sale of the Ship were to be paid out of the proceeds of sale, and the costs of the application were to be in the cause.