Maritime Law and Practice in China 9781138639959, 9781315636917

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M A RIT IME L AW A N D PR ACTI CE I N CHI NA

MARITIME AND TRANSPORT LAW LIBRARY

MARITIME AND TRANSPORT LAW LIBRARY

Air Cargo Insurance by Malcom A. Clarke and George Leloudas (2016) The Modern Law of Marine Insurance Volume 4 edited by D. Rhidian Thomas (2016) Ship Building, Sale and Finance edited by Bariş Soyer and Andrew Tettenborn (2016) International Maritime Conventions Volume Three Protection of the Marine Environment by Francesco Berlingieri (2016) International Maritime Conventions Volume Two Navigation, Securities, Limitation of Liability and Jurisdiction by Francesco Berlingieri (2015) Maritime Law 3rd Edition edited by Yvonne Baatz (2015) Offshore Contracts and Liabilities by Bariş Soyer and Andrew Tettenborn (2015) Marine Insurance Fraud by Bariş Soyer (2015) International Maritime Conventions Volume One The Carriage of Goods and Passengers by Sea by Francesco Berlingieri (2014) International Carriage of Goods by Road: CMR 6th Edition by Malcolm A. Clarke (2014) The Maritime Labour Convention 2006: International Labour Law Redefined edited by Jennifer Lavelle (2014)

MARIT I ME L AW AN D P RA CT IC E I N C HI N A LIANG ZHAO AND LIANJUN LI

First edition published 2017 by Informa Law from Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Informa Law from Routledge 711 Third Avenue, New York, NY 10017 Informa Law from Routledge is an imprint of the Taylor & Francis Group, an Informa business © 2017 Liang Zhao and Lianjun Li The right of Liang Zhao and Lianjun Li to be identified as authors of this work has been asserted by them in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Names: Zhao, Liang (Law teacher), author. | Li, Lianjun (Lawyer), author. Title: Maritime law and practice in China / by Liang Zhao and Lianjun Li. Description: Abingdon, Oxon ; New York, NY : Informa Law from Routledge, 2017. | Series: Maritime and transport law library | Includes index. Identifiers: LCCN 2016058919 | ISBN 9781138639959 (hbk) | ISBN 9781315636917 (ebk) Subjects: LCSH: Maritime law—China. Classification: LCC KNQ970 .Z4734 2017 | DDC 343.5109/6—dc23 LC record available at https://lccn.loc.gov/2016058919 ISBN: 978-1-138-63995-9 (hbk) ISBN: 978-1-315-63691-7 (ebk) Typeset in Times New Roman by Apex CoVantage, LLC Disclaimer Whilst every effort has been made to ensure that the information contained in this book is correct, neither the author nor Informa Law can accept any responsibility for any errors or omissions or for any consequences arising therefrom. Every effort has been made to contact copyright-holders to seek permission to republish extracts of other works. Please advise the publisher of any errors or omissions, and these will be corrected in subsequent editions.

CONTENTS

Acknowledgements Foreword Preface Table of cases Table of legislation Table of other authorities PART I CHAPTER 1

xvii xix xxi xxiii xliii lix SUBSTANTIVE MARITIME LAW

INTRODUCTION TO CHINESE MARITIME LAW

3

Chinese maritime law Chinese maritime courts and practice Inconsistency in adjudication and guiding cases

3 5 5

CHAPTER 2

7

SHIPS

The ship Ownership of a ship Ship registration Registration of ownership of ships Amendment and cancellation of registration Nationality of ships Ship mortgage Establishment of ship mortgage Registration of ship mortgage Registration of bareboat charter

7 8 11 12 13 13 15 16 17 19

CHAPTER 3

22

MASTER AND SEAMEN

Master Seamen Registration and qualifications of seamen Registration Competency certificate Seaman’s passport Guarantee of profession for seamen Benefits

22 25 26 26 27 27 28 28

v

CONTENTS

Repatriation Maritime Labour Convention 2006

29 30

CHAPTER 4

31

CHARTERPARTIES

Voyage charter Compulsory provisions Rights and obligations Time charter Delivery and redelivery of ship Shipowner’s rights and obligations Charterer’s rights and obligations Bareboat charter Delivery and redelivery of ship Shipowner’s rights and obligations Charterer’s rights and obligations Financial lease of ship

32 33 35 38 39 41 42 43 44 44 45 48

CHAPTER 5

50

BILL OF LADING: FUNCTIONS

Evidence of contract Receipt of goods Document of title Bill of lading and property right Delivery of goods without bill of lading Letter of indemnity

50 52 56 59 61 63

CHAPTER 6

66

BILL OF LADING: PARTIES

The carrier The actual carrier The common carrier The shipper Right of control of the shipper Consignee and bill of lading holder The consignee Bill of lading holder Incorporation of charterparty into bill of lading Incorporation of law and arbitration clause Incorporation of time charters

CHAPTER 7

BILL OF LADING: OBLIGATIONS, LIABILITIES AND LIMITATION

Obligations of carrier Period of responsibility Obligations Liabilities, exemptions and limitation of liability of carrier Liability for loss, damage and delay

vi

66 67 69 70 71 73 73 74 74 75 77

78 78 78 79 80 80

CONTENTS

Liability for live animal and deck cargo Assessment of liability Exemptions Limitation of liability Loss of liability limitation Delivery of goods Notice for delivery Notice for damage Non-delivery of goods Obligations and liabilities of shipper Information and formalities Dangerous goods Freight Fault and liability

CHAPTER 8

81 81 83 84 85 86 86 87 88 90 90 90 91 92

FREIGHT FORWARDING AND MULTIMODAL TRANSPORT

93

Freight forwarding Freight forwarding services Freight forwarder Disputes over ocean freight forwarder Freight forwarding contract Freight forwarder as carrier Delivery of shipping documents Obligations and liability Sub-commission Rescission of contract NVOCC Non-vessel-operating services and NVOCC Freight forwarder or NVOCC? Multimodal transport Multimodal transport in the CMC 1992 Responsibility period Liability and limitation

93 93 94 95 96 97 98 99 100 101 101 101 102 103 103 105 106

CHAPTER 9

107

CARRIAGE OF PASSENGERS BY SEA

Athens Convention Definitions Invalid clauses Carrier and the actual carrier Passenger ticket Carriage period Liability of passenger Liability of carrier Liability and immunity

107 108 108 109 109 110 110 111 111

vii

CONTENTS

Liability for valuables Burden of proof Notice for damage to luggage Damages and compensation Limitation of liability of carrier Limitation of liability for coastal carriage Loss of limitation of liability

111 112 112 112 113 114 115

CHAPTER 10

116

SEA TOWAGE CONTRACTS

Third parties to sea towage contracts Seaworthiness of tug and tow Force majeure in sea towage contract Towage fee and duress Liabilities and immunities

116 118 118 119 119

CHAPTER 11

121

COLLISION OF SHIPS

Ships in collision Liabilities in collision General principles Proportion of liability Causation in tort Compensation for damages Compensation in general Compensation for damage to property Compensation for personal injury Liable persons Burden of proof and evidence

122 122 122 123 125 126 126 127 128 129 130

CHAPTER 12

134

SALVAGE AT SEA

Concepts and application Salvage contract and performance Salvage contract Salvage operations State-controlled salvage Performance of salvage Annulment and modification of contracts Rights of salvors No cure no pay Salvage reward Salved value and apportionment Special compensation No entitlement of remuneration Apportionment between salvors Salvage of persons Claims and actions Duty to provide security

134 135 135 136 137 138 138 139 139 139 140 142 142 143 143 143 143

viii

CONTENTS

Auction sale of salved ship and property Interim payment Interest Publication of arbitral awards

CHAPTER 13

143 144 144 144

GENERAL AVERAGE

145

Scope of general average General average in claim The amount of sacrifice and contribution General average adjustment

145 146 147 148

CHAPTER 14

151

LIMITATION OF LIABILITY FOR MARITIME CLAIMS

Scope of application Ships Persons entitled to limit liability Maritime claims Claims subject to limitation Claims excepted from limitation Limits of liability The general limits The special limits The limits for passenger claims Aggregation of claims Loss of limitation of liability Limitation fund

151 151 152 152 152 154 155 155 156 157 157 158 159

CHAPTER 15

160

MARINE INSURANCE

Marine insurance contract Perils Insurable value and insured amount Freight Double insurance Open cover Assignment of insurance contract Termination of insurance contract Interpretation of contract clauses Literal rule Contra proferentem rule Exemption clause All risks Insurable interest Disclosure of material circumstances Warranties of the assured Loss and abandonment Indemnity from insurer Liability of indemnity

161 161 162 162 163 164 165 165 166 166 167 168 168 170 172 174 175 176 176

ix

CONTENTS

Amount of indemnity Exemption of liability Subrogation

177 178 179

CHAPTER 16

182

MARINE POLLUTION

International regime Concepts and applications Concepts Applications Damage and compensation Claimants Pollution damage Liability and proportion Liability under the conventions Joint and several liabilities Liability not under the conventions Evidence and burden of proof Limitation of liability Insurance and financial guarantee

182 183 183 184 185 185 185 187 187 188 189 190 190 192

CHAPTER 17 APPLICABLE LAW AND TIME LIMITS

195

Applicable law Party autonomy and closest connection Intention of the parties International law and public policy Statutory applicable law Time limits for maritime claims Time limits for carriage of goods claims Time limits for carriage of passengers’ claims Time limits for marine insurance claims Time limits for other claims Suspension and discontinuation

195 195 196 197 198 198 198 205 206 207 208

PART II CHAPTER 18

MARITIME PROCEDURE LAW

INTRODUCTION TO CHINESE MARITIME PROCEDURE LAW AND THE CHINESE MARITIME COURT SYSTEM

Introduction The Chinese court system The developments of the Chinese maritime courts system The development of Chinese maritime procedural law A brief review of the Special Maritime Procedure Law General principles Jurisdiction Preservation of maritime claims

x

215 215 215 215 216 217 217 217 218

CONTENTS

Ship arrests Arrest of ships and sister ships Second arrests “Live” arrests The duration of arrests Auction of ships Attachment and auction of cargo carried by ships Maritime injunctions Preservation of maritime evidence Maritime security Service Special trial procedures Trial of ship collision cases Trial of general average cases Exercising rights of subrogation by marine insurers Limitation fund for maritime claims Procedure of registration and repayment of debt Procedure for exigence of maritime liens Other sources of law for maritime actions The court fees

219 219 219 220 220 220 221 221 221 222 222 223 223 223 224 224 225 225 226 227

CHAPTER 19

229

MARITIME JURISDICTIONS

Introduction Jurisdiction of maritime courts Maritime territorial jurisdiction Hierarchical jurisdiction Agreed jurisdiction and exclusive jurisdiction Disputes about maritime jurisdiction

229 230 237 242 242 244

CHAPTER 20

246

PRESERVATION OF MARITIME CLAIMS

Introduction Procedures and requirements for applying preservation of maritime claims Jurisdiction Application form Evidence Security Order of preservation and discharge of the preservation Liability for wrongful application Arrest of ships General introduction to ship arrest “Fixed arrest” and “live arrest” Conditions for ship arrest Re-arrest and multiple arrest Compulsory auction of ship Conditions for compulsory auction of ships Procedure of compulsory auction of ships

xi

246 246 246 247 247 248 248 250 251 251 251 252 254 254 255 256

CONTENTS

Attachment of cargo on board the ship Compulsory auction of cargoes

260 261

CHAPTER 21

MARITIME INJUNCTION

262

Introduction The general nature of the remedy Application for a maritime injunction Before or during the arbitration/litigation The court Making the application Security Conditions for granting a maritime injunction Review and issue of a maritime injunction order Execution Reconsideration and objection Maritime injunctions wrongfully obtained Comparison with a Mareva injunction

262 262 263 263 263 264 264 265 266 266 267 267 268

CHAPTER 22

269

PRESERVATION OF MARITIME EVIDENCE

Introduction The general nature of the remedy Application for preservation of maritime evidence Before or during the arbitration/litigation The court Making the application Security Conditions for obtaining an order to preserve maritime evidence Qualifications of subject – a claimant is a party concerned of a maritime claim Standards of evidence – evidence to be preserved on claims must have evidential effect on a maritime claim Requirements for targets – a person against whom the claim is made is relevant to the evidence to be preserved on claims Applicable situations – an urgent situation where no immediate steps to preserve evidence taken will lead to the loss of evidence or difficulty in obtaining evidence Review and issue an order to preserve the evidence Execution Reconsideration and objection Wrongfully obtained order for preservation of maritime evidence

275 276 276 276 277

CHAPTER 23

278

MARITIME SECURITY

Introduction Security put up by a defendant in proceedings involving a maritime claim Amount of security Claimant’s liability for requirement of an excessive amount of security Reduction, alteration and cancellation of security

xii

269 269 271 271 271 272 272 273 273 274 274

278 279 279 279 281

CONTENTS

Claimant’s liability for wrongful request of security Type of security Return of security Counter security put up by claimant Counter security in ship arrest Amount of counter security Alteration and reduction of counter security Type of counter security Return of counter security Counter security in the proceedings of the attachment of other types of property Counter security in the proceedings of maritime injunctions and the preservation of maritime evidence Counter security in applications for the preservation of evidence Security involved in the constitution of a limitation fund and advanced payment prior to judgment

CHAPTER 24

PROCEDURES FOR TRIAL, CONSTITUTION OF LIMITATION FUND FOR MARITIME CLAIM, RECOGNITION AND PAYMENT OF DEBTS, EXIGENCE OF MARITIME LIEN

Introduction General trial procedure The first instance trial procedure The second instance trial procedure Special rules on the trial of the collision of ships The collision of ships that is governed by the Chinese Maritime Code (the “CMC”) and the SMPL Investigation form for maritime accident Completion of production of factual evidence The investigation materials by the Maritime Safety Administration Requirement of inspection of a ship and appraisal of a ship’s value The time period of the trial of collision of ships Special rules on the trial of general average Jurisdiction of general average cases General average adjustment report Claim for non-general average losses Special rules on the trial of marine insurer’s subrogation claim Summary procedure, procedure for urging payment of debt and procedure for public notice of exigence of claim Summary procedure Small claim procedure Procedure for urging payment of debt Procedure for public notice of exigency of claim Procedure for constitution of liability limitation fund for maritime claims Parties who can apply for constitution of limitation fund Jurisdiction of the maritime court

xiii

281 282 285 286 286 286 286 287 288 288 289 290 291

292 292 292 292 295 296 296 297 298 298 299 300 300 300 300 302 302 304 304 305 305 306 307 307 307

CONTENTS

Application for constitution of limitation fund and examination of application by court Constitution of the limitation fund Court’s dealing with property preservation Registration of claims and distribution of limitation fund among creditors Procedure for the registration of claims in auction of a ship and distribution of the proceeds from the auction Procedure for exigence of maritime lien

CHAPTER 25

CONFLICT OF LAWS

311 313

314

Introduction General principles Supremacy of the international treaty Lex voluntatis Ascertainment of foreign law Reservation of public order and the application of mandatory provisions Nature of disputes and application of laws Contract Ownership and mortgage Maritime lien Collision Salvage General average Limitation of liability for maritime claims Jurisdiction of Chinese court in foreign-related disputes

CHAPTER 26

308 309 310 310

MARITIME ARBITRATION, CONCILIATION AND RECOGNITION AND ENFORCEMENT OF FOREIGN ARBITRATION AWARDS AND FOREIGN JUDGMENTS

Introduction Review of the Arbitration Law of People’s Republic of China (the “Arbitration Law”) Types of arbitration The Arbitration Law and its judicial interpretation Valid arbitration agreement Arbitration proceedings Arbitrators and arbitration tribunal Hearings Enforcement and setting aside of domestic arbitration award Maritime arbitration and the CMAC The CMAC and the arbitration rules of CMAC A special issue for maritime arbitration – the validity of an arbitration clause in the bill of lading Conciliation/mediation

xiv

314 315 315 315 316 317 318 318 321 322 323 324 325 326 327

330 330 331 331 331 331 334 335 335 337 338 338 340 343

CONTENTS

Conciliation by court Conciliation in arbitration Conciliation by government Recognition and enforcement of foreign arbitration award Procedures for recognition and enforcement of foreign maritime arbitral awards in China Reasons for refusing the recognition and enforcement of foreign arbitral awards Recognition and enforcement of Hong Kong arbitration awards Recognition and enforcement of Taiwan arbitration awards Recognition and enforcement of foreign judgments in China General procedure Basis on which the application can be approved Enforcement of court judgments of Hong Kong, Macau and Taiwan

ANNEX I ANNEX II

343 344 345 346 346 347 349 349 351 351 352 353

MARITIME CODE OF THE PEOPLE’S REPUBLIC OF CHINA

355

SPECIAL MARITIME PROCEDURE LAW OF THE PEOPLE’S REPUBLIC OF CHINA

428

Index

459

xv

A C K N O W L E D G E ME NT S

Dr Liang Zhao would like to thank his wife Lei for her emotional support and taking care of three young children, Maggie, Charlie and Davie. Mr Lianjun Li would like to give his heartfelt thanks to his wife Xiaoli and his daughters Annie, Anna, Angela and Andrea for their support and understanding.

xvii

F O R E WORD

China has become a world influential country in international shipping and trade. Chinese maritime law has played an important role for building such influence. My experience as a Chinese maritime judge, later a chief judge of the maritime division and a member of the Judicial Committee of the Tianjin Maritime Court before 1994, and now a practising Chinese maritime lawyer, saw the development of both Chinese maritime law and judicial practice. Not many books about Chinese maritime law written in English have been published to match the rapid development of Chinese maritime law and maritime procedure law. Chinese courts have dealt with hundreds of thousands of maritime cases since the establishment of maritime courts in China, but the case study of maritime judgments in English language is very limited. An English book of modern Chinese maritime law and practice is much desired for non-Chinese maritime law practitioners to understand Chinese maritime law and practice. Now, I am glad to know that Dr Liang Zhao and Mr Lianjun Li have written such a book: Maritime Law and Practice in China. Dr Zhao is a young but talented and energetic maritime law scholar. His Chinese law study from Dalian Maritime University and common law study from the University of Southampton and the University of Hong Kong have guaranteed his qualification for writing the substantive law of Chinese maritime law. Lianjun is one of my old friends and a successful maritime lawyer. He has extensive experience in dealing with practical and legal aspects of maritime litigation and arbitration in China. He has been a partner of Reed Smith Richards Butler since 2004. Lianjun has received so many honours and awards including the recent ones: Band 1 in Shipping Litigation (China) by Chambers Asia – Pacific 2016 and Leading Individual by Legal 500 Asia – Pacific 2016. Lianjun graduated from Dalian Maritime University and is a visiting maritime law professor to Dalian Maritime University and Jimei University. No doubt he has been well positioned to write Chinese maritime procedure law and maritime arbitration. This book covers the whole range of topics that form the body of Chinese maritime law and maritime procedure law. The sources of this book include statutes, judicial interpretations and judgments. This book will give English readers a comprehensive and detailed world of Chinese maritime law and judicial practice. I am confident that this book will greatly benefit those foreign lawyers who wish to understand China-related maritime law and practice. I believe that this book deserves a place on the shelves of maritime lawyers and professionals in maritime law field.

xix

FOREWORD

I am also pleased to know that this book has been collected in the Maritime and Transport Law Library as a leading book series of Informa Law from Routledge. Chinese maritime law has become a member of the world maritime law family. I wish this book every success. Zhong Cheng Former Maritime Judge Senior Partner Wang Jing & Co.

xx

P R E FA C E

In comparison with other major maritime nations, Chinese maritime law is perhaps still a young member of the international maritime law world. Chinese courts started to deal with maritime disputes without a maritime code since the establishment of the People’s Republic of China in 1949. China has established ten maritime courts as professional courts to deal with maritime matters since 1984. The Chinese Maritime Code was promulgated in November 1992 and came into force in July 1993. In 1999, China adopted the Special Maritime Procedure Law which took effect in 2000. The establishment of maritime courts and the enactment of the maritime law and the maritime procedure law have become the landmarks of Chinese maritime law and practice. As a quasi-civil law jurisdiction, China has been shrouded in mystery for non-Chinese practitioners for a long time, not only because of the Chinese language but also the complicated judicial practice. There are only a few English publications about Chinese maritime law but all those publications are out of date. With the fast development of Chinese economy and close connection with the rest of the world, Chinese modern maritime law and practice became an important gap to be filled as a part of the maritime law system in the world. The purpose of this book is to produce a professional book of Chinese maritime law for practitioners in maritime law and professionals in shipping-related industries. We hope that this book could be used as a text book for Chinese maritime law teaching and learning and could be used for comparative study of maritime law among different law jurisdictions. This book is divided up into two parts: Part I “Substantive maritime law” and Part II “Maritime procedure law”. Liang Zhao has written Part I and Lianjun Li has written Part II. The chapters in Part I are based on the chapters of the Chinese Maritime Code 1992 plus a chapter on marine pollution that is not covered by the Chinese Maritime Code 1992. Part II is written based on the Special Maritime Procedure Law 1999 with two special chapters on conflict of laws, and maritime arbitration, conciliation and recognition and enforcement of foreign arbitral awards and judgments. Relevant civil laws and civil procedure law in China are discussed in this book. Judicial interpretations relating to maritime law and maritime procedure law from the Supreme People’s Court in China are also discussed as important sources of law in China. China is not a common law jurisdiction and traditional publications on Chinese law do not focus on Chinese judicial practice. Although Chinese judgments are not precedents in judicial practice, they provide the reader with a view of the real world of maritime law in China. For preparing this book, we have examined more than 1,000 Chinese maritime judgments. In this book, there are more than 400 leading Chinese judgments discussed in the xxi

PREFACE

context of Chinese maritime law. Those Chinese judgments from Chinese Maritime Courts, High People’s Courts and the Supreme People’s Court are mainly from the databases of Westlaw China and China Judgments Online. Therefore, this book provides readers with both the statutory law and the judicial practice of maritime law and maritime procedure law in China. The Chinese Maritime Code 1992 and the Special Maritime Procedure Law 1999 are reproduced as annexes to this book in Chinese with English translation. The English translations are based on the “official” translations (with our amendments) from the General Office of the Legislative Affairs Commission, the Standing Committee of the National People’s Congress of the People’s Republic of China. If there is any inconsistency or ambiguity between the Chinese version and the English translation, the Chinese version shall prevail. We have relied upon the help of colleagues in preparing and reviewing this book and would particularly to thank Jonathan Hooi and Yiran Wen from Reed Smith Richards Butler in Hong Kong. In addition to Jonathan and Yiran, Lianjun wishes to take this opportunity to express his sincere thanks to his other colleagues or ex-colleagues in his team at Reed Smith Richards Butler for their assistances and contributions to Part II of this book, in particular Li Min, Victoria Wei, Cheryl Yu, Edward Liu, Anna Chen and Jody Luk. We would also like to express our sincere thanks to Mr Zhong Cheng, our friend and one of the leading Chinese maritime lawyers with many years’ judicial experience in China for his review and kind words in his foreword to this book. We are also grateful to our publisher Informa Law from Routledge and particularly to Caroline Church and Amy Jones for their patience and efficiency. The law is stated as at 1 August 2016. Liang Zhao and Lianjun Li

xxii

TA B L E O F C AS E S

Cases China A. P. Molloer-Masersk A/S v GL Biochem (Shanghai) Ltd and SIPG Logistics Co Ltd (2013) Hu Hai Fa Shang Chu Zi No. 1224 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . 7.38 A. P. Molloer-Masersk A/S v Qingdao Huaqing Import & Export Co Ltd (2003) Qing Hai Fa Shang Chu Zi No. 59 (Qingdao Maritime Court); (2004) Lu Min Si Zhong Zi No. 1 (Shandong High People’s Court) (CA) . . . . . . . . . . . . . . 7.35 A.P. Moller-Maersk A/S v Shanghai XEN Freight Agency Ltd and Shanghai XEN Freight Agency Ltd Shenzhen Branch (Maersk v XEN ) (2012) Guang Hai Fa Chu Zi No. 329 (Guangzhou Maritime Court); (2013) Yue Gao Fa Min Si Zhong Zi No. 162 (Guangdong High People’s Court) (CA); (2015) Min Shen Zi No. 559 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.29, 17.28 Ace European Group Co Ltd v Lianyungang Mingri International Marine Shipping Co Ltd and Shanghai Mingri International Shipping Service Co Ltd (2011) Min Si Ti Zi No. 16 (SPC) (Retrial). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.9 Adissa Sport and Fitness (Hangzhou) Co Ltd v FIEGE Ltd and FIEGE Ltd Ningbo Branch (2009) Yong Hai Fa Shang Chu Zi No. 460 (Ningbo Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.38 Allianz China General Insurance Co Ltd v Youda (Shanghai) International transportation Co Ltd and others (2014) Hu Hai Fa Shang Chu Zi No. 361 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.16 American President Liners Co Ltd v Feida Electric Appliance Factory, Feili Company and Great Wall Company (1994) Guang Hai Fa Shang Zi No. 66 (Guangzhou Maritime Court); (1996) Yue Fa Jing Er Shang Zi No. 29 (Guangdong High People’s Court) (CA); (1998) Jiao Ti Zi No. 3 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . 17.6 American President Lines v Guangzhou Feida Electrical Apparatus Factory, SPC, 25 June 2002. This is a case published on the Gazette of SPC of People’s Republic of China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.25 Anhui Light Industries International Co., Ltd. v Shanghai Chuangjian International Freight Forwarding Co., Ltd (2011) Hu Hai Fa Shang Chu Zi No. 1255 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.22 Anhui Longlide Packing and Printing Co., Ltd v BP Agnati S.R.L (2013) Min Si Ta Zi No. 13 (SPC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.14 Anhui Only Electronic Co Ltd v Lvyun International Freight Forwarding (Shenzhen) Co Ltd Shanghai Branch and Voyage Logistics Ltd (2011) Min Shen Zi No. 177 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.36, 6.18 Australia China Metal Corporation Pty Ltd v PICC P&C Co Ltd Tianjin Jinnan Branch (2013) Min Shen Zi No. 2358 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . 17.45

xxiii

TABLE OF CASES

B&T Ceramic Gourp S.R.1 v E.N. Group s.p.a (2000) Fo Zhong Fa Jing Chu Zi No.633 (Guangdong Foshan Intermediate People’s Court). . . . . . . . . . . . . . . . . . . . . . . . 26.112 Bank of China Insurance Co Ltd Fujian Branch v Fangchenggang Fuhang Shipping Co Ltd and Yangpu Bihai Shipping Co Ltd (2013) Xia Hai Fa Shi Chu Zi No. 36 (Xiamen Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.29 Baoding Condiment Co Ltd and Baoding Tianpeng Import & Export Group Co Ltd v Merzario (Hong Kong) Ltd and Mediterranean Shipping Company SA (2003) Hai Shang Chu Zi No. 68–72 (Tianjin Maritime Court) . . . . . . . . . . . . . .17.7, 17.10 Baron Motorcycles Inc v Awell Logistics Group Inc (2007) Hu Hai Fa Shang Chu Zi No. 706 (Shanghai Maritime Court); (2009) Hu Gao Min Si (Hai) Zhong Zi No. 27 (Shanghai High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.8 BCEN-EURO Bank v Ferta Trade Ltd SA (2005) Jin Hai Fa Shang Chu Zi No. 401; (2006) Jin Gao Min Si Zhong Zi No. 95(Tianjin High People’s Court) (CA). . . . . . . . . . . . 2.26 Beau Corporation v Shanghai Lizhi International Logistics Co., Ltd (2013) Hu Hai Fa Shang Chu Zi No. 1588 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . 25.8 Beihai Honghai Shipping Co Ltd v Orient Overseas Container Line (U.K.) Ltd and Others (2009) Guang Hai Fa Chu Zi No. 4, 292; (2010) Yue Gao Fa Min Si Zhong Zi No. 86, 87 (Guangdong High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . 11.10 Beihai Honghai Shipping Co Ltd v Orient Overseas Container Line (U.K.) Ltd and Others (2012) Min Ti Zi No. 142 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . 11.10 Beijing CSGC Tiantie Iron & Steel Trade Co Ltd and Tangshan Universal Industrial Development Co Ltd v COSCO Shipping Co Ltd [2009] Min Si Ta Zi No. 13 (SPC) (Reply). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.25 Beijing Ellison Import Export Co. Ltd v Solar Shipping Angtrading S.A. and Songa Shipholding Pte Limited [2007] Min Si Ta Zi No. 14 (SPC) . . . . . . . . . . . . . .25.54, 26.63 Beijing Profit Sail International Express Co Ltd Shanghai Branch v Shanghai AMASS International Freight Co Ltd (2009) Hu Gao Min Si (Hai) Zhong Zi No. 103 (Shanghai High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.22, 17.25 Beijing TMSC North Freight Agency Co Ltd v Beijing Silk Import & Export Co Ltd and Beijing Noth Haifeng International Freight Agency Co Ltd (2004) Jin Gao Min Si Zhong Zi No. 140 (Tianjin High People’s Court) (CA) . . . . . . . . . . . . . . . . 6.18 Bestec Electronics (Dongguan) Co Ltd v PENAVICO Shenzhen Logistics Ltd (2008) Guang Hai Fa Chu Zi No. 330 (Guangzhou Maritime Court) . . . . . . . . . . . . . . . . . . 7.26 Beston Chemical Corporation v PICC P&C Co Ltd Beijing Branch (Beston v PICC) (2004) Jin Hai Fa Shang Chu Zi No. 562 (Tianjin Maritime Court); (2005) Jin Gao Min Si Zhong Zi No. 160 (Tianjin High People’s Court) (CA) . . . . . . . . . 17.46 CCCC Second Harbour Engineering Co Ltd v Guangxi Tianlong Shipping Co Ltd (2011) Wu Hai Fa Shi Zi No. 00057 (Wuhan Maritime Court); (2013) E Min Si Zhong Zi No. 00099 (Hubei High People’s Court) (CA); (2015) Min Si Ti Zi No. 14 (SPC) (Retrial). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.55 Changchun Dacheng Corn Development Co Ltd v PICC P&C Co Ltd Jilin Branch (2001) Liao Jing Yi Zhong Zi No. 13 (Liaoning High People’s Court) (CA); [2001] Min Si Ti Zi No. 25 (SPC) (Reply) . . . . . . . . . . . . . . . . . . . . . . . . . . 15.12 Changzhou Foreign Trade Corporation v Shanghai Grandway International Transportation Co Ltd (2006) Hu Hai Fa Shang Chu Zi No. 244 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.35 Chaoyang Xiongwei Industrial Co Ltd v China Ocean Shipping Agency Shantou Co Ltd (2003) Guang Hai Fa Chu Zi No. 290 (Guangzhou Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.47

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Chen Yunlin v Wenzhou Lianhang International Transport Services Co Ltd (2008) Yong Hai Fa Wen Shang Chu Zi No. 8 (Ningbo Maritime Court). . . . . . . . . . . . . . . 7.17 Chenco International Inc v China Pacific Insurance Co Ltd Shanghai Branch (1997) Hu Hai Fa Shang Zi No. 486 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . 15.42 Cheng Songpeng v Zhang Jianfei (2011) Yong Hai Fa Zhou Shang Chu Zi No. 98 (Ningbo Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.20 Cheong Fu Li (Hong Kong) Company Limited v ATC Shipping Co. Ltd (2013) Yong Hai Fa Shang Chu Zi No. 636 (Ningbo Maritime Court) . . . . . . . . . . . . . . . . 25.17 China Auto CAIEC Ltd v Qingdao Zhongshun International Logistics Co Ltd (2015) Min Shen Zi No. 1660 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.14 China Construction Bank Guangzhou Liwan Branch v Guangdong Lanyue Energy Developments Ltd and Huilai Yuedong Electric Fuel Co Ltd (China Construction Bank v Guangdong Lanyue and Others) (2015) Min Si Ti Zi No. 126 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.29, 5.32 China Construction Bank Zhoushan Chengguan Branch v Zhoushan Dechang Trading Company (2001) Zhe Jing Er Zhong Zi No. 85 (Zhejiang High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.25 China Container Line (Shanghai) Ltd v Shanghai Guanyun Freight Forwarding Co Ltd (2014) Hu Hai Fa Shang Chu Zi No. 603 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.27 China Drawnwork Shanghai Import & Export Co Ltd v China Pacific Insurance Co Ltd Shanghai Branch [2000] Jiao Ta Zi No. 8 (SPC) (Reply) . . . . . . . . . . . . . . . . . . . . 15.30 China Electronics Zhuhai Co Ltd v P&O Nedlloyd Ltd and P&O Nedlloyd (China) Ltd (2002) Hu Hai Fa Shang Chu Zi No. 254 (Shanghai Maritime Court); (2003) Hu Gao Min Si (Hai) Zhong Zi No. 84 (Shanghai High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.14 China Fishing Vessels Owners Mutual Insurance Association v Lin Yawei and Another (2005) Hai Shi Chu Zi No. 034 (Beihai Maritime Court). . . . . . . . . . . . . . . . . 15.2 China Grains & Oils Group Shanghai Co Ltd v PICC P&C Co Ltd Dalian Branch and PICC P&C Co Ltd Dalian Ganjingzi Branch (2014) Min Shen Zi No. 568 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.3 China House Enterprises Co Ltd v Bondex Logistics Co Ltd Guangzhou Branche and others (2002) Guang Hai Fa Shang Zi No. 415 (Guangzhou Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3 China Huadian Engineering Co Ltd v CONTI JORK Shipping Ltd (2009) Jin Gao Min Si Zhong Zi No. 369 (Tianjin High People’s Court) (CA) . . . . . . . . . . . . . . . 11.17 China Huangshi Ocean Shipping aAgency v Shanghai ALS International Transport Co Ltd (2005) Hu Hai Fa Shang Chu Zi No. 294 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.12 China Insurance Co Ltd Jiangsu Branch v Qinzhou Port Weilong Shipping Co Ltd (2013) Xia Hai Fa Shi Chu Zi No. 25(Xiamen Maritime Court). . . . . . . . . . . . . . . 11.33 China MINMETALS Trade Corporation v Radiant Shipping Limited (2000) Qing Hai Fa Yan Shang Chu Zi No. 115 (Qingdao Maritime Court); (2002) Lu Min Si Zhong Zi No 24 (Shandong High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . 5.14 China National Fisheries Corporation v NingBo Haizhixing Ocean Fishing Co Ltd (2015) Yong Hai Fa Shang Chu Zi No. 1111 (Ningbo Maritime Court) . . . . . . . . . . . . . . . . 13.2 China National Packaging Import & Exports Company Shandong Branch v Hecny Transportation Ltd (2001) Qing Hai Fa Hai Shang Chu Zi No. 237 (Qingdao Maritime Court); (2002) Lu Min Si Zhong Zi No. 35 (Shandong High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.19

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China Ocean Shipping Agency Beihai Co Ltd v Yinghai International Logistics Co (Beihai) Ltd and Beihai Marine Transport Co Ltd (2004) Hai Shang Chu Zi No. 020 (Beihai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.14 China Pacific Insurance Co Ltd Jiangsu Branch v COSCO Logistics (Beijing) Co Ltd and Others [2009] Min Si Ta Zi No. 11 (SPC) (Reply). . . . . . . . . . . . . . . . . . . . . . 15.65 China Pacific Insurance Co Ltd Shanghai Branch v Shenzhen Wanpeng Shipping Co Ltd (2001) Hu Hai Fa Shang Chu Zi No. 12 (Shanghai Maritime Court) . . . . . . . . . . . . 10.5 China Pacific Property Insurance Co Ltd Shanghai Branch v Gen Shipping Pacific Line Pte Ltd and others (2005) Hu Hai Fa Shang Chu Zi No. 492 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.14 China Pacific Property Insurance Co Ltd Shenzhen Branch and Guangdong Donlinks Group Co Ltd v Wangjing & Co and Niko Maritimeinc, Liberia (2003) Guang Hai Fa Chu Zi No. 342 (Guangzhou Maritime Court) . . . . . . . . . . . . . . . . . . 7.14 China Pacific Property Insurance Co Ltd v COSCO Shipping Co Ltd (2011) Min Ti Zi No. 12 (SPC) (Retrial). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.7 China Pacific Property Insurance Co Ltd Yangzhou Central Branch v Jiangsu Far East Shipping Co Ltd and PICC P&C Co Ltd Jiangsu Branch (2005) Hu Hai Fa Shang Chu Zi No. 10 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . 11.26 China Pacific Property Insurance Co Ltd Zhejiang Branch v COSCO Container Lines Co Ltd (2011) Hu Hai Fa Shang Chu Zi No. 40 (Shanghai Maritime Court) . . . . . . . . . . . 17.34 China Pacific Property Insurance Co. Ltd Shanghai Branch v Sunglide Maritime Ltd., Ocean Freighters Ltd. and the United Kingdom Mutual Steam Ship Assurance Association [2008] Min Si Ta Zi No. 50 (SPC). . . . . . . . . . .25.54, 26.61 China Pacific Property Insurance Co Ltd Shanghai Branch v Sunglide Maritime Ltd, Ocean Freighers Ltd and The United Kingdom Mutual Steam Ship Assurance Association Ltd [2008] Min Si Ta Zi No. 50 (SPC) (Reply) . . . . . . . . . . . . . . . . 6.25 China Pingan Property Insurance Co Ltd Jiangsu Branch v CCCC International Shipping Corporation (2014) Hu Gao Min Zi (Hai) Zhong Zi No. 159 (Shanghai High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.8 China Pingan Property Insurance Co Ltd Qingdao Branch v Bright Sail (Hong Kong) Co Ltd (2009) Hu Hai Fa Shang Chu Zi No. 710 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.9 China Recycling Development Co Ltd Nantong Branch Liquidation Committee v China Shipping Agency Nantong Co Ltd and Sinotrans Jiangsu Co Ltd (2006) Wu Hai Fa Shang Zi No. 36 (Wuhan Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.20 China Shipowners Mutual Assurance Association v China Marine Bunker Supply Qingdao Co Ltd (2002) Qing Hai Fa Shang Chu Zi No. 96 (Qingdao Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.2 China Shipowners Mutual Assurance Association v Nanjing Hongyou Shipping Co Ltd [2003] Min Si Ta Zi No. 34 (SPC) (Reply) . . . . . . . . . . . . . . . . . . . . . . . . 15.2 China Shipping Container Lines v Qingdao Huaying Logistics Co Ltd and Shandong Sunshine Science & Technology Chemical Co Ltd (2012) Lu Min Si Zhong Zi No. 25 (Shandong High People’s Court) (CA). . . . . . . . . . . . . . . . . . . 7.32 China Shipping Industry (Jiangsu) Co Ltd v China Pacific Property Insurance Co Ltd Yangzhou Central Branch and China Pacific Property Insurance Co Ltd (2011) Hu Hai Fa Shang Chu Zi No. 1308 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . .14.2, 14.5 China Yangtze River Shipping Co Ltd v Zhejiang Xiangshan Rongning Shipping Co Ltd (2005) Hu Hai Fa Shang Chu Zi No. 441 (Shanghai Maritime Court) . . . . . . . . . . . 4.29 Chongqing Changjiang Shipping Corp v Yichang Santong Shipping Co Ltd (2013) Min Ti Zi No. 84 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2

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Chongqing Wanzhou Wangang Shipping Co Ltd v Chongqing Wanzhou Lilong Transport Co Ltd (2012) Min Shen Zi No. 631 (SPC) (Retrial) . . . . . . . . . . . . . . . . 4.42 Chongqing Xinpei Food Co. Ltd v Strength Shipping Corporation, Liberia [2006] Min Si Ta Zi No. 26, (SPC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.54, 26.60 CJ Smart Cargo Co Ltd v Wuxi Futong Motocycle Co Ltd [2008] Min Si Ta Zi No. 5 (SPC) (Reply) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.34 CMEC (Nantong) Machinery Import & Export Co Ltd Import Branch v Pingan Insurance (Group) Company of China (2012) Min Shen Zi No. 34 (SPC) (Retrial) . . . . . . . . . . . . . . 15.50 Coast Underwriters Ltd v China Shipping Lines Ltd and Shanghai Guandong International Container Terminal Co Ltd (2012) Hu Hai Fa Shang Chu Zi No. 1492 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11 Complant International Transportation Co Ltd Shandong Branch v Dalian Fortune International Freight & Forwarding Agency Company (2004) Qing Hai Fa Shang Chu Zi No. 256 (Qingdao Maritime Court) . . . . . . . . . . . . . . . . . . . . . 17.47 Continent Link International Ltd v Jiangxi Huachun Environmental Protection Decoration Material Co Ltd (2010) Hu Hai Fa Shang Chu Zi No. 1116 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.25 Cooper & Turner (Ningbo) International Trading Co Ltd v Burke Shipping Group Shanghai Ltd (2012) Hu Hai Fa Shang Chu Zi No. 1192 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . 8.19 COSCO (Nantong) Clavon Ship Engineering Co. v Zhejiang Jingang Shipbuilding Co., Ltd at 1st Instance (2012) Tai Wen Shang Chu Zi No. 2037; at 2nd Instance (2013) Zhe Tai Shang Zhong Zi No. 340. . . . . . . . . . . . . . . . . . 23.12 COSCO Container Lines Co Ltd v Hunan Jiali International Trade Co Ltd (2010) Qing Hai Fa Shang Chu Zi No. 166 (Qingdao Maritime Court) . . . . . . . . . . . . . . . 17.15 COSCO Container Lines Co Ltd v King Far East Shipping Co Ltd Guangzhou Branch (COSCO Container v King Far East) (2009) Hu Hai Fa Shang Chu Zi No. 817 (Shanghai Maritime Court); (2010) Hu Gao Min Si (Hai) Zhong Zi No. 28 (Shanghai High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . .5.5, 7.28 COSCO Container Lines Co Ltd v Wuhu Zhongfei Plastic Co Ltd (2013) Hu Hai Fa Shang Chu Zi No. 1308 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . 6.12 Cui Dehai v Jinyang Shipping Company (2003) Jin Gao Min Si Zhong Zi No. 87 (Tianjin High People’s Court) (CA). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3 Dalian Ouxiang Shipping Co Ltd v Dalian Jingbei Petroleum Chemical Industry Sales Co Ltd (2010) Hu Gao Min Zi (Hai) Zhong Zi No. 37 (Shanghai High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.8 Dalian Port Authority v COSCO Dalian International Freight Co Ltd [2002] Min Si Ta Zi No. 21 (SPC) (Reply) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.5, 17.20 Dalian Port Authority v COSCO Dalian International Freight Co Ltd [2002] Min Si Ta Zi No. 21 (SPC) (Reply) art 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5 Dalian Sanyang Fishery Co Ltd v Dalian Ocean University and Others (2012) Liao Min San Zhong Zi No.94 (Liaoning High Peoples’ Court) (CA) . . . . . . . . . . . . . . . . . . 2.7 Dalian Shipping Group Co Ltd v Grand Moment Capital Ltd (2000) Da Hai Fa Shang Chu Zi No. 284 (Dalian Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . 4.34 Dazhong Insurance Company Ltd Suzhou Central Branch and Dazhong Insurance Company Ltd v Suzhou Zheshen Industrial Co Ltd [2007] Min Si Ta Zi No. 8 (SPC) (Reply) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.29 Department of Ocean and Fisheries of Guangdong Province v China Shipowners Mutual Assurance Association and Others (2001) Guang Hai Fa Chu Zi No. 89 (Guangzhou Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16.21

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Department of Ocean and Fisheries of Guangdong Province v China Shipping Raw Material Supply Fujian Co Ltd and Taizhou Donghai Shipping Co Ltd (2000) Yue Gao Fa Jing Er Zhong Zi No. 328 (Guangdong High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.21 Department of Ocean and Fisheries of Shandong Province v UNTED Ocean Shipping Sdn Bhd and Others (2007) Qing Hai Fa Yan Que Zi No. 1 (Qingdao Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.22 Ding Hanshou and Others v Liu Xiaoyun (2015) Min Shen Zi No. 1205 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2 Dong Fang Gang Tuo 7 (2010) Yong Hai Fa Shang Chu Zi No. 127 (Ningbo Maritime Court); (2011) Zhe Hai Zhong Zi No. 25 (Zhejiang High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.12 DSM CITRIC ACD (Wuxi) Ltd v Sparkle International Enterprises Ltd and Others (2005) Wu Hai Fa Shang Zi No. 183 (Wuhan Maritime Court) . . . . . . . . . . . . . . . . 5.11 ECO Shipping Co Ltd v Fuzhou Changxiong Ocean Fishery Co Ltd and others (2003) Xia Hai Fa Shang Chu Zi No. 111 (Xiamen Maritime Court) . . . . . . . . . . . . . 4.8 EURO-ATLANTICSDN.BHD v COSCO Container Lines Co Ltd and PENAVICO Yingkou International Freight Services Co Ltd (2009) Hu Hai Fa Shang Chu Zi No. 813 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . 7.14 FannTex Co Ltd and Hoi Yuet Shipping Co Ltd v Wuchuan Import & Export Trade Co Ltd (2001) Guang Hai Fa Chu Zi No. 158 (Guangzhou Maritime Court) . . . . . . . . . . . . 7.27 Ferpinta – Industrias De Tubos De Aço De Fernando Pinho Teixeira, SA v Huatai Property Insurance Co Ltd Shanghai Branch (2011) Hu Hai Fa Shang Chu Zi No. 180 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.36 Fujian Nanan Yanping Shipping Co Ltd v Quanzhou Daying Building Materials Trading Co Ltd and Xiamen Non-metallic Minerals Import and Export Co Ltd (2014) Min Shen Zi No. 1041 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . 12.7 Fujian Shipping Company’s Application on Constitution of Limitation Fund, (2007) Xia Hai Fa Xian Zi No. 3 (Xiamen Maritime Court). . . . . . . . . . . . . . . . . . . . . . . . 25.43 Fuzhou Baiyang Hengfeng Ship Services Co Ltd v Shantou Fushun Shipping Co Ltd and Pingan Property Insurance Co Ltd (2014) Xia Hai Fa Shang Chu Zi No. 182 (Xiamen Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.34 Globe Express Services (Shanghai) Ltd v China Shipping Container Lines Tianjin Co Ltd and China Shipping Container Lines (Hong Kong) Co Ltd (2008) Hu Hai Fa Shang Chu Zi No. 93 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . 5.4, 7.6, 7.17 Gold East Paper (Jiangsu) Co Ltd v Yichang Nine Five Ship Transport Co Ltd and Others (2014) Min Shen Zi No. 1617 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . 8.28 Golden Coast International Trade Ltd v Yancheng Zhongda International Trading Co Ltd (2007) Hu Hai Fa Shang Chu Zi No. 655 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.43 Good Safe Group Co Ltd v Huabang International Logistics Ltd (2006) Hu Hai Fa Shang Chu Zi No. 25 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . 11.31 Gothaer Allgemeine Versicherung AG v SK Shipping Co., Ltd, Sunrise Shipping S.A., Shanghai Huagang International Shipping Agency Co., Ltd, P&F Marine Co., Ltd (2011) Hu Gao Min Si (Hai) Zhong Zi No. 184 (Shanghai High People’s Court, CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.21

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Granville Shipping Company, Chen Zhen and Chen Chun v Mitsui OSK Lines Ltd (Granville v Mitsui) (1989) Hu Hai Fa Shang Chu Zi No. 25 (Shanghai Maritime Court); (2008) Hu Gao Min Si (Hai) Zhong Zi No. 80 (Shanghai High People’s Court) (CA); (2010) Min Shen Zi No. 1269 (SPC) (Retrial). . . . . . . . . . . . . . . . . . . . . . . . 17.48 Guanfeng Shipping Co Ltd v Liang Zhaoxiong (2002) Guang Hai Fa Chu Zi No. 381 (Guangzhou Maritime Court). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.14 Guangdong Dyna International Freight Agency Co Ltd Beihai Branch and Guangdong Dyna International Freight Agency Co Ltd v Beihai Chengdong Transportation Co Ltd (2003) Hai Shang Chu Zi No. 020 (Beihai Maritime Court) . . . . . 17.25 Guangdong Qunxing Toys Joint-Stock Co Ltd v Express Star Logistics Ltd (2011) Min Shen Zi No. 1410 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.30 Guangdong Yongyu Petroleum Trade Co Ltd v Guangzhou Haizhu Xinhai Shipping Co Ltd (2002) Guang Hai Fa Chu Zi No. 344 (Guangzhou Maritime Court) . . . . . . . . . . . 17.44 Guangdong Yudean Shipping Co Ltd v Hiro Shipping Inc and Others (2012) Min Shen Zi No. 23 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.25 Guangxi Qinzhou Sanhe Trade Co Ltd v Pingan Property Insurance Co Ltd Nanning Division (1999) Hai Shang Chu Zi No. 011 (Beihai Maritime Court) . . . . . . . . . . . . . . . . 15.36 Guangxi Wanxin International Trade Co., Ltd. v the owners of MV Michal Akis (2006) Bei Hai Fa Zheng Zhi No. 002–1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.38 Guangzhou Dongfang Shipping Co Ltd and Wu Guolin v Wu Yunhua (2016) Yue 72 Min Chu 2 (Guangzhou Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2 Guangzhou Huirui Import & Export Co Ltd v Hong Kong Huajin Shipping Co Ltd (2012) Min Shen Zi No. 28 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.18 Guangzhou Maritime Transport Co Ltd v Anhui Wanjiang Shipping Co Ltd and Wuhu Chiangjiang Shipping Co Ltd (2001) Min Si Ti Zi. No 3 (SPC) (Retrial) . . . . . . . . . 11.2 Guangzhou Panyu Dashi Shangjiao Shipyard v Guangzhou Huiyue Shipping Company (2012) Guang Hai Fa Chu Zi No. 228 (Guangzhou Maritime Court) . . . . . . . . . . . . . . . . . . . 2.3 Guangzhou Rescue and Salvage Bureau v Dalian Jiliang Shipping Co Ltd and others (2000) Guang Hai Fa Shan Zi No. 89, 90, 91 (Guangzhou Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12.11, 12.21 Guangzhou Yongyu Petroleum Trading Co Ltd v Guangzhou Zhuhai Xinhai Shipping Transport Co Ltd (2002) Guang Hai Fa Chu Zi No. 344 (Guangzhou Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.17 Guangzhou Zhaoying Hardware Co Ltd v Expeditors International Washington Inc and Others (2004) Guang Hai Fa Chu Zi No. 59 (Guangzhou Maritime Court) . . . . . . . . 17.10 Guo Ditang v Guo Hongqi (2014) Min Shen Zi No. 1309 (SPC) (Retrial). . . . . . . . . . . . . . . . . . 11.1 Haikou Nanqing Lines Co Ltd v Xiamen Nantai Shipping Co Ltd (2009) Hu Gao Min Si (Hai) Zhong Zi No. 62 (Shanghai High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . 17.17 Hailan International Trade Co Ltd v South Korean Sea and Air Transport Co Ltd and China Distribution Center Co Ltd (2005) Hu Hai Fa Shang Chu Zi No. 6 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.16 Hainan Fenghai Cereals & Oils Industrial Co Ltd v PICC P&C Co Ltd Hainan Branch (1996) Hai Shang Chu Zi No. 096 (Beihai Maritime Court); (1997) Qiong Jing Zhong Zi No. 44 (Hainan High People’s Court) (CA); (2003) Min Si Ti Zi No. 5 (SPC) (Retrial), Guiding Case No. 52 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.26 Hainan Hulian Shipping Co Ltd v PICC Guangxi Branch and Guangxi International Cooperation Economics and Trade Co Ltd (2000) Hai Shang Chu Zi No. 054 (Beihai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13.6, 25.40

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Hangzhou Cogeneration Import and Export Company Limited v J. Friend Shipping Company Limited (2010) Xia Hai Fa Shang Chu Zi No. 353 (Xiamen Maritime Court) . . . . . . . . . . 25.11 Hangzhou Huazhan Trade Co Ltd v Shanghai F S Container Line SA (2014) Yong Hai Fa Shang Chu Zi No. 31 (Ningbo Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.18 Hangzhou Longda Differential Polyester Co Ltd v Yongji Shipping Co Ltd and Zhoushan Yongji Shipping Co Ltd [2008] Min Si Ta Zi No. 33 (SPC) (Reply) . . . . . . . . . . 6.26 Hanjin Shipping Company Ltd. v China Oil & Foodstuffs International Storage and Transportation Corporation (Shan Dong), AT Container Line Ltd, and Lianyungang Chemical, Medicine and Health Products Import & Export Co., Ltd (2001) Qing Hai Fa Hai Shang Chu Zi No. 140 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.26 Hebei Metals & Minerals Import & Export Co Ltd v OOCL Ltd and Shandong Yantai International Marine Shipping Co Ltd (2001) Yong Shang Chong Zi No. 1 (Ningbo Maritime Court); (2001) Zhe Jing Er Zhong Zi No. 109 (Zhejiang High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.4, 7.17 Henan Tongxu Jin’ao Commodities Co Ltd v A. P. Moller-Maersk A/S (Jin’ao Commodities v A. P. Moller-Maersk) (2013) Hu Hai Fa Shang Chu Zi No. 1747 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.20 Hong Kong Changxin Shipping Service Co Ltd v Hachiuma Steamship Co Ltd (2010) Hu Gao Min Si (Hai) Zhong Zi No. 74 (Shanghai High People’s Court) (CA) . . . . . . . . . 11.25 Hong Kong Huaji (International) Logistics Co Ltd v Shanghai Pudong International Transport Co Ltd (2008) Hu Gao Min Zi (Hai) Zhong Zi No. 236 (Shanghai High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.12 Hong Kong Jinxi Shipping Ltd v China Continent Property & Casualty Insurance Co Ltd Ningbo Branch (2009) Yong Hai Fa Shang Chu Zi No. 276 (Ningbo Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.7 Hongxin Investment (HK) Co., Ltd v Henan Tianyu Transportation Co. Ltd, Zhengzhou Kunkai Trading Co., Ltd, Ma Yinming, Ma Dongfeng, Wang Changchang (2014) Xia Hai Fa Shang Chu Zi No. 44 (Xiamen Maritime Court). . . . . . . . . . . . . . . . . . . . . . . . 25.25 Hu Zhu and Lu Xianghong v Li Pinjian and Li Yan (2006) Gui Min Si Zhong Zi No. 8 (Guangxi) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.39 Huamei Trade Co Ltd v Qingdao Haisheng International Ship Agency Co Ltd and Yang Ming Marine Transport Corp (2004) Xia Hai Fa Shang Chu Zi No. 116 (Xiamen Maritime Court); (2005) Min Min Zhong Zi No. 95 (Fujian High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7, 7.14 Huang Guangren v Zeng Fuchun and Cheng Baojing (2013) Xia Hai Fa Shi Chu Zi No. 58 (Xiamen Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3 Huarun Dadong Dockyard Co Ltd v Pingan Property Insurance Co Ltd Shanghai Branch (2013) Hu Hai Fa Shang Chu Zi No. 797 (Shanghai Maritime Court). . . . . . . . . . 15.20 Huarun Dadong Dockyard Co Ltd v Pingan Property Insurance Co Ltd Shanghai Branch (2013) Hu Hai Fa Shang Chu Zi No. 797 (Shanghai Maritime Court); (2014) Hu Gao Min Si (Hai) Zhong Zi No. 78 (Shanghai High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15.20, 17.37 Huatai P & C Insurance Beijing Branch v CMA CGM SA (2010) Hu Gao Min Si (Hai) Zhong Zi No. 85 (Shanghai High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . 7.2 Huatai P & C Insurance Beijing Branch v COSCO Zhejiang International Freight Co Ltd Wenzhou Branch and Others (2010) Hu Hai Fa Shang Chu Zi No. 349 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.20 Huatai Property Insurance Co Ltd Beijing Branch v COSCO Zhejiang International Freight Co Ltd Wenzhou Branch and Others (2010) Hu Hai Fa Shang Chu Zi No. 349 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.61

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Huatai Property Insurance Co Ltd Shanghai Branch v Shanghai Safe Shipping Enterprises Co (Huatai v Safe Shipping) (2004) Hu Hai Fa Shang Chu Zi No. 5 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.3 Huaye International Investment Co Ltd v Grand Fortune International Shipping Agency Ltd (2013) Hu Hai Fa Shang Chu Zi No. 1168 (Shanghai Maritime Court) . . . . . . . . . . 5.20, 6.5 Hubei New Torch Science & Technology Co Ltd v Taiping General Insurance Co Ltd Xiangfan Central Branch (2011) E Min Si Zhong Zi No. 1 (Hubei High People’s Court) (CA); (2011) Min Shen Zi No. 1084 (SPC) (Retrial) . . . . . . . . . . . . . . . . 15.15 Hyosdoc (HK) Ltd v China Marine Shipping Agency Co Ltd Fangchenggang Company and others (Hyosdoc (HK) Ltd v China Marine Shipping Agency) (2002) Min Si Zhong Zi No. 27 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.23, 5.24 Hyosung (HK) Ltd v China Marine Shipping Agency Co Ltd Fangchenggang Branch and Others (2002) Min Si Zhong Zi No. 27 (SPC) (Retrial) . . . . . . . . . . . . . . . . . 17.33 injunction case concerning the release of a withheld cargo , This case is an unreported case made by the Qingdao Maritime Court . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.33 International Economic & Trading Corporation WISCO v Fuzhou Tianheng Shipping Co Ltd and Fortune International Shipping Co Ltd [2009] Min Si Ta Zi No. 36 (SPC) (Reply). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.26 Japanese Taihai Co Ltd v Haibo Fisheries Co Ltd (1997) Jiao Ti Zi No. 3 (SPC) (Retrial) . . . . . . 4.30 JC International Logistics Co Ltd Ningbo Branch v Huayu Electric Group Co Ltd (2015) Min Ti Zi No. 19 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.9 Jiang Hedi v Le Hengguo (2002) Yong Hai Shi Chu Zi No. 18 (Ningbo Maritime Court). . . . . . . 3.2 Jiangliu v Sunshine Property Insurance Ltd Liuzhou Central Branch (2011) Hai Shang Chu Zi No. 22 (Beihai Maritime Court); (2011) Gui Min Si Zhong Zi No. 22 (Guangxi High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.1 Jiangsu CNPC & TAFO Corp v Xinpengcheng Shipping (S) Pte Ltd (2014) Min Shen Zi No. 1777 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.22 Jiangsu Holly Corporation v CTS International Logistics Co Ltd (2011) Hu Hai Fa Shang Chu Zi No. 232 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.9 Jiangsu Oversea Group Corporation v Shanghai Fengtai Insurance Co., Ltd Shanghai Maritime Court, Gazette of SPC of People’s Republic of China. . . . . . . . . . . . . . . . . . . . . 25.17 Jiangsu Rongda Tools Co Ltd v Fancheng Internatinal Transportation Service Co Ltd (2013) Hu Hai Fa Shang Chu Zi No. 1010 (Shanghai Maritime Court) . . . . . . . . . . . . . 6.18 Jiangsu Soho International Group Co v Inco Kaiun Kaisha Ltd (1996) Wu Hai Fa Shang Zi No. 128 (Wuhan Maritime Court); (1997) E Jing Zhong Zi No. 294 (Hu Bei High People’s Court) (CA); (2000) Jiao Ti Zi No. 7 (SPC) (Retrial) . . . . . . .5.25, 5.26 Jiangsu Weilun Shipping Co Ltd v Miranda Rose Co Ltd (2010) Hu Hai Fa Shang Chu Zi No. 24 (Shanghai Maritime Court), Guiding Case No. 31 . . . . . . . . . . . . . . . . . . . 11.12 Jiangsu Xingzhenyu International Logistics Co Ltd v Worldwide Logistics (U.S.A.) Corp and Round-the-world Logistics Co Ltd (2009) Hu Hai Fa Shang Chu Zi No. 693 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.14 Jinxi Machinery Industry Group Ltd v Rickmers-Linie GmbH&Cie KG (2001) Hai Shang Chu Zi No. 365 (Tianjin Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.19 JP Morgan Chase & Co v Sea Stream Shipping Inc (2002) Guang Hai Fa Chu Zi No. 116. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.7 Kena Import & Export Co Ltd v China Shipping Container Lines (Hong Kong) Co Ltd and China Shipping Container Lines Co Ltd Zhejiang Branch (2014) Yong Hai Fa Shang Chu Zi No. 369 (Ningbo Maritime Court) . . . . . . . . . . . . . . . . . 7.11, 17.18

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Kunshan Juhui Textile Trade Co Ltd v AWOT Global Corporation and AWOT Global Corporation Suzhou Branch (2014) Hu Hai Fa Shang Chu Zi No. 1103 (Shanghai Maritime Court); (2014) Hu Gao Min Si (Hai) Zhong Zi No. 155 (Shanghai High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11 Laizhou Anda Shipping Agency Co Ltd v Eastern Light Shipping Ltd (2004) Lu Min Si Zhong Zi No. 8 (Shandong High People’s Court) (CA). . . . . . . . . . . . . . . . . . . 12.21 Laizhou Anda Shipping Agency Co Ltd v Eastern Light Shipping Ltd (2004) Lu Min Si Zhong Zi No. 8 (Shandong High People’s Court) (CA). . . . . . . . . . . . . . . . . . . . 12.9 Lanxi Fangxing Packing Production Factory v APM Global Logistics (Shanghai) Co Ltd Ningbo Branch and APM Global Logistics Co Ltd (2009) Yong Hai Fa Shang Chu Zi No. 24 (Ningbo Maritime Court); (2009) Zhe Hai Zhong Zi No. 89 (Zhejiang High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.13 Leqing Branch of Agricultural Bank of China v Dongfang Shipbuilding Group Co., Ltd, Zhejiang Shengang Shipping Co., Ltd, Dongfang Shipbuilding Co., Ltd, Hong Kong Samwo International Shipping Co., Ltd (2012) Yong Hai Fa Wen Shang Chu Zi No. 30 (Ningbo Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.27 Leqing Ocean Shipping Co Ltd v China Pacific Insurance Co Ltd Leqing Branch (2011) Yong Hai Fa Shang Chu Zi No. 29 (Ningbo Maritime Court) . . . . . . . . . . . . . . . . . 15.50 Li Chunrui v Dai Guirong and Jiang Jingyuan (2011) Min Shen Zi No. 174 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.36 Li Mengwen v Lianyungang Yandong Transport Co Ltd (2013) Min Shen Zi No. 1946 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.12 Lianyungang Chemical, Medicine and Health Products Import & Export Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.26 Lianyungang Cosfar Shipping International Co Ltd v Nateus N.V. and others (2013) Min Shen Zi No. 2325 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.1 Lianyungang Xiangshun Mineral Resources Co Ltd v Ugland Shipping A/S [2013] Min Si Ta Zi No. 1 (SPC) (Reply) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.26 Limitation Fund Establishment on the Application of SIPG Fuxing Shipping Service Co Ltd, Re (2014) Yue Gao Fa Min Si Xian Zhong Zi No. 1 (Guangdong High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.14 Lin Shichang & Zhejiang Yushun Shipping Co Ltd v Jiangsu Shunhe Petrochemical Co Ltd (2009) Zhe Hai Zhong Zi No. 34 (Zhejiang High People’s Court) (CA) . . . . . . . . . . 4.7 Lin Xianjun and Chen Qianping v Hainan Lingao Kunshe Shipping Company and Others (2002) Guang Hai Fa Chu Zi No. 37 (Guangzhou Maritime Court) . . . . . . . . . 10.6 Lin Yawei v China Fishing Vessels Owners Mutual Insurance Association (2005) Hai Shang Chu Zi No. 108 (Beihai Maritime Court); (2006) Gui Min Si Zhong Zi No. 5 (Guangxi High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.2 Lin Zhuanxiao and Lin Fangtong v Yu Han and Yu Sai’er (2015) Zhe Min Shen Zi No. 1055 (Zhejiang High People’s Court) (Retrial). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.10 Liu Guocheng v China Continent Property & Casualty Insurance Co Ltd Liaoning Branch (2011) Liao Min San Zhong Zi No. 111 (Liaoning High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.24 Liu Lin v Li Yingyuan and Huang Jianbin (2011) Guang Hai Fa Chu Zi No. 113 (Guangzhou Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 Liu Yuesheng and Liu Yueji v Liu Guodong (2007) Gui Min Si Zhong Zi No. 40 (Guangxi High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.32 Longhai Gelin Seafood Co Ltd v Pacific International Lines Pte Ltd and Others (2012) Min Shen Zi No. 1100 (SPC) (Retrial). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.5

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Longkou Sitong Shipping Co Ltd v Huatai P & C Insurance Hebei Branch (2013) Jin Hai Fa Shang Chu Zi No. 614 (Tianjin Maritime Court) . . . . . . . . . . . . . . . . . . . 13.5 Longteng Trading Co Ltd v China Pacific Proerty Insurance Co Ltd Zhejiang Branch (2009) Hu Gao Min Si (Hai) Zhong Zi No. 214 (Shanghai High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.43 Mac Steel International USA Corp v Chinese-Polish Joint Stock Shipping Company and others (Mac Steel v Chinese–Polish Shipping) (2013) Min Shen Zi No. 33 (SPC) (Retrial). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.13, 5.16 Maoming Maonan Xinghua Petroleum & Chemical Co Ltd v Fujian Shishi Xinda Shipping Co Ltd and Others (2002) Guang Hai Fa Chu Zi No. 139 (Guangzhou Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.9 Marittima SPA v Ningbo Ocean Shipping Co Ltd and Ningbo Shunzhou Shipping Co Ltd (2008) Yong Hai Fa Shang Chu Zi No. 37 (Ningbo Maritime Court). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.26 Mikilines Co. Ltd v Hong Kong Rich Star Shipping Forwarding Co. Ltd (2013) Yong Hai Fa Shang Chu Zi No. 404 (Ningbo Maritime Court) . . . . . . . . . . . . . . . . 25.20 Minermet SpA v China Shipping Bulk Carrier Co Ltd and China Metallurgical Import & Export Guangdong Company (2004) Da Hai Chang Shang Chu Zi No. 1 (Dalian Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.15 Ming Yang Shipping Co., Ltd. v The People’s Insurance Company (Group) of China, www.ccmt.org.cn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.26 Mohamed Gad.Karim ABD EL Rahim Othman v Evergreen Marine Corporation (2009) Hu Hai Fa Shang Chu Zi No. 672 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . 6.3 Mohamed Mostafa Ahmed Mohamed Ammar v The Orient Overseas Container Line (2013) Min Shen Zi No. 2192 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.18 Nanhai Rescue Bureau of the Ministry of Transport v Archangelos Investments ENE and Another (2012) Guang Hai Fa Chu Zi No. 898 (Guangzhou Maritime Court); (2014) Yue Gao Fa Min Si Zhong Zi No. 117 (Guangdong High People’s Court) (CA); (2015) Min Shen Zi No. 3182 (SPC) (Retrial) . . . . . . . . . . . . . . . . . .12.18, 12.19, 12.24, 12.25, 12.27 Nanjing Hengxing Shipping Co Ltd v PICC P&C Co Ltd Cangzhou Yunhe Branch Fuyang Division (2015) Min Shen Zi No. 137 (SPC) (Retrial). . . . . . . . . . . . . . . . . . . . . . 15.22 Nanjing Petroleum Transportation Co Ltd v Huatai P & C Insurance Shijiazhuang Branch [2005] Min Si Ta Zi No. 1–1 (SPC) (Reply). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3 Nanjing Qiangquan Transport Trade Co Ltd v Taiping General Insurance Co Ltd Fujian Branch (2012) Min Shen Zi No. 712 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . 15.40 Nantong Tianshun Shipping Co Ltd v Tianjin-Kobe International Marine Shipping Co Ltd and Yangzhou Yuyang Shipping Co Ltd (2001) Guang Hai Fa Shang Chu Zi No. 109 (Guangzhou Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.25 New Dragon International Enterprise Co Ltd, HK v Suifenhe Longjiang Lianshang Import & Export Co Ltd (2003) Tong Shang98 (Wuhan Maritime Court) . . . . . . . . . . . . . . . 4.5 New East Grace International Corporation Wuxi Company v JIF Logistics Inc (2014) Min Shen Zi No. 446 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.36 Ningbo Boda Shipbuilding Co Ltd v Pingan Property Insurance Co Ltd Ningbo Branch (2009) Yong Hai Fa Shang Chu Zi No. 51 (Ningbo Maritime Court) . . . . . . . . . . . . . . . . . 15.63 Ningbo Iron & Steel Co Ltd v Pingan Property Insurance Co Ltd Ningbo Branch and Pingan Property Insurance Co Ltd (2008) Yong Hai Fa Shang Chu Zi No. 137 (Ningbo Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.54

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Ningbo Longsheng Shipping Co Ltd v Tianjin Guodian Shipping Co Ltd (2014) Min Shen Zi No. 1228 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.18 Ningbo Oudian Audio Electronics Co Ltd v West Consolidators Inc and Others (2009) Yong Hai Fa Shang Chu Zi No. 400 (Ningbo Maritime Court) . . . . . . . . . . . . . . . . . 17.9 Ningbo Penavico-CCL International Freight Forwarding Co Ltd v Ningbo World Way International Marine Co Ltd (2014) Min Shen Zi No. 1551 (SPC) (Retrial) . . . . . . . . 8.16 Ningbo Shenyu Shipping Co Ltd v Tangshan Kangbi Freight Forwarding Co Ltd (2010) Yong Hai Fa Shang Chu Zi No. 131 (Ningbo Maritime Court) . . . . . . . . . . . . . . . . . 4.19 Ningbo Yinzhou Kongke Fashion Co Ltd v Sea-Air Logistics (China) Ltd (2011) Hu Hai Fa Shang Chu Zi No. 39 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . 5.38 Ningbo Zhenhai Manyang Shipping Co Ltd v Ezhou Datong Shipping Co Ltd (2014) Hu Hai Fa Shang Chu Zi No. 420 (Ningbo Maritime Court); (2014) Yong Hai Fa Shang Chu Zi No. 420 (Ningbo Maritime Court) . . . . . . . . . . .12.12, 12.21 Nippon Yusen Kabushiki Kaisha v Quanzhou Port Group Co Ltd (2003) Xi Hai Fa Shang Chu Zi No. 159 (Xiamen Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.24 Nipponkoa Insurance Co Ltd v Shanghai Puxin International Container Storage and Transportation Co Ltd and Shanghai Huahang International Transportation Co Ltd (2003) Hu Hai Fa Shang Chu Zi No. 473 (Shanghai Maritime Court) . . . . . . . . . . 15.14 Nipponkoa Insurance Co Ltd v Sinotrans Container Lines Co Ltd (2012) Hu Hai Fa Shang Chu Zi No. 963 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.62 Nishitani & Co Ltd v PICC Qingdao Branch (2002) Lu Min Si Zhong Zi No. 45 (Shandong High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.38 NKTEX Co Ltd v Cargo Services (China) Ltd (2012) Hu Hai Fa Shang Chu Zi No. 271 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.8 Orient Overseas Container Line (U.K.) Limited v Beihai Honghai Shipping Co., Ltd (2012) Min Ti Zi No. 142 (SPC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.21 Oriental Scientific Instruments Zhejiang Import & Export Corporation v ZIM Israel Navigation Co Ltd and Ningbo Port Authority Beilun Container Co Ltd (2000) Yong Hai Fa Shang Chu Zi No. 218 (Ningbo Maritime Court). . . . . . . . . . . . . . . . . .7.14, 25.18 P&O Nedlloyd Ltd v Shanghai Hongxi International Trade Co Ltd (2006) Hu Hai Fa Shang Chu Zi No. 82 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.25 Pacific International Lines (Private) Ltd v Sinochem Jiangsu Co Ltd and Golden-China Agency Inc (2013) Min Shen Zi No. 735 (SPC) (Retrial) . . . . . . . . . . . . . . . 7.33 Panama Floating Mountain Shipping Ltd SA v PICC P&C Co Ltd Qingdao Branch (2001) Lu Jing Zhong Zi No. 314 (Shandong High People’s Court) (CA); [2002] Min Si Ta Zi No. 12 (SPC) (Reply) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.21 Panama Trade Expansion Shipping Company and Hong Kong Weilin Sailing Co Ltd v Zhong Xiaoyuan and Zhuhai Anti-Smuggling Office (The Trade Expansion) (1994) Guang Hai Fa Shang Chu Zi No. 10 (Guangzhou Maritime Court); (1994) Yue Fa Jing Er Shang Zi No. 147 (Guangdong High People’s Court) (CA); (1996) Jiao Ti Zi No. 4 (SPC) (Retrial). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.27 Panda Tool Co Ltd v Shanghai THI Freight Forwarding Co Ltd (2003) Hu Hai Fa Shang Chu Zi No. 260 (Shanghai Maritime Court). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.7 PICC P&C Co Ltd Beijing Branch v Dalian Glorious Ocean International Logistics Co Ltd and New Orient Shipping Ltd (2011) Liao Min San Zhong Zi No. 14 (Liaoning High People’s Court) (CA) . . . . . . . . . . 17.23 PICC P&C Co Ltd Dalian Branch v Tarsus Shipping Ltd (2011) Qing Hai Fa Shang Chu Zi No. 273 (Qingdao Maritime Court) . . . . . . . . . . . . . . . . 6.22

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PICC P&C Co Ltd Guangdong Branch and Others v Shanghai Electric Group Co Ltd (2015) Min Si Ti Zi No. 165 (SPC) (Retrial). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.65 PICC P&C Co Ltd Guangdong Branch v Chongqing Ruichi Logistics Co Ltd and Others (2009) Hu Gao Min Si (Hai) Zhong Zi No. 164 (Shanghai High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.43 PICC P&C Co Ltd Shanghai Branch v COSCO Shipping Co Ltd (2009) Zhe Hai Zhong Zi No. 145 (Zhejiang High People’s Court) stowing (CA) . . . . . . . . . . . . . . . . . . . . 4.32 PICC P&C Co Ltd Shanghai Branch v COSCO Shipping Co Ltd and Guangzhou Ocean Shipping Co Ltd (2005) Hu Hai Fa Shang Chu Zi No. 185 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4 PICC P&C Co Ltd Shanghai Branch v Kawasaki Kisen Kaisha Ltd and Blackship Line SA (2013) Hu Hai Fa Shang Chu Zi No. 1377 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7 PICC P&C Co Ltd Shantou Branch v Fujian Pingtan Quanxing Shipping Co Ltd and Wuxian (2005) Min Min Zhong Zi No. 342 (Fujian High People’s Court) (CA); (2005) Xia Hai Fa Shang Chu Zi No. 3 (Xiamen Maritime Court). . . . . . . . . . . . . . 14.21 PICC P&C Co Ltd Shenzhen Branch v Guangzhou Ocean Shipping Co Ltd [2005] Min Si Ta Zi No. 29 (SPC) (Reply) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.26 PICC P&C Co Ltd Wuxi Branch v Panalpina World Transport (PRC) Ltd (2014) Min Shen Zi No. 1188 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2 PICC P&C Co Ltd Zhanjiang Economic and Technological Development Zone Branch v Cross Seas Shipping Corporation and Others (1999) Guang Hai Fa Zhan Zi No. 47 (Guangzhou Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.38 PICC P&C Co Ltd Zhejiang Branch v China Consolidation Services Ltd. of Shanghai (2005) Hu Hai Fa Shang Chu Zi No. 249 (Shanghai Maritime Court); (2007) SPC Gazette, Issue 10 (Shanghai High People’s Court) (CA). . . . . . . . . . . . . . . . . . 7.14 PICC Xiamen Branch v Chinese Polish Joint Stock Shipping Company [2004] Min Si Ta Zi No. 43 (SPC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.54, 26.62 Pingan Property Insurance Co Ltd Beijing Branch v Compania Chilenade Navegacion Interoceanica SA (2009) Hu Hai Fa Shang Chu Zi No. 948 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.16 Pingan Property Insurance Co Ltd Beijing Branch v Front Saga Inc (2015) Yong Hai Fa Shou Chu Zi No. 5 (Ningbo Maritime Court); (2015) Zhe Min Shou Zhong Zi No. 7 (Zhejiang High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . 13.4, 17.31 Pingan Property Insurance Co Ltd Dalian Branch v COSCO Shipping Co Ltd and Guangzhou Ocean Shipping Co Ltd [2006] Min Si Ta Zi No. 49 (SPC) (Reply). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.25 Pingan Property Insurance Co Ltd Suzhou Branch v Shanghai Speedier Logistics Co Ltd and Speedier Logistics Co Ltd (2010) Hu Gao Min Si (Hai) Zhong Zi No. 195 (Shanghai High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.60 Pinghu Fuhua Bag Factory and Shanghai Sinotex United Co Ltd v Globe Express Services (Shanghai) Ltd (2009) Hu Hai Fa Shang Chu Zi No. 259 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5 Polembros Shipping Ltd. v Shenzhen Chiwan Wharf Holdings Limited (2004) Guang Hai Fa Chu Zhi No. 106 (Guangzhou Maritime Court). . . . . . . . . . . . . . . . . . . . . . 23.10 PRC Shantou Marine Safety Administration v Hsin Ying Shipping Co., Ltd, Ever Success (HK) Shipping Company Limited (2007) Guang Hai Fa Chu Zi No. 352 (Guangzhou Maritime Court). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.37 Prime International (Xiamen) Co Ltd v Maersk (China) Shipping Co Ltd, Xiamen Branch and Maersk (China) Shipping Co Ltd (2005) Xia Hai Fa Shi Chu Zi

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No. 48 (Xiamen Maritime Court); (2008) Min Min Zhong Zi No. 381 (Fujian High People’s Court) (CA); (2010) Min Ti Zi No 213 (SPC) (Retrial) . . . . . . . . . . . . 6.10, 6.11 Putian Haishen Shipping Co Ltd v Pingan Property Insurance Co Ltd Hainan Branch and Hainan Yuehai Shipping Logistics Co Ltd (2014) Min Shen Zi No. 450 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.10 Qiao Zhenshan v Dalian Tianmiao International Shipping Agency Co Ltd (2010) Liao Min San Zhong Zi No. 99 (Liaoning High People’s Court) (CA). . . . . . . . . . . . . . . . . 3.20 Qingdao Port Authority Oil Port Company v Schiffarts Gesellshaft Hansa-Constance MBH & Co and others (2000) Qing Hai Fa Hai Shi Chu Zi No. 48 (Qingdao Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.6 Qingdao Railway Travel Development Co Ltd v Guangxi Beihai Shipping Co Ltd (2002) Hai Chong Zi No. 03 (Beihai Maritime Court); (2003) Qiong Min Er Zhong Zi No. 50 (Hainan High People’s Court) (CA). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.20 Qinghai Minhe Economic and trade Co Ltd v Sinotrans Tianjin Group Co Ltd (2002) Min Si Ti Zi No. 9 (SPC) (Retrial). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.28 Qingyuan Shipping Co Ltd and Qingyuan Shipping Material Supply Company v Li Jincheng (2002) Guang Hai Fa Chu Zi No. 349 (Guangzhou Maritime Court) . . . . . . . . 4.41 Qinhuangdao Jinrun Shipping Co Ltd v Fujian Guanhai Shipping Co Ltd (2014) Hu Hai Fa Shang Chu Zi No. 44 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . 11.14 Qinzhou Port Weilong Shipping Co Ltd v PICC P&C Co Ltd Ningbo Branch (2015) Hai Fa Shang Chu Zi No. 606 (Ningbo Maritime Court); (2015) Zhe Xia Zhong Zi No. 200 (Zhejiang High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . 15.65 Qinzhou Port Xinan Ship Agency Co Ltd v Fuzhou Jinfan Shipping Co Ltd (2004) Gui Min Zi Zhong Zi No. 15 (Guangxi High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . 4.5 Quan Yuqing v Guo Yongchang and Zhanjiang Shipping Service Company (Quan Yuqing v Guo Yongchang) (2005) Guang Hai Fa Chu Zi No. 52 (Guangzhou Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.44, 4.46 Quanzhou Hongsheng Light Industrial Co Ltd v Xiamen Yongkang International Forwarding Co Ltd (2008) Xia Hai Fa Shang Chu Zi No. 51 (Xiamen Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.24 Quanzhou Zhongqiao Co Ltd v Sinokor Merchant Marine Co Ltd (2003) Xia Hai Fa Shang Chu Zi No. 203 (Xiamen Maritime Court). . . . . . . . . . . . . . . . . . . . . . . . 7.22 Rickmers Genoa Schiffahrtsgesellschaft mbH & Cie KG and Rickmers-Linie GmbH & Cie KG v CS Marine Co Ltd (2009) Hu Gao Min Si (Hai) Zhong Zi No. 239 (Shanghai High People’s Court) (CA); (2009) Hu Gao Min Si (Hai) Zhong Zi No. 241 (Shanghai High People’s Court, CA). . . . . . . . . . . . . . . . . 11.13, 14.13, 25.7 Rizhao Deyun Logistics Co Ltd v Taiping General Insurance Co Ltd Shandong Branch (2016) Min 72 Min Chu 13 (Xiamen Maritime Court). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.6 Rongcheng Huajin Aquatic products Co Ltd v Seaspan Ship Management Ltd and CSCL Ningbo Shipping Co Ltd (2002) Qing Hai Fa Shi Hai Shi Chu Zi No. 60 (Qingdao Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.26 Royaline Logistics Co Ltd v Honey Manufacturing (Group) Co Ltd (2012) Hu Hai Fa Shang Chu Zi No. 1637 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.35 SAICG International Trade Co Ltd v Pingan Property Insurance Co Ltd Shanghai Branch (2000) Hai Shang Chu Zi No. 011 (Beihai Maritime Court) . . . . . . . . . . . . . . . . . 17.36 Sea Sun Star Co Ltd v AEL-Berkman Forwarding (HK) Ltd Xiamen Branch (2014) Xia Hai Fa Shang Chu Zi No. 27 (Xiamen Maritime Court). . . . . . . . . . . . . . . . . . . 8.10

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Shandong Foreign Trade Group Co Ltd v Liaoning Shipping Co Ltd (1996) Qing Hai Fa Hai Shang Chu Zi No. 62 (Qingdao Maritime Court); (1997) Lu Jing Zhong Zi No. 492 (Shandong High People’s Court) (CA); (2004) Min Si Ti Zi No. 2 (SPC) (Retrial). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.20, 17.32 Shandong Laiwu No. 2 Dyeing & Weaving Factory v AMS Global Transportation Co Ltd (2000) Hu Hai Fa Shang Chu Zi No. 63 (Qingdao Maritime Court). . . . . . . . . . . . . 5.20 Shandong Province East International Trade Co Ltd v CMA CGM SA (2000) Qing Hai Fa Shang Chu Zi No. 289 (Qingdao Maritime Court) . . . . . . . . . . . . . . . . . . . . . . 7.20 Shanghai Baosteel International Economic & Trading Co., Ltd. v the Owners of MV Redestos (2002) Hu Hai Fa Shang Bao Zhi No. 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.38 Shanghai C&J International Trade Co Ltd v MISC Berhad (2011) Yong Hai Fa Shang Chu Zi No. 290 (Ningbo Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6 Shanghai Changying Industrial Co Ltd v Pacific International Lines (Pte) Ltd (2014) Hu Hai Fa Shang Chu Zi No. 1159 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . 7.7 Shanghai Dongfang Dredging Engineering Co Ltd v Hudong Shipbuilding Co Ltd (1999) Hu Gao Jing Zhong Zi No. 423 (Shanghai High People’s Court) (CA) . . . . . . . . . . 11.8 Shanghai Feierda International Trade Co Ltd v SBS Wordwide Ltd and Others (2013) Hu Hai Fa Shang Chu Zi No. 851 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . 5.36 Shanghai Fengqi Petroleum Chemical Co Ltd v Zhejiang Liyang Shipping Co Ltd and others (2013) Hu Hai Fa Shang Chu Zi No. 583 (Shanghai Maritime Court) . . . . . . . . 4.40 Shanghai Huayifang Export & Import Co Ltd v Phoenix International Freight Services Ltd (2013) Hu Hai Fa Shang Chu Zi No. 1389 (Shanghai Maritime Court) . . . . . . . . . . . . . 6.12 Shanghai International Port (Group) Co Ltd and Shanghai East Container Terminal Co Ltd v KSF6 International SA and Hyundai Merchant Marine Co Ltd (2012) Min Shen Zi No. 1401 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.19 Shanghai Jielong Industry Group Co Ltd v Norasia Container Lines Ltd and CSAV Group (China) Shipping Co Ltd (2012) Hu Hai Fa Shang Chu Zi No. 1011 (Shanghai Maritime Court); (2013) Hu Gao Min Si (Hai) Zhong Zi No. 132 (Shanghai High People’s Court) (CA); (2015) Min Shen Zi No. 573 (SPC) (Retrial) . . . . . . . . . . . . . . 7.37 Shanghai Jinrongxiang Enterprise Development Co Ltd v China Pacific Property Insurance Co Ltd Shanghai Branch (2012) Hu Hai Fa Shang Chu Zi No. 166 (Shanghai Maritime Court); (2012) Hu Gao Min Si (Hai) Zhong Zi No. 73 (Shanghai High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.45 Shanghai Kaichang International Transportation Co Ltd v Changzhou JC International Logistics Co Ltd (2013) Hu Hai Fa Shang Chu Zi No. 1077 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.20 Shanghai Kaiyuan Shipping Co Ltd and Others v Dalian Guorun Ship Agency Co Ltd and Another (2014) Hu Hai Fa Shang Chu Zi No. 753 (Shanghai Maritime Court); (2016) Hu Min Zhong 38 (Shanghai High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . 13.4 Shanghai Ocean Shipping Co., Ltd v Star Holdings (2003) Hu Hai Fa Shang Chu Zi No. 113 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.10 Shanghai Ocean Shipping Company v China TUHSU Guangxi Branch (The Liu Lin Hai) (1987) Guang Hai Fa Shang Zi No. 03–20 (Guangzhou Maritime Court); Fa (Jiao) Fu (1988) No. 44 (SPC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.41, 5.42 Shanghai Robinson International Transport Co Ltd v Shanghai Huayifang Import & Export Co Ltd (2015) Min Shen Zi No. 2816 (SPC) (Retrial). . . . . . . . . . . . . . . . . . . . . . . . 6.14 Shanghai Rushi Industrial Co Ltd v Zhejiang Yonghua Shipping Co Ltd (2010) Hu Hai Fa Shang Chu Zi No. 767 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . 4.12 Shanghai Senfu Industrial Co Ltd v Hachiman Shipping SA and Dorval Kaiun KK (2009) Qing Hai Fa Shang Chu Zi No. 276 (Qingdao Maritime Court);

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(2011) Lu Min Si Zhong Zi No. 131 (Shandong High People’s Court) (CA); (2013) Min Si Ti Zi No. 7 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.10, 7.12 Shanghai Shenfu Chemical Co Ltd v PICC P&C Co Ltd Shanghai Branch (2010) Hu Hai Fa Shang Chu Zi No. 1022 (Shanghai Maritime Court); (2011) Hu Gao Min Si (Hai) Zhong Zi No. 134 (Shanghai High People’s Court) (CA); (2011) Min Shen Zi No. 1517 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.58 Shanghai Shiwei International Freight Forwarding Co Ltd v Jiangsu Yonglu Fertiliser Co Ltd (2010) Hu Hai Fa Shang Chu Zi No. 230 (Shanghai Maritime Court) . . . . . . . . . . . . 4.5 Shanghai SVA-DAV Electronics Co Ltd v Cheng Lie Navigation Co Ltd (2003) Hu Hai Fa Shang Chu Zi No. 415 (Shanghai Maritime Court) . . . . . . . . . . . . .5.20, 5.39 Shanghai Yinhe Shipping Co Ltd v Shenyang Woka Heavy Goods Transportation Co Ltd (2013) Hu Hai Fa Shang Chu Zi No. 1603 (Shanghai Maritime Court); (2014) Hu Gao Min Si (Hai) Zhong Zi No. 69 (the Shanghai High People’s Court) (CA) . . . . . . . . . . 4.19 Shantou Maritime Safety Administration of the PRC v Sinopec Guangdong Yuedong Petroleum Branch (2005) Guang Hai Fa Chu Zi No. 182 (Guangzhou Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12.13, 12.20 Shanxi Xinghuacun International Trade Co Ltd v Airsea Worldwide Logistics Ltd (Xianghuacun v Airsea) (2013) Min Ti Zi No. 5 (SPC) (Retrial) . . . . . . . . . . . . . . . . . 17.18 Shaoguan Qujiang Jiaxing Mineral Products Processing Factory v Yong An Property Insurance Co Ltd Weifang Central Branch (2012) Min Shen Zi No. 1502 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.37 Shaoxing Dite Import & Export Co Ltd v Shanghai Shifa International Freight Forwarding Co Ltd (2013) Hu Hai Fa Shang Chu Zi No. 1605 (Shanghai Maritime Court); (2014) Hu Gao Min Si (Hai) Zhong Zi No. 145 (Shanghai High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.3, 8.17 Shaoxing Hengchang Group Co Ltd v Shanghai Dongsue International Logistics Co Ltd (2014) Hu Hai Fa Shang Chu Zi No. 1148 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.14, 8.23, 17.34 Shaoxing Kady Steel & Plastic Products Co Ltd v EUMEX Line Shenzhen Ltd and EUMEX Line Ningbo Ltd (2011) Yong Hai Fa Shang Chu Zi No. 316 (Ningbo Maritime Court); (2012) Zhe Hai Zhong Zi No. 36 (Zhejiang High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.18 Shaoxing Mingxing Plastics & Leather Co Ltd v Wan Hai Lines Ltd (Shaoxing Mingxing v Wan Hai Lines) (2004) Hu Hai Fa Shang Chu Zi No. 567 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.16 Shaoxing Textile City Xingxing Knitting Co Ltd v Huatai Property Insurance Co Ltd Shaoxing Central Branch (2009) Hai Fa Shang Chu Zi No. 236 (Ningbo Maritime Court). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.14 Shenzhen Cereals Group Co Ltd v Future E. N. E. (Shenzhen Cereals v Future) (2004) Qing Hai Fa Shang Chu Zi No. 245 (Qingdao Maritime Court) . . . . . . . . . . . . . . . . 6.27 Shenzhen Guangda Shipping Co Ltd v PICC P&C Co Ltd Shenzhen Branch (2000) Guang Hai Fa Shen Zi No. 7 (Guangzhou Maritime Court) . . . . . . . . . . . . . . . . . . 17.43 Shenzhen Zhongxing Oil Co Ltd v Arktis Carrier Shipping Co Ltd (2003) Guang Hai Fa Chu Zi No. 377 (Guangzhou Maritime Court). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.14 Shipping Corporation of India Co Ltd and United India Insurance Company v Qingdao Beihai Shipbuilding Heavy Industry Co Ltd (2008) Lu Min Si Zhong Zi No. 95 (Shandong High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3 Shouguang Lianmeng Phosphate & Compound Fertilizer Co Ltd v Qingdao Dehai Marine Shipping Co Ltd and Wuhu Tiangong Freight Agency Co Ltd (2012) Min Shen Zi No. 541 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.32

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Sinochem International Corporation v China Railway International Freight Forwarding Dalian Co Ltd (2014) Hu Hai Fa Shang Chu Zi No. 358 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.16 Sinochem Group v Haili Co [2009] Min Si Ta Zi No. 12 (SPC) (Reply) . . . . . . . . . . . . . . . . . . . 6.25 SINOCHEM Lianyungang Branch v Jiangsu Globle Foreign Trade Transportation Co Shanghai Branch and others (2002) Hu Gao Min Si (Hai) Zhong Zi No. 110 (Shanghai High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9 Sinopec Sales Company Shanghai Petroleum Branch Luojing Tank Farm v Guangdong Renke Shipping Co Ltd (2014) Min Ti Zi No. 191 (SPC) (Retrial) . . . . . . . . . . 14.5 Sinotrans Container Lines Co Ltd v Sichuan Minsheng International Freight Forwarding Services Co Ltd and Sichuan Changtong Port Co Ltd (2010) Hu Hai Fa Shang Chu Zi No. 10 (Shanghai Maritime Court); (2010) Hu Gao Min Si (Hai) Zhong Zi No. 143 (Shanghai High People’s Court) (CA) . . . . . . . . . . . . 7.21 Sinotrans International Economic and Technical Cooperation Company v China North Industries Corporation Beijing Branch (1999) Gao Jing Zhong Zi No. 168 (Tianjin High People’s Court) (CA). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.16 Sirallekas Shipping SA v China National Minerals Co Ltd (2009) Hu Hai Fa Shang Chu Zi No. 465 (Shanghai Maritime Court); (2010) Hu Gao Min Si (Hai) Zhong Zi No. 58 (Shanghai High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.28 SITC Shipping Co Ltd v Xiamen Haomen Food Co Ltd (2004) Xia Hai Fa Shang Chu Zi No. 20 (Xiamen Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.22, 7.28 Spring Holding Group Co Ltd v CTSI Logistics (Taiwan) Inc and Evergreen Marine Corporation (Taiwan) Ltd (2008) Zhe Min Si Zhong Zi No. 58 (Zhejiang High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.7, 8.18 Stolt-Nielsen Transportation (Shanghai) Co Ltd v Anhui Shine Chemical Co Ltd (2008) Hu Hai Fa Shang Chu Zi No. 741 (Shanghai Maritime Court); (2009) Hu Gao Min Si (Hai) Zhong Zi No. 26 (Shanghai High People’s Court) (CA) . . . . . . . . . . . . . . . . 17.34 Strength Shipping Corporation, Liberia v Chongqing Xinpei Foods Co Ltd [2006] Min Si Ta Zi No. 26 (SPC) (Reply) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.26 Suzhou Everich Imp. & Exp Co Ltd v Jinghai Transport Co Ltd (2009) Hu Hai Fa Shang Chu Zi No. 637 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.39 Swissmarine Services SA v YYF International Ltd BVI [2014] Guang Hai Fa Ta Zi No. 2 (Guangzhou Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.81 Taizhou Hisource International Trade Co Ltd v U.S. United Logistics Inc (Taizhou Hisource v UUL) (2006) Hu Gao Min Si (Hai) Zhong Zi No. 44 (Shanghai High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4 Taizhou Jinglong Bulk Cements Co Ltd v Anhui Tengda Shipping Co Ltd (2008) Yong Hai Fa Shang Chu Zi No. 77 (Ningbo Maritime Court). . . . . . . . . . . . . . . . . . . . . . . 11.29 Tao Zhanjun v Gao Xueguang (2011) Min Shen Zi No. 916 (SPC) (Retrial) . . . . . . . . . . . . . . . . 4.29 Tavorn Rubber Industry (1982) Co Ltd v China Pacific Insurance Co Ltd Guangzhou Branch (2000) Guang Hai Fa Chong Zi No. 1 (Guangzhou Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.7 Teda Enterprises (Canada) Inc v CSAV SA and NCL Shipping Agencies Ltd (2003) Jin Gao Min Si Zhong Zi No. 47 (Tianjin High People’s Court) (CA) . . . . . . . . . . . . . . . . 17.43 The Liu Lin Hai see Shanghai Ocean Shipping Company v China TUHSU Guangxi Branch (1987) The Minjie No. 8 (2011) Zhe Hai Zhong Zi No. 69 (Zhejiang High People’s Court) (CA) . . . . . . 2.8 The Zhao Qing Gong 1111 (2012) Guang Hai Fa Chu Zi No. 269 (Guangzhou Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.8

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Tianjin International Shipping Co Ltd v Shantou Yuedong International Ship Agency Co Ltd SPC Gazette, Issue 3, 2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.15 Tianjin Iron and Steel Group Co., Ltd and PICC Tianjin v Niagara Maritime S.A [2011] Min Si Ta Zi No. 12 (SPC). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.58 Tokio Marine & Nichido Fire Insurance (China) Co Ltd v Grieg Star Shipping AS and Grieg Shipping AS (Tokio Marine v Grieg Star) (2014) Min Shen Zi No. 445 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . 5.17, 5.18, 15.62 Tokio Marine & Nichido Fire Insurance Co Ltd v PT Djakarta Lloyd (PERSERO) (2008) Hu Hai Fa Shang Chu Zi No. 49 (Shanghai Maritime Court); (2010) Hu Gao Min Si (Hai) Zhong Zi No. 198 (Shanghai High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.24 Trade Quicker Inc. v Golden Light Overseas Management S.A., 1992 (Tianjin Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.34 Trans Power Co Ltd v Danzhou Yonghang Stainless Steel Co Ltd (2009) Hai Shang Chu Zi No. 7 (Haikou Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5 Translink Shipping v Wuxi Yifeng Clothing Co., Ltd. (2013) Hu Hi Fa Shang Chu Zi No. 1721 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.25 Wang Cairong v Fujian Longhai Fugong Shipping Co Ltd (2014) Xia Hai Fa Shang Chu Zi No. 559 (Xiamen Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.9 Wang Fengkui v Dalian Shipping Co Ltd (2005) Da Hai Shang Wai Chu Zi No. 21 (Dalian Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.8 Wang Sanju v PICC P&C Co Ltd Zhaoqing Branch (2015) Min Shen Zi No. 129 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.18 Wang Yishun and Hangzhou Jingwei Shipping Co Ltd (2011) Min Shen Zi No. 119 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.34 Wanhai Lines Pte Ltd v Global Express Logistics (Xiamen) Co Ltd Shanghai Branch (2014) Hu Hai Fa Shang Chu Zi No. 163 (Shanghai Maritime Court). . . . . . . . . . 17.29 Wenzhou Dongfeng Transport Co Ltd v Shanghai Asian Development International Trans Pudong Co Ltd and Others (2010) Zhe Hai Zhong Zi No. 64 (Zhejiang High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.34 Wenzhou Lucheng Foreign Trade Co Ltd v Transvision International Logistics Co Ltd Shanghai Branch (2010) Hu Hai Fa Shang Chu Zi No. 130 (Shanghai Maritime Court); (2010) Hu Gao Min Si (Hai) Zhong Zi No. 139 (Shanghai High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.12 Wing Wah Oil Ship Co.,Ltd v Jiangxi Xinghai Shipping Co., Ltd (2013) Xia Hai Fa Shang Chu Zi No. 166 (Xiamen Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.10 Woodtrans Navigation Corporation, Panama and Sanwai Navigation SA, Panama v Angang Group International Trade Corporation (2000) Jiao Ti Zi No. 6 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.8 Wuhan Associated Marine Transport Inc v China Yangtze River Shipping Co Ltd (2004) Hu Hai Fa Shang Chu Zi No. 187 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . 4.29 Wuhan Huamei Feed Co Ltd v PICC P&C Co Ltd Jiangxi Branch (2004) Hu Gao Min Si (Hai) Zhong Zi No. 151 (Shanghai High People’s Court) (CA) . . . . . . . . 15.48 Wuhan Yuankai Import & Export Co Ltd v COSCO Container Lines Ltd and others (2012) Min Shen Zi No. 1242 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.12 Wuxi Dahua Habit Co Ltd v Damco China Limited (2012) Hu Hai Fa Shang Chu Zi No. 492 (Shanghai Maritime Court); (2012) Hu Gao Min Si (Hai) Zhong Zi No. 159 (Shanghai High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . .6.13, 8.15

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Xiamen Chengyi Shipping Co Ltd v Yunfu Pyrite Group Ltd (2000) Guang Hai Fa Shi Zi No. 95 (Guangzhou Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.44 Xiamen Haicang People’s Government v Xiamen Gangwu Shipping Co Ltd and Xiamen Qianhe Shipping Co Ltd (2013) Xia Hai Fa Shi Chu Zi No. 55 (Xiamen Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.9, 16.21, 16.23 Xing Yulin v Qinzhou Port Yunshunda Shipping Co Ltd (2013) Hu Hai Fa Shang Chu Zi No. 51 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.14 Xinjiang Shenpujing Steel Co Ltd v Chinse–Polish Joint Stock Shipping Company (2006) Hu Hai Fa Shang Chu Zi No. 495 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . 5.19 Xu Yan v Weidong Ferry Co Ltd (2014) Qing Hai Fa Hai Shang Chu Zi No. 382 (Qingdao Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.15 Xuzhou Tianye Metal Resources Co Ltd v San Clemente Shipping SA and Tokyo Sangyo Kaisha Ltd (2011) Hu Hai Fa Shang Chu Zi No. 753 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.5 Yancheng Foreign Trade Co Ltd v Tianjin Marine Shipping Co Ltd (2000) Hai Shen Jian Shang Zai Chu Zi No. 1–6 (Tianjin Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . 17.44 Yangtze Navigation (Hong Kong) Co Ltd v Taizhou Jianghai Transport Co Ltd (2012) Hu Hai Fa Shang Chu Zi No. 21 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . 4.20 Yangzhou Shipping Co Ltd v An Bang Property & Casualty Insurance Co Ltd Zhejiang Branch (2011) Hu Gao Min Si (Hai) Zhong Zi No. 83 (Shanghai High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.53 Yantai Dongyao Fishery Co Ltd v UNTED Ocean Shipping Sdn Bhd and Others (2008) Qing Hai Fa Yan Que Zi No. 22 (Qingdao Maritime Court) . . . . . . . . . . . . . . . . . 16.34 Yantai Hongrui Harbor Engineering Co Ltd v Fuzhou Port Engineering Department (2015) Min Shen Zi No. 1923 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . 4.25 Yantai Rescue and Salvage Bureau v Shandong Rongcheng Longxu Island Fishing Corporation [2002] Min Si Ti Zi No. 3 (SPC) (Retrial). . . . . . . . . . . . . . . . . . . . . . . 2.4 Yantai Rescue and Salvage Bureau v Shandong Rongcheng Longxudao Fishery Co Ltd [2002] Min Si Ti Zi No. 3 (SPC) (Retrial). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.1 Yantai Weisheng International Shipping Management Co Ltd v China Continent Property & Casualty Insurance Co Ltd Weihai Central Branch (2009) Qing Hai Fa Hai Shang Chu Zi No. 353 (Qingdao Maritime Court) . . . . . . . . . . . . . . . . . . . . . . 15.39 Yingkou New Port Ore Terminal Co., Limited v China Railway Materials Co., Limited (2015) Min Ti Zi No. 13 (SPC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.14 Yixing Mingyue Architectural Ceramic Co Ltd v Hopeful Logistics Co Ltd (Yixing Mingyue v Hopeful Logistics) (2009) Hu Hai Fa Shang Chu Zi No. 275 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.33 Yixing Mingyue Architectural Ceramic Co Ltd v Hopeful Logistics Co Ltd (2008) Hai Fa Shang Chu Zi No. 507 (Tianjin Maritime Court); (2009) Jin Gao Min Si Zhong Zi No. 574 (Tianjin High People’s Court) (CA); (2011) Min Shen Zi No. 417 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.31, 8.35 Yizheng Kangping Ship Building and Repairing Factory v Xiao Yiyuan and Others (2012) Min Shen Zi No. 1052 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.41 Yuen Tat Wai v Shanghai Aoyang Marine Co Ltd and Others (2011) Hu Hai Fa Shang Chu Zi No. 1188 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.28 Zhaoyuan Linglong Batteries Co Ltd v Yantai Jiyang Container Transport Co Ltd [2002] Min Si Ta Zi No. 38 (SPC) (Reply) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.3

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Zhejiang Fenfei Rubber & Plastic Products Co Ltd v SUN Cargo International (Shanghai) Ltd Ningbo Branch (2015) Min Shen Zi No. 826 (SPC) (Retrial) . . . . . . . .8.8, 8.15 Zhejiang Longyu Shipping Co Ltd v Nanjing Shunjin Shipping Co Ltd (2014) Min Shen Zi No. 2132 (SPC) (Retrial) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.9 Zhejiang Orient Holding Huaye Import & Export Co Ltd v Kuehne & Nagel (China) Feight Forwarding Co Ltd and Transpac Container System Ltd (2012) Hu Hai Fa Shang Chu Zi No. 827 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . 17.18 Zhejiang Qingsen Garment Co Ltd v Shanghai Shenghong International Logistics Co Ltd (2009) Hu Hai Fa Shang Chu Zi No. 1110 (Shanghai Maritime Court) . . . . . . . . . . 8.11 Zhejiang Shihang Zhapu Port Co Ltd v Shanghai Kairun Shipping Co Ltd (2011) Yong Hai Fa Shi Chu Zi No. 63 (Ningbo Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . 12.23 Zhejiang Tea Group Co Ltd v CMA CGS SA (2008) Yong Hai Fa Shang Chu Zi No. 23 (Ningbo Maritime Court) . . . . . . . . . . . . . . . . . . . 7.8 Zhejiang Textiles Import & Export Group Co., Ltd v Uniglory Marine Corporation (UGMC) Shanghai High People’s Court (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.15 Zhejiang Textiles Import & Export Group Co.,Ltd. v Evergreen International Storage & Transport Corp (2001) Hu Hai Fa Shang Chu Zi No. 441 (Shanghai Maritime Court); (2003) Hu Gao Min Si (Hai) Zhong Zi No. 39 (Shanghai High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.12 Zhejiang Zhongda Novotex Co Ltd v “K” Line (China) Ltd (2003) Hu Gao Min Si (Hai) Zhong Zi No. 71 (Shanghai High People’s Court) (CA) . . . . . . . . . . . . . . . . . . . . . . . . 6.5 Zhejiang Zhonghua Group Co Ltd v Huatai Property Insurance Co Ltd Ningbo Branch (2011) Yong Hai Fa Shang Chu Zi No. 47 (Ningbo Maritime Court) . . . . . . . . . . . . . . . . . 17.37 Zhejiang Zhoushan Putuo Yongan Shipping Co Ltd v Xu Yunbao and Jinan Jitong Ship Transportation Co Ltd (2004) Hu Hai Fa Shang Chu Zi No. 313 (Shanghai Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.30 Zheng Faming v Zhejiang Qinfeng Shipping Co Ltd (2016) Zhe 72 Min Chu 151 (Ningbo Maritime Court) art 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9 Zhi Huaxiang v China United Insurance Holding Corporation Zhoushan Branch (2005) Yong Hai Fa Shang Chu Zi No. 639 (Ningbo Maritime Court) . . . . . . . . . . . . . . . . . 2.2 Zhong Shan Port Shipping Enterprises Group v Haikou Nanqing Container Lines Co., Ltd (2007) Qiong Min Er Zhong Zi No. 21 (Hainan High People’s Court, CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.6, 23.7 Zhou Shuiping v He Chengliang (2008) Yong Hai Fa Shang Chu Zi No. 119 (Ningbo Maritime Court). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.38, 4.45, 4.46 Zhoushan Tongtu Engineering Co Ltd v Dandong Jixiang Shipping Co Ltd and Dandong Marine Shipping Co Ltd (2001) Yong Hai Shi Chu Zi No. 109 (Ningbo Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.23, 14.22 Zhoushan Yuntong Shipping Co Ltd v Zhejiang Qianhong Marine Co Ltd (2008) Yong Hai Fa Shang Chu Zi No. 152 (Ningbo Maritime Court). . . . . . . . . . . . . . . . . . . . . . 10.11 Zhu Xindong v Shen Zhouhang and Others (2015) Qing Hai Fa Hai Shi Chu Zi No. 116 (Qingdao Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.21 Zurich International (Deutschland) Versicherungs AG v Chinese-Polish Joint Stock Shipping Company (1998) Guang Hai Fa Shang Zi No. 96 (Guangzhou Maritime Court) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.38

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TA B L E O F L E G IS L AT I ON

Contents: • • • • •

Legislation China Interpretations of the SPC Provisions of the SPC Regulations Rules

Legislation China Arbitration Law art 5 . . . . . . . . . . . . . . . . . . . . . . . . . .26.25 art 16 . . . . . . . . . . . . . . . . . . . . . . . . . 26.11 art 16 . . . . . . . . . . . . . . . . . . . . . . . . .26.20 art 23 . . . . . . . . . . . . . . . . . . . . . . . . .26.28 art 26 . . . . . . . . . . . . . . . . . . . . . . . . .26.25 art 28 . . . . . . . . . . . . . . . . . . . . . . . . .26.37 art 43 . . . . . . . . . . . . . . . . . . . . . . . . .26.35 art 44 . . . . . . . . . . . . . . . . . . . . . . . . .26.35 art 44 . . . . . . . . . . . . . . . . . . . . . . . . .26.36 art 49 . . . . . . . . . . . . . . . . . . . . . . . . .26.39 art 51 . . . . . . . . . . . . . . . . . . . . . . . . . .26.5 art 54 . . . . . . . . . . . . . . . . . . . . . . . . .26.41 art 55 . . . . . . . . . . . . . . . . . . . . . . . . .26.40 art 58 . . . . . . . . . . . . . . . . . . . . . . . . .26.43 art 59 . . . . . . . . . . . . . . . . . . . . . . . . .26.43 art 61 . . . . . . . . . . . . . . . . . . . . . . . . .26.43 Auction Law of the PRC 2004, as amended in 2015 . . . . . . . . . . . . . . .2.26 Chinese Maritime Code 1992 . . . . . .1.1, 1.3, 1.4, 2.1, 2.4, 2.5, 2.25, 2.26, 2.30, 25.3 art 2 . . . . . . . . . . . . . . . . . . . . . . . . 4.3, 5.1 art 3 . . . . . . . . . . . . . . . 2.2, 4.2, 11.3, 12.2, 13.1, 14.2, 24.15 art 4 . . . . . . . . . . . . . . . . . . . . . . . . . . .10.1 art 4 para 1 . . . . . . . . . . . . . . . . . . . . . .2.21

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art 4 para 2 . . . . . . . . . . . . . . . . . . . . . 2.21 art 5 para 1 . . . . . . . . . . . . . . . . . . . . . .2.13 art 5 para 1. . . . . . . . . . . . . . . . . . . . . . 2.21 art 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6 art 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6 art 9 . . . . . . . . . . . . . . . . . 2.11, 2.29, 25.25 art 9 para 1 . . . . . . . . . . . . . . . . . . . . . . .2.9 art 11 . . . . . . . . . . . . . . . . . . . . . . . . . .2.25 art 12 para 2 . . . . . . . . . . . . . . . . . . . . .2.27 art 13 para 1 . . . . . . . . . . . . . . . . . . . . .2.27 art 13 para 2 . . . . . . . . . . . . . . . . . . . . .2.35 art 14 . . . . . . . . . . . . . . . . . . . . . . . . . .2.34 art 15 . . . . . . . . . . . . . . . . . . . . . . . . . .2.28 art 16 . . . . . . . . . . . . . . . . . . . . . . . . . .2.27 art 17 . . . . . . . . . . . . . . . . . . . . . . . . . .2.27 art 18 . . . . . . . . . . . . . . . . . . . . . . . . . .2.27 art 20 . . . . . . . . . . . . . . . . . . . . . . . . . .2.28 art 23 . . . . . . . . . . . . . . . . . . . . . . . . . .2.36 art 25 para 1 . . . . . . . . . . . . . . . . . . . . .2.29 art 26 . . . . . . . . . . . . . . . . . . . . . . . . .24.59 art 31 . . . . . . . . . . . . . . . . . . . . . . . . . .3.10 art 35 para 1 . . . . . . . . . . . . . . . . . . . . . .3.2 art 35 para 2 . . . . . . . . . . . . . . . . . . . . . .3.4 art 35 para 3 . . . . . . . . . . . . . . . . . . . . . .3.2 art 36 . . . . . . . . . . . . . . . . . . . . . . . . . . .3.7 art 37 . . . . . . . . . . . . . . . . . . . . . . . . . . .3.8 art 38 . . . . . . . . . . . . . . . . . . . . . . . . . .2.37 art 38 para 1 . . . . . . . . . . . . . . . . . . . . . .3.6

TABLE OF LEGISLATION

art 38 para 2 . . . . . . . . . . . . . . . . . . . . . .3.5 art 39 . . . . . . . . . . . . . . . . . . . . . . . . . . .3.2 art 40 . . . . . . . . . . . . . . . . . . . . . . . . . . .3.4 art 41 . . . . . . . . . . . . . . . . . . . . . . 2.38, 5.1 art 42 . . . . . . . . . . . . . . . . . . . . . . . . . .4.10 art 42 (1). . . . . . . . . . . . . . . . . . . . . . . . .6.2 art 42 (2). . . . . . . . . . . . . . . . . . . . . . . . .6.6 art 42 (3). . . . . . . . . . . . . . . . . . . . . . . .6.12 art 42 (3) (a) . . . . . . . . . . . . . . . . . . . . .8.15 art 42 (3) (b) . . . . . . . . . . . . . . . . . . . . .8.15 art 42 (4). . . . . . . . . . . . . . . . . . . 6.19, 7.24 art 42 (5). . . . . . . . . . . . . . . . . . . . . . . . .5.1 art 43 . . . . . . . . . . . . . . . . . . . . . . . . . . .4.4 art 44 . . . . . . . . . . . . . . . . . . . . . 5.11, 7.21 art 45 . . . . . . . . . . . . . . . . . . . . . . . . . .7.21 art 46 . . . . . . . . . . . . . . . . . . . . . . . 7.3, 7.7 art 47 . . . . . . . . . . . . . . . . . . . . . . . 4.6, 7.4 art 48 . . . . . . . . . . . . . . . . . . . . . . . . . . .4.9 art 49 . . . . . . . . . . . . . . . . . . . . . . . 4.6, 7.5 art 50 . . . . . . . . . . . . . . . . . . . . . . 7.7, 7.17 art 52 . . . . . . . . . . . . . . . . . . . . . . . . . .7.10 art 53 . . . . . . . . . . . . . . . . . . . . . . . . . .7.10 art 54 . . . . . . . . . . . . . . . . . . . . . . . . . . .7.9 art 55 . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11 art 56 . . . . . . . . . . . . . . . . . . . . . 4.47, 14.7 art 56 para 1 . . . . . . . . . . . . . . . . . . . . .7.15 art 56 para 2 . . . . . . . . . . . . . . . . . . . . .7.16 art 56 para 3 . . . . . . . . . . . . . . . . . . . . .7.16 art 57 . . . . . . . . . . . . . . . . . . . . . 7.17, 14.6 art 58 . . . . . . . . . . . . . . . . . . . . . 4.47, 7.18 art 59 . . . . . . . . . . . . . . . . . . . . . . . . . .7.19 art 60 . . . . . . . . . . . . . . . . . . . . . . . . . . .6.8 art 61 . . . . . . . . . . . . . . . . . . . . . . . . . . .6.6 art 63 . . . . . . . . . . . . . . . . . . . . . . . 6.7, 6.9 art 64 . . . . . . . . . . . . . . . . . . . . . . . . . .7.18 art 65 . . . . . . . . . . . . . . . . . . . . . . . . . . .6.9 art 66 para 1 . . . . . . . . . . . . . . . . . . . . .7.30 art 67 . . . . . . . . . . . . . . . . . . . . . . . . . .7.30 art 68 . . . . . . . . . . . . . . . . . . . . . . . . . .7.31 art 69 . . . . . . . . . . . . . . . . . . . . . . . . . .7.34 art 70 . . . . . . . . . . . . . . . . . . . . . . . . . .7.37 art 71 . . . . . . . . . . . . . . . . . . . . . . 5.2, 5.20 art 72 para 1 . . . . . . . . . . . . . . . . . . . . .8.13 art 72 para 2 . . . . . . . . . . . . . . . . . . . . . .5.9 art 74 . . . . . . . . . . . . . . . . . . . . . . . . . . .5.9 art 75 . . . . . . . . . . . . . . . . . . . . . . . . . .5.10 art 76 . . . . . . . . . . . . . . . . . . . . . 5.12, 5.16 art 77 . . . . . . . . . . . . . . . . . . . . . . . . . .5.12 art 78 . . . . . . . . . . . . . . . . . . . . . . . . . .5.31

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art 78 para 1 . . . . . . . . . . . . . . . . . 5.6, 6.19 art 78 para 2 . . . . . . . . . . . . . . . . . . . . . .5.7 art 79 . . . . . . . . . . . . . . . . . . . . . . . . . .6.22 art 80 . . . . . . . . . . . . . . . . . . . . . . . . . . .5.8 art 81 . . . . . . . . . . . . . . . . . . . . . . . . . .7.24 art 82 . . . . . . . . . . . . . . . . . . . . . . . . . .7.24 art 85 . . . . . . . . . . . . . . . . . . . . . . . . . .7.24 art 86 . . . . . . . . . . . . . . . . . . . . . . . . . .7.25 art 87 . . . . . . . . . . . . . . . . . . . . . . 4.8, 7.26 art 87–88 . . . . . . . . . . . . . . . . . . . . . .17.15 art 88 . . . . . . . . . . . . . . . . . . . . . . . . . .7.26 art 89 . . . . . . . . . . . . . . . . . . . . . . . . . .7.36 art 90 . . . . . . . . . . . . . . . . . . . . . . . . . .7.36 art 91 . . . . . . . . . . . . . . . . . . . . . . . . . .7.23 art 92 . . . . . . . . . . . . . . . . . . . . . . . . . . .4.4 art 94 . . . . . . . . . . . . . . . . . . . . . . . . . . .4.8 art 94 para 1 . . . . . . . . . . . . . . . . . . . . . .4.6 art 95 . . . . . . . . . . . . . . . . .5.3, 6.23, 25.52 art 96 para 1 . . . . . . . . . . . . . . . . . . . . .4.12 art 96 para 2 . . . . . . . . . . . . . . . . . . . . .4.12 art 97 . . . . . . . . . . . . . . . . . . . . . . . . . .4.13 art 98 . . . . . . . . . . . . . . . . . . . . . . . . . .4.18 art 99 . . . . . . . . . . . . . . . . . . . . . . . . . .4.16 art 100 para 2 . . . . . . . . . . . . . . . . . . . .4.16 art 101 . . . . . . . . . . . . . . . . . . . . . . . . .4.17 art 102 . . . . . . . . . . . . . . . . . . . . . . . . .8.27 art 103 . . . . . . . . . . . . . . . . . . . . . . . . .8.32 art 104 . . . . . . . . . . . . . . . . . . . . . . . . .8.32 art 105 . . . . . . . . . . . . . . . . . . . . . . . . .8.35 art 106 . . . . . . . . . . . . . . . . . . . . . . . . .8.35 art 107 . . . . . . . . . . . . . . . . . . . . . 4.47, 9.1 art 108 (1). . . . . . . . . . . . . . . . . . . . . . . .9.4 art 108 (2). . . . . . . . . . . . . . . . . . . . . . . .9.4 art 108 (5). . . . . . . . . . . . . . . . . . 9.4, 22.27 art 109 . . . . . . . . . . . . . . . . . . . . . 9.6, 9.28 art 110 . . . . . . . . . . . . . . . . . . . . . . . . . .9.8 art 111. . . . . . . . . . . . . . . . . . . . . . . . . .9.10 art 112 . . . . . . . . . . . . . . . . . . . . . . . . . 9.11 art 113 . . . . . . . . . . . . . . . . . . . . . . . . .9.13 art 114 para 1 . . . . . . . . . . . . . . . . . . . .9.14 art 114 paras 2–4 . . . . . . . . . . . . . . . . .9.17 art 115 . . . . . . . . . . . . . . . . . . . . . . . . .9.14 art 116 . . . . . . . . . . . . . . . . . . . . . . . . .9.16 art 117 paras 1–3 . . . . . . . . . . . . . . . . .9.23 art 118 . . . . . . . . . . . . . . . . . . . . . . . . .9.28 art 119 . . . . . . . . . . . . . . . . . . . . . . . . .9.18 art 120 . . . . . . . . . . . . . . . . . . . . . . . . .9.24 art 121 . . . . . . . . . . . . . . . . . . . . . . . . . .9.7 art 123 . . . . . . . . . . . . . . . . . . . . . . . . . .9.7

TABLE OF LEGISLATION

art 124 . . . . . . . . . . . . . . . . . . . . . . . . .9.24 art 125 . . . . . . . . . . . . . . . . . . . . . 9.7, 9.24 art 126 . . . . . . . . . . . . . . . . . . . . . . . . . .9.5 art 127 . . . . . . . . . . . . . . . .4.20, 4.28, 4.36 art 128 . . . . . . . . . . . . . . . . . . . . 4.20, 4.36 art 129 . . . . . . . . . . . . . . . . . . . . . . . . .4.20 art 131 . . . . . . . . . . . . . . . . . . . . . . . . .4.21 art 132 . . . . . . . . . . . . . . . . . . . . . . . . .4.24 art 133 . . . . . . . . . . . . . . . . . . . . . . . . .4.29 art 134 . . . . . . . . . . . . . . . . . . . . 4.30, 4.49 art 135 . . . . . . . . . . . . . . . . . . . . 4.31, 4.49 art 136 . . . . . . . . . . . . . . . . . . . . . . . . .4.32 art 137 . . . . . . . . . . . . . . . . . . . . . . . . .4.33 art 138 . . . . . . . . . . . . . . . . . . . . . . . . .4.33 art 139 . . . . . . . . . . . . . . . . . . . . . . . . .4.35 art 140 . . . . . . . . . . . . . . . . . . . . . . . . .4.27 art 141 . . . . . . . . . . . . . . . . . . . . . . . . .4.27 art 142 . . . . . . . . . . . . . . . . . . . . . . . . .4.37 art 143 . . . . . . . . . . . . . . . .4.24, 4.25, 4.37 art 144 . . . . . . . . . . . . . . . . . . . . . . . . .4.36 art 146 . . . . . . . . . . . . . . . . . . . . . . . . .4.37 art 147 . . . . . . . . . . . . . . . . . . . . . . . . .4.40 art 148 . . . . . . . . . . . . . . . . . . . . . . . . .4.41 art 149 . . . . . . . . . . . . . . . . . . . . . . . . .4.40 art 149 para 2 . . . . . . . . . . . . . . . . . . . .4.38 art 150 . . . . . . . . . . . . . . . . . . . . . . . . .4.43 art 151 . . . . . . . . . . . . . . . . . . . . . . . . .4.38 art 152 para 1 . . . . . . . . . . . . . . . . . . . .4.39 art 152 para 2 . . . . . . . . . . . . . . . . . . . .4.38 art 153 . . . . . . . . . . . . . . . . . . . . 4.37, 4.49 art 154 . . . . . . . . . . . . . . . . . . . . . . . . .4.50 art 155 . . . . . . . . . . . . . . . . . . . . . . . . .10.1 art 156 . . . . . . . . . . . . . . . . . . . . . . . . .10.2 art 156 para 2 . . . . . . . . . . . . . . . . . . . . 11.3 art 157 . . . . . . . . . . . . . . . . . . . . . . . . .10.7 art 157 para 2 . . . . . . . . . . . . . . . . . . . .10.8 art 158 . . . . . . . . . . . . . . . . . . . . . . . .10.10 art 159 . . . . . . . . . . . . . . . . . . . . . . . .10.10 art 160 . . . . . . . . . . . . . . . . . . . . . . . . .10.9 art 161 . . . . . . . . . . . . . . . . . . . . . . . . 10.11 art 162 . . . . . . . . . . . . . . . . . . . . . . . .10.12 art 163 . . . . . . . . . . . . . . . . . . . . . . . .10.13 art 164 . . . . . . . . . . . . . . . . . . . . . . . . .10.2 art 165 . . . . . . . . . . . . . . . . . . . 11.1, 24.15 art 166 . . . . . . . . . . . . . . . . . . . . . . . . . .3.9 art 167 . . . . . . . . . . . . . . . . . . . 11.7, 11.15 art 168 . . . . . . . . . . . . . . . . . . . 11.7, 11.15 art 169 para 1 . . . . . . . . . . . . . . 11.7, 16.21 art 169 para 2–3 . . . . . . . . . . . . . . . . . 11.15

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art 169 para 3 . . . . . . . . . . . . . . . . . . .17.39 art 170 . . . . . . . . . . . . . . 11.5, 15.21, 24.15 art 171 . . . . . . . . . . . . . . . . . . . . . . . . .12.1 art 172 . . . . . . . . . . . . . . . . . . . . 12.2, 12.3 art 173 . . . . . . . . . . . . . . . . . . . . . . . . .12.3 art 174 . . . . . . . . . . . . . . . . . . . . . . . .12.16 art 175 para 1 . . . . . . . . . . . . . . . . . . . .12.6 art 175 para 2 . . . . . . . . . . . . . . . . . . . .12.7 art 176 . . . . . . . . . . . . . . . . . . . . . . . .12.17 art 177 . . . . . . . . . . . . . . . . . . . . . . . .12.14 art 178 . . . . . . . . . . . . . . . . . . . . . . . .12.15 art 179 . . . . . . . . . . . . . . . . . . . . . . . .12.19 art 180 . . . . . . . . . . . . . . . . . . . . . . . .12.20 art 181 . . . . . . . . . . . . . . . . . . . . . . . .12.22 art 182 para 1 . . . . . . . . . . . . . . . . . . .12.28 art 182 para 2 . . . . . . . . . . . . . . . . . . .12.29 art 182 para 3 . . . . . . . . . . . . . . . . . . .12.30 art 182 para 4–6 . . . . . . . . . . . . . . . . .12.31 art 184 . . . . . . . . . . . . . . . . . . . . . . . .12.33 art 185 . . . . . . . . . . . . . . . . . . . . . . . .12.34 art 186 . . . . . . . . . . . . . . . . . . . . . . . .12.32 art 187 . . . . . . . . . . . . . . . . . . . . . . . .12.32 art 188 . . . . . . . . . . . . . . . . . . . . . . . .12.35 art 189 . . . . . . . . . . . . . . . . . . . . . . . .12.37 art 190 . . . . . . . . . . . . . . . . . . . . . . . .12.36 art 191 . . . . . . . . . . . . . . . . . . . . . . . .12.19 art 192 . . . . . . . . . . . . . . . . . . . . . . . .12.12 art 193 para 1 . . . . . . . . . . . . . . . . . . . .13.1 art 193 para 2 . . . . . . . . . . . . . . . . . . . .13.3 art 194 . . . . . . . . . . . . . . . . . . . . . . . . .13.2 art 195 . . . . . . . . . . . . . . . . . . . . . . . . .13.2 art 196 . . . . . . . . . . . . . . . . . . . . . . . . .13.4 art 197 . . . . . . . . . . . . . . . . . . . 13.5, 13.12 art 198 . . . . . . . . . . . . . . . . . . . . . . . . .13.7 art 199 . . . . . . . . . . . . . . . . . . . . . . . . .13.9 art 200 para 1 . . . . . . . . . . . . . . . . . . . .13.3 art 200 para 2 . . . . . . . . . . . . . . . . . . . .13.8 art 201 . . . . . . . . . . . . . . . . . . . . . . . . .13.8 art 202 . . . . . . . . . . . . . . . . . . . . . . . .13.10 art 203 . . . . . . . . . . . . . . . . . . 13.11, 25.39 art 204 . . . . . . . . . . . . . . . . . . . . . . . . .14.3 art 205 . . . . . . . . . . . . . . . . . . . . . . . . .14.4 art 206 . . . . . . . . . . . . . . . . . . . . . . . . .14.4 art 207 para 1 . . . . . . . . . . . . . . . . . . . .14.5 art 207 para 2 . . . . . . . . . . . . . . . . . . . .14.5 art 208 . . . . . . . . . . . . . . . . . . 14.10, 16.25 art 209 . . . . . . . . . . . . . . . . . . 14.21, 16.26 art 210 para 1 . . . . . . . . . . . . . . . . . . . 14.11 art 210 para 4 . . . . . . . . . . . . . . . . . . . .14.2

TABLE OF LEGISLATION

art 211 . . . . . . . . . . . . . . . . . . . . . . . .14.17 art 211 para 1 . . . . . . . . . . . . . . . . . . . .9.25 art 211 para 2 . . . . . . . . . . . . . . . . . . . .14.2 art 212 . . . . . . . . . . . . . . . . . . . . . . . .14.19 art 213 . . . . . . . . . . . . . . . . . . . . . . . .14.23 art 214 . . . . . . . . . . . . . . . . . . . . . . . .14.23 art 215 . . . . . . . . . . . . . . . . . . . . . . . .14.20 art 216 para 1 . . . . . . . . . . . . . . . . . . . .15.3 art 216 para 2 . . . . . . . . . . . . . . . . . . . .15.4 art 217 . . . . . . . . . . . . . . . . . . . . . . . .15.12 art 218 . . . . . . . . . . . . . . . . . . . . . . . . .15.4 art 219 . . . . . . . . . . . . . . . . . . . . . . . . .15.5 art 220 . . . . . . . . . . . . . . . . . . . . . . . . .15.5 art 221 . . . . . . . . . . . . . . . . . . . . . . . . .15.3 art 222 . . . . . . . . . . . . . . . . . . . . . . . .15.37 art 223 . . . . . . . . . . . . . . . . . . . . . . . .15.41 art 224 . . . . . . . . . . . . . . . . . . . . . . . . .15.8 art 225 . . . . . . . . . . . . . . . . . . . 15.9, 15.10 art 226 . . . . . . . . . . . . . . . . . . . . . . . .15.17 art 227 . . . . . . . . . . . . . . . . . . . . . . . .15.17 art 228 . . . . . . . . . . . . . . . . . . . . . . . .15.17 art 230 para 1 . . . . . . . . . . . . . . . . . . .15.16 art 230 para 2 . . . . . . . . . . . . . . . . . . .15.16 art 231 . . . . . . . . . . . . . . . . . . . . . . . . 15.11 art 232 . . . . . . . . . . . . . . . . . . . . . . . . 15.11 art 233 . . . . . . . . . . . . . . . . . . . . . . . .15.13 art 234 . . . . . . . . . . . . . . . . . . . . . . . . .15.6 art 235 . . . . . . . . . . . . . . . . . . . . . . . .15.44 art 236 . . . . . . . . . . . . . . . . . . . . . . . .15.57 art 237 . . . . . . . . . . . . . . . . . . . . . . . .15.50 art 238 . . . . . . . . . . . . . . . . . . . . . . . .15.52 art 239 . . . . . . . . . . . . . . . . . . . . . . . .15.52 art 240 . . . . . . . . . . . . . . . . . . . . . . . .15.53 art 240 para 1 . . . . . . . . . . . . . . . . . . .15.60 art 241 . . . . . . . . . . . . . . . . . . . . . . . .15.52 art 242 . . . . . . . . . . . . . . . . . . . . . . . .15.57 art 243 . . . . . . . . . . . . . . . . . . . . . . . .15.58 art 244 . . . . . . . . . . . . . . . . . . . . . . . .15.59 art 245 . . . . . . . . . . . . . . . . . . . . . . . .15.46 art 247 . . . . . . . . . . . . . . . . . . . . . . . .15.47 art 248 . . . . . . . . . . . . . . . . . . . . . . . .15.48 art 249 . . . . . . . . . . . . . . . . . . . . . . . .15.49 art 250 . . . . . . . . . . . . . . . . . . . . . . . .15.49 art 251 . . . . . . . . . . . . . . . . . . . . . . . .15.50 art 252 . . . . . . . . . . . . . . . . . . . . . . . .15.60 art 253 . . . . . . . . . . . . . . . . . . . . . . . .15.63 art 255 . . . . . . . . . . . . . . . . . . . . . . . .15.56 art 256 . . . . . . . . . . . . . . . . . . . . . . . .15.56 art 257 para 1 . . . . . . . . . . . . . 17.14, 17.20

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art 257 para 2 . . . . . . . . . . . . . . 4.19, 17.17 art 258 . . . . . . . . . . . . . . . . . . . . . . . .17.35 art 259 . . . . . . . . . . . . . . . . . . . . . . . .17.17 art 260 . . . . . . . . . . . . . . . . . . . . . . . .17.39 art 261 . . . . . . . . . . . . . . . . . . . . . . . .17.39 art 262 . . . . . . . . . . . . . . . . . . . . . . . .17.39 art 264 . . . . . . . . . . . . . . . . . . . . . . . .17.36 art 266 . . . . . . . . . . . . . . . . . . . . . . . .17.42 art 268 . . . . . . . . . . . . . . . . . . . 17.10, 25.5 art 268 para 1 . . . . . . . . . . . . . . . . . . . .12.1 art 268 para 2 . . . . . . . . . . . . . . . . . . . .5.19 art 269 . . . . . . . . . . . . . . .17.2,25.15,25.24 art 270 . . . . . . . . . . . . . . . . . . . . . . . . 17.11 art 271 . . . . . . . . . . . . . . . . . . . . . . . . 17.11 art 272s. . . . . . . . . . . . . . . . . . 17.11, 25.29 art 273 . . . . . . . . . . . . . . . . . . . . . . . .17.12 art 274 . . . . . . . . . . . . . . . . . . . . . . . .17.13 art 275 . . . . . . . . . . . . . . . . . . . . . . . .17.13 art 276 . . . . . . . . . . . . . . . . . . 17.10, 25.12 art 277 . . . . . . . . . . . . . . . . . . . . . . . . .7.15 chapter 4 section 7 . . . . . . . . . . . . . . . . .4.1 Civil Procedure Law 2012 . . . . . . . . . . . . 1.4, 18.8, 18.9 art 19 . . . . . . . . . . . . . . . . . . . . . . . . .19.22 art 20 . . . . . . . . . . . . . . . . . . . . . . . . .19.22 art 23 . . . . . . . . . . . . . . . . . . . . . 19.18(10) art 27 . . . . . . . . . . . . . . . . . . . . . . 19.18(2) art 28–30 . . . . . . . . . . . . . . . . . . . 19.18(1) art 31 . . . . . . . . . . . . . . . . . . . . . . 19.18(8) art 32 . . . . . . . . . . . . . . . . . 19.18(9), 24.24 art 34 . . . . . . . . . . . . . . . . . . . 19.24, 24.24 art 37 . . . . . . . . . . . . . . . . . . . . . . . . .19.33 art 56 para 2 . . . . . . . . . . . . . . . . . . . .15.55 art 63 . . . . . . . . . . . . . . . . . . . . . . . . .24.18 art 64 . . . . . . . . . . . . . . . . . . . . . . . . .24.19 art 97 . . . . . . . . . . . . . . . . . . . . . . . . .26.70 art 98 . . . . . . . . . . . . . . . . . . . . . . . . .26.70 art 100 . . . . . . . . . . . . . . . . . . . . . . . . .21.5 art 100–101 . . . . . . . . . . . . . . . . . . . .20.12 art 103 . . . . . . . . . . . . . . . . . . . . . . . .20.46 art 106 . . . . . . . . . . . . . . . . . . . . . . . .23.40 art 107 . . . . . . . . . . . . . . . . . . . . . . . .23.40 art 118 . . . . . . . . . . . . . . . . . . . . . . . .18.52 art 119–121 . . . . . . . . . . . . . . . . . . . . .24.3 art 122 . . . . . . . . . . . . . . . . . . . . . . . . .24.4 art 123 . . . . . . . . . . . . . . . . . . . . . . . . .24.4 art 125 . . . . . . . . . . . . . . . . . . . . . . . . .24.5 art 127 . . . . . . . . . . . . . . . . . . 19.27, 19.32 art 136 . . . . . . . . . . . . . . . . . . . . . . . . .24.9

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art 149 . . . . . . . . . . . . . . . . . . . . . . . . 24.11 art 162 . . . . . . . . . . . . . . . . . . . . . . . .24.35 art 164 . . . . . . . . . . . . . . . . . . . . . . . .24.12 art 167 . . . . . . . . . . . . . . . . . . . . . . . .24.12 art 170 . . . . . . . . . . . . . . . . . . . . . . . .24.14 art 191 (3). . . . . . . . . . . . . . . . . . . . . . .13.4 art 200 . . . . . . . . . . . . . . . . . . . . . . . .12.27 art 214 . . . . . . . . . . . . . . . . . . . . . . . .24.37 art 237 . . . . . . . . . . . . . . . . . . . . . . . .26.42 art 264 . . . . . . . . . . . . . . . . . . . . . . . . .24.3 art 265 . . . . . . . . . . . . . . . . . . . . . . . .25.47 art 266 . . . . . . . . . . . . . . . . . . . . . . . .25.48 art 267–68 . . . . . . . . . . . . . . . . . . . . . 11.29 art 268 . . . . . . . . . . . . . . . . . . . 24.5, 24.12 art 269 . . . . . . . . . . . . . . . . . . . . . . . .24.12 art 270 . . . . . . . . . . . . . . . . . . . . . . . . 24.11 art 282 . . . . . . . . . . . . . . . . . . . . . . .26.106 chapter 2 Trial Procedure . . . . . . . . . . .24.1 chapter 8. . . . . . . . . . . . . . . . . . . . . . . .26.5 chapter 13 Summary Procedure . . . . .24.33 Contract Law 1999 of People’s Republic of China . . . . . 1.4, 2.6, 2.7, 4.3, 15.4, 25.3 art 4 . . . . . . . . . . . . . . . . . . . . . . . . . . .6.28 art 6 . . . . . . . . . . . . . . . . . . . . . . . . . . .5.41 art 10 . . . . . . . . . . . . . . . . . . . . . . 2.11, 4.4 art 11 . . . . . . . . . . . . . . . . . . . . . . . . . . .4.4 art 21 . . . . . . . . . . . . . . . . . . . . . . . . . . .5.5 art 52 para 5 . . . . . . . . . . . . . . . . . . . . .4.44 art 65 . . . . . . . . . . . . . . . . . . . . . . . . . .7.34 art 66 . . . . . . . . . . . . . . . . . . . . . . . . . .8.34 art 67 . . . . . . . . . . . . . . . . . . . . . . . . . .8.34 art 78 . . . . . . . . . . . . . . . . . . . . . . . . . .13.1 art 80 para 1 . . . . . . . . . . . . . . . . . . . . .13.1 art 91 . . . . . . . . . . . . . . . . . . . . . . . . . .4.48 art 95 para 1 . . . . . . . . . . . . . . . . . . . . .4.13 art 97 . . . . . . . . . . . . . . . . . . . . . . . . . .4.48 art 113 . . . . . . . . . . . . . . . . . . . . 4.26, 9.21 art 113 para 1 . . . . . . . . . . . . . . . . . . . .7.13 art 114 . . . . . . . . . . . . . . . . . . . . . . . . .4.18 art 117 para 2 . . . . . . . . . . . . . . 11.8, 17.42 art 119 . . . . . . . . . . . . . . . . . . . . . . . . .7.27 art 123 . . . . . . . . . . . . . . . . . . . . . . . . . .4.4 art 124 . . . . . . . . . . . . . . . . . . . . . . . . . .4.5 art 125 . . . . . . . . . . . . . . . . . . . . . . . .15.22 art 126 . . . . . . . . . . . . . . . . . . 25.15, 25.24 art 126 para 1 . . . . . . . . . . . . . . . . . . . .17.3 art 133 . . . . . . . . . . . . . . . . . . . . 2.12, 5.27 art 224 para 2 . . . . . . . . . . . . . . . . . . . .4.48 art 242 . . . . . . . . . . . . . . . . . . . . . . . . .4.50

art 245 . . . . . . . . . . . . . . . . . . . . . . . . .4.51 art 247 . . . . . . . . . . . . . . . . . . . . . . . . .4.51 art 248 . . . . . . . . . . . . . . . . . . . . . . . . .4.51 art 249 . . . . . . . . . . . . . . . . . . . . . . . . .4.51 art 289 . . . . . . . . . . . . . . . . . . . . . . . . .6.10 art 290 . . . . . . . . . . . . . . . . . . . . . . . . .9.19 art 291 . . . . . . . . . . . . . . . . . . . . . . . . .9.19 art 293 . . . . . . . . . . . . . . . . . . . . . . . . . .9.9 art 295 . . . . . . . . . . . . . . . . . . . . . . . . .9.12 art 302 . . . . . . . . . . . . . . . . . . . . . . . . .9.14 art 308 . . . . . . . . . . . . . . . . . . . . . . . . .6.15 art 309 . . . . . . . . . . . . . . . . . . . . . . . . . 7.22 art 317 . . . . . . . . . . . . . . . . . . . . . . . . . 8.28 art 319 . . . . . . . . . . . . . . . . . . . . . . . . . 8.29 art 320 . . . . . . . . . . . . . . . . . . . . . . . . . 8.29 art 407 . . . . . . . . . . . . . . . . . . . . . . . . .8.16 art 410 . . . . . . . . . . . . . . . . . . . . . . . . . 8.20 CPL see Civil Procedure Law of the People’s Republic of China Decisions Decision of the SPC Concerning the Issues on Setting up Maritime Courts . . . . 18.6 Decision of the SPC on the Establishment of Haikou Maritime Court and Xiamen Maritime Court . . . . . . . . . 18.6 Decision of the SPC on the Establishment of Ningbo Maritime . . . . . . . . . . . . .18.6 Decision of the Standing Committee of the National People’s Congress on the Establishment of Maritime Courts in Coastal Port Cities. . . . . . . . . . . . . . 18.6 Explanations Explanation see “Explanations concerning Relevant Issues of Foreign Related Commercial and Maritime Trial Practice published by the Fourth Civil Court of the SPC” Explanations No. 1 2004 see “Explanations concerning Practical Issues in Foreign Related Commercial and Maritime Trails No. 1, 2004” Explanations concerning Practical Issues in Foreign Related Commercial and Maritime Trails No. 1, 2004 (Explanations No. 1 2004) art 98 . . . . . . . . . . . . . . . . . . . . . . . . . .6.25 art 124 . . . . . . . . . . . . . . . . . . . . . . . . .13.3

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Application of Laws to ForeignRelated Civil Relations Law of People’s Republic of China on Application of Laws to ForeignRelated Civil Relations . . . . . . 1.4, 25.3 art 2 . . . . . . . . . . . . . . . . . . . . . . . . . . .25.3 art 3 . . . . . . . . . . . . . . . . . . . . . . . . . . .25.6 art 4 . . . . . . . . . . . . . . . . . . . . . . . . . .25.12 art 5 . . . . . . . . . . . . . . . . . . . . . . . . . .25.12 arts 8–9. . . . . . . . . . . . . . . . . . . . . . . .25.13 art 10 . . . . . . . . . . . . . . . . . . . . . . . . .25.10 art 12 . . . . . . . . . . . . . . . . . . . . . . . . .26.16 art 14 . . . . . . . . . . . . . . . . . . . . . . . . .26.16 art 41 . . . . . . . . . . . . . . . . . . . . 17.4, 25.15 art 44 . . . . . . . . . . . . . . . . . . . . . . . . .25.31

art 125 para 2 . . . . . . . . . . . . . . . . . . . . .9.1 art 137 . . . . . . . . . . . . . . . . . . . . . . . . .13.1 art 139 . . . . . . . . . . . . . . . . . . . . . . . . .14.9 art 140 . . . . . . . . . . . . . . . . . . . . . . . . .7.20 art 181 . . . . . . . . . . . . . . . . . . . . . . . .14.19 Explanations concerning Relevant Issues of Foreign Related Commercial and Maritime Trial Practice published by the Fourth Civil Court of the SPC (the “Explanation”) . . . . . . . . . . . .26.55 General Principles of the Civil Law 1986 as amended in 2009 . . . . . . 1.4, 2.6, 2.7, 4.3, 16.1, 25.3 art 4 . . . . . . . . . . . . . . . . . . . . . . . . . . .5.41 art 7 . . . . . . . . . . . . . . . . . . . . . . . . . . .4.15 art 130 . . . . . . . . . . . . . . . . . . . . . . . . .5.44 art 135 . . . . . . . . . . . . . . . . . . 17.32, 17.49 art 135–137 . . . . . . . . . . . . . . 17.33, 17.41 art 140 . . . . . . . . . . . . . . . . . . . . . . . .17.47 art 145 . . . . . . . . . . . . . . . . . . 25.15, 25.24 Guaranty Law 1995 . . . . . . . . . . . . . . . . . .1.4

Marine Environment Protection Law 2013 . . . . . . . . . . . . . . . . . . . . .16.1 art 71 . . . . . . . . . . . . . . . . . . . . . . . . .12.13 art 90 . . . . . . . . . . . . . . . . . . . . . . . . . .16.9 art 90 para 1 . . . . . . . . . . . . . . . . . . . .16.22 Maritime Law (the “CMC 1992”) see Chinese Maritime Code Maritime Traffic Safety Law 1983. . . . .24.20 art 43 . . . . . . . . . . . . . . . . . . . . . . . . . 11.33 Measures for the Payment of Court Fees promulgated by the State Council on 19 December 2006 . . . . . . . . . . . . . . .18.52 art 6 . . . . . . . . . . . . . . . . . . . . . . . . . .18.52 Measures of the People’s Republic of China for Implementation of Civil Liability Insurance for Oil Pollution Damage Caused by Ships 2010, as amended in 2013 Order No. 11 [2013] of the Ministry of Transport of the PRC . . . . . . . . . . . . . . . . . . .16.33

Guidance Guidance of the Standardizing of the Maritime Traffic Accident Investigation and the Maritime Trial of the PRC Supreme People’s Court Division No. 4 and the PRC State Maritime Safety Administration (Fa Min Si (2006) No. 1) section I (5) . . . . . . . . . . . . . . . . . . . .24.20 Section I (6) . . . . . . . . . . . . . . . . . . . .24.20 Insurance Law 2015 art 12 para 2 . . . . . . . . . . . . . . . . . . . .15.31 art 12 para 6 . . . . . . . . . . . . . . . . . . . .15.31 art 19 . . . . . . . . . . . . . . . . . . . . . . . . .15.23 art 23 paras 1–2 . . . . . . . . . . . . . . . . .15.51 art 24 . . . . . . . . . . . . . . . . . . . . . . . . .15.51 art 25 . . . . . . . . . . . . . . . . . . . . . . . . .1550. art 30 . . . . . . . . . . . . . .15.18, 15.20, 15.23 art 48 . . . . . . . . . . . . . . . . . . . . . . . . .15.31 art 56 . . . . . . . . . . . . . . . . . . . . . . . . . .15.9 art 184 . . . . . . . . . . . . . . . . . . . . . . . . .15.1 Labour Contract Law 2012 . . . . . . . . . . . 3.20 Labour Law 1994 . . . . . . . . . . . . . . . . . . 3.20 Law of Application of Laws see Law of People’s Republic of China on

Minutes Minutes of the Second National Working Conference 2005 see “Minutes of the Second National Working Conference on the Trial of Foreign-Related Commercial and Maritime Cases 2005” Minutes of the Second National Working Conference on the Trial of ForeignRelated Commercial and Maritime Cases 2005 (Minutes of the Second National Working Conference 2005) Fa Fa [2005] No. 26 (SPC) . . . . . . . . . . . . . . . . . . . . 1.5, 16.1

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art 107 . . . . . . . . . . . . . . . . . . . . . . . . .5.37 art 109 . . . . . . . . . . . . . . . . . . . . . . . . .5.37 art 110 para 1.. . . . . . . . . . . . . . . . . . . .5.36 art 118 para 1 . . . . . . . . . . . . . . . . . . .15.44 art 118 para 2 . . . . . . . . . . . . . . . . . . .15.45 art 119 . . . . . . . . . . . . . . . . . . . . . . . .15.45 art 120 . . . . . . . . . . . . . . . . . . . . . . . .15.43 art 122 . . . . . . . . . . . . . . . . . . . . . . . .15.13 art 124 . . . . . . . . . . . . . . . . . . . . . . . .15.49 art 127 . . . . . . . . . . . . . . . . . . . . . . . .15.64 art 128 . . . . . . . . . . . . . . . . . . . . . . . . . 11.3 art 130 para 1 . . . . . . . . . . . . . . . . . . . 11.26 art 130 para 2 . . . . . . . . . . . . . . . . . . . 11.23 art 131 . . . . . . . . . . . . . . . . . . . . . . . . 11.16 art 132 . . . . . . . . . . . . . . . . . . . . . . . . 11.16 art 133 . . . . . . . . . . . . . . . . . . . . . . . . 11.16 art 135 . . . . . . . . . . . . . . . . . . . . . . . . 11.30 art 143 . . . . . . . . . . . . . . . . . . . . . . . .16.28 art 144 . . . . . . . . . . . . . . . . . . . . . . . . .16.9 art 145 . . . . . . . . . . . . . . . . . . . . . . . . .16.9 art 146 . . . . . . . . . . . . . . . . . . . . . . . . .16.9 art 147 . . . . . . . . . . . . . . . . . . . . . . . .16.23 art 148 . . . . . . . . . . . . . . . . . . . . . . . .16.23 art 151 . . . . . . . . . . . . . . . . . . . . . . . . .16.9 Section X (127) . . . . . . . . . . . . . . . . .24.32 Notices Notice of Some Issues concerning the People’s Court’s Dealing with ForeignRelated or Foreign Arbitration of the PRC Supreme People’s Court’s Fa Fa (1995) No. 18 . . . . . . . . . . . . . . . . . .24.6 Notice of the Release of Maritime Litigation Form (Trail Version) of the SPC (Fa Fa [2003] No. 4) . . . . . . . . . . . . . . . . .24.16 Notice of the SPC and the Ministry of Communications on the Establishment of a Maritime Court. . . . . . . . . . . . . . . . .18.6 Notice of the Supreme People’s Court and the Supreme People’s Procuratorate on Prohibiting Local People’s Courts and People’s Procuratorates from Formulating Judicial Interpretation Documents, Fa Fa [2012] No. 2 (SPC) . . . . . . . . .1.5 Notice of the Supreme People’s Court Concerning Some Issues on Disposal of Foreign-related Arbitration and Foreign Arbitration (the “Notice”) Fa Fa [1995] No. 18, published on 28th August 1995 . . . . . . . . . . . . . .26.21

Notice of the Supreme People’s Court on the Handling of Issues Concerning Foreignrelated Arbitration and Foreign Arbitration by People’s Courts, Fa Fa [1995] No. 18. . . . . . . . . . . . . . . . . . . . . . . .6.24 art 1 . . . . . . . . . . . . . . . . . . . . . . . . . . .6.24 Organic Law of the People’s Courts of the People’s Republic of China art 2 . . .19.2 Opinions Certain Opinions of the Supreme People’s Court on Further Distinguishing Simple Cases from Complicated Ones and Optimizing the Allocation of Judicial Resources promulgated by the SPC on 12 September 2016 (the “Opinion on Allocation of Judicial Resources”) Fa Fa [2016] No.21, came into effect on 12 September 2016 . . . . . . . . . . . . . . . . . . . . . . . .18.35 Opinion of Supreme People’s Court on Certain Issues Concerning the Implementation of the “General Principles of the Civil Law of People’s Republic of China” (Trial) art 193 . . . . . . . . . . . . . . . . . .25.9 Opinions of the Supreme People’s Court on Certain Issues concerning the Implementation of the General Principles of the Civil Law (Trial) 1988 art 165 . . . . . . . . . . . . . . . . . .17.49 Opinions of the Supreme People’s Court on Certain Issues Concerning the Implementation of the General Principles of the Civil Law 1986 (Trial) 1998, Fa (Ban) Fa [1998] No. 6 art 173 para 2 . . . . . . . . . . . .17.47

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Procedures for Ship Registration 2015 Hai Chuan Bo (2015) No. 9, Ministry of Transport of the PRC . . . . . . . . . . . .2.34 Procedures for the Ship Registration 2015 No. 9 [2015] of the Maritime Safety Administration of the PRC. . . . . . . .2.39 Procedures for the Ship Registration 2015 art 61 . . . . . . . . . . . . . . . . . . . . . . . . . .2.39 art 62 . . . . . . . . . . . . . . . . . . . . . . . . . .2.39 Procedures for Vessel Registration 2015 art 16 . . . . . . . . . . . . . . . . . . . . . . . . . .2.34

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Application of Law in respect of Civil Liability for oil pollution in Chinese territorial sea caused by Ships registered in China Sailing on nonInternational Lines [2008] Min Si Ta Zi No. 20 (SPC) (Reply). . . . . . . . . . .16.25 Reply of the Supreme People’s Court on Request for Instructions on the Limitation Period for Carrier’s Claim Against Shipper, Consignee or Bill of Lading Holder for Damages, Fa Shi [1997] 3 (SPC) . . . . . . . . . . . . . . . . . . . . . . .17.14 Reply of the Supreme People’s Court on Request for Instructions on the Limitation Period for Carrier’s Claim Against Shipper, Consignee or Bill of Lading Holder for Damages, Fa Shi [1997] 3 (SPC) . . . . . . . . . . . . . . . . . . . . . . .17.29 Reply of the Supreme People’s Court on Request for Instructions on the Limitation Period for Claims for Damages in Coastal and Inland Water Carriage of Goods, Fa Shi [2001] 18 (SPC). . . . . . . . . . . . . . . . . . . . .17.16 Reply of the Supreme People’s Court on Request for Instructions on the Validity of the Contract for the Carriage of Goods by Sea Concluded between an Unqualified NVOCC and a Shipper or the Bill of Lading Issued by the Unqualified NVOCC [2007] Min Si Ta Zi No. 19 (SPC) (Reply) . . . . . . . . .8.27 Reply of the Supreme People’s Court on Request for Instructions on Validity of Arbitration Clause in the Contract of Carriage of Goods by Sea in PICC P&C Co Ltd Shenzhen Branch v Guangzhou Ocean Shipping Co Ltd [2005] Min Si Ta Zi No. 29 (SPC) (Reply). . . . . . . . . . . . . . . . . .6.26 Reply of the Supreme People’s Court on the Commencement Date of the Limitation Period for Insurers under Marine Insurance Contracts to Exercise Subrogation Rights, Fa Shi [2014] No. 15. . . . . . . . . . . . . . . . . . . . . . .17.38 Reply to the Issue concerning the Time Limit of Making Challenge to the Court Jurisdiction in the Case involving Economic Disputes of the PRC Supreme

art 62 . . . . . . . . . . . . . . . . . . . . . . . . . .2.34 Property Law 2007. . . . . . . . . . . . . . . 1.4, 2.6 art 24 . . . . . . . . . . . . . . . . . . . . . . . . . .2.10 art 202 . . . . . . . . . . . . . . . . . . . 2.28, 23.18 art 230 para 1 . . . . . . . . . . . . . . . . . . . . .2.3 Replies Answers to Practical Issues concerned in Foreign-Related Commercial and Maritime Trial by the Division IV of the PRC Supreme People’s Court (I) Section II (160) . . . . . . . . . . . . . . .24.29 Answers to Questions in Foreign-Related Commercial and Maritime Trial, item 106 . . . . . . . . . . . . . . . 23.13, 23.36 item 109 . . . . . . . . . . . . . . . . . . . . .23.36 Reply Letter to the Request on the Validity of Arbitration Clause involved in The PICC Shenzhen v Guangzhou Ocean Shipping in Respect of the Claim for Cargo Damage in the Contract of the Carriage of Goods by Sea. ([2005] Min Si Ta Zhi No. 29) . . . . . . . . . .24.32 Reply Letter to the Request on the Validity of the Arbitration Clause involved in China Pacific Insurance Corporation Beijing Branch v COSCO Logistics Co., Ltd. Beijing, Tianjin Zhenhua International Shipping Agency Co., Ltd., Nile Dutch Services in respect of the Subrogation Claim in the Contract of the Carriage of Goods by Sea ([2009] Min Si Ta Zhi No. 11) . . . . . . . . . . . . . .24.32 Reply of the China Insurance Regulatory Commission on Request for Instructions on Interpretation of Risk of Nondelivery in All Risks in Ocean Marine Cargo Clauses, Bao Jian Chan [2000] 6 China Insurance Regulatory Commission . . . . . . . . . . . . . . . . . .15.30 Reply of the People’s Bank of China on Request for Instructions on the Interpretation of “all risks” in Ocean Marine Cargo Clauses Yin Han [1997] 210, People’s Bank of China . . . . . . . . .15.27 Reply of the SPC on the establishment of the Beihai Maritime Court in Guangxi Zhuang Autonomous Region . . . . . 18.6 Reply of the Supreme People’s Court on Request for Instructions on the

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art 48 . . . . . . . . . . . . . . . . . . . . . . . . .20.89 art 50 . . . . . . . . . . . . . . . . . . . . . . . . .20.80 art 51 . . . . . . . . . . . . . . . . . . . . . . . . .23.33 art 52 . . . . . . . . . . . . . . . . . 19.18(15), 21.3 art 53 . . . . . . . . . . . . . . . . . . . . . . . . . .21.8 art 54 . . . . . . . . . . . . . . . . . . . . . . . . .21.15 art 55 . . . . . . . . . . . . . .21.17, 23.21, 23.33 art 56 . . . . . . . . . . . . . .21.25, 23.21, 23.33 art 57 . . . . . . . . . . . . . . . . . . . . . . . . .21.33 art 58 . . . . . . . . . . . . . . . . . . . 21.39, 21.40 art 59 . . . . . . . . . . . . . . . . . . . 21.37, 21.38 art 60 . . . . . . . . . . . . . . . . . . . . . . . . .21.41 art 61 . . . . . . . . . . . . . . . . . . . 21.10, 22.11 art 62 . . . . . . . . . . . . . . . . . . . . . 22.1, 22.2 art 63 . . . . . . . . . . . 19.18(16), 22.9, 22.13 art 64 . . . . . . . . . . . . . . . . . . . . . . . . . .22.9 art 65 . . . . . . . . . . . . . . . . . . . . . . . . .22.33 art 66 . . . . . . . . . . . . . . . . . . . 22.18, 23.37 art 67 . . . . . . . . . . . . . . . . . . . . 22.6, 23.37 art 69 . . . . . . . . . . . . . . . . . . . 22.38, 22.39 art 70 . . . . . . . . . . . . . . . . . . . . . . . . . .22.7 art 71 . . . . . . . . . . . . . . . . . . . 23.37, 22.41 art 72 . . . . . . . . . . . . . . . . . . . . . . . . . .22.2 art 73 . . . . . . . . . . . . . . . . . . . . 23.1, 23.11 art 74 . . . . . . . . . . . . . . . . . . . 20.14, 23.13 art 75 . . . . . . . . . . . . . . . . . . . . . . . . . .23.4 art 75–76 . . . . . . . . . . . . . . . . . . . . . .20.15 art 76 . . . . . . . . . . . . . . . 20.22, 23.4, 23.7, 23.21, 23.23, 23.33 art 77 . . . . . . . . . . . . . . . . . . . . . . . . . .23.8 art 78 . . . . . . . . . . . . . . . . . . . . . . . . . .23.4 art 79 . . . . . . . . . . . . . . . . . . . . . . . . .23.40 art 82 . . . . . . . . . . . . . . . . . . . . . . . . .24.16 art 83 . . . . . . . . . . . . . . . . . . . . . . . . .24.18 art 84 . . . . . . . . . . . . . . . . . . . . . . . . .24.17 art 85 . . . . . . . . . . . . . . . . . . . . . . . . .24.18 art 86 . . . . . . . . . . . . . . . . . . . . . . . . .24.22 art 87 . . . . . . . . . . . . . . . . . . . . . . . . .24.23 art 88 . . . . . . . . . . . . . . . . . . . . . . . . .24.24 art 89 . . . . . . . . . . . . . . . . . . . . . . . . .24.25 art 90–91 . . . . . . . . . . . . . . . . . . . . . .24.27 art 92 . . . . . . . . . . . . . . . . . . . . . . . . .24.27 art 93 . . . . . . . . . . . . . . . . . . . . . . . . .24.28 art 94–95 . . . . . . . . . . . . . . . . . . . . . .24.28 art 96 . . . . . . . . . . . . . . . . . . . 15.61, 24.29 art 97 . . . . . . . . . . . . . . . . . . . . . . . . .24.31 art 98 . . . . . . . . . . . . . . . . . . . . . . . . .24.33 art 99 . . . . . . . . . . . . . . . . . . . . . . . . .24.36 art 100 . . . . . . . . . . . . . . . . . . . . . . . .24.39 art 101 . . . . . . . . . . . . . . . . . . . . . . . .24.42

People’s Court (Fa (Jing) Fu (1990) No. 10) . . . . . . . . . . . . . . . . . . . . . . .24.6 Reply to the Issue concerning Whether Maritime Courts May Apply Small Claim Procedure in the Trial of Marine Cases (Fa Shi (2013) No. 16) . . . . . . . . . .24.35 Security Law art 21 . . . . . . . . . . . . . . . . . . . . . . . . . .23.4 art 26 . . . . . . . . . . . . . . . . . . . . . . . . .23.15 art 33 . . . . . . . . . . . . . . . . . . . . . . . . .23.16 art 34 . . . . . . . . . . . . . . . . . . . . . . . . .23.16 art 41 . . . . . . . . . . . . . . . . . . . . . . . . .23.16 art 42 . . . . . . . . . . . . . . . . . . . . . . . . .23.16 art 63 . . . . . . . . . . . . . . . . . . . . . . . . .23.17 art 76 . . . . . . . . . . . . . . . . . . . . . . . . .23.16 art 77 . . . . . . . . . . . . . . . . . . . . . . . . .23.16 art 78 . . . . . . . . . . . . . . . . . . . . . . . . .23.16 SMPL see Special Maritime Procedure Law (the “SMPL 1999”) Special Maritime Procedure Law (the “SMPL 1999”) . . 1.1, 1.3, 1.4, 2.26 art 2 . . . . . . . . . . . . . . . . . . . . . . . . . . .24.1 art 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.7 art 6 . . . . . . . . . . . . . . . . . . . . . . . 19.18(1) art 6(2) . . . . . . . . . . . . . . . . . . . . . 19.18(2) art 6(3) . . . . . . . . . . . . . . . . . . . . . 19.18(3) art 6(4) . . . . . . . . . . . . . . . . . . . . . 19.18(4) art 6(5) . . . . . . . . . . . . . . . . . . . . . 19.18(5) art 6(6) . . . . . . . . . . . . . . . . . . . . . 19.18(6) art 6(7) . . . . . . . . . . . . . . . . . . . . . 19.18(7) art 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.7 art 9 . . . . . . . . . . . . . .19.18(11), 19.18(12) art 11 . . . . . . . . . . . . . . . . . . . . . 19.18(13) art 12 . . . . . . . . . . . . . . . . . . . . . . . . . .20.3 art 13 . . . . . . . . . . . . . . . . . 19.18(14), 20.4 art 15 . . . . . . . . . . . . . . . . .20.5, 20.8, 23.3 art 16 . . . . . . . . . . . . . . . . . . . 20.11, 23.21 art 17 . . . . . . . . . . . . . .20.16, 20.19, 20.20 art 18 . . . . . . . . . . . . . . .20.22, 23.3, 23.19 art 19 . . . . . . . . . . . . . . . . . . . . . . . . . .20.7 art 20 . . . . . . . . . . . . . . . . . . . . 20.23, 23.9 art 23 s 2. . . . . . . . . . . . . . . . . . . . . . .24.58 art 28 . . . . . . . . . . . . . . . . . . . . . . . . .20.52 art 31 . . . . . . . . . . . . . . . . . . . 20.59, 20.61 art 33 . . . . . . . . . . . . . . . . . . . . . . . . .20.64 art 34 . . . . . . . . . . . . . . . . . . . . . . . . .20.66 art 36 . . . . . . . . . . . . . . . . . . . . . . . . .20.69 art 37 . . . . . . . . . . . . . . . . . . . . . . . . .20.75 art 41 . . . . . . . . . . . . . . . . . . . . . . . . .20.78

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art 26 . . . . . . . . . . . . . . . . . . . . . . . . .23.24 art 29 . . . . . . . . . . . . . . . . . . . . . . . . .20.33 art 32 . . . . . . . . . . . . . . . . . . . . . . . . .20.59 art 33 . . . . . . . . . . . . . . . . . . . . . . . . .20.59 art 34 . . . . . . . . . . . . . . . . . . . . . . . . .20.64 art 38 . . . . . . . . . . . . . . . . . . . . . . . . .20.80 art 41 . . . . . . . . . . . . . . . . . . . . . . . . .21.12 art 42 . . . . . . . . . . . . . . . . . . . . . . . . .21.33 art 42 . . . . . . . . . . . . . . . . . . . . . . . . .21.36 art 43 . . . . . . . . . . . . . . . . . . . . . . . . .21.36 art 44 . . . . . . . . . . . . . . . . . . . . . . . . .21.40 art 45 . . . . . . . . . . . . . . . . . . . 21.23, 23.36 art 47 . . . . . . . . . . . . . . . . . . . . . . . . .22.14 art 47–51 . . . . . . . . . . . . . . . . . . . . . . .22.2 art 51 . . . . . . . . . . . . . . . . . . . . . . . . .22.41 art 52 . . . . . . . . . . . . . . . . . . . . . . . . . .23.8 art 56 . . . . . . . . . . . . . . . . . . . . . . . . .24.17 art 57 . . . . . . . . . . . . . . . . . . . 24.16, 24.18 art 58 . . . . . . . . . . . . . . . . . . . . . . . . .24.17 art 59 . . . . . . . . . . . . . . . . . . . . . . . . .24.18 art 60 . . . . . . . . . . . . . . . . . . . . . . . . .24.22 art 62 . . . . . . . . . . . . . . . . . . . . . . . . .24.24 art 63 . . . . . . . . . . . . . . . . . . . . . . . . .24.25 art 64 . . . . . . . . . . . . . . . . . . . . . . . . .24.27 art 65 . . . . . . . . . . . . . . . . . . . . . . . . .24.28 art 66 . . . . . . . . . . . . . . . . . . . . . . . . .24.29 art 67 . . . . . . . . . . . . . . . . . . . . . . . . .24.30 art 68 . . . . . . . . . . . . . . . . . . . . . . . . .24.29 art 69 . . . . . . . . . . . . . . . . . . . . . . . . .24.31 art 70 . . . . . . . . . . . . . . . . . . . . . . . . .24.39 art 72–75 . . . . . . . . . . . . . . . . . . . . . .24.40 art 76–78 . . . . . . . . . . . . . . . . . . . . . .24.41 art 79 . . . . . . . . . . . . . . . . . . . . . . . . .24.42 art 83 . . . . . . . . . . . . . . . . . . . . . . . . .24.48 art 84–85 . . . . . . . . . . . . . . . . . . . . . .24.50 art 85 . . . . . . . . . . . . . . . . . . . . . . . . .23.40 art 86 . . . . . . . . . . . . . . . . . . . . . . . . .24.51 s 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23.2 s 10 . . . . . . . . . . . . . . . . . . . . . . . . . . .24.58 Interpretation (I) of the Supreme People’s Court on Certain Issues Concerning Application of the Law of the People’s Republic of China on Choice of Law for Foreign-related Civil Relationship (the “Interpretation I”) Fa Shi [2012] No. 24. . . . . . . . . . . . . . . . . . . . . . . .25.1 art 3 . . . . . . . . . . . . . . . . . . . . . . . . . . .25.6 art 7 . . . . . . . . . . . . . . . . . . . . . . . . . .25.23 art 8 . . . . . . . . . . . . . . . . . . . . . . . . . . .25.8 art 10 . . . . . . . . . . . . . . . . . . . . . . . . .25.12

art 101–103 . . . . . . . . . . . . . . . . . . . .24.43 art 102 . . . . . . . . . . . . . . . . . . . . 19.18(17) art 104–105 . . . . . . . . . . . . . . . . . . . .24.46 art 106 . . . . . . . . . . . . . . . . . . . . . . . .24.47 art 108 . . . . . . . . . . . . . . . . . . 23.40, 24.50 art 111. . . . . . . . . . . . . . . . . . . . . . . . .24.55 art 113–116. . . . . . . . . . . . . . . . . . . . .24.56 art 117–119. . . . . . . . . . . . . . . . . . . . .24.54 chapter 3. . . . . . . . . . . . . . . . . . . . . . . .23.3 chapter 6. . . . . . . . . . . . . . . . . . . . . . . .23.2 chapter 8 to chapter 11 . . . . . . . . . . . . .24.1 chapter 11. . . . . . . . . . . . . . . . . . . . . .24.58 Tort Liability Law 2009 . . . . . . . . . . 1.4, 16.1 art 10 . . . . . . . . . . . . . . . . . . . . . . . . . 11.22 art 22 . . . . . . . . . . . . . . . . . . . . . . . . . 11.21 art 65 . . . . . . . . . . . . . . . . . . . . . . . . .16.22 art 92 . . . . . . . . . . . . . . . . . . . . . . . . .16.22 Interpretations of the Supreme People’s Court Interpretation I see Interpretation (I) of the Supreme People’s Court on Certain Issues Concerning Application of the Law of the People’s Republic of China on Choice of Law for Foreign-related Civil Relationship Interpretation of the Arbitration Law art 1 . . . . . . . . . . . . . . . . . . . . . . . . . .26.20 art 4 . . . . . . . . . . . . . . . . . . . . . . . . . .26.13 art 5 . . . . . . . . . . . . . . . . . . . . . . . . . .26.19 art 6 . . . . . . . . . . . . . . . . . . . . . . . . . .26.13 art 7 . . . . . . . . . . . . . . . . . . . . . . . . . .26.19 arts 17–22. . . . . . . . . . . . . . . . . . . . . .26.43 Interpretation of the CPL see Interpretations of the Supreme People’s Court on the Application of the CPL Interpretation of the SMPL see Interpretation of the Special Maritime Procedure Law of the Supreme People’s Court Interpretation of the Special Maritime Procedure Law of the Supreme People’s Court (the “Interpretation of the SMPL”) . . . . . . . . . . . . . . . . . 20.2 art 19 . . . . . . . . . . . . . . . . . . . . . . . . .20.79 art 20 . . . . . . . . . . . . . . . . . . . . . . . . . .20.6 art 21 . . . . . . . . . . . . . . . . . . . . . . . . . .20.5 art 24 . . . . . . . . . . . . . . . . . . . . . . . . .20.24 art 25 . . . . . . . . . . . . . . . . . . . . . . . . .23.19

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the Case Acceptance Scope of Maritime Courts (the “Case Acceptance Scope Provision”) Certain Provisions on Trying Cases Involving Disputes over the Limitation of Liability for Maritime Claims, Fa Shi [2010] No. 11, (Provisions on Limitation of Liability 2010) . . . . . . . . . . . . . . . . .1.5 art 12 . . . . . . . . . . . . . . . . . . . . . . . . . .14.3 art 13 . . . . . . . . . . . . . . . . . . . . . . . . .14.24 art 14 . . . . . . . . . . . . . . . . . . . . . . . . .14.24 art 15 . . . . . . . . . . . . . . . . . . . . . . . . .14.24 art 17 para 1 . . . . . . . . . . . . . . . . . . . . .14.8 art 17 para 2 . . . . . . . . . . . . . . . . . . . . .14.9

art 18 . . . . . . . . . . . . . . . . . . . . . . . . . 25.11 art 19 . . . . . . . . . . . . . . . . . . . . . . . . .25.18 Interpretation of the Supreme People’s Court on Several Issues concerning the Application of the PRC Security Law art 32 . . . . . . . . . . . . . . . . . . .23.15 Interpretations of the Supreme People’s Court on the Application of the CPL (“Interpretation of the CPL”) art 18 . . . . . . . . . . . . . . . . . . . . . 19.18(10) art 29 . . . . . . . . . . . . . . . . . . . . . . . . .19.26 art 30 . . . . . . . . . . . . . . . . . . . . . . . . .19.25 art 36 . . . . . . . . . . . . . . . . . . . . . . . . . .19.6 art 94 . . . . . . . . . . . . . . . . . . . . . . . . .24.19 art 142 . . . . . . . . . . . . . . . . . . . . . . . .26.67 art 143 . . . . . . . . . . . . . . . . . . . . . . . .26.68 art 146 . . . . . . . . . . . . . . . . . . . . . . . .26.69 art 148 . . . . . . . . . . . . . . . . . . . . . . . .26.71 art 170 . . . . . . . . . . . . . . . . . . . . . . . .23.40 art 216 . . . . . . . . . . . . . . . . . . . . . . . . .24.6 art 224 . . . . . . . . . . . . . . . . . . . . . . . . .24.8 art 243 . . . . . . . . . . . . . . . . . . . . . . . . 24.11 art 256 . . . . . . . . . . . . . . . . . . . . . . . .24.33 art 257 . . . . . . . . . . . . . . . . . . . . . . . .24.33 art 273 . . . . . . . . . . . . . . . . . . . . . . . .24.35 art 275 . . . . . . . . . . . . . . . . . . . . . . . .24.35 art 429 . . . . . . . . . . . . . . . . . . . . . . . .24.37 art 437 . . . . . . . . . . . . . . . . . . . . . . . .24.38 art 438 . . . . . . . . . . . . . . . . . . . . . . . .24.38 art 523 . . . . . . . . . . . . . . . . . . . . . . . . .24.3 art 543 . . . . . . . . . . . . . . . . . . . . . . .26.107 art 544 . . . . . . . . . . . . . . . . . . . . . . .26.107 art 546 . . . . . . . . . . . . . . . . . . . . . . .26.108 art 547 . . . . . . . . . . . . . . . . . . . . . . .26.107 art 548 . . . . . . . . . . . . . . . . . . . . . . .26.109 Interpretation on Compensation for Mental Distress 2001 Fa Shi [2001] No. 7 (SPC) . . . . . . . . . . . . . . . . . . . . . . . 11.21 art 9 . . . . . . . . . . . . . . . . . . . . . . . . . . 11.21 Interpretation on Compensation for Personal Damage 2003 Fa Shi [2003] No. 20 (SPC) . . . . . . . . . . . . . . . . . 11.20 art 17 . . . . . . . . . . . . . . . . . . . . . . . . . 11.20 art 18 . . . . . . . . . . . . . . . . . . . . . . . . . 11.21

Provisions Concerning Limitation of Liability for Maritime Claims for Ships with a Gross Tonnage not exceeding 300 Tons and Those for Coastal Transport Services or for Other Coastal Operations, 1993 (1993) Order No. 5 of the Ministry of Communications of the PRC . . .14.14 art 3 . . . . . . . . . . . . . . . . . . . . . . . . . .14.15 art 4 . . . . . . . . . . . . . . . . . . . . . . . . . .14.16 art 5 . . . . . . . . . . . . . . . . . . . . . . . . . .14.16 Provisions Concerning Limitation of Liability with Respect to Carriage of Passengers by Sea between Ports of the People’s Republic of China 1993 (1993) Order No. 6 of the Ministry of Communications of the PRC . . . . . . . . . . . . . . . . . . . 9.26, 14.18 art 3 para 1 . . . . . . . . . . . . . . . . . . . . . .9.26 art 3 para 2 . . . . . . . . . . . . . . . . . . . . . .9.27 art 4 . . . . . . . . . . . . . . . . . . . . . 9.27, 14.18 Provisions of Jurisdiction over Maritime Lawsuits art 3. . . . . . . . . . . . . . . . .19.33 Provisions of Mediation art 12. . . . . . . .26.70 Provisions of Ship Arrest and Auction see Provisions of the Supreme People’s Court on Several Issues concerning the Application of Law to the Arrest and Auction of Vessels Provisions of Taiwan Arbitral Awards see Provisions of the Supreme People’s Court on the Recognition and Enforcement of the Arbitral Awards Rendered in Taiwan Region Provisions on Administration of the International Freight Forwarding 1995 see

Provisions of the Supreme People’s Court Case Acceptance Scope Provision see Provision of the Supreme People’s Court on

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arts 8–9. . . . . . . . . . . . . . . . . . . . . . . . .8.26 Provisions of the Supreme People’s Court on Certain Issues Concerning the Application of Law to the Trial of Cases Involving Delivery of Goods without Original Bills of Lading 2009 (Provisions on Delivery of Goods without Original Bills of Lading 2009) Fa Shi [2009] No. 1 (SPC) . . . . . . . . . . . . . . . . . . .5.21 art 2 . . . . . . . . . . . . . . . . . . . . . . . . . . .5.33 art 3 . . . . . . . . . . . . . . . . . . . . . . . . . . .5.33 art 3 para 1 . . . . . . . . . . . . . . . . . . . . . .5.30 art 4 . . . . . . . . . . . . . . . . . . . . . . 5.33, 7.20 art 5 . . . . . . . . . . . . . . . . . . . . . . . . . . .5.33 art 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 art 7 . . . . . . . . . . . . . . . . . . . . . . . . . . .5.36 art 8 . . . . . . . . . . . . . . . . . . . . . . . . . . .5.36 art 9 . . . . . . . . . . . . . . . . . . . . . . . . . . .5.34 art 10 . . . . . . . . . . . . . . . . . . . . . . . . . .5.21 art 11 . . . . . . . . . . . . . . . . . . . . . . . . . .5.33 art 12 . . . . . . . . . . . . . . . . . . . . . . . . . .6.13 art 13 . . . . . . . . . . . . . . . . . . . . . . . . . .5.21 art 14 . . . . . . . . . . . . . . . . . . . . . . . . .17.32 Provisions of the Supreme People’s Court on Case Guidance Work 2010 Fa Fa [2010] No. 51 (SPC) . . . . . . . . . . . .1.10 art 7 . . . . . . . . . . . . . . . . . . . . . . . . . . .1.10 Provisions of the Supreme People’s Court on Certain Issues concerning the Trial of Cases of Disputes over Ocean Freight Forwarding 2012 (Provisions on Disputes over Ocean Freight Forwarding 2012) Fa Shi [2012] No. 3 (SPC) . . . . . . . . . . . . . . . . . . . .8.7 art 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.7 art 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.8 art 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.8 art 4 para 1 . . . . . . . . . . . . . . . . . . . . . .8.10 art 4 para 2 . . . . . . . . . . . . . . . . . . . . . . 8.11 art 5 . . . . . . . . . . . . . . . . . . . . . . . . . . .8.19 art 7 . . . . . . . . . . . . . . . . . . . . . . . . . . .8.14 art 8 . . . . . . . . . . . . . . . . . . . . . . . 8.9, 8.15 art 9 . . . . . . . . . . . . . . . . . . . . . . . . . . .8.20 art 10 . . . . . . . . . . . . . . . . . . . . . . . . . .8.16 art 11 . . . . . . . . . . . . . . . . . . . . . . . . . . 8.11 art 11 . . . . . . . . . . . . . . . . . . . . . . . . . .8.17 art 12 . . . . . . . . . . . . . . . . . . . . . . . . . .8.18 art 13 . . . . . . . . . . . . . . . . . . . . . . . . . . .8.7 art 14 . . . . . . . . . . . . . . . . . . . . . . . . . .8.23 art 15 . . . . . . . . . . . . . . . . . . . . . . . . . . .8.7

Provisions of the People’s Republic of China on Administration of the International Freight Forwarding Provisions on Compensation for Vessel Collisions 1995 art 1 . . . . . . . . . . . . . . . . . . . . . . . . . . 11.17 art 3 . . . . . . . . . . . . . . . . . . . . . . . . . . 11.18 art 4 . . . . . . . . . . . . . . . . . . . . . . . . . . 11.19 art 5 . . . . . . . . . . . . . . . . . . . . . . . . . . 11.19 art 16 . . . . . . . . . . . . . . . . . . . . . . . . .15.21 Provisions on Delivery of Goods without Original Bills of Lading 2009 see Provisions of the Supreme People’s Court on Certain Issues Concerning the Application of Law to the Trial of Cases Involving Delivery of Goods without Original Bills of Lading Provisions on Disputes over Ocean Freight Forwarding 2012 see Provisions of the Supreme People’s Court on Certain Issues concerning the Trial of Cases of Disputes over Ocean Freight Forwarding 2012 Provisions on Limitation of Liability 2010 see Certain Provisions of the Supreme People’s Court on Trying Cases Involving Disputes over the Limitation of Liability for Maritime Claims Provisions on Marine Insurance 2006 see Provisions of the Supreme People’s Court on Several Issues on the Trial of Cases Concerning Marine Insurance Disputes 2006 Provisions on Oil Pollution Damage 2011 see Provisions of the Supreme People’s Court on Several Issues Concerning the Trial of Cases involving Disputes over Compensation for Vessel Oil Pollution Damage 2011 Provisions on Vessel Collisions 2008 see Provisions of the Supreme People’s Court on Several Issues Concerning the Trial of Cases Involving Disputes over Vessel Collisions 2008 Provisions of the People’s Republic of China on Administration of the International Freight Forwarding 1995 (Provisions on Administration of the International Freight Forwarding 1995) . . . . . . . . .8.2 art 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.2 art 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.3

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Collisions 2008 (the “Provisions on Vessel Collisions 2008”) Fa Shi [2008] No. 7 (SPC) . . . . . . . . . . . . . . . . . . . 11.1 art 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.3 art 3 para 2 . . . . . . . . . . . . . . . . . . . . . . 11.1 art 4 . . . . . . . . . . . . . . . . . . . . . . . . . . 11.23 art 6 . . . . . . . . . . . . . . . . . . . . . . . . . . 11.15 art 8 . . . . . . . . . . . . . . . . . . . . . . . . . . 11.29 art 10 . . . . . . . . . . . . . . . . . . . . . . . . . 11.31 art 11 . . . . . . . . . . . . . . . . . . . . . . . . . 11.31 Provisions of the Supreme People’s Court on Several Issues on the Trial of Cases Concerning Marine Insurance Disputes 2006 (Provisions on Marine Insurance 2006) Fa Shi [2006] 10 (SPC) . . . . .15.1 art 1 . . . . . . . . . . . . . . . . . . . . . . . . . . .15.1 art 2 . . . . . . . . . . . . . . . . . . . . . . . . . . .15.1 art 3 . . . . . . . . . . . . . . . . . . . . . . . . . . .15.1 art 4 . . . . . . . . . . . . . . . . . . . . . . . . . .15.41 art 5 . . . . . . . . . . . . . . . . . . . . . . . . . . .15.7 art 8 . . . . . . . . . . . . . . . . . . . . . . . . . .15.45 art 9 . . . . . . . . . . . . . . . . . . . . . . . . . .15.16 art 10 . . . . . . . . . . . . . . . . . . . . . . . . . .15.8 art 11 . . . . . . . . . . . . . . . . . . . . . . . . .15.30 art 12 . . . . . . . . . . . . . . . . . . . . . . . . .15.57 art 14 . . . . . . . . . . . . . . . . . . . . . . . . .15.62 art 15 . . . . . . . . . . . . . . . . . . . . . . . . .15.64 art 16 . . . . . . . . . . . . . . . . . . . . . . . . .15.64 Provisions of the Supreme People’s Court on Several Issues Related to the Trial of Disputes Occurring within the Sea Areas under the Jurisdiction of China (I) art 1 . . . . . . . . . . . . . . . . . . . . . .19.29 Provisions of the Supreme People’s Court on Several Issues related to the Trial of Relevant Disputes Occurring within the Sea Areas under the Jurisdiction of China (I) Fa Shi [2016] No. 16 art 5 . . . . . . . . . . . . . . . . . . . . . 19.18(1) Provision of the Supreme People’s Court on the Case Acceptance Scope of Maritime Courts (the “Case Acceptance Scope Provision”) Fa Shi [2016] No. 4. . . . . . . . . . . . . . . . . . . . . . . . 19.11 Provisions of the Supreme People’s Court on the Jurisdiction over Maritime Lawsuits, Fa Shi [2016] No. 2 . . . . . . . . . . . .19.16 Provisions of the Supreme People’s Court on the Recognition and Enforcement of the Arbitral Awards Rendered in Taiwan

Provisions of the Supreme People’s Court on Certain Issues concerning Work of Civil Conciliation of People’s Courts (the “Provisions of Conciliation”) art 9 . . . . . . . . . . . . . . . . . . . . . . . .26.70 Provisions of the Supreme People’s Court on Evidence in Civil Proceedings, Fa Shi [2001] No. 33 (SPC) art 77 . . . . . . 11.32 Provisions of the Supreme People’s Court on Recognition by People’s Courts of Relevant Civil Judgments of Courts in Taiwan, which was promulgated by the SPC in 1998 (the “1998 Provisions”) . . . . . . . . . . . . . . . . . 26.100 Provisions of the Supreme People’s Court on Several Issues concerning the Application of Law to the Arrest and Auction of Vessels (the “Provisions of Ship Arrest and Auction 2015”) Fa Shi [2015] No. 6 . . . . . . . . . . . . . . . . . .20.28 art 4 . . . . . . . . . . . . . . . . . . . . . . . . . .20.13 art 12 . . . . . . . . . . . . . . . . . . . 20.68, 20.72 art 13–14 . . . . . . . . . . . . . . . . . . . . . .20.73 art 19 . . . . . . . . . . . . . . . . . . . . . . . . .20.60 Provisions of the Supreme People’s Court on Several Issues Concerning the Trial of Cases involving Disputes over Compensation for Vessel Oil Pollution Damage 2011 (Provisions on Oil Pollution Damage 2011) Fa Shi [2011] No. 14 (SPC) . . . . . . . . . . . . . . . . . . . . . . . .16.1 art 3 . . . . . . . . . . . . . . . . . . . . . . . . . .16.20 art 4 . . . . . . . . . . . . . . . . . . . . . . . . . .16.21 art 5 . . . . . . . . . . . . . . . . . . . . . . . . . .16.27 art 7 . . . . . . . . . . . . . . . . . . . . . . . . . .16.34 art 9 . . . . . . . . . . . . . . . . . . . . . . . . . . 16.11 art 10 . . . . . . . . . . . . . . . . . . . . . . . . .16.12 art 11 . . . . . . . . . . . . . . . . . . . . . . . . .16.12 art 12 . . . . . . . . . . . . . . . . . . . . . . . . .16.13 art 13 . . . . . . . . . . . . . . . . . . . . . . . . .16.14 art 14 . . . . . . . . . . . . . . . . . . . . . . . . .16.14 art 15 . . . . . . . . . . . . . . . . . . . . . . . . .16.13 art 16 . . . . . . . . . . . . . . . . . . . . . . . . .16.15 art 17 . . . . . . . . . . . . . . . . . . . . . . . . .16.15 art 19 para 2 . . . . . . . . . . . . . . . . . . . .16.27 art 31 para 1 . . . . . . . . . . . . . . . . . . . . .16.4 art 31 para 2 . . . . . . . . . . . . . . . . . . . . .16.6 Provisions of the Supreme People’s Court on Several Issues Concerning the Trial of Cases Involving Disputes over Vessel

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art 22 . . . . . . . . . . . . . . . . . . . . . . . . .24.58 Regulations of Some Issues concerning the Trial of Oil Pollution Damage Claim caused by Ship of the PRC Supreme People’s Court (Fa Shi (2011) No. 14) art 2 . . . . . . . . . . . . . . . . . . . . . . . . . .24.44 art 23–24 . . . . . . . . . . . . . . . . . . . . . .24.51 art 25 . . . . . . . . . . . . . . . . . . . . . . . . .24.53 Regulations of the Investigation and Handling of Maritime Traffic Accident . . . . . . . . . . . . . . . . . . . . .24.20 Regulations of the Investigation of the Safety of the Foreign-related Maritime Accident or Event (Hai An Quan [2011] No. 91) . . . . . . . . . . . . . . . .24.20 Regulations of the People’s Republic of China on the Investigation and Handing of Maritime Traffic Accidents art 21 . . . . . . . . . . . . . . . . . . . . . . .26.79 Regulations of the Trial of Cases concerning Limitation of Marine Claims of the PRC Supreme People’s Court (Fa Shi (2010) No. 11) art 2–4 . . . . . . . . . . . . . . . . . . . . . . . .24.45 art 8 . . . . . . . . . . . . . . . . . . . . . . . . . .24.51 art 10–11 . . . . . . . . . . . . . . . . . . . . . .24.53 art 12 . . . . . . . . . . . . . . . . . . . . . . . . .24.42 Regulations on International Maritime Transportation 2001 . . . . . . . . . . . . . .1.4 Regulations on International Maritime Transportation 2016, Decree No. 335 of the State Council of the PRC 2001 . . . . . . . . . . . . . . . . . . . . . . . . .8.21 Regulations on International Maritime Transportation 2016 art 7 para 1 . . . . . . . . . . . . . . . . . . . . . .8.22 art 7 para 2 . . . . . . . . . . . . . . . . . . . . . .8.21 art 7–8 . . . . . . . . . . . . . . . . . . . . . . . . .8.26 art 8 para 3 . . . . . . . . . . . . . . . . . . . . . .8.22 Regulations on Marine Pollution 2016 see Administrative Regulations on the Prevention of Marine Pollution Caused by Vessels 2009 Regulations of the PRC on Seamen 2007, as amended in 2013 and 2014 (the “Regulations on Seamen 2014”) Decree No. 494 of the State Council of the PRC 2007 . . . . . . . . . .3.1 Regulations on Seamen 2007. . . . . . . . . . .1.4

Region (the “Provisions of Taiwan Arbitral Awards”) Fa Shi [2015] No. 14. . . . . . . . . . . . . . . . . . . . . .26.101 art 19 . . . . . . . . . . . . . . . . . . . . . . . .26.103 Provisions of the Supreme People’s Court on the Recognition and Enforcement of the Civil Judgments Rendered by Courts in Taiwan Region (the “Provisions of Enforcement of Taiwan Judgment”) Fa Shi [2015] No. 13. . . . . . . . . . . . . . . . . . . . . . 26.119 Provisions of the Supreme People’s Court on the Work Concerning Judicial Interpretation, Fa Fa [2007] No. 12 . . . . . . . .1.5 Regulations Administrative Regulations on the Prevention of Marine Pollution Caused by Vessels 2009, as amended in 2013, 2014 and 2016 (Regulations on Marine Pollution 2016) (2016) Order of State Council No. 666, State Council of the PRC . . . . . . . . . . . . . . . . . . . . . .16.1 art 53 para 1 and 2 . . . . . . . . . . . . . . .16.33 art 56 . . . . . . . . . . . . . . . . . . . . . . . . .16.33 Provisional Regulations of the Registered Ship’s Inspector System. . . . . . . . .24.22 Regulations of the Survey of the Ship and Offshore Facilities . . . . . . . . . . . . .24.22 Regulations for Preventing Collisions on Inland Waters 1991 as amended in 2003 (1991) No. 30 Order of the Ministry of Communications of the PRC . . . . . . 11.2 Regulations of Some Issues concerned in the Trial of Marine Insurance by the PRC People’s Supreme People’s Court (Fa Shi (2006) No. 10) art 13 . . . . . . . . . . . . . . . . . . . . . . . . .24.29 art 14 . . . . . . . . . . . . . . . . . . . . . . . . .24.30 art 15 . . . . . . . . . . . . . . . . . . . . . . . . .24.30 art 16 . . . . . . . . . . . . . . . . . . . . . . . . .24.30 Regulations of Some Issues concerning the Application of Law in the Arrest and Auction of a Ship of the PRC Supreme People’s Court (Fa Shi (2015) No. 6) art 16 . . . . . . . . . . . . . . . . . . . . . . . . .24.55 art 18 . . . . . . . . . . . . . . . . . . . . . . . . .24.55 art 20–21 . . . . . . . . . . . . . . . . . . . . . .24.56

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Regulations on Seamen 2014 art 4 para 1 . . . . . . . . . . . . . . . . . . . . . .3.10 art 4 para 2 . . . . . . . . . . . . . . . . . . . . . . .3.2 art 4 para 2–3 . . . . . . . . . . . . . . . . . . . . 3.11 art 5 . . . . . . . . . . . . . . . . . . . . . . . . . . .3.13 art 6 para 2 . . . . . . . . . . . . . . . . . . . . . .3.14 art 7 . . . . . . . . . . . . . . . . . . . . . . . . . . .3.14 art 8 . . . . . . . . . . . . . . . . . . . . . . . . . . .3.14 art 9 . . . . . . . . . . . . . . . . . . . . . . . . . . .3.15 art 10 . . . . . . . . . . . . . . . . . . . . . . . . . .3.15 art 11 . . . . . . . . . . . . . . . . . . . . . . . . . .3.15 art 12 . . . . . . . . . . . . . . . . . . . . . . . . . . 3.11 art 15 . . . . . . . . . . . . . . . . . . . . . . . . . .3.16 art 16 . . . . . . . . . . . . . . . . . . . . . . . . . .3.16 art 17 . . . . . . . . . . . . . . . . . . . . . . . . . .3.17 art 18 . . . . . . . . . . . . . . . . . . . . . . . . . .3.17 art 20 . . . . . . . . . . . . . . . . . . . . . . . . . .3.12 art 21 . . . . . . . . . . . . . . . . . . . . . . . . . . .3.4 art 22 . . . . . . . . . . . . . . . . . . . . . . . . . . .3.5 art 22 para 7 . . . . . . . . . . . . . . . . . . . . . .3.2 art 23 . . . . . . . . . . . . . . . . . . . . . . . . . . 3.11 art 24 . . . . . . . . . . . . . . . . . . . . . . . . . . .3.6 art 25 . . . . . . . . . . . . . . . . . . . . . . . . . .3.18 art 26 . . . . . . . . . . . . . . . . . . . . . . . . . .3.19 art 27 . . . . . . . . . . . . . . . . . . . . . . . . . .3.20 art 31 . . . . . . . . . . . . . . . . . . . . . . . . . .3.21 art 32 . . . . . . . . . . . . . . . . . . . . . . . . . .3.22 art 33 . . . . . . . . . . . . . . . . . . . . . . . . . .3.22 art 71 . . . . . . . . . . . . . . . . . . . . . . . . . . .3.1 Regulations on the Registration of Ships 2014 (1994) Decree No. 155 of the State Council of the PRC, as amended by the State Council of the PRC in 2014 . . . . . . . . . . . . . . . . . 2.1, 2.5, 2.30 art 1 . . . . . . . . . . . . . . . . . . . . . . . . . . .2.15 art 2 . . . . . . . . . . . . . . . . . . . . . . . . . . .2.14 art 3 . . . . . . . . . . . . . . . . . . . . . . . . . . .2.15 art 4 . . . . . . . . . . . . . . . . . . . . . . . . . . .2.15 art 6 . . . . . . . . . . . . . . . . . . . . . 2.40, 11.24 art 9 . . . . . . . . . . . . . . . . . . . . . . . . . . .2.16 art 13 . . . . . . . . . . . . . . . . . . . . . . . . . .2.16 art 14 . . . . . . . . . . . . . . . . . . . . . . . . . .2.17 art 16 . . . . . . . . . . . . . . . . . . . . . . . . . .2.22 art 17 . . . . . . . . . . . . . . . . . . . . . . . . . .2.24 art 18 . . . . . . . . . . . . . . . . . . . . . . . . . 2.23 art 19 . . . . . . . . . . . . . . . . . . . . . . . . . 2.23 art 20 . . . . . . . . . . . . . . . . . . . . . . . . . .2.34 art 22 . . . . . . . . . . . . . . . . . . . . . . . . . .2.35 art 25 . . . . . . . . . . . . . . . . . . . . . . . . . .2.40

art 26 . . . . . . . . . . . . . . . . . . . . . . . . . .2.41 art 27 . . . . . . . . . . . . . . . . . . . . . . . . . .2.42 art 28 para 1 . . . . . . . . . . . . . . . . . . . . .2.43 art 28 para 2 . . . . . . . . . . . . . . . . . . . . .2.43 art 29 . . . . . . . . . . . . . . . . . . . . . . . . . .2.44 art 30 . . . . . . . . . . . . . . . . . . . . . . . . . .2.44 art 35 . . . . . . . . . . . . . . . . . . . . . . . . . .2.18 art 37 . . . . . . . . . . . . . . . . . . . . . . . . . .2.18 art 39 . . . . . . . . . . . . . . . . . . . . . . . . . .2.19 art 40 . . . . . . . . . . . . . . . . . . . . . . . . . .2.20 art 42 . . . . . . . . . . . . . . . . . . . . . . . . . .2.42 art 43 . . . . . . . . . . . . . . . . . . . . . . . . . .2.45 art 44 . . . . . . . . . . . . . . . . . . . . . . . . . .2.46 art 45 . . . . . . . . . . . . . . . . . . . . . . . . . .2.22 art 56 para 1 . . . . . . . . . . . . . . . . . . . . .2.15 Rules

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Rules on Issues in relation to Civil Litigation Evidence art 23 . . . . . . . . . . . . . . .22.16 Detailed Rules of Implementation of the Provisions of the Supreme People’s Court on Case Guidance Work 2015 Fa [2015] No. 130 (SPC) . . . . . . . . .1.10 art 10 . . . . . . . . . . . . . . . . . . . . . . . . . .1.10 Implementation Rules for International Freight Forwarding 2004 Implementation Rules for the Administrative Provisions on International Freight Forwarding of the People’s Republic of China 2004 (Implementation Rules for International Freight Forwarding 2004) Announcement [2003] No. 82 of the Ministry of Commerce of the PRC. . . . . . . . . . . .8.3 art 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.4 art 23 . . . . . . . . . . . . . . . . . . . . . . . . . . .8.3 art 36 . . . . . . . . . . . . . . . . . . . . . . . . . . .8.5 art 37 para 1 . . . . . . . . . . . . . . . . . . . . .8.26 art 37 para 1 . . . . . . . . . . . . . . . . . . . . . .8.6 art 37 para 3 . . . . . . . . . . . . . . . . . . . . . .8.6 Implementation Rules for the Regulations on International Maritime Transportation 2013 Order No. 9 [2013] of the Ministry of Transport of the PRC . . . . . . . . . . . . . . . . . . . . . .8.21 art 3 (4). . . . . . . . . . . . . . . . . . . . . . . . .8.21 art 3 (5). . . . . . . . . . . . . . . . . . . . . . . . .8.22 art 7 para 3 . . . . . . . . . . . . . . . . . . . . . .8.22

TABLE OF LEGISLATION

Rules on Several Issues concerning Registration of Acceptance of Case Filing of the Supreme People’s Court of the PRC art 2 . . . . . . . . . . . . . . . . . . . . . . . . . . .24.4 art 6 . . . . . . . . . . . . . . . . . . . . . . . . . . .24.3 art 9 . . . . . . . . . . . . . . . . . . . . . . . . . . .24.4 PRC Rules of the Approval and Administration of the Qualification of the Ship’s Survey Institution. . . . . . . . . . . . . .24.22 Rules on Some Issues concerning Trial of Disputes over the Collision of Ships of the PRC Supreme People’s Court (Fa Shi [2008] No. 7) art 1 . . . . . . . . . . . . . . . . . . . . . . . . . .24.15 art 10 . . . . . . . . . . . . . . . . . . . . . . . . .24.19

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art 11 . . . . . . . . . . . . . . . . . . . . . . . . .24.20 Rules on the Arrest and Sale of Ships art 4 . . . . . . . . . . . . . . . . . . . . . . . . . .23.22 art 5 . . . . . . . . . . . . . . . . . . . . . . . . . .23.23 art 4–6 . . . . . . . . . . . . . . . . . . . . . . . . .23.2 art 6 . . . . . . . . . . . . . . . . . . . . . . . . . . .23.5 Rules on the Preservation of Assets of Shanghai High People’s Court art 6 . . . . . . . . . . . . . . . . . . . . . . . . . .23.31 art 28 . . . . . . . . . . . . . . . . . . . . . . . . .23.33 Rules on the Preservation of Property of Shanghai High People’s Court art 29–30 . . . . . . . . . . . . . . . . . . . . . .23.28 art 30 . . . . . . . . . . . . . . . . . . . . . . . . .23.13 art 35 . . . . . . . . . . . . . . . . . . . . . . . . .23.30

TA B L E O F O T H E R A UT HORI T I E S

Contents • • • • • •

Cases UK Cases Hong Kong Cases US Legislation UK Legislation US Other Authorities

Cases UK Bankers Trust International Limited v Todd Shipyards Corporation (The “Halcyon Isle”) [1980] 2 Lloyd’s Rep 325 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.28 Breffka & Hehnke GmbH & Co KG and Others v Navire Shipping Co Ltd and Others (The Saga Explorer) [2012] EWHC 3124 (Comm). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.18 Brown, Jenkinson & Co Ltd v Percy Dalton [1957] 2 QB 621 . . . . . . . . . . . . . . . . . . . . . . . . . 5.43 Davies v Mann, 152 Eng. Rep. 588 (1842) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.11 Dawkins v Carnival [2011] EWCA Civ 1237 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.15 Mareva Compania Naviera SA v International Bulkcarriers SA [1980] 1 All ER 213 . . . . . . 21.44 Overseas Tankship (UK) Ltd v Morts Dock and Engineering Co Ltd (The Wagon Mound (No. 1)) [1961] AC 388 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.14 Overseas Tankship (UK) Ltd v The Miller Steamship Co (The Wagon Mound (No. 2)) [1967] 1 AC 617. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.14 The Achilleas [2008] 2 Lloyd’s Rep 275 (HL) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.26 The Calliope [1970] 1 Lloyd’s Rep 84 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.14 The Peonia [1991] 1 Lloyd’s Rep 100, 108. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.25 The Starsin [2003] UKHL 12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4 Cases Hong Kong OKA Electronics Ltd v Manohar Chugh [1991] HKLY 154 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.5 Cases US Tokio Marine & Fire Insurance Company Ltd v Retla Steamship Company [1970] 2 Lloyd’s Rep 91 (US 9th Circuit CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.18 Legislation UK Carriage of Goods by Sea Act 1992 section 2–3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6

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TABLE OF OTHER AUTHORITIES

Marine Insurance Act 1906 s 32 (2) (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.10 s 33 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.42 s 58 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.48 s 61 (2) (ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.47 s 61 (2) (iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.47 s 62 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.49 Legislation US US Shipping Act of 1984 (46 U.S.C. App. 1701) s 2 (6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.10 Other Authorities 1957 International Convention Relating to the Limitation of Liability of Owners of Sea-Going Ship (the “1957 Convention”) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.42 art 1(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.42 art 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.42 art 5(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.42 Agreement between People’s Republic of China and the Republic of France on Mutual Judicial Assistance in Civil and Commercial Matters art 28. . . . . . . . . . . . . . . . . 25.9 Arrangement of Mainland and Macao Special Administrative Region on Mutual Recognition and Execution of Civil and Commercial Judgments (the “Mainland and Macau Judgment Arrangement”) Fa Shi [2006] No. 2 . . . . . . . . . . . . . . . . . . . . . . 26.118 Arrangement of the Supreme People’s Court between the Courts of the Mainland and the Hong Kong Special Administrative Region on Mutual Recognition and Enforcement of Judgments of Civil and Commercial Cases under the Jurisdiction as Agreed to by the Parties Concerned (the “Mainland and Hong Kong Judgment Arrangement”) Fa Shi [2008] No. 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.117 art 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.117 Arbitration Ordinance of Hong Kong see Hong Kong Arbitration Ordinance Arbitration Rules of CIETAC see China International Economic and Trade Arbitration Commission (“CIETAC”) Arbitration Rules of CMAC see China Maritime Arbitration Commission (the “CMAC”) Athens Convention relating to the Carriage of Passengers and their Luggage by Sea 1974. . . . 1.4 Athens Convention and its Protocol started to apply to China from 30 August 1994 . . . . . . . 25.44 art 1 (1) (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.4 art 1 (5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.4 art 2 para 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.3 art 4 (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.6 art 10 para 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.23 art 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.23 art 16 para 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.35 art 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.46 art 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.25 art 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.3 Baltic and International Maritime Conference Uniform General Charter as revised 1922, 1976 and 1994 see GENCON 1994

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Beijing Rules for Adjustment art 2 para 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.12 art 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.13 art 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.14 Bunker Convention 2001 art 1 para 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.4 art 1 para 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.5 art 1 para 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.6 art 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.8 art 3 para 1–2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.18 art 3 para 3–4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.18 art 3 para 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.18 art 3 para 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.18 art 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.8 art 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.19 art 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.26 art 7 para 1–2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.31 art 7 para 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.31 art 7 para 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16.32, 16.34 art 7 para 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.31 art 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.40 China International Economic and Trade Arbitration Commission (“CIETAC”) art 56 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.32 China Maritime Arbitration Commission (the “CMAC”) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.44 Arbitration Rules of CMAC, CMAC Rules 2015 arbitration 52 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.5 art 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.45 art 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.37, 26.38, 26.51 art 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.10 art 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.8, 21.11, 26.51 art 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.51 art 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.37 art 41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.33 art 52 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.78 art 57 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.54 art 61 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.32 art 71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.52 CIETAC see China International Economic and Trade Arbitration Commission (“CIETAC”) CLC Protocol 1992 see International Convention on Civil Liability for Oil Pollution Damage Collisions Convention 1910 see Convention for the Unification of Certain Rules of Law with respect to Collisions between Vessels COLREGS see Convention on the International Regulations for Preventing Collisions at Sea 1972 (the “COLREGs 1972”) Convention for the Unification of Certain Rules of Law with respect to Collisions between Vessels, 1910 (the “Collisions Convention 1910”) . . . . . . . . . . . . . . . . . . . .1.4, 11.1 art 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.4 art 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.6 art 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.6

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art 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.6 art 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.6 art 6 para 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.27 art 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.5, 15.21 Convention on Limitation of Liability for Maritime Claims (the “LLMC 1976”) 1976 Convention on Limitation of Liability for Maritime Claims (the “LLMC”) . . . . . . . 25.42 art 1 para 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.3 art 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.8 art 6 para 1 (a) (i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.11 art 6 para 1 (b) (i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.11 art 6 para 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.12 art 10 rule 3 and art 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.42 art 15 (5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.2 art 18 para 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.8 Convention on the International Regulations for Preventing Collisions at Sea 1972 (the “COLREGs 1972”). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2 art 1 para 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.4 art 3 para 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.4 rule 21 (b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.12 Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters took effect in China in 1992 . . . . . . . . . . . . . . . . . . . . . . . 18.49 Convention relating to Civil Liability in the Field of Maritime Carriage of Nuclear Material 1971 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.10 COSCO Container Lines Bill of Lading (amended 24/8/2001) art 23 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.4 Clause 22 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.22 Clause 23 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.11 EC Convention on the Law Applicable to Contractual Obligations (Rome 1980) (“Rome Convention”) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.24 Article 4 – Applicable law in the absence of choice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.24 FUND Protocol 1992 see International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage GENCON 1994 Baltic and International Maritime Conference Uniform General Charter Form clause 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.9 clause 9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.14 clause 19. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.16 Hague Visby Rules art III, r 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.21 art 3 para 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4 art 3 para 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4 Hong Kong Arbitration Ordinance (Cap 609) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.37 s 5(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.52 Hong Kong Merchant Shipping (Collision Damage Liability and Salvage) Ordinance (Chapter 508), Part II, s 3 (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.16

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International Convention on Civil Liability for Oil Pollution Damage, 1969 (CLC 1969) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.2 International Convention on Civil Liability for Oil Pollution Damage, 1992 (CLC 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.4, 16.2 2000 Amendments to CLC Protocol 1992 (2003) Announcement No. 16 of the Ministry of Communications of the PRC . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16.2, 16.24 2000 Amendments to CLC Protocol 1992 Resolution LEG.1(82). They were adopted by the IMO on 18 October 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.24 art 1 para 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.4 art 1 para 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.5 art 1 para 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.6 art 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.7 art 3 para 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.16 art 3 para 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.16 art 3 para 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.17 art 3 para 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.16 art 3 para 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.17 art 3 para 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.17 art 3 para 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.40 art 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.19 art 5 para 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.24 art 5 para 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.24 art 7 para 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.29 art 7 para 2–4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.29 art 7 para 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.30 art 7 para 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.34 art 7 para 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.29 art 7 para 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.29 art 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.7 International Convention for the Prevention of Pollution from Ships, 73/78 (MARPOL) International Convention for the Safety of Life at Sea 1974 as amended (SOLAS). . . . . . . . . . .32 International Convention on Standards of Training, Certification and Watchkeeping, 1978, as amended (STCW) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.23 International Convention on the Arrest of Ships art 4.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.7 International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1971 (FUND 1971) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.2 International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1992 (FUND 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.2 LLMC see Convention on Limitation of Liability for Maritime Claims (the “LLMC 1976”) Mainland and Hong Kong Judgment Arrangement see “Arrangement of the Supreme People’s Court between the Courts of the Mainland and the Hong Kong Special Administrative Region on Mutual Recognition and Enforcement of Judgments of Civil and Commercial Cases..” Mainland and Macau Judgment Arrangement see “Arrangement of Mainland and Macao Special Administrative Region on Mutual Recognition and Execution of Civil and Commercial Judgments” Maritime Labour Convention 2006 (the MLC 2006) . . . . . . . . . . . . . . . . . . .3.20, 3.23, 3.24, 3.25

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MARPOL see International Convention for the Prevention of Pollution from Ships New York Convention took effect in China in 1987 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.49 art II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.20 art V s 1(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.33 NYPE 1993 New York Produce Exchange Time Charter Form clause 45. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.16 Rome Convention 1980 see EC Convention on the Law Applicable to Contractual Obligations (Rome 1980) R&E Treaties Ministry of Foreign Affairs of the People’s Republic of China: http://www.fmprc.gov.cn/web/ziliao_674904/tytj_674911/wgdwdjdsfhzty_ 674917/t1215630.shtml . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.50 Salvage Convention 1989 1989 International Convention on Salvage art 1(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.8 art 1(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.28 art 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.37 art 4 para 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.2 art 10 para 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.16 art 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.20 art 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.32 art 23 para 1 and 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.39 art 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.38 art 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.4 art 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.4 art 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.39 art 263 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.40 art 265 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.40 SOLAS see International Convention for the Safety of Life at Sea 1974 United Nations International Convention on the Carriage of Goods by Sea adopted in Hamburg on 31 March 1978 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.12 York-Antwerp Rules 1974, 1994 and 2004 Rule D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.12

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PART I

SUBSTANTIVE MARITIME LAW

CHAPTER 1

Introduction to Chinese maritime law

1.1 The legal system of the People’s Republic of China (the “PRC”) is similar to the civil law system. The main statutory law of the maritime law of the PRC includes the Maritime Law (the “CMC 1992”)1 promulgated in 1992, and the Special Maritime Procedure Law (the “SMPL 1999”) promulgated in 1999. In practice, the Supreme People’s Court (the “SPC”) has also promulgated judicial interpretations for the implementation of Chinese maritime law. The SPC’s judicial interpretations have played an important role in Chinese judicial practice. Still, the judgments of maritime cases in China are not sources of Chinese law. However, maritime judgments, especially some judgments selected by the SPC as the guiding cases, have become important references for adjudication in Chinese maritime judicial practice. 1.2 The judicial practice of maritime law in China started before the enactment of the various legislations of Chinese maritime law and maritime procedure law.2 Before 1984, maritime cases were heard as general civil or commercial cases in local people’s courts and the SPC in China. Chinese maritime trials have since become professional, with the establishment of the maritime courts in 1984. Currently, ten maritime courts, ten high people’s courts as the courts of appeal of the ten maritime courts, and the SPC all have the exclusive jurisdiction of maritime cases in China. Further, the concept of a “second instance finality with three levels of courts” has been formed in Chinese maritime trials. Chinese maritime law 1.3 In the early years of maritime judicial practice in China, there were no special maritime laws applying to maritime disputes. The enactment of the CMC 1992 and the SMPL 1999 were landmarks in the history of Chinese maritime legislation. The CMC 1992 provides for substantive systems of ships, seamen, carriage of goods by sea, carriage of passengers by sea, towage, collision, salvage, general average, limitation of liability for maritime claims, marine insurance, time limits and applicable laws for foreign-related matters. The SMPL 1999 provides for procedure rules for jurisdiction, preservation of maritime

1 CMC 1992 is the abbreviation of the Chinese Maritime Code 1992. This abbreviation has been commonly used in English publications of Chinese maritime law. It is sometimes cited as CMC 1993 because the Maritime Law of the PRC entered into force in 1993. It is cited CMC 1992 in this book. 2 In this book, the maritime law and judicial practice of China refer to that of mainland China, excluding Hong Kong, Macau and Taiwan.

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claims including arrest and auction of ships and goods carried by ships, maritime injunction, maritime security, preservation of maritime evidence, trial procedures, procedure for constitution of limitation fund for maritime claims, procedure for registration and repayment of debt and procedure for service by publication of maritime liens. 1.4 Not all maritime issues and procedures are governed by the CMC 1992 and the SMPL 1999. Some issues and procedures may be governed by civil laws and civil procedure law. They mainly include the General Principles of Civil Law 1986, as amended in 2009, the Contract Law 1999, the Guaranty Law 1995, the Property Law 2007, the Tort Liability Law 2009, the Law on Application of Laws to Foreign-Related Civil Relations 2010 and the Civil Procedure Law 1991, as amended in 2007 and 2012. Some regulations adopted by China’s State Council have relevant provisions for maritime matters, for example, the Regulations on International Maritime Transportation 2001, as amended in 2013 and 2016 and the Regulations on Seamen 2007, as amended in 2013. Some international maritime conventions that the PRC has adopted also apply to Chinese maritime judicial practice, such as the International Convention on Civil Liability for Oil Pollution Damage 1992, the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea 1974 and the Convention for the Unification of Certain Rules of Law with respect to Collisions between Vessels 1910.3 1.5 Besides laws, regulations and international conventions, the SPC’s judicial interpretations are also important judicial authorities even though they are not laws in themselves. There are four types of judicial interpretations; “Interpretation”, “Provisions”, “Reply” and “Decision”.4 “Interpretation” refers to SPC’s judicial interpretations on how to apply a certain law or how to apply law to a specific type of case or issue in trial work. “Provisions” refers to the SPC’s regulations or opinions formulated in trial work based on the spirit of legislation: for example, Certain Provisions on Trying Cases Involving Disputes over the limitation of Liability for Maritime Claims 2010.5 “Reply” refers to SPC’s replies to the request from the High People’s Courts and the special courts, e.g. the maritime courts for the opinion on certain questions of law in trial work: for example, the Reply of the Supreme People’s Court on Request for Claim for Recourse Action for Damage to Goods in Carriage of Goods by Sea in Dalian Port Authority v COSCO Dalian International Freight Co Ltd.6 “Decision” refers to SPC’s decisions to amend or repeal the SPC’s judicial interpretations.7 Only the SPC is authorised to publish judicial interpretations and local courts have no such an authority.8 In judicial practice, SPC’s judicial interpretations may be in other forms: for example, the Minutes of the Second National Working Conference on the Trial of ForeignRelated Commercial and Maritime Cases 2005.9 They are also authorities cited in Chinese judicial practice of maritime law.

3 The details of those Conventions will be discussed in the relevant chapters. 4 Provisions of the Supreme People’s Court on the Work Concerning Judicial Interpretation, Fa Fa [2007] No. 12. 5 Fa Shi [2010] No. 11. 6 [2002] Min Si Ta Zi No. 21 (SPC) (Reply). 7 ibid, art 6. 8 Notice of the Supreme People’s Court and the Supreme People’s Procuratorate on Prohibiting Local People’s Courts and People’s Procuratorates from Formulating Judicial Interpretation Documents, Fa Fa [2012] No. 2 (SPC). 9 Fa Fa [2005] No. 26 (SPC).

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INTRODUCTION TO CHINESE MARITIME LAW

Chinese maritime courts and practice 1.6 There are ten maritime courts in China that have been established since 1984. They are in nine coastal cities of Dalian, Tianjin, Qingdao, Shanghai, Ningbo, Xiamen, Guangzhou, Beihai and Haikou, and one in Wuhan along the Yangtze River. The High People’s Courts of the locus in quo were designated as the appellate courts of ten maritime courts. In order to strengthen guidance and supervision of adjudicatory work for maritime cases throughout the country, the SPC set up the Fourth Civil Division for trials and the rehearing of commercial and maritime cases, and for exercising guidance and supervision of the adjudicatory work of all the maritime courts and the appellate courts. The formation of a specialised maritime adjudication system in China is based on the scheme of second instance finality with three levels of courts, including the maritime courts, the High People’s Courts and the SPC. The courts of each level have jurisdiction as the court of first instance, although there has been no maritime case that has been accepted or tried by the SPC as the court of first instance so far. 1.7 The maritime courts deal with actions brought by parties in respect of maritime tort, disputes over maritime contracts and other maritime disputes as provided for by law.10 Furthermore, where the parties to a maritime dispute are aliens, stateless persons, foreign enterprises or organisations who have agreed in writing to be subject to the jurisdiction of a Chinese maritime court, notwithstanding that the place that is actually related to the dispute is not within the territory of the PRC, the said maritime court does have jurisdiction over the dispute.11 In JP Morgan Chase & Co v Sea Stream Shipping Inc,12 both the plaintiff and the defendants were foreign parties in the dispute regarding a ship mortgage registered in London under the law of the Bahamas. However, the plaintiff JP Morgan Chase voluntarily chose to withhold the vessel and institute proceedings in China. The Guangzhou Maritime Court applied the Bahamas Merchant Shipping Act and entered judgment. 1.8 Chinese courts have handled a large volume of the world’s maritime cases. The annual caseload rose from around 100 cases in the early years to more than 20,000 in 2014.13 By end of December 2013, the ten maritime courts had entertained 225,283 cases of all types since 1984 (131,604 first instance cases, 45,646 special maritime cases, 48,033 maritime enforcement cases), and concluded or enforced 215,826 cases (128,776 at first instance, 40,417 at special maritime proceedings, and 46,633 at enforcement), with a value of more than 22 billion US dollars, involving about 70 countries and regions in Asia, Europe, Africa, and North and South Americas. The SPC believes that the goal of building a maritime judicial centre in the Asia-Pacific region has been achieved.14 Inconsistency in adjudication and guiding cases 1.9 China is not a common law jurisdiction, so Chinese maritime judges do not need to consider or follow any other judgments for the same or similar disputes as precedents, even those made by higher level courts such as the SPC. This judicial practice has caused

10 11 12 13 14

SMPL 1999, art 4. ibid, art 8. (2002) Guang Hai Fa Chu Zi No. 116. SPC: White Book of China’s Maritime Adjudication (1984–2014), p 58. ibid, p 68.

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inconsistency in Chinese maritime adjudication. In order to harmonise the judicial practice of maritime law, the SPC has taken some measures to unify the standards for maritime adjudication. First, the SPC has formulated a “three-step” judicial interpretation mechanism, namely from research report, to directive opinions, and finally to judicial interpretations. The SPC aims to promulgate one or two judicial interpretations in the field of maritime law each year so as to unify the judicial practice, especially in the areas that are not covered by statute law. Second, the SPC, by information feedback in individual cases, regularly circulates case quality analyses and annual summaries of maritime trials, etc, which has strengthened internal information exchange on adjudicatory work. For example, the ten maritime courts have formed a forum hosted in turn annually, including an adjudication symposium and enforcement symposium to exchange trial experiences, which has acted as a good aid to the voluntary harmonisation of adjudicatory standards and judicial activities. 1.10 Although Chinese judgments are not precedents, the SPC requires that the maritime courts and the High People’s Courts (as the appeal courts of the maritime courts) to submit five to ten cases each year, from which a batch of typical model cases will be selected for exemplification and promotion in the Gazette of the Supreme People’s Court, Selected Cases of the People’s Courts, Guide on Foreign-Related Commercial and Maritime Trial, and its internet publication at www.ccmt.org.cn.15 The published cases have become important references for maritime adjudication in China. Last but not least, China has established the guiding case system. According to the Provisions of the Supreme People’s Court on Case Guidance Work 2010,16 Chinese courts at all levels shall take the guiding cases published by the SPC as a reference when trying similar cases.17 Under the Detailed Rules of Implementation of the Provisions of the Supreme People’s Court on Case Guidance Work 2015,18 when a Chinese court at any level refers to a guiding case in the adjudication of a similar case, it must quote the guiding case as part of the reasons for judgment/ruling although the guiding case is not to be cited as a basis for judgment/ruling.19 From 2011 to 5 July 2016, the SPC has published 64 guiding cases. Although there are only three maritime cases in these guiding cases, it indicates that the judicial experiences based on the previous judgments will more and more contribute to and influence Chinese maritime judicial practice.

15 The judgments in those publications are in Chinese. 16 Fa Fa [2010] No. 51 (SPC). 17 Provisions of the Supreme People’s Court on Case Guidance Work 2010, art 7. 18 Fa [2015] No. 130 (SPC). 19 Detailed Rules of Implementation of the Provisions of the Supreme People’s Court on Case Guidance Work 2015, art 10.

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CHAPTER 2

Ships

2.1 The CMC 1992 covers legal issues of ownership of ships, mortgage of ships and maritime liens on ships. Ship registration is regulated by the Regulations on the Registration of Ships 2014.1 This chapter mainly discusses the ownership of ships, ship registration and ship mortgage. Maritime liens in article 22 of the CMC 1992 are given for five classes of ship debts: (1) seamen’s wages, (2) loss of life or personal injury, (3) disbursements, (4) salvage, and (5) damage by ship. The enforcement of maritime liens are introduced in Part II. The ship 2.2 “Ship” as referred to in the CMC 1992 means sea-going ships and other mobile units, but does not include ships or crafts to be used for military or public service purposes, nor small ships of less than 20 tons gross tonnage. The term “ship” also includes ship’s apparel.2 The ship’s apparel does not include personal belongings of crew. In Zhi Huaxiang v China United Insurance Holding Corporation Zhoushan Branch,3 the Ningbo Maritime Court held that ship’s apparel usually means appurtenances that are attached to a ship and self-existent, but that does not form the structure of a ship. They are equipped on board for the normal and usual navigation and operation of a ship. Therefore, the living goods of the crew do not belong to the ship’s apparel. 2.3 For ships not within the concept as defined in the CMC 1992, e.g. inland water ships or small fishing boats, other relevant laws may apply, e.g. the Contract Law, the Property Law and the Guaranty Law. In a claim in respect of personal injury that occurred in the operation of a ship, the Xiamen Maritime Court found that the ship in dispute was a fishing boat of less than 20 tons gross tonnage and, therefore, such a claim was not entitled to the maritime lien in the CMC 1992.4 Therefore, Chinese tort law applied to this personal injury claim. Similarly, the exercise of a possessory lien in the CMC 1992 also depends on whether the ship detained for the possessory lien is a ship as defined under the CMC 1992. In Guangzhou Panyu Dashi Shangjiao Shipyard v Guangzhou Huiyue Shipping Company,5 the

1 (1994) Decree No. 155 of the State Council of the PRC, as amended by the State Council of the PRC in 2014. 2 CMC 1992, art 3. 3 (2005) Yong Hai Fa Shang Chu Zi No. 639 (Ningbo Maritime Court). 4 Huang Guangren v Zeng Fuchun and Cheng Baojing (2013) Xia Hai Fa Shi Chu Zi No. 58 (Xiamen Maritime Court). 5 (2012) Guang Hai Fa Chu Zi No. 228 (Guangzhou Maritime Court).

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Guangzhou Maritime Court held that the ship in dispute on which the ship repairer exercised a possessory lien was not a ship under the CMC 1992, but an inland water vessel, therefore the repairer could only exercise the possessory lien on that ship according to the Property Law,6 in which the retained ship was considered as a general movable. 2.4 Conversely, the CMC 1992 applies to a sea-going ship even if the ship involves in disputes in coastal operation. In Yantai Rescue and Salvage Bureau v Shandong Rongcheng Longxu Island Fishing Corporation,7 one of the questions was whether Yantai Rescue and Salvage Bureau, as the shipowner, which caused oil pollution, was entitled to apply for the constitution of a maritime fund for maritime claims. To answer this question, another question must be answered first, that is, whether the CMC 1992 applied to this dispute, because only the CMC 1992 provides for the regime of a maritime fund for maritime claims. In other words, if the applicable law is not the CMC 1992, but is another law, e.g. general civil law, the shipowner would not be entitled to the benefit of a maritime fund. The ship in dispute was a domestic coastal oil carriage and fuel supply ship of 788 tons gross tonnage. The Qingdao Maritime Court did not recognise the ship as a ship under the CMC 1992, but applied the General Principles of the Civil Law and rejected the application for the constitution of maritime fund. The shipowner appealed this decision, but this appeal was dismissed. The SPC brought the case up for trial by itself. The SPC held that the ship in dispute was a ship under the CMC 1992 and the shipowner was entitled to the limitation of liability in the CMC 1992. The SPC clarified from this case that a sea-going ship is a ship in the CMC 1992 irrespective of whether the ship is navigating or operating along the coast or on the high seas when the accident occurs. 2.5 The scope of ‘ship’ and the ship defined for ship mortgage registration in the Regulations on the Registration of Ships 2014 is different from that of the CMC 1992.8 In other words, not all kinds of ships registered under the Regulations on the Registration of Ships 2014 are ships governed by the CMC 1992, and the ships in the CMC 1992 may not be registered according to the Regulations on the Registration of Ships 2014. For ship mortgages, ship also includes ships under construction.9 Ownership of a ship 2.6 The ownership of a ship in the CMC 1992 means the shipowner’s rights to lawfully possess, utilise, profit from and dispose of a ship in his ownership.10 The ownership of small ships of less than 20 tons gross tonnage are not regulated by the CMC 1992, but by the general civil law of China, e.g. the Contract Law, the Property Law of and the General Principles of Civil Law. Ownership of ships under construction is not regulated by the CMC 1992 because they are not real ships under the CMC 1992.11 Therefore, general civil law

6 Article 230, para 1 of the Property Law 2007 provides that if a debtor fails to perform due debt, the creditor may retain the debtor’s movables which have been legally possessed by the creditor and shall have the priority in being paid with the said property. 7 [2002] Min Si Ti Zi No. 3 (SPC) (Retrial). 8 For ship in the ship registration, see para 2.13. 9 See para 2.29. 10 CMC 1992, art 7. 11 Cheng Songpeng v Zhang Jianfei (2011) Yong Hai Fa Zhou Shang Chu Zi No. 98 (Ningbo Maritime Court).

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SHIPS

will apply to such ownership. For state-owned ships operated by an enterprise owned by the whole person having a legal person status granted by the State,12 the provisions of the CMC 1992 regarding the shipowner apply to that legal person.13 2.7 The ownership of a ship may be obtained through sale and purchase of a secondhand ship or building a new ship. The CMC 1992 has no provision for the sale and purchase contract of a ship and a new building ship contract. The Contract Law and the General Principles of the Civil Law apply to these two kinds of contract. The judicial practice requires further that the ownership of a ship should be obtained in good faith. It means that the purchaser should not have knowledge that the seller has no right to sell the ship and the purchaser should have paid the price of the ship.14 There are two kinds of disposal of ships, that is, physical disposal and disposal in law. The former disposal includes ship renovation, ship conversion, ship recycling and ship sinking on the high seas. The latter disposal means a change of the status of ships, e.g. transfer of the ownership of ship, registration of ship mortgage, etc. 2.8 The shipowner usually realises possession and utilisation of ships by the appointment of master and crew on board to actually control a ship. The shipowner’s possession right may be restricted by time charter or bareboat charter under which the charterers actually possess, maintain and operate ship.15 Even if a ship has been sold, the ownership of the ship may just be restricted, but not infringed. In The Minjie No. 8,16 a dispute of joint ownership, one of the joint shipowners of a ship in dispute claimed that his rights of ownership had been infringed because the ship had been sold to a third company in Hong Kong. The Ningbo Maritime Court found that the purpose of the sale of the ship was not to deprive the owners of the ownership, but to satisfy the legal requirements for operation of the ship. In fact, the claimant still received a bonus after the sale of the ship. Therefore, it was held that the claimant’s rights of ownership had not been infringed. The claimant appealed. The Zhejiang High People’s Court found that although the ownership of the ship had been transferred according to the formalities, the claimant and other shareholders still controlled the ship and gained benefits through internal arrangements. Therefore, the appeal was dismissed. During the trial of the appeal at the second and final instance, the other joint owners of the ship undertook that they would bear all legal liabilities if the transfer of the ownership resulted in the claimant’s loss of the ownership and control of the ship or any damage to the benefit of joint owners of the ship. It is believed that this undertaking was an important security of the joint ownership of the claimant and an important factor that was considered by the appeal court. 2.9 The acquisition, transfer or extinction of the ownership of a ship shall be registered by the ship registration authorities.17 Although the lack of registration will not affect the validity of contract for the acquisition, transfer or extinction of the ownership, there is no legal effect of the acquisition, transfer or extinction of the ownership against a third party

12 Such as China Ocean Shipping (Group) Company (COSCO) and China Shipping (Group) Company. 13 CMC 1992, art 8. 14 Dalian Sanyang Fishery Co Ltd v Dalian Ocean University and Others (2012) Liao Min San Zhong Zi No. 94 (Liaoning High Peoples’ Court) (CA). If there is no contractual price, it should be a reasonable price. 15 For time charter and bareboat charter, see Chapter 4. 16 (2011) Zhe Hai Zhong Zi No. 69 (Zhejiang High People’s Court) (CA). 17 For ship registration, see paras 2.15–2.19.

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without such registrations. Furthermore, the joint ownership of a ship shall be registered at the ship registration authorities where a ship is jointly owned by two or more legal persons or individuals. However, the unregistered joint ownership does not affect the actual ownership of the joint owner.19 The joint ownership of the ship shall not have legal effect against a third party unless registered.20 2.10 The legal effect of registration of ship against a third party has been reaffirmed in the Property Law, which provides that, before registration, the creation, alteration, transfer or extinction of the property right of the vessels shall not have legal effect against a bona fide third party.21 In other words, the third party may be protected by the ship registration. In Lin Zhuanxiao and Lin Fangtong v Yu Han and Yu Sai’er,22 the ship owned by the claimants was registered with the name of the defendants who mortgaged the ship for a loan from a bank. The claimants received notice of the mortgage when the bank exercised the right of mortgagee due to the failure of repayment of the loan by the defendants. The claimants challenged the mortgage but were rejected by the courts. It was pointed out that ownership without registration has no legal effect on a third party in good faith. It was found that the ship mortgage was agreed based on the registration of the ship by the defendants and the bank had not been at fault in the ship mortgage agreement. Therefore, the registration agreement between the claimants and the defendants could not affect the legal effect of the ship mortgage. 2.11 According to the contract law of China, the parties may, when making a contract, use written form, verbal form or any other form. The written form shall be adopted only if laws or administrative regulations so require, or if the parties so agree.23 The CMC 1992 does not require the written form of a contract for the acquisition and extinction of the ownership of ships, but requires that the transfer of the ownership of a ship shall be made by a contract in writing.24 Although the reason for such a requirement is unknown, the acquisition, transfer and extinction of the ownership of ships in China are usually made by contracts in writing because of the high value of the ships. However, it is unclear what the legal consequence is if there is no contract in writing for the transfer of ownership of ships. 2.12 The written contract may provide for when the ownership of a ship will be transferred. If there is no agreement about the time of transfer, the ownership of a ship is transferred upon the delivery of the ship.25 The written contract is also one of the documents required for ship registration.26 However, in judicial practice the agreement for delivery of a ship and the ship registration are only prima facie evidence to prove the transfer of the ownership. In Li Mengwen v Lianyungang Yandong Transport Co Ltd,27 although the agreement of sale of the ship and the agreement of handover had been concluded, and the seller and the buyer and the ship had been registered accordingly, the ship had not been 18

18 19 20 21 22 23 24 25 26 27

CMC 1992, art 9, para 1. Zheng Faming v Zhejiang Qinfeng Shipping Co Ltd (2016) Zhe 72 Min Chu 151 (Ningbo Maritime Court). ibid, art 10. Property Law 2007, art 24. (2015) Zhe Min Shen Zi No. 1055 (Zhejiang High People’s Court) (Retrial). Contract Law 1999, art 10. CMC 1992, art 9. Contract Law 1999, art 133. See para 2.15 for the details of registration of ownership of ships. (2013) Min Shen Zi No. 1946 (SPC) (Retrial).

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actually delivered to the buyer and the seller still controlled and operated the ship under a charterparty concluded with the buyer. The SPC found that the retrial applicant buyer failed to prove the actual delivery of the ship, and therefore denied the transfer of the ownership to the retrial applicant. It seems that the transfer of ownership is confirmed when the seller finally delivers the ship to the buyer, when the parties completed the performance of the charterparty, although it was not a legal issue in this case. Ship registration 2.13 Ship registration gives a ship the nationality of the country where she registers. The nationality allows the ship to travel internationally under the national flag.28 Ship registration in China is regulated by the Regulations on the Registration of Ships 2014. Ships are allowed to sail under the national flag of the PRC after being duly registered and granted the nationality of the PRC.29 2.14 The ships that shall be registered in accordance with the provisions of the Regulations on the Registration of Ships 2014 include: (1) (2)

(3) (4)

ships owned by citizens of the PRC whose residences or principal places of business are located within the territory thereof; ships owned by enterprises with legal person status established under the laws of the PRC and whose principal places of business are located within the territory thereof, provided that, where foreign investment is involved, the proportion of registered capital contributed by Chinese investors shall not be less than 50 per cent;30 service ships of the government of the PRC and ships owned by institutions with legal person status; and other ships whose registration is considered necessary by the competent authority of the PRC.31

2.15 A “ship” in the Regulations on the Registration of Ships 2014 means any selfpropelled or non-self-propelled vessel and any other mobile unit on water with the exception of lifeboats and life rafts equipped on board ships and boats or rafts of less than five metres in length.32 Not all ships that need to be registered in China are ships under the CMC 1992,33 but ships falling under the CMC 1992 shall be registered in China when they belong to any one of the four aforementioned categories. The registration of military ships, fishery ships and sports craft is not governed by the Regulations on the Registration of Ships 2014.34 Ships are allowed to sail under the national flag of the PRC only after being registered and granted the nationality of the PRC.35 In other words, no ship can sail under

28 For nationality of ships, see paras 2.21–2.24. 29 CMC 1992, art 5, para 1. 30 It can be inferred that such ships are not required to be registered in China if the proportion of the registered capital contributed by foreign investors is more than 50 per cent. 31 Regulations on the Registration of Ships 2014, art 2. 32 ibid, art 56, para 1. 33 For definition of ship in the CMC 1992, see para 2.2. 34 Regulations on the Registration of Ships 2014, art 1. 35 ibid, art 3.

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the national flag of the PRC without being registered according to the Regulations on the Registration of Ships 2014. As citizens of the PRC, ships registered in China may not have dual nationality. Therefore, a ship registered abroad must suspend or cancel the foreign registration so as to be granted Chinese nationality.36 Registration of ownership of ships 2.16 A shipowner applying for registration of the ownership of a ship should produce to the ship registration authority37 at the port of registry the documents adequately evidencing his legitimate identification, and submit the originals and copies of the documents evidencing the procurement of his ownership of the ship and the technical information thereof. The port where a ship is registered should be the port of registry of the ship.38 For the registration of ownership of a ship purchased, the following documents should be submitted: (1) seller’s invoice or sales contract and delivery document; (2) the document issued by the ship registration authority at the original port of registry certifying the deletion of the original ownership registration; and (3) the document evidencing that the ship is not under mortgage or that the mortgagees agree to the transfer of the mortgaged ship. For the registration of ownership of a newly-built ship, the contract of ship construction and the delivery document should be submitted. Meanwhile, for the registration of ownership of a ship under construction, the contract of ship construction should be submitted. For the registration of ownership of a ship built by oneself for one’s own use, a document evidencing the procurement of ownership should be submitted. For the registration of ownership of a ship procured through inheritance, donation, auction under legal process, or court judgment, a document with appropriate legal effect evidencing the ship’s ownership shall be submitted.39 2.17 The ship registration authority, having examined and verified the application for registration of ownership, and if the application meets the requirements of the Regulations on the Registration of Ships 2014, shall issue a certificate of registration of ship’s ownership and grant an official registration number within seven days of the date of receipt of the application to the shipowner.40 In the register of ships the following particulars are recorded: (1) (2) (3) (4) (5) (6)

Ship’s name and its call sign; Port of registry, official registration number and identification mark of the ship; Name and address of the shipowner and name of its legal representative; Way in which the ship’s ownership was procured and the date of procurement; Date on which the ship’s ownership was registered; Name of ship builder, and time and place of building;

36 ibid, art 4. 37 The competent authority in charge of registration of ships in China is Maritime Safety Administration of the PRC. 38 Regulations on the Registration of Ships 2014, art 9. The owner of a ship may choose a port closer to his residence or his principal place of business as the port of registry, but not allowed to choose two or more ports as the port of registry. 39 Regulations on the Registration of Ships 2014, art 13. 40 ibid, art 14. The ship registration authority shall inform the shipowner in writing of any non-compliance of his application with the Regulations within seven days after the date of receipt of the application.

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(7) Value of the ship, material of ship’s hull and ship’s main technical information; (8) Original name and port of registry of the ship and the date of deletion or suspension of its original registration; (9) Information about joint ownership if the ship is owned by two or more owners; (10) Name and address of bareboat charterer or ship operator, and name of its legal representative, in case the shipowner is not the one who operates or actually controls the ship; and (11) Information about the establishment of any mortgage.41 Amendment and cancellation of registration 2.18 In case of any amendment to the particulars of the ship registration,42 the shipowner must submit the relevant documents of ship registration and documents evidencing such amendment to the ship registration authority at the port of registry.43 In case of any change of joint ownership, the shipowners must also submit the certificate of registration of ship’s ownership and the documents evidencing such change to the ship registration authority at the port of registry.44 2.19 In case of transfer of ship’s ownership, the former shipowner must submit the certificate of ship’s ownership, certificate of ship’s nationality45 and other relevant documents to the ship registration authority at the port of registry. After the application is examined and verified, the ship registration authority at the port of registry will cancel the registration regarding ship’s ownership and other relevant registrations in the register of ships, withdraw the certificates of registration concerned, and issue a certificate of cancellation of ship’s registration to the shipowner. If the ship is sold overseas, the ship registration authority will issue a certificate to the effect that the ship’s nationality has been cancelled, or that the ship’s nationality will be cancelled when the ship is registered overseas.46 2.20 In case a ship is lost (including where the ship is recycled or has sunk) or is missing, the shipowner must, within three months after the date as the ship is lost or missing, submit the certificate of registration of ship’s ownership, certificate of ship’s nationality and the document evidencing that the ship has been lost or missing to the ship registration authority at the port of registry. After the application is examined and verified, the ship registration authority will cancel the ship’s registration in the registry of the ship, withdraw the certificates of registrations concerned, and issue a certificate of cancellation to the shipowner.47 Nationality of ships 2.21 Ships are allowed to sail under the national flag of the PRC after being registered, as required by law, and are granted the nationality of the PRC.48 The national flag

41 42 43 44 45 46 47 48

Regulations on the Registration of Ships 2014, art 14. For the particulars in the ship registry, see para 2.16. Regulations on the Registration of Ships 2014, art 35. ibid, art 37. For ship’s nationality, see paras 2.20–2.23. Regulations on the Registration of Ships 2014, art 39. ibid, art 40. CMC 1992, art 5, para 1.

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is important not only for navigation of ships on the high seas, but also for Chinese coastal carriage. With regards to cabotage, except as otherwise provided for by laws or administrative rules and regulations, maritime transport and towage services between ports of China may only be undertaken by ships flying the national flag of the PRC.49 Furthermore, no foreign ships may engage in maritime transport or towage services between the Chinese ports unless permitted by the competent authorities of transport and communications under the State Council of the PRC.50 2.22 Subject to its approval, the ship registration authority will issue the certificate of ship’s nationality to a ship registered under the Regulations on the Registration of Ships 2014. The validity period of the certificate of ship’s nationality is five years.51 The shipowner of a ship must, within one year prior to the expiration of the certificate of ship’s nationality, apply for the renewal of the certificate by submitting the certificate of ship’s nationality and the valid technical certificates from the ship registration authority at the port of registry.52 2.23 The ship registration authority may also issue a provisional certificate of ship’s nationality on application by a shipowner or bareboat charterer. The provisional certificate of ship’s nationality has the same legal effect as the certificate of ship’s nationality.53 The validity period of a provisional certificate of ship’s nationality does not generally exceed one year. For a ship bareboat chartered overseas, the validity period of the provisional certificate of ship’s nationality is determined according to the charter period, provided that it does not exceed a maximum of two years. Where the charter period exceeds two years, the charterer must renew the provision certificate of ship’s nationality within the period of validity by applying to the ship registration authority at the ship’s port of registry.54 2.24 The circumstances for where an application for a provisional certificate of ship’s nationality is appropriate include: (1)

(2)

(3)

for a newly built ship which is to be sold overseas, the shipowner should apply to the ship registration authority at the place of construction for a provisional certificate of ship’s nationality by submitting the document evidencing the procurement of ownership of the ship, and the valid technical certificate thereof; for a newly built ship purchased from overseas, the shipowner should apply to the local embassy or consulate of the PRC for a provisional certificate of ship’s nationality by submitting the document evidencing the procurement of ownership of the ship and its valid technical certificates; for a ship built in a place within the PRC other than its intended port of registry, if the shipowner needs a provisional certificate of ship’s nationality, they should apply for the certificate to the ship registration authority at the place of ship building by submitting the contract of ship construction, the delivery document and its valid technical certificates;

49 ibid, art 4, para 1. The restriction reflects the control of national security and economic lifeline. 50 ibid, art 4, para 2. The purpose to permit foreign ships to engage in coastal carriage when domestic carriage service becomes insufficient. 51 Regulations on the Registration of Ships 2014, art 16. 52 ibid, art 45. 53 ibid, art 19. 54 ibid, art 18.

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(4)

(5)

for a ship built overseas, the shipowner should apply to the local embassy or consulate of the PRC for a provisional certificate of ship’s nationality by submitting the contract of ship construction, the delivery document and the valid technical certificates of the ship; and for a ship bareboat chartered overseas, the bareboat charterer should apply to the ship registration authority for a provisional certificate of ship’s nationality by submitting the bareboat charterparty and the certificate issued by the ship registration authority at the former port of registry to the effect that the former nationality of the ship has been suspended or cancelled, or that the former nationality of the ship will be suspended or cancelled when the new registration takes effect.55

Ship mortgage 2.25 There is no definition of ship mortgage under Chinese law. The CMC 1992 provides the definition for the right of ship mortgage, which is the right of preferred compensation enjoyed by the mortgagee of that ship from the proceeds of an auction sale made in accordance with law when and where the mortgagor fails to pay his debt to the mortgagee secured by the mortgage of that ship.56 Although the condition to exercise the right of ship mortgage in the CMC 1992 is where the mortgagor fails to pay his debt, in practice, parties may agree in a ship mortgage contract that the mortgagee may exercise his right of ship mortgage based on conditions agreed in ship mortgage contract rather than the legal conditions in the CMC 1992, e.g. the mortgagor involved in a serious arbitration or litigation or the mortgagor faced financial difficulties that substantially affect his ability to pay debt. In judicial practice, when such contractual conditions are satisfied, the mortgagee is allowed to exercise his right of ship mortgage.57 2.26 From the concept of the right of ship mortgage in the CMC 1992, it can be seen that the mortgagor of ship mortgage is the debtor and the ship mortgage is designed as a security of the mortgagor’s debt only. This concept does not cater for other financial arrangements e.g. the establishment of ship mortgage for the security of debt of a third party rather than the mortgagor. Furthermore, in practice the auction sale of mortgaged ship is usually in reference to the judicial sale by auction organised by the Chinese maritime courts in accordance with the SMPL 1999. It is unclear whether a ship mortgage can be enforced under the commercial sale by auction.58 The mortgage on a ship may be realised by the auction sale of a ship. However, after the auction sale, any right of ship mortgage cannot be enforced. In other words, the ship mortgagee is not entitled to exercise the mortgage on a ship when the ownership has been transferred to a third party by auction sale.59

55 ibid, art 17. 56 CMC 1992, art 11. 57 China Construction Bank Zhoushan Chengguan Branch v Zhoushan Dechang Trading Company (2001) Zhe Jing Er Zhong Zi No. 85 (Zhejiang High People’s Court) (CA). 58 The commercial sale by auction shall be governed by the Auction Law of the PRC 2004, as amended in 2015. 59 BCEN-EURO Bank v Ferta Trade Ltd SA (2005) Jin Hai Fa Shang Chu Zi No. 401; (2006) Jin Gao Min Si Zhong Zi No. 95 (Tianjin High People’s Court) (CA).

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SUBSTANTIVE MARITIME LAW

Establishment of ship mortgage 2.27 A ship mortgage must be established by a contract in writing60 and registered with the ship registration authority jointly by the mortgagee and the mortgagor. No mortgage may act against a third party unless it is registered.61 A ship mortgage can be established on a ship with joint ownership. Unless otherwise agreed upon among the joint owners, the establishment of a mortgage of a ship is subject to the agreement of those joint owners who have more than two-thirds of the shares thereof. The mortgage established by the joint owners of a ship is not affected by virtue of the division of ownership.62 Once a mortgage is established on a ship, the ownership of the mortgaged ship may not be transferred without the consent of the mortgagee.63 Where the mortgagee has transferred all or part of his right to the debt secured by the mortgaged ship to another person, the mortgage will be transferred accordingly.64 2.28 For security purposes, the mortgaged ship is to be insured by the mortgagor unless the contract of mortgage provides otherwise. Where a ship is not insured, the mortgagee has the right to place the ship under insurance coverage and the mortgagor must then pay for the premium.65 Any mortgages on the ship are extinguished when the mortgaged ship is lost. With respect to the compensation paid from the insurance coverage on account of the loss of the ship, the mortgagee is entitled to enjoy priority in compensation over other creditors.66 The mortgagee must exercise his mortgage interest within the limitation provided for action of the principal claim; if he fails to do so, the court will not provide protection in this respect.67 2.29 Two or more mortgages may be established on the same ship. The ranking of the mortgages is determined according to the order of the respective registrations. Thus, where two or more mortgages are established, the mortgagees will be compensated out of the proceeds of the auction sale of the ship in the order of registration of their respective mortgages. The mortgages registered on the same date rank equally for compensation.68 For purposes of compensation and enforcement of maritime claims, a maritime lien has priority over a possessory lien, and a possessory lien has priority over ship mortgage.69 2.30 Although ships under construction are not “real” ships, at least not as conceptually defined in the CMC 1992 or the Regulations on the Registration of Ships 2014, a ship mortgage can be established on ships under construction. The purpose of a ship mortgage over a ship under construction is to encourage the development of ship finance, which also acts as a broad stimulus on the shipping industry in China. The concept of the right of ship

60 CMC 1992, art 12, para 2. 61 ibid, art 13, para 1. 62 ibid, art 16. 63 ibid, art 17. 64 ibid, art 18. 65 ibid, art 15. 66 ibid, art 20. 67 Property Law 2007, art 202. 68 CMC 1992, art 9. 69 CMC 1992, art 25, para 1. The possessory lien in the CMC 1992 means the right of the ship builder or repairer to secure the building or repairing cost of the ship by means of detaining the ship in his possession when the other party to the contract fails in the performance thereof. The possessory lien shall be extinguished when the ship builder or repairer no longer possesses the ship he has built or repaired.

16

SHIPS

mortgage under the CMC 1992 provides that the mortgagor is the owner of the mortgaged ship. However, the mortgagor of a ship under construction may be the shipowner or the builder, depending on the agreement between them. If the ownership of the ship under construction belongs to the shipowner when the mortgage is established, then the shipowner should be the mortgagor. Conversely, the builder may in other circumstances set up a ship mortgage on a ship under construction. 70

Registration of ship mortgage 2.31 Where a mortgage is established with respect to a ship71 of 20 tons gross tonnage or more,72 the mortgagee and the mortgagor should apply to the ship registration authority at the ship’s port of registry for the registration of ship mortgage by submitting the following documents: (1) written application signed by the mortgagee and the mortgagor; (2) certificate of ship’s ownership or contract of ship building; and (3) contract of ship mortgage.73 Where there are other mortgages established on the ship, the relevant certificates must also be submitted. Where a mortgage is established on a jointly-owned ship, the joint owners should, in addition, submit a document evidencing the agreement by the joint owners holding more than two-thirds or contracted proportion of shares thereof.74 2.32 After examination and verification of the application for compliance with the Regulations on the Registration of Ships 2014, the ship registration authority will, within seven days after the date of receipt of the application, record matters regarding the mortgagee, the mortgagor and the ship mortgage as well as the date of mortgage registration in the register of ships and the certificate of ship’s ownership. The ship registration authority will then issue a certificate of registration of ship mortgage to the mortgagee.75 2.33 Where two or more mortgages are established on the same ship, the ship registration authority registers the mortgages in sequence based on the dates on which the applications were registered, and indicates the dates of registration in the register of ships. The date on which the application is registered is the date of registration. Where two or more applications are made on the same day, the dates of registration are the same.76 2.34 Mortgages of ships under construction are registered with the ship registration authority. For registration of mortgages of ships under construction, the building contract of the ship should be submitted to the ship registration authority.77 The Maritime Safety Administration of the PRC has also issued the Procedures for Ship Registration 2015.78 According to these procedures, the application for mortgage of a ship under construction should be submitted to the ship registration authority at the place where the ship is built by both the mortgagor and mortgagee.79 For a ship mortgage of a ship under construction,

70 71 72 73 74 75 76 77 78 79

See para 2.25. For definition of ship under the Regulations on the Registration of Ships 2014, see para 2.14. For ship mortgage on a ship of less 20 tons gross tonnage, the Guaranty Law 1995 shall apply. Regulations on the Registration of Ships 2014, art 20, para 1. ibid, art 20, paras 1 and 2. ibid, art 21. ibid, art 24. CMC 1992, art 14. See also article 20 of the Regulations on the Registration of Ships 2014. Hai Chuan Bo (2015) No. 9, Ministry of Transport of the PRC. Procedures for Vessel Registration 2015, art 16.

17

SUBSTANTIVE MARITIME LAW

before the application, the ship should be under construction and at least one of the sections should have been completed if the ship is built in sections, or the ship should be under construction and the keel of the ship have been laid down if the ship is built by monolithic construction.80 2.35 Information about the registration of mortgage of ships is accessible to the public for enquiry. The main items for the registration of ship mortgage include: (1) name or designation and address of the mortgagee and the name or designation and address of the mortgagor of the ship; (2) name and nationality of the mortgaged ship and the authorities that issued the certificate of ownership and the certificate number; and (3) the amount of debt secured, the interest rate and the period for the repayment of debt.81 2.36 In the case of a mortgage transfer, the mortgagee and the transferee should apply to the ship registration authority at the ship’s port of registry for registration by submitting the contract of ship mortgage transfer. The mortgagee should notify the mortgagor of the mortgage transfer prior to its registration. Where the application has been examined and verified to be in compliance with the requirements of these Regulations, the ship registration authority will record the transferee as the mortgagee in the register of ships and the certificate of registration of ship’s ownership, issue a certificate of registration of ship’s mortgage to the transferee, and seal up the former certificate of registration of ship’s mortgage.82 2.37 Where the contract of ship’s mortgage is changed, the mortgagee and the mortgagor should submit the certificate of registration of ship ownership, the certificate of registration of ship mortgage and the documents evidencing such change to the ship registration authority. After the application has been examined and verified to be in compliance with the requirements of the Regulations on the Registration of Ships 2014, the ship registration authority at the port of registry will indicate the change of the mortgage contract in the certificate of registration of ship’s ownership, the certificate of registration of ship mortgage and the registry of ships.83 2.38 Where a contract of mortgage is terminated, the mortgagee and the mortgagor should submit the certificate of registration of ship’s ownership, certificate of registration of ship mortgage and the document signed by the mortgagee evidencing the termination of the mortgage contract to the ship registration authority at the port of registry. After the application has been examined and verified to be in compliance with the requirements of the Regulations on the Registration of Ships 2014, the ship registration authority at the port of registry will cancel the registration of the ship mortgage in the certificate of ship’s ownership and the register of ships.84 2.39 Ships under construction can be used for ship mortgages. Under the Procedures for the Ship Registration 2015,85 the mortgage of ships of more than 20 tons gross tonnage shall be registered. Where a mortgage over a ship of more than 20 tons gross tonnage under construction is created,86 the mortgagor and the mortgagee should go through registration

80 ibid, art 62. 81 Regulations on the Registration of Ships 2014, art 22. It is the same as art 13, para 2 of the CMC 1992. 82 ibid, art 23. 83 ibid, art 38. 84 ibid, art 41. 85 No. 9 [2015] of the Maritime Safety Administration of the PRC. 86 It seems that there is no registration requirement for the mortgage over a ship of less than 20 tons gross tonnage under construction.

18

SHIPS

of mortgage at the ship registration authority at the place where the domicile of the shipbuilding enterprise is located.87 If a ship under construction that is taken as property under mortgage is built through the hull-block construction method, at least one block must have been completed and the construction must be ongoing; if the ship is built through the integral shipbuilding method, the keel must have been laid and the construction must be ongoing.88 Registration of bareboat charter 2.40 Not all bareboat charters need to be registered in China.89 According to the Regulations on the Registration of Ships 2014, the shipowner and the charterer should apply for the registration of bareboat charter in the following circumstances; where: (1) (2) (3)

a ship of Chinese nationality is bareboat chartered to a Chinese enterprise; a ship of foreign nationality is bareboat chartered to a Chinese enterprise; or a ship of Chinese nationality is bareboat chartered overseas.90

Therefore, all ships of Chinese nationality bareboat chartered must be registered in China irrespective of the identity of the charterers. For ships of foreign nationality, only those bareboat chartered to Chinese enterprises need to be registered. In other words, foreign enterprises do not need to register their bareboat charters if the ships bareboat chartered are of foreign nationality. It seems that a Chinese citizen does not need to register his/her bareboat charters regardless of the nationality of the chartered ships. However, individuals may still voluntarily register their bareboat charterers as a matter of caution, because no bareboat charterer may act against a third party unless registered.91 2.41 Where a ship is chartered within the territory of China, the shipowner and the charterer should, prior to the commencement of the charter, apply to the ship registration authority at the ship’s port of registry for the registration of the bareboat charter by submitting the certificate of registration of ship’s ownership, the certificate of ship’s nationality and the original and the copy of the bareboat charter. After the application has been examined and verified to be in compliance with the requirements of the Regulations on the Registration of Ships 2014, the ship registration authority at the port of registry will record the relevant matters of the bareboat charter in the certificate of registration of ship’s ownership and the register of ships respectively, and issue the certificate of registration of bareboat charter to the shipowner and the charterer.92 2.42 Where a ship is bareboat chartered overseas, the shipowner should apply to the ship registration authority at the port of registry for registration of the bareboat charter. After the application has been examined and verified to be in compliance with the requirements of the Regulations on the Registration of Ships 2014, the ship registration authority will

87 88 89 90 91 92

Procedures for the Ship Registration 2015, art 61. ibid, art 62. For the definition of bareboat charter in the CMC 1992, see para 4.36. Regulations on the Registration of Ships 2014, art 25. ibid, art 6. ibid, art 26.

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SUBSTANTIVE MARITIME LAW

suspend or delete the nationality of the ship93 and issue to the applicant the certificate of registration of bareboat charter in duplicate.94 2.43 Where a ship is bareboat chartered from overseas, the charterer should apply, prior to the commencement of the charter, to the ship registration authority for registration of the bareboat charter by submitting the following documents: (1) (2) (3)

the original and copy of the bareboat charter; ship’s valid technical certificates issued by a statutory organisation for ship survey; and a certificate issued by the ship registration authority of the former port of registry to the effect that the former nationality of the ship has been suspended or deleted, or that the former nationality of the ship will be suspended or deleted when the new registration is effected.95

After the application has been examined and verified to be in compliance with the requirements of these Regulations, the ship registration authority will issue the certificate of registration of bareboat charter and the provisional certificate of ship’s nationality,96 and record the original country of registration in the register of ships.97 2.44 Where a bareboat charter period is to be extended, the shipowner and the charterer should, within 15 days prior to the expiration of the charter period, apply to the ship registration authority for the renewal of the bareboat charter registration by submitting originals and copies of the certificate of registration of bareboat charter and the contract for extension.98 During the period of the bareboat charter, the charterer should not apply for the registration of subletting the charter unless agreed by the shipowner in writing.99 2.45 Upon the expiration or the termination of a bareboat charterparty, the shipowner should within 15 days after the date of such expiration or termination, go through the formalities with the ship registration authority at the port of registry for registration of deletion of the bareboat charter by submitting the certificate of registration of ship’s ownership and the bareboat charterparty or the document evidencing such termination. Where the ship is bareboat chartered overseas, the shipowner should in addition submit a certificate issued by the ship registration authority at the charterer’s place of business to the effect that the ship’s nationality has been deleted or that the ship’s nationality will be deleted when the ship is registered anew. The ship registration authority at the port of registry, having approved the application, will delete the registration of bareboat charter in the certificate of registration of the ship’s ownership and the register of ships, and return to the shipowner the original certificate of ship’s nationality.100

93 The ship registration authority at the port of registry shall seal up the original certificate of ship’s nationality and issue a certificate of suspension or deletion of the ship’s nationality. See art 42 of the Regulations on the Registration of Ships 2014. 94 ibid, art 27. 95 ibid, art 28, para 1. 96 For the provisional certificate of ship’s nationality, see paras 2.23–2.24. 97 Regulations on the Registration of Ships 2014, art 28, para 2. 98 ibid, art 29. 99 ibid, art 30. 100 ibid, art 43.

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SHIPS

2.46 Where a ship is bareboat chartered, the charterer should, within 15 days after the expiration or termination of the bareboat charterparty, go through the formalities with the ship registration authority at the port of registry for registration of deletion by submitting the bareboat charterparty and the document evidencing such termination. Where the ship is bareboat chartered from overseas, the provisional certificate of nationality should be submitted as well. The ship registration authority at the port of registry, having approved the application, will then delete the ship’s registration of bareboat charter in the register of ships, withdraw the provisional certificate of nationality, and issue a certificate of deletion of the bareboat charter and a certificate of deletion of the provisional certificate of the ship’s nationality.101

101 ibid, art 44.

21

CHAPTER 3

Master and seamen

3.1 The CMC 1992 provides for the general rules of seamen and the special rules pertaining to the master. The Regulations of the PRC on Seamen 2007,1 as amended in 2013 and 2014 (the “Regulations on Seamen 2014”) provide detailed rules regarding the registration, qualification, training and occupational security of seamen as well as the provision of seaman services within the territory of the PRC.2 In 2015, the National People’s Congress Standing Committee of the PRC (the “NPCSC”) ratified the 2006 Maritime Labour Convention (the “MLC 2006”), which aims at protecting the rights and interests of maritime workers. The relevant laws regarding seamen in China need to be improved or amended according to the MLC 2006. Master 3.2 In the Regulations on Seamen 2014, a “master” means a person who has obtained master’s qualifications in accordance with the provisions of the Regulations on Seamen 2014 and is responsible for managing and commanding a ship.3 According to the CMC 1992, the master is responsible for the management and navigation of the ship.4 The duty of the master in the management and navigation of the ship is not absolved even with the presence of a pilot piloting the ship.5 The master should also take necessary measures to protect the ship and all persons on board, the documents, postal matters, the goods as well as other property carried.6 For the protection of persons on board, the Regulations on Seamen 2014 specify that when managing and commanding a ship, the master must ensure the safety of persons on board and those temporarily embarked on board.7 The master if negligent in protecting the safety of seamen on board is liable in tort for the injury to or death of any seamen.8 The master’s liability will not be discharged even if there is a certain fault of the injured seaman.9 1 Decree No. 494 of the State Council of the PRC 2007. 2 Seamen on military vessels shall be administered in accordance with the relevant provisions of the State and the armed forces. Seamen serving on fishing vessels shall be administered in accordance with the relevant provisions of the competent fisheries administration department of the State Council. See art 71 of the Regulations on Seamen 2014. 3 Regulations on Seamen 2014, art 4, para 2. 4 CMC 1992, art 35, para 1. 5 ibid, art 39. 6 ibid, art 35, para 3. 7 Regulations on Seamen 2014, art 22, para 7. 8 Jiang Hedi v Le Hengguo (2002) Yong Hai Shi Chu Zi No. 18 (Ningbo Maritime Court). 9 Liu Lin v Li Yingyuan and Huang Jianbin (2011) Guang Hai Fa Chu Zi No. 113 (Guangzhou Maritime Court).

22

MASTER AND SEAMEN

3.3 The persons temporarily embarked on board include any person sent by charterers on board for loading/discharge operations. In Cui Dehai v Jinyang Shipping Company,10 an employee of the charterer was sent on board and injured in an accident during the discharge operation. The Tianjin High People’s Court held that the master had a duty to ensure the safety of the employee on board and the shipowner had the burden of proof that the master had exercised due diligence in the management of the ship to prevent the occurrence of the accident. Persons temporarily embarked on board also include repairmen who are on board the vessel to conduct repair work. In The Shipping Corporation of India Co Ltd and United India Insurance Company v Qingdao Beihai Shipbuilding Heavy Industry Co Ltd,11 the ship repairmen on board were injured when an accident happened to the ship in the shipyard. The Shandong High People’s Court held that the master’s duty of management of the ship was not relieved on the basis of the ship repair. The repairer’s duties were to repair certain parts of the ship under the supervision of the master. When the master was on board, it was not the repairmen’s duty but the master’s responsibility to keep the ship safe and ensure the safety of the repairmen. The master is free of responsibility only when he is not on board and if the repairmen control and operate the ship. 3.4 To comply with these obligations, orders given by the master within the scope of his functions and powers must be carried out by other members of crew, passengers and all other persons on board.12 The Regulations on Seamen 2014 repeat that all persons on board are bound to carry out the orders delivered by the master within the scope of his functions and powers. In addition, the officers should organise their subordinate seamen to carry out the master’s orders and supervise the performance of their functions and duties.13 Should death occur to the master, or should the master be unable to perform his duties for whatever reason, the deck officer with the highest rank shall then act as the master; before the ship sails from its next port of call, the shipowner should appoint a new master to take command.14 3.5 The Regulations on Seamen 2014 provide detailed requirements for the master’s obligation to manage and navigate a ship. When managing and commanding a ship, the master must meet the following requirements: (1) (2) (3) (4)

10 11 12 13 14

ensuring that the ship and seamen carries all certificates, documents and other relevant navigational materials to meet statutory requirements; formulating the emergency plan and ensuring its effective implementation; ensuring the seaworthiness of the ship and the competency of the seamen at the commencement of the voyage, ensuring the minimum safe manning for the ship according to the relevant law, and securing the normal watchkeeping of the ship; implementing the maritime administration’s instructions on waterborne traffic safety and prevention and control of pollution from ships, and submitting an accident report to the maritime administration where the ship is involved in a waterborne traffic accident or pollution accident;

(2003) Jin Gao Min Si Zhong Zi No. 87 (Tianjin High People’s Court) (CA). (2008) Lu Min Si Zhong Zi No. 95 (Shandong High People’s Court) (CA). CMC 1992, art 35, para 2. Regulations on Seamen 2014, art 21. CMC 1992, art 40.

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SUBSTANTIVE MARITIME LAW

(5) (6)

(7) (8) (9)

conducting routine training and examination of seamen on the ship, and faithfully recording their service experience and performance in their Seaman’s Identity Documents; being on duty on the bridge or, if necessary, directly commanding the ship, when the ship enters or leaves the port, berths or unberths, or passes heavy traffic zones or dangerous navigational zones, or encounters inclement weather or sea conditions, or suffers a waterborne traffic accident, ship pollution accident, ship security incident or other emergency situations; ensuring the safety of persons on board and those temporarily embarked on board; organising the seamen and other persons on board to render rescue operations where the ship encounters an accident threatening the safety of the lives and property on board; and when the ship is abandoned, taking all measures first to organise the passengers to safely leave the ship, then arranging for seamen to leave, and himself as the master, being the last person to leave and, before leaving the ship, directing seamen to rescue the deck log book, engine log book, oil record book, radio log book, the charts, documents and papers used in the voyage, as well as valuables, postal matter and cash money as far as possible.15

3.6 The Regulations on Seamen 2014 emphasise that the master has the power to make independent decisions with regard to the waterborne safety of lives and property, ship security and prevention and control of pollution, and shall assume the ultimate responsibility for such matters. In performing his duties, the master may exercise the following powers: (1) (2) (3) (4) (5) (6)

to determine the voyage plan, or refuse to sail or discontinue the voyage where the ship fails to meet the requirements for safe navigation; to refuse to carry out illegal instructions by the employer of the seamen or the owner of the ship, or instructions that may threaten the safety of lives, property and the ship or cause pollution to the waters; to correct or stop the pilot’s instruction in a timely manner or, if necessary, to ask for a change of the pilot, when finding the pilot’s operating instructions may threaten safe navigation or pollute the waters; to decide to evacuate the ship when the ship is in distress and the safety of lives on board is seriously threatened; to decide to abandon the ship if the sinking or destruction of the ship is inevitable, however, he must first report such matter to the owner of the ship for permission, except in an emergency;16 and to order incompetent seamen to leave their posts.17

3.7 To ensure the safety of the ship and all persons on board, the master is entitled to confine or take other necessary measures against those who have committed crimes or violated laws or regulations on board, and to guard against their concealment, destruction or forging of evidence. The master, having taken those actions, must make a written report

15 Regulations on Seamen 2014, art 22. The 9th requirement is the same as art 38, para 2 of the CMC 1992. 16 It is the same as art 38, para 1 of the CMC 1992. 17 Regulations on Seamen 2014, art 24.

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MASTER AND SEAMEN

of the case, which shall bear the signature of the master himself and those of two or more others on board, and shall be handed over, together with the offender, to the authorities concerned for disposition.18 3.8 The master should make entries in the log book of any occurrence of birth or death on board and should issue a certificate to that effect in the presence of two witnesses. The death certificate shall be attached with a list of personal belongings of the deceased, and attestation should be given by the master to the will, if any, of the deceased. Both the death certificate and the will should be taken into safe keeping by the master and handed over to the family members of the deceased or the organisations concerned.19 3.9 After a collision, the master of each of the ships in collision is bound, so far as he can do so without serious danger to his ship and persons on board, to render assistance to the other ship and persons on board. The master of each of the ships in collision is likewise bound so far as possible to make known to the other ship the name of his ship, its port of registry, port of departure and port of destination.20 Seamen 3.10 The term “seamen” in the CMC 1992 means the entire complement of the ship, including the master.21 The term “seaman” in the Regulations on Seamen 2014 means a person who has obtained the Seaman’s Identity Document after being registered in accordance with the provisions of the Regulations on Seamen 2014 including the master, officer and rating (who is any ordinary seaman other than master or officer).22 As words are not pluralised in Chinese, the terms for “seamen” and “seaman” are the same word. The meaning of seaman in the Regulations on Seamen 2014 emphasises the requirements for the registration and possession of the Seaman’s Identity Document.23 3.11 In the Regulations on Seamen 2014, the term “officer” means a person who has obtained the relevant qualifications in accordance with the provisions of the Regulations on Seamen 2014, including chief officer, second officer, third officer, chief engineer, second engineer, third engineer, fourth engineer, communication personnel, and other senior technical and administrative personnel serving on board. The term “rating” means seamen other than the master and officers.24 During the voyage, the master and officers may not resign, leave or suspend their duties without permission.25 The master and officers of a ship with Chinese nationality26 should be recruited from among Chinese seamen. In case of an actual need for the posts of officers to be assumed by foreign seamen, the matter shall be reported to the maritime administration27 for approval.28

18 19 20 21 22 23 24 25 26 27 28

CMC 1992, art 36. ibid, art 37. ibid, art 166. ibid, art 31. Regulations on Seamen 2014, art 4, para 1. For definition of Identity Document, see para 3.14. Regulations on Seamen 2014, art 4, paras 2 and 3. ibid, art 23. For ship’s nationality, see paras 2.21–2.14. The authority is the Maritime Safety Administration of the PRC. Regulations on Seamen 2014, art 12.

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SUBSTANTIVE MARITIME LAW

3.12 According to the Regulations on Seamen 2014, when serving on board, a seaman must meet the following requirements: (1) (2) (3)

(4) (5) (6) (7)

carry the valid documents and certificates as specified in the Regulations on Seamen 2014; keep abreast of the seaworthiness conditions of the ship, security conditions of the trade route, as well as the necessary information about meteorological and sea conditions in the relevant trade zone; abide by the management systems and watchkeeping provisions of the ship, operate, control and manage the ship according to the rules on waterborne traffic safety and prevention and control of pollution from ships, faithfully complete the relevant statutory documents of the ship, and not conceal, tamper with or destroy the relevant statutory certificates and documents of the ship; participate in emergency drills and exercises of the ship and implement emergency precautions as required by emergency management of the ship; abide by the reporting system of the ship and submit a timely report when dangers, accidents, security incidents or other circumstances affecting the navigation safety are found or take place; make all efforts to rescue people in danger if it would impose no serious danger to himself; and be prohibited from carrying passengers and cargo on the ship for private purposes or carry contraband.29

Registration and qualifications of seamen Registration 3.13 To apply for seaman registration, the following requirements must be met: (1) (2) (3)

be not less than 18 years old (or not less than 16 years old for those who are on internship or probation on board) but not more than 60 years old; meet the medical fitness standards for seamen; and have received basic safety training for seamen and passed the examination held by the maritime administration.

Those who apply for registration as seamen serving on ships of international voyages must in addition pass the professional foreign language examination for seamen.30 3.14 The maritime administration should, within ten days from the date of receipt of an application for seaman registration, make a decision whether or not to register the applicant. If the requirements prescribed in the Regulations on Seamen 2014 are met, it should register the applicant and issue the Seaman’s Identity Document. However, it will not register the applicant if five years have not elapsed since the revocation of his Seaman’s Identity Document in accordance with the law.31 The Seaman’s Identity Document

29 ibid, art 20. 30 ibid, art 5. 31 ibid, art 6, para 2.

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MASTER AND SEAMEN

is the occupational identity certificate of a seaman. It indicates the seaman’s name, address, contact person(s), contact methods and other relevant information. If any item of the Seaman’s Identity Document changes, the seaman must go through certain formalities at the relevant maritime administration.32 The maritime administration will cancel the seaman’s registration and make it known to the public if a seaman is found in one of the following circumstances: (1) (2) (3) (4)

to be dead or being declared missing; to have lost his capacity for civil conduct; that his Seaman’s Identity Document has been revoked in accordance with law; or he has applied for cancellation of registration on his own volition.33

Competency certificate 3.15 A seaman performing navigational or engineering watchkeeping duties must obtain a relevant Seaman’s Competency Certificate. To apply for the Seaman’s Competency Certificate, he must have met the following requirements: (1) (2) (3) (4)

obtained a Seaman’s Identity Document; met the medical fitness requirements for the seaman’s post; received the relevant competency training and special training; and have the corresponding qualifications for the seaman’s post and a good performance and safety record.34

To apply for the Seaman’s Competency Certificate, a written application should be submitted to the maritime administration, accompanied with the materials certifying that the applicant meets the aforementioned requirements. Where the applicant meets the requirements and has passed the competency examination held by the maritime administration, the maritime administration will issue a relevant Competency Certificate to him.35 The Seaman’s Competency Certificate indicates the items such as the trade zone (route), type and class of the ship, his position and the validity period of the Certificate, which will match the seaman’s competency. The validity period of the Seaman’s Competency Certificate may not exceed five years.36 Seaman’s passport 3.16 A Chinese seaman who enters and leaves China as a seaman or serves on a ship flying the flag of a foreign country should apply for a Seaman’s Passport of the PRC at the maritime administration. To apply for a Seaman’s Passport, the following requirements must be met: (1)

32 33 34 35 36

be a citizen of the People’s Republic of China;

ibid, art 7. ibid, art 8. ibid, art 9. ibid, art 10. ibid, art 11.

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(2) (3)

hold the Seaman’s Competency Certificate for serving on ships of international voyages or undertaking a definite seafaring mission abroad; and not be prohibited from leaving the country by any laws or administrative regulations.37

The maritime administration will, within seven days from the date of receipt of the application, make a decision to approve or not to approve such application and, if it decides to approve the application, issue a Seaman’s Passport to the applicant; or, if it decides not to approve, it will notify the applicant in writing and give reasons.38 3.17 The purpose of the Seaman’s Passport of the PRC is to serve as a document for a Chinese seaman on a mission abroad to prove his identity as a citizen of the PRC. Where the Seaman’s Passport is lost, stolen or damaged, an application for issuance of a new passport can be made to the maritime administration. Where the seaman is abroad, he may apply for such issuance to the embassy or consulate of the PRC. The validity period of the Seaman’s Passport does not exceed five years.39 A seaman holding the Seaman’s Passport of the PRC enjoys the requisite rights, and is entitled to pass freely in other countries and regions in accordance with local laws, relevant international treaties, and the maritime or shipping agreements signed between the PRC and the relevant countries.40 Guarantee of profession for seamen Benefits 3.18 Seamen and their employers are covered by work injury insurance, medical insurance, old age insurance, unemployment insurance as well as other social insurance in accordance with the relevant laws and provisions of the PRC, and they should pay premiums on time and in full in accordance with law. The seamen’s employers should buy special life and health insurance and provide relevant protective measures for seamen who serve on ships traveling to or through war zones or epidemic areas or ships carrying toxic or hazardous substances.41 3.19 The living and working areas of seamen on board shall conform to the requirements for a suitable living environment, safe operations and the protection of seamen as prescribed by the national criteria for ship survey. The seamen’s employers should provide seamen with the necessary articles for daily use, occupational protective articles and medical supplies, establish the health records for seamen, and carry out regular medical examinations for seamen to prevent and control for occupational injuries or diseases. The employer of seamen should provide timely medical treatment for sick or injured seamen serving on board and, if a seaman is found to be missing or dead, should make proper subsequent arrangements in a timely manner.42

37 38 39 40 41 42

ibid, art 15. ibid, art 16. ibid, art 17. ibid, art 18. ibid, art 25. ibid, art 26.

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MASTER AND SEAMEN

3.20 Employers of seamen should sign labour contracts with the seamen in accordance with the laws and regulations on labour contracts as well as the international treaties regarding seamen’s labour and social security that the PRC has concluded or acceded to. There are three types of employment contracts for seamen in China. The first is the employment contract between a shipowner and seamen, which is a formal employment contract. The second is a temporary employment contract between a shipowner and seamen, which is a kind of service contract. The last is a tripartite contract between a shipowner, seamen and an employment agency under which the seamen have an employment contract with the agency and are sent to the shipowner for work on board. The relevant laws and regulations governing the first kind of employment contract include the Labour Law 1994, the Labour Contract Law 2012 and the Regulations on Seamen 2014.43 The laws governing the latter two kinds of employment contract are the General Principle of the Civil Law and the Contract Law.44 The relevant international treaty governing such employment contracts is the Maritime Labour Convention 2006.45 An employer may not recruit a person who has not obtained the certificates prescribed by the Regulations on Seamen 2014 to work on board a vessel.46 Repatriation 3.21 When serving on board, a seaman may ask for repatriation in any of the following circumstances: (1) (2) (3) (4) (5)

the seaman’s labour contract expires or is terminated in accordance with law; the seaman is incompetent to perform the duties of his post on board; the ship is lost; the ship travels to a war zone or an epidemic area without consent of the seaman; or the employer of seamen or the owner of the ship is unable to continue to fulfil its legal or contractual obligations for its seamen by reason of bankruptcy, sale of the ship, change in ship’s registration or other reasons.47

3.22 A seaman may choose the place of repatriation from among the following places: (1) (2) (3)

the place where he is recruited or he first assumes his post on board; the place of residence or registered permanent residence of the seaman, or the ship’s registry; or a place agreed upon by the seaman and the employer of seamen or the owner of the ship.48

The employer of seamen must pay for the cost of repatriation of its seamen, including the seamen’s traveling expenses, reasonable expenses for accommodation, food and medical 43 Qiao Zhenshan v Dalian Tianmiao International Shipping Agency Co Ltd (2010) Liao Min San Zhong Zi No. 99 (Liaoning High People’s Court) (CA). 44 Cheng Songpeng v Zhang Jianfei (2011) Yong Hai Fa Zhou Shang Chu Zi No. 98 (Ningbo Maritime Court). 45 For discussion of the MLC 2006, see paras 3.23–3.25. 46 Regulations on Seamen 2014, art 27. 47 ibid, art 31. 48 ibid, art 32.

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treatment during the repatriation travel time, and expenses for transportation of 30 kilograms of the seamen’s luggage.49 Maritime Labour Convention 2006 3.23 The Maritime Labour Convention 2006 (the MLC 2006), passed by the International Labour Organization in 2006, came into force on 20 August 2013.50 It is a comprehensive international labour convention. The MLC 2006 aims to ensure comprehensive worldwide protection of the rights of seafarers and to establish a level playing field for countries and shipowners committed to providing decent working and living conditions for seafarers, protecting them from unfair competition on the part of substandard ships. The MLC 2006 was designed to be a global legal instrument that could act as the “fourth pillar” of the international regulatory regime for quality shipping, by complementing the key conventions of the International Maritime Organization (IMO), such as the International Convention for the Safety of Life at Sea, 1974, as amended (SOLAS), the International Convention on Standards of Training, Certification and Watchkeeping, 1978, as amended (STCW), and the International Convention for the Prevention of Pollution from Ships, 73/78 (MARPOL). 3.24 The MLC 2006 comprises three different but related parts: the articles, the regulations and the code. The articles and regulations set out the core rights and principles and the basic obligations of members ratifying the MLC 2006. The code contains the details for the implementation of the regulations. It comprises Part A (mandatory standards) and Part B (non-mandatory guidelines). The regulations and the code are organised into general areas under five titles: Title 1: Minimum requirements for seafarers to work on a ship Title 2: Conditions of employment Title 3: Accommodation, recreational facilities, food and catering Title 4: Health protection, medical care, welfare and social security protection Title 5: Compliance and enforcement The MLC 2006 has three underlying purposes: (a) to lay down, in its articles and regulations, a firm set of rights and principles; (b) to allow, through the code, a considerable degree of flexibility in the way members implement those rights and principles; and (c) to ensure, through Title 5, that the rights and principles are properly complied with and enforced. 3.25 China ratified the MLC 2006 on 29 August 2015. Meanwhile, the NPCSC stated that in accordance with Standard A4.5 of the MLC 2006, the applicable social insurances in the PRC including endowment insurance, medical insurance, work-related injury insurance, unemployment insurance and maternity insurance, and the MLC 2006 do not apply to the Hong Kong Special Administrative Region (SAR) and the Macao SAR for the time being. After ratification, China has been improving its relevant laws regarding maritime workers, and setting up a labour supervision and implementation mechanism so as to satisfy the requirements of the MLC 2006.

49 ibid, art 33. 50 Amendments of 2014 to the Maritime Labour Convention 2006 were approved by the International Labour Conference in 2014.

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CHAPTER 4

Charterparties

4.1 In Chapter 4 of the CMC 1992, “Contract of Carriage of Goods by Sea”, the voyage charter is considered as a type of special contract for the carriage of goods by sea.1 Although the time charter is considered as another kind of contract of carriage of goods by sea, it is not included in the same chapter along with the voyage charter in the CMC 1992. Time charters and bareboat charters are separately regulated in Chapter 6 of the CMC 1992. At common law, the voyage charter and the time charter are both considered as contracts of carriage of goods by sea. While the bareboat charter is a kind of lease contract, under common law, the general principles behind the time charter may sometimes be applied to bareboat charters.2 Practically speaking, the different categories of charterparties do not affect chartering practice. 4.2 Because the CMC 1992 does not provide specifically for the concept of a ship in the context of a charterparty, the general concept of a ship in the CMC 1992 applies. A “ship” as referred to in the CMC 1992, means sea-going ships and other mobile units, but does not include ships or craft used for military or public service purposes, nor small ships of less than 20 tons gross tonnage.3 Therefore, the provisions on charterparty including voyage charter, time charter and bareboat charter in the CMC 1992 apply only to charterparties for sea-going ships, while the Contract Law applies for inland water ships (albeit that there is no specified charterparty contract in the Contract Law).4 4.3 The CMC 1992 provides that maritime transport means the carriage of goods or passengers by sea, including sea–river and river–sea direct transport, and the provisions concerning contracts of carriage of goods by sea as contained in Chapter 4 are not applicable to the maritime transport of goods between ports within the PRC.5 Therefore, the provisions concerning the voyage charter in Chapter 4 of the CMC 1992 will not apply to the coastal carriage of goods in China,6 whereas there is no such limit of application for time charters and bareboat charters.

1 It is regulated in section 7 of Chapter 4 following the provisions of bill of lading in the CMC 1992. 2 See generally Sir Bernard Eder (ed), Scrutton on Charterparties and Bills of Lading (23rd edn, Sweet & Maxwell 2015). 3 CMC 1992, art 3. 4 Chongqing Changjiang Shipping Corp v Yichang Santong Shipping Co Ltd (2013) Min Ti Zi No. 84 (SPC) (Retrial). 5 CMC 1992, art 2. 6 The Contract Law 1999 and the General Principles of the Civil Law 1986, as amended in 2009 will apply to the voyage charters for coastal and inland water carriage of goods in China.

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Voyage charter 4.4 A voyage charterparty in the CMC 1992 is a charterparty under which the shipowner charters out and the charterer charters in, the whole or part of the ship’s space for the carriage by sea of the intended goods from one port to another and as part of the bargain, the charterer pays the agreed amount of freight.7 Voyage charters must be in writing. Telegrams, telexes and telefaxes have the effect of written documents.8 The Contract Law provides that the parties may, when making a contract, use written form, verbal form or any other form9 and “written form” means any form that renders the information contained in a contract capable of being reproduced in a tangible form such as a written agreement, a letter, or electronic text (including telegram, telex, facsimile, electronic data interchange and email).10 The Contract Law applies to the written form requirement for voyage charter, and electronic text, such as email can also be regarded as a contract in writing.11 Hence, where some voyage charters are fixed by exchange of emails through chartering brokers, this requirement is still satisfied. 4.5 In Chinese shipping practice, voyage charters are mainly based on standard forms such as the GENCON 1976. Such standard forms have been recognised in Chinese judicial practice.12 However, where parties generally agree to refer to the GENCON form but do not otherwise indicate a specific version of GENCON form, such agreement would not be recognised by Chinese courts.13 As a matter of Chinese business tradition, the formal contract, i.e. the voyage charter, needs to be signed by the representative of parties and sealed with the respective stamps of the parties. In practice, if a voyage charter has been signed but not sealed, the contract may still not be held void due to the lack of the stamp. Chinese courts may recognise it as a valid contract if the shipowner and charterers have actually performed the contract.14 In practice, shipowners may use the ship’s seal instead of the company seal to be affixed on the voyage charter. The Chinese courts recognise this practice and shipowners cannot deny the validity of voyage charters on the excuse of the use of the ship’s seal.15 It is also a kind of shipping practice that where parties to a voyage charter are Chinese companies, including companies from Hong Kong, Macau and Taiwan where Chinese is an official language, a bilingual voyage charter in both Chinese and English is concluded. The Contract Law provides that if a contract is made in two or more languages that are equally authentic as contracted, the words and sentences used in the different language texts shall be assumed to be identical in denotation. If the words and sentences used in different language texts contain discrepancies, they should be interpreted according to the purpose of

7 CMC 1992, art 92. 8 ibid, art 43. 9 Contract Law 1999, art 10. 10 ibid, art 11. 11 ibid, art 123. 12 New Dragon International Enterprise Co Ltd, HK v Suifenhe Longjiang Lianshang Import & Export Co Ltd (2003) Tong Shang98 (Wuhan Maritime Court). 13 Trans Power Co Ltd v Danzhou Yonghang Stainless Steel Co Ltd (2009) Hai Shang Chu Zi No. 7 (Haikou Maritime Court). 14 Shanghai Shiwei International Freight Forwarding Co Ltd v Jiangsu Yonglu Fertiliser Co Ltd (2010) Hu Hai Fa Shang Chu Zi No. 230 (Shanghai Maritime Court). 15 Qinzhou Port Xinan Ship Agency Co Ltd v Fuzhou Jinfan Shipping Co Ltd (2004) Gui Min Zi Zhong Zi No. 15 (Guangxi High People’s Court) (CA).

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the contract. However, in judicial practice Chinese courts do naturally prefer to construe contracts based on the Chinese version. 16

Compulsory provisions 4.6 The CMC 1992 provides that the provisions in article 47 and article 49 in Chapter 4 apply to the shipowner under a voyage charter.17 Article 47 provides for a seaworthiness obligation, that the carrier shall, before and at the beginning of the voyage, exercise due diligence to make the ship seaworthy, properly man, equip and supply the ship, and to make the holds, refrigerating and cool chambers and all other parts of the ship in which goods are carried, fit and safe for their reception, carriage and preservation. Meanwhile, article 49 provides for an obligation of non-deviation, that the carrier must carry the goods to the port of discharge on the agreed or customary or geographically direct route, save for any deviation for saving or attempting to save life or property at sea or any reasonable deviation that shall not be deemed to be an act of deviating from the provisions in article 49. It means that the CMC 1992 imposes compulsory obligations of seaworthiness and non-deviation on the shipowner, and the shipowner is consequently not allowed to exclude the seaworthiness obligation by use of an exemption clause or the non-deviation obligation by a liberty clause. 4.7 The standard of seaworthiness is a question of fact. If a ship has satisfied the basic requirements of seaworthiness, the charterer is not allowed to require a higher or different standard of seaworthiness. In Lin Shichang & Zhejiang Yushun Shipping Co Ltd v Jiangsu Shunhe Petrochemical Co Ltd,18 the shipowner chartered its ship to the charterer for carriage of fuel oil. The charterer was also the seller of the fuel oil who agreed to sell the goods to the buyer. It was agreed in the sale of goods contract that the buyer would not accept the ship for berthing and discharge of fuel oil until the the ship passed inspection. At the port of discharge, the ship did not pass the inspection of the buyer. The charterer then chartered a new ship and discharged the goods by barge. The shipowner claimed against the charterer for payment of demurrage. Meanwhile, the charterer counterclaimed against the shipowner for loss due to the charter of the barge. In the claim and counterclaim, the charterer’s main argument was that the ship involved was unseaworthy because she had failed to pass the buyer’s inspection. The Ningbo Maritime Court held that the shipowner had proved the seaworthiness of the ship by submitting relevant ship documents. As to the inspection of the buyer, it was a special requirement of ship from a third party and it should not be used as a reference to the standard of seaworthiness of the ship. This judgment was confirmed at appeal by the Zhejiang High People’s Court. 4.8 The CMC 1992 further provides that other provisions in Chapter 4 regarding the rights and obligations of the parties to the contract apply to the shipowner and the charterer under voyage charter only in the absence of relevant provisions or in the absence of provisions differing therefrom in the voyage charter.19 This means that parties to a voyage charter are free to agree their rights and obligations in the voyage charter except for the obligations 16 17 18 19

Contract Law 1999, art 124. CMC 1992, art 94, para 1. (2009) Zhe Hai Zhong Zi No. 34 (Zhejiang High People’s Court) (CA). CMC 1992, art 94.

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of seaworthiness and non-deviation. In ECO Shipping Co Ltd v Fuzhou Changxiong Ocean Fishery Co Ltd and others,20 the parties agreed for a clause of possessory lien on cargo in the voyage charter. The Xiamen Maritime Court held that the agreement of possessory lien was valid since it did not infringe any prohibition of law and therefore the provisions concerning the possessory lien in the CMC 1992 did not apply to the voyage charter.21 In Dalian Ouxiang Shipping Co Ltd v Dalian Jingbei Petroleum Chemical Industry Sales Co Ltd,22 the Shanghai High People’s Court held that a clause of measurement operation in a voyage charter was valid based on the principle of freedom of contract, because it did not infringe the compulsory obligations of seaworthiness and non-deviation of shipowners. In China Pingan Property Insurance Co Ltd Jiangsu Branch v CCCC International Shipping Corporation,23 the Shanghai Maritime Court confirmed the validity of the exemption clause from a standard form of voyage charter and the shipowner was therefore held not to be liable for the damage to the goods. This ruling was confirmed on appeal of the case by the Shanghai High People’s Court. 4.9 Conversely, the provisions of the CMC 1992 apply to a voyage charter if there is no specific relevant clause in the voyage charter. In China Pingan Property Insurance Co Ltd Qingdao Branch v Bright Sail (Hong Kong) Co Ltd,24 the shipowner argued that they were entitled to an exemption of liability for short delivery of goods based on the Owner’s Responsibility Clause of GENCON 94 which provides that: The Owners are to be responsible for loss of or damage to the goods or for delay in delivery of the goods only in case the loss, damage or delay has been caused by personal want of due diligence on the part of the Owners or their Manager to make the Vessel in all respects seaworthy and to secure that she is properly manned, equipped and supplied, or by the personal act or default of the Owners or their Manager. And the Owners are not responsible for loss, damage or delay arising from any other cause whatsoever, even from the neglect or default of the Master or crew or some other person employed by the Owners on board or ashore for whose acts they would, but for this Clause, be responsible, or from unseaworthiness of the Vessel on loading or commencement of the voyage or at any time whatsoever.25

The Shanghai Maritime Court held that it could not be seen from this clause that the shipowner should not be liable for the shortage of delivery of goods. The shipowner, to the contrary, still had responsibility for the proper and careful management of goods and safe carriage of goods,26 and therefore was held to be liable for the shortage of delivery. 4.10 The SPC summarised the application of the provisions of Chapter 4 of the CMC 1992 to voyage charters in Ace European Group Co Ltd v Lianyungang Mingri International Marine Shipping Co Ltd and Shanghai Mingri International Shipping Service Co Ltd.27 It

20 ECO Shipping Co Ltd v Fuzhou Changxiong Ocean Fishery Co Ltd and others (2003) Xia Hai Fa Shang Chu Zi No. 111 (Xiamen Maritime Court). 21 The provisions concerning the possessory lien are in art 87 of the CMC 1992. 22 (2010) Hu Gao Min Zi (Hai) Zhong Zi No. 37 (Shanghai High People’s Court) (CA). 23 (2014) Hu Gao Min Zi (Hai) Zhong Zi No. 159 (Shanghai High People’s Court) (CA). 24 (2009) Hu Hai Fa Shang Chu Zi No. 710 (Shanghai Maritime Court). 25 It is cl 2 of GENCON 94. 26 It is the carrier’s obligation in the CMC 1992. Article 48 provides that the carrier shall properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried. 27 (2011) Min Si Ti Zi No. 16 (SPC) (Retrial).

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CHARTERPARTIES

clarified that when a voyage charter was concluded, the parties to the voyage charter should perform the charter according to the clauses of the charter and also perform the obligations of seaworthiness and non-deviation in the CMC 1992. When there are no relevant clauses or no clauses contrary to the provisions of Chapter 4 of the CMC 1992 in the voyage charter, the provisions of Chapter 4 apply to the rights and obligations of the shipowner and charterer. However, the SPC emphasised that not all provisions in Chapter 4 should apply to the parties to the voyage charter. Only the provisions concerning the rights and obligations of the carrier and shipper apply. The applicable provisions should not include those concerning the actual carrier28 because the actual carrier is not a party to the voyage charter. The actual carrier and its liabilities are limited by the concept of the bill of lading. 4.11 Based on the aforementioned judicial practice, it is understood that the shipowner will be entitled to the rights and obliged to perform the obligations of the carrier when the provisions of Chapter 4 of the CMC 1992 apply. However, there is no judicial decision to clarify whether the charterer is correspondingly entitled to the rights and obliged to perform the obligations of a shipper. A logical and reasonable inference that may be drawn from the judicial decisions concerning the shipowner is that the provisions concerning the shipper in Chapter 4 apply to the charterer. Rights and obligations 4.12 In the CMC 1992, the shipowner of a voyage charter should provide the intended ship. The intended ship may be substituted with the consent of the charterer. However, if the ship substituted does not meet the requirements of the charterparty, the charterer may reject the ship or cancel the charter.29 It means that providing an intended ship or a substituted ship complying with the voyage charter is a condition in the CMC 1992. Therefore, the shipowner’s failure in providing the intended ship due to his own fault entitles the charterer to cancel the charter and claim damages or loss.30 If the innocent charterer refuses a substituted ship provided by the shipowner, he may find another ship by himself and claim damages for the difference between the originally contracted freight and newly agreed higher freight31 and storage charges if any.32 Of course, rescission of a voyage charter is an option for an innocent charterer. The charterer may not cancel the charter but can accept a substituted vessel to continue the charter and claim for damages so caused.33 4.13 Providing a ship within the laydays fixed in a voyage charter is also a condition in the CMC 1992. If the shipowner has failed to provide the ship within the laydays, the

28 Actual carrier in the CMC 1992 means the person to whom the performance of carriage of goods, or of part of the carriage, has been entrusted by the carrier, and includes any other person to whom such performance has been entrusted under a sub-contract. See art 42 of the CMC 1992. 29 CMC 1992, art 96, para 1. 30 ibid, art 96, para 2. 31 China Huangshi Ocean Shipping aAgency v Shanghai ALS International Transport Co Ltd (2005) Hu Hai Fa Shang Chu Zi No. 294 (Shanghai Maritime Court). 32 Hong Kong Huaji (International) Logistics Co Ltd v Shanghai Pudong International Transport Co Ltd (2008) Hu Gao Min Zi (Hai) Zhong Zi No. 236 (Shanghai High People’s Court) (CA). 33 Shanghai Rushi Industrial Co Ltd v Zhejiang Yonghua Shipping Co Ltd (2010) Hu Hai Fa Shang Chu Zi No. 767 (Shanghai Maritime Court).

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charterer is entitled to cancel the charterparty. Where the charterer has suffered losses as a result of such a delay due to the fault of the shipowner, the shipowner shall be liable for such losses. However, if the shipowner has notified the charterer of the delay of the ship and the expected date of its arrival at the port of loading, the charterer shall notify the shipowner whether it desires to cancel the charter, within 48 hours of the receipt of the shipowner’s notification.34 However, the CMC 1992 does not clarify on the legal consequences if the charterer does not so notify the shipowner of its decision. Still, the Contract Law provides that if a time limit for exercising the right to cancel a contract is provided for by laws or by agreement of the parties, and the party concerned does not exercise such a right at the expiration of the time limit, such a right becomes invalid.35 Therefore, it is believed that the charterer’s right to cancel the voyage charter will be invalid if he does not so notify the shipowner as required by the CMC 1992 and the charterer is obliged to continue to perform the charter by accepting the late arrival of the ship. 4.14 In shipping practice, if a voyage charter refers to a standard form, the relevant terms and conditions of the form will prevail and solve any apparent problems in the CMC 1992. For example, clause 9 of GENCON 94 provides that: (a) (b)

Should the Vessel not be ready to load (whether in berth or not) on the cancelling date indicated in Box 21, the Charterers shall have the option of cancelling this Charterparty. Should the Owners anticipate that, despite the exercise of due diligence, the Vessel will not be ready to load by the cancelling date, they shall notify the Charterers thereof without delay stating the expected date of the Vessel’s readiness to load and asking whether the Charterers will exercise their option of cancelling the Charterparty, or agree to a new cancelling date. Such option must be declared by the Charterers within 48 running hours after the receipt of the Owners’ notice. If the Charterers do not exercise their option of cancelling, then this Charterparty shall be deemed to be amended such that the seventh day after the new readiness date stated in the Owners’ notification to the Charterers shall be the new cancelling date.” The provisions of sub-clause (b) of this Clause shall operate only once, and in case of the Vessel’s further delay, the Charterers shall have the option of cancelling the Charterparty as per sub-clause (a) of this Clause.

Obviously, the draft of the CMC 1992 was made with reference to standard shipping practice, but the relevant provisions were not well drafted. Even if the Contract Law applied, the answer would still not be as satisfactory as under the relevant terms and conditions of standard forms in shipping practice. 4.15 The charterer under voyage charter has the duty to use the chartered ship according to both the terms and conditions of the relevant charter and relevant laws. In Tianjin International Shipping Co Ltd v Shantou Yuedong International Ship Agency Co Ltd,36 because of the charterer’s default, the chartered ship was detained by Indonesian Customs due to breach of local laws. The shipowner had to pay for the release of the ship and for relevant expenses such as legal fees, travel fees and the fees for the safety of the ship and protection of the seamen on board during the detention. The shipowner claimed against the charterer in the Tianjin Maritime Court. The Court pointed out that, although there are no relevant 34 CMC 1992, art 97. 35 Contract Law 1999, art 95, para 1. 36 SPC Gazette, Issue 3, 2003, pp. 29–33.

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CHARTERPARTIES

provisions for the charterer’s duty in this regard in the CMC 1992, the Contract Law and the General Principles of the Civil Law37 required the charterer to use the ship, while always complying with law. Thus, the charterer was liable for the losses of the shipowner due to the breach of local law.38 The Contract Law provides that the parties shall, in making and fulfilling the contract, abide by laws and administrative regulations. From this case it can be seen that the definition of law and regulations in the Contract Law include both Chinese laws and foreign laws. 4.16 In the CMC 1992, the charterer is allowed to sub-charter the chartered vessel, but the rights and obligations under the head charter will not be affected.39 It reflects the chartering practice that a ship may be chartered more than one once in a charterparty chain. Chinese judicial practice has also clarified that the rights and obligations under a sub-charter will not be affected by the head charter. In Sinotrans International Economic and Technical Cooperation Company v China North Industries Corporation Beijing Branch,40 because the sub-charterer China North Industries Corporation Beijing Branch (China North) could not provide goods as agreed in a voyage charter, the sub-shipowner Sinotrans International Economic and Technical Cooperation Company (Sinotrans) claimed against China North for the losses suffered. At first instance, Sinotrans proved its loss by submitting a settlement agreement with the shipowner under the head charter in which Sinotrans agreed to compensate 1.496 million US dollars. The Tianjin Maritime Court supported the claim and the amount of loss of Sinotrans. On appeal, the Tianjin High People’s Court reversed the judgment at first instance. It held that China North should be liable because of its failure in providing the intended goods,41 but the amount of compensation to the shipowner in the head charter should not form the basis of the sub-charterer’s liability. The appeal court pointed out that Sinotrans should instead prove its loss of the difference between the contractual freight in the sub-charter and actual freight it earned, which was actually 392,000 US dollars and the associated interest. 4.17 The CMC 1992 provides that the shipowner shall discharge the goods at the port of discharge specified in the charterparty. Where a voyage charter contains a clause allowing the choice of the port of discharge by the charterer, the master may choose one from among the agreed nominated ports to discharge the goods, where the charterer does not, as agreed in the charter, instruct in time as to the port chosen for discharging the goods. Where the charterer does not instruct in time as to the chosen port of discharge as agreed in the charter, and the shipowner suffers corresponding losses, the charterer is liable for compensation; where the charterer has suffered losses as a result of the shipowner’s arbitrary choice of a port to discharge the goods, in disregard of the provisions in the relevant charter, the shipowner is liable for compensation.42 37 Article 7 of the General Principles of the Civil Law 1986, as amended in 2009, provides that parties who breach a contract or fail to fulfil other obligations shall bear civil liability. 38 The judgment of the Tianjin Maritime Court was confirmed in the appeal by the Tianjin High People’s Court. 39 CMC 1992, art 99. 40 (1999) Gao Jing Zhong Zi No. 168 (Tianjin High People’s Court) (CA). 41 CMC 1992, art 100, para 2. Article 100, para 1 also provides that the charterer shall provide the intended goods, but he may replace the goods with the consent of the shipowner. However, if the goods replaced are detrimental to the interests of the shipowner, the shipowner shall be entitled to reject such goods and cancel the charter. 42 ibid, art 101.

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4.18 As to laytime, demurrage and dispatch money under voyage charters, the CMC 1992 does not provide any special rule but allows for parties to fix them in their voyage charters.43 The judicial decisions of the Chinese courts provide more details on these legal issues. In Ningbo Longsheng Shipping Co Ltd v Tianjin Guodian Shipping Co Ltd,44 the charterer argued that the demurrage in the voyage charter was too high and applied for an adjustment of the demurrage. The SPC explained that the demurrage in voyage charters meant for the payment from the charterers to shipowners for extra time used exceeding the agreed laytime in voyage charters, where the extra time was not caused by any fault of the shipowner.45 Unlike the concept of a penalty under contract law,46 the nature of the demurrage was an agreed (liquidated) amount of compensation for the shipowner due to the detention of the ship.47 The calculation of demurrage is not subject to the real loss of the shipowner. In fact, the real loss of the shipowner might be more than the agreed demurrage but the shipowner could not claim more. Therefore, the SPC refused the charterer’s application to adjust the demurrage agreed in the voyage charter. 4.19 Besides demurrage, the shipowner may also claim interests of the demurrage from the due date of the demurrage to the date of judgment.48 If parties agree in the voyage charter that the losing party should compensate for the legal fee of the winning party in a dispute over a voyage charter, the Chinese courts will recognise such an agreement.49 Furthermore, Chinese courts may adjust the penalty rate agreed in a voyage charter if it is believed to be unreasonable.50 The limitation period for claims against the carrier with regard to the voyage charterparty is two years, counting from the day on which the claimant knew or should have known that his rights had been infringed.51 Time charter 4.20 In the CMC 1992, a time charterparty is a contract under which the shipowner provides a designated manned ship to the charterer, and the charterer employs the ship during

43 ibid, art 98. 44 (2014) Min Shen Zi No. 1228 (SPC) (Retrial). 45 If parties agreed in the voyage charter that the shipowner was responsible for loading and discharge operation, the shipowner could not claim demurrage no matter how long it took for loading and discharge operation. See n14. 46 Article 114 of the Contract Law 1999 provides that the parties may stipulate that in case of breach of contract by either party a certain amount of penalty shall be paid to the other party. If the stipulated penalty for breach of contract is lower than the loss caused by the breach, the party concerned may apply to a court or an arbitration institution for an increase. If the stipulated penalty for breach of contract is excessively higher than the loss caused by the breach, the party concerned may apply to a court or an arbitration institution for an appropriate reduction. 47 Penalty is set up for possible damage due to breach and therefore can be used for compensation of damage. See Guangzhou Huirui Import & Export Co Ltd v Hong Kong Huajin Shipping Co Ltd (2012) Min Shen Zi No. 28 (SPC) (Retrial). 48 Ningbo Shenyu Shipping Co Ltd v Tangshan Kangbi Freight Forwarding Co Ltd (2010) Yong Hai Fa Shang Chu Zi No. 131 (Ningbo Maritime Court). The interest rate should be the deposit rate of the same period of the People’s Bank of China. 49 Shanghai Yinhe Shipping Co Ltd v Shenyang Woka Heavy Goods Transportation Co Ltd (2013) Hu Hai Fa Shang Chu Zi No. 1603 (Shanghai Maritime Court). It was confirmed in the appeal of the case (2014) Hu Gao Min Si (Hai) Zhong Zi No. 69 (the Shanghai High People’s Court) (CA). 50 ibid. 51 CMC 1992, art 257, para 2.

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the contractual period for the agreed service and pays hire for the service.52 If a time charter is concluded for performance of one voyage, but the hire is calculated based on contractual hire rate multiplying by time spent for the voyage, such a charter is still a time charter in the CMC 1992 although it is designed for only one voyage, not a period of time (such as a trip time charter).53 The provisions concerning the rights and obligations of the shipowner and the charterer of time charters in the CMC 1992 apply only when there are no stipulations or no different stipulations in this regard specifically agreed between the parties in the time charters.54 Time charters must be concluded in writing.55 Delivery and redelivery of ship 4.21 In the delivery of the chartered ship, time is of the essence under the CMC 1992. The shipowner must deliver the ship within the agreed time in the time charter. The shipowner’s breach of this obligation will entitle the charterer to cancel the time charter. However, if the shipowner has notified the charterer of the anticipated delay in delivery and has given an estimated time of arrival of the ship at the port of delivery, the charterer shall notify the shipowner, within 48 hours of the receipt of such notice from the shipowner, of his decision whether to cancel the charter or to continue to perform the charter. The shipowner shall be liable for the charterer’s loss resulting from the delay in delivery of the ship due to the shipowner’s fault.56 The CMC 1992 does not clarify the legal consequence if the charterer does not reply to the shipowner’s notice of delayed arrival of the chartered ship. It seems that in the CMC 1992 it is an obligation of the charterer to notify whether to cancel the charter or not. So, the charterer may not cancel the charter if he fails to so notify the shipowner his decision. 4.22 If a time charter is concluded based on a standard contract, e.g. the NYPE ’93 form, this problem may be solved. In NYPE ’93 form, the “Extension of Cancelling” provision of Clause 16 (Delivery/Cancelling) provides that: If the Owners warrant that, despite the exercise of due diligence by them, the Vessel will not be ready for delivery by the cancelling date, and provided the Owners are able to state with reasonable certainty the date on which the Vessel will be ready, they may, at the earliest seven days before the Vessel is expected to sail for the port or place of delivery, require the Charterers to declare whether or not they will cancel the Charterparty. Should the Charterers elect not to cancel, or should they fail to reply within two days or by the cancelling date, whichever shall first occur, then the seventh day after the expected date of readiness for delivery as notified by the Owners shall replace the original cancelling date. Should the Vessel be further delayed, the Owners shall be entitled to require further declarations of the Charterers in accordance with this Clause.57

4.23 However, it is noted that the “Extension of Cancelling” provision first incorporated in NYPE ’93 has not been included into NYPE 2015.58 “While views on whether 52 ibid, art 129. 53 Yangtze Navigation (Hong Kong) Co Ltd v Taizhou Jianghai Transport Co Ltd (2012) Hu Hai Fa Shang Chu Zi No. 21 (Shanghai Maritime Court). 54 CMC 1992, art 127. 55 ibid, art 128. For the contract in writing in Chinese law, see para 4.4. 56 ibid, art 131. 57 Lines 209–218 of NYPE ’93. 58 NYPE 2015 is the product of a cooperative effort between BIMCO, the Association of Shipbrokers and Agents (ASBA), who are the copyright holders of the NYPE form, and the Singapore Maritime Foundation (SMF) and is jointly authored by the three organisations.

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to maintain the ‘Extension of Cancelling’ wording are split between owners who favour including the clause and charterers who are not in favour, BIMCO is of the view that it is beneficial to both parties to have as much advance warning of potential delays as possible and to have in place a mechanism for managing such delays should they occur. BIMCO encourages parties to discuss on a case-by-case basis the inclusion of the ‘Extension of Cancelling’ clause if they feel it appropriate and important to their particular business.”59 Therefore, if Chinese law applies to a time charter based on the NYPE 2015 without inclusion of the “Extension of Cancelling” clause, more uncertainty may arise. 4.24 At the time of delivery, the shipowner should exercise due diligence to make the ship seaworthy. The ship delivered should be fit for the intended service. Where the shipowner breaches the obligation of delivery, the charterer is entitled to cancel the charter and claim any losses resulting therefrom.60 When the charterer redelivers the ship to the shipowner, the ship should be in the same good order and condition as it was at the time of delivery, fair wear and tear excepted. Where, upon redelivery, the ship is not in the same good order and condition as it was at the time of delivery, the charterer is responsible for its rehabilitation or for compensation.61 4.25 At common law, the charterers have an implicit duty to ensure that they give only legitimate voyage orders that the ship can reasonably be expected to complete in time to allow the ship to be redelivered on time. A voyage order that the ship cannot reasonably be expected to perform within the charter period is an illegitimate order.62 The charterers may breach the time charter by giving an illegitimate order and the owners are therefore entitled to refuse to perform it.63 By contrast, the CMC 1992 provides that, if, on the basis of a reasonable calculation, a ship may be able to complete its last voyage at around the time of redelivery but probably beyond the time of redelivery, the charterer is entitled to use the ship exceeding the date of redelivery in order to complete that voyage. For the extended period, the charterer is obliged to pay hire at the rate fixed by the charter, and, if the current market rate of hire is higher than that specified in the charter, the charterer would be obliged to pay hire at the current market rate.64 4.26 In addition to the loss of hire for the extended period, the shipowners may suffer other losses from the next charter that the ship was due to perform as a result of late redelivery. At common law, the shipowners’ damages due to late redelivery are limited to the normal measure of losses and the concept of remoteness.65 In contrast, the CMC 1992 does not provide an answer to such other losses. The Contract Law provides that, if either party

59 NYPE 2015 Explanatory Notes, p 5. The reason for not including the “Extension of Cancelling” wording in NYPE 2015 is that charterers’ representatives involved in the revision project felt that it would be particularly difficult for charterers under a trip charter agreement to change at short notice the arrangements already in place for the cargo in terms of underlying sales contracts and letters of credit. They also felt that in terms of highlighting a potential delay to the ship en route to the delivery place, then vessel tracking methods and more stringent eta/ itinerary provisions would serve much the same purpose from their perspective. 60 CMC 1992, art 132. 61 ibid, art 143. 62 Terence Coghlin, Andrew Baker, Julian Kenny, John Kimball, Thomas H. Belknap Jr., Time Charters (7th edn, Informa 2008), para 4.64. 63 The Peonia [1991] 1 Lloyd’s Rep 100, 108. 64 CMC 1992, art 143. See also Yantai Hongrui Harbor Engineering Co Ltd v Fuzhou Port Engineering Department (2015) Min Shen Zi No. 1923 (SPC) (Retrial). 65 The Achilleas [2008] 2 Lloyd’s Rep 275 (HL).

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fails to perform its obligations under the contract and thus causes losses to the other party, the amount of compensation for the loss shall be equivalent to the loss actually caused by the breach of contract but shall not exceed the sum of the loss that has been anticipated or ought to be anticipated by the breaching party in the making of the contract.66 As to whether the shipowners’ damages had been anticipated or ought to be anticipated, it will depend on the construction of contracts by the Chinese judges who will find out the intention of the parties concerning such anticipation. Shipowner’s rights and obligations 4.27 In the CMC 1992, the charterer shall pay the hire as agreed upon in the charter. Where the charterer fails to pay the agreed-upon hire, the shipowner is entitled to cancel the charterparty and claim any losses resulting therefrom.67 Where the charterer fails to pay hire or other sums of money as agreed upon in the charter, the shipowner shall have a lien on the charterer’s goods, property on board and earnings from the sub-charter.68 The provisions in the CMC 1992 concerning the shipowner’s lien are different from the clauses of some standard forms. For example, clause 23 of NYPE ’93 provides that “The Owner shall have a lien upon all cargoes and all sub-freights and/or sub-hire for any amount due under this Charterparty.”69 4.28 Although the CMC 1992 provides that the provisions concerning the rights and obligations of the shipowner and the charterer under time charters shall apply only when there are no stipulations or no different stipulations in this regard in the charterparty,70 Chinese courts may not recognise the freedom of contract for time charters. In Yuen Tat Wai v Shanghai Aoyang Marine Co Ltd and Others,71 the shipowner exercised the contractual lien from a time charter upon all cargoes without consideration of the ownership of the cargoes including the cargo of the claimant who was not the charterer of the time charter. The Shanghai Maritime Court pointed out that such a lien clause was inconsistent with the relevant provisions concerning the shipowner’s lien on the charterer’s cargo in the CMC 1992. Although the lien clause was a valid agreement between the shipowner and charterer, it breached the notion of privity of contract and could not bind a third party in good faith. Therefore, it was held that the shipowner should be liable for damage to the claimant due to his wrongful exercise of the lien on the claimant’s cargo. This interpretation is not uncommon in other Chinese maritime courts. 4.29 The duty to maintain the seaworthiness of the chartered ship is an obligation of the shipowner in the CMC 1992. During the charter period, if the ship is found to be at variance with the seaworthiness or the other conditions agreed upon in the charter, the shipowner shall take all reasonable measures to have them restored as soon as possible. Where the ship has not been operated normally for 24 consecutive hours due to its failure to maintain the seaworthiness or the other conditions as agreed upon, the charterer shall not be obliged to

66 67 68 69 70 71

Contract Law 1999, art 113. CMC 1992, art 140. ibid, art 141. Lines 259–261 of NYPE ’93. CMC 1992, art 127. (2011) Hu Hai Fa Shang Chu Zi No. 1188 (Shanghai Maritime Court).

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pay the hire for the operating time so lost, unless such failure was caused by the charterer.72 If the ship chartered could not be restored and the time charter could not be performed due to the vessel’s unseaworthiness, the charterer is entitled to cancel the time charter and claim damages resulting therefrom against the shipowner.73 Similarly, if the ship chartered becomes a total loss, the charterer is entitled to cancel the time charter and the shipowner is liable for the losses of the charterer.74 However, unless otherwise agreed in a time charter, the shipowner shall not be liable for damage to the charterer if the ship chartered is an actual total loss without fault of the shipowner.75 Charterer’s rights and obligations 4.30 In the CMC 1992, the charterer must guarantee that the ship shall be employed in the agreed navigating zones between the safe ports or places (within trading limits). If the charterer breaches this obligation, the shipowner is entitled to cancel the charter and claim any losses resulting therefrom.76 The safe port is considered as a broad concept in judicial practice. It means a port that is safe for both the navigation of the chartered ship and the loading, stowage, carriage and discharge of goods. In Japanese Taihai Co Ltd v Haibo Fisheries Co Ltd,77 the ship chartered was a live fish carrier and it was held that a fresh water port was not a safe port because the loading and discharge of live sea-fish would be safe only in a sea port. If there is no agreement in a time charter concerning the navigating zones and it is found that the ship chartered is not suitable for the navigating zones ordered by the charterer, the parties may cancel the time charter. In such a circumstance, the parties shall bear their respective liabilities accordingly.78 4.31 The charterer in the CMC 1992 must also guarantee that the ship shall be employed to carry the lawful merchandise as agreed in time charters. Where the ship is to be employed by the charterer to carry live animals or dangerous goods, prior consent of the shipowner is required. The charterer shall be liable for any loss of the shipowner resulting from the charterer’s breach of those obligations concerning the goods carried under the time charters.79 4.32 During the period of time charter, the charterer is entitled to give the master instructions with respect to the operation of the ship.80 In other words, the charterer uses the chartered ship for commercial purpose and the shipowner controls the navigation and management of the ship through the operation of the master and crews on board. They are each responsible for the purpose and control of the vessel respectively.81 Moreover, the

72 CMC 1992, art 133. 73 Tao Zhanjun v Gao Xueguang (2011) Min Shen Zi No. 916 (SPC) (Retrial). 74 Wuhan Associated Marine Transport Inc v China Yangtze River Shipping Co Ltd (2004) Hu Hai Fa Shang Chu Zi No. 187 (Shanghai Maritime Court). 75 China Yangtze River Shipping Co Ltd v Zhejiang Xiangshan Rongning Shipping Co Ltd (2005) Hu Hai Fa Shang Chu Zi No. 441 (Shanghai Maritime Court). 76 CMC 1992, art 134. 77 (1997) Jiao Ti Zi No. 3 (SPC) (Retrial). 78 Zhejiang Zhoushan Putuo Yongan Shipping Co Ltd v Xu Yunbao and Jinan Jitong Ship Transportation Co Ltd (2004) Hu Hai Fa Shang Chu Zi No. 313 (Shanghai Maritime Court). 79 CMC 1992, art 135. 80 ibid, art 136. 81 Liu Yuesheng and Liu Yueji v Liu Guodong (2007) Gui Min Si Zhong Zi No. 40 (Guangxi High People’s Court) (CA).

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charterer’s instructions should not be inconsistent with the stipulations of the time charter.82 In PICC P&C Co Ltd Shanghai Branch v COSCO Shipping Co Ltd,83 the time charter provided that the charterer had the duty of stowage but the master should supervise the stowage. It was found that the goods were damaged due to inappropriate stowage. The courts found that the main reason of the damage was the bad stowage done by the master and crews according to the instructions of the charterer. Therefore, it was held that the charterer should bear 80 per cent liability for the damage and the shipowner 20 per cent because the master did not exercise due diligence to supervise stowage. 4.33 In the CMC 1992, during the period of the time charter, the shipowner can transfer the ownership of the chartered ship and the charterer can sub-charter the chartered ship. Where the ownership of the ship under a time charter has been transferred by the shipowner, the rights and obligations agreed upon under the original charter shall not be affected. However, the shipowner shall inform the charterer thereof in time. After such transfer, the transferee and the charterer shall continue to perform the original time charter.84 Where the charterer sub-charters the ship under the original time charter, he must notify the shipowner of the sub-charter in time. The rights and obligations agreed upon in the original time charter shall not be affected by the sub-charter.85 4.34 In judicial practice, the Chinese courts will consider the time charter and the subcharter as two independent contracts although they may be in a chain of charterparties. In Dalian Shipping Group Co Ltd v Grand Moment Capital Ltd,86 the shipowner chartered his ship to the charterer who sub-chartered the same ship to the sub-charterer. The ship in dispute was actually delivered from the shipowner to the sub-charterer. When the charterer failed to pay hire according to the time charter, the shipowner required the sub-charterer to pay hire and the sub-charterer actually paid certain hire. Because the charterer failed to pay the hire as agreed in the time charter, the shipowner claimed against both the charterer and the sub-charterer for joint and several liabilities of payment of hire. It was held that the charterer was liable for the payment of hire but the sub-charterer had no such liability although he actually took the delivery of the ship and paid some hire at the request of the shipowner. 4.35 Unless otherwise agreed in a time charter, should the ship be engaged in salvage operations during the charter period, the charterer under the CMC 1992 will be entitled to half of the amount of the payment for salvage operations after deducting therefrom the salvage expenses, compensation for damage, the portion due to crew members and other relevant costs.87 Bareboat charter 4.36 A bareboat charter under the CMC 1992 is a charterparty under which the shipowner provides the charterer with an unmanned ship that the charterer can possess, employ and operate within an agreed period and for which the charterer shall pay hire to the shipowner.88 82 83 84 85 86 87 88

CMC 1992, art 136. (2009) Zhe Hai Zhong Zi No. 145 (Zhejiang High People’s Court) stowing (CA). CMC 1992, art 138. ibid, art 137. (2000) Da Hai Fa Shang Chu Zi No. 284 (Dalian Maritime Court). CMC 1992, art 139. ibid, art 144.

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The main purposes of bareboat charter are for management purposes, financing purposes and changing the flag of the ship. Like a time charter in the CMC 1992, the provisions concerning the rights and obligations of the shipowner and the charterer of bareboat charters in the CMC 1992 shall apply only when there are no stipulations or no different stipulations specifically agreed in the bareboat charter.89 Bareboat charters must be concluded in writing.90 Some bareboat charters should be registered with the ship registration authorities of China. However, registration is not a condition for effectiveness of the bareboat charter – the bareboat charter will not be invalid due to the lack of registration.91 Delivery and redelivery of ship 4.37 In the CMC 1992, the shipowner shall deliver the ship and its certificates to the charterer at the port or place and time as stipulated in the bareboat charter. At the time of delivery, the shipowner should exercise due diligence to make the ship seaworthy. The ship delivered should be fit for the agreed service. Where the shipowner breaches the obligation of delivery, the charterer shall be entitled to cancel the charter and claim any losses resulting therefrom.92 For redelivery of the ship, the charterer of the bareboat charter, like the charterer of the time charter in the CMC 1992,93 has a duty to redeliver the ship in the same good order and condition as it was at the time of delivery, fair wear and tear excepted. If the ship is not in the same good order and condition upon redelivery as it was at the time of delivery, the charterer is responsible for rehabilitation or for compensation.94 Like the charterer of a time charter, the charterer of a bareboat charter in the CMC 1992 is also entitled to use the ship in order to complete the last voyage even if its time of redelivery will be overdue. Accordingly, the charterer shall pay hire for that extended period based on the contractual hire rate or the current market rate, whichever is higher.95 Shipowner’s rights and obligations 4.38 In the CMC 1992, the shipowner may not establish any mortgage of the ship during the period of bareboat charter without prior consent in writing by the charterer. If the shipowner breaches this duty, he shall be liable for losses to the charterer if caused.96 Furthermore, should the ship be arrested due to any disputes over its ownership or debts owed by the shipowner, the shipowner shall guarantee that the interest of the charterer is not affected.97 In fact, when the ship is arrested, the charterer’s interest must be affected and the shipowner’s guarantee would be meaningless. So, the CMC 1992 provides that the shipowner is liable for compensation for any losses of the charterer caused by such

89 ibid, art 127. 90 ibid, art 128. For the contract in writing in Chinese law, see para 4.4. 91 Li Chunrui v Dai Guirong and Jiang Jingyuan (2011) Min Shen Zi No. 174 (SPC) (Retrial). 92 CMC 1992, art 146. 93 The duty of redelivery of the time charterer shall apply to the bareboat charterer in the CMC 1992. See art 153 of the CMC 1992. 94 CMC 1992, art 142. 95 ibid, art 143. For discussion of the legitimate last voyage, see para 4.25. 96 ibid, art 151. 97 ibid, art 149, para 2.

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arrest. When a ship is arrested due to the shipowner’s debts and then the ownership of the ship is transferred, the charterer is entitled to cancel the bareboat charter and to claim any damages suffered.99 Should the ship be lost or missing, payment will cease from the day when the ship was lost or was last heard of. Any hire paid in advance should be refunded in proportion.100 4.39 According to the CMC 1992, the charterer shall pay hire as stipulated in the charter. In default of payment by the charterer for seven consecutive days or more after the time as agreed in the charter for such payment, the shipowner is entitled to cancel the charter and claim for any losses suffered.101 The CMC 1992 allows the parties to agree more or less seven consecutive days’ delay in payment for the entitlement of the shipowner to cancel the bareboat charter. However, the shipowner’s entitlement may be waived by acceptance of late payment. In Hu Zhu and Lu Xianghong v Li Pinjian and Li Yan,102 clause 6 of the bareboat charter provided that “payment of hire shall be made every month in advance on the first day of each month . . . In default of payment beyond a period of 10 running days, the Owner shall have the right to cancel the Charter and withdraw the ship or repossess the ship redelivered by the Charterer”. During the performance of the bareboat charter, the charterer had paid the hire for eight months in which three payments of hire were delayed more than ten days. However, the shipowner did not cancel the charter or withdraw the ship but accepted the late payments of hire and allowed the charterer to continue the use of the ship. The court refused to grant the shipowner’s application for cancellation of the bareboat charter when the charterer delayed the payment as usual again. 98

Charterer’s rights and obligations 4.40 In the CMC 1992, the charterer shall be responsible for the maintenance and repair of the ship during the bareboat charter period.103 During the bareboat charter period, if the charterer’s possession, employment or operation of the ship has affected the interests of the shipowner or caused any losses thereto, the charterer shall be liable for eliminating the harmful effect or compensating for the losses.104 In judicial practice, it is understood that under a bareboat charter, the shipowner of the bareboat charter only reserves the ownership of the chartered ship and the charterer is entitled to possess, manage and operate the ship. Therefore, the charterer shall properly man, equip, supply and operate the ship. In Shanghai Fengqi Petroleum Chemical Co Ltd v Zhejiang Liyang Shipping Co Ltd and others,105 the oil provider claimed against both the shipowner and charterer of a bareboat charter for the payment of price of oil. It was found that the charterer concluded the contract for supply of fuel-oil for the ship with the oil provider. The shipowner had chartered his ship to the charterer and registered the bareboat charter. Therefore, it was held that the shipowner was

98 ibid. 99 Zhou Shuiping v He Chengliang (2008) Yong Hai Fa Shang Chu Zi No. 119 (Ningbo Maritime Court). 100 CMC 1992, art 152, para 2. 101 ibid, art 152, para 1. 102 (2006) Gui Min Si Zhong Zi No. 8 (Guangxi) (CA). 103 CMC 1992, art 147. 104 ibid, art 149. 105 (2013) Hu Hai Fa Shang Chu Zi No. 583 (Shanghai Maritime Court).

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not liable and it was the charterer rather than the shipowner who would bear the risks and liabilities for operation of the ship during the period of the bareboat charter. 4.41 The CMC 1992 provides that during the bareboat charter period, the ship must be insured by the charterer at his expense, at the value agreed upon in the charter and in a way consented to by the shipowner.106 Disputes may arise if there is no detailed or clear arrangement of insurance in bareboat charters. In Qingyuan Shipping Co Ltd and Qingyuan Shipping Material Supply Company v Li Jincheng,107 the bareboat charter provided that the insured value of the chartered ship should be decided by the charterer at his expense according to the navigating zones and the purpose of the charter. But the charter did not clarify who had the responsibility to take out insurance formalities. In fact, the charterer had chartered the ship in dispute for more than one year but had not insured the ship. It was held that it was the charterer’s legal duty to insure the ship under the bareboat charter according to the CMC 1992 if the charter itself did not provide relevant provisions for this matter. 4.42 Ship insurance will not exempt the charterer’s liability for damage to the ship in a bareboat charter. In Chongqing Wanzhou Wangang Shipping Co Ltd v Chongqing Wanzhou Lilong Transport Co Ltd,108 the bareboat charter provided that the shipowner should take out insurance formalities at the charterer’s expense. But the charter did not clarify whether the shipowner had the obligation to buy the insurance first or whether the charterer should pay for the insurance premium first. In fact, the parties had not reached any agreement on this matter and no ship insurance had been bought. During the bareboat charter period, the ship overturned due to the charterer’s fault. The shipowner claimed against the charterer for damages suffered thereby. The charterer argued that the damages could not be covered because the shipowner failed to arrange the ship insurance and, therefore, the charterer should not be liable for such damages. The SPC pointed out that even if the shipowner had bought the ship insurance, the insurer could recover such damages from the charterer. Therefore, the shipowner’s failure of arrangement of ship insurance would not be a reason to exempt the charterer’s liability for damages due to his fault. 4.43 It is common practice that a ship under a bareboat charter is always sub-chartered in a sub-time charter or sub-voyage charter. The CMC 1992, however, provides that during the bareboat charter period, the charterer shall not assign the rights and obligations stipulated in the charter or sub-charter the ship under another bareboat charter without the shipowner’s consent in writing.109 The CMC 1992 does not clarify the legal consequence if the charterer breaches this legal duty, especially the legal effect of the other bareboat charters by which the charterer sub-charters the ship under the original bareboat charter. 4.44 There are two different and competing viewpoints in judicial practice concerning the legal effect of the sub-bareboat charter. In Quan Yuqing v Guo Yongchang and Zhanjiang Shipping Service Company (Quan Yuqing v Guo Yongchang),110 the charterer sub-chartered the ship under the original bareboat charter (the 1st bareboat charter) with the sub-charterer in a sub-bareboat charter (the 2nd bareboat charter) without the shipowner’s

106 107 108 109 110

CMC 1992, art 148. (2002) Guang Hai Fa Chu Zi No. 349 (Guangzhou Maritime Court). (2012) Min Shen Zi No. 631 (SPC) (Retrial). CMC 1992, art 150. (2005) Guang Hai Fa Chu Zi No. 52 (Guangzhou Maritime Court).

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consent in writing. The Guangzhou Maritime Court referred to the Contract Law, which provides that a contract is invalid if mandatory provisions of laws or administrative regulations are violated.111 Therefore, it was held that the 2nd bareboat charter concluded between the charterer and the sub-charterer without the shipowner’s consent in writing was invalid. 4.45 However, the Ningbo Maritime Court held a contrary view. In Zhou Shuiping v He Chengliang,112 the shipowner chartered his ship to the charterer in a bareboat charter and the charterer sub-chartered the ship to the sub-charterer in a sub-bareboat charter without the shipowner’s consent in writing. Because of the shipowner’s financial dispute, the ship was arrested and then transferred to a third party, and the sub-bareboat charter could not be performed. The sub-charterer claimed against the charterer for the losses suffered. The Ningbo Maritime Court pointed out that whether there was the shipowner’s consent in writing when the charterer sub-chartered the ship by the sub-bareboat charter during the period of the bareboat charter would not affect the validity of the sub-bareboat charter between the charterer and the sub-charterer. Therefore, it was held that the sub-bareboat charter was valid although the charterer breached the bareboat charter. 4.46 The key issue between the two different views is the understanding of the relevant provisions of the Contract Law, namely, the provision that “a contract is invalid if mandatory provisions of laws or administrative regulations are violated”. In other words, the question is whether the fact that the charterer sub-chartered the ship under another bareboat charter without the shipowner’s consent in writing leads to the circumstance described in the Contract Law that “mandatory provisions of laws or administrative regulations are violated” in which a contract is invalid. In Quan Yuqing v Guo Yongchang, whether the 2nd bareboat charter was invalid depends on whether mandatory provisions of laws or administrative regulations are violated. It should be understood that the “mandatory provisions of laws or administrative regulations” are the laws and regulations concerning the 2nd bareboat charter. However, the said mandatory laws in the CMC 1992 are provisions about the performance of the 1st bareboat charter or a legal duty of the charterer in the 1st bareboat charter, and have no direct or indirect relation with validity of the 2nd bareboat charter. Therefore, the 2nd bareboat charter in Quan Yuqing v Guo Yongchang was valid even through the charterer breached the mandatory provisions of the CMC 1992. In other words, the judicial decision in Zhou Shuiping v He Chengliang should be correct. 4.47 It is meaningful to analyse whether a contract is valid or invalid because the legal consequences are different in Chinese law. An invalid or rescinded contract does not have legal binding force from a priori.113 If a contract becomes invalid, any property obtained under the contract should be returned. If it is impossible or unnecessary to return the property, compensation shall be made at an estimated price. The party at fault should compensate the other party for the loss caused by the fault. If both parties have faults, they should each bear their respective responsibilities.114 By contrast, if a contract is valid, the party at fault should bear the liability for breach of the contract by continuing to perform the obligations, taking remedial measures, or compensating for losses.115

111 112 113 114 115

Contract Law 1999, art 52, para 5. (2008) Yong Hai Fa Shang Chu Zi No. 119 (Ningbo Maritime Court). CMC 1992, art 56. ibid, art 58. ibid, art 107.

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4.48 As for the charterer’s liability to the shipowner if the charterer sub-chartered the ship under a bareboat charter by a sub-bareboat charter without the shipowner’s consent in writing, the CMC 1992 does not provide answers. The Contract Law provides that in case of a sublease by the lessee without the consent of the lessor, the lessor may rescind the contract.116 When a contract is rescinded, the rights and obligations under the contract shall be terminated.117 After the rescission of a contract, for those clauses not yet performed, the performance shall also cease. For those already performed, the party concerned may, in accordance with the situation of performance and the nature of the contract, demand their restoration to the original status or take other remedial measures, and have the right to claim compensation.118 4.49 Like the charterer in the time charter of the CMC 1992,119 the charterer in the bareboat charter must guarantee that the ship shall be employed in the agreed maritime transport between safe ports or places within the trading limits agreed upon. The shipowner is entitled to cancel the charter and claim any losses resulting therefrom if the charterer breaches the guarantee of safe ports or places.120 The bareboat charterer also has another guarantee that the ship should be employed to carry the lawful merchandise agreed. Where the ship is to be employed by the charterer to carry live animals or dangerous goods, prior consent of the shipowner is required. The charterer is liable for any loss of the shipowner resulting from the charterer’s violation of those obligations.121 Financial lease of ship 4.50 The CMC 1992 provides provisions concerning the financial lease of ship. The ownership of a ship under bareboat charter containing a lease-purchase clause shall be transferred to the charterer when the charterer has paid off the lease-purchase price to the shipowner as stipulated in the charter.122 Because the CMC 1992 provides only for provisions for transfer of ownership in the financial lease of a ship, Chapter 14 Contracts for Financial Lease of the Contract Law applies to the issues concerning the financial lease of a ship. 4.51 As the lessor, the shipowner enjoys ownership over the chartered ship in the bareboat charter. If the charterer as the lessee goes bankrupt, the chartered ship does not fall into the category of bankrupt property.123 The shipowner guarantees the possession and use of the chartered ship by the charterer.124 The charterer shall properly maintain and use the chartered ship125 and pay the hire as contracted. If the charterer fails to pay hire within a reasonable period of time after being urged to do so, the shipowner may demand the full

116 117 118 119 120 121 122 123 124 125

Contract Law 1999, art 224, para 2. ibid, art 91. ibid, art 97. CMC 1992, art 153. ibid, art 134. See also para 4.29. ibid, art 135. ibid, art 154. Contract Law 1999, art 242. ibid, art 245. ibid, art 247.

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payment of hire, or rescind the contract and take back the chartered ship.126 Where the parties stipulate that the charterer shall have ownership over the chartered ship after the expiration of the lease term, where the charterer has paid most of the hire but is unable to pay the remaining hire, and where the shipowner has therefore rescinded the contract and taken back the ship, the charterer may demand a partial refund if the value of the ship taken back exceeds hire in arrears and other expenses.127

126 ibid, art 248. 127 ibid, art 249.

49

CHAPTER 5

Bill of lading: Functions

5.1 In the CMC 1992, a contract of carriage of goods1 by sea is a contract under which the carrier, against payment of freight, undertakes to carry by sea the goods contracted for shipment by the shipper from one port to another.2 The carriage of goods by sea in the CMC 1992 includes sea-to-river and river-to-sea direct transport but not coastal traffic, and the provisions concerning the bill of lading do not apply to the maritime transport of goods between the ports of China.3 The Contract Law 1999 applies to the coastal and inland water carriage of goods. 5.2 A bill of lading in the CMC 1992 is a document that serves as evidence of the contract of carriage of goods by sea and the taking over or loading of the goods by the carrier, based on which the carrier undertakes to deliver the goods against the surrender of the bill of lading.4 It can be concluded that the bill of lading in the CMC 1992 has three functions, namely, evidence of contract, receipt of goods and document of title. The relevant issues include document of title and property rights, delivery of goods without bill of lading and letters of indemnity. Evidence of contract 5.3 The bill of lading is evidence of contract of carriage of goods by sea between the shipper and the carrier. If a bill of lading is issued under a voyage charter and the bill of lading holder is not the charterer, the rights and obligations of the carrier and the holder of the bill of lading shall be governed by the clauses of the bill of lading.5 The carriage of goods by sea may be arranged through a freight forwarder who provides storage, loading and carriage services to the seller, but there may not be a contract of carriage of goods between the seller and the freight forwarder unless the freight forwarder issues the seller a house bill of lading, which acts as evidence for a carriage of goods contract between the seller and the freight forwarder. In Shaoxing Dite Import & Export Co Ltd v Shanghai Shifa International Freight Forwarding Co Ltd,6 the freight forwarder delivered a bill of lading 1 The “goods” in the CMC 1992 includes live animals and containers, pallets or similar articles of transport supplied by the shipper for consolidating the goods. See the CMC 1992, art 42 (5). 2 CMC 1992, art 41. 3 ibid, art 2. 4 ibid, art 71. 5 ibid, art 95. 6 (2013) Hu Hai Fa Shang Chu Zi No. 1605 (Shanghai Maritime Court); (2014) Hu Gao Min Si (Hai) Zhong Zi No. 145 (Shanghai High People’s Court) (CA).

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issued from a third party on which the freight forwarder was not identified as the carrier. It was held that the seller had no title to sue the freight forwarder based on the contract of carriage evidenced by the third party’s bill of lading, because that bill of lading was not an evidence of contract between the seller and the freight forwarder. 5.4 When there is a conflict between the original carriage contract and the terms of the bill of lading, the original contract prevails if it can be proved. In Globe Express Services (Shanghai) Ltd v China Shipping Container Lines Tianjin Co Ltd and China Shipping Container Lines (Hong Kong) Co Ltd,7 the carrier agreed to carry the goods on a certain date but actually delayed the carriage for a month. The shipper finally arranged for the carriage of the goods by air and claimed against the carrier for the air carriage freight. The carrier argued that there was a liberty clause on the reverse side of the bill of lading that entitled the carrier to carry the goods to the destination at any time by any means of transport. The Shanghai Maritime Court held that the terms of the bill of lading were not the real intention of the parties and would not bind the shipper. 5.5 In shipping practice, a bill of lading may not be issued if parties agree to release goods by telex. In such a circumstance, a sample copy of bill of lading confirmed by the shipper is still evidence of contract of carriage of goods by sea between the shipper and the carrier.8 The circumstance may not be certain if the sample copy of bill of lading is not confirmed by the shipper. In Longhai Gelin Seafood Co Ltd v Pacific International Lines Pte Ltd and Others,9 the shipper received a sample of bill of lading through a freight forwarder and requested a telex release upon notice, but such a request did not reached the carrier through the freight forwarder. The carrier did not deliver the goods according to the terms of the sample bill of lading, but argued that the sample bill of lading was not evidence of the contract between the shipper and the carrier because the shipper had not expressly confirmed the sample. This was a typical issue of battle of forms under contract law. In the view of the SPC, the shipper should have accepted the sample of bill of lading without objection since the request for telex release had not reached the carrier, and, therefore, the sample bill of lading was evidence of the contract between the shipper and the carrier. The Contract Law provides that an acceptance shall be made in the form of a notice, unless, in light of trade practices or as indicated by the offer, the offeree may indicate assent by performing an act.10 In this case, the SPC seems to have concluded that the silence was to be deemed as preliminary evidence of the acceptance of the offer. This conclusion may not comply with the requirement from the Contract Law unless it is provided that such acceptance by silence is a kind of trade practice. 5.6 The bill of lading under the CMC 1992 is not only the evidence of contract between the shipper and the carrier, but also governs the relationship between the carrier and the consignee or the holder of the bill of lading with respect to their rights and obligations.11 It provides a legal basis for the rights of suit of the consignee and the bill of lading holder who are not parties to the contract evidenced by the bill of lading, although it seems too 7 (2008) Hu Hai Fa Shang Chu Zi No. 93 (Shanghai Maritime Court). 8 COSCO Container Lines Co Ltd v King Far East Shipping Co Ltd Guangzhou Branch (2009) Hu Hai Fa Shang Chu Zi No. 817 (Shanghai Maritime Court). 9 (2012) Min Shen Zi No. 1100 (SPC) (Retrial). 10 Contract Law 1999, art 21. Cf Hong Kong case OKA Electronics Ltd v Manohar Chugh [1991] HKLY 154 for Hong Kong common law position on the battle of forms. 11 CMC 1992, art 78, para 1.

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general and simple compared to the provisions of the UK Carriage of Goods by Sea Act 1992.12 The rights of suit of the bill of lading holder are obtained through the transfer of the bill of lading. In some special circumstances, the rights of suit of the person who was the bill of lading holder may not be extinguished even if the bill of lading has been transferred. In Shanghai C&J International Trade Co Ltd v MISC Berhad,13 the buyer as the bill of lading holder found damage to the goods before taking delivery and raised a claim against the carrier. Meanwhile, the buyer sub-sold the goods to a third party with discount of the price of the goods and then claimed against the carrier for the loss of the discount. The Ningbo Maritime Court took the view that the sub-sale of the goods was an act of mitigation and a positive measure to reduce the loss of the buyer. In fact, the sub-buyer suffered no loss because of the discount of the price, but the buyer actually suffered the loss. Therefore, it was held that the buyer was still entitled to claim against the carrier although it had already transferred the bill of lading to another person. 5.7 The CMC 1992 further provides that neither the consignee nor the holder of the bill of lading shall be liable for demurrage, dead freight and all other expenses in respect of loading incurred at the loading port unless the bill of lading clearly states that the aforesaid demurrage, dead freight and all other expenses are to be borne by the consignee and the holder of the bill of lading.14 The purpose of this provision is obviously to deny the liability of Chinese importers (including the consignee and the bill of lading holder) of the payment of costs and expenses incurred at ports of loading. However, standard bills of lading always contain a freight and charge clause and a lien clause for security of such a liability. Receipt of goods 5.8 In the CMC 1992, the carrier shall, on demand of the shipper, issue to the shipper a bill of lading when the goods have been taken over by the carrier or have been loaded on board.15 Where a carrier has issued a document other than a bill of lading as evidence of the receipt of the goods to be carried, such a document is prima facie evidence of the conclusion of the contract of carriage of goods by sea and the taking over by the carrier of the goods as described therein. Such documents, such as sea waybills that are issued by the carrier, are not negotiable.16 It is not clear whether a shipper can request a bill of lading based on a contract of carriage or upon its demand. The Shanghai Maritime Court takes the view that the request for a bill of lading is a legal right of the shipper in the CMC 1992.17 It may become complicated if a FOB seller, who is not a contractual shipper but an actual shipper in the CMC 1992, demands the issue of a bill of lading, but the carrier may insist on issuing bill of lading to the contractual shipper. The carrier may agree to issue a sea waybill as a receipt of goods rather than a bill of lading to the FOB seller, but the seller may obtain the bill of lading through a maritime injunction. 12 Particularly ss 2 and 3 of the UK Carriage of Goods by Sea Act 1992. 13 (2011) Yong Hai Fa Shang Chu Zi No. 290 (Ningbo Maritime Court). 14 CMC 1992, art 78, para 2. 15 There is a concept of actual shipper in Chinese maritime law. So, the carrier may be required to issue a bill of lading to an actual shipper, not the contractual shipper. 16 CMC 1992, art 80. 17 NKTEX Co Ltd v Cargo Services (China) Ltd (2012) Hu Hai Fa Shang Chu Zi No. 271 (Shanghai Maritime Court).

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BILL OF LADING: FUNCTIONS

5.9 A bill of lading may be signed and issued by a person authorised by the carrier. A bill of lading signed and issued by the master of the ship carrying the goods is deemed to have been signed and issued on behalf of the carrier.18 The CMC 1992 recognises bills of lading issued before or after the shipment of goods, which are namely the received bill of lading and the shipped bill of lading. If the carrier has issued, on demand of the shipper, a received bill of lading or other similar documents before the goods are loaded on board, the shipper may surrender the same to the carrier as against a shipped bill of lading when the goods have been loaded on board. The carrier may also note on the received bill of lading or other similar documents with the name of the carrying ship and the date of loading, and, when so designated, the received bill of lading or other similar documents shall be deemed to constitute a shipped bill of lading.19 5.10 The carrier should adequately describe the goods on the bills of lading, including name, number and quantity of goods, when the bills of lading are issued at the request of the shipper. However, if the bill of lading contains particulars concerning the name, mark, number of packages or pieces, weight or quantity of the goods with respect to which the carrier or the other person issuing the bill of lading on his behalf has knowledge or reasonable grounds to suspect that such particulars do not accurately represent the goods actually received, or, where a shipped bill of lading is issued, loaded, or if he has had no reasonable means of checking, the carrier or such other person may make a note on the bill of lading specifying those inaccuracies, the grounds for suspicion or the lack of reasonable means of checking.20 In these circumstances, the carrier may use an “unknown” clause to replace the description of goods on bill of lading, but it must explain the reason why some particulars are unknown. Otherwise, the unknown clause will be invalid.21 5.11 If a bill of lading concurrently contains the weight of goods and an unknown clause, the unknown clause may be held invalid. In DSM CITRIC ACD (Wuxi) Ltd v Sparkle International Enterprises Ltd and Others,22 the carrier described the weight and other particulars of the goods, but also included an unknown clause on the bill of lading. It was held by the Wuhan Maritime Court that the unknown clause lessened the carrier’s obligation to describe the goods on the bill of lading. According to the CMC 1992, any stipulation in a contract of carriage of goods by sea or a bill of lading or other similar documents evidencing such contract that derogates from the provisions of the chapter for carriage shall be null and void. Therefore, it was held that the unknown clause was null and void.23 However, it is questionable whether description of goods on the bill of lading is a legal obligation of the carrier under the CMC 1992. In fact, there is no express provision regarding such an obligation in the CMC 1992. Therefore, the unknown clause shall not be null and void automatically. Whether particulars of goods are known and whether the unknown clause qualifies the description of goods are questions of fact, and not questions of law.

18 CMC 1992, art 72, para 2. 19 ibid, art 74. 20 ibid, art 75. 21 Shanghai Senfu Industrial Co Ltd v Hachiman Shipping SA and Dorval Kaiun KK (2011) Lu Min Si Zhong Zi No. 131 (Shandong High People’s Court) (CA). In this case, the Shandong High People’s Court held that the unknown clause was invalid because there was no note on the reason of inserting the unknown clause on the bill of lading. 22 (2005) Wu Hai Fa Shang Zi No. 183 (Wuhan Maritime Court). 23 CMC 1992, art 44.

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5.12 For the description of the quality of goods, the carrier is required to describe the apparent order and condition of goods. In shipping practice, the carrier may make notes on the bill of lading according to the notes of apparent order and condition of goods on the mate’s receipt. If the carrier or the other person issuing the bill of lading on his behalf made no note on the bill of lading regarding the apparent order and condition of the goods, the goods are deemed to be in apparent good order and condition.24 Except for an unknown note concerning the name, mark, number of packages or pieces, weight or quantity of the goods, the bill of lading issued by the carrier or the other person acting on his behalf is prima facie evidence of the taking over or loading by the carrier of the goods as described therein. Proof to the contrary by the carrier shall not be admissible if the bill of lading has been transferred to a third party, including a consignee, who has acted in good faith in reliance on the description of the goods contained in the bill of lading.25 5.13 Although it has been noted in Chinese judicial practice that description of apparent order and condition of goods on bill of lading is important for international trade, Chinese courts may not require the carrier to make such description. In Mac Steel International USA Corp v Chinese-Polish Joint Stock Shipping Company and others (Mac Steel v Chinese– Polish Shipping),26 the SPC took the view that the carrier has the discretion to decide whether to make notes on the bill of lading according to the notes on the mate’s receipt. In this case, the goods carried were cold rolled steel and the mate’s receipt described apparent damage to the package of the steel. The carrier, based on professional knowledge and due diligence, believed that the apparent order and condition described on the mate’s receipt would not affect the quality of the steel products. The SPC, therefore, held that there was no fault or fraud of the carrier who did not make notes concerning the apparent bad order and condition on the bill of lading. 5.14 It is a question of fact whether a carrier has exercised due diligence to decide for the necessity of notes regarding the apparent order and condition on bill of lading. In Shenzhen Zhongxing Oil Co Ltd v Arktis Carrier Shipping Co Ltd,27 the goods carried were sorghum with inclusion of some sorghum halepense and sorghum almum, which were prohibited from entering China, according to the Chinese Quarantine Law. The carrier did not make notes for the inclusion of impurities. The Guangzhou Maritime Court held that the carrier bore no fault for the issue of a clean bill of lading because the proportion of impurities was very low in the context of all of the goods and it did not affect the apparent order and condition of goods. However, it will be the carrier’s fault if a clean bill of lading is issued where the impurity is obvious. In (China) MINMETALS Trade Corporation v Radiant Shipping Limited,28 the proportion of impurities was 6 per cent, which were much higher than the 2 per cent requirement for the “apparent clean” condition of goods. Therefore, the master or the carrier should have accordingly found and noted the apparent bad condition through visual examination of goods. The Qingdao Maritime Court held that the master in

24 ibid, art 76. 25 ibid, art 77. 26 (2013) Min Shen Zi No. 33 (SPC) (Retrial). 27 (2003) Guang Hai Fa Chu Zi No. 377 (Guangzhou Maritime Court). 28 (2000) Qing Hai Fa Yan Shang Chu Zi No. 115 (Qingdao Maritime Court). The judgment was overruled in the appeal based on finding of new evidence by the Shandong High People’s Court (2002) Lu Min Si Zhong Zi No 24 (Shandong High People’s Court) (CA).

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BILL OF LADING: FUNCTIONS

this circumstance should make the appropriate notes and was at fault when he issued a clean bill of lading without notes. 5.15 The carrier should exercise due diligence to examine the goods only within the scope of its professional knowledge and skills. In Minermet SpA v China Shipping Bulk Carrier Co Ltd and China Metallurgical Import & Export Guangdong Company,29 the goods described on the bill of lading were fused magnesia–chrome sinter but the goods actually carried were valueless stones. The Dalian Maritime Court held that the carrier was responsible only for the apparent order and condition, and not the actual quality of the goods. 5.16 The SPC in Mac Steel v Chinese–Polish Shipping pointed out that as a matter of fact, the package problem noted on the mate’s receipt had no connection with the damage to the goods. It proved the accuracy of the carrier’s decision. However, there is no requirement of such connection in the CMC 1992 regarding the carrier’s obligation to describe the goods on the bill of lading. Furthermore, in the CMC 1992 there is no such discretion of the carrier to decide whether to make notes on the bill of lading if the mate’s receipt has relevant notes. On the contrary, the CMC 1992 provides that if the carrier made no note on the bill of lading regarding the apparent order and condition of the goods, the goods shall be deemed to be in apparent good order and condition.30 The carrier did not make any notes on the bill of lading in Mac Steel v Chinese–Polish Shipping, but the deemed result obviously was inconsistent with the fact that the steel products were in apparent bad order and condition. 5.17 The carrier may use special clauses on bills of lading to replace a description of apparent order and condition of goods, particularly the goods of steel production. Standard forms of bill of lading for the carriage of steel products usually contain the RETLA clause, which provides that: If the Goods as described by the Merchant are iron, steel, metal or timber products, the phrase “apparent good order and condition” set out in the preceding paragraph does not mean the Goods were received in the case of iron, steel or metal products, free from visible rust or moisture or in the case of timber products free from warpage, breakage, chipping, moisture, split or broken ends, stains, decay or discoloration. Nor does the Carrier warrant the accuracy of any piece count provided by the Merchant or the adequacy of any banding or securing. If the Merchant so requests, a substitute Bill of Lading will be issued omitting this definition and setting forth any notations which may appear on the mate’s or tally clerk’s receipt.

The carrier may rely on the RETLA clause to exempt their obligation of description of apparent order and condition on bill of lading. However, the SPC denied this exemption clause in Tokio Marine & Nichido Fire Insurance (China) Co Ltd v Grieg Star Shipping AS and Grieg Shipping AS (Tokio Marine v Grieg Star).31 In this case, the SPC took the view that the RETLA clause was a clause printed on the bill of lading before shipment and, therefore, it could not be used for the description of the goods in dispute. Thus, the SPC held that the carrier was not exempted to describe the apparent order and condition on the bill of lading by the RETLA clause.

29 (2004) Da Hai Chang Shang Chu Zi No. 1 (Dalian Maritime Court). 30 CMC 1992, art 76. 31 (2014) Min Shen Zi No. 445 (SPC) (Retrial).

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5.18 If the carrier had described the goods in apparent good order and condition in Tokio Marine v Grieg Star,32 the RETLA clause may have qualified the description although it could not properly be considered as a description.33 If it qualified the description, it would actually become an unknown clause and it would mean that there was no description on the bill of lading. This turns on the same question in Tokio Marine v Grieg Star. It was believed in Tokio Marine v Grieg Star that the carrier had legal obligation to describe the apparent order and condition of goods under the CMC 1992.34 It seems that the carrier breached the obligation even if the goods were described because of the existence of the RETLA clause. However, it must be noted that there is no express provision in the CMC 1992 that requires such an obligation of description. Otherwise, the carrier will not have the discretion to decide whether or not to describe the apparent order and condition.35 Therefore, the RETLA clause should validly qualify the description of apparent order and condition of goods on bill of lading.36 5.19 The notes of apparent bad order and condition on the bill of lading are also a kind of qualification to the description of “clean on board”. In Xinjiang Shenpujing Steel Co Ltd v Chinse–Polish Joint Stock Shipping Company,37 the carrier made notes on the bill of lading regarding the apparent damaged condition of goods although the bill also contained the words “clean on board”. The bill of lading holder insisted that this bill of lading was a clean bill of lading and claimed against the carrier for damage to the goods. The carrier denied liability and contended that this bill of lading was not a clean bill of lading. The Shanghai Maritime Court referred to article 32 of the UCP 500 and found that such a kind of bill of lading was not a clean bill of lading in the eyes of banks.38 Therefore, it was a valid qualification to the statement of “clean on board” and the bill of lading in dispute was not a clean bill of lading. The Shanghai Maritime Court also pointed out that the bill of lading holder should reject the unclean bill of lading and it suffered the loss because it had paid the price for the goods against the unclean bill of lading. It was thus held that the bill of lading holder could not rely on the unclean bill of lading to make claim against the carrier. Document of title 5.20 The last function of the bill of lading in carriage of goods by sea is to act as a document of title. A bill of lading in the CMC 1992 is a document based on which the carrier 32 See English case Breffka & Hehnke GmbH & Co KG and Others v Navire Shipping Co Ltd and Others (The Saga Explorer) [2012] EWHC 3124 (Comm). 33 See Tokio Marine & Fire Insurance Company Ltd v Retla Steamship Company [1970] 2 Lloyd’s Rep 91 (US 9th Circuit CA). 34 Therefore, the SPC thus held that the RETLA clause infringed the compulsory requirement of the CMC 1992 and became null and void. 35 See Mac Steel (n 26). 36 This understanding is consistent with the decision in the US judgment of Tokio Marine & Fire Insurance Company Ltd v Retla Steamship Company. It is, however, inconsistent with the English judgment of The Saga Explorer. 37 (2006) Hu Hai Fa Shang Chu Zi No. 495 (Shanghai Maritime Court). 38 The Shanghai Maritime Court referred to the UCP because there is no answer from the CMC 1992 to the question in the dispute. Article 268, para 2 of the CMC 1992 provides that international practice may be applied to matters for which neither the relevant Chinese laws nor any international treaty concluded or acceded to by China contain any relevant provisions.

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undertakes to deliver the goods against the surrender of the bill of lading.39 A provision in the document stating that the goods are to be delivered to the order of a named person, or to order, or to bearer, constitutes such an undertaking.40 It means that the CMC 1992 recognises the order bill of lading and bearer bill of lading as documents of title.41 The CMC 1992 does not clarify whether the straight bill of lading is a document of title, but the understanding of Chinese judicial practice is that it is also a document of title, but it is not negotiable.42 However, the straight bill of lading is not a document of title when held by a person other than the consignee as stated on the straight bill of lading, and such a holder is not entitled to take delivery of goods from the carrier.43 5.21 In shipping practice, the carrier may issue more than one original copy of the bill of lading. For delivery purposes, it is always expressed on a bill of lading that one copy is to be surrendered for delivery of goods and, on surrender, the others will be void. Chinese judicial practice also recognises this concept. Where a carrier issues an original bill of lading in multiple copies, after the delivery of the goods to the person who first submits one original copy of the bill of lading, the carrier has no obligation of delivery of goods to any other persons who hold the remaining original copies of the bill of lading.44 5.22 It is not uncommon in practice that the shipper and the carrier agree for a telex release of goods according to instructions of the shipper. In this circumstance, the carrier will issue a bill of lading with words “surrendered” or “telex release” and take it back at the port of shipment. This kind of bill of lading is called a telex release bill of lading. In Chinese judicial practice, the telex release bill of lading is not a document of title because it is not used for the delivery of goods in the port of discharge.45 Of course, the telex release bill of lading is still evidence of contract between the shipper and the carrier and receipt of goods. 5.23 A bill of lading may not be considered as a document of title if the holder has given up entitlement to the delivery of goods. In Hyosdoc (HK) Ltd v China Marine Shipping Agency Co Ltd Fangchenggang Company and others (Hyosdoc (HK) Ltd v China Marine Shipping Agency),46 the goods were delivered without an original bill of lading. After the delivery, the bill of lading holder signed a settlement agreement with relevant parties including the person who took the delivery of goods and promised to pay the price of goods to the bill of lading holder. In the claim by the bill of lading holder against the carrier, the SPC held that the bill of lading holder, by settlement agreement, had recognised the legal entitlement of the actual receiver of the goods and given up its right to claim delivery of 39 The bill of lading issued by a person who actually has not received the goods for carriage is not a document of title. See Shandong Laiwu No. 2 Dyeing & Weaving Factory v AMS Global Transportation Co Ltd (2000) Hu Hai Fa Shang Chu Zi No. 63 (Qingdao Maritime Court). 40 CMC 1992, art 71. 41 The transfer of order bill of lading needs valid endorsements. Otherwise, it constitutes illegal transfer and such an order bill of lading cannot be used for delivery of goods. Therefore, it is not considered as a document of title. See China Recycling Development Co Ltd Nantong Branch Liquidation Committee v China Shipping Agency Nantong Co Ltd and Sinotrans Jiangsu Co Ltd (2006) Wu Hai Fa Shang Zi No. 36 (Wuhan Maritime Court). 42 Shanghai SVA-DAV Electronics Co Ltd v Cheng Lie Navigation Co Ltd (2003) Hu Hai Fa Shang Chu Zi No. 415 (Shanghai Maritime Court). 43 Huaye International Investment Co Ltd v Grand Fortune International Shipping Agency Ltd (2013) Hu Hai Fa Shang Chu Zi No. 1168 (Shanghai Maritime Court). 44 Provisions on Delivery of Goods without Original Bills of Lading 2009, art 10. 45 Beijing Profit Sail International Express Co Ltd Shanghai Branch v Shanghai AMASS International Freight Co Ltd (2009) Hu Gao Min Si (Hai) Zhong Zi No. 103 (Shanghai High People’s Court) (CA). 46 (2002) Min Si Zhong Zi No. 27 (SPC) (Retrial).

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the goods. Therefore, the SPC held that the bill of lading in dispute would no longer be a document of title in the hands of the holder and, therefore, the bill of lading holder was not entitled to claim against the carrier. 5.24 It seems possible to conclude from Hyosdoc (HK) Ltd v China Marine Shipping Agency that the bill of lading in this case was not a document of title because the goods had been delivered according to the settlement agreement. However, the settlement agreement was just an agreement between trade parties and the carrier was not a party to that agreement. If the bill of lading holder has not received payment through the settlement agreement, the holder must have suffered loss due to the delivery of goods without a bill of lading. There is no reason to reject the holder’s claim against the carrier based on the bill of lading. The SPC amended its opinion in this case through its judicial interpretations. According to the Provisions of the Supreme People’s Court on Certain Issues Concerning the Application of Law to the Trial of Cases Involving Delivery of Goods without Original Bills of Lading 2009 (Provisions on Delivery of Goods without Original Bills of Lading 2009),47 after a carrier delivers goods without a bill of lading, if the bill of lading holder and the person who takes the goods without the bill of lading reach an agreement on payment for goods, such an agreement shall not prejudice the exercise of the right of the holder to claim against the carrier for any loss incurred by the holder due to the delivery of goods without a bill of lading, provided that the agreed payment has not been paid.48 5.25 The carrier’s obligation of delivery of goods against an original bill of lading may be exempted by the instruction of the bill of lading holder. In Jiangsu Soho International Group Co v Inco Kaiun Kaisha Ltd,49 before the arrival of the goods, the bill of lading holder requested the charterer to issue a letter of indemnity to the shipowner as the carrier for delivery of goods to the holder without bill of lading. However, the carrier delivered the goods to a person who was the buyer of the goods in the sale of goods contract made with the bill of lading holder. The buyer failed to pay the whole price of the goods and the bill of lading holder claimed against the carrier. The carrier was held liable for delivery of goods without the original bill of lading in the court of first instance50 and the court of appeal.51 However, the SPC denied the bill of lading holder’s claim and held that the bill of lading in the hands of the holder was not a document of title when it had already requested the delivery of goods without the original bill of lading. The SPC pointed out that such a request of the bill of lading holder indicated that the holder had given up its right on the bill of lading as the document of title. More importantly, when the carrier delivered the goods to the buyer, the bill of lading holder was aware of the delivery but had not taken action to stop the delivery and instead asked for the payment for the goods from the buyer. It was believed by the SPC that, in this circumstance, the bill of lading had ceased to be a document of title and the bill of lading holder should not be able to claim delivery of goods against the carrier. 5.26 It seems reasonable to conclude from Jiangsu Soho International Group Co v Inco Kaiun Kaisha Ltd that the bill of lading will not be a document of title when the bill of lading holder requests the delivery of goods without a bill of lading, because it will not use the

47 48 49 50 51

Fa Shi [2009] No. 1 (SPC). Provisions on Delivery of Goods without Original Bills of Lading 2009, art 13. (2000) Jiao Ti Zi No. 7 (SPC) (Retrial). (1996) Wu Hai Fa Shang Zi No. 128 (Wuhan Maritime Court). (1997) E Jing Zhong Zi No. 294 (Hu Bei High People’s Court) (CA).

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bill to take delivery. Even if the bill of lading holder claims against the carrier after delivery, the carrier may not be liable for delivery of goods without bill of lading because the bill of lading holder suffers no loss when it takes delivery of the goods. However, where the carrier actually delivers the goods to a third party, the bill of lading in the hands of holder may revert to a document of title because the carrier did not deliver the goods to the bill of lading holder upon its instruction. Of course, it might be the bill of lading holder’s fault when it knew of the wrong delivery but did not take any action to stop it. But the consequence of such a fault may simply be a deduction of the carrier’s liability, and not the complete loss of the function of the document of title. Bill of lading and property right 5.27 Although the CMC 1992 expresses clearly that the bill of lading is a document for title of delivery of goods, both Chinese academic scholars and Chinese judges will commonly confuse the two concepts of the document of title on goods and the property right on goods. The function of a document of title has no direct relation with the property right on goods. The transfer of ownership of goods is a matter of the contract of sale of goods, rather than the contract of carriage of goods. The Contract Law provides that the ownership over a targeted matter is transferred upon the delivery of the targeted matter, unless the law provides otherwise or the parties stipulate otherwise.52 Therefore, whether the ownership has been transferred depends on the contractual intention in the sale of goods contract, and the bill of lading is not evidence of such intention. 5.28 The parties to a sale of goods contract may agree to transfer the property right at any time, e.g. before the receipt of goods by the carrier, after the loading of the goods on board, after discharge of the goods, after the payment of price, after the inspection of the goods in discharge port or after the receipt of the goods by the buyer. Obviously, only where the parties agree to transfer the ownership of goods when the goods have been loaded on board and the bill of lading is required to be issued for the carriage, will the bill of lading issued accordingly become evidence of transfer of the ownership of goods. But even if the ownership has been transferred from the seller to the buyer, the seller may still have the rights of suit against the carrier if the contract of carriage is between the seller and the carrier.53 5.29 The relationship between the bill of lading and the property right has confused Chinese judicial practice for a long time. It has always been understood by the Chinese maritime courts that the bill of lading is a proof of property right of the bill of lading holder. Recent and detailed explanation of the relation between the two issues was given by the SPC in China Construction Bank Guangzhou Liwan Branch v Guangdong Lanyue Energy Developments Ltd and Huilai Yuedong Electric Fuel Co Ltd (China Construction Bank v Guangdong Lanyue and Others).54 In this case, there were two questions relating to the bill of lading that needed to be answered by the SPC. The first was whether the bill of lading was evidence of a property right. The second question was, if the answer was 52 Contract Law 1999, art 133. 53 For example, the parties to a sale of goods contract use CIF term. Then the seller who is responsible for the carriage becomes the shipper with the carrier in a carriage of goods contract. 54 (2015) Min Si Ti Zi No. 126 (SPC) (Retrial).

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yes to the first question, whether a person obtained the property right if he took possession of the bill of lading. 5.30 In regards to the first question, the SPC clarified that the bill of lading could be evidence of a property right over goods. There are two reasons for this. First, when the goods are arranged for delivery by shipment, the seller may not be deprived of the property right on the delivered goods. Although the seller does not physically control the goods, which are actually controlled by the carrier, the seller who reserves the property right can still request the return of the goods. The SPC understood that such right of return of goods is based on the property right and the bill of lading is the only document for taking the delivery of goods returned from the carrier. Secondly, for the delivery of goods without an original bill of lading, the carrier may take the liability for breach of contract or the liability in tort.55 We would humbly submit that this reasoning is questionable. As discussed aforesaid,56 the bill of lading could be evidence of property right, but not based on the two reasons given by the SPC in China Construction Bank v Guangdong Lanyue and others. First, the seller may request the return of goods as a right of control provided by the Contract Law, but whether the right of control in general contract of carriage can apply to the carriage of goods by sea is questionable. Even if the goods could be returned upon the seller’s request, the carrier usually requires the seller to return the bill of lading and finally return the goods not upon the surrender of the bill of lading but a new agreement for return carriage. Second, whether a bill of lading holder can claim against the carrier for tortious liability depends on the claimant’s property right, which, as discussed aforesaid,57 is based on the sale of goods contract, and not the bill of lading. 5.31 For the second question, the SPC answered that whether the bill of lading holder obtains a property right depends on whether the holder is entitled to possess the bill of lading based on the underlying contract. The SPC gave three examples to illustrate how the possession of a bill of lading can prove the obtainment of property right. First, if a person obtains a bill of lading based on an entrustment contract, that person may only be entitled to take the delivery of goods,58 but not the property right. It is a simple example and the answer is appropriate. Second, if the transfer of a bill of lading is based on a sale of goods contract, such a transfer means the transfer of the contractual rights and the property rights on the goods. There is no doubt that the transfer of the bill of lading will have the legal effect of transfer of contractual rights of the bill of lading.59 However, as discussed aforesaid,60 as the bill of lading may or may not be the evidence of property right on goods, the transfer of bill of lading may not prove the transfer of the property right. Last, if a bill of lading is obtained through pledge, the transfer of bill of lading will have contractual effect under the pledge contract. 5.32 In the second example, the SPC provided the authority for its answer. Article 26 of the Property Law provides that “[W]here a third party has taken possession of the movables according to law prior to the creation or transfer of the property right of the said movables, the person who is obligated to deliver the movables may do so, instead, through transferring

55 56 57 58 59 60

Provisions on Delivery of Goods without Original Bills of Lading 2009, art 3, para 1. See para 5.28. See paras 5.27. For example, that person is entrusted to take delivery of goods. CMC 1992, art 78. See paras 5.27 and 5.28.

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the right of requesting the third party to return the original movables.” However, the Property Law just recognises the method of transfer of property right through the transfer of the right of requesting the third party for delivery, e.g. the transfer of bill of lading. In fact, the transfer of the property right is not based on the transfer of the bill of lading, but the intention of parties in the sale of goods contract. In other words, if there is no such agreement in a sale of goods contract for the transfer of property right though the transfer of the bill of lading for delivery of goods, even if the bill of lading is transferred, it does not mean that there has been a transfer of the property right because it was not in the intention of the parties. In other words, the SPC in China Construction Bank v Guangdong Lanyue and others clarified that the bill of lading is not necessarily evidence of property right and possession of the bill of lading does not mean the entitlement of the property right, although the second example and some explanations used were not entirely appropriate. Delivery of goods without bill of lading 5.33 Where a carrier delivers goods without the original bill of lading, and thus infringes the original bill of lading holder’s rights, the original bill of lading holder may request the carrier to bear the civil liabilities for the loss caused.61 Such liabilities include the liability for breach of contract or in tort.62 The bill of lading holder may request the carrier who delivers goods without the bill of lading and the person who takes the goods without the bill of lading to bear joint and several liability for compensation.63 If a person uses a forged bill of lading for taking goods from a carrier, the consignee that holds the bill of lading may request the carrier to bear civil liability for delivery of goods without the bill of lading.64 Where a carrier bears any civil liability for delivery of goods without a bill of lading, it shall not be entitled to the limitation of liability in the CMC 1992.65 5.34 There is a special exemption of liability for delivery of goods without a bill of lading in the SPC’s Provisions on Delivery of Goods without Original Bills of Lading 2009. Where a carrier, according to the requests from the shipper of a straight bill of lading, suspends the shipment, returns the goods, changes the port of destination or delivers the goods to other consignees, if the consignee who holds the straight bill of lading requests the carrier to bear the civil liability for delivery of goods without the original bill of lading, the Chinese courts shall not uphold such request.66 There is no clear authority for such an interpretation. It seems that those requests from the shipper are based on the right of control from the Contract Law, but the right of control is not restricted to the straight bill of lading. It seems that the SPC considers the straight bill of lading as the sea waybill for the purpose of the right of control even though the straight bill of lading is considered as the document of title but the sea waybill is not.67

61 Provisions on Delivery of Goods without Original Bills of Lading 2009, art 2. 62 ibid, art 3. 63 ibid, art 11. 64 ibid, art 5. It is believed that a bill of lading holder other than a consignee also may request the carrier to bear liability. 65 ibid, art 4. This provision is inconsistent with the provisions of limit of liability in the CMC 1992. See paras 7.15–7.18 for limit of liability in the CMC 1992. 66 Provisions on Delivery of Goods without Original Bills of Lading 2009, art 9. 67 See para 5.20.

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5.35 The burden of proof for delivery of goods without a bill of lading is on the bill of lading holder. In Changzhou Foreign Trade Corporation v Shanghai Grandway International Transportation Co Ltd,68 the shipper holding the bill of lading claimed against the carrier for delivery of goods without bill of lading. The shipper proved that the customs clearance of the goods had been completed. The Shanghai Maritime Court held that the burden of proof was not satisfied because the shipper failed to prove that the delivery of goods was a pre-condition of customs clearance. Therefore, it was held that there was no sufficient evidence to prove the carrier’s delivery of goods without a bill of lading. In this case, the shipper did not try to take delivery of goods by itself with the bill of lading. If the shipper claimed for the delivery of goods, and not for the liability for delivery of goods without bill of lading, the burden of proof may shift to the carrier if the carrier actually delivers the goods without a bill of lading. 5.36 In container carriage of goods by sea, particularly unsure of meaning FCL/FCL or LCL/FCL,69 container devanning is prima facie evidence of the delivery of goods without bill of lading. It is presumptive evidence because container devanning does not inevitably result in delivery of goods. If the bill of lading holder proves container devanning, the carrier needs to prove that the goods are still under its control.70 Otherwise, it would be presumed that the carrier has delivered goods without bill of lading.71 If the carrier can prove any of the following circumstances, the carrier shall not be held liable for delivery of goods without a bill of lading: (1) the bill of lading holder acknowledges the delivery of goods without a bill of lading; (2) the laws of the place in the location of discharge port as specified in the bill of lading compulsorily prescribes that the arrived goods shall be delivered to the local customs or port authorities;72 or (3) no person takes the delivery of goods at the port of destination and the carrier delivers goods according to the instruction of the shipper.73 Similarly, if no customs declaration is made for the goods and the relevant customs takes the goods and sells them legally, or the relevant court renders a decision to sell the goods detained by the carrier, the carrier shall be exempted from the obligation of the delivery of goods.74 5.37 The amount of compensation for the loss caused by a carrier to the bill of lading holder due to delivery of goods without the bill of lading is calculated based on the price

68 (2006) Hu Hai Fa Shang Chu Zi No. 244(Shanghai Maritime Court). 69 FCL means full container load and LCL means less than container load. If it is agreed FCL in port of discharge, it means that the carrier is not responsible for container devanning. On the contrary, if it is agreed FCL/ LCL or LCL/LCL, the carrier is responsible for container devanning. In the latter case, the container devanning shall not be evidence of delivery of goods without bill of lading. 70 Anhui Only Electronic Co Ltd v Lvyun International Freight Forwarding (Shenzhen) Co Ltd Shanghai Branch and Voyage Logistics Ltd (2011) Min Shen Zi No. 177 (SPC) (Retrial). In this case, the carrier proved that the goods were still in the warehouse of its agent at the port of discharge. The SPC held that the goods were in the control of the carrier and the container devanning did not prove the delivery of goods without bill of lading. See also New East Grace International Corporation Wuxi Company v JIF Logistics Inc (2014) Min Shen Zi No. 446 (SPC) (Retrial). In this case, the carrier proved that the goods were not delivered without bill of lading but carried back to the shipper. 71 Shanghai Feierda International Trade Co Ltd v SBS Wordwide Ltd and Others (2013) Hu Hai Fa Shang Chu Zi No. 851 (Shanghai Maritime Court). 72 It is affirmed by the Provisions on Delivery of Goods without Original Bills of Lading 2009, art 7. 73 Minutes of the Second National Working Conference on the Trial of Foreign-Related Commercial and Maritime Cases 2005, art 110, para 1. 74 Provisions on Delivery of Goods without Original Bills of Lading 2009, art 8.

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of the goods plus freight and insurance expenses when the goods are shipped.75 The price can be determined on the basis of the prices specified in the trade contract, settlement bills or verification bills; where there is any discrepancy in the amount, the price is determined on the basis of actually paid prices. The compensation also includes the loss of interest of actually paid prices.76 This amount of compensation applies to a person who takes delivery of goods from the carrier without a bill of lading for its tortious liability.77 5.38 There is a causation requirement between the bill of lading holder’s loss and the carrier’s delivery of goods without bill of lading. If the bill of lading holder has received the payment of price of goods, the carrier may not be liable because the holder suffered no loss although the carrier delivered the goods without bill of lading.78 For the same reason, if the bill of lading holder has received part payment, the payment will be deducted from the compensation of the carrier.79 There is no doubt that the Chinese seller who holds the bill of lading may suffer loss of payment of price from the foreign buyer who fails or refuses to pay if the carrier delivers the goods to the buyer without bill of lading. However, it is controversial whether the export tax rebate under Chinese law shall be compensated by the carrier who delivers goods without bill of lading. 5.39 In Shanghai SVA-DAV Electronics Co Ltd v Cheng Lie Navigation Co Ltd,80 the Shanghai Maritime Court took the view that the shipper had not received the payment and the export tax rebate became impossible. Therefore, it was held that there was causation between the shipper’s loss including the export tax rebate and the carrier’s delivery of goods without a bill of lading. However, the Shanghai Maritime Court changed its view a few years later in Suzhou Everich Imp. & Exp Co Ltd v Jinghai Transport Co Ltd.81 In this case, it was pointed out that the loss of export tax rebate was caused by the failure of payment of the price, and not directly by the delivery of goods. Therefore, there was no causation between the delivery of goods without bill of lading and the loss of export tax rebate. Furthermore, the Shanghai Maritime Court explained that the exporter could still apply for the export tax rebate when it received the compensation from the carrier. Even if the export tax rebate is not admissible, the exporter can raise a separate claim for the loss of export tax rebate. It is difficult to anticipate which judgment may be followed in judicial practice and the SPC’s future explanation may be needed for clarification. Letter of indemnity 5.40 Letters of indemnity are commonly used in carriage of goods by sea. In the port of shipment, a letter of indemnity may be required for issue of clean bills of lading, advanced bills of lading or back-dated bills of lading. In the port of discharge, a letter of indemnity

75 ibid, art 6. 76 Minutes of the Second National Working Conference on the Trial of Foreign-Related Commercial and Maritime Cases 2005, art 107. 77 ibid, art 109. 78 Adissa Sport and Fitness (Hangzhou) Co Ltd v FIEGE Ltd and FIEGE Ltd Ningbo Branch (2009) Yong Hai Fa Shang Chu Zi No. 460 (Ningbo Maritime Court). 79 Ningbo Yinzhou Kongke Fashion Co Ltd v Sea-Air Logistics (China) Ltd (2011) Hu Hai Fa Shang Chu Zi No. 39 (Shanghai Maritime Court). 80 (2003) Hu Hai Fa Shang Chu Zi No. 415 (Shanghai Maritime Court). 81 (2009) Hu Hai Fa Shang Chu Zi No. 637 (Shanghai Maritime Court).

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may be required for release of goods without bill of lading. When the carrier issues a clean bill of lading, or releases goods without an original bill of lading against a letter of indemnity, it may be held liable to a third party, e.g. the bill of lading holder for the damage to goods or the delivery of goods without bill of lading. For compensation, the carrier can, based on the letter of indemnity, claim against the provider of letter of indemnity, usually the shippers of the goods and the charterers of a ship, to indemnify its liability to the third party. 5.41 Whether a carrier can be successfully indemnified depends on the validity of the letter of indemnity it relies on. A letter of indemnity may be valid if it is used for a reasonable purpose. In Shanghai Ocean Shipping Company v China TUHSU Guangxi Branch (The Liu Lin Hai),82 the shipper required the carrier to open the hatch cover to dry the goods of cassava sheets during the carriage and therefore provided a letter of indemnity that provided that the shipper would be liable for shortage of goods in the port of discharge. The goods were discharged and shortage of delivery was found. The carrier was held liable for the shortage of delivery to the bill of lading holder and then claimed against the shipper based on the letter of indemnity in the Guangzhou Maritime Court. It was found that the weight of the goods was assessed by the draught survey and a certain amount of error in weight was unavoidable when the goods were weighted by the draught survey, and the short weight was also inevitable where the goods were dried during the voyage. It was, therefore, believed that the shipper did not intend to deny any problem of quality of the goods by providing the letter of indemnity for issue of a clean bill of lading. Meanwhile, the carrier had no intention of fraud by the issue of the clean bill of lading against the letter of indemnity; it was just for a resolution of disputes concerning the weight of goods between the shipper and the carrier. The Guangzhou Maritime Court concluded that both the shipper and the carrier acted in good faith and the issue of the letter of indemnity in dispute complied with the requirement of good faith in the General Principles of the Civil Law 1986.83 Therefore, the letter of indemnity was a valid contract and the shipper should indemnify the carrier’s liability to the receiver of the goods. 5.42 For reasons of prudence, before the Guangzhou Maritime Court gave the judgment in The Liu Lin Hai, the Guangdong High People’s Court84 requested the opinion of law from the SPC.85 The SPC gave its reply (the SPC’s Reply) which confirmed the opinion of the Guangzhou Maritime Court.86 The SPC replied that the shipper and the carrier shall perform the letter of indemnity if the shipper provides the letter of indemnity and the carrier accepts it in good faith. The SPC’s Reply reaffirms that good faith is a condition of the validity of a letter of indemnity for issue of a clean bill of lading, and a valid letter of indemnity shall likewise legally bind the carrier and the shipper. The judgment of The Liu Lin Hai from the Guangzhou Maritime Court indicates that whether a letter of indemnity is provided and accepted in good faith depends on the intention of the parties, namely the shipper and the carrier. 82 (1987) Guang Hai Fa Shang Zi No. 03–20 (Guangzhou Maritime Court). 83 General Principles of the Civil Law 1986, as amended in 2009, art 4. Good faith is also a requirement of performance of contract in art 6 of the Contract Law 1999. 84 The Guangdong High People’s Court is the appellate court of the Guangzhou Maritime Court. 85 It is a judicial practice in Chinese courts that a court may request the opinion of law on complicated legal issues from the upper level courts before making judgments. 86 Fa (Jiao) Fu (1988) No. 44 (SPC).

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5.43 The finding of parties’ intention is a question of fact and Chinese courts decide it on a case-by-case basis. In Golden Coast International Trade Ltd v Yancheng Zhongda International Trading Co Ltd,87 the Shanghai Maritime Court found that there was no fraudulent intention on the part of the shipper and the carrier against third parties when a clean bill of lading was issued against a letter of indemnity. Therefore, it was believed that the shipper provided the letter of indemnity and the carrier accepted it in good faith. It was held that such a letter of indemnity was valid and the carrier was entitled to claim against the shipper based on the letter of indemnity. It seems that the Shanghai Maritime Court regarded good faith and the lack of fraud as equivalent. In fact, they are two different concepts. Good faith for the validity of a letter of indemnity is a requirement between the carrier and the provider of the letter of indemnity, whereas the lack of fraud is not. Fraud may become evidence of bad faith, but bad faith may not include the intention for fraud against interests of third parties. For example, a carrier may know of the apparent damaged order and condition of the goods but deliberately issue a clean bill of lading against a letter of indemnity from a shipper.88 This carrier may not have an intention to defraud, but did so for the purposes of doing business with the shipper only. In this situation, the letter of indemnity should not be valid because it is not accepted by the carrier in good faith even if there is no fraud. 5.44 If a letter of indemnity is invalid due to bad faith, a carrier cannot be indemnified based on the invalid contract. However, the carrier may be indemnified according to Chinese civil law. In Xiamen Chengyi Shipping Co Ltd v Yunfu Pyrite Group Ltd,89 the carrier claimed against the shipper to indemnify its liability due to the issue of a clean bill of lading against the shipper’s letter of indemnity. It was found that the letter of indemnity was invalid because of bad faith. However, The Guangzhou Maritime Court held that both the carrier and the shipper infringed upon the bill of lading holder’s rights and both of them should be jointly liable for the compensation of cargo claim. Because the carrier had compensated the bill of lading holder’s loss, the shipper should indemnify 50 per cent of the carrier’s compensation to the bill of lading holder. The legal authority was the General Principles of the Civil Law 1986 which provides that if two or more persons jointly infringe upon another person’s rights, they shall bear joint liability for the damage thus caused to that person.90 However, those provisions are for the one and same dispute between the two or more wrongful persons and the innocent person. They do not apply to a carrier’s claim against a shipper under the letter of indemnity after he is liable for compensation to the bill of lading holder in another dispute of cargo claim.

87 88 89 90

(2007) Hu Hai Fa Shang Chu Zi No. 655 (Shanghai Maritime Court). Cf English case Brown, Jenkinson & Co Ltd v Percy Dalton [1957] 2 QB 621. (2000) Guang Hai Fa Shi Zi No. 95 (Guangzhou Maritime Court). General Principles of the Civil Law 1986, as amended in 2009, art 130.

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CHAPTER 6

Bill of lading: Parties

6.1 The parties to the contract of carriage of goods by sea evidenced by bill of lading are the shipper and the carrier. Besides the contractual shipper and the contractual carrier, there are also the concepts of an actual shipper and an actual carrier in the CMC 1992. The actual shipper is the person other than the contractual shipper who delivers goods to the carrier for shipment. It is a term used in judicial practice, but is simply termed “shipper” in the CMC 1992. The actual carrier is defined in the CMC 1992 to be distinguished from the contractual carrier who does not actually carry the goods but has contracted with the shipper. A consignee is defined in the CMC 1992 as not a party to the contract evidenced by bill of lading, although its name may sometimes appear on the straight bill of lading. The consignee and the bill of lading holder are responsible for some obligations under the CMC 1992 or the Contract Law. The consignee and the bill of lading holder may be also affected by charterparties if they are validly incorporated into the bills of lading. The carrier 6.2 “Carrier” in the CMC 1992 means the person by whom or in whose name a contract of carriage of goods by sea has been concluded with a shipper.1 It requires a contractual relationship with the shipper, regardless of whether the carrier actually carries the goods by sea. Identification of a carrier is always a fundamental task in cargo claims or the claims against the cargo interests in Chinese maritime courts. The difficulty in identification of a carrier is mainly caused by the inconsistencies found between the head section of bill of lading, signature on the face of bill of lading and terms on the reverse side of bill of lading. The Chinese judicial practice for identification of carriers follows and respects the commercial sense used in shipping practice. 6.3 When a standard bill of lading is issued, the name or logo in the head section of the bill of lading may be obvious, but it may not be used for identification of the carrier. In Mohamed Gad.Karim ABD EL Rahim Othman v Evergreen Marine Corporation,2 the bill of lading was a standard bill with the words “EVERGREEN LINE” in the head section. However, it was found that not only Evergreen Marine Corporation but also other companies were entitled to use this standard bill of lading. A signature of Italia Marittima SPA as

1 CMC 1992, art 42 (1). 2 (2009) Hu Hai Fa Shang Chu Zi No. 672 (Shanghai Maritime Court).

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the carrier was found in the signature box of the bill of lading.3 Therefore, it was held that Italia Marittima SPA was the carrier, and not Evergreen Marine Corporation. Even if the company named in the head section of the bill of lading has some internal and commercial relationship with the company that signs the bill of lading as the carrier, the company named in the head section will not be considered as the carrier if they are two different and independent companies. In China House Enterprises Co Ltd v Bondex Logistics Co Ltd Guangzhou Branche and others,4 the company in the section head was Maersk Sealand, but both the signature on the face of the bill of lading and the terms on the reverse side of the bill of lading identified “Dampskibsselskabetof1912” as the carrier. It was held that “Dampskibsselskabetof1912” was the carrier although those two companies were two core commercial units of A.P. Moller Maersk Group. 6.4 If a person is recognised as the carrier on the face of the bill of lading, it cannot rely on the terms on the reverse side of the bill of lading to deny its status as the carrier. In Taizhou Hisource International Trade Co Ltd v U.S. United Logistics Inc (Taizhou Hisource v UUL),5 the agent signed on the face of the bill of lading but denied its status as the carrier according to the terms on the reverse side of the bill of lading. It was held that the carrier should be identified by the signature on the face of bill of lading because it would cause difficulty to the shipper and the bill of lading holder in good faith in identification of the carrier if the carrier hid behind the bill of lading. This case reflects the common understanding in shipping practice.6 6.5 It is reasonable to give the priority to the information on the face of bill of lading for identification of the carrier. However, the problem in Taizhou Hisource v UUL is that, when the agent signed the bill of lading on behalf of the carrier, the agent should not be considered as the carrier unless it signed the bill of lading “as carrier”.7 If an agent who signs and issues a bill of lading on behalf of a carrier, in order to prove that it is not the carrier, it would need to prove that its principal, namely the carrier legally exists when the bill of lading is issued and that it has obtained the principal’s authority to issue such a bill of lading. Otherwise, the agent will be considered as the carrier.8 Of course, if the shipper including the actual shipper knows the fact that the agent acts on behalf of the carrier, the agent is exempted from such a burden of proof.9 The actual carrier 6.6 “Actual carrier” in the CMC 1992 means the person to whom the performance of carriage of goods, or of part of the carriage, has been entrusted by the carrier, and includes any other person to whom such performance has been entrusted under a sub-contract.10 3 In fact, Italia Marittima SPA was a company merged and acquired by Evergreen Marine Corporation. That is why Italia Marittima SPA was entitled to use the standard bill of lading of Evergreen Marine Corporation. 4 (2002) Guang Hai Fa Shang Zi No. 415 (Guangzhou Maritime Court). 5 (2006) Hu Gao Min Si (Hai) Zhong Zi No. 44 (Shanghai High People’s Court) (CA). 6 See English case The Starsin [2003] UKHL 12. 7 Pinghu Fuhua Bag Factory and Shanghai Sinotex United Co Ltd v Globe Express Services (Shanghai) Ltd (2009) Hu Hai Fa Shang Chu Zi No. 259 (Shanghai Maritime Court). 8 Zhejiang Zhongda Novotex Co Ltd v “K” Line (China) Ltd (2003) Hu Gao Min Si (Hai) Zhong Zi No. 71 (Shanghai High People’s Court) (CA). 9 Huaye International Investment Co Ltd v Grand Fortune International Shipping Agency Ltd (2013) Hu Hai Fa Shang Chu Zi No. 1168 (Shanghai Maritime Court). 10 CMC 1992, art 42 (2).

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The actual carrier may exist in carriage of goods by sea when the carrier is a non-vessel carrier or the actual carrier performs part of the carriage, e.g. second carriage of a transhipment carriage. The provisions with respect to the responsibility of the carrier contained in the CMC 1992 are applicable to the actual carrier. The defence and limitation of liability including the loss of limit provided for in the CMC 1992 applies to the servant or agent of the actual carrier.11 6.7 In some special circumstances, the actual carrier may not be considered as the actual carrier but the contractual carrier. In PICC P&C Co Ltd Shanghai Branch v Kawasaki Kisen Kaisha Ltd and Blackship Line SA,12 the contractual carrier was the charterer and the actual carrier was the shipowner to a charterparty. An agent signed and issued a bill of lading on behalf of both the charterer and the shipowner as the carrier. It was held that both the charterer and the shipowner were carriers and they should bear joint and several liabilities. However, according to the CMC 1992, only where both the carrier and the actual carrier are liable for compensation shall they be jointly and severally liable within the scope of such liability.13 This judgment may not be appropriate if the actual carrier actually had no fault for the cargo claim but is held jointly liable. It might be sensible only when the contractual carrier has no financial capacity for its liability. However, this consideration is inconsistent with the CMC 1992. In Huamei Trade Co Ltd v Qingdao Haisheng International Ship Agency Co Ltd and Yang Ming Marine Transport Corp,14 there was no contract between the shipper and the actual carrier. However, it was held that the actual carrier could not thus deny its contractual relationship with the shipper. There was no authority for such conclusion in the judgment. The purpose of this judgment seems to consider the actual carrier as the carrier even though there is no legal ground in the CMC 1992. Other Chinese courts have denied such a contractual relationship between the shipper and the actual carrier.15 6.8 Unless otherwise agreed in contract, where the performance of the carriage or part thereof has been entrusted to an actual carrier, the carrier nevertheless remains responsible for the entire carriage. The carrier is responsible, in relation to the carriage performed by the actual carrier, for the act or omission of the actual carrier and of his servant or agent acting within the scope of his employment or agency.16 However, the actual carrier is not liable for any loss caused by the fault of the carrier. In Woodtrans Navigation Corporation, Panama and Sanwai Navigation SA, Panama v Angang Group International Trade Corporation,17 the time charterer as the carrier issued two bills of lading to the voyage charterer and the claimant for the same goods and the shipowner as the actual carrier delivered the goods to the voyage charterer according to the instruction of the time charterer under the time charter. The claimant claimed against both the time charterer and the shipowner as the actual carrier. It was held that the shipowner was not liable for the delivery of goods without the claimant’s bill of lading. 11 ibid, art 61. 12 (2013) Hu Hai Fa Shang Chu Zi No. 1377 (Shanghai Maritime Court). 13 CMC 1992, art 63. 14 (2005) Min Min Zhong Zi No. 95(Fujian High People’s Court) (CA). 15 Spring Holding Group Co Ltd v CTSI Logistics (Taiwan) Inc and Evergreen Marine Corporation (Taiwan) Ltd (2008) Zhe Min Si Zhong Zi No. 58 (Zhejiang High People’s Court) (CA). 16 CMC 1992, art 60. 17 (2000) Jiao Ti Zi No. 6 (SPC) (Retrial).

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6.9 Under the CMC 1992, where both the carrier and the actual carrier are liable for compensation, they shall jointly and severally be liable within the scope of such liability.18 Where a carriage is performed by an actual carrier who is liable for damage to goods, the shipper may claim against the carrier for breach of contract and claim against the actual carrier for tortious liability. If the shipper claims against both the carrier and the actual carrier, the shipper may have difficulty in identifying the nature of the action,19 namely the action for breach of contract or action for liability in tort. In SINOCHEM Lianyungang Branch v Jiangsu Globle Foreign Trade Transportation Co Shanghai Branch and others,20 the actual carrier delivered goods without a bill of lading and the bill of lading holder chose to claim against the carrier and the actual carrier in tort. The Shanghai High People’s Court pointed out that joint liability of the carrier and the actual carrier in the CMC 1992 is different from joint contractual or tortious liability in Chinese civil law. The choice of nature of action is uncertain in these circumstances because of the special provision in the CMC 1992. Therefore, the bill of lading holder’s claims would be not affected by the choice of the nature of action. The allocation of liability between the carrier and the actual carrier and the right of recourse are different issues. The CMC 1992 does not affect the recourse between the carrier and the actual carrier.21 The common carrier 6.10 The common carrier is a not a concept in Chinese maritime law. In common law jurisdiction, the term “common carrier” may refer to a person that holds itself out to the general public to provide transportation by water of passengers or cargo.22 In shipping practice, the common carrier refers to the liner carrier who provides carriage service based on the published schedule and tariff. Whether such a common carrier is a public carrier was a controversial issue in China. The SPC gave its clear answer in Prime International (Xiamen) Co Ltd v Maersk (China) Shipping Co Ltd, Xiamen Branch and Maersk (China) Shipping Co Ltd.23 In this case, Maersk (China) Shipping Co Ltd (Maersk Company) notified PENAVICO Xiamen that it was ceasing to provide containers and container seals of Maersk Company to Prime International (Xiamen) Co Ltd (Prime International). Therefore, Prime International instituted a lawsuit in the Xiamen Maritime Court on the grounds that Maersk Company did not accept the space-booking and consignment of Prime International on behalf of its consignors, which caused losses thereto, and requested the Court to order Maersk Company to provide Prime International with freight space-booking and relevant services, and that it could not refuse Prime International in accepting the commissioned handling of import and export container freight and land container transport business related to the Maersk Company. The legal authority for the claim was in the Contract Law, which provides that the carrier engaging in public transport may not reject normal and reasonable transport requests of passengers and consignors.24 18 19 20 21 22 23 24

ibid, art 63. It is a common requirement in Chinese judicial practice that the claimant shall clarify the nature of action. (2002) Hu Gao Min Si (Hai) Zhong Zi No. 110 (Shanghai High People’s Court) (CA). CMC 1992, art 65. E.g. s 2 (6) of the US Shipping Act of 1984 (46 U.S.C. App. 1701). (2010) Min Ti Zi No 213 (SPC) (Retrial). Contract Law 1999, art 289.

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6.11 The Xiamen Maritime Court rejected the claim and held that Maersk Company was not a public carrier. It was pointed out that a public carrier must have the characteristic of a non-profit public service and have a welfare nature. However, Maersk Company as a liner carrier was a profit-making company and not a public carrier. Therefore, Maersk Company was not compulsorily obliged to conclude contracts with Prime International.25 In the appeal of this case, the Fujian High People’s Court reversed the judgment of the court of first instance and held that Maersk Company was a public carrier because it opened its business to the public although it was a profit-making company.26 In the retrial of this case, the SPC pointed out that the public transport in the Contract Law refers to transport that provides utility services for the public and has a monopoly position. However, international liner shipping is a commercial business activity that serves international trade, which is not public utility, and has no characteristics of public welfare, monopoly, or strict control over price. Therefore, Maersk Company was not a public carrier and did not bear any compulsory contracting obligation.27 The shipper 6.12 “Shipper” in the CMC 1992 means (a) the person by whom or in whose name or on whose behalf a contract of carriage of goods by sea has been concluded with a carrier; or (b) the person by whom or in whose name or on whose behalf the goods have been delivered to the carrier involved in the contract of carriage of goods by sea.28 The first kind of shipper is the contractual shipper and the second is the “actual shipper”, although it is not so named in the CMC 1992. This concept of shipping originated from the similar concept of shipper in the Hamburg Rules.29 It aims to protect the interests of FOB sellers who are not the contractual party to the contract of carriage of goods by sea. The actual shipper is still named as a shipper in the CMC 1992 in order to give the same rights of a contractual shipper, especially the right to request the delivery of the bill of lading from the carrier as an important security for the payment of the price of goods from the buyer.30 The actual shipper is not only entitled to the rights as the shipper, but also responsible for obligations as the shipper, e.g. pay the freight for carriage,31 or charge for container detention even though it is the contractual shipper who is identified on the bill of lading.32 25 (2005) Xia Hai Fa Shi Chu Zi No. 48 (Xiamen Maritime Court). 26 (2008) Min Min Zhong Zi No. 381 (Fujian High People’s Court) (CA). 27 The judgment of the Xiamen Maritime Court was upheld. 28 CMC 1992, art 42 (3). 29 The Hamburg Rules are a set of rules governing the international shipment of goods, resulting from the United Nations International Convention on the Carriage of Goods by Sea adopted in Hamburg on 31 March 1978. 30 Shanghai Huayifang Export & Import Co Ltd v Phoenix International Freight Services Ltd (2013) Hu Hai Fa Shang Chu Zi No. 1389 (Shanghai Maritime Court). See also Zhejiang Textiles Import & Export Group Co., Ltd. v Evergreen International Storage & Transport Corp (2001) Hu Hai Fa Shang Chu Zi No. 441 (Shanghai Maritime Court); (2003) Hu Gao Min Si (Hai) Zhong Zi No. 39 (Shanghai High People’s Court) (CA). In this case, it was held that the person who had actually delivered goods to the carrier, accepted the bills of lading as issued by the carrier, and performed the obligation of submitting such bills of lading to the bank under the trade contract, still had the legal status of a shipper. This was even though the person, as the original holder of such bills of lading (that were returned by the bank because there was no one to clear them), was not recorded as the shipper in such bills of lading and was not endorsed upon relevant instructions in the bills of lading. 31 COSCO Container Lines Co Ltd v Wuhu Zhongfei Plastic Co Ltd (2013) Hu Hai Fa Shang Chu Zi No. 1308 (Shanghai Maritime Court). 32 Wuhan Yuankai Import & Export Co Ltd v COSCO Container Lines Ltd and others (2012) Min Shen Zi No. 1242 (SPC) (Retrial).

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6.13 Although the carrier can choose either the contractual shipper or the actual shipper for compensation, it may not easily decide to whom the bill of lading should be issued. When both the contractual shipper and the actual shipper request the delivery of bill of lading, it is believed that the actual shipper has priority, albeit that there is no clear authority for this point in the CMC 1992.33 Although the carrier should deliver the bill of lading to the contractual party, namely the contractual shipper, the actual shipper may request the bill of lading and obtain the bill of lading through the maritime injunction.34 If the actual shipper obtains an order bill of lading but is not named as the shipper on the order bill of lading, it is entitled to claim against the carrier for delivery of goods without a bill of lading.35 6.14 Another dilemma of the carrier is to whom goods should be delivered if it receives instructions from both the contractual shipper and the actual shipper. In Shanghai Robinson International Transport Co Ltd v Shanghai Huayifang Import & Export Co Ltd,36 the carrier agreed for telex release according to the contractual shipper but later agreed to deliver goods according to the actual shipper’s instruction because it requested the actual shipper to pay the freight. The carrier finally did not deliver the goods according to the actual shipper’s instructions, and was held liable for the losses of the actual shipper due to the breach of the agreement. In China Auto CAIEC Ltd v Qingdao Zhongshun International Logistics Co Ltd,37 the carrier, after receiving the letter of indemnity from the actual shipper, agreed to deliver the goods according to the actual shipper’s instruction, but actually delivered the goods according to the contractual shipper’s instruction. The SPC held that the carrier was entitled to deliver the goods according to the contractual shipper’s instruction, but was also liable for the loss of the actual carrier due to the non-delivery of the goods. It is unknown whether the carrier has the same obligation for delivery of goods according to the actual carrier’s instruction if the actual shipper does not agree to pay freight or provide letters of indemnity. Right of control of the shipper 6.15 The Contract Law provides that, before the carrier delivers the goods to the consignee, the shipper may request the carrier to stop the transportation, return the goods, change the place of destination, or deliver the goods to another consignee. However, the shipper shall compensate for the losses thus caused to the carrier.38 The shipper’s right to stop the carriage, return the goods, change the destination and the consignee is called the right of control of the shipper in Chinese judicial practice. In shipping practice, the main reason that the shipper exercises the right of control is the dispute in trade transactions, e.g. the buyer refuses or fails to pay the price of goods. However, whether the right of control from the Contract Law can apply to the carriage of goods by sea is questionable. 6.16 The landmark case concerning the right of control of the shipper is Shaoxing Mingxing Plastics & Leather Co Ltd v Wan Hai Lines Ltd (Shaoxing Mingxing v Wan Hai 33 Wuxi Dhua Habit Co Ltd v Damco China Ltd (2012) Hu Hai Fa Shang Chu Zi No. 492 (Shanghai Maritime Court). 34 Some Chinese maritime courts grant maritime injunctions but some do not. If it is granted, the carrier may become liable for non-delivery of bill of lading to the contractual shipper. 35 Provisions on Delivery of Goods without Original Bills of Lading 2009, art 12. 36 (2015) Min Shen Zi No. 2816 (SPC) (Retrial). 37 (2015) Min Shen Zi No. 1660 (SPC) (Retrial). 38 Contract Law 1999, art 308.

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Lines). In this case, because the buyer failed to pay the price of the goods, the seller – as the shipper – requested the carrier to return the goods but was rejected. The shipper claimed against the carrier for the return of the goods or the loss of the price of the goods. The carrier contended that, because the consignee refused to take delivery of the goods, the goods had been sold at auction by the local customs. Although the shipper requested to return the goods, it was to amend the contract of carriage and the carrier was entitled to reject the amendment. The core issue was how to construe and apply the right of control from the Contract Law to the carriage of goods by sea. 6.17 The Shanghai Maritime Court in Shaoxing Mingxing v Wan Hai Lines pointed out that, as a general principle, when the CMC 1992 as a special law does not provide rules for certain issues about contract, the Contract Law as a general law may apply. It was noted that, for the purpose of the right of control, the shipper “may request” the carrier to follow its instructions. The words “may request” means an intention of negotiation. Whether the shipper’s request can be satisfied depends on the intention of the carrier. It was believed that the right of control might be designed for general carriage of goods, but not suitable for carriage of goods by sea. Therefore, it was held that the carrier had no obligation to return the goods once the shipper raised such a request. It has been clarified in Shaoxing Mingxing v Wan Hai Lines that the right of control is not a real right of the shipper in the carriage of goods by sea, but a request that needs the consent from the carrier for execution. The Shanghai Maritime Court also clarified in Shaoxing Mingxing v Wan Hai Lines that the request for return delivery is not an amendment to the contract, but an offer of a new contract of return carriage, which also requires the consent of the carrier for performance of the return carriage. 6.18 In Chinese judicial practice, if the carrier rejects the shipper’s request for return carriage, the shipper can take delivery of the goods if the goods have not been delivered, but cannot claim against the carrier for infringement of the shipper’s right of control.40 The carrier may reject the request for the return of goods even if the shipper agrees to pay the freight for the return carriage.41 If the carrier accepts the shipper’s request under the right of control, e.g. delivery of goods to another consignee, the shipper shall compensate for the loss thus caused to the carrier, e.g. the storage charge. If the carrier agrees to return the goods to the shipper, the carrier may always request the return of the issued bill of lading from the shipper and the payment for the return freight.42 Unless otherwise agreed, the carrier may have a lien on the goods carried for security of the storage charge. If the shipper or the new consignee has provided security, the carrier shall not have a lien on the goods.43 The judicial practice has been reaffirmed by the SPC in Anhui Only Electronic Co Ltd v Lvyun International Freight Forwarding (Shenzhen) Co Ltd Shanghai Branch, 39

39 (2004) Hu Hai Fa Shang Chu Zi No. 567 (Shanghai Maritime Court). 40 Hangzhou Huazhan Trade Co Ltd v Shanghai F S Container Line SA (2014) Yong Hai Fa Shang Chu Zi No. 31 (Ningbo Maritime Court). 41 Jiangsu Rongda Tools Co Ltd v Fancheng Internatinal Transportation Service Co Ltd (2013) Hu Hai Fa Shang Chu Zi No. 1010 (Shanghai Maritime Court). 42 Mohamed Mostafa Ahmed Mohamed Ammar v The Orient Overseas Container Line (2013) Min Shen Zi No. 2192 (SPC) (Retrial). 43 Beijing TMSC North Freight Agency Co Ltd v Beijing Silk Import & Export Co Ltd and Beijing Noth Haifeng International Freight Agency Co Ltd (2004) Jin Gao Min Si Zhong Zi No. 140 (Tianjin High People’s Court) (CA).

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Voyage Logistics Ltd. However, it must be noted that a few Chinese courts still insist on the right of control as a legal right of the shipper in the carriage of goods by sea and will hold that the carrier is obliged to follow the shipper’s instruction under the right of control.45 44

Consignee and bill of lading holder 6.19 The consignee and bill of lading holder are not parties to the contract of carriage of goods by sea evidenced by the bill of lading, but their relationship with the carrier is governed by the terms of the bill of lading.46 “Consignee” in the CMC 1992 means the person who is entitled to take delivery of the goods.47 There is no definition of bill of lading holder in the CMC 1992. If a person obtains a bill of lading in good faith, that person becomes the lawful holder of the bill of lading who is entitled to take delivery of the goods. It seems that the definition of consignee in the CMC 1992 includes both the consignee on the bill of lading and the lawful holder of the bill of lading. The consignee 6.20 In shipping practice, if the seller and the buyer agree to use a straight bill of lading, the buyer will be named on the bill of lading as the consignee. Then the consignee has the obligation to take delivery of goods from the carrier and is responsible for relevant expenses if it refuses or delays in taking delivery of the goods. In a special circumstance, the consignee may not be obliged to do so. In Henan Tongxu Jin’ao Commodities Co Ltd v A. P. Moller-Maersk A/S (Jin’ao Commodities v A. P. Moller-Maersk),48 the Chinese seller exported goods to Australia but was ordered to return the goods by the Australian Inspection and Quarantine authority. The buyer requested the carrier to return the goods to the seller. The carrier issued a sea waybill for the return carriage on which the seller was named as the consignee. The seller was not informed about the return and the container for the goods was detained at the port of discharge. The carrier claimed against the seller for the charges for container detention. The sellers denied its status as the consignee on the sea waybill. The Shanghai Maritime Court held that the seller was not the consignee on the sea waybill because it never agreed to be the consignee for the return carriage, and, therefore, the seller was not bound by the sea waybill and was not liable for the container detention. 6.21 The legal authority in Jin’ao Commodities v A. P. Moller-Maersk is based on privity of contract. The Shanghai Maritime Court pointed out that the seller was not a party to the contract evidenced by the sea waybill. Therefore, if the parties to the sea waybill wanted to impose obligations, e.g. taking delivery of goods on the seller, they needed to obtain the consent of the seller. In other words, in order to name the seller as the valid consignee on

44 (2011) Min Shen Zi No. 177 (SPC) (Retrial). 45 Shaoxing Kady Steel & Plastic Products Co Ltd v EUMEX Line Shenzhen Ltd and EUMEX Line Ningbo Ltd (2011) Yong Hai Fa Shang Chu Zi No. 316 (Ningbo Maritime Court); (2012) Zhe Hai Zhong Zi No. 36 (Zhejiang High People’s Court) (CA). 46 CMC 1992, art 78, para 1. 47 ibid, art 42 (4). 48 (2013) Hu Hai Fa Shang Chu Zi No. 1747 (Shanghai Maritime Court).

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the sea waybill, it was necessary for the seller to accept such a designation as the consignee. This requirement reflects the relationship between the sale of goods contract and the carriage of goods contract. In shipping practice, when parties to a sale of goods contract agree to use a non-negotiable shipping document, e.g. the straight bill of lading or the sea waybill, they will agree to put the buyer’s name as the consignee on the shipping document. The consignee’s consent is from the sale of goods contract, not the contract evidenced by the shipping document. Because there was no sale of goods contract in which the buyer agreed to sell goods to the seller, there was no basis for the return carriage in Jin’ao Commodities v A. P. Moller-Maersk. Thus if the sea waybill names the seller as the consignee this will not bind the seller. In fact, the return carriage should be a dispute between the seller and the carrier based on the contract of carriage between them. The carrier should contact and negotiate with the seller for the return carriage, instead of following instructions from the buyer, and then the carrier can legally claim against the seller based on the contract between them, and not the contract between the buyer and the carrier. Bill of lading holder 6.22 The bill of lading holder is defined as a lawful bill of lading holder. In other words, the bill of lading holder means a person who obtains the bill of lading in good faith. A bill of lading holder is not a lawful holder if the bill of lading is not legally transferred. The transferability of a bill of lading depends on the character of the bill. Under the CMC 1992, the bill of lading includes the straight bill of lading that is not negotiable, the order bill of lading that may be negotiated with endorsement to order or endorsement in blank and the bearer bill of lading that is negotiable without endorsement.49 If an order bill of lading is transferred without appropriate endorsement, the bill of lading holder is not a lawful holder and its rights of suit may be affected unless the carrier accepts the bill. In PICC P&C Co Ltd Dalian Branch v Tarsus Shipping Ltd,50 the carrier denied the rights of suit of the bill of lading holder because the order bill of lading was not legally transferred. The Qingdao Maritime Court pointed out that the bill of lading was not a lawful holder and should not be entitled to sue the carrier. However, it was found that the carrier examined the bill of lading presented by the bill of lading holders and accordingly delivered the goods to them. Therefore, it was held that the bill of lading holders were entitled to sue the carrier because the carrier had recognised the legal status of the bill of lading holders through its performance, namely the delivery of goods to the holders. Incorporation of charterparty into bill of lading 6.23 The consignee or bill of lading holder may be affected not only by the terms of the bill of lading, but also the terms of the charterparty under which the bill of lading is issued if the charterparty is incorporated into the bill of lading. Under the CMC 1992, when the clauses of a voyage charter are incorporated into a bill of lading issued under the voyage

49 CMC 1992, art 79. 50 (2011) Qing Hai Fa Shang Chu Zi No. 273 (Qingdao Maritime Court).

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charter, the relevant clauses of the voyage charter shall apply to the bill of lading governing the contractual relation between the carrier and the holder of the bill of lading rather than the charterer.51 However, the CMC 1992 does not clarify how a charterparty can be effectively incorporated into a bill of lading. The Chinese courts have restricted the incorporation of the charterparty into the bill of lading in judicial practice, particularly in the incorporation of arbitration clauses. 6.24 In 1995, the SPC established a reporting system for such issues as the acceptance of foreign-related economic dispute cases by a Chinese court, refusal to execute foreignrelated arbitral awards, denial of and refusal to implement foreign arbitral awards, etc.52 According to the reporting system, with respect to any foreign-related, or Hong Kong, Macau or Taiwan-related economic or maritime dispute cases filed to a Chinese court, if the parties involved have included an arbitration clause in the contract or have concluded an arbitration agreement afterwards, and if the Chinese court considers the arbitration clause or the arbitration agreement null, void or unclear to the extent of being non-executable, the Chinese court, before deciding to accept the lawsuit filed by a party concerned, must report to the higher level court that covers its jurisdiction for examination; if the higher level court agrees to the acceptance, it shall report to the SPC on its examination opinions. Before the SPC gives its reply, the Chinese court may dismiss the lawsuit on an interim basis.53 Therefore, the cases in which the claims were dismissed because of the existence of arbitration agreements are not discussed and only the special cases in which the incorporation was not recognised under the reporting system will be discussed below. Incorporation of law and arbitration clause 6.25 In shipping practice, the carrier can in certain instances neglect to state the names of parties to the charterparty or the date of the charterparty for incorporation even though the incorporation clause provides that “all terms and conditions of the charterparty, dated as overleaf, are incorporated”. In the view of the SPC, no charterparty can be incorporated in such situations because no charterparty can be identified without the information of the parties and the date of the charterparty.54 If the charterparty can be identified, the general words of an incorporation clause in the bill of lading are required for incorporation purposes. For example, “all terms and conditions of the charterparty are incorporated”. However, for incorporation of some special clauses, e.g. law and arbitration clauses as ancillary provisions, the general words of incorporation clause may not be sufficient for incorporation of them. Unless the incorporation clause expressly states that the arbitration clause, jurisdiction clause and applicable law clause of a charterparty shall be incorporated into the bill

51 CMC 1992, art 95. 52 Notice of the Supreme People’s Court on the Handling of Issues Concerning Foreign-related Arbitration and Foreign Arbitration by People’s Courts, Fa Fa [1995] No. 18. 53 ibid, art 1. 54 Reply of the Supreme People’s Court on Request for Instructions on Validity of Arbitration Clause in the Dispute over Cargo Damages under Contract for Carriage of Goods by Sea in Sinochem Group v Haili Co [2009] Min Si Ta Zi No. 12 (SPC) (Reply). The English courts may not simply deny the incorporation because of the lack of date but try their best to identify the charterparty for incorporation.

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of lading, those clauses shall not bind the holder of the bill of lading.55 This requirement has been applied to Chinese judicial practice.56 When the arbitration clause, in the view of Chinese courts, has not been incorporated into the bill of lading, Chinese courts may obtain the jurisdiction of the case.57 6.26 In judicial practice, the SPC requires that the arbitration clause in a charterparty shall be stated on the face of the bill of lading, not the reverse side, otherwise the arbitration clause cannot be incorporated.58 Furthermore, the SPC pointed out that an arbitration clause should be stated on the face of bill of lading and must be in a notable form different from other clauses so as to remind the bill of lading holder of the incorporation of the arbitration clause.59 Some maritime courts required the consensus of parties for incorporation of the arbitration clauses of the charterparty into the bill of lading. The incorporation of an arbitration clause may be denied because the bill of lading holder was not a contracting party to a charterparty, nor was he involved in the negotiation for the conclusion of the arbitration clause of the charterparty, so the arbitration clause was not the real intention of the bill of lading holder. The SPC has not given any clear answer to this point.60 However, the SPC has clarified that, even if the bill of lading holder was not involved in the conclusion of the arbitration agreement in the charterparty, if it expressly accepts the incorporation of clauses of the charterparty including the law and arbitration clause, the arbitration clause of the charterparty is effectively incorporated into the bill of lading.61 The SPC has also clarified that the arbitration clause incorporated into the bill of lading shall not bind the insurer who has obtained the subrogation right from the bill of lading holder.62

55 Explanations concerning Practical Issues in Foreign Related Commercial and Maritime Trails No. 1, 2004, art 98. 56 Reply of the Supreme People’s Court on Request for Instructions on Validity of Arbitration Clause in the Dispute over Contract for Carriage of Goods by Sea in Beijing CSGC Tiantie Iron & Steel Trade Co Ltd and Tangshan Universal Industrial Development Co Ltd v COSCO Shipping Co Ltd [2009] Min Si Ta Zi No. 13 (SPC) (Reply). 57 Reply of the Supreme People’s Court on Request for Instructions on Validity of Arbitration Clause in the Dispute over Insurance Subrogation in Pingan Property Insurance Co Ltd Dalian Branch v COSCO Shipping Co Ltd and Guangzhou Ocean Shipping Co Ltd [2006] Min Si Ta Zi No. 49 (SPC) (Reply) and Reply of the Supreme People’s Court on the Request for Instructions on the Objection to the Jurisdiction over Disputes of the Maritime Cargo Transport Contract in China Pacific Property Insurance Co Ltd Shanghai Branch v Sunglide Maritime Ltd, Ocean Freighers Ltd and The United Kingdom Mutual Steam Ship Assurance Association Ltd [2008] Min Si Ta Zi No. 50 (SPC) (Reply). 58 Reply of the Supreme People’s Court on Request for Instructions on Objection over Jurisdiction in Contract Dispute for Carriage of Goods by Sea in Strength Shipping Corporation, Liberia v Chongqing Xinpei Foods Co Ltd [2006] Min Si Ta Zi No. 26 (SPC) (Reply). 59 Reply of the Supreme People’s Court to the Request for Instructions on Objection to Jurisdiction over Disputes on a Contract for Carriage of Goods by Sea in Lianyungang Xiangshun Mineral Resources Co Ltd v Ugland Shipping A/S [2013] Min Si Ta Zi No. 1 (SPC) (Reply). 60 Reply of the Supreme People’s Court on Request for Instructions on Validity of Arbitration Clause in the Contract of Carriage of Goods by Sea in Hangzhou Longda Differential Polyester Co Ltd v Yongji Shipping Co Ltd and Zhoushan Yongji Shipping Co Ltd [2008] Min Si Ta Zi No. 33 (SPC) (Reply). 61 Reply of the Supreme People’s Court on Request for Instructions Re Objection over Jurisdiction in Contract Dispute for Carriage of Goods by Sea in International Economic & Trading Corporation WISCO v Fuzhou Tianheng Shipping Co Ltd and Fortune International Shipping Co Ltd [2009] Min Si Ta Zi No. 36 (SPC) (Reply). This reply was to support the bill of lading holder’s challenge to the jurisdiction of Chinese courts in which the carrier claimed against the holder for payment of freight and demurrage. 62 Reply of the Supreme People’s Court on Request for Instructions on Validity of Arbitration Clause in the Contract of Carriage of Goods by Sea in PICC P&C Co Ltd Shenzhen Branch v Guangzhou Ocean Shipping Co Ltd [2005] Min Si Ta Zi No. 29 (SPC) (Reply).

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Incorporation of time charters 6.27 The CMC 1992 does not provide the same rule for incorporation of time charters into the bill of lading. In Shenzhen Cereals Group Co Ltd v Future E. N. E. (Shenzhen Cereals v Future),63 the Qingdao Maritime Court denied the incorporation of the time charter into the bill of lading. First, the Qingdao Maritime Court pointed out that whether the arbitration clause of the time charter had been incorporated into the bill of lading was a question of procedure. Chinese courts shall apply Chinese law for disputes over procedure. Therefore, it was held that Chinese law should apply to the issue of incorporation of the time charter into the bill of lading. Second, the time charter should not be incorporated into the bill of lading. In the view of the Qingdao Maritime Court, the time charter is a contract of employment of a ship. Its nature is entirely different from the voyage charter, which is a contract of carriage of goods by sea. The bill of lading is evidence of the contract of carriage of goods by sea. Therefore, the time charter as a contract of a different nature should not be incorporated into the bill of lading. Furthermore, it was pointed out that the arbitration clause in the time charter was a dispute resolution clause for any dispute of the employment of ship. This arbitration clause should not be used for any dispute arising from the contract of carriage of goods by sea evidenced by the bill of lading.64 6.28 Although the Qingdao Maritime Court in Shenzhen Cereals v Future gave a definite answer to the question on the incorporation of the time charter into the bill of lading, it may not have given appropriate reasoning. First, whether the arbitration clause of the time charter has been incorporated into the bill of lading is a question of fact, it does not relate to any procedural question. Arbitration or litigation is a question of choice of procedures, but not a question of procedure itself. It may be appropriate to apply the applicable law of the bill of lading to examine the validity of incorporation. If there is no agreement of applicable law, the court should identify the appropriate applicable law first. Second, the nature of the time charter has no relation to the question of incorporation. It is the parties’ freedom to incorporate any kind of contract into any other kind of contract if it is not prohibited by law.65 There is no such prohibition in the CMC 1992 or other Chinese laws. Therefore, like the incorporation of the voyage charter into the bill of lading,66 when a person accepts a bill of lading that is to be used with a time charter without any objection, the time charter should be incorporated into the bill of lading.

63 (2004) Qing Hai Fa Shang Chu Zi No. 245 (Qingdao Maritime Court). 64 Last but not least, a clause on the face of the bill of lading said “freight prepaid as per charterparty”. The Qingdao Maritime Court held the word “freight” meant the incorporation of a voyage charter, not a time charter because the freight is payment under the voyage charter. 65 Contract Law 1999, art 4. 66 Sirallekas Shipping SA v China National Minerals Co Ltd (2009) Hu Hai Fa Shang Chu Zi No. 465 (Shanghai Maritime Court); (2010) Hu Gao Min Si (Hai) Zhong Zi No. 58 (Shanghai High People’s Court) (CA).

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CHAPTER 7

Bill of lading: Obligations, liabilities and limitation

7.1 In the CMC 1992, the carrier has obligations of seaworthiness, management of goods and reasonable despatch. The carrier is liable for the damage to or loss of goods during its responsibility period and for the economic loss caused by delay in delivery of goods. The carrier is entitled to legal exemptions and limitation of liability. Both the carrier and the shipper are responsible for delivery and taking delivery of goods. The shipper has obligations of payment of freight. The shipper is liable for the shipment of dangerous goods and other faults. In contrast, the shipper has no limitation of liability. Obligations of carrier Period of responsibility 7.2 In the CMC 1992, the responsibility of the carrier with regard to the goods carried in containers covers the entire period during which the carrier is in charge of the goods, starting from the time the carrier has taken over the goods at the port of loading, until the goods have been delivered at the port of discharge. In container carriage, it is believed that the carrier begins to take over the goods in the container when the container arrives in the container yard and the responsibility period commences accordingly. The carrier is liable for the damage to the goods when the container is moved from the yard to the ship.1 The delivery that ends the responsibility period is when there is actual delivery. The issue and acceptance of a delivery order does not signify the end of the carrier’s responsibility period so long as the goods are still controlled by the carrier.2 7.3 In the CMC 1992, the responsibility of the carrier with respect to non-containerised goods covers the period during which the carrier is in charge of the goods, starting from the time of loading of the goods onto the ship until the time the goods are discharged therefrom. The period of responsibility does not prevent the carrier from entering into any agreement concerning the carrier’s responsibilities with regard to non-containerised goods prior to loading onto and after discharging from the ship.3 The responsibility period for the bulk liquid cargo is different because of different method of loading and discharge.

1 PICC P&C Co Ltd Wuxi Branch v Panalpina World Transport (PRC) Ltd (2014) Min Shen Zi No. 1188 (SPC) (Retrial). 2 Huatai P & C Insurance Beijing Branch v CMA CGM SA (2010) Hu Gao Min Si (Hai) Zhong Zi No. 85 (Shanghai High People’s Court) (CA). 3 CMC 1992, art 46.

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The responsibility period of bulk liquid cargo ends at the time of connection between the ship pipeline and the shore tank pipeline, not the time when all bulk liquid cargo has been discharged into the shore tank.4 Obligations 7.4 In the CMC 1992, the carrier shall, before and at the beginning of the voyage, exercise due diligence to make the ship seaworthy, properly man, equip and supply the ship and make the holds, refrigerating and cooling chambers and all other parts of the ship in which goods are carried, fit and safe for their reception, carriage and preservation.5 This seaworthiness obligation is similar to that of the Hague-Visby Rules.6 The carrier shall properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried.7 The carrier may be liable for physical damage to the goods if it fails to properly and carefully carry and care for the goods, e.g. the self-ignition of fishmeal due to careless stowage and unsafe keeping of the carrier.8 The carrier may also be liable for the economic loss of the goods due to its own fault, e.g. the forfeiture of goods by the customs due to the lack of the manifest of the goods.9 7.5 The carrier has the obligation of reasonable despatch without unjustifiable deviation in the CMC 1992. The carrier must carry the goods to the port of discharge on the agreed or customary or geographically direct route. Justifiable deviation means any deviation in saving or attempting to save life or property at sea or any reasonable deviation.10 The reasonableness of deviation is a question of fact. In Xuzhou Tianye Metal Resources Co Ltd v San Clemente Shipping SA and Tokyo Sangyo Kaisha Ltd,11 the carrier carried the goods from North Konawa, Indonesia to Lianyungang, China. For purposes of drying goods and adding fresh water and other supplies, the carrier deviated to Davao, Philippine. The consignees claimed against the carrier for economic loss caused by the delayed delivery of goods due to the deviation. It was found that Davao is close to the customary route of carriage and it only took a short time to deviate to Davao. Therefore, it was difficult to prove the causation between such a deviation and the economic loss due to the delayed delivery. 7.6 In shipping practice, the slot exchange agreement is common in liner carriage. In judicial practice, such an agreement is not a good excuse for breach of the obligation of reasonable despatch. In Globe Express Services (Shanghai) Ltd v China Shipping Container 4 Therefore, unless agreed by the carrier, the shore tank weight inspection certificate shall not be admissible for the quantity of the delivered liquid cargo. Unless it is proved that the shortage occurs during the carrier’s responsibility period, ship’s cabin certificate and space report are the proof of the quantity of actual delivery. See Reply of the Supreme People’s Court on Request for Instructions on Subrogation of Marine Insurance in Nanjing Petroleum Transportation Co Ltd v Huatai P & C Insurance Shijiazhuang Branch [2005] Min Si Ta Zi No. 1–1 (SPC) (Reply). 5 CMC 1992, art 47. 6 Hague-Visby Rules, art 3, para 1. 7 It is similar to the Hague-Visby Rules, art 3, para 2. 8 PICC P&C Co Ltd Shanghai Branch v COSCO Shipping Co Ltd and Guangzhou Ocean Shipping Co Ltd (2005) Hu Hai Fa Shang Chu Zi No. 185 (Shanghai Maritime Court). 9 Hebei Metals & Minerals Import & Export Co Ltd v OOCL Ltd and Shandong Yantai International Marine Shipping Co Ltd (2001) Yong Shang Chong Zi No. 1 (Ningbo Maritime Court); (2001) Zhe Jing Er Zhong Zi No. 109 (Zhejiang High People’s Court) (CA). 10 CMC 1992, art 49. 11 (2011) Hu Hai Fa Shang Chu Zi No. 753 (Shanghai Maritime Court).

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Lines Tianjin Co Ltd and China Shipping Container Lines (Hong Kong) Co Ltd,12 the carrier agreed to carry the goods from Tianjin, China to Ashdod, Israel with transhipment in Shanghai by ZIM China Ltd on a certain date. The goods were delayed in Shanghai for a long time. The shipper had to arrange the carriage of goods by air and claimed against the carrier for the payment of air freight. The carrier argued that the transhipment was subject to the slot exchange agreement between the carrier and ZIM Israel Navigation Co Ltd and it could not arrange the transhipment because the slot space was full. This argument was rejected by the Shanghai Maritime Court. It was held that the slot exchange agreement was not a valid defence and the carrier breached the obligation of reasonable despatch. Liabilities, exemptions and limitation of liability of carrier Liability for loss, damage and delay 7.7 During the period the carrier is in charge of the goods, the carrier is liable for loss of or damage to the goods, except those arising or resulting from causes for which the carrier is not liable as provided for in the CMC 1992.13 The carrier is liable for damage to the goods if he fails to care for the goods during the period of responsibility even if the damage occurs after the period due to such failure.14 Besides the liability for the loss of or damage to goods, the carrier is also liable for loss of or damage to the goods and economic losses even if no loss of or damage to the goods had actually occurred that was caused by the delay in delivery due to the fault of the carrier. However, this liability is exempted by those arising or resulting from causes for which the carrier is not liable as provided for in the CMC 1992. Delay in delivery occurs when the goods have not been delivered at the designated port of discharge within the time expressly agreed upon.15 The person entitled to make a claim for the loss of goods may treat the goods as lost when the carrier has not delivered the goods within 60 days from the expiry of the time for delivery.16 7.8 In Chinese judicial practice, the shipper may not be entitled to claim against the carrier for loss caused by delay in delivery if it has transferred the bill of lading. In Zhejiang Tea Group Co Ltd v CMA CGS SA,17 the seller as the shipper received the payment of the price of the goods with deduction from the buyer because of delay in delivery of the goods. The seller claimed against the carrier for the loss of the deduction. The Ningbo Maritime Court pointed out that only the buyer as the bill of lading holder had the title to sue and the seller failed to prove that the buyer had assigned such a title to the seller. Therefore, it was held that the seller had no title to sue the carrier. It is commonly understood that the rights of suit will be transferred when the bill of lading is transferred. However, the transfer of

12 (2008) Hu Hai Fa Shang Chu Zi No. 93 (Shanghai Maritime Court). 13 CMC 1992, art 46. 14 Shanghai Changying Industrial Co Ltd v Pacific International Lines (Pte) Ltd (2014) Hu Hai Fa Shang Chu Zi No. 1159 (Shanghai Maritime Court). 15 The line schedules are not considered as expressly agreed time for delivery of goods. See Panda Tool Co Ltd v Shanghai THI Freight Forwarding Co Ltd (2003) Hu Hai Fa Shang Chu Zi No. 260 (Shanghai Maritime Court). 16 CMC 1992, art 50. If there is no expressly agreed time for delivery, the reasonable despatch obligation applies. 17 (2008) Yong Hai Fa Shang Chu Zi No. 23 (Ningbo Maritime Court).

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the bill of lading does not mean that the shipper will cease to be a contractual party to the contract of carriage of goods by sea. If the bill of lading holder had paid the full price of the goods but suffered loss due to the delay in delivery, it might claim against the carrier for such a loss. However, when the buyer chose to be compensated by the deduction of payment of price, the seller actually suffered the loss due to the delay in delivery. There is no reason to deny the seller’s title to sue the carrier. 7.9 Where loss or damage or delay in delivery has occurred from causes from which the carrier or his servant or agent is not entitled to exoneration from liability, together with another cause, the carrier shall be liable only to the extent that the loss, damage or delay in delivery is attributable to the causes from which the carrier is not entitled to exoneration from liability; however, the carrier bears the burden of proof with respect to the loss, damage or delay in delivery resulting from the other cause.18 Liability for live animal and deck cargo 7.10 The carrier shall not be liable for the loss of or damage to live animals arising or resulting from the special risks inherent in the carriage thereof. However, the carrier has the burden to prove that he has fulfilled the special requirements of the shipper with regard to the carriage of the live animals and that under the circumstances of the sea carriage, the loss or damage has occurred due to the special risks inherent therein.19 Where the carrier intends to ship the goods on deck, he shall come to an agreement with the shipper or comply with the custom of the trade20 or the relevant laws or administrative rules and regulations. When the goods have been so shipped on deck, the carrier shall not be liable for loss of or damage to the goods caused by the special risks involved in such carriage. Otherwise, if the carrier has shipped the goods on deck and the goods have consequently suffered loss or damage, the carrier shall therefore be liable.21 Assessment of liability 7.11 In the CMC 1992, the amount of indemnity for the loss of the goods shall be calculated on the basis of the actual value of the goods so lost, while that for the damage to the goods shall be calculated on the basis of the difference between the values of the goods before and after the damage, or on the basis of the expenses for repair. The actual value is the value of the goods at the time of shipment plus insurance and freight. When the price of goods in the sale of goods contract is different from the price in the customs declaration, the latter price shall prevail.22 At the time of compensation, deduction is to be made of the expenses that had been reduced or avoided as a result of the loss or damage occurred.23 If damage occurs before or at the beginning of the carriage, the freight will not 18 CMC 1992, art 54. 19 ibid, art 52. 20 For example, the container liner carriage. 21 CMC 1992, art 53. 22 See Kena Import & Export Co Ltd v China Shipping Container Lines (Hong Kong) Co Ltd and China Shipping Container Lines Co Ltd Zhejiang Branch (2014) Yong Hai Fa Shang Chu Zi No. 369 (Ningbo Maritime Court). 23 CMC 1992, art 55.

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be added for compensation if it is not paid.24 In judicial practice, any economic damage of delay and reputation due to the loss of goods is not within the scope of compensation from the carrier.25 7.12 Although the CMC 1992 provides the methods for calculation of loss or damage, if the goods are damaged and not assessed for the damaged value but sold with discount, the assessment of such liability had not been certain until the decision of the SPC in Shanghai Senfu Industrial Co Ltd v Hachiman Shipping S.A. and Dorval Kaiun KK.26 In this case, the goods of 1,400 tons of phenol were damaged and sold by the consignee to a third party in the port of discharge at the price of Renminbi (RMB) 4,700 per ton although the highest offer was RMB 5,000 per ton. The original price of the goods was RMB 14,668,844.40 at the port of shipment. In the first instance, the Qingdao Maritime Court took the view that it was reasonable to calculate the damage on the basis of the expenses for the repair because the actual value of the damaged goods at the port of discharge was not proved.27 This method was overruled on appeal of this case. 7.13 The Shandong High People’s Court pointed out that the repair method should not be adopted because the goods were not actually repaired. It was held that the damage to the goods should be the difference between the original price at the port of shipment and the price based on the highest offer at the port of discharge. Therefore, the damage was RMB 7,668,844.40 (7,668,844.40 = 14,668,844.40 – (5,000 × 1,400)). However, the method of the court of appeal was overruled in the retrial of the case. The SPC pointed out that the method of assessment of damage to the goods in the CMC 1992 does not count the market loss. In other words, the actual value of the goods in the port of discharge was not the market value of the damaged goods. It complies with the compensation principle in the Contract Law.28 The court of appeal took into account the highest offer for the damaged goods in the market at the port of discharge. It meant that the market price was used for the calculation of the damage. The SPC pointed out that the carrier should not be liable for the market loss due to the damage to the goods. It was found that the average market price at the port of discharge was RMB 5,850 per ton. The SPC first calculated the depreciation rate which was 19.66 per cent ((5,850 – 4,700)/5,850). Then the SPC calculated the damage based on the depreciation rate plus the insurance of the goods which was RMB 2,887,071.96 ((14,668,844.40 + 16,160.47) × 19.66 per cent). The SPC’s method of assessment of damage to the goods has now been adopted by Chinese maritime courts, particularly where the market price of the goods varies.

24 Coast Underwriters Ltd v China Shipping Lines Ltd and Shanghai Guandong International Container Terminal Co Ltd (2012) Hu Hai Fa Shang Chu Zi No. 1492 (Shanghai Maritime Court). 25 Kunshan Juhui Textile Trade Co Ltd v AWOT Global Corporation and AWOT Global Corporation Suzhou Branch (2014) Hu Hai Fa Shang Chu Zi No. 1103 (Shanghai Maritime Court); (2014) Hu Gao Min Si (Hai) Zhong Zi No. 155 (Shanghai High People’s Court) (CA). 26 (2013) Min Si Ti Zi No. 7 (SPC) (Retrial). 27 (2009) Qing Hai Fa Shang Chu Zi No. 276 (Qingdao Maritime Court). 28 Article 113, para 1 of the Contract Law 1999 provides that “[I]f either party fails to perform its obligations under the contract or does not perform its obligations as contracted and thus causes losses to the other party, the amount of compensation for the loss shall be equivalent to the loss actually caused by the breach of contract and shall include the profit obtainable after the performance of the contract, but shall not exceed the sum of the loss that might be caused by a breach of contract and has been anticipated or ought to be anticipated by the breaching party in the making of the contract.”

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Exemptions 7.14 In the CMC 1992, the carrier shall not be liable for loss of or damage to goods that occurred during the period of the carrier’s responsibility arising or resulting from any of the following causes:29 (1) fault of the master, crew members, pilot or servant of the carrier in the navigation or management of the ship;30 (2) fire,31 unless caused by the actual fault of the carrier;32 (3) act of God and perils, dangers and accidents of the sea or other navigable waters;33 (4) war or armed conflict; (5) act of the government or competent authorities, quarantine restrictions or seizure under legal process;34 (6) strikes, stoppages or restraint of labour; (7) saving or attempting to save life or property at sea; (8) act of the shipper, owner of the goods or their agents; (9) nature or inherent vice of the goods;35

29 CMC 1992, art 51. 30 If the goods are damaged due to the collision of the ships, the cargo interests have the burden of proof of the unseaworthiness or other causes that cause the collision. If the causation is not proved, it is presumed that the collision is caused by the fault of master and crew members in navigation or management of ship and the carrier is thus not liable for the damage to the goods. See China Ocean Shipping Agency Beihai Co Ltd v Yinghai International Logistics Co (Beihai) Ltd and Beihai Marine Transport Co Ltd (2004) Hai Shang Chu Zi No. 020 (Beihai Maritime Court). 31 The fire includes both where the fire occurs during the carriage and where the fire occurs before loading and after discharge if the goods are control by the carrier in the carrier’s responsibility period. See PICC P&C Co Ltd Zhejiang Branch v China Consolidation Services Ltd. of Shanghai (2005) Hu Hai Fa Shang Chu Zi No. 249 (Shanghai Maritime Court). 32 The carrier has no burden of proof regarding the fire unless it has been proved that the fire was caused by the actual fault of the carrier. See PICC P&C Co Ltd Zhejiang Branch Zhejiang Branch v China Consolidation Services Ltd. of Shanghai (2007) SPC Gazette, Issue 10 (Shanghai High People’s Court) (CA). 33 Not all bad weather on the sea can be an exempted cause. All bad weather that is out of control of the carrier is an exempted cause. See Huamei Trade Co Ltd v Qingdao Haisheng International Ship Agency Co Ltd and Yang Ming Marine Transport Corp (2004) Xia Hai Fa Shang Chu Zi No. 116 (Xiamen Maritime Court). Some Chinese maritime courts held that this exempted cause must be unforeseeable and unavoidable, and cannot be overcome. In fact, there are no such requirements for implementation of this exemption in the CMC 1992 and it is also unreasonable to raise such requirements. This exemption is different from the force majeure in the Contract Law which means objective situations that cannot be foreseen, avoided or overcome. See China Pacific Property Insurance Co Ltd Shanghai Branch v Gen Shipping Pacific Line Pte Ltd and others (2005) Hu Hai Fa Shang Chu Zi No. 492 (Shanghai Maritime Court). 34 However, if a maritime injunction is granted due to the fault of the carrier, the carrier cannot rely on this exemption. In China Electronics Zhuhai Co Ltd v P&O Nedlloyd Ltd and P&O Nedlloyd (China) Ltd (2002) Hu Hai Fa Shang Chu Zi No. 254 (Shanghai Maritime Court); (2003) Hu Gao Min Si (Hai) Zhong Zi No. 84 (Shanghai High People’s Court) (CA), the carrier issued the delivery order to the consignee without the surrender of the bill of lading, and the consignee, based on the delivery order, applied for and was granted the maritime injunction for the delivery of goods. It was held that the carrier could not rely on the exemption of the restriction from the local court because the maritime injunction was based on the delivery order that proved the carrier’s fault. 35 For example, the shortage of delivery of bulk dry cargo, e.g. soybean, may be caused by the reduction of moisture content of the goods. See China Pacific Property Insurance Co Ltd Shenzhen Branch and Guangdong Donlinks Group Co Ltd v Wangjing & Co and Niko Maritimeinc, Liberia (2003) Guang Hai Fa Chu Zi No. 342 (Guangzhou Maritime Court). For refrigerated goods transport in containers, the carrier may rely on this exemption if it can provide the temperature of the containers to prove the proper management of the goods. See EUROATLANTICSDN.BHD v COSCO Container Lines Co Ltd and PENAVICO Yingkou International Freight Services Co Ltd (2009) Hu Hai Fa Shang Chu Zi No. 813 (Shanghai Maritime Court).

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(10) inadequacy of packing or insufficiency or illegibility of marks; (11) latent defect of the ship not discoverable by due diligence; and (12) any other cause arising without the fault of the carrier or his servant or agent.36 The carrier who is entitled to exoneration from liability for compensation as provided for in the preceding paragraph shall, with the exception of the causes given in sub-paragraph (2), bear the burden of proof. Limitation of liability 7.15 The carrier’s liability for the loss of or damage to the goods shall be limited to an amount equivalent to 666.67 units of account37 per package or other shipping unit, or two units of account per kilogramme of the gross weight of the goods lost or damaged, whichever is the higher, except where the nature and value of the goods had been declared by the shipper before shipment and inserted in the bill of lading, or where a higher amount than the amount of limitation of liability in the CMC 1992 had been agreed upon between the carrier and the shipper.38 7.16 Where a container, pallet or similar article of transport is used to consolidate goods, the number of packages or other shipping units enumerated in the bill of lading as packed in such article of transport shall be deemed to be the number of packages or shipping units. If not so enumerated, the goods in such article of transport shall be deemed to be one package or one shipping unit.39 If there is more than one number of the same goods in the container, the minimum cargo unit number should be adopted for calculation of limitation of liability.40 The limitation of liability shall be calculated based on the damaged goods, not all of the goods carried.41 Where the article of transport is not owned or furnished by the carrier, such article of transport shall be deemed to be one package or one shipping unit.42 7.17 The liability of the carrier for the economic losses resulting from delay in delivery of the goods shall be limited to an amount equivalent to the freight payable for the goods so delayed. Where the loss of or damage to the goods has occurred concurrently with the

36 In judicial practice, Chinese courts take a restricted construction on the last general exemption. It has been noted that, except for the first exemption of navigation and management fault and the second exemption of fire without the privity of the carrier, all other exemptions are based on force majeure or the fault of others rather than the carrier. It is believed that the relationship between exemption (12) and exemptions (3)–(11) is the relationship between the general provisions and the specific enumeration. Therefore, the construction of exemption (12) must be restricted by the specific exemptions. See The Oriental Scientific Instruments Zhejiang Import & Export Corporation v ZIM Israel Navigation Co Ltd and Ningbo Port Authority Beilun Container Co Ltd (2000) Yong Hai Fa Shang Chu Zi No. 218 (Ningbo Maritime Court). 37 The unit of account referred to in this Code is the special drawing right as defined by the International Monetary Fund; the amount of the Chinese currency (RMB) in terms of the special drawing right shall be that computed on the basis of the method of conversion established by the authorities in charge of foreign exchange control of this country on the date of the judgment by the court or the date of the award by the arbitration organisation or the date mutually agreed upon by the parties. See the CMC 1992, art 277. 38 CMC 1992, art 56, para 1. 39 ibid, para 2. 40 Pingan Property Insurance Co Ltd Beijing Branch v Compania Chilenade Navegacion Interoceanica SA (2009) Hu Hai Fa Shang Chu Zi No. 948 (Shanghai Maritime Court). 41 Allianz China General Insurance Co Ltd v Youda (Shanghai) International transportation Co Ltd and others (2014) Hu Hai Fa Shang Chu Zi No. 361 (Shanghai Maritime Court). 42 CMC 1992, art 56, para 3.

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delay in delivery thereof, the limitation of liability of the carrier for the loss of or damage to the goods shall apply.43 In the CMC 1992, delay in delivery occurs when the goods have not been delivered at the designated port of discharge within the time expressly agreed upon.44 Therefore, if the goods are delayed but no expressed time for delivery has been agreed, there is no delay in delivery but a breach of obligation of reasonable despatch. Thus the carrier shall not be entitled to limit its liability for the economic losses resulting from delay in delivery of the goods.45 If parties have agreed compensation for breach of contract that is higher than the limitation of liability for the economic losses resulting from delay in delivery of the goods, the carrier is entitled to limit its liability to an amount equivalent to the freight payable for the goods so delayed.46 7.18 The defence and limitation of liability in the CMC 1992 shall apply to any legal action brought against the carrier with regard to the loss of or damage to or delay in delivery of the goods covered by the contract of carriage of goods by sea, whether or not the claimant is a party to the contract or whether the action is founded in contract or in tort. The defence and limitation of liability of the carrier shall apply if the action is brought against the carrier’s servant or agent, and the carrier’s servant or agent proves that its action was within the scope of his employment or agency.47 If claims for compensation have been separately made against the carrier, the actual carrier and their servants or agents with regard to the loss of or damage to the goods, the aggregate amount of compensation shall not be in excess of the limitation of liability for the loss of or damage to the goods in the CMC 1992.48 Loss of liability limitation 7.19 The carrier shall not be entitled to the benefit of the limitation of liability if it is proved that the loss of, damage to or delay in delivery of the goods resulted from an act or omission of the carrier done with the intent to cause such loss, damage or delay or recklessly and with knowledge that such loss, damage or delay would probably result.49 The servant or agent of the carrier shall also not be entitled to the benefit of limitation of liability if it is proved that the loss, damage or delay in delivery resulted from an act or omission of the servant or agent of the carrier done with the intent to cause such loss, damage or delay or recklessly and with

43 ibid, art 57. 44 ibid, art 50. 45 Globe Express Services (Shanghai) Ltd v China Shipping Container Lines Tianjin Co Ltd and China Shipping Container Lines (Hong Kong) Co Ltd (2008) Hu Hai Fa Shang Chu Zi No. 93 (Shanghai Maritime Court). 46 Chen Yunlin v Wenzhou Lianhang International Transport Services Co Ltd (2008) Yong Hai Fa Wen Shang Chu Zi No. 8 (Ningbo Maritime Court). 47 CMC 1992, art 58. 48 ibid, art 64. 49 In Hebei Metals & Minerals Import & Export Co Ltd v OOCL Ltd and Shandong Yantai International Marine Shipping Co Ltd (2001) Yong Shang Chong Zi No. 1 (Ningbo Maritime Court); (2001) Zhe Jing Er Zhong Zi No. 109 (Zhejiang High People’s Court) (CA), the master of the ship did not carry the manifest and the goods were forfeited by local customs. It was pointed out that the master of the ship, as a competent master, should have known the result of forfeiture of the goods without a proper manifest on board of the ship. Therefore, it was held that the carrier should not be entitled to the limitation of liability because the loss of the forfeited goods resulted from the omission of the carrier recklessly and with knowledge of the possible result.

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knowledge that such loss, damage or delay would probably result.50 The burden of proof for the loss of the limitation of liability is on the claimant who claims against the carrier.51 7.20 Where a carrier bears any civil liability for delivery of goods without the bill of lading, the limitation of liability for the loss of the goods shall not apply.52 Where a carrier bears any civil liability due to the issue of an ante-dated bill of lading or back-dated bill of lading, the limitation of liability shall also not apply.53 Where a carrier issues two sets of bill of lading and delivered goods to the holder of the first set of bill of lading, the carrier is not entitled to the limitation of liability for the loss of the holder of second set of bill of lading.54 If a bill of lading holder claims against a carrier in tort for delivery of goods without a bill of lading or issue of an ante-dated bill of lading or back-dated bill of lading, the liability of the carrier is limited to the loss of the bill of lading holder caused by the tortious act. Legal causation between the loss and the tortious act is required.55 7.21 Any stipulation in a contract of carriage of goods by sea or a bill of lading or other similar documents evidencing such contract that derogates from the provisions of responsibility period, liability, exemption and limit of liability of the carrier shall be null and void.56 However, such stipulation shall not affect the validity of other provisions of the contract or the bill of lading or other similar documents. A clause assigning the benefit of insurance of the goods in favour of the carrier or any similar clause shall be null and void.57 Delivery of goods Notice for delivery 7.22 Under the CMC 1992, the carrier has no obligation to give notice of arrival of the goods at the port of discharge. Some maritime courts have applied the Contract Law and concluded that the carrier has the obligation of notifying the consignee of the arrival of the goods. The Contract Law provides that when the goods are transported to the place of destination and the carrier knows of the identity of the consignee, the carrier shall promptly notify the consignee.58 In Quanzhou Zhongqiao Co Ltd v Sinokor Merchant Marine Co Ltd,59 the Xiamen Maritime Court held that the Contract Law should apply to the issue 50 CMC 1992, art 59. 51 Jinxi Machinery Industry Group Ltd v Rickmers-Linie GmbH&Cie KG (2001) Hai Shang Chu Zi No. 365 (Tianjin Maritime Court). 52 Provisions of the Supreme People’s Court on Certain Issues Concerning the Application of Law to the Trial of Cases Involving Delivery of Goods without Original Bills of Lading 2009, art 4. 53 Explanations concerning Practical Issues in Foreign Related Commercial and Maritime Trails No. 1, 2004, art 140. 54 Shandong Province East International Trade Co Ltd v CMA CGM SA (2000) Qing Hai Fa Shang Chu Zi No. 289 (Qingdao Maritime Court). 55 Shandong Foreign Trade Group Co Ltd v Liaoning Shipping Co Ltd (2004) Min Si Ti Zi No. 2 (SPC) (Retrial). 56 For example, a clause which sets up the limitation of liability lower than the limitation in the CMC 1992 shall be null and void. See Sinotrans Container Lines Co Ltd v Sichuan Minsheng International Freight Forwarding Services Co Ltd and Sichuan Changtong Port Co Ltd (2010) Hu Hai Fa Shang Chu Zi No. 10 (Shanghai Maritime Court); (2010) Hu Gao Min Si (Hai) Zhong Zi No. 143 (Shanghai High People’s Court) (CA). 57 CMC 1992, art 44. Besides the compulsory obligations and liabilities in the CMC 1992, supplementary obligations and liabilities of the carrier by agreement is allowed. See CMC 1992, art 45. 58 Contract Law 1999, art 309. 59 (2003) Xia Hai Fa Shang Chu Zi No. 203 (Xiamen Maritime Court).

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of notification and the carrier should have the obligation to notify the consignee of the arrival of the goods. In this case, the carrier did not give notice of the arrival of the goods. However, it was found that the consignee should have known of the arrival of the goods through other means. Therefore, it was held that the carrier was not liable for the loss of the consignee due to its delay in taking delivery of the goods. Although there may be a clause in the bill of lading to exclude the obligation of notification,60 if there is a notify party on the bill of lading,61 the carrier may still have the obligation to notify the notify party of the arrival of the goods.62 7.23 In the CMC 1992, if, due to a force majeure or any other causes not attributable to the fault of the carrier or the shipper, the ship could not discharge its goods at the port of destination as provided for in the contract of carriage, unless the contract provides otherwise, the master shall be entitled to discharge the goods at a safe port or place near the port of destination and the contract of carriage shall be deemed to have been fulfilled. In such a circumstance, in deciding on the discharge of the goods, the master shall inform the shipper or the consignee and shall take the interests of the shipper or the consignee into consideration.63 Notice for damage 7.24 In the CMC 1992, the consignee has the obligation to notify the carrier of any loss of or damage to the goods.64 Unless notice of loss or damage is given in writing by the consignee to the carrier at the time of delivery of the goods by the carrier to the consignee, such delivery shall be deemed to be prima facie evidence of the delivery of the goods by the carrier as described in the transport documents and of the apparent good order and condition of such goods.65 Where the loss of or damage to the goods is not apparent, the consignee shall give notice in writing within seven consecutive days from the next day of the delivery of the goods, or, in the case of containerised goods, within 15 days from the next day of the delivery thereof. The notice in writing regarding the loss or damage need not be given if the state of the goods has, at the time of delivery, been the subject of a joint survey or inspection by the carrier and the consignee.66 The carrier shall not be liable for compensation if no notice on the economic losses resulting from delay in delivery of the

60 For example, COSCO Container Lines Bill of Lading (amended 24/8/2001), clause 22 (1) provides that “[A]ny mention herein of parties to be notified of the arrival of the Goods is solely for information of the Carrier, and failure to give such notification shall not give rise to any liability on the part of the Carrier or relieve the Merchant of any obligation hereunder.” 61 The notify party is a person that needs to be notified about the arrival of the goods covered in the bill of lading. The notify party could be the consignee, freight forwarder, agency or any other entity. 62 SITC Shipping Co Ltd v Xiamen Haomen Food Co Ltd (2004) Xia Hai Fa Shang Chu Zi No. 20 (Xiamen Maritime Court). 63 CMC 1992, art 91. 64 The consignee includes not only the consignee on the bill of lading but also the bill of lading holder or any other person who is entitled to take the delivery of the goods. See the CMC 1992, art 42 (4). 65 However, if parties have agreed the compensation for breach of contract, the consignee does not need to give notice for the loss or damage. See Quanzhou Hongsheng Light Industrial Co Ltd v Xiamen Yongkang International Forwarding Co Ltd (2008) Xia Hai Fa Shang Chu Zi No. 51 (Xiamen Maritime Court). 66 CMC 1992, art 81. The notice given to the actual carrier has the same effect as that given to the carrier and vice versa. See CMC 1992, art 85.

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goods has been received from the consignee within 60 consecutive days from the next day on which the goods had been delivered by the carrier to the consignee.67 Non-delivery of goods 7.25 If no one claims delivery of the goods at the port of discharge or the consignee has delayed or refused taking delivery of the goods, the master may discharge the goods into warehouses or other appropriate places, and any expenses or risks arising therefrom shall be borne by the consignee.68 The consignee may be liable for relevant expenses according to the terms of the bill of lading even if it abandons the goods under the bill of lading. In P&O Nedlloyd Ltd v Shanghai Hongxi International Trade Co Ltd,69 the consignee refused to take the delivery of goods due to disputes in trade and sent a letter for abandoned cargo to the carrier. The carrier claimed against the consignee for the detention charge for the extended use of containers. The Shanghai Maritime Court held that the consignee was still liable for the claimed detention charge although it abandoned the goods. Besides the consignee, the carrier can also claim against the shipper for the expenses or risks arising from the non-delivery or the consignee’s delay in taking delivery or refusal of the delivery because the shipper is still bound by the contract of carriage even when the goods have been delivered to the carrier.70 7.26 If the freight, contribution in general average, demurrage to be paid to the carrier and other necessary charges paid by the carrier on behalf of the owner of the goods as well as other charges to be paid to the carrier have not been paid in full, nor has appropriate security been given, the carrier may have a lien, to a reasonable extent, on the goods.71 If the goods under the lien of the carrier have not been taken delivery of within 60 days from the next day of the ship’s arrival at the port of discharge, the carrier may apply to the court for an order to sell the goods by auction; where the goods are perishable or the expenses for keeping such goods would exceed their value, the carrier may apply for an earlier sale by auction. The proceeds from the auction sale shall be used to pay off the expenses for the storage and auction sale of the goods, and the freight and other related charges to be paid to the carrier. If the proceeds fall short of such expenses, the carrier is entitled to claim the difference from the shipper, whereas any amount in surplus shall be refunded to the shipper. If there is no way to make the refund and such surplus amount has not been claimed at the end of one full year after the auction sale, it shall go to the State Treasury.72 7.27 The CMC 1992 gives the carrier a lien on the goods and the auction sale of the goods for the non-payment of relevant expenses and charges. However, those rights may become the carrier’s obligations in some special circumstances in which the carrier may

67 ibid, art 82. 68 ibid, art 86. 69 (2006) Hu Hai Fa Shang Chu Zi No. 82 (Shanghai Maritime Court). 70 Continent Link International Ltd v Jiangxi Huachun Environmental Protection Decoration Material Co Ltd (2010) Hu Hai Fa Shang Chu Zi No. 1116 (Shanghai Maritime Court). 71 The CMC 1992, art 87. The carrier’s lien on the goods can be excluded by agreement. In Bestec Electronics (Dongguan) Co Ltd v PENAVICO Shenzhen Logistics Ltd (2008) Guang Hai Fa Chu Zi No. 330 (Guangzhou Maritime Court), parties agreed to exercise the lien on shipping documents to replace the lien on goods, it was held that the carrier was not entitled to exercise the lien on the goods. 72 CMC 1992, art 88.

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not be fully compensated due to the breach of such obligations. In FannTex Co Ltd and Hoi Yuet Shipping Co Ltd v Wuchuan Import & Export Trade Co Ltd,73 the carrier exercised the lien on the goods and possessed the goods until the claim against the consignee was made in Guangzhou Maritime Court. It was held that the carrier failed to take appropriate measures to prevent the increase of the loss and it was partially liable for its loss. The legal authority for this judgment is the Contract Law, which provides that, after either party breaches the contract, the other party shall take appropriate measures to prevent the increase of the loss; the party that fails to take appropriate preventive measures and thus aggravates the loss may not claim compensation for the increased part of the loss. The reasonable expenses incurred by the other party in preventing the aggravation of the loss shall be borne by the breaching party.74 However, the Contract Law does not clarify who has the burden to prove whether the measures are appropriate. 7.28 In judicial practice, Chinese courts take the view that the carrier has the burden of proof. In COSCO Container Lines Co Ltd v King Far East Shipping Co Ltd Guangzhou Branch (COSCO Container v King Far East),75 the carrier returned the goods because no one claimed the delivery at the port of discharge. The carrier claimed against the shipper for return carriage freight and storage charges in the Shanghai Maritime Court. The carrier’s claim was rejected because it failed to prove the return carriage was a more appropriate measure than the disposal of the goods at the port of discharge, e.g. the auction sale of the goods. In this case, the shipper requested the carrier to deal with the goods at the port of discharge and refused the return carriage. Had the carrier followed the shipper’s instruction, the burden of proof may have shifted to the shipper. The carrier has the burden of proof required by the Chinese courts even if it is entitled to return the goods according to the terms of the bill of lading.76 7.29 Where the carrier fails to prove the appropriateness of the measures it took, the compensation it may have is very limited. In A. P. Moller-Maersk A/S v Shanghai XEN Freight Agency Ltd Shenzhen Branch and Shanghai XEN Freight Agency Ltd,77 no one claimed the delivery of the goods in containers at the port of discharge and finally the goods were forfeited by local customs. The carrier claimed against the shipper for the charge for the extended use of containers. It was held that the carrier failed to take appropriate measures to prevent the increase of its loss when the claimed charge became higher than the value of the containers and, therefore, it could be compensated only for the value of the containers. It may become a risk for the carrier to decide how to deal with the goods at the port of discharge when no one claims the delivery of the goods. A better way for the carrier in such a circumstance, as suggested in COSCO Container Lines Co Ltd v King Far East, is to negotiate with the shipper for an appropriate solution.

73 (2001) Guang Hai Fa Chu Zi No. 158 (Guangzhou Maritime Court). 74 Contract Law 1999, art 119. 75 (2009) Hu Hai Fa Shang Chu Zi No. 817 (Shanghai Maritime Court); (2010) Hu Gao Min Si (Hai) Zhong Zi No. 28 (Shanghai High People’s Court) (CA). 76 SITC Shipping Co Ltd v Xiamen Haomen Food Co Ltd (2004) Xia Hai Fa Shang Chu Zi No. 20 (Xiamen Maritime Court). The Xiamen Maritime Court pointed out that the contractual right should not prevail over the legal requirement in the Contract Law 1999. 77 (2012) Guang Hai Fa Chu Zi No. 329 (Guangzhou Maritime Court); (2013) Yue Gao Fa Min Si Zhong Zi No. 162 (Guangdong High People’s Court) (CA).

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Obligations and liabilities of shipper Information and formalities 7.30 In the CMC 1992, the shipper shall have the goods properly packed and shall guarantee the accuracy of the name, mark, number of packages or pieces, weight or quantity of the goods at the time of shipment and shall indemnify the carrier against any loss resulting from the improper package or the inaccuracies in the above-mentioned information.78 Furthermore, the shipper shall perform all necessary procedures at the port, customs, quarantine, inspection or other competent authorities with respect to the shipment of the goods and shall furnish to the carrier all relevant documents concerning the procedures the shipper has gone through. The shipper shall be liable for any damage to the interest of the carrier resulting from the inadequacy or inaccuracy or delay in delivery of such documents.79 Dangerous goods 7.31 At the time of shipment of dangerous goods, the shipper shall, in compliance with the regulations governing the carriage of such goods, have them properly packed, distinctly marked and labelled and notify the carrier in writing of their proper description, nature and the precautions to be taken. Where the shipper fails to notify the carrier or notified him inaccurately, the carrier may have such goods landed, destroyed or rendered innocuous when and where circumstances so require, without compensation. The shipper shall be liable to the carrier for any loss, damage or expense resulting from such shipment. Notwithstanding the carrier’s knowledge of the nature of the dangerous goods and his consent to carry, he may still have such goods landed, destroyed or rendered innocuous, without compensation, when they become an actual danger to the ship, the crew and other persons on board or to other goods. However, this shall not prejudice the contribution in general average, if any.80 7.32 Whether goods are dangerous depends on the nature of the goods. In China Shipping Container Lines v Qingdao Huaying Logistics Co Ltd and Shandong Sunshine Science & Technology Chemical Co Ltd,81 the chemical goods exploded and damaged the ship. The carrier claimed against the shipper for shipment of dangerous goods. It was found that the chemical goods were harmful to the environment, but were not flammable or explosive materials. It was also found that the chemical goods were not one of the dangerous goods listed in “International Maritime Dangerous Goods Code”. Therefore, it was held that the shipper did not breach the obligation to declare the “dangerous” nature of the goods. The carrier can refuse to carry dangerous goods. However, if the goods carried are dangerous goods but the carrier agrees to carry them as normal goods based on a simple test, the shipper is exempted from the declaration obligation and the carrier is estopped from insisting on the dangerous nature of the goods.82 78 CMC 1992, art 66, para 1. 79 ibid, art 67. 80 ibid, art 68. 81 (2012) Lu Min Si Zhong Zi No. 25 (Shandong High People’s Court) (CA). 82 Shouguang Lianmeng Phosphate & Compound Fertilizer Co Ltd v Qingdao Dehai Marine Shipping Co Ltd and Wuhu Tiangong Freight Agency Co Ltd (2012) Min Shen Zi No. 541 (SPC) (Retrial).

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7.33 Where the dangerous goods damage other goods on board the same ship, the carrier has the right of recourse against the owner of the dangerous good when it compensates the owner of the other damaged goods. In order to exercise the right of recourse, the carrier should prove its loss due to the compensation. However, the amount of compensation based on settlement between the carrier and the owner of the damaged goods is not admissible as evidence of the carrier’s loss. In this circumstance, the carrier would need to prove the real damage to the goods.83 However, this burden of proof may not be reasonable because the amount of compensation in settlement is usually less than the real damage to the goods. So the amount of compensation in settlement should be reasonable evidence of the carrier’s loss, unless it is proved that such an amount is more than the real damage to the goods. Freight 7.34 The shipper shall pay the freight to the carrier as agreed. The shipper and the carrier may reach an agreement that the freight shall be paid by the consignee and such an agreement shall be noted on the transport documents,84 e.g. “freight collect” or “freight to be collected” on the bill of lading. In shipping practice, if no one claims the delivery of the goods or the consignee refuses to take the delivery, the carrier may request the payment of freight from the shipper although it is agreed “freight collect” on the bill of lading. The legal authority is the Contract Law, which provides that “[W]here the parties agree that a third party shall discharge the debts to the creditor and where the third party fails to do so or fails to meet its liability as contracted, the debtor shall bear the liability for breach of contract to the creditor.”85 The SPC interpreted that the shipper is the debtor who shall bear the liability for the non-payment of the freight from the consignee as the third party. The SPC also clarified that the carrier shall have a lien on the goods if there is no appropriate security provided for the non-payment of freight.86 7.35 If a sale of goods contract is concluded on FOB terms, the seller may be free from the duty of payment of freight.87 However, the agreement in the sale of goods contract does not affect the obligation of payment of freight in the carriage of goods contract. In A. P. Molloer-Masersk A/S v Qingdao Huaqing Import & Export Co Ltd,88 because of the seller, the goods were returned but the seller refused to take the delivery of the goods. The carrier claimed against the seller for the payment of freight and other relevant losses. The seller argued that it was the FOB seller and not responsible for carriage of goods including the payment of freight according to the sale of goods contract. It was found that the seller actually concluded the contract of carriage with the carrier. It was held that the seller as the 83 Pacific International Lines (Private) Ltd v Sinochem Jiangsu Co Ltd and Golden-China Agency Inc (2013) Min Shen Zi No. 735 (SPC) (Retrial) 84 CMC 1992, art 69. 85 Contract Law 1999, art 65. 86 Reply of the Supreme People’s Court on Request for Instructions on Freight Payment under Contract for Carriage of Goods by Sea in CJ Smart Cargo Co Ltd v Wuxi Futong Motocycle Co Ltd [2008] Min Si Ta Zi No. 5 (SPC) (Reply). 87 FOB term has variants. So, the seller may be liable for freight if it concludes the contract of carriage with the carrier for the carriage of the goods. See Royaline Logistics Co Ltd v Honey Manufacturing (Group) Co Ltd (2012) Hu Hai Fa Shang Chu Zi No. 1637 (Shanghai Maritime Court). 88 (2003) Qing Hai Fa Shang Chu Zi No. 59 (Qingdao Maritime Court); (2004) Lu Min Si Zhong Zi No. 1 (Shandong High People’s Court) (CA).

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shipper was liable for the payment of the freight due to the breach of the carriage of goods contract evidenced by the bill of lading, not based on the sale of goods contract. 7.36 The shipper may request the cancellation of the contract of carriage of goods by sea before the ship sails from the port of loading. However, except as otherwise provided for in the contract, the shipper shall in this case pay half of the agreed amount of freight and bear the expenses for the loading and discharge and other related charges.89 Either the carrier or the shipper may cancel the contract of carriage and neither shall be liable to the other if, due to force majeure or other causes not attributable to the fault of the carrier or the shipper, the contract could not be performed prior to the ship’s sailing from the port of shipment. If the freight has already been paid, it shall be refunded to the shipper, and, if the goods have already been loaded on board, the discharge expenses shall be borne by the shipper. If a bill of lading has been issued, it shall be returned by the shipper to the carrier.90 Fault and liability 7.37 The shipper shall not be liable for the losses sustained by the carrier or the actual carrier, or for the damages sustained by the ship, unless such loss or damage was caused by the fault of the shipper, his servant or agent. The servant or agent of the shipper shall not be liable for the loss sustained by the carrier or the actual carrier, or for the damage sustained by the ship, unless the loss or damage was caused by the fault of the servant or agent of the shipper.91 In Shanghai Jielong Industry Group Co Ltd v Norasia Container Lines Ltd and CSAV Group (China) Shipping Co Ltd,92 the shipper had neither notified the carrier of the correct name and address of the consignee, nor had it instructed the carrier how to dispose of the goods. It resulted in non-delivery of the goods for a long time and a high cost of storage for the goods. It was held that the carrier’s loss was caused by the shipper’s fault and the shipper should be liable for such a cost. 7.38 Although the shipper shall be liable for its faults, the burden of proof of such faults is on the carrier. In A. P. Molloer-Masersk A/S v GL Biochem (Shanghai) Ltd and SIPG Logistics Co Ltd,93 the goods carried were detained by the customs at the transhipment port. The carrier claimed against the shipper for the charge for extended use of containers. The Shanghai Maritime Court pointed out that the carrier should prove the fault of the shipper that caused the detention of the goods. Because the carrier failed to prove the reason of the detention so as to prove the shipper’s fault, the possibility of other reasons that caused the detention could not be ruled out, e.g. the carrier’s fault or causes without the shipper’s fault. Therefore, the carrier should bear the legal consequences of the failure on burden of proof.

89 CMC 1992, art 89. 90 ibid, art 90. 91 ibid, art 70. 92 (2012) Hu Hai Fa Shang Chu Zi No. 1011 (Shanghai Maritime Court); (2013) Hu Gao Min Si (Hai) Zhong Zi No. 132 (Shanghai High People’s Court) (CA); (2015) Min Shen Zi No. 573 (SPC) (Retrial). 93 (2013) Hu Hai Fa Shang Chu Zi No. 1224 (Shanghai Maritime Court).

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CHAPTER 8

Freight forwarding and multimodal transport

8.1 Ocean freight forwarding is an important part of international shipping carriage. Ocean freight forwarders are important intermediaries between cargo interests and carriers. However, there is no concept of ocean freight forwarding or ocean freight forwarders in the CMC 1992. In other words, the CMC 1992 does not regulate the business of ocean freight forwarding. Instead, departmental regulations govern the administration and operation of ocean freight forwarding. Unlike the traditional concept of freight forwarding, non-vessel-operating services provided by the non-vessel-operating common carrier (the “NVOCC”) is a newly-adopted concept regulated by departmental regulations. Freight forwarding services and non-vessel-operating services sometimes overlap and the status of service providers may not be clear in practice. However, it is important to clarify whether the services provider is an ocean freight forwarder as the agent or the NVOCC as the carrier. Multimodal transport is regulated by both the CMC 1992 and the Contract Law. Freight forwarding Freight forwarding services 8.2 The regulations for freight forwarding are the Provisions of the People’s Republic of China on Administration of the International Freight Forwarding 1995 (Provisions on Administration of the International Freight Forwarding 1995).1 Although they are administrative regulations, the concept of freight forwarding in the regulations reflects the common understanding of ocean freight forwarding in practice. Freight forwarding means the profession that receives the entrustment of the consignee or the shipper of imported or exported goods in the name of the entrusting person or its own name, to handle international carriage and related business for the entrusting person and to collect remuneration for services.2 Freight forwarding includes ocean freight forwarding. 8.3 The Implementation Rules for the Administrative Provisions on International Freight Forwarding of the People’s Republic of China 2004 (Implementation Rules for

1 Decree No. 5 of the Ministry of Foreign Trade and Economic Cooperation of the PRC 1995. The Ministry of Foreign Trade and Economic Cooperation has been replaced by the Ministry of Commerce. 2 Provisions on Administration of the International Freight Forwarding 1995, art 2.

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International Freight Forwarding 2004)3 enumerate services of freight forwarding including but not limited to:4 (1) (2) (3) (4) (5) (6) (7) (8)

collection of cargoes, booking spaces (including chartering of ships, planes and shipping spaces), consignment, warehousing and packaging; supervision of loading and unloading of goods, vanning, devanning, de-consolidation and transit of containers, and related short-distance transport services; customs declarations, applications for examination, applications for inspection and arrangement of insurance; preparation and issuance of relevant documents, payment of freight, and settlement and payment of incidental expenses; freight forwarding of international exhibits, personal belongings and transit goods; international multimodal transport and container transport (including container consolidation); international express delivery (excluding personal letters); and consultation and other business related to international freight forwarding.

Freight forwarder 8.4 The international freight forwarder5 (including the ocean freight forwarder under the Implementation Rules for International Freight Forwarding 2004) may engage in international freight forwarding as an agent for the consignee and/or the shipper of imported and exported goods or as an independent contractor. As an agent, the international freight forwarder may engage in relevant business in the names of its principals6 or in its own name,7 and collect an agency fee or commission. As an independent contractor, the international freight forwarder may accept the entrustment by the consignee or the shipper of imported and exported goods or agents thereof, sign and issue transport documents, perform transport contracts, and collect freight and service fees.8 Therefore, the ocean freight forwarder acting as an independent contractor is the contractual carrier on the freight forwarder’s bill of lading,9 namely the house bill of lading. 8.5 When engaging in relevant business as an agent, the international freight forwarder shall conclude a written agency contract with its principal. If any business dispute arises between the freight forwarder and its principal, the written agency contract shall be taken as the basis for settling the said dispute. If the international freight forwarder engages in relevant business as an independent contractor, it shall sign and issue relevant transport documents to the cargo interests. If any business dispute arises between the international 3 Announcement [2003] No. 82 of the Ministry of Commerce of the PRC. 4 Implementation Rules for International Freight Forwarding 2004, art 23. 5 The international freight forwarder must obtain the status of a legal person enterprise of the People’s Republic of China in accordance with law. See the Provisions on Administration of the International Freight Forwarding 1995, art 3. 6 The principals include the consignee or the shipper of imported and exported goods or the agent thereof. 7 If the freight forwarder uses its own name, it is the agency of unnamed principal. 8 Implementation Rules for International Freight Forwarding 2004, art 2. 9 The contractual carrier may be entitled to the exemptions of liability and the limitation of liability in the CMC 1992.

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freight forwarder and the cargo interests, the transport documents shall be taken as the basis for settling the said dispute. If any business dispute arises between the international freight forwarders and the actual carrier, the transport contract that has been concluded by them shall be taken as the basis for settling the said dispute.10 8.6 All house bills of lading signed and issued by the international freight forwarder within the territory of China must be registered at the Ministry of Commerce.11 The international freight forwarders shall arrange the liability insurance for their house bills of lading with insurance companies in China. Like the ocean bill of lading, the negotiability of the house bill of lading depends on the type of house bill of lading. The straight house bill of lading is non-negotiable; the order house bill of lading is negotiable upon special endorsements or blank endorsement; and the bearer house bill of lading is negotiable without endorsements.12 However, unlike the ocean bill of lading, the house bill of lading is not a document of title whether it is negotiable or not because it cannot be used to take delivery of goods from the ocean carrier. Disputes over ocean freight forwarder 8.7 Although the CMC 1992 does not provide rules for ocean freight forwarding, the SPC provides rules in its judicial interpretation of the Provisions of the Supreme People’s Court on Certain Issues concerning the Trial of Cases of Disputes over Ocean Freight Forwarding 2012 (Provisions on Disputes over Ocean Freight Forwarding 2012).13 The Provisions on Disputes over Ocean Freight Forwarding 2012 apply to the following disputes that occur in freight forwarding transactions:14 (1) (2) (3) (4) (5)

disputes arising from cargo space booking, customs clearance, inspection reporting, test reporting and insurance services; disputes arising from cargo packaging, packaging supervision, unloading supervision, container devanning, distribution and transfer services; disputes arising from preparation or delivery of relevant documents or settlement of fees; disputes arising from warehousing and land transport services; and disputes arising from handling other marine freight forwarding transactions.

Chinese maritime courts have jurisdiction of the aforementioned disputes.15 The Provisions on Disputes over Ocean Freight Forwarding 2012 do not apply to cases of disputes over freight forwarding involving coastal and inland transport of goods.16

10 Implementation Rules for International Freight Forwarding 2004, art 36. As administrative regulations, the Implementation Rules for International Freight Forwarding 2004 may not be an appropriate authority for civil or commercial disputes. However, the rules in the regulations comply with the principles in the Contract Law. 11 ibid, art 37, para 1. The Ministry of Commerce shall indicate the approval number on the registered house bill of lading. 12 ibid, art 37, para 3. 13 Fa Shi [2012] No. 3 (SPC). 14 Provisions on Disputes over Ocean Freight Forwarding 2012, art 1. 15 ibid, art 13. 16 ibid, art 15.

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Freight forwarding contract 8.8 Freight forwarding services include agency, transport, warehousing, and etc., so relevant laws and regulations will apply accordingly.17 In order to determine whether a contract is an ocean freight forwarding contract, it is necessary to consider the name and manner for freight forwarders to get remuneration, types of invoices issued and charges collectable, transaction practices between parties concerned and other situations of actual performance of contract.18 In Zhejiang Fenfei Rubber & Plastic Products Co Ltd v SUN Cargo International (Shanghai) Ltd Ningbo Branch,19 although the parties in dispute did not conclude any written contract, the SPC held that the freight forwarding contract had been concluded based on the facts of the transactions between them. It was found that the freight forwarder sent the expenses confirmation sheet and the invoice for the expenses including the trailer fee, packing list fee, customs declaration fee, space booking fee, etc and the counter party paid the expenses to the freight forwarder. Although there was no written contract, the contents of the oral contract could be found through the communication record of the parties. The fact that the freight forwarder declared the customs, issued documents and arranged the land transport, and the counter party had paid for the relevant business could prove the existence of the freight forwarding contract between the parties. 8.9 The purpose of denying the existence of the freight forwarding contract may be to deny having any payment obligation, while the purpose of insisting on the existence of a freight forwarding contract may be necessary to obtain the delivery of shipping documents.20 However, if there is only an invoice without other supporting evidence, this may not prove the existence of the freight forwarding contract. In JC International Logistics Co Ltd Ningbo Branch v Huayu Electric Group Co Ltd,21 the FOB seller insisted that it had the freight forwarding contract with the freight forwarder. However, the freight forwarder argued that it accepted the entrustment from the FOB buyer for relevant freight forwarding business. Although the freight forwarder arranged the shipment of the goods from the FOB seller, it did not mean that there was a freight forwarding contract between them. The FOB seller’s evidence was an invoice issued from the freight forwarder to the agent of the FOB seller for payment of the partial freight in RMB. The freight forwarder argued that it issued such an invoice according to the instruction of its principal, namely the FOB buyer. The SPC took the view that on the basis of only the invoice, it could not prove the existence of the freight forwarding contract between the freight forwarder and the FOB seller and, conversely, the invoice proved the contractual relationship between the freight forwarder and the FOB buyer. In fact, the FOB seller had not paid any agency fee to the freight forwarder. Therefore, it was held that there was no freight forwarding contract between the FOB seller and the freight forwarder.

17 ibid, art 2. The Contract Law 1999 provides special chapters for carriage contract (chapter XVII), warehousing contract (chapter XX) and entrustment contract (chapter XXI). However, the CMC 1992 applies to the carriage of goods by sea contract. 18 ibid, art 3. 19 (2015) Min Shen Zi No. 826 (SPC) (Retrial). 20 For the FOB seller’s right to obtain the shipping documents from the freight forwarder, see Provisions on Disputes over Ocean Freight Forwarding 2012, art 8. 21 (2015) Min Ti Zi No. 19 (SPC) (Retrial).

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Freight forwarder as carrier 8.10 As aforementioned, an ocean freight forwarder in the Provisions on Administration of the International Freight Forwarding 1995 may act as an agent of its principal or an independent contractor.22 The SPC takes the view that an ocean freight forwarder may be considered as a carrier if the freight forwarder signs and issues bills of lading, sea waybills or other transport documents in its own name during handling freight forwarding transactions.23 In the practice of ocean freight forwarding, where an ocean freight forwarder accepts the entrustment of the cargo interests and accordingly arranges the forwarding transactions including the carriage of goods, it may sign and issue shipping documents, deliver goods according to telex release instructions from the cargo interest and collect expenses and fees including the telex release fee. In this circumstance, it is believed that the ocean freight forwarder is effectively converted into the carrier.24 8.11 In shipping practice, it is not uncommon that an ocean freight forwarder uses the registered bill of lading from another shipping company. When such a borrowed bill of lading is issued, that shipping company may not be considered as the carrier. In the view of the SPC, where a freight forwarder signs and issues bills of lading, sea waybills or other transport documents in the name of the carrier’s agent but could not prove that it has obtained the carrier’s entrustment, the freight forwarder is also considered as the carrier.25 In Chinese judicial practice, the burden of proof may be heavier than the requirement from the SPC’s view. In Zhejiang Qingsen Garment Co Ltd v Shanghai Shenghong International Logistics Co Ltd,26 the ocean freight forwarder denied its status as the carrier when it signed and issued a bill of lading with another company’s name on the bill of lading. It argued that it signed and issued the bill of lading for and on behalf of another company. For this argument, it was required to prove that it had obtained the entrustment of that company and that company legally existed when it signed and issued the bill of lading. In other words, even if the freight forward had obtained the entrustment, if the entrustment was from a company that was not legally established as a legal person enterprise in China, the freight forwarder was considered as the carrier under the bill of lading.27 8.12 An ocean freight forwarder may be considered as the carrier even if it has no real relation with the carriage under the bill of lading. In Wenzhou Lucheng Foreign Trade Co Ltd v Transvision International Logistics Co Ltd Shanghai Branch,28 the ocean freight forwarder issued the bill of lading but denied its status as the carrier because it did not collect freight. The Shanghai Maritime Court pointed out that it was agreed “freight collect” on the bill of lading, which meant the freight was to be collected in the port of discharge. Therefore, the fact that the freight forwarder did not collect freight in the port of shipment could not prove that the freight forwarder was not the carrier.29 In the appeal, the freight forwarder argued that it did not arrange any relevant forwarding business but just issued the 22 See para 8.4. 23 Provisions on Disputes over Ocean Freight Forwarding 2012, art 4, para 1. 24 Sea Sun Star Co Ltd v AEL-Berkman Forwarding (HK) Ltd Xiamen Branch (2014) Xia Hai Fa Shang Chu Zi No. 27 (Xiamen Maritime Court). 25 Provisions on Disputes over Ocean Freight Forwarding 2012, art 4, para 2. 26 (2009) Hu Hai Fa Shang Chu Zi No. 1110 (Shanghai Maritime Court). 27 See also the Provisions on Disputes over Ocean Freight Forwarding 2012, art 11. 28 (2010) Hu Gao Min Si (Hai) Zhong Zi No. 139 (Shanghai High People’s Court) (CA). 29 (2010) Hu Hai Fa Shang Chu Zi No. 130 (Shanghai Maritime Court).

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bill of lading for the interests of others. This argument was rejected by the Shanghai High People’s Court. It was pointed out that, as a professional company, the freight forwarder should be aware of the importance of the bill of lading and the risk of issuing the bill of lading. Therefore, it should exercise due diligence and not help others to issue the bill of lading. Otherwise, it would have to bear the carrier’s liability when it was identified as the carrier on its bill of lading. Delivery of shipping documents 8.13 The CMC 1992 provides, when the goods have been taken over by the carrier or have been loaded on board, the carrier shall, on demand of the shipper, issue to the shipper a bill of lading.30 The CMC 1992, however, does not provide whether the ocean freight forwarder should deliver the bill of lading obtained from the carrier to the shipper. In Lanxi Fangxing Packing Production Factory v APM Global Logistics (Shanghai) Co Ltd Ningbo Branch and APM Global Logistics Co Ltd,31 the ocean freight forwarder delivered a cargo receipt to the shipper but the shipper requested the delivery of the bill of lading. It was found that there was no agreement for delivery of the bill of lading in the entrustment contract between the ocean freight forwarder and the shipper, but the shipper accepted the cargo receipt. It was held that the ocean freight forwarder was not obliged to deliver the bill of lading to the shipper since it had delivered the cargo receipt that had been accepted by the shipper. As obiter dictum, the Ningbo Maritime Court pointed out that, if there was no agreement for delivery of shipping documents and the shipper did not accept the cargo receipt, the ocean freight forwarder, upon the request of the shipper, should be obliged to deliver the bill of lading to the shipper. The Zhejiang High People’s Court upheld the obiter dictum.32 8.14 Where it is agreed that the ocean freight forwarder may deliver documents obtained from handling ocean freight forwarding transactions on the condition that the principal pays relevant expenses, the freight forwarder is entitled to refuse to deliver the documents if the principal has not paid relevant expenses. Where it is not so agreed or there is no agreement for delivery of documents, the freight forwarder is still entitled to refuse to deliver the documents if the principal fails to pay the relevant expenses except for bills of lading, sea waybills or other transport documents.33 If the principal suffers loss due to the illegal detention of the shipping documents, e.g. the bill of lading by the ocean freight forwarder, the ocean freight forwarder shall be liable for the loss.34 Even though the ocean freight forwarder is entitled to detain the documents if the debt is not paid, including the shipping documents if it is so agreed in the entrustment contract, it cannot possess the shipping documents to request the delivery of goods from the carrier, particularly on a straight bill of lading to which the ocean freight forwarder is not the consignee.35 30 CMC 1992, art 72, para 1. 31 (2009) Yong Hai Fa Shang Chu Zi No. 24 (Ningbo Maritime Court). 32 (2009) Zhe Hai Zhong Zi No. 89 (Zhejiang High People’s Court) (CA). 33 Provisions on Disputes over Ocean Freight Forwarding 2012, art 7. 34 Shaoxing Hengchang Group Co Ltd v Shanghai Dongsue International Logistics Co Ltd (2014) Hu Hai Fa Shang Chu Zi No. 1148 (Shanghai Maritime Court). 35 Jiangsu Xingzhenyu International Logistics Co Ltd v Worldwide Logistics (U.S.A.) Corp and Round-theworld Logistics Co Ltd (2009) Hu Hai Fa Shang Chu Zi No. 693 (Shanghai Maritime Court). In this case, it was held that the straight bill of lading in the hands of the ocean freight forwarder was not a document of title and the ocean freight forwarder was not entitled to exercise the lien on the straight bill of lading.

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8.15 Because there are two shippers in the CMC 1992,36 not only does the carrier, but also the ocean freight forwarder who obtains the shipping documents from the carrier, face the dilemma of delivery of the shipping documents. In the view of the SPC, where a freight forwarder accepts commission from the contractual shipper37 to handle cargo space booking transactions and accepts commission from the actual shipper38 to deliver cargo to the carrier, it shall, upon the request of the actual shipper, deliver the bills of lading, sea waybills or other transport documents obtained by it to the actual shipper.39 In Chinese judicial practice, when both the contractual shipper and the actual shipper request the delivery of the bill of lading, the ocean freight forwarder shall deliver the bill of lading to the actual shipper.40 The judicial practice aims to protect the interests of Chinese FOB sellers. Special agreements in the sale of goods contract may not affect the ocean freight forwarder’s obligation to deliver the shipping documents to the actual shipper. In Zhejiang Fenfei Rubber & Plastic Products Co Ltd v SUN Cargo International (Shanghai) Ltd Ningbo Branch,41 the ocean freight forwarder did not deliver the bill of lading to the FOB seller as the actual shipper but to the FOB buyer as the contractual shipper. It was not agreed who was entitled to the delivery of the bill of lading in the general trade contract and in the past trade transactions under the general trade contract the FOB seller had never requested the bill of lading. In fact, the actual shipper had only requested the copy of the bill of lading in the past trade transactions. Therefore, the ocean freight forwarder delivered the original bill of lading to the contractual shipper. However, the SPC ignored the past trade transactions and held that the actual shipper was still entitled to the delivery of the bill of lading unless it had expressly agreed to the delivery of the bill of lading to other parties. Obligations and liability 8.16 The ocean freight forwarder shall be liable for compensation if it causes loss to the principal while handling ocean freight forwarding transactions.42 Conversely, if the freight forwarder as the agent suffers a loss in handling the entrusted affairs not due to its own fault, the principal shall compensate the agent.43 The ocean freight forwarder’s liability is based on the principle of fault presumption. In case of short delivery of goods, if the ocean freight forwarder cannot prove that it has no fault for the shortage, it is assumed that the ocean freight forwarder is liable for the shortage.44 The ocean freight forwarder may also be

36 They are the contractual shipper and the actual shipper. 37 Contractual shipper refers the person by whom or in whose name or on whose behalf a contract of carriage of goods by sea has been concluded with a carrier. See the CMC 1992, art 42 (3) (a). 38 Actual shipper refers to the person by whom or in whose name or on whose behalf the goods have been delivered to the carrier involved in the contract of carriage of goods by sea. See the CMC 1992, art 42 (3) (b). 39 Provisions on Disputes over Ocean Freight Forwarding 2012, art 8. 40 Wuxi Dahua Habit Co Ltd v Damco China Limited (2012) Hu Hai Fa Shang Chu Zi No. 492; (2012) Hu Gao Min Si (Hai) Zhong Zi No. 159 (Shanghai High People’s Court) (CA). 41 (2015) Min Shen Zi No. 826 (SPC) (Retrial). 42 Provisions on Disputes over Ocean Freight Forwarding 2012, art 10. 43 Contract Law 1999, art 407. See also Ningbo Penavico-CCL International Freight Forwarding Co Ltd v Ningbo World Way International Marine Co Ltd (2014) Min Shen Zi No. 1551 (SPC) (Retrial). 44 Sinochem International Corporation v China Railway International Freight Forwarding Dalian Co Ltd (2014) Hu Hai Fa Shang Chu Zi No. 358 (Shanghai Maritime Court).

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liable for loss of goods. In Hailan International Trade Co Ltd v South Korean Sea and Air Transport Co Ltd and China Distribution Center Co Ltd,45 the shipper claimed against the ocean freight forwarder for the loss of the goods. The ocean freight forwarder acted as the agent of both the shipper and the ocean carrier. In the trial of the case, the ocean freight forwarder could not describe the position and status of the goods. It was held that the ocean freight forwarder failed to exercise due diligence to act in freight forwarding transactions and should be liable for the loss of the goods. 8.17 Where a freight forwarder fails to perform the duty of care while concluding the contract of carriage of goods by sea with a NVOCC that has not registered its bill of lading with China’s competent department of transport,46 thus causing loss to the principal, the freight forwarder shall bear the corresponding liability for the loss.47 However, if the ocean freight forwarder is not responsible for concluding the contract of carriage, it has no corresponding liability. In Shaoxing Dite Import & Export Co Ltd v Shanghai Shifa International Freight Forwarding Co Ltd,48 the FOB buyer concluded the contract of carriage with the carrier and the ocean freight forwarder had no choice of carrier. Therefore, the ocean freight forwarder was not liable for any fault in the choice of carrier.49 8.18 Where a freight forwarder signs and issues a bill of lading under the entrustment from a NVOCC that has not registered its bill of lading with China’s competent department of transport, the freight forwarder shall not be considered as the carrier.50 It shall only bear joint and several liability with the NVOCC for the loss occurred under the unregistered bill of lading. The freight forwarder is entitled to recover the loss from the NVOCC after bearing the liability for compensation.51 Sub-commission 8.19 In the freight forwarding business, the principal may agree on sub-commission authority with the freight forwarder. Where there is no agreement on the authority of subcommission, it should not be assumed that the principal has approved the sub-commission on the grounds that the principal should have known that the freight forwarder would sub-commission the third party to handle the freight forwarding transactions in whole or in part but did not raise any objection against it, except for where the principal’s behaviour expressly shows that it accepted the sub-commission.52 Without authority of subcommission, the ocean freight forwarder shall be responsible for all activities of the third party and liable for loss caused by the third party.53

45 (2005) Hu Hai Fa Shang Chu Zi No. 6 (Shanghai Maritime Court). 46 It is the Ministry of Transport of the PRC. 47 Provisions on Disputes over Ocean Freight Forwarding 2012, art 11. 48 (2013) Hu Hai Fa Shang Chu Zi No. 1605 (Shanghai Maritime Court); (2014) Hu Gao Min Si (Hai) Zhong Zi No. 145 (Shanghai High People’s Court) (CA). 49 Furthermore, in this case the loss suffered by the shipper was caused by the non-payment of the price of the goods by the buyer and the act of the ocean freight forwarder had no causation with the shipper’s loss. 50 Spring Holding Group Co Ltd v CTSI Logistics (Taiwan) Inc and Evergreen Marine Corporation (Taiwan) Ltd (2008) Zhe Min Si Zhong Zi No. 58 (Zhejiang High People’s Court) (CA). 51 Provisions on Disputes over Ocean Freight Forwarding 2012, art 12. 52 Provisions on Disputes over Ocean Freight Forwarding 2012, art 5. 53 Cooper & Turner (Ningbo) International Trading Co Ltd v Burke Shipping Group Shanghai Ltd (2012) Hu Hai Fa Shang Chu Zi No. 1192 (Shanghai Maritime Court).

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Rescission of contract 8.20 Where a freight forwarder, within the generalised authority of commission, completes the ocean freight forwarding transactions, it is entitled to request the payment of relevant expenses.54 Before the completion of the freight forwarding transactions, the principal or the ocean freight forwarder may rescind the entrustment contract at any time. If the rescission of the contract by a party causes loss to the other party, the party who rescinds the contract shall compensate for any loss, except for reasons not attributable to that party.55 If the principal has rescinded the entrustment contract but the ocean freight forwarder continues the freight forwarding business, it shall not be entitled to any compensation or commission from the time of rescission.56 NVOCC Non-vessel-operating services and NVOCC 8.21 China established the concept of the NVOCC by the Regulations of the People’s Republic of China on International Maritime Transportation 2001, amended in 2013 and 2016 (Regulations on International Maritime Transportation 2016).57 A NVOCC may accept shipments from the shipper as a carrier, issue its own bills of lading or other shipping documents, collect freight from the shipper, arrange the carriage of goods by sea through an ocean carrier, and assume the responsibilities of a carrier.58 The non-vessel-operating services in the Implementation Rules for the Regulations of the People’s Republic of China on International Maritime Transportation 2003, as amended in 2013 (Implementation Rules for the Regulations on International Maritime Transportation 2013)59 include but are not limited to the following business:60 i. ii. iii. iv. v.

signing international cargo transportation contracts with the shipper as the carrier; accepting and delivering the goods as the carrier; issuing the bills of lading or other transportation documents; collecting freight and other remunerations for the service; booking shipping space and handling shipment for the goods carried with the ocean carrier or other carrier; vi. paying port charges or other transportation fees; and vii. devanning and consolidating containers.

54 Provisions on Disputes over Ocean Freight Forwarding 2012, art 9. 55 Contract Law 1999, art 410. 56 Shanghai Kaichang International Transportation Co Ltd v Changzhou JC International Logistics Co Ltd (2013) Hu Hai Fa Shang Chu Zi No. 1077 (Shanghai Maritime Court). In this case, the shipper rescinded the entrustment contract for the return the goods but the ocean freight forwarder completed the return carriage. It was held that the ocean freight forwarder was not titled to the commission fee for the arrangement of the return carriage. 57 Decree No. 335 of the State Council of the PRC 2001. The Regulations on International Maritime Transportation 2016 apply to international maritime transportation business operations to and from the ports of China as well as the auxiliary business operations relating to international maritime transportation. 58 Regulations on International Maritime Transportation 2016, art 7, para 2. 59 Order No. 9 [2013] of the Ministry of Transport of the PRC. 60 Implementation Rules for the Regulations on International Maritime Transportation 2013, art 3 (4).

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8.22 The NVOCC shall be an enterprise and legal person established according to the law within Chinese territory.61 The NVOCC includes Chinese NVOCC and foreign NVOCC in the Implementation Rules for the Regulations on International Maritime Transportation 2013. Chinese NVOCC refers to Chinese business corporations that have obtained the qualification for non-vessel shipping business according to the Regulations on International Maritime Transportation 2016. Foreign NVOCC refers to the foreign enterprise that is established according to foreign law and has obtained the qualification for non-vessel shipping business through Chinese ports according to the Regulations on International Maritime Transportation 2016.62 The NVOCC should register its bill of lading at the competent department of transport63 and submit a deposit.64 The deposit shall be used for the payment of debts incurred from non-performance or improper performance of obligations by the NVOCC or the payment of fines.65 Freight forwarder or NVOCC? 8.23 Comparing the ocean freight forwarder and the NVOCC in China, it seems that the ocean freight forwarder acting as independent contractor, namely the carrier, is the same as the NVOCC. In fact, the NVOCC can also have a similar business to that of the ocean freight forwarder. The only substantial difference is the administrative department; the one for the ocean freight forwarder is the Ministry of Commerce and the other one for the NVOCC is the Ministry of Transport. As required by the SPC, where Chinese courts in their trials find any freight forwarder without the business qualification for NVOCC, which infringes the Regulations on International Maritime Transportation 2016 by signing and issuing bills of lading, sea waybills or other transport documents in their own names, they shall issue judicial suggestions to the relevant competent department of transport to advise the department to impose the corresponding punishments on the freight forwarder.66 8.24 There is no doubt that Chinese courts have the authority to issue judicial suggestions. However, NVOCC is a concept in the Regulations on International Maritime Transportation 2016, but an ocean freight forwarder may sign and issue shipping documents with the business qualification under the Provisions on Administration of the International Freight Forwarding 1995. It seems that the SPC considers the ocean freight forwarder as the NVOCC when it signs and issues bill of lading as the carrier. However, they are different concepts under different administrative regulations. 8.25 This confusion also exists in Chinese judicial practice. In Shaoxing Hengchang Group Co Ltd v Shanghai Dongsue International Logistics Co Ltd,67 the Shanghai Maritime Court pointed out that whether a person was an ocean freight forwarder or a NVOCC depended on whether that person had issued the shipping documents. Only the person who issued the shipping documents could be identified as the NVOCC. However, the ocean freight forwarder can also issue house bills of lading. Therefore, the issuance of shipping 61 62 63 64 65 66 67

ibid, art 7, para 3. Implementation Rules for the Regulations on International Maritime Transportation 2016, art 3 (5). It is the Ministry of Transport of the PRC. Regulations on International Maritime Transportation 2016, art 7, para 1. ibid, art 8, para 3. The payment of debts is subject to the effective judgments and enforced arbitral awards. Provisions on Disputes over Ocean Freight Forwarding 2012, art 14. (2014) Hu Hai Fa Shang Chu Zi No. 1148 (Shanghai Maritime Court).

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documents is not the decisive factor to distinguishing between an ocean freight forwarder from a NVOCC. 8.26 This problem is caused by the cross-administrative management of similar shipping business from different authorities in China. In essence, there is no substantial difference of business between the ocean freight forwarder and the NVOCC in shipping practice. The outstanding difference is the administrative requirements for the two kinds of business. The establishment of an ocean freight forwarder is subject to the approval of the Ministry of Commerce of the PRC and the minimum amount of registered capital for the ocean freight forwarder shall be RMB 5,000,000.68 When it is established, the ocean freight forwarder’s bill of lading shall be registered.69 However, there is no approval requirement for the establishment of a NVOCC and there is no requirement for the minimum amount of registered capital for the NVOCC. The NVOCC should only register its bill of lading and submit the deposit of RMB 800,000.70 So some ocean freight forwarders also register their bill of lading and become NVOCCs. By doing so, an ocean freight forwarder may open itself to more business.71 However, it is not a legal requirement for an ocean freight forwarder to do so. 8.27 Nevertheless, in the view of the SPC, the registration of a bill of lading at the Ministry of Transport becomes a legal requirement if the bill of lading is not issued from an ocean carrier but from an ocean freight forwarder who acts as a carrier.72 Therefore, where an ocean freight forwarder issues a bill of lading, it infringes the Regulations on International Maritime Transportation 2016 if it is not registered in the Ministry of Transport as the NVOCC, and if it did not register its bill of lading in the Ministry of Transport, and thus should be imposed penalties. However, this said infringement does not affect the validity of the contract of carriage of goods by sea evidenced by the unregistered bill of lading between the shipper and the ocean freight forwarder. In other words, the ocean freight forwarder was still considered as the carrier and the legal effect of the infringement is a penalty imposed by administrative authority on the ocean freight forwarder. Multimodal transport Multimodal transport in the CMC 1992 8.28 The multimodal transport contract in the CMC 1992 means a contract under which the multimodal transport operator undertakes to transport the goods, against the payment of freight for the entire transport, from the place where the goods are received in his charge to the destination and to deliver them to the consignee by two or more different modes of transport, one of which being sea carriage. The multimodal transport operator means the person who has entered into a multimodal transport contract with the shipper either by himself or by another person acting on his behalf.73 The difference of the multimodal 68 Provisions on Administration of the International Freight Forwarding 1995, arts 8 and 9. 69 Implementation Rules for International Freight Forwarding 2004, art 37, para 1. 70 Regulations on International Maritime Transportation 2016, arts 7 and 8. 71 And it seems harmless to do so. 72 Reply of the Supreme People’s Court on Request for Instructions on the Validity of the Contract for the Carriage of Goods by Sea Concluded between an Unqualified NVOCC and a Shipper or the Bill of Lading Issued by the Unqualified NVOCC [2007] Min Si Ta Zi No. 19 (SPC) (Reply). 73 CMC 1992, art 102.

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transport contract between the CMC 1992 and the Contract Law is the requirement of sea carriage as one of the modes of the multimodal transport.74 The leg of sea carriage for the multimodal carriage in the CMC 1992 shall be an international sea carriage of goods, not coastal carriage.75 Furthermore, it is the Contract Law, not the CMC 1992, which applies to the multimodal transport contract with a leg of inland water carriage.76 8.29 Although the Contract Law applies to the multimodal transport with a leg of inland water or coastal carriage, it does not mean that the Contract Law does not apply to the multimodal transport identified in the CMC 1992. The provisions in respect of the multimodal transport in the Contract Law shall apply if the CMC 1992 has no corresponding provisions for the multimodal transport. Under the Contract Law, the multimodal transport operator shall issue multimodal transport documents on receiving the goods consigned for transport by the consignor. At the request of the consignor, the multimodal transport documents may be transferable or non-transferable.77 If any loss suffered by the operator of multimodal transport is caused due to the fault of the consignor at the time of consigning the goods for transport, even if the consignor has transferred the multimodal transport documents, the consignor shall still be liable for the loss.78 Those provisions apply to multimodal transport under the CMC 1992. 8.30 In shipping practice, an ocean freight forwarder may act as a multimodal transport operator in the CMC 1992 or just an agent of its principal. In Guangdong Qunxing Toys Joint-Stock Co Ltd v Express Star Logistics Ltd,79 the ocean freight forwarder undertook the land road carriage of goods and arranged the ocean carriage through an ocean carrier. The claimant insisted that the ocean freight forwarder acted as the multimodal transport operator and should be responsible for the whole transport of the goods. It was found that the freight forwarder accepted the entrustment from the claimant for the inland road carriage and the shipment of the goods for the sea carriage. However, the ocean freight forwarder did not issue any multimodal transport document but forwarded the ocean bill of lading from the ocean carrier to the claimant on which the freight forwarder was not identified as the carrier. Therefore, the SPC held that the ocean freight forwarder was just an agent for the sea carriage but not a multimodal transport operator for the whole carriage. 8.31 Conversely, in Yixing Mingyue Architectural Ceramic Co Ltd v Hopeful Logistics Co Ltd, although the ocean freight forwarder and its principal signed the freight forwarding contract, the contents of the contract were the rights and obligations of the shipper and the multimodal transport operator. It was found that the ocean freight forwarder issued bills of lading covering both the sea carriage and the land carriage. The Tianjin Maritime Court held that such a contract was actually a multimodal transport contract and the ocean freight forwarder was a multimodal transport operator.80 In the appeal of the case, the Tianjin High

74 Contract Law 1999, art 317. 75 Qinghai Minhe Economic and trade Co Ltd v Sinotrans Tianjin Group Co Ltd (2002) Min Si Ti Zi No. 9 (SPC) (Retrial). 76 Gold East Paper (Jiangsu) Co Ltd v Yichang Nine Five Ship Transport Co Ltd and Others (2014) Min Shen Zi No. 1617 (SPC) (Retrial). 77 Contract Law 1999, art 319. 78 ibid, art 320. 79 (2011) Min Shen Zi No. 1410 (SPC) (Retrial). 80 (2008) Jin Hai Fa Shang Chu Zi No. 507 (Tianjin Maritime Court).

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People’s Court also found that the shipper had paid the freight for the entire transport and thus upheld the decision of the court of first instance.81 Responsibility period 8.32 The responsibility of the multimodal transport operator with respect to the goods under multimodal transport contract covers the period from the time he takes the goods in his charge to the time of their delivery.82 The multimodal transport operator shall be responsible for the performance of the multimodal transport contract or the procurement of the performance therefor, and shall be responsible for the entire transport. Meanwhile, the multimodal transport operator may enter into separate contracts with the carriers of the different modes defining their responsibilities with regard to the different sections of the transport under the multimodal transport contracts. However, such separate contracts shall not affect the responsibility of the multimodal transport operator with respect to the entire transport.83 8.33 The multimodal transport operator may be deprived of the right of a performance defence due to its failure of performance of the entire transport. In Yixing Mingyue Architectural Ceramic Co Ltd v Hopeful Logistics Co Ltd (Yixing Mingyue v Hopeful Logistics),84 because the shipper failed to pay the freight as agreed, the multimodal transport operator detained the goods in the port of discharge although it agreed to deliver the goods to the premises of the consignee. The shipper claimed against the multimodal transport operator for the delay of carriage and the multimodal transport operator counterclaimed against the shipper for the demurrage of the goods in the port of discharge. The Shanghai Maritime Court pointed out that the performance of the entire transport of goods was the mandatory requirement in law. Thus it was held that the multimodal transport operator was not entitled to reject the performance of the multimodal transport contract due to the shipper’s fault in the payment of freight. In the view of the Shanghai Maritime Court, the multimodal transport operator should perform the contract and then claim against the shipper for the payment of freight. 8.34 However, although the multimodal transport operator is responsible for the entire transport of the goods, there is no reason to deprive the multimodal transport operator of the right of a performance defence in Yixing Mingyue v Hopeful Logistics. Under the Contract Law, where both the parties should perform the contract without sequential order, either party has the right to reject the other party’s demand for the performance if the other party fails to perform the contract.85 Where there is a sequential order for the performance of the parties, the latter performing party has the right to reject the earlier performing party’s demand to perform the contract if the earlier performing party fails to perform the contract; the latter performing party also has the right to reject the corresponding part of the contract if the latter performing party does not perform the contract as agreed.86 Since the Contract

81 82 83 84 85 86

(2009) Jin Gao Min Si Zhong Zi No. 574 (Tianjin High People’s Court) (CA). CMC 1992, art 103. ibid, art 104. (2009) Hu Hai Fa Shang Chu Zi No. 275 (Shanghai Maritime Court). Contract Law 1999, art 66. ibid, art 67.

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Law provides the right of performance defence, the Shanghai Maritime Court in Yixing Mingyue v Hopeful Logistics should have made a finding of fact for whether the parties had agreed the sequential order for performance, and then decide whether the multimodal transport operator was entitled to exercise the right of performance defence. Liability and limitation 8.35 If loss of, or damage to, the goods has occurred in a certain section of the transport, the provisions of the relevant laws and regulations governing that specific section of the multimodal transport shall be applicable to matters concerning the liability of the multimodal transport operator and the limitation thereof.87 Where the goods are lost or damaged in the port of discharge before the land carriage, the Contract Law may apply because the sea carriage is when the goods are discharged and ready for land carriage.88 If the section of transport in which the loss of, or damage to, the goods occurred cannot be ascertained, the multimodal transport operator shall be liable for compensation in accordance with the stipulations regarding the carrier’s liability and the limitation thereof in the CMC 1992.89

87 CMC 1992, art 105. 88 Yixing Mingyue Architectural Ceramic Co Ltd v Hopeful Logistics Co Ltd (2008) Hai Fa Shang Chu Zi No. 507 (Tianjin Maritime Court); (2009) Jin Gao Min Si Zhong Zi No. 574 (Tianjin High People’s Court) (CA); (2011) Min Shen Zi No. 417 (SPC) (Retrial). 89 CMC 1992, art 106.

106

CHAPTER 9

Carriage of passengers by sea

9.1 Carriage of passengers by sea in China is subject to the relevant provisions in the CMC 1992 and the relevant contract of carriage of passengers by sea. A contract of carriage of passengers by sea is a contract where the carrier undertakes to carry passengers and their luggage, as the case may be, by sea from one port to another, by ships suitable for that purpose against payment of fare by the passengers.1 The provisions regarding the carriage of passengers by sea in the CMC 1992 apply to both the international carriage of passengers by sea and the coastal carriage between Chinese ports including the direct carriage between a port in rivers and lakes and a sea port through sea waters.2 Both the CMC 1992 and the Contract Law apply to the contract of carriage of passengers by sea in China.3 Athens Convention 9.2 The applicable international convention for carriage of passengers by sea is the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea 1974 (the “Athens Convention”) and the Protocol to the Athens Convention 1976 (the “1976 Protocol”).4 The 1976 Protocol made the unit of account the Special Drawing Right, replacing the “Poincaré franc”, based on the “official” value of gold, as the applicable unit of account. In 1994, China acceded to the Athens Convention and 1976 Protocol. The contents of the CMC 1992 are similar to those in the Athens Convention, and the carrier’s liability and the limitation of liability are the same in the CMC 1992 and the 1976 Protocol. 9.3 The Athens Convention shall apply to any international carriage if:5 (a) (b) (c)

the ship is flying the flag of, or is registered in, a State Party to the Convention, or the contract of carriage has been made in a State Party to the Convention, or the place of departure or destination, according to the contract of carriage, is in a State Party to the Convention.

1 CMC 1992, art 107. 2 Explanations concerning Practical Issues in Foreign Related Commercial and Maritime Trails No. 1, 2004, art 125, para 2. 3 The Contract Law 1999 applies to all the contracts of carriage of passengers including inland water carriage, whereas the CMC 1992 applies to only contracts of international carriage and coastal carriage of passengers. 4 1990 Protocol was intended to raise the limits set out in the convention but it did not enter into force and was superseded by the 2002 Protocol. 5 Athens Convention, art 2, para 1.

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The Athens Convention also applies to commercial carriage undertaken by States or public authorities under contracts of carriage of passengers by sea.6 Definitions 9.4 For the carriage of passengers by sea in the CMC 1992, “carrier” means the person by whom or in whose name a contract of carriage of passengers by sea has been entered into with the passengers.7 “Actual carrier” means the person by whom the whole or part of the carriage of passengers has been performed as entrusted by the carrier, including those engaged in such carriage under a sub-contract.8 “Passenger” means a person carried under a contract of carriage of passengers by sea. With the consent of the carrier, a person supervising the carriage of goods aboard a ship covered by a contract of carriage of goods is regarded as a passenger.9 “Luggage” means any article or vehicle shipped by the carrier under the contract of carriage of passengers by sea, with the exception of live animals.10 The luggage in the Athens Convention also excludes articles and vehicles carried under a charterparty, bill of lading or other contract primarily concerned with the carriage of goods.11 “Cabin luggage” means the luggage that the passenger has in his cabin or is otherwise in his possession, custody or control.12 Invalid clauses 9.5 Any of the following clauses contained in a contract of carriage of passengers by sea under the CMC 1992 shall be null and void:13 (1) (2) (3) (4)

any clause that exonerates the statutory responsibility of the carrier in respect of the passenger;14 any clause that reduces the limitation of liability of the carrier as contained in the CMC 1992;15 any clause that contains provisions contrary to those of the CMC 1992 concerning burden of proof;16 and any clause that restricts the right of claim of the passenger.

However, the nullity and invalidity of those clauses shall not prejudice the validity of the other clauses of the contract.

6 ibid, art 21. 7 CMC 1992, art 108 (1). 8 ibid, art 108 (2). The Athens Convention uses the term “performing carrier” instead of the “actual carrier” in the CMC 1992. The Athens Convention also clarifies that the performing carrier could be the owner, charterer or operator of a ship who actually performs the whole or a part of the carriage. See the Athens Convention, art 1 (1) (b). 9 CMC 1992, art 108 (3). 10 ibid, art 108 (4). 11 Athens Convention, art 1 (5). 12 CMC 1992, art 108 (5). 13 ibid, art 126. 14 See paras 9.14–9.16. 15 For the limitation of liability of the carrier, see para 9.22. 16 See para 9.17.

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Carrier and the actual carrier 9.6 The provisions regarding the responsibilities of the carrier for the carriage of passengers by sea in the CMC 1992 apply to the actual carrier and the provisions regarding the responsibilities of the servant or agent of the carrier also apply to the servant or agent of the actual carrier.17 It means that the actual carrier is subject and entitled to the provisions of the CMC 1992 for the part of the carriage performed by it,18 in particular the liability and limitation of liability in the CMC 1992. 9.7 Where the performance of the carriage of passengers or part thereof has been entrusted by the carrier to an actual carrier, the carrier shall remain liable for the entire carriage. Where the carriage is performed by the actual carrier, the carrier shall be liable for the act or omission of the actual carrier or the act or omission of his servant or agent within the scope of his employment or agency.19 Furthermore, if, by any special agreement, the carrier assumes obligations not provided for in the CMC 1992 or waives the rights conferred by the CMC 1992, the actual carrier is not bound by such a special agreement unless the actual carrier has expressly agreed in writing to the contents thereof.20 Where both the carrier and the actual carrier are liable for compensation, they shall be liable jointly and severally within the scope of such liability.21 The relationship between the carrier and the actual carrier in the CMC 1992 shall not affect the right of recourse between them.22 Passenger ticket 9.8 The passenger ticket in the CMC 1992 is not the contract, but evidence of a contract of carriage of passengers by sea.23 The contract of carriage of passenger may be proved by the facts without the passenger ticket. In Wang Fengkui v Dalian Shipping Co Ltd,24 the injured passenger as the claimant lost his passenger ticket when he escaped from a fire that occurred on board the ship. The carrier denied the contractual relationship between the claimant and the carrier because of the lack of the passenger ticket. However, it was found that the carrier arranged the salvage of the passengers including the claimant, provided disability examination for the claimant, negotiated with the claimant for compensation, and paid part of the expenses of hospitalisation. The Dalian Maritime Court held that the contract of carriage of passenger by sea could be identified from the facts of this case. 9.9 In the practice of passenger carriage by sea, there is no written contract between the passengers and the carrier. Therefore, a contract of carriage of passenger is concluded at the time when the carrier delivers the ticket to the passenger, unless the parties agree otherwise or follow other trade practices.25 The trade practices may exist in some coastal 17 ibid, art 109. 18 Athens Convention, art 4 (1). 19 CMC 1992, art 121. 20 ibid, art 122. Such a special agreement shall be binding upon the carrier whether the actual carrier has agreed to its contents or not. 21 ibid, art 123. 22 ibid, art 125. 23 CMC 1992, art 110. 24 (2005) Da Hai Shang Wai Chu Zi No. 21 (Dalian Maritime Court). 25 Contract Law 1999, art 293.

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carriages of passenger. In Wang Cairong v Fujian Longhai Fugong Shipping Co Ltd,26 it was proved that the purchase of ticket after embarkation was a trade practice in respect of the ship in dispute. The Xiamen Maritime Court pointed out that the claimant embarked on the ship without buying the ticket, which complied with the trade practice. Therefore, it was held that the claimant was the passenger of the carriage and the contract of carriage was concluded between the claimant and the carrier when the claimant embarked on the ship. Carriage period 9.10 The period of carriage for the carriage of passengers by sea in both the CMC 1992 commences from the time of embarkation of the passengers and terminates at the time of their disembarkation, including the period during which the passengers are transported by water from land to the ship or vice versa, if such cost of transport is included in the fare. However, the period of carriage does not include the time when the passengers are at a marine terminal or station, or on a quay, or in, or on, any other port installations. The period of carriage for the cabin luggage of the passengers shall be the same as that stipulated above. The period of carriage for luggage other than the cabin luggage commences from the time when the carrier or his servant or agent receives it into his charge and terminates at the time when the carrier or his servant or agent redelivers it to the passengers.27 Liability of passenger 9.11 In the CMC 1992, a passenger travelling without a ticket or taking a higher class berth than booked or going beyond the distance paid for shall pay for the fare or the excess fare as required by relevant regulations. The carrier may, according to the relevant regulations, charge additional fare. Should any passenger refuse to pay, the master of the ship is entitled to order him to disembark at a suitable place and the carrier has the right of recourse against him.28 9.12 According to the Contract Law, a passenger who is unable to get on board at the time indicated by the ticket due to his own fault shall, within the prescribed period of time, undergo the procedures for returning the ticket and getting the refund or making a change of the ticket. If the passenger fails to obtain a refund or change procedures within the prescribed period of time, the carrier may refuse to refund the ticket, and has no more need to fulfil its transport obligation.29 9.13 For safety reason, passengers shall not take on board or pack in their luggage contraband goods or any article of an inflammable, explosive, poisonous, corrosive or radioactive nature or other dangerous goods that would endanger the safety of life and property on board. The carrier is at liberty to have the contraband or dangerous goods brought on board by the passenger or packed in his luggage discharged, destroyed or rendered innocuous at any time and at any place or sent over to the appropriate authorities, without being liable for compensation to passenger. Meanwhile, the passenger shall 26 27 28 29

(2014) Xia Hai Fa Shang Chu Zi No. 559 (Xiamen Maritime Court). CMC 1992, art 111. ibid, art 112. Contract Law 1999, art 295.

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be liable for compensation if any loss or damage occurs as a result of his breach of the aforementioned obligations.30 Liability of carrier Liability and immunity 9.14 During the period of carriage of the passengers and their luggage in the CMC 1992, the carrier shall be liable for the death of or personal injury to passengers or the loss of or damage to their luggage resulting from accidents caused by the fault of the carrier or his servant or agent committed within the scope of his employment or agency.31 However, if it is proven by the carrier that the death of or personal injury to the passenger or the loss of or damage to his luggage was caused by the fault of the passenger himself or the faults of the carrier and the passenger combined, the carrier’s liability may be completely or partially diminished. Furthermore, if it is proven by the carrier that the death of or personal injury to the passenger or the loss of or damage to the passenger’s luggage was intentionally caused by the passenger himself, or the death or personal injury was due to his health condition, the carrier shall not be liable therefor.32 According to the Contract Law, the carrier’s aforementioned liability and immunity applies also to any passenger exempted from holding a ticket according to the relevant provisions, such as for passengers holding a complimentary ticket or permitted by the carrier to travel without a ticket.33 9.15 In judicial practice, Chinese courts impose a high standard of care of passengers on the carrier and take a strict view on the carrier’s liability. In Xu Yan v Weidong Ferry Co Ltd,34 the claimant as a passenger slipped down and was injured in the toilet on board the ferry. The passenger claimed against the carrier for negligence due to the breach of the duty of care. The carrier denied its liability and argued that the injury was caused by the fault of the passenger herself. The Qingdao Maritime Court took the view that, if the carrier tried to absolve itself of its liability for the passenger’s injury, it must prove that the injury was caused by the culpable negligence or the intention of the passenger. In other words, the passenger’s fault must be a culpable negligence, and not only a minor mistake. Because the carrier failed to prove the culpable negligence or the intention of the claimant, it was held liable for the passenger’s injury.35 Liability for valuables 9.16 The carrier shall not be liable for any loss of or damage to the monies, gold, silver, jewellery, negotiable securities or other valuables of the passengers. However, if the passenger has entrusted the above-mentioned valuables to the safe-keeping of the carrier under an agreement for that purpose, the carrier shall be liable for compensation. Where the limitation of liability agreed upon between the carrier and the passenger in writing is 30 31 32 33 34 35

CMC 1992, art 113. CMC 1992, art 114, para 1. ibid, art 115. Contract Law 1999, art 302. (2014) Qing Hai Fa Hai Shang Chu Zi No. 382 (Qingdao Maritime Court). Cf English case: Dawkins v Carnival [2011] EWCA Civ 1237.

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higher than that of the CMC 1992, the carrier shall make the compensation in accordance with that higher amount.36 Burden of proof 9.17 In principle, the claimant shall bear the burden of proof regarding the fault of the carrier or his servant or agent. However, if the death of or personal injury to the passengers, or loss of or damage to the passengers’ cabin luggage occurred as a result of shipwreck, collision, stranding, explosion, fire or the defect of the ship, it shall be presumed that the carrier or his servant or agent has committed a fault, unless proof to the contrary has been given by the carrier or his servant or agent. As to any loss of or damage to the luggage other than the passenger’s cabin luggage, unless the carrier or his servant or agent proves to the contrary, it shall be presumed that the carrier or his servant or agent has committed a fault, no matter how the loss or damage was caused.37 Notice for damage to luggage 9.18 In case of apparent damage to the luggage, the passenger shall notify the carrier or his servant or agent in writing according to the following: (1) notice with respect to cabin luggage shall be made before or at the time of his embarkation; (2) notice regarding luggage other than cabin luggage shall be made before or at the time of redelivery thereof. If the damage to the luggage is not apparent and it is difficult for the passenger to discover such damage at the time of his disembarkation or of the redelivery of the luggage, or if the luggage has been lost, the passenger shall notify the carrier or his servant or agent in writing within 15 days from the next day of disembarkation of the passenger or of the redelivery of the luggage. If the passenger fails to send the notice in writing in time, it shall be presumed that the luggage has been received undamaged, unless proof to the contrary is made. Where the luggage has been jointly surveyed or inspected by the passenger and the carrier at the time of redelivery thereof, the aforementioned notice need not be given.38 Damages and compensation 9.19 Like the carrier for carriage of goods, the carrier for carriage of passengers has the duty of reasonable despatch without deviation under the Contract Law. The carrier shall safely transport passengers to the contracted destination within the contracted time limitation or within a reasonable period of time,39 and transport passengers and goods to the contracted destination via the contracted or the usual transport route.40 The carrier shall be liable for the damage caused by the breach of these duties. 9.20 The damages and compensation are governed by the Contract Law. In Qingdao Railway Travel Development Co Ltd v Guangxi Beihai Shipping Co Ltd,41 the carrier 36 37 38 39 40 41

CMC 1992, art 116. ibid, art 114, paras 2–4. ibid, art 119. Contract Law 1999, art 290. ibid, art 291. (2003) Qiong Min Er Zhong Zi No. 50 (Hainan High People’s Court) (CA).

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delayed the passengers in a transhipment port due to the stranding accident of the ship. The travel agency arranged air carriage of passengers from the transhipment port to the next destination and then claimed against the carrier for damages thus caused. The Beihai Maritime Court held that the carrier breached the contract of carriage of passengers and was liable for the delay in transport of passengers. The compensation for the damages included the costs and expenses for detention of the passengers in the transhipment port and the fares for the subsequent air carriage of the passengers.42 9.21 The carrier appealed and argued that the carrier should not be liable for the fares for the air carriage. The authority relied upon was that the Contract Law provides that if either party fails to perform its obligations under the contract and thus causes losses to the other party, the amount of compensation for the loss shall not exceed the sum of the loss that might be caused by a breach of contract and has been anticipated or ought to be anticipated by the breaching party in the making of the contract.43 The appeal was dismissed by the Guangxi High People’s Court. It was pointed out that the transhipment port was just an intermediate stop of the consecutive carriage in the whole travel and the passengers would not catch the train from the next destination if they were detained in the transhipment port. It was believed that the carrier, when it concluded the carriage contract, should have anticipated the loss caused by the detention if it could not transport the passengers to the next destination at the agreed time. Limitation of liability of carrier 9.22 Except where a higher limitation of liability is agreed upon between the carrier and the passenger in writing, the limitation of liability of the carrier under each carriage of passengers by sea shall be governed by the following: (1) (2) (3) (4)

for death of or personal injury to the passenger: not exceeding 46,666 units of account per passenger; for loss of or damage to the passengers’ cabin luggage: not exceeding 833 units of account per passenger; for loss of or damage to the passengers’ vehicles including the luggage carried therein: not exceeding 3,333 units of account per vehicle; for loss of or damage to luggage other than those described in sub-paragraphs (2) and (3) above: not exceeding 1,200 units of account per passenger.

9.23 An agreement may be reached between the carrier and the passengers with respect to the deductibles applicable to the compensation for loss of or damage to the passengers’ vehicles and luggage other than their vehicles. However, the deductible with respect to the loss of or damage to the passengers’ vehicles shall not exceed 117 units of account per vehicle, whereas the deductible for the loss of or damage to the luggage other than the vehicle shall not exceed 13 units of account per piece of luggage per passenger. In calculating the amount of compensation for the loss of or damage to the passenger’s vehicle or the luggage other than the vehicle, deduction shall be made of the agreed deductibles the 42 (2002) Hai Chong Zi No. 03 (Beihai Maritime Court). The carrier was also held liable for return of the fares for the carriage of passengers by sea. 43 Contract Law 1999, art 113.

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carrier is entitled to. The Athens Convention clarifies that the limitation of liability shall apply to the aggregate of the amounts recoverable in all claims arising out of the death of or personal injury to any one passenger or the loss of or damage to his luggage,45 and interest on damages and legal costs shall not be included in the limitation of liability.46 9.24 With regard to the claims made to the carrier’s servant or agent, such servant or agent shall be entitled to invoke the provisions regarding defence and limitation of liability contained in the CMC 1992 if such servant or agent proves that his act or omission was within the scope of his employment or agency.47 Where separate claims have been brought against the carrier, the actual carrier and their servants or agents with respect to the death of or personal injury to the passengers or the loss of or damage to their luggage, the aggregate amount of compensation shall not be in excess of the limitation of liability in the CMC 1992.48 9.25 The Athens Convention does not modify the rights or duties of the carrier, the performing carrier, and their servants or agents provided for in international conventions relating to the limitation of liability of owners of seagoing ships.49 The current international convention is the Convention on Limitation of Liability for Maritime Claims 1976, but China has not acceded to nor ratified it. However, the shipowner as the carrier for the carriage of passengers by sea is entitled to the limitation of liability for maritime claims in the CMC 1992. In respect of claims for loss of life or personal injury to passengers carried by sea, the limitation of liability of the shipowner under the CMC 1992 shall be an amount of 46,666 units of account multiplied by the number of passengers that the ship is authorised to carry according to the ship’s relevant certificate, but the maximum amount of compensation shall not exceed 25,000,000 units of account.50 44

Limitation of liability for coastal carriage 9.26 The limitation of liability for coastal carriage of passengers is not governed by the CMC 1992, but the Provisions Concerning Limitation of Liability with Respect to Carriage of Passengers by Sea between Ports of the People’s Republic of China 1993.51 The limitation of liability of the carrier for coastal carriage under each carriage of passengers by sea shall be fixed as follows:52 (1) (2)

for death of or personal injury to the passenger, not exceeding RMB 40,000 per passenger; for loss of or damage to the passengers’ cabin luggage, not exceeding RMB 800 per passenger;

44 CMC 1992, art 117, paras 1–3. 45 Athens Convention, art 12. 46 ibid, art 10, para 2. 47 CMC 1992, art 120. 48 ibid, art 124. However, it shall not affect the right of recourse between the carrier and the actual carrier. See the CMC 1992, art 125. 49 Athens Convention, art 19. 50 CMC 1992, art 211, para 1. 51 (1993) No. 6 of the Ministry of Communications of the PRC. 52 Provisions Concerning Limitation of Liability with Respect to Carriage of Passengers by Sea between Ports of the People’s Republic of China 1993, art 3, para 1.

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(3) (4)

for loss of or damage to the passengers’ vehicles including the luggage carried therein, not exceeding RMB 3,200 yuan per vehicle; for loss of or damage to the passengers’ luggage other than those described in subparagraphs (2) and (3) above; not exceeding RMB 20 per kilogram of the luggage.

9.27 A higher limitation of liability than the aforementioned limitation may be agreed upon between the carrier and the passenger in writing.53 In respect of claims for loss of life or personal injury to passengers carried by sea, the limitation of liability shall be an amount of RMB 40,000 multiplied by the number of passengers that the ship is authorised to carry according to the ship’s certificate, but the maximum amount of compensation shall not exceed RMB 21,000,000.54 Loss of limitation of liability 9.28 If it is proved that the death of or personal injury to the passenger or the loss of or damage to the passenger’s luggage resulted from an act or omission of the carrier or the servant or agent of the carrier done with the intent to cause such loss or damage or recklessly and with knowledge that such death or personal injury or such loss or damage would probably result, the carrier or the servant or agent of the carrier may not invoke the provisions regarding the limitation of liability in the CMC 1992.55 This also applies to the actual carrier and the servant or agent of the actual carrier.56

53 54 55 56

ibid, art 3, para 2. ibid, art 4. CMC 1992, art 118. ibid, art 109.

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CHAPTER 10

Sea towage contracts

10.1 In the CMC 1992, a sea towage contract is a contract whereby the tug owner undertakes to tow an object by sea with a tug from one place to another, and the tow party pays the towage. Towage in the CMC 1992 does not include the towage service rendered to ships within the port area.1 Furthermore, maritime towage services between the ports of the PRC shall be undertaken by ships flying the national flag of the PRC, except as otherwise provided for by laws or administrative rules and regulations. No foreign ships may engage in the maritime towage services between the ports of the PRC unless permitted by the competent authorities of transport and communications under the State Council.2 10.2 Sea towage contracts in Chinese shipping practice are always based on standard form of towage, e.g. CHINATOW of China Ocean Engineering Corporation and BIMCO’s TOWCON and TOWHIRE. A sea towage contract must be between tug and tow. Where a tug owner tows a barge owned or operated by him to transport goods by sea from one port to another, it shall be deemed as an act of carriage of goods by sea, and not a towage.3 The CMC 1992 requires that a contract of sea towage shall be made in writing.4 Although a sea towage contract is not a named contract in the Contract Law 1999, the general principles of the Contract Law 1999 can apply to the sea towage contract except where the CMC 1992 has special rules for the sea towage contract. Third parties to sea towage contracts 10.3 Normally, a tow owner directly enters into a sea towage contract with a tug owner. In some special cases, a sea towage contract may be concluded between a tug owner and a third party rather than a tow owner. Meanwhile, the third party can enter into another contract with the tow owner for the towage service. Of course, it is the tug owner who actually provides towage service for the tow owner. When the object of towage is damaged due to the fault of the tug, a question may arise that whether the tug owner or the third party shall be liable for the damage to the object of towage. This question has been examined in Huatai Property Insurance Co Ltd Shanghai Branch v Shanghai Safe Shipping Enterprises Co (Huatai v Safe Shipping).5 In this case, the defendant entered into a towage contract

1 2 3 4 5

CMC 1992, art 155. ibid, art 4. ibid, art 164. ibid, art 156. (2004) Hu Hai Fa Shang Chu Zi No. 5 (Shanghai Maritime Court).

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based on BIMCO TOWCON form with Yantai Salvage Bureau. It was agreed that the tow owner hired the vessel Beihai 102 from Yantai Salvage Bureau to tow a FPSO vessel6 Hai Yang Shi You 111 of the tow owner for a trial trip. In the contract between the tow owner and the defendant, it was agreed that the defendant was responsible for the towage with the same tug Beihai 102. The vessel Hai Yang Shi You 111 collided with another vessel during the towage. It was not disputed that the vessel Beihai 102 was liable for the damage to the vessel Hai Yang Shi You 111 due to the collision. The insurer of the vessel Hai Yang Shi You 111 exercised the right of subrogation against the defendant. 10.4 In the Shanghai Maritime Court, the insurer claimed that the defendant as the contractual party to the towage contract should be liable for the damage to the tow. The Shanghai Maritime Court, however, did not recognise the defendant as the party to the towage contract. It was understood that, although the defendant was the contractual party to the contract with the insured tow owner, Yantai Salvage Bureau was actually the party who provided the towage service for the tow owner. The Shanghai Maritime Court interpreted that the contract between the defendant and the tow owner was not the basis of the insurer’s claim, but an evidence of Yantai Salvage Bureau’s status as the performing party in the towage. Therefore, Yantai Salvage Bureau was the actual party to the towage contract and the defendant was not liable for the damage to the tow. 10.5 This interpretation may not completely comply with the principle of privity of contract. However, the same tug in the two contracts Huatia v Safe Shipping may indicate that the defendant may have been acting as an agent of the tow owner only. If the name of the tug were not identified in the contract between the defendant and the tow owner, it is uncertain and difficult to anticipate whether, in Chinese courts, the defendant as a third party who does not actually provide towage service is considered as the contractual party rather than the agent in the towage contract. When a third party exists in the chain of towage contract, the tow owner may choose to claim against the tug owner directly in tort since there is no contractual relation between them.7 However, it seems that a safe solution for the tow owner is to claim against both the third party and the tug owner for joint liability. 10.6 If necessary, the tow owner may claim against all relevant parties involved in the towage service and the Chinese courts will find the liable person for the damage to the tow. In Lin Xianjun and Chen Qianping v Hainan Lingao Kunshe Shipping Company and Others,8 the tow owner entered into a towage contract with the first tug owner but the first tug owner did not provide the agreed tug for towage service. Instead, the second tug owner, according to the agreement between the first tug owner and the second tug owner, provided the second tug to tow the object in the towage contract. The tow sank in the towage due to the unseaworthiness of the second tug. The tow owner claimed for the damage to the tow against the defendants including the first tug owner, the real owner of the second tug, the registered owner of the second tug and the bareboat charterer of the second tug. It was found by the Guangzhou Maritime Court that the first tug owner did not exist in the

6 A FPSO vessel refers to a Floating Processing Storage and Offloading vessel. A FPSO vessel can be a conversion of an oil tanker or can be a vessel built specially for the application. 7 China Pacific Insurance Co Ltd Shanghai Branch v Shenzhen Wanpeng Shipping Co Ltd (2001) Hu Hai Fa Shang Chu Zi No. 12 (Shanghai Maritime Court). 8 (2002) Guang Hai Fa Chu Zi No. 37 (Guangzhou Maritime Court).

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registration of the local authority. Therefore, the tow owner could only claim against other defendants in tort. The Guangzhou Maritime Court ultimately found that the bareboat charterer actually controlled the second tug and provided the towage service to the tow owner. Therefore, it was held that the bareboat charterer of the second tug should be liable for the damage to the tow. Seaworthiness of tug and tow 10.7 Under the CMC 1992, seaworthiness of the tug and tow is not absolute. On the one hand, the tug owner shall, before and at the beginning of the towage, exercise due diligence to make the tug seaworthy and towworthy and to properly man the tug and equip it with gears and tow lines and to provide all other necessary supplies and appliances for the intended voyage. On the other hand, the tow owner shall, before and at the beginning of the towage, make all necessary preparations therefore and shall exercise due diligence to make the object to be towed towworthy and shall give the tug owner a true account of the object to be towed.9 10.8 The tow owner also needs to provide the certificate of towworthiness and other documents of the object to be towed issued by the relevant survey and inspection organisations.10 If the tow owner fails to provide the necessary certificates and documents, he shall be liable for the damage to the tug owner even if the towage is not performed. In The Zhao Qing Gong 1111,11 the tug owner agreed to tow the vessel Zhao Qing Gong 1111 for a coastal voyage from Fujian Fuzhou to Guangdong Sihui and the tow owner agreed to pay the towage. The towage contract provided that the tow owner was responsible for the certificate of towworthiness. The tow owner paid RMB 80,00012 as the first instalment of towage fee. The tug owner sent the tug from Xiamen to Fuzhou but could not contact the tow owner. Thus the towage contract was not performed. The tow owner claimed against the tug owner for return of the paid instalment of towage fee. It was found that the tow owner failed to provide the certificate of towwothiness because the tow vessel Zhao Qing Gong 1111 was an inland water vessel only. The tug owner argued that the cost of fuel for the return voyage of the tug was more than RMB 80,000 which was the damage to the tug owner because of the tow owner’s breach of the towage contract. The Guangzhou Maritime Court held that it was the tow owner, not the tug owner, who breached the towage contract and, therefore, dismissed the tow owner’s claim. Force majeure in sea towage contract 10.9 The general principle of force majeure in contract law applies to the sea towage contract in the CMC 1992. Where the object towed cannot reach its destination due to force majeure or other causes not attributable to the fault of either party, unless the towage contract provides otherwise, the tug owner may deliver the object towed to the tow party or its 9 CMC 1992, art 157. 10 ibid, art 157, para 2. 11 (2012) Guang Hai Fa Chu Zi No. 269 (Guangzhou Maritime Court). 12 RMB is an abbreviation of Renminbi. RMB is official money in the PRC.

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agent at a place near the destination or at a safe port or an anchorage chosen by the master of the tug, and the contract of towage shall be deemed to have been fulfilled.13 10.10 If, before the commencement of the towage service, due to force majeure or other causes not attributable to the fault of either party, the towage contract cannot be performed, either party may cancel the contract and neither shall be liable to the other. In such event, the towage fee that has already been paid shall be returned to the tow party by the tug owner, unless otherwise agreed upon in the towage contract.14 If, after the commencement of the towage service, due to force majeure or other causes not attributable to the fault of either party, the towage contract could not be performed, either party may cancel the towage contract and neither shall be liable to the other.15 Towage fee and duress 10.11 The payment of the towage fee is an important obligation of the tow owner in a towage contract. Where the tow owner fails to pay the towage fee or other reasonable expenses as agreed, the tug owner shall have a lien on the object towed under the CMC 1992.16 If the tow owner refuses to pay the towage fee relying on duress, he has the burden to prove the existence of the duress. In Zhoushan Yuntong Shipping Co Ltd v Zhejiang Qianhong Marine Co Ltd,17 although the towage fee was fixed to be RMB 1.25 million, the tug owner required a further RMB 200,000 for the towage. Because the tow lost power before the towage, the tow owner agreed to pay the further towage fee. After the towage service, the tow owner refused to pay the further towage fee and argued that he had to agree to pay the further towage fee at the request of the tug owner in duress, because otherwise both the tow and the crews and goods on board the tow would be in danger. This argument was refused by the Ningbo Maritime Court. The Ningbo Maritime Court pointed out that the tow owner could cancel the towage contract if he refused to pay the further towage fee. It was found that the tow was still safely anchored and had kept the correct anchoring position before and during the towage. Therefore, the tow owner failed to prove the existence of duress and was liable for the payment of the further towage fee as was agreed. Liabilities and immunities 10.12 The liability regime of towage in the CMC 1992 is based on the fault of parties. This liability regime applies only if and when there are no provisions or no different provisions in this regard in the sea towage contract. In the course of the sea towage, if the damage suffered by the tug owner or the tow owner was caused by the fault of one of the parties, the party in fault shall be liable for compensation. If the damage was caused by the faults of both parties, both parties shall be liable for compensation in proportion to the extent of

13 14 15 16 17

CMC 1992, art 160. ibid, art 158. ibid, art 159. ibid, art 161. (2008) Yong Hai Fa Shang Chu Zi No. 152 (Ningbo Maritime Court).

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their respective faults. Notwithstanding the fault-based liability regime, the tug owner shall not be liable if he proves that the damage suffered by the tow party is due to one of the following causes: 18

(1) (2)

fault of the master or other crew members of the tug or the pilot or other servants or agents of the tug owner in the navigation and management of the tug; fault of the tug in saving or attempting to save life or property at sea.

The provisions of this article shall only apply if and when there are no provisions or no different provisions in this regard in the sea towage contract.19 10.13 If death of or personal injury to a third party or damage to property thereof has occurred during the sea towage due to the fault of the tug owner or the tow owner, the tug owner and the tow owner shall be jointly and severally liable to that third party. Except as otherwise provided for in the towage contract, the party that has jointly and severally paid compensation in an amount exceeding the proportion for which it is liable shall have the right of recourse against the other party.20

18 The Dong Fang Gang Tuo 7 (2010) Yong Hai Fa Shang Chu Zi No. 127 (Ningbo Maritime Court); (2011) Zhe Hai Zhong Zi No. 25 (Zhejiang High People’s Court) (CA). 19 CMC 1992, art 162. 20 ibid, art 163.

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CHAPTER 11

Collision of ships

11.1 Collision of ships in the CMC 1992 means an accident arising from the touching of ships at sea or in other navigable waters adjacent thereto.1 The main provisions regarding collision of ships in the CMC 1992 are for the legal liability of the parties to be blamed. The regime of the legal liability is the same to that of Convention for the Unification of Certain Rules of Law with respect to Collisions between Vessels, 1910 (the “Collisions Convention 1910”) to which China has acceded.2 Besides the CMC 1992, the Tort Liability Law 2009 also applies to disputes over the collision of ships.3 The judicial interpretation on the collision of ships is Provisions of the Supreme People’s Court on Several Issues Concerning the Trial of Cases Involving Disputes over Vessel Collisions 2008 (the “Provisions on Vessel Collisions 2008”).4 With regard to tort disputes arising out of contact between ships that are not caused by a collision of ships, the liabilities for compensation of the contacted vessels are determined in accordance with the General Principles of Civil Law 1986, as amended in 2009.5 11.2 For preventing collisions at sea, China has acceded to the Convention on the International Regulations for Preventing Collisions at Sea 1972 (the “COLREGs 1972”).6 In judicial practice, administrative regulations on navigation in local waters may apply in addition to the COLREGs 1972 for the assessment of liabilities of collided ships.7 Meanwhile, the Regulations for Preventing Collisions on Inland Waters 1991,8 as amended in 2003, apply to the collisions in Chinese inland waters and provide rules for the distribution of liability. However, it does not affect the application of the other relevant provisions in CMC 1992 for the liability of collisions in the inland waters.9 China also has the Maritime 1 CMC 1992, art 165. 2 Collisions Convention 1910 was concluded at the Brussels Maritime Conference and signed by 24 states on 23 September 1910. It entered into force on 1 March 1913. 3 Guo Ditang v Guo Hongqi (2014) Min Shen Zi No. 1309 (SPC) (Retrial). 4 Fa Shi [2008] No. 7 (SPC). 5 Provisions on Vessel Collisions 2008, art 3, para 2. 6 The COLREGs 1972 includes 38 rules divided into five sections: Part A – General; Part B – Steering and Sailing; Part C – Lights and Shapes; Part D – Sound and Light signals; and Part E – Exemptions. There are also four annexes containing technical requirements concerning lights and shapes and their positioning; sound signalling appliances; additional signals for fishing vessels when operating in close proximity, and international distress signals. 7 Guangzhou Dongfang Shipping Co Ltd and Wu Guolin v Wu Yunhua (2016) Yue 72 Min Chu 2 (Guangzhou Maritime Court). 8 (1991) No. 30 Order of the Ministry of Communications of the PRC. 9 Guangzhou Maritime Transport Co Ltd v Anhui Wanjiang Shipping Co Ltd and Wuhu Chiangjiang Shipping Co Ltd (2001) Min Si Ti Zi. No 3 (SPC) (Retrial).

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Traffic Safety Law 1983, which includes relevant issues in respect of collisions of ships, such as navigation, berthing and operations, safety protection, investigation and handling of traffic accidents and legal liability. However, it is understood as an administrative law for the safe management of ships by governments. Therefore, both the CMC 1992 and the COLREGs 1972 apply to disputes over the collision of ships in judicial practice.10 Ships in collision 11.3 “Ships” in the collision of ships in the CMC 1992 include those non-military or public service ships or craft that collide with the ships generally defined in the CMC 1992.11 The ship as a general concept in the CMC 1992 means sea-going ships and other mobile units, but does not include ships or craft to be used for military or public service purposes, nor small ships of less than 20 tons gross tonnage, including ship’s apparel.12 However, the provisions regarding the collision of ships in the CMC 1992 do not apply to disputes over collision between military vessels or official vessels in commercial activities and others ships for the collision of ships in the CMC 1992.13 Furthermore, the collision of ships in the CMC 1992 does not include collision between the inland water ships.14 11.4 The COLREGs 1972 applies to all vessels on the high seas and in all waters connected therewith navigable by seagoing vessels.15 The word “vessel” includes every description of water craft, including non-displacement craft and seaplanes, used or capable of being used as a means of transportation on water.16 The Collisions Convention 1910 applies to the compensation for damages caused to vessels, or to any things or persons on board thereof due to a collision that occurs between sea-going vessels or between sea-going vessels and vessels of inland navigation in whatever waters the collision takes place.17 11.5 Where a ship has caused damage to another ship and persons, goods or other property on board that ship, either by the execution or non-execution of a manoeuvre or by the non-observance of navigation regulations, even if no collision has actually occurred,18 the provisions regarding collision of ships in the CMC 1992 shall apply.19 Liabilities in collision General principles 11.6 The three general rules of legal liability are established by the Collisions Convention 1910. First, if a collision occurs that is accidental or of an uncertain cause, the damages 10 Ding Hanshou and Others v Liu Xiaoyun (2015) Min Shen Zi No. 1205 (SPC) (Retrial). 11 CMC 1992, art 156, para 2. 12 ibid, art 3. 13 Minutes of the Second National Working Conference on the Trial of Foreign-Related Commercial and Maritime Cases 2005 (the “Minutes of the Second National Working Conference 2005”), art 128. 14 Provisions on Vessel Collisions 2008, art 1. 15 COLREGs 1972, art 1, para 1. 16 ibid, art 3, para 1. 17 Collisions Convention, art 1. 18 For example, the damage caused by waves due to the short distance between two ships. 19 CMC 1992, art 170. Article 13 of the Collisions Convention 1910 provides the same extension of application.

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are borne by the party that suffers them.20 Second, if a collision occurs that is the fault of a party, the party at fault is liable for the damages that were caused.21 Last, if a collision occurs that is the fault of more than one party, the parties at fault are liable in proportion to the faults respectively committed (if it is not possible to determine the proportional fault, the liability is apportioned equally between the parties at fault).22 The general rules of legal liability in the Collisions Convention 1910 apply where the collision is caused by the fault of a pilot, even when the pilot is carried by compulsion of law.23 11.7 The general rules in the Collisions Convention 1910 are the same to those in the CMC 1992. First of all, neither of the parties shall be liable to the other if the collision is caused by force majeure or other causes not attributable to the fault of either party or if the cause thereof is left in doubt.24 Second, if the collision is caused by the fault of one of the ships, the one in fault shall be liable therefor.25 Last, if the colliding ships are all in fault, each ship shall be liable in proportion to the extent of its fault; if the respective faults are equal in proportion or it is impossible to determine the extent of the proportion of the respective faults, the liability of the colliding ships shall be apportioned equally.26 11.8 Force majeure in the Contract Law 1999 means objective situations that cannot be foreseen, avoided or overcome.27 In judicial practice, Chinese courts apply the same concept of force majeure in disputes over collision of ships although there may be tortious liability and not contractual liability in such disputes. In Shanghai Dongfang Dredging Engineering Co Ltd v Hudong Shipbuilding Co Ltd,28 the defendant’s ship suffered a force 10 gale, which broke the cables for anchoring the ship; it collided with another ship when it crossed the Huangpu River in a short period of time. It was found that the meteorological department did not forecast the disastrous weather in this case. Because the claimant failed to prove that the defendant had not made great efforts in good faith to avoid overcoming this disaster, the defendant was not liable for the collision due to the disastrous weather as a force majeure. Proportion of liability 11.9 Where the colliding ships are all at fault for the collision at sea or in other navigable waters, the liability and the proportion thereof shall be analysed in the context of the COLREGs 1972. In principle, more fault mean more liability. If the ships in the collision have the same or are at similar fault, the liability of their shipowners shall be divided equally in proportion. Otherwise, the shipowner who is at more fault bears more liability. In Maoming Maonan Xinghua Petroleum & Chemical Co Ltd v Fujian Shishi Xinda Shipping Co Ltd and Others,29 both of the ships in the collision failed to maintain a proper look-out by sight,

20 21 22 23 24 25 26 27 28 29

Collisions Convention 1910, art 2. ibid, art 3. ibid, art 4. ibid, art 5. CMC 1992, art 167. ibid, art 168. ibid, art 169, para 1. Contract Law 1999, art 117, para 2. (1999) Hu Gao Jing Zhong Zi No. 423 (Shanghai High People’s Court) (CA). (2002) Guang Hai Fa Chu Zi No. 139 (Guangzhou Maritime Court).

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failed to proceed at a safe speed, and failed to properly use the radar equipment and thus violated rules 5, 6 and rule 7 (b) of the COLREGs 1972. Apart from the same violations, one of the ships also failed to take avoiding action consisting of an alteration of course towards a vessel abeam or abaft the beam in ample time and thus violated rule 19 (d) (ii) of the COLREGs 1972. Because one of the ships had violated the COLREGs 1972 more, that ship was held to bear 60 per cent of the liability for the collision. 11.10 Where the violations of the COLREGs 1972 by the parties in the ships collision are similar, Chinese courts may take into account the primary cause of the collision for determining the proportion of liability. Whether an action is a primary cause of the ships’ collision is subject to the discretion of judges based on the facts of the accident. In Beihai Honghai Shipping Co Ltd v Orient Overseas Container Line (U.K.) Ltd and Others,30 the stand-on ship OOCL Europe collided with the give-way ship Xinghai 668 and both ships violated rules 5, 6, 7 (a) and 8 of the COLREGs 1972. It was found that Xinghai 668 in the crossing situation did not take early and substantial action to keep well clear until the last two minutes before the accident, which violated rule 16 of the COLREGs 1972, but OOCL Europe altered course to port for Xinghai 668 on her own port side even when it was found that Xinghai 668 altered course to starboard so as to involve risk of collision that violated rule 17 (c) of the COLREGs 1972. The court of first instance concluded that the wrong action of OOCL Europe was the primary cause of the ships’ collision and thus should bear 60 per cent of the liability for the collision.31 11.11 However, the SPC disagreed with this conclusion in the retrial of this case. It pointed out that the wrong action of Xinghai 668 was the primary cause of collision although the wrong actions of OOCL Europe were also an important factor. Therefore, the SPC held that Xinghai 668 should bear 60 per cent of the liability for the collision. The SPC seems to have indicated that the collision may not have happened if the Xinghai 668 took early and substantial action to keep well clear in the crossing situation even if OOCL Europe ultimately took the wrong action to alter course to port. If this approach is correct, it may then be necessary to examine whether OOCL Europe had a last clear chance to avoid the collision if it had taken the right action.32 If OOCL Europe had a last clear chance to avoid the collision when it found that Xinghai 668 altered course to starboard, Xinghai 668 should not bear any liability, or at least not more liability than that of OOCL Europe. If there was no last clear chance, the equal proportion of liability may be appropriate because it is hard to conclude which action contributed to the collision more. 11.12 In reality, ships may not follow the COLREGs 1972 but take actions by mutual agreement. In this circumstance, Chinese courts still apply the COLREGs 1972 for determining the proportion of liability. In Jiangsu Weilun Shipping Co Ltd v Miranda Rose Co Ltd,33 before both ships Miranda Rose and Weilun 06 reached consensus, they should “intersect at red lights”34 when crossing each other. However, Miranda Rose first proposed 30 (2012) Min Ti Zi No. 142 (SPC) (Retrial). 31 (2009) Guang Hai Fa Chu Zi No. 4, 292; (2010) Yue Gao Fa Min Si Zhong Zi No. 86, 87 (Guangdong High People’s Court) (CA). 32 The last clear chance doctrine is widely attributed to the English case of Davies v Mann, 152 Eng. Rep. 588 (1842). 33 (2010) Hu Hai Fa Shang Chu Zi No. 24 (Shanghai Maritime Court), Guiding Case No. 31. 34 The lights in the term of “intersect in red lights” in this case referred to the “sidelights”, which mean a green light on the starboard side and a red light on the port side. See rule 21 (b) of the COLREGs 1972.

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an “intersection at green lights” and Weilun 06 agreed to the proposal although this proposal violated the give-way obligation under the COLREGs 1972. Under this special circumstance, there was no “give-way vessel” or “keep-way vessel” under the COLREGs 1972. Nevertheless, after reaching consensus on intersection in green lights, both parties believed that the other party would give way to it and they failed to conduct an effective observation on the situation of the waters and fully estimate the current occasion and risks of collision. They also did not take action until immediate danger was formed, and finally failed to avoid the collision. Although there was a mutual agreement between the ships, the Shanghai Maritime Court determined the liabilities for the ships collision according to the COLREGs 1972 without consideration of the mutual agreement that violated the COLREGs 1972. Because of the identical wrong courses of action, it was held that the two ships should bear liability in equal proportion. Causation in tort 11.13 For tortious liability in collision cases, the general principles of tort law apply. Causation is a condition of tortious liability in the judicial practice of ship collision cases even though Chinese statute law does not expressly require this condition. In Rickmers Genoa Schiffahrtsgesellschaft mbH & Cie KG and Rickmers-Linie GmbH & Cie KG v CS Marine Co Ltd,35 one of the issues in the dispute over the ships’ collision was the causation between the collision and the explosion of one of the colliding ships, Rickmers Genoa. Because of the collision, a flood of water poured into the No. 1 cargo hold of Rickmers Genoa. The cargo of magnesium desulfurisation agent within containers reacted with the water and hydrogen was released, which caused the explosion. In the chain of causation, the Shanghai Maritime Court pointed out that the collision was the origin of the explosion, the reaction between the water and the cargo was the condition of the explosion, and both the collision and the reaction caused the explosion. Without the collision, the reaction as the condition of the explosion would not have happened and the explosion would not have thus occurred. Therefore, it was held that there was causation in law between the ships’ collision and the explosion on Rickmers Genoa. For liability in tort, it is necessary to examine both the causation in fact and the causation in law. In this case, there was only causation in fact. In other words, the damage due to the explosion was too remote. 11.14 The test of remoteness is foreseeability.36 If the damage is not foreseeable, it is too remote. In Xing Yulin v Qinzhou Port Yunshunda Shipping Co Ltd,37 the ship Tailianda collided with a first ship and kept reversing until a second collision with a second ship. The Shanghai Maritime Court pointed out that the first collision was an obvious cause of the second collision. However, it was just causation in fact, but not causation in law. In 35 (2009) Hu Gao Min Si (Hai) Zhong Zi No. 239 (Shanghai High People’s Court) (CA). 36 There is no such requirement in Chinese statute law. See English case Overseas Tankship (UK) Ltd v Morts Dock and Engineering Co Ltd (The Wagon Mound (No. 1)) [1961] AC 388. In this case the defendant was not held liable for fire damage because it was not foreseeable, whereas, in Overseas Tankship (UK) Ltd v The Miller Steamship Co (The Wagon Mound (No. 2)) [1967] 1 AC 617, the same defendant was held liable for the fire damage based on the same facts in the claim from a different plaintiff, as the risk was foreseeable although it was very small. 37 (2013) Hu Hai Fa Shang Chu Zi No. 51 (Shanghai Maritime Court).

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fact, Tailianda did not lose its power after collision but was still under control. In the view of the Shanghai Maritime Court, Tailianda should not have kept reversing, leading to the second collision, but instead should have stopped and anchored in a safe water. Therefore, it was not the first collision but the continuous reverse of Tailianda that caused the second collision. So the liabilities in the two collisions should be separate and the first colliding ship was not liable for any damage to the second colliding ship in the second collision. If both the causation in fact and the causation in law are satisfied, the liable person is liable for the damage caused to others in tort. In Qinhuangdao Jinrun Shipping Co Ltd v Fujian Guanhai Shipping Co Ltd,38 the ship Guanhai 308 collided with a first ship in a crossing situation causing its bow to alter course to starboard and collided again with a second ship in the overtaking situation two minutes later. It was held that, from the perspective of causation, the first collision was the direct and primary cause of the second collision.39 Since the causation was satisfied, the first colliding ship should be liable for the compensation from Guanhai 308 to the second colliding ship according to its proportion of liability in the first collision.40 Compensation for damages Compensation in general 11.15 There is no compensation if neither of the parties is liable to the other.41 If the collision is caused by the fault of one of the ships, the one at fault shall be liable for compensation of the loss of the other one.42 If each ship is liable in proportion to the extent of its fault, the ships in fault are liable for the damage to the ship, the goods and other property on board pursuant to the proportions. Where the cargos on board are damaged when both the colliding ships are at fault, the cargo interests may claim against the carrying vessel for breach of contract, or claim against one or both of the colliding vessels for compensation in tort.43 Where damage is caused to the property of a third party, the liability for compensation of any of the colliding ships does not exceed the proportion it shall bear. If the ships in fault have caused loss of life or personal injury to a third party, they shall be jointly and severally liable. If a ship has paid an amount of compensation in excess of its proportion, it has the right of recourse against the other ship at fault.44 11.16 The property loss or losses of a third party means the loss or losses directly caused by the vessel collision to the properties other than goods on the vessels or properties carried by crew, passengers, or other personnel on the ships that are all in fault.45 The

38 (2014) Hu Hai Fa Shang Chu Zi No. 44 (Shanghai Maritime Court). 39 The question in a situation like this was not whether the negligence, which caused the collision, was continuing, but whether the effect of the collision – which such negligence caused – was continuing. See English case The Calliope [1970] 1 Lloyd’s Rep 84. 40 However, the compensation to the second colliding ship was not raised by Guanhai 308, so this point was not discussed in the judgment of this case. 41 CMC 1992, art 167. 42 ibid, art 168. 43 Provisions on Vessel Collisions 2008, art 6. 44 CMC 1992, art 169, paras 2 and 3. 45 Minutes of the Second National Working Conference 2005, art 131.

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loss of life or personal injury to a third party includes the personal casualties of crew, passengers, and other personnel on the collided ships.46 In judicial practice, where parties to disputes over ship collision have lodged lawsuits for disputes over the collision of ships, a maritime court will suspend the trial of disputes over losses caused by the collision to the properties of a third party and resume the trial after the conclusion of the dispute over the collision.47 Compensation for damage to property 11.17 The compensation for damage to property caused by the ships’ collision is subject to the Provisions on Compensation for Vessel Collisions 1995. Damage to property includes the physical damage to property, consequential expenses and loss, the reasonable expenses and loss for avoiding or minimising the damage and the loss of expected prospective interest.48 In Chinese judicial practice, the prospective interest is the reasonable loss that could be reasonably anticipated by the liable person.49 The loss of penalty paid to a third party is not a reasonable prospective interest because it cannot be anticipated by the liable person in a collision.50 11.18 The compensation for damage to the ship includes the compensation for the whole damage and for partial damage. Whole damage to a ship includes the loss of value of the ship including bunkers on board, ship’s apparel and other properties on board, seamen’s wages, repatriation fees and other reasonable expenses. Partial damage to a ship includes the temporary and permanent repair cost, auxiliary expenses and maintenance cost. The damage to a ship also includes reasonable salvage remuneration, expenses for investigation, rescue and removal of shipwreck, the costs for setting the wreck mark, salvage reward, loss of hire or freight for the current voyage, contribution to general average, loss due to detention of ship and other reasonable costs and expenses.51 11.19 The compensation for damage to the property on board includes the loss or devaluation caused by the loss of or damage to the property, reasonable cost for repair or treatment, reasonable cost for salvage, rescue and removal of the property, contribution to general average and other reasonable costs and expenses.52 The compensation for damage to the onshore installations caused by the collision with ships includes the whole loss of installations or the repair cost for the partial damage and reasonably expected prospective interest before installations can be used as usual after repair.53 If the owner of the damaged installations violates the principle of good faith and deliberately delays the repair, the owner shall be liable for the loss of prospective interest so caused.54

46 ibid, art 132. 47 ibid, art 133. 48 Provisions on Compensation for Vessel Collisions 1995, art 1. 49 It also lacks the causation in law, namely the foreseeability in tort claim. See paras 11.13 and 11.14. 50 China Huadian Engineering Co Ltd v CONTI JORK Shipping Ltd (2009) Jin Gao Min Si Zhong Zi No. 369 (Tianjin High People’s Court) (CA). 51 Provisions on Compensation for Vessel Collisions 1995, art 3. 52 ibid, art 4. 53 ibid, art 5. 54 Shanghai International Port (Group) Co Ltd and Shanghai East Container Terminal Co Ltd v KSF6 International SA and Hyundai Merchant Marine Co Ltd (2012) Min Shen Zi No. 1401 (SPC) (Retrial).

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Compensation for personal injury 11.20 According to the Interpretation on Compensation for Personal Damage 2003,55 compensation for personal injury includes:56 (a)

(b)

(c)

in the event of injury: expenses paid for medical treatment and loss of income due to absence from work, including medical expenses, nursing expenses, travelling expenses, accommodation expenses, board expenses in hospital, and necessary expenses for food; in the event of disability due to injury: necessary expenses, cost for additional needs in living and loss of income due to inability to work, including disability compensation, expenses of disability aids, living expenses of dependants, as well as necessary expenses of recovery, nursing, and continuing treatment actually occurred in follow-up treatment; in the event of death: the compensation for injury before death, funeral expenses, living expenses of any dependants, death compensation expenses, travelling expenses and accommodation expenses paid and the loss of income due to absence from work incurred by the relatives of the victim in collision for funeral arrangements as well as other reasonable expenses.

11.21 Where a victim or a close relative of the deceased suffers mental distress, and the compensation claimant files an action with a people’s court claiming compensation for mental distress, such compensation shall be determined according to the Interpretation on Compensation for Mental Distress 2001.57 The right to claim compensation for mental distress shall not be transferred or succeeded, unless the person obligated to compensate has promised in writing to make financial compensation or the compensation claimant has filed an action with a Chinese court.58 The compensation for mental distress includes the compensation for disability, death and other forms of damage.59 For the purpose of compensation, the claimant must prove that the mental distress is serious.60 If the claimant fails to prove the seriousness of mental distress, the claim for mental distress compensation may not be considered when the personal injury has been compensated.61 11.22 The amount of compensation for mental distress shall be determined based on the following factors:62 (1) (2) (3) (4)

degree of the infringer’s fault, unless the law provides otherwise; the means and place of the harm and the manner of the act of harm; consequences of the act of tort; the benefits obtained by the liable person;

55 Fa Shi [2003] No. 20 (SPC). 56 Interpretation on Compensation for Personal Damage 2003, art 17. 57 Fa Shi [2001] No. 7 (SPC). 58 Interpretation on Compensation for Personal Damage 2003, art 18. 59 Interpretation on Compensation for Mental Distress 2001, art 9. 60 Tort Liability Law 2009, art 22. 61 Zhu Xindong v Shen Zhouhang and Others (2015) Qing Hai Fa Hai Shi Chu Zi No. 116 (Qingdao Maritime Court). 62 Interpretation on Compensation for Mental Distress 2001, art 10.

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(5) (6)

the liable person’s financial ability to bear the liability; and average living standard in the area where the court accepting the case is located.

Liable persons 11.23 The liabilities for compensation arising out of a ship collision shall be borne by the owner of the ship or by the bareboat charterer if the collision occurs during the period of bareboat charter and the bareboat charter is registered.63 In principle, a shipowner shall mean the person who has been legally registered as the shipowner. Where a ship is not legally registered, the shipowner shall mean the person actually in possession of such ship.64 However, in some special circumstances, the legally registered shipowner may not be the liable person in the collision of ships. In Chinese practice, a ship owned by the beneficial owner may be registered by another person with the person’s name. The reason for this special practice is the registration requirement in law. The real owner may not be qualified to register his ship as the shipowner, and thus the ship is registered by others to satisfy the requirement of ship registration. Therefore, this special practice is not based on an agency agreement or management agreement between the real beneficial owner and the registered owner, but on a special agreement that is for registration purpose only. So the registered owner is not an agent or the manager of the ship. Except the registration, the real beneficial owner controls and is responsible for everything of the ship. In this circumstance, only the real beneficial owner is recognised as the liable person for collision of ships and the registered owner does not bear joint and several liability.65 11.24 In international shipping practice, the ship’s Nationality Certificate is the most important piece of evidence for identifying the shipowner. In Tokio Marine & Nichido Fire Insurance Co Ltd v PT Djakarta Lloyd (PERSERO),66 the defendant was identified as the shipowner through the ship’s registration information from the website of Lloyd’s Register in the court of first instance.67 The defendant argued that it was just the ship’s technical manager, and, although the defendant’s name was on the ship’s seal, it was just for technical management of the ship. The ship’s Safety Certificate and Compliance Certificate showed that the defendant was the ship’s technical manager. The court of appeal pointed out that, as international shipping practice, the ship’s Nationality Certificate was valid evidence of ownership of the ship. According to the ship’s Nationality Certificate, the defendant was not the shipowner or responsible manager. 11.25 In China, the bareboat chartering shall be registered at the ship registration authority. No ship bareboat chartering shall have legal effect against a third party unless registered.68 So, if a bareboat charter is not legally registered,69 the owner of the bareboat chartered ship 63 Provisions on Vessel Collisions 2008, art 4. 64 Minutes of the Second National Working Conference 2005, art 130, para 2. 65 Zhoushan Tongtu Engineering Co Ltd v Dandong Jixiang Shipping Co Ltd and Dandong Marine Shipping Co Ltd (2001) Yong Hai Shi Chu Zi No. 109 (Ningbo Maritime Court). 66 (2010) Hu Gao Min Si (Hai) Zhong Zi No. 198 (Shanghai High People’s Court) (CA). 67 (2008) Hu Hai Fa Shang Chu Zi No. 49 (Shanghai Maritime Court). 68 Regulations on the Registration of Ships 2014, art 6. 69 The registration of a bareboat charter in foreign jurisdictions may be recognised if it is proved that the bareboat charter has been legally registered overseas according to the relevant foreign law. See Guangdong Yudean Shipping Co Ltd v Hiro Shipping Inc and Others (2012) Min Shen Zi No. 23 (SPC) (Retrial).

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cannot argue that the bareboat charterer is liable for compensation in the ship collision. In other words, the charterer of the unregistered bareboat charter is not a liable person for ship collision unless he agrees to bear the liability. However, the unregistered charterer will be held jointly and severally liable with the shipowner in the ship collision action against both of them.70 Furthermore, where the colliding ships are all at fault, if the owner of one ship chooses to claim against an unregistered bareboat charterer of the other ship for the compensation of his loss without requiring to add the owner of the chartered ship for the claim, the claimant shall not deny the bareboat charterer’s capacity as a subject in the counterclaim against him.71 11.26 Where the ship operator or manager is at fault in the ship collision, the operator or manager shall be held jointly and severally liable with the shipowner or the bareboat charterer,72 without prejudice to the circumstance where subjects bearing liability may seek reimbursement among themselves.73 Of course, the ship manager who is held liable shall have the authority from the shipowner for the management of the ship and for dealing with the matters of ship collision.74 Burden of proof and evidence 11.27 Under the Collisions Convention 1910, it is mandated that all legal presumptions of fault in regard to liability for collision are abolished.75 The SPC has abolished the legal presumptions of fault. The liabilities due to the fault in the ships collision are identified on the basis of evidence. In Panama Trade Expansion Shipping Company and Hong Kong Weilin Sailing Co Ltd v Zhong Xiaoyuan and Zhuhai Anti-Smuggling Office (The Trade Expansion),76 a fishing boat was hit and sank and 21 people fell overboard. The ship causing the accident did not rescue any person overboard but left the accident waters. The owners of the fishing boat and Zhuhai Anti-Smuggling Office that requisitioned the fishing boat claimed against the “liable” shipowner of the “liable” ship Trade Expansion causing the accident.77 Both the court of first instance and the court of appeal held that the “liable” shipowner was liable for the loss of the fishing boat and the death of the people due to the collision.78 11.28 In the retrial of The Trade Expansion, the SPC pointed out that the claimants should bear the burden of proof. In fact, all evidence that allegedly proved that Trade Expansion was the liable ship causing the accident was indirect evidence. It was found that there was no collision trace and damage at the bow of Trade Expansion, the adherent paint

70 Nantong Tianshun Shipping Co Ltd v Tianjin-Kobe International Marine Shipping Co Ltd and Yangzhou Yuyang Shipping Co Ltd (2001) Guang Hai Fa Shang Chu Zi No. 109 (Guangzhou Maritime Court). 71 Hong Kong Changxin Shipping Service Co Ltd v Hachiuma Steamship Co Ltd (2010) Hu Gao Min Si (Hai) Zhong Zi No. 74 (Shanghai High People’s Court) (CA). 72 Rongcheng Huajin Aquatic products Co Ltd v Seaspan Ship Management Ltd and CSCL Ningbo Shipping Co Ltd (2002) Qing Hai Fa Shi Hai Shi Chu Zi No. 60 (Qingdao Maritime Court). 73 Minutes of the Second National Working Conference 2005, art 130, para 1. 74 China Pacific Property Insurance Co Ltd Yangzhou Central Branch v Jiangsu Far East Shipping Co Ltd and PICC P&C Co Ltd Jiangsu Branch (2005) Hu Hai Fa Shang Chu Zi No. 10 (Shanghai Maritime Court). 75 Collisions Convention 1910, art 6, para 2. 76 (1996) Jiao Ti Zi No. 4 (SPC) (Retrial). 77 The claimants also include Zhuhai Anti-Smuggling Office which requisitioned the fishing boat. 78 (1994) Guang Hai Fa Shang Chu Zi No. 10 (Guangzhou Maritime Court); (1994) Yue Fa Jing Er Shang Zi No. 147 (Guangdong High People’s Court) (CA).

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drawn from the left stroke-side of Trade Expansion was totally different from the paint on the fishing boat and Trade Expansion did not make a sharp left turn or slow down when it passed the incident waters. It was also found that the relative situations of the position of collision as claimed by the claimants, the sinking position of the fishing boat, and the position where the persons were rescued did not conform to local tides at that time. More importantly, it was found that there was another container ship coming from Hong Kong passing the incident waters when the collision occurred. Basically, there was a lack of evidence to determine that Trade Expansion was the liable ship causing the accident. Therefore, the SPC revoked the judgments of the first instance and the second instance of this case and dismissed the claim from the claimants. 11.29 The Trade Expansion was the first case about the dispute over ships’ collision that was tried by the SPC. It was of guiding significance in the judicial practice of how to apply indirect evidence to determine collision occurrence. When direct evidence is insufficient, the collision can be determined only when such indirect evidence is interactive and constitutes a complete chain of evidence. Where the cargo interests of the cargoes on the colliding vessels or a third party claim for compensation for any loss to the cargoes or other property against either or both of the colliding vessels, the burden of proof of the proportion of the degree of fault shall lie with the colliding vessels. If no evidence is furnished without justifiable reasons, either of the colliding vessels shall bear all liabilities for compensation or both vessels shall bear joint and several liabilities.79 The evidence includes, but is not limited to, legally binding judgments, rulings, mediation decisions and arbitration awards including the judgments, rulings, mediation decisions and arbitration awards made by foreign authorities as submitted by the colliding vessels.80 A judgment from the court of first instance may not be a legally binding judgment if any party in the dispute appeals. However, such a judgment could still be considered as evidence of the proportion of the degree of fault if the decision of the court of appeal or the settlement of the parties does not change the proportion of the degree of fault in the judgment of the court of first instance.81 11.30 Where the parties to the dispute over a ship’s collision have reached an agreement on the proportion of the degree of fault, they are liable for the loss of the third party according to the agreed proportion, without prejudice to the lawful interests of the third party. Where the parties have only reached an agreement on the mutual compensation amount without specifying the proportion of the degree of fault, they are liable for the loss of the third party according to the proportion on the basis of the compensation amount, without prejudice to the lawful interests of the third party.82 11.31 During the trial of cases involving disputes over a collision, Chinese courts shall not produce the evidence obtained through evidence preservation upon application by the parties concerned or collected from relevant authorities through investigation until the parties concerned have completed producing all evidence and issued the statement on the 79 Bank of China Insurance Co Ltd Fujian Branch v Fangchenggang Fuhang Shipping Co Ltd and Yangpu Bihai Shipping Co Ltd (2013) Xia Hai Fa Shi Chu Zi No. 36 (Xiamen Maritime Court). 80 Provisions on Vessel Collisions 2008, art 8. The foreign judgments, rulings, mediation decisions and arbitration awards shall be subject to examination in accordance with the procedures set forth in art 267 and art 268 of the Civil Procedure Law 2012. 81 Taizhou Jinglong Bulk Cements Co Ltd v Anhui Tengda Shipping Co Ltd (2008) Yong Hai Fa Shang Chu Zi No. 77 (Ningbo Maritime Court). 82 Minutes of the Second National Working Conference 2005, art 135.

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completion thereof. After a collision, relevant authorities may find the facts of the collision through investigation. Such finding of facts confirmed by the parties and relevant personnel to the accidents may be adopted as evidence by Chinese authorities to ascertain the facts of the accident unless the finding of facts can be overturned by sufficient evidence to the contrary.84 The party who disagrees with the finding of facts from the relevant authorities bears the burden of proof to provide sufficient evidence to the contrary.85 11.32 If more than one piece of evidence is available for the same ships’ collision, Chinese courts may confirm the probative force of several pieces of evidence for the same fact according to the following general principles:86 83

(1) (2) (3) (4) (5)

that the probative force of public documentary evidence produced by authorities or social organisations according to its function and power is greater than that of other documentary evidence; that the probative force of material evidence, archives, expert conclusions, records of inspection or notarised or registered documentary evidence is greater than that of other documentary evidence, audio-visual materials and testimony of a witness; that the probative force of primary evidence is greater than that of the hearsay evidence; that the probative force of direct evidence is greater than that of the secondary evidence; and that the probative force of testimony offered by a witness in favour of the party having a family relationship or other close relationship therewith is greater than that of other witness testimony.

11.33 In China, relevant authorities are authorised and also obliged to investigate accidents for administrative purpose. In China Insurance Co Ltd Jiangsu Branch v Qinzhou Port Weilong Shipping Co Ltd,87 the local Maritime Safety Administration was authorised to investigate the cause of the accident of ships’ collision and ascertain the liabilities of the parties in the accident.88 The proportion of liabilities in the accident concluded by the local Maritime Safety Administration is the most persuasive evidence for finding the facts of the ships’ collision although any evidence to the contrary is still admissible. 11.34 In Chinese judicial practice, when the evidence produced by the relevant authorities and the evidence produced by professional organisations is inconsistent, Chinese courts determine the probative force of that evidence on the bases of their analysis of it. In Wang Yishun and Hangzhou Jingwei Shipping Co Ltd,89 the report from the local Maritime Safety Administration and the report from a professional company concluded a different proportion of the degree of fault of the parties in the ships’ collision. It was found that the report from the local authority was concluded on the basis of the evidence obtained through the

83 Provisions on Vessel Collisions 2008, art 10. 84 ibid, art 11. 85 Good Safe Group Co Ltd v Huabang International Logistics Ltd (2006) Hu Hai Fa Shang Chu Zi No. 25 (Shanghai Maritime Court). 86 Provisions of the Supreme People’s Court on Evidence in Civil Proceedings, Fa Shi [2001] No. 33 (SPC), art 77. 87 (2013) Xia Hai Fa Shi Chu Zi No. 25(Xiamen Maritime Court). 88 Maritime Traffic Safety Law 1983, art 43. 89 (2011) Min Shen Zi No. 119 (SPC) (Retrial).

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investigation, such as electronic chart, logbook, telegraph record, etc of one of the ships in collision and the interview of some crewmen on board the ship. In comparison, the conclusion of the report from the professional company was based only on the analysis of the accident. The SPC pointed out that the report from the local authority was more persuasive and the report from the professional company could not overturn the conclusion of the report from the local authority. Therefore, the report from the local authority was accepted as the evidence of the facts of the collision.

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CHAPTER 12

Salvage at sea

12.1 Salvage at sea in the CMC 1992 refers to the salvage operations rendered at sea or any other navigable waters adjacent thereto to the ships and other property in danger.1 The provisions for salvage at sea in the CMC 1992 were drafted based on the International Convention on Salvage 1989 (the “Salvage Convention 1989”). Therefore, both the structure and the contents of the relevant provisions in the CMC 1992 are very similar to the provisions in the Salvage Convention 1989. Meanwhile, in 1993, China acceded to the Salvage Convention 1989. According to the CMC 1992, if any international convention concluded or acceded to by the PRC contains provisions differing from those contained in the CMC 1992, the provisions of the relevant international convention shall apply, unless the provisions are those on which the PRC has announced reservations.2 Therefore, the provisions of the Salvage Convention 1989 have the force of law in China except for any reservations, and have the priority in application over the relevant provisions in CMC 1992. Concepts and application 12.2 “Ship” in the context of salvage at sea means any ship referred to in the CMC 1992 and any other non-military, public service ship or craft that has been involved in salvage operations therewith.3 The ship in the CMC 1992 means sea-going ships and other mobile units, but does not include ships or craft to be used for military or public service purposes, nor small ships of less than 20 tons gross tonnage.4 The Salvage Convention 1989 also provides that “this Convention shall not apply to warships or other non-commercial vessels owned or operated by a State and entitled, at the time of salvage operations, to sovereign immunity under generally recognized principles of international law unless that State decides otherwise”.5 12.3 “Property” means any property not permanently and intentionally attached to the shoreline and includes freight at risk. “Payment” means any reward, remuneration or compensation for salvage operations to be paid by the salved party to the salvor according to the provisions for salvage in the CMC 1992.6 The provisions for the salvage at sea in the CMC

1 2 3 4 5 6

CMC 1992, art 171. ibid, art 268, para 1. ibid, art 172. ibid, art 3. The term “ship” also includes ship’s apparel. Salvage Convention 1989, art 4, para 1. CMC 1992, art 172.

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1992 do not apply to fixed or floating platforms or mobile offshore drilling units when such platforms or units are on location engaged in the exploration, exploitation or production of sea-bed mineral resources.7 12.4 Salvage at sea includes the salvage of cargoes on board the salved ship. There is no concept of cargo in the CMC 1992 or the Salvage Convention 1989. So the cargo for the purposes of salvage at sea means any general cargo except for state-owned cargo and humanitarian cargo. Unless the State owner consents, no provision of the Salvage Convention 1989 shall be used as a basis for the seizure, arrest or detention by any legal process of, nor for any proceedings in rem against, non-commercial cargoes owned by a State and entitled, at the time of the salvage operations, to sovereign immunity under generally recognised principles of international law.8 Furthermore, no provision of the Salvage Convention 1989 shall be used as a basis for the seizure, arrest or detention of humanitarian cargoes donated by a State, if such State has agreed to pay for salvage services rendered in respect of such humanitarian cargoes.9 12.5 China acceded to the Salvage Convention 1989 but reserved the right not to apply the provisions of the Salvage Convention 1989: (a) when the salvage operations take place in inland waters and all vessels involved are of inland navigation; (b) when the salvage operations take place in inland waters and no vessel is involved; and (c) when the property involved is maritime cultural property of prehistoric, archaeological or historic interest and is situated on the sea-bed. Salvage contract and performance Salvage contract 12.6 In the CMC 1992, a contract for salvage operations at sea is concluded when an agreement has been reached between the salvor and the salved party regarding the salvage operations to be undertaken.10 In some dangerous emergency circumstances, the salvor and the salved party may have no time or chance to conclude a written contract for salvage. The salvage operations may be conducted by the salved party or the master of the ship in danger. Therefore, the lack of written salvage contract is not a valid defence of the salved party to deny its liability for the salvage payment.11 12.7 The master of the ship in distress shall have the authority to conclude a contract for salvage operations on behalf of the shipowner. The master of the ship in distress or its owner shall have the authority to conclude a contract for salvage operations on behalf of the owner of the property on board.12 Because of the authority of the owner of the salved ship, the shipowner, after paying the salvage payment to the salvor, has the right of recourse against the owners of the salved property for the apportionments of the salvage payment. However, this recourse claim is a claim relating to the contract of carriage of goods by sea, 7 ibid, art 173. 8 Salvage Convention 1989, art 25. 9 ibid, art 26. 10 CMC 1992, art 175, para 1. 11 Qingdao Port Authority Oil Port Company v Schiffarts Gesellshaft Hansa-Constance MBH & Co and others (2000) Qing Hai Fa Hai Shi Chu Zi No. 48 (Qingdao Maritime Court). 12 CMC 1992, art 175, para 2.

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namely the claim of the carrier against the cargo interests, but not a claim relating to the salvage at sea.13 Salvage operations 12.8 A salvage operation in the Salvage Convention 1989 means any act or activity undertaken to assist a vessel or any other property in danger in navigable waters or in any other waters whatsoever.14 A salvage operation is always an urgent demand because the ship to be salved is in danger. For this reason, special operations for salvage may be conducted before the conclusion of the salvage contract. The special operations include but are not limited to off-loading operations and towing operations. It is always a dispute in Chinese judicial practice that the salved party denies the special operation as part of the salvage operation. So, the construction of the nature of special operations is important for the recognition of the salvage operation so that the salved party may be entitled to the salvage payment. 12.9 When the goods are off-loaded from the ship in danger, it might be argued that the operation is not a salvage operation but a lightening operation. Laizhou Anda Shipping Agency Co Ltd v Eastern Light Shipping Ltd is such a kind of case for bulk cargo.15 In this case, a bulk carrier grounded on the channel and failed in the attempt of refloating. After receiving instruction from the Penglai Maritime Safety Administration, the claimant sent its ship for the over barge operation. During the two days’ operation, about 2,700 tons of logs were off-loaded and, after that, the bulk carrier successfully refloated by its own engine with assistance of three tug boats. The Qingdao Maritime Court held that the over barge operation was a salvage operation. The owner of the bulk carrier appealed and argued that it had only concluded an off-loading contract with the claimant. The appeal was rejected by the Shandong High People’s Court. It was pointed out that the bulk carrier was in danger when it failed to refloat and thus the off-loading operation was for salvage purposes. 12.10 Similar lightening operations for oil tankers may also be considered as salvage operations. In Putian Haishen Shipping Co Ltd v Pingan Property Insurance Co Ltd Hainan Branch and Hainan Yuehai Shipping Logistics Co Ltd,16 an oil tanker sank into the sea after collision and the break-hole was below the surface of sea. The master of the oil tanker requested the local rescue centre for the drainage of water in the engine room. Upon the request of the rescue centre, the claimant sent its ship to pump out the oily water and to lay out an oil fence. After the receiving operation, the break-hole rose over the surface and the oil tanker was salved. However, the owner of the oil tanker denied salvage at sea, but instead contended that the claimant had just provided oily water receiving operations which was not part of a salvage operation. The SPC in the retrial of the case pointed out that the oil tanker was in real danger and the claimant’s operation was a salvage operation even if the oil pollution had not eventually occurred. 12.11 A ship without power may not be in danger but may be in danger in special circumstances, e.g. in bad weather. In those special circumstances, a towing operation shall

13 Fujian Nanan Yanping Shipping Co Ltd v Quanzhou Daying Building Materials Trading Co Ltd and Xiamen Non-metallic Minerals Import and Export Co Ltd (2014) Min Shen Zi No. 1041 (SPC) (Retrial). 14 Salvage Convention 1989, art 1 (a). 15 (2004) Lu Min Si Zhong Zi No. 8 (Shandong High People’s Court) (CA). 16 (2014) Min Shen Zi No. 450 (SPC) (Retrial).

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be considered as a salvage operation. In The Guangzhou Rescue and Salvage Bureau v Dalian Jiliang Shipping Co Ltd and others,17 the ship of the defendant lost power due to a collision with another ship. The defendant sent a request to the claimant for towing the ship to a safe port. When the towage commenced, the claimant requested to calculate the salvage reward based on the “no cure no pay” principle, but the defendant replied that it wanted to calculate remuneration for towage. After towing, a dispute arose whether the defendant should pay the salvage reward or the towage remuneration. The northeast wind was found at 5–7 level and gust at 8 level before and at the beginning of towing. The Guangzhou Maritime Court pointed out that, although the collision did not put the defendant’s ship in danger, the ship lost power and was actually in danger in the weather condition at that time. Therefore, it was held that the towing operation was a salvage operation. State-controlled salvage 12.12 With respect to the salvage operations performed or controlled by the relevant competent authorities in China, the salvors shall be entitled to the rights and remedies provided for in the CMC 1992 in respect of salvage operations.18 Therefore, besides the relevant competent authorities that perform the salvage operations by themselves, the private salvors that perform the salvage operation controlled by the relevant competent authorities are also the salvors although they may not conclude any written salvage contract.19 In China, the relevant competent authorities include the Maritime Safety Administration (MSA) and its branches, and China Rescue and Salvage (CRS) and its branches of the Ministry of Transport of the PRC. The salvage operations may be organised by local maritime safety administrations and performed by local rescue and salvage bureaus. 12.13 In practice, the MSA may entrust CRS for salvage operations according to the entrustment agreement between them. A question in practice arose on whether the MSA can claim salvage payment as a salvor. In Shantou Maritime Safety Administration of the PRC v Sinopec Guangdong Yuedong Petroleum Branch,20 the defendant requested salvage of its oil tanker from Shantou Maritime Safety Administration (Shantou MSA) and Shantou MSA organised China Rescue and Salvage Shanghai Branch (Shanghai CRS) to perform the salvage operation. After successful salvage, Shantou MSA claimed the salvage payment, but this was rejected by the defendant who argued that Shantou MSA did not perform the salvage operation and thus was not the salvor. The Guangzhou Maritime Court pointed out that Shantou MSA was legally authorised to organise the salvage operation according to law.21 It was agreed in the entrustment contract that Shantou MSA was entitled to claim for the salvage payment and Shanghai CRS promised not to claim directly against the salved party for the salvage payment. Therefore, it was held that Shantou MSA was entitled to the salvage payment as the salvor.

17 (2000) Guang Hai Fa Shan Zi No. 89, 90, 91 (Guangzhou Maritime Court). 18 CMC 1992, art 192. 19 Ningbo Zhenhai Manyang Shipping Co Ltd v Ezhou Datong Shipping Co Ltd (2014) Hu Hai Fa Shang Chu Zi No. 420 (Ningbo Maritime Court). 20 (2005) Guang Hai Fa Chu Zi No. 182 (Guangzhou Maritime Court). 21 The legal authority is art 71 of the Marine Environment Protection Law of the PRC, which provides that, in case of the sea accident of a vessel that has caused or may cause major pollution damage to the marine environment, the State administrative department in charge of maritime affairs is entitled to adopt enforcement measures to avoid or reduce the pollution damage.

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Performance of salvage 12.14 During the salvage operation, the salvor shall owe a duty to the salved party to:22 (1) (2) (3) (4)

carry out the salvage operations with due care; exercise due care to prevent or minimise damage to the environment; seek assistance from other salvors whenever circumstances reasonably require; accept the intervention of other salvors when reasonably requested to do so by the salved party; provided however that the amount of his reward shall not be prejudiced should it be found that such a request was unreasonable.

12.15 During the salvage operation, the party salved is under an obligation to the salvor to:23 (1) (2) (3)

cooperate fully with the salvor; exercise due care to prevent or minimise the damage to the environment; promptly accept the request of the salvor to take delivery of the ship or property salved when such ship or property has been brought to a place of safety.

12.16 Under the CMC 1992, every master is bound, so far as he can do so without serious danger to his ship and persons thereon, to render assistance to any person in danger of being lost at sea.24 The Salvage Convention 1989 also requires that the States Parties shall adopt the measures necessary to enforce the master’s duty.25 However, it is not clear what the liability is if the master of a ship fails to comply with the duty to render assistance under Chinese law. In the common law jurisdiction of the Hong Kong Special Administrative Region of the PRC, the master of a vessel who fails to comply with the duty to render assistance commits an offence and shall be liable (a) on summary conviction, to imprisonment for a term not exceeding six months or a fine of Hong Kong Dollars (HKD) 10,000, or both; (b) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine of HKD 50,000, or both.26 Annulment and modification of contracts 12.17 The salvage contract may be modified by a judgment of the court that has entertained the suit brought by either party, or modified by an award of the arbitration organisation to which the dispute has been submitted for arbitration upon the agreement of the parties, if the contract has been entered into under undue influence or the influence of danger and its terms are obviously inequitable, or the payment under the contract is in an excessive degree too large or too small for the services actually rendered.27 12.18 The reason for the modification of the salvage contract may be that the salvage operations were actually different from the agreed operations in the salvage contract. In 22 CMC 1992, art 177. 23 ibid, art 178. 24 ibid, art 174. 25 Salvage Convention 1989, art 10, para 2. Paragraph 3 clarifies that the owner of the vessel shall incur no liability for a breach of the duty of the master. 26 Hong Kong Merchant Shipping (Collision Damage Liability and Salvage) Ordinance (Chapter 508), Part II, s 3 (1). 27 CMC 1992, art 176.

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Nanhai Rescue Bureau of the Ministry of Transport v Archangelos Investments ENE and Another,28 the salvor, upon the request of the owner of the ship in danger, agreed to provide three tugs and a diving team for towing operations based on the tug rate RMB 3.5 per horsepower hour. However, the towing operation was replaced by the off-loading operation. In the dispute over the calculation of the payment for salvage, the Guangzhou Maritime Court held that it was reasonable to reduce the tug rate to RMB 2.9 per horsepower hour because the services rendered by the tug were easier than the agreed services and the agreed tug rate was obviously higher than a reasonable rate for off-loading operation. Rights of salvors No cure no pay 12.19 The principle of salvage reward in the CMC 1992 is “no cure no pay”. Where the salvage operations rendered to the ship and other property in danger have had a useful result, the salvor shall be entitled to a reward. Except as otherwise provided for the special compensation in the CMC 1992 or by other laws or the salvage contract, the salvor shall not be entitled to the payment if the salvage operations had no useful result.29 Therefore, when parties have agreed the payment for the salvage operation in a salvage contract, the principle of “no cure no pay” shall not apply and the salvage payment shall be calculated and paid not on the basis of the success of salvage but on the salvage contract. In this circumstance, the salvor shall be entitled to the payment for salvage irrespective of the success of salvage if it is so agreed in the salvage contract.30 Furthermore, the provisions with respect to the salvage payment in the CMC 1992 apply to the salvor’s right to the payment for the salvage operations carried out between the ships of the same owner.31 Salvage reward 12.20 According to article 180, paragraph 1 of the CMC 1992, the reward shall be fixed with a view to encouraging salvage operations, taking into full account the following criteria:32 (1) the salved value of the ship and other property; (2) the skill and efforts of the salvors in preventing or minimising the damage to the environment; (3) the measure of success obtained by the salvors; (4) the nature and degree of the danger; (5) the skill and efforts of the salvors in salving the ship, other property and life; (6) the time used and expenses and losses incurred by the salvors;

28 (2012) Guang Hai Fa Chu Zi No. 898 (Guangzhou Maritime Court). 29 CMC 1992, art 179. 30 Nanhai Rescue Bureau of the Ministry of Transport of PRC v Archangelos Investments ENE (2014) Yue Gao Fa Min Si Zhong Zi No. 117 (Guangdong High People’s Court) (CA). 31 CMC 1992, art 191. 32 Salvage Convention 1989 also clarifies in art 13 that the following criteria shall be taken into account without regard to the order in which they are presented. The criteria in art 180 of the CMC 1992 are the same to those in art 13 of the Salvage Convention 1989.

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(7) (8) (9) (10)

the risk of liability and other risks run by the salvors or their equipment; the promptness of the salvage services rendered by the salvors; the availability and use of ships or other equipment intended for salvage operations; the state of readiness and efficiency of the salvor’s equipment and the value thereof.

The reward shall not exceed the value of the salved ship and other property.33 12.21 In Chinese judicial practice, the common dispute in respect of the salvage at sea is the assessment of salvage reward. Chinese courts may increase or reduce the claimed salvage reward by taking into full account the criteria in article 180 of the CMC 1992. The claimed salvage reward may be reduced in judgments where the degree of the danger is low, the time used and expenses incurred by the salvors are not too much, or no special skill of the salvors is required for salvage.34 The claimed salvage reward may be increased with a view to encouraging salvage operations based on the expenses and losses incurred by the salvors.35 However, any element other than the criteria in the CMC 1992 will not be considered for the assessment of the salvage reward, e.g. litigation expenses and lawyers’ fees.36 Salved value and apportionment 12.22 The salved value of the ship and other property means the assessed value of the salved ship and other property or the proceeds of the sale thereof, after deduction of the relevant taxes and customs dues, quarantine expenses, inspection charges as well as expenses incurred in connection with the discharge, storage, assessment of the value and the sale thereof. However, the salved value does not include the value of the salved personal belongings of the crew and that of the cabin luggage of the passengers.37 12.23 If not only a ship but also other property on board the ship has been salved, according to article 183 of the CMC 1992 the salvage reward shall be paid by all of the ship and other property interests in proportion to their respective salved values. Therefore, the salvor shall not claim against the owners of salved ship and salved property for the joint and several liability for the payment of salvage reward, but for separate liabilities in proportion to their respective salved values.38 However, if the salvor claims against the owner of the salved ship only for the salvage reward, a question may arise on whether the salvor is entitled to claim for the payment of reward only in proportion to the salved value of the ship, or the whole salvage reward. The answer to this question

33 If the salvor claims for the salvage reward against only the owner of the salved ship or the owner of the salved property, the reward shall not exceed the value of the ship or the other property respectively: Shantou Maritime Safety Administration of the PRC v Sinopec Guangdong Yuedong Petroleum Branch (2005) Guang Hai Fa Chu Zi No. 182 (Guangzhou Maritime Court). 34 The Guangzhou Rescue and Salvage Bureau (n 17). 35 Ningbo Zhenhai Manyang Shipping Co Ltd v Ezhou Datong Shipping Co Ltd (2014) Yong Hai Fa Shang Chu Zi No. 420 (Ningbo Maritime Court). 36 Laizhou Anda Shipping Agency Co Ltd v Eastern Light Shipping Ltd (2004) Lu Min Si Zhong Zi No. 8 (Shandong High People’s Court) (CA). 37 CMC 1992, art 181. 38 Zhejiang Shihang Zhapu Port Co Ltd v Shanghai Kairun Shipping Co Ltd (2011) Yong Hai Fa Shi Chu Zi No. 63 (Ningbo Maritime Court).

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depends on the judicial interpretation on the CMC 1992 and the construction of the salvage contract. 12.24 In Nanhai Rescue Bureau of the Ministry of Transport v Archangelos Investments ENE and Another,39 the salvor conducted salvage operations according to the salvage contract and both the ship and the property on board the ship were salved. The salvor claimed against the owner of the salved ship for the agreed salvage payment according to the salvage contract. During the trial of the court of first instance, the owner of the salved ship applied for the participation of the owner of the salved property in the proceedings for contribution to the salvage reward. This application was rejected by the Guangzhou Maritime Court. It was interpreted that the apportionment of the salvage reward under article 183 of the CMC 1992 applies only when there is no agreement for the salvage reward. If there is an agreement for the payment of reward, as in this case, the salved party shall pay the reward as agreed and the participation of the owner of the salved property was irrelevant to the payment of salvage reward. 12.25 The owner of the salved ship appealed and argued that it should be liable for the salvage reward in the proportion to the salved value of its ship. The Guangdong High People’s Court accepted the argument and reverted to the judgment of the court of first instance, despite the fact that the participation of the owner of the salved property was not required. In the view of the court of appeal, the agreed payment for salvage was still a salvage reward although it was assessed according to the salvage contract, rather than the criteria in the CMC 1992. For the payment of the salvage reward under article 183, it was pointed out that the CMC 1992 does not distinguish the circumstances with and without a salvage contract. Therefore, article 183 shall apply to the payment of the salvage reward irrespective of the existence of a salvage contract.40 12.26 This judicial interpretation seems to indicate that the salvage contract can be used for calculation of the salvage payment only and article 183 shall be used for the payment of the salvage reward. However, it is doubtful whether the payment for salvage under a contract is equivalent to the salvage reward under the CMC 1992. The “payment” in the CMC 1992 means any reward, remuneration or compensation according to the provisions for salvage in the CMC 1992. However, the payment for salvage in this case means the agreed money according to the salvage contract, not the CMC 1992. Furthermore, although article 183 does not exclude its application to the salvage operations based on contracts as interpreted by the court of appeal, it also does not prohibit the free agreement about the payment for agreed salvage operations between the contractual parties. 12.27 The salvor applied for retrial of the case by the SPC. The SPC preliminarily examined the application and found that there was definite error in the application of law to the making of the judgment of the court of appeal.41 The SPC retried this case and upheld the judgment of the court of first instance. It was pointed out that article 183 of the CMC 1992 should not apply to the salvage on a contract basis without the adoption of “no cure no pay” principle.42 39 40 41 42

n 28. (2014) Yue Gao Fa Min Si Zhong Zi No. 117 (Guangdong High People’s Court) (CA). In this circumstance, the SPC shall retry the case. See art 200 of the Civil Procedure Law 2012. (2016) Zui Gao Fa Min Zai 61 (SPC) (Retrial).

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Special compensation 12.28 If the salvor has carried out the salvage operations in respect of a ship that by itself or its goods threatened pollution damage to the environment43 and has failed to earn a reward under article 180 of the CMC 1992 at least equivalent to the special compensation assessable in the CMC 1992, he shall be entitled to special compensation from the owner of that ship equivalent to his expenses as herein defined.44 In other words, the salvor shall not request the special compensation from the owner of the salved property other than the ship. 12.29 If the salvor has carried out such salvage operations and has prevented or minimised pollution damage to the environment, the special compensation payable by the owner to the salvor may be increased by an amount of up to a maximum of 30 per cent of the expenses incurred by the salvor. The court which has entertained the suit or the arbitration organisation may, if it deems fair and just and taking into consideration the criteria in article 180 of the CMC 1992, increase the amount of such special compensation further, but in no event shall the total increase be more than 100 per cent of the expenses incurred by the salvor.45 12.30 The salvor’s expenses for special compensation means the salvor’s out-of-pocket expenses reasonably incurred in the salvage operation and the reasonable expenses for the equipment and personnel actually used in the salvage operation. In determining the salvor’s expenses, the provisions of sub-paragraphs (8), (9) and (10) of paragraph 1 of article 180 of the CMC 1992 shall be taken into consideration.46 12.31 Under all circumstances, the total special compensation provided for in the CMC 1992 shall be paid only if such compensation is greater than the reward recoverable by the salvor under article 180 of the CMC 1992, and the amount to be paid shall be the difference between the special compensation and the reward. However, if the salvor has been negligent and has thereby failed to prevent or minimise the pollution damage to the environment, the salvor may be deprived of the whole or part of any special compensation. The provisions for special compensation shall affect the right of recourse on the part of the shipowner against any other parties salved.47 No entitlement of remuneration 12.32 The salvor shall not be entitled to the remuneration in the following salvage operations:48 (1)

The salvage operation is carried out as due performance of a towage contract or other service contract,49 with the exception, however, of providing special services exceeding the due performance.

43 There is no definition of damage to the environment in the CMC 1992. The Salvage Convention 1989 provides in art 1 (d) that damage to the environment means substantial physical damage to human health or to marine life or resources in coastal or inland waters or areas adjacent thereto, caused by pollution, contamination, fire, explosion or similar major incidents. 44 CMC 1992, art 182, para 1. 45 ibid, art 182, para 2. 46 ibid, art 182, para 3. 47 ibid, art 182, paras 4–6. 48 ibid, art 186. 49 Salvage Convention 1989 also clarifies in art 17 that the towage contract or other service contract shall be entered into before the danger arises.

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(2)

The salvage operation is carried out in spite of the express and reasonable prohibition on the part of the master or the owner of the ship in danger or the owner of any other property.

A salvor may be deprived of the whole or part of the payment due to the extent that the salvage operations have become necessary or more difficult because of fault or neglect on his part or if the salvor has been guilty of fraud or other dishonest conduct.50 Apportionment between salvors 12.33 The apportionment of a salvage reward among the salvors taking part in the same salvage operation shall be made by agreement among those salvors on the basis of the criteria set out in article 180 of the CMC 1992. Without such agreement, the matter may be brought before the court hearing the case for judgment, or, upon the agreement of the parties, submitted to the arbitration organisation for an award.51 In other words, the apportionment of a reward between salvors shall be made on the basis of the criteria in article 180 of the CMC 1992 only. Salvage of persons 12.34 The salvors of human life shall not demand any remuneration from those whose lives are saved. However, a salvor of human life is entitled to a fair share of the payment awarded to the salvor for salving the ship or other property or preventing or minimising damage to the environment.52 Claims and actions Duty to provide security 12.35 After the completion of the salvage operation, the salved party shall, at the request of the salvor, provide satisfactory security for salvage reward and other charges. Meanwhile, the owner of the salved ship shall, before the release of the goods, make best endeavours to request the owners of the salved property to provide satisfactory security for the share of the payment that they ought to bear. Without the consent of the salvor, the salved ship or other property shall not be removed from the port or place at which they first arrived after the completion of the salvage operation until satisfactory security demanded by the salvor has been provided with respect to the salved ship or other property.53 Auction sale of salved ship and property 12.36 If the salved party has neither made payment nor provided satisfactory security for the ship and other salved property within 90 days of the salvage, the salvor may apply 50 51 52 53

CMC 1992, art 187. ibid, art 184. ibid, art 185. ibid, art 188.

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to the court for an order on forced sale by auction. With respect to where the salved ship or property cannot be kept or cannot be properly kept, or the storage charges to be incurred may exceed its value, the salvor may apply for an earlier forced sale by auction. After the auction sale, the proceeds of the sale shall, after deduction of the expenses incurred for the storage and sale, be used for the salvage payment in accordance with the provisions of the CMC 1992. The remainder, if any, shall be returned to the party salved, and, if there is no way to return the remainder or if the remainder has not been claimed after one year of the forced sale, it shall go to the State treasury. In case of any deficiency, the salvor has the right of recourse against the salved party.54 In order to realise the entitlement of security, the salvor may apply for maritime injunctions in writing with a Chinese maritime court of the place where the maritime dispute arises. Interim payment 12.37 The court or the arbitration organisation handling the salvor’s claim for payment may, in light of the specific circumstances and under fair and just terms, decide or make an award ordering the party salved to pay on account an appropriate amount to the salvor. On the basis of the aforementioned payment on account made by the party salved, the security provided under the CMC 1992 shall be reduced accordingly.55 Interest 12.38 Under the Salvage Convention 1989, the right of the salvor to interest on any payment due shall be determined according to the law of the State in which the tribunal seized of the case is situated.56 In Chinese judicial practice, the salvor’s claim for interest in a dispute of payment of salvage rewards is always supported by Chinese courts. Publication of arbitral awards 12.39 Under the Salvage Convention 1989, States Parties shall encourage, as far as possible and with the consent of the parties, the publication of arbitral awards made in salvage cases.57 The China Maritime Arbitration Commission frequently publishes selected arbitral awards online and has published several books of selected arbitral awards including the cases of the salvage at sea.

54 55 56 57

ibid, art 190. ibid, art 189. Salvage Convention 1989, art 24. ibid, art 27.

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CHAPTER 13

General average

13.1 General average in the CMC 1992 means the extraordinary sacrifice or expenditure intentionally and reasonably made or incurred for common safety and for the purpose of preserving a ship, goods or other property involved in a common maritime adventure from peril.1 The provisions regarding the general average in the CMC 1992 apply to coastal and inland water carriage of goods, provided that the ships for those carriages are “ships” as defined under the CMC 1992.2 A “ship” in the CMC 1992 refers to sea-going ships and other mobile units, but does not include ships or crafts used for military or public service purposes, nor small ships of less than 20 tons gross tonnage.3 According to the Contract Law,4 the entitlement of general average can be transferred to a third party if such a transfer has been notified to the debtor of the general average.5 Scope of general average 13.2 When a ship suffers damage due to a fire, the costs and expenses for salvage, rescue and repairs for safety of both the ship and the goods on board shall be allowed as general average.6 When a ship, after having been damaged in consequence of accident, sacrifice or other extraordinary circumstances, enters a port or place of refuge or returned to its port or place of loading for repairs that are necessary for the safe prosecution of the voyage, the port charges paid, the wages and maintenance of the crew incurred and the fuel and stores consumed during the extra period of detention in such port or place, as well as the loss or damage and the cost arising from the discharge, storage, reloading and handling of the goods, fuel, stores and other property on board for the repairs, shall be allowed as general average.7 Furthermore, any extra expenses incurred in place of another expense that would have been allowed as general average shall be counted as general average and accordingly 1 CMC 1992, art 193, para 1. 2 Explanations concerning Practical Issues in Foreign Related Commercial and Maritime Trails No. 1, 2004 (Explanations No. 1), art 137. See also Jiangliu v Sunshine Property Insurance Ltd Liuzhou Central Branch (2011) Hai Shang Chu Zi No. 22 (Beihai Maritime Court); (2011) Gui Min Si Zhong Zi No. 22 (Guangxi High People’s Court) (CA). 3 CMC 1992, art 3. The term ship also includes ship’s apparel. 4 Contract Law 1999, arts 78 and 80, para 1. 5 Lianyungang Cosfar Shipping International Co Ltd v Nateus N.V. and others (2013) Min Shen Zi No. 2325 (SPC) (Retrial). 6 China National Fisheries Corporation v NingBo Haizhixing Ocean Fishing Co Ltd (2015) Yong Hai Fa Shang Chu Zi No. 1111 (Ningbo Maritime Court). 7 CMC 1992, art 194.

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allowed, but the amount of such expenses incurred cannot exceed the replaced general average expense.8 13.3 However, any loss or damage sustained due to the delay of the ship or the goods, whether on the voyage or post voyage, including the damage for detention of the ship, the loss of market and other indirect losses, shall not be allowed under general average.9 Furthermore, goods undeclared or wrongfully declared shall be considered for the contribution to general average, but the special sacrifice sustained by such goods shall not be allowed under general average.10 The shipowner or the owner of the property on board may raise actions for the dispute of general average. However, the recourse actions raised by such a shipowner or owner of the property on board against a liable third party are not considered as a dispute of general average.11 General average in claim 13.4 In a claim of general average, the burden of proof is on the party claiming contribution of general average to show that the losses or expenses claimed are properly allowed as general average.12 The carrier’s conjecture of accident does not discharge his burden of proof.13 Aside from the proof of the existence of general average, the claimant also needs to prove the amount of sacrifice or expenditure for general average. If the amount has not been appropriately calculated in another relevant but separate claim, the claim for contribution of general average will be dismissed by the Chinese courts.14 This practice may apply to the circumstance where the amount of sacrifice or expenditure is not finalised in the adjustment of general average.15 However, a practical problem, arises where a claim for contribution of general average may be time barred when the amount of sacrifice or expenditure is specified. In practice, a better solution for the claimant is to require security for the contribution of general average before it releases the goods to the cargo interests.16 13.5 In the CMC 1992, rights to the contribution of general average shall not be affected even if the event that gave rise to the sacrifice or expenditure may have been due to the fault of one of the parties to the adventure. However, this does not prejudice any remedies that may be available to that party at fault.17 At the stage of the contribution of general average, if it is unclear whether a declaration of general average was caused by a fault for 8 ibid, art 195. 9 ibid, art 193, para 2. 10 ibid, art 200, para 1. 11 Explanations No. 1, art 124. 12 CMC 1992, art 196. 13 Shanghai Kaiyuan Shipping Co Ltd and Others v Dalian Guorun Ship Agency Co Ltd and Another (2014) Hu Hai Fa Shang Chu Zi No. 753 (Shanghai Maritime Court); (2016) Hu Min Zhong 38 (Shanghai High People’s Court) (CA). 14 Pingan Property Insurance Co Ltd Beijing Branch v Front Saga Inc (2015) Yong Hai Fa Shou Chu Zi No. 5 (Ningbo Maritime Court); (2015) Zhe Min Shou Zhong Zi No. 7 (Zhejiang High People’s Court) (CA). The claimant applied for stay of proceedings but was rejected. 15 It is required that, when a lawsuit is brought, there must be specific claim or claims, facts, and cause or causes for the suit. See the Civil Procedure Law 2012, art 191 (3). 16 See para 13.10. In shipping practice, the carrier always requires security according to the terms of bills of lading. E.g. Cosco Container Lines Bill of Lading (amended 24/8/2001) art 23 (1) provide that “the Merchant shall give such cash deposit or other security as the Carrier may deem sufficient to cover the estimated General Average contribution of the Goods before delivery.” 17 CMC 1992, art 197.

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which the carrier is liable, the cargo interests must first contribute to the general average. Cargo interests may then raise recourse actions against the carrier if the causation is later found between the carrier’s non-exempted fault and the general average.18 13.6 However, if it is clear that the fault of the carrier resulted in general average, the cargo interests are entitled to reject the contribution to general average. In Hainan Hulian Shipping Co Ltd v PICC Guangxi Branch and Guangxi International Cooperation Economics and Trade Co Ltd,19 the ship in dispute was towed to a safe port due to an unsolved problem in the main engine. The vessel was then towed again to the destination port because the main engine could not be obtained in the safe port. The shipowner as the carrier announced general average for the cost of the two instances of towage. The carrier, after the adjustment of general average, claimed against the cargo interests for the contribution of the towage cost as general average. The cargo interests argued that the second towage was unreasonable, which caused more extraordinary expenditure. The Beihai Maritime Court pointed out that the cargo interests had the burden to prove that the remuneration for the second towage was higher than the freight for the transhipment of the goods from the safe port to the port of destination. The carrier had the title to sue the cargo interests according to the general average clause on the reverse side of the bill of lading. However, it was found that the towages occurred due to the unseaworthiness of the ship and the carrier was not exempted from the liability for the unseaworthiness. Therefore, the carrier’s claim for contribution of the general average was dismissed. The amount of sacrifice and contribution 13.7 In the CMC 1992, the amounts of sacrifice of the ship, the goods and the freight are respectively determined as follows:20 (1)

(2)

The amount of sacrifice of the ship shall be calculated based on the actual repair costs of the ship, from which any reasonable deduction in respect of “new for old” can be made. Where the ship has not been repaired after the sacrifice, the amount of sacrifice is calculated on the basis of the reasonable reduced value of the ship after the general average sacrifice. This amount shall not exceed the estimated costs of repair. Where the ship is an actual total loss or where the cost of repair would exceed the value of the ship after the repair, the amount of sacrifice of the ship is calculated on the basis of the estimated sound value of the ship, less the estimated costs of repair not allowed as general average, as well as the value of the ship after the damage. The amount of sacrifice of the goods already lost shall be calculated on the basis of the value of the goods at the time of shipment plus insurance and freight, deducted from any freight not required to be paid due to the sacrifice. For damaged goods that have already been sold before an agreement was reached on the extent of the damage sustained, the amount of sacrifice is calculated on the basis of the difference between the value of the goods at the time of shipment plus insurance and freight, and the net proceeds of the goods when sold.

18 Longkou Sitong Shipping Co Ltd v Huatai P & C Insurance Hebei Branch (2013) Jin Hai Fa Shang Chu Zi No. 614 (Tianjin Maritime Court). 19 (2000) Hai Shang Chu Zi No. 054 (Beihai Maritime Court). 20 CMC 1992, art 198.

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(3)

The amount of sacrifice of the freight shall be calculated on the basis of the amount of loss of freight on account of the sacrifice of the goods, minus the operating expenses that ought to be paid in order to earn such freight but need not be paid because of the sacrifice.

13.8 Where the value of the goods has been improperly declared at a value below its actual value, the contribution to general average shall be made on the basis of their actual value and, where a general average sacrifice has occurred, the amount of sacrifice shall be calculated on the basis of the declared value.21 Furthermore, any interest shall be allowed for general average sacrifice and general average expenses paid on account. A commission shall be allowed for the general average expenses paid on account, except those for the wages and maintenance of the crew and fuel and store consumed.22 13.9 The contribution to general average shall be made in proportion to the contributory values of the respective beneficiaries. The contributory value in general average by the ship, goods and freight shall be determined as follows:23 (1)

(2)

(3)

The contributory value of the ship shall be calculated on the basis of the sound value of the ship at the place where the voyage ends, minus any damage that does not come under general average sacrifice. Alternatively, calculation can be made based on the actual value of the ship at the place where the voyage ends, plus the amount of general average sacrifice. The contributory value of the goods shall be calculated on the basis of the value of the goods at the time of shipment plus insurance and freight, minus the damage that does not come under the general average sacrifice and the carrier’s freight at risk. Where the goods have been sold before its arrival at the port of destination, its value for contribution shall be the net proceeds plus the amount of general average sacrifice. Passenger’s luggage and personal belongings are not included in the value for contribution. The contributory value of freight shall be calculated on the basis of the amount of freight at the risk of the carrier and that the carrier is entitled to collect at the end of the voyage, less any expense incurred for the prosecution of the voyage after the general average, in order to earn freight, plus the amount of general average sacrifice.

13.10 The contributing parties shall provide security for general average contribution at the request of the parties that have an interest therein. Where the security has been provided in the form of cash deposits, such deposits shall be put in a bank by an average adjuster in the name of a trustee. Nevertheless, the provision, use and refund of the deposits shall be without prejudice to the ultimate liability of the contributing parties.24 General average adjustment 13.11 The adjustment of general average shall be governed by the average adjustment rules agreed upon in the relevant contract. In the absence of such an agreement in the 21 22 23 24

ibid, art 200, para 2. ibid, art 201. ibid, art 199. ibid, art 202.

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contract, the relevant provisions regarding general average in the CMC 1992 shall apply.25 In shipping practice, it is very common that bills of lading will provide a general average clause adopting a certain adjustment rule for general average. For example, Cosco Container Lines Bill of Lading (amended 24 August 2001) provides that “General Average shall be adjusted at any port or place at the Carrier’s option according to the York-Antwerp Rules 1974, as amended in 1990, and any other amendments thereto.”26 Aside from the popular York-Antwerp Rules 1974, the China Council for the Promotion of International Trade provides Provisional Rules for General Average Adjustment 1975 (known as the “Beijing Rules for Adjustment”). 13.12 The contents of the Beijing Rules are similar to those of the York-Antwerp Rules 1974 except one outstanding difference. According to the principle of adjusting general average of the Beijing Rules, if the event giving rise to a claim submitted for adjustment as general average is due to the fault of one of the parties to the contract of carriage, for which he is not entitled to exemption from liability, no general average adjustment shall be proceeded with.27 This principle is different from relevant rules in both the York-Antwerp Rules and the CMC 1992.28 The problem with this principle in the Beijing Rules is how the adjustor decides whether general average is due to the fault of one of the parties to the contract of carriage before the adjustment of the general average. It should be the judge or the arbitrator, and not the adjustor of general average who decides the issues of fault and exemption of liability of the parties. In fact, as a matter of general practice in instances of general average, the adjustor under the Beijing Rules always proceeds with the normal adjustment of general average, and leaves the issues of fault and exemption of liability to be solved through other means. 13.13 The Beijing Rules provide a time limit for general average. All parties shall, upon the occurrence of the accident giving rise to general average, do everything necessary in time and declare general average and provide the Department for Average Adjustment29 with relevant materials within the following time limits:30 1. 2.

Declaration of general average Within 48 hours upon the ship’s arrival in the first port after the accident, if it has occurred at sea, or within 48 hours after the accident, if it has occurred in a port. Provision of relevant materials For documentary evidence pertaining to the occurrence of general average and general average loss or damage, within one month after receipt thereof by the claiming party, but all materials shall in any case be provided within one year of the completion of the voyage.

In case of extraordinary circumstances, the above time limits may be appropriately extended, provided a reason for extension has been given within the respective time limits to the Department for Average Adjustment and its approval obtained. In case of failure to 25 ibid, art 203. 26 Clause 23 (1) of COSCO Container Lines Bill of Lading. 27 Beijing Rules for Adjustment, art 2, para 3. However, the case may be otherwise appropriately dealt with through consultation according to the circumstances involved. 28 See Rule D of York-Antwerp Rules 1974, 1994 and 2004, and art 197 of the CMC 1992. 29 This is a department under China Council for the Promotion of International Trade. 30 Beijing Rules for Adjustment, art 7.

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observe the above stipulations on the part of any of the parties concerned, the Department for Average Adjustment may either decline to proceed with adjustment or adjust the case on the basis of the materials in its possession. 13.14 The Beijing Rules are also intended to simplify the process of the adjustment of general average. With a view to lightening the burden of all parties concerned and improving working efficiency, the adjustment of general average is made as simple as possible; unduly complicated procedures and calculations are to be avoided; the adjustment should be made as clear and concise as possible and should be easy to execute. Summary adjustment may be applied in simple cases. For cases in which the amount involved is small, adjustment may be dispensed with if consent has been obtained from the principal parties concerned.31

31 ibid, art 8.

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CHAPTER 14

Limitation of liability for maritime claims

14.1 The draft of the provisions regarding the limitation of liability for maritime claims in the CMC 1992 heavily relied upon the Convention on Limitation of Liability for Maritime Claims, 1976 (LLMC 1976). Although China has not acceded to nor ratified the LLMC 1976, the maritime claims for limitation of liability and the amount of limitation are similar in both the CMC 1992 and the LLMC 1976.1 The main differences between the relevant provisions in the CMC 1992 and the LLMC 1976 are the application to various types of ships for limitation purposes and the jurisdiction of the limitation fund.2 The limitation of liability for ships with a gross tonnage not exceeding 300 tons and those engaging in transport services between the ports of the PRC as well as those for other coastal works is not governed by the CMC 1992, but instead by administrative regulations. The limitation of liability in respect of claims for loss of life or personal injury to passengers carried by sea is also governed by administrative regulations. Scope of application Ships 14.2 A ship involved in maritime claims subject to limitation of liability in the CMC 1992 must be a real ship, not a ship under construction or a ship in trial operation.3 The limitation of liability in the CMC 1992 does not apply to ships with a gross tonnage not exceeding 300 tons and those engaging in transport services between Chinese ports and ships for the carriage of passengers between the Chinese ports.4 Aside from these exceptions, there is no other special requirement or restriction on the ship for the purpose of the limitation of liability in the CMC 1992. If the general concept of the ship in the CMC 1992 applies,5 the limitation of liability in the CMC 1992 also applies to other mobile units if such units are not within those exceptions. In the LLMC 1976, the limitation of liability does not apply to

1 The amount of limitation of liability in the LLMC 1976 has been increased in the 1996 Protocol and the amendments to the 1996 Protocol. However, the CMC 1992 does not accordingly increase the amount of limitation. 2 For details of establishment of limitation fund, see Chapter xx. 3 China Shipping Industry (Jiangsu) Co Ltd v China Pacific Property Insurance Co Ltd Yangzhou Central Branch and China Pacific Property Insurance Co Ltd (2011) Hu Hai Fa Shang Chu Zi No. 1308 (Shanghai Maritime Court). 4 CMC 1992, art 210, para 4 and art 211, para 2. 5 ibid, art 3.

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floating platforms constructed for the purpose of exploring or exploiting natural resources on the seabed or the subsoil thereof.6 It seems that the LLMC 1976 does not apply to such floating platforms irrespective of their mobility. However, the limitation of liability in the CMC 1992 may apply to such floating platforms if they are not permanently located in one position, but in transit. Persons entitled to limit liability 14.3 Under the CMC 1992, shipowners and salvors may limit their liability according to the relevant provisions in the CMC 1992. The shipowner for the purposes of limitation of liability includes both the charterer and the operator of a ship.7 A charterer can include all types of charterers based on charterparties, including any voyage charter, time charter, bareboat charter and any other kind of charter.8 An operator can include a registered ship operator, or a person who, upon entrustment of the shipowner, actually uses and controls the ship and is responsible for the ship, but excludes the NVOCC,9 and the contractual carrier who is not the charterer or the operator.10 14.4 If the claims subject to limitation in the CMC 1992 are not made against shipowners or salvors themselves but against persons for whose act, neglect or default the shipowners or salvors are responsible, such persons may limit their liability in accordance with the relevant provisions of the CMC 1992.11 Furthermore, where the assured may limit his liability in accordance with the relevant provisions in the CMC 1992, the insurer liable for the maritime claims shall be entitled to the limitation of liability to the same extent as the assured.12 Maritime claims Claims subject to limitation 14.5 Apart from claims exempted from limitation in the CMC 1992, with respect to the following maritime claims, regardless of the basis for liability and the manner of how the claims are lodged, the person liable may limit his liability where:13 (1)

claims in respect of loss of life or personal injury or loss of or damage to property including damage to harbour works, basins and waterways and aids to navigation

6 LLMC 1976, art 15 (5). The LLMC 1976 also excludes the application to air-cushion vehicles. 7 CMC 1992, art 204. The shipowner in the LLMC 1976 also includes the manager of a seagoing ship: the LLMC 1976, art 1, para 2. 8 Huatai P & C Insurance Beijing Branch v COSCO Zhejiang International Freight Co Ltd Wenzhou Branch and Others (2010) Hu Hai Fa Shang Chu Zi No. 349 (Shanghai Maritime Court). 9 Certain Provisions of the Supreme People’s Court on Trying Cases Involving Disputes over the Limitation of Liability for Maritime Claims, Fa Shi [2010] No. 11, (Provisions on Limitation of Liability 2010), art 12. 10 Reply of the Supreme People’s Court on Request for Instructions on Application of Limitation of Liability in Zhaoyuan Linglong Batteries Co Ltd v Yantai Jiyang Container Transport Co Ltd [2002] Min Si Ta Zi No. 38 (SPC) (Reply). 11 CMC 1992, art 205. 12 ibid, art 206. 13 ibid, art 207, para 1.

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(2) (3) (4)

occurring on board or in direct connection with the operation of the ship or with salvage operations, as well as consequential damages resulting therefrom;14 claims in respect of losses resulting from delay in delivery in the carriage of goods by sea or from delay in the arrival of passengers or their luggage; claims in respect of other losses resulting from infringement of rights other than contractual rights occurring in direct connection with the operation of the ship or salvage operations;15 claims of a person other than the person liable in respect of measures taken to avert or minimise loss for which the person liable may limit his liability in accordance with the provisions of this chapter, and further loss caused by such measures.

However, with respect to the remuneration set out in sub-paragraph (4) for which the person liable pays as agreed upon in the contract, in relation to the obligation for payment, the person liable may not invoke the provisions on the limitation of liability under the CMC 1992.16 14.6 It must be noted that the shipowners’ or the salvors’ limitation of liability is different from the carrier’s limitation of liability in the context of carriage of goods by sea, although the two limitations of liability may occur concurrently in some special circumstances. The shipowner may be entitled to both limits only when the cargo claims are brought for the delay in delivery of goods against the shipowner as the carrier. In such circumstances, where the shipowner as the carrier faces more than one cargo interest as claimant, the shipowner may limit its liability for the economic losses resulting from delay in delivery of the goods to an amount equivalent to the freight payable for the goods so delayed respectively.17 Meanwhile, the shipowner may limit its liability in the subparagraph (2) for the loss resulting from delay in delivery in the aggregation of claims. 14.7 In the cargo claims, a shipowner as a carrier may be entitled to limit its liability for the loss of or damage to the goods based on the package or other shipping unit, or the gross weight of the goods lost or damaged in kilograms.18 However, the shipowner as the carrier shall not be entitled to limit liability under sub-paragraph (3) because the maritime claim subject to the shipowner’s limitation of liability must be from claims resulting from the infringement of rights other than contractual rights. Obviously, the loss of or damage to the goods results from the infringement of contractual rights. Therefore, it would be wrong for a carrier to be entitled to the limits of liability in sub-paragraph (3) if the carrier is the shipowner of the ship in dispute.19

14 In Sinopec Sales Company Shanghai Petroleum Branch Luojing Tank Farm v Guangdong Renke Shipping Co Ltd (2014) Min Ti Zi No. 191 (SPC) (Retrial), the ship collided with the tank dock and caused damages. The shipowner was entitled to limit its liability for not only the direct damages to the dock but also the consequential damages including the cost of removal in the dock, the expense for watching at the accident scene and the shipping lane, and the marking cost. 15 The operation of the ship shall be the business operation. Therefore, the maritime claim subject to limitation of liability shall not apply to the trial operation of a ship. See China Shipping Industry (Jiangsu) Co Ltd v China Pacific Property Insurance Co Ltd Yangzhou Central Branch and China Pacific Property Insurance Co Ltd (2011) Hu Hai Fa Shang Chu Zi No. 1308 (Shanghai Maritime Court). In this case, the ship in dispute had not obtained the certificate of registration and the license of business. 16 CMC 1992, art 207, para 2. 17 ibid, art 57. 18 ibid, art 56. 19 China Pacific Property Insurance Co Ltd v COSCO Shipping Co Ltd (2011) Min Ti Zi No. 12 (SPC) (Retrial).

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14.8 Aside from the same maritime claims subject to limitation in the CMC 1992, the maritime claims subject to limitation in the LLMC 1976 also include claims in respect of the raising, removal, destruction or the rendering harmless of a ship that has sunk, has been wrecked, stranded or abandoned, and includes anything that is or has been on board such ship, and claims in respect of the removal, destruction or the rendering harmless of the cargo of the ship. However, the two types of claims shall not be subject to limitation of liability to the extent that they relate to remuneration under a contract with the person liable.20 However, any State may, at the time of signature, ratification, acceptance, approval or accession, reserve the right to exclude the application of the two types of maritime claims subject to limitation.21 The CMC 1992 does not include the two types of maritime claims subject to the limitation of liability and the SPC’s judicial interpretations exclude them.22 14.9 However, where a person liable is claimed against in one of the two types of maritime claims due to collision between ships, but seeks the recovery of compensation against the other ship in relation to any relevant loss, the person related to the other ship is entitled to the limitation of liability for the compensation.23 Therefore, although a person liable is not entitled to limit its liability in a maritime claim for the cost of the compulsory removal of shipwreck under the CMC 1992,24 the other party who is liable for compensation requested by the person liable due to the collision of the ships is however entitled to limit its own liability for compensation.25 Claims excepted from limitation 14.10 The limitation of liability shall not apply to:26 (1) (2) (3) (4) (5)

claims for salvage payment or contribution in general average; claims for oil pollution damage under the International Convention on Civil Liability for Oil Pollution Damage to which the PRC is a party;27 claims for nuclear damage under the International Convention on Limitation of Liability for Nuclear Damage to which the PRC is a party;28 claims against the shipowner of a nuclear ship for nuclear damage; claims by the servants of the shipowner or salvor, if under the law governing the contract of employment, the shipowner or salvor is not entitled to limit his liability or if he is by such law only permitted to limit his liability to an amount greater than that provided for in the CMC 1992.

20 LLMC 1976, art 2. 21 ibid, art 18, para 1. 22 Provisions on Limitation of Liability 2010, art 17, para 1. 23 ibid, art 17, para 2. 24 Explanations concerning Practical Issues in Foreign Related Commercial and Maritime Trails No. 1, 2004 (Explanations No. 1 2004), art 139. 25 Zhejiang Longyu Shipping Co Ltd v Nanjing Shunjin Shipping Co Ltd (2014) Min Shen Zi No. 2132 (SPC) (Retrial). 26 CMC 1992, art 208. 27 China is a State party to the Protocol of 1992 to amend the International Convention on Civil Liability for Oil Pollution Damage 1969. 28 China is not a State party to Convention relating to Civil Liability in the Field of Maritime Carriage of Nuclear Material 1971.

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Limits of liability The general limits 14.11 The limitation of liability for maritime claims, except the limits for passenger claims below, is calculated as follows:29 (1)

in respect of claims for loss of life or personal injury: (a) 333,000 units of account for a ship with a gross tonnage ranging from 300 to 500 tons;30 (b) for a ship with a gross tonnage in excess of 500 tons, the limitation under (a) above shall be applicable to the first 500 tons and the following amounts in addition to that set out under (a) shall be applicable to the gross tonnage in excess of 500 tons: for each ton from 501 to 3,000 tons: 500 units of account; for each ton from 3,001 to 30,000 tons: 333 units of account; for each ton from 30,001 to 70,000 tons: 250 units of account; for each ton in excess of 70,000 tons: 167 units of account;

(2)

in respect of claims other than for loss of life or personal injury: (a) 167,000 units of account for a ship with a gross tonnage ranging from 300 to 500 tons;31 (b) for a ship with a gross tonnage in excess of 500 tons, the limitation under (a) above shall be applicable to the first 500 tons, and the following amounts in addition to that under (a) shall be applicable to the part in excess of 500 tons: for each ton from 501 to 30,000 tons: 167 units of account; for each ton from 30,001 to 70,000 tons: 125 units of account; for each ton in excess of 70,000 tons: 83 units of account.

(3)

(4)

(5)

Where the amount calculated in accordance with sub-paragraph (1) above is insufficient for payment of claims for loss of life or personal injury set out therein in full, the amount calculated in accordance with sub-paragraph (2) shall be available for payment of the unpaid balance of claims under sub-paragraph (1), and such unpaid balance shall rank rateably with claims set out under sub-paragraph (2). However, without prejudice to the right of claims for loss of life or personal injury under sub-paragraph (3), claims in respect of damage to harbour works, basins and waterways and aids to navigation shall have priority over other claims under sub-paragraph (2). The limitation of liability for any salvor not operating from any ship or for any salvor operating solely on the ship to, or in respect of which, he is rendering salvage services, shall be calculated according to a gross tonnage of 1,500 tons.

29 CMC 1992, art 210, para 1. 30 Article 6, para 1 (a) (i) of the LLMC 1976 provides “333,000 Units of Account for a ship with a tonnage not exceeding 500 tons”. 31 Article 6, para 1 (b) (i) of the LLMC 1976 provides “167,000 Units of Account for a ship with a tonnage not exceeding 500 tons”.

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14.12 For the purpose of the LLMC 1976 the ship’s tonnage shall be the gross tonnage calculated in accordance with the tonnage measurement rules contained in Annex I of the International Convention on Tonnage Measurement of Ships, 1969 (TONNAGE).32 China is a contracting State of the TONNAGE, therefore the ship’s tonnage for the limitation of liability in the CMC 1992 is also the gross tonnage calculated under the TONNAGE. 14.13 If the claims are for both the loss of life or personal injury and the loss of or damage to properties, and both parties are to be blamed, a question in judicial practice is how to set off the losses in the claims for the purpose of limitation of liability. One method is to set off the loss of life or personal injury and the loss of or damage to properties of the two parties respectively and then combine the two types of loss for the limitation of liability. The other is to aggregate the total losses of the two types of loss of the two parties and then set them off for the limitation of liability. Chinese judicial practice adopts the first method.33 Because the nature of the limitation of liability for the loss of life or personal injury and the loss of or damage to properties are different and the limits of the two types of liability are different, it is appropriate to set off the amount of the two types of loss separately and apply the different limitations of liability for the two types of loss respectively. The special limits 14.14 The limitation of liability in respect of the ships with a gross tonnage exceeding 20 tons but not exceeding 300 tons, and those with a gross tonnage exceeding 300 tons engaging in the carriage of goods between the ports of the PRC or in other coastal operations is governed by the Provisions Concerning Limitation of Liability for Maritime Claims for Ships with a Gross Tonnage not exceeding 300 Tons and Those for Coastal Transport Services or for Other Coastal Operations, 1993.34 A ship “engaging in the carriage of goods between the ports of the PRC or in other coastal operations” means any ship engaging in coastal carriage or operations when an accident occurs.35 14.15 The limitation of liability for maritime claims for ships with a gross tonnage not exceeding 300 tons, except the limitation of liability for maritime claims for a ship with a gross tonnage not exceeding 300 tons engaging in the carriage of goods between Chinese ports or in other coastal operations, is calculated as follows:36 (1)

in respect of claims for loss of life or personal injury: (a) 54,000 units of account for a ship with a gross tonnage in excess of 20 tons and less than 21 tons; (b) for a ship with a gross tonnage in excess of 21 tons, 1000 units of account shall be added for each ton in excess of 21 tons.

32 LLMC 1976, art 6, para 5. 33 Rickmers Genoa Schiffahrtsgesellschaft mbH & Cie KG and Rickmers-Linie GmbH & Cie KG v CS Marine Co Ltd (2009) Hu Gao Min Si (Hai) Zhong Zi No. 239 (Shanghai High People’s Court) (CA). 34 (1993) Order No. 5 of the Ministry of Communications of the PRC. There is no limitation of liability in respect of the ships with a gross tonnage not exceeding 20 tons. 35 Re Limitation Fund Establishment on the Application of SIPG Fuxing Shipping Service Co Ltd (2014) Yue Gao Fa Min Si Xian Zhong Zi No. 1 (Guangdong High People’s Court) (CA). 36 Provisions Concerning Limitation of Liability for Maritime Claims for Ships with a Gross Tonnage not exceeding 300 Tons and Those for Coastal Transport Services or for Other Coastal Operations 1993, art 3.

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(2)

in respect of claims other than that for loss of life or personal injury: (a) 27,500 units of account for a ship with a gross tonnage in excess of 20 tons and less than 21 tons; (b) for a ship with a gross tonnage in excess of 21 tons, 500 units of account shall be added for each ton in excess of 21 tons.

14.16 The limitation of liability for maritime claims for a ship with a gross tonnage not exceeding 300 tons engaging in the carriage of goods between the ports of the People’s Republic of China or in other coastal operations is calculated on the basis of 50 per cent of the limitation amount specified in article 3 of the Provisions, and for ships with a gross tonnage exceeding 300 tons is calculated on the basis of 50 per cent of the general limitation of liability in the CMC 1992.37 Regarding the limitation of liability for maritime claims, the general limits in the CMC 1992 or the special limits that apply to one of the ships in an accident also apply to the other ships in the same accident.38 The limits for passenger claims 14.17 In respect of claims for loss of life or personal injury to passengers carried by sea, the limitation of liability of the shipowner thereof shall be an amount of 46,666 units of account multiplied by the number of passengers that the ship is authorised to carry according to the ship’s relevant certificate, but the maximum amount of compensation shall not exceed 25,000,000 units of account.39 14.18 The special limitation of liability for claims for loss of life or personal injury to passengers carried by sea between the ports of the PRC is governed by the Provisions Concerning Limitation of Liability with Respect to Carriage of Passengers by Sea between Ports of the People’s Republic of China 1993.40 In respect of claims for loss of life or personal injury to passengers carried by sea, the limitation of liability shall be an amount of RMB 40,000 multiplied by the number of passengers that the ship is authorised to carry according to the ship’s certificate, but the maximum amount of compensation shall not exceed RMB 21,000,000.41 Aggregation of claims 14.19 The limitation of liability under the CMC 1992 shall apply to the aggregate of all claims that may arise on any distinct occasion against shipowners and salvors themselves, and any person for whose act, neglect or fault the shipowners and the salvors are responsible.42 A distinct occasion for the aggregation of claims means an occasion or occasions caused by the same reason in a specified place at a specified time. If the occasions are caused

37 ibid, art 4. 38 ibid, art 5. 39 CMC 1992, art 211. 40 (1993) Order No. 6 of the Ministry of Communications of the PRC. 41 Provisions Concerning Limitation of Liability with Respect to Carriage of Passengers by Sea between Ports of the People’s Republic of China 1993, art 4. 42 CMC 1992, art 212.

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by different reasons or occur without the same causation, those occasions are considered as different occasions and the person liable shall be able to separately limit the liabilities.43 14.20 Where a person entitled to limitation of liability under the CMC 1992 has a counterclaim against the claimant arising out of the same occurrence, their respective claims shall be set off against each other and the provisions regarding the limitation of liability in the CMC 1992 shall only apply to the balance, if any.44 Since the shipowners and salvors entitled to limit liability under the CMC 1992 actually include persons other than the shipowner and the salvors, the aggregation of claims covers a wider scope of persons liable for the maritime claims. If, for the same occurrence, the shipowner already partially makes compensation for the losses caused, the partial compensation shall be deducted from the amount of the limitation of liability in a separate claim against the liable charterer.45 Loss of limitation of liability 14.21 A person liable shall not be entitled to limit his liability in accordance with the provisions of this chapter, if it is proved that the loss resulted from his act or omission was done with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result.46 In PICC P&C Co Ltd Shantou Branch v Fujian Pingtan Quanxing Shipping Co Ltd and Wuxian,47 the manpower was insufficient on board the ship, which made the ship unseaworthy. It was believed that the defendant as the owner and the operator of the ship knew of the insufficient manpower but operated the ship recklessly and with knowledge that losses caused by unseaworthiness would probably result. Therefore, the Xiamen Maritime Court held that the shipowner was not entitled to limit his liability in the maritime claim.48 However, unseaworthiness may not deprive the shipowner of the limitation of liability if the shipowner’s intention or negligence is not proved.49 14.22 In judicial practice, proof of the crews’ intention or negligence will not be considered as the intention or negligence of the shipowner for the purpose of the limitation of liability. In Zhoushan Tongtu Engineering Co Ltd v Dandong Jixiang Shipping Co Ltd and Dandong Marine Shipping Co Ltd,50 the ships collided because of the dragging anchor due to the fault of the master of one of the ships. The Ningbo Maritime Court pointed out that the fault of the master should not be considered as the fault of the shipowner. Even if the loss resulted from the master’s act or omission done with the intent or recklessness to cause such loss, and with knowledge that such loss would probably result, it should not affect the shipowner’s entitlement to the limitation of liability. In Jiangsu CNPC & TAFO Corp v Xinpengcheng Shipping (S) Pte Ltd,51 the SPC clarified that, for the purpose of the 43 Explanations No. 1 2004, art 181. 44 CMC 1992, art 215. 45 Huatai P & C Insurance Beijing Branch v COSCO Zhejiang International Freight Co Ltd Wenzhou Branch and Others (2010) Hu Hai Fa Shang Chu Zi No. 349 (Shanghai Maritime Court). 46 CMC 1992, art 209. 47 (2005) Xia Hai Fa Shang Chu Zi No. 3 (Xiamen Maritime Court). 48 It was upheld by Fujian High People’s Court (2005) Min Min Zhong Zi No. 342 (Fujian High People’s Court) (CA). 49 Shanghai Xinda Machinery Co., Ltd v SIPG Fuxing Shipping Service Co Ltd (2010) Hu Hai Fa Shang Chu Zi No. 1221 (Shanghai Maritime Court). 50 (2001) Yong Hai Shi Chu Zi No. 109 (Ningbo Maritime Court). 51 (2014) Min Shen Zi No. 1777 (SPC) (Retrial).

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limitation of liability in the CMC 1992, a person liable means the liable person himself, not others. When the master of the ship was blamed for the loss that resulted from his act or omission done with the intent or recklessness to cause such loss, with knowledge that such loss would probably result, the master was the person actually liable. However, the shipowner was not the liable person and was still entitled to limit his liability for such loss when he was claimed against in the maritime claim. Limitation fund 14.23 Any person liable claiming the limitation of liability under the CMC 1992 may constitute a limitation fund with a court having jurisdiction. The fund shall be constituted in the sum of such an amount set out in the CMC 1992, together with the interest thereon from the date of the occurrence giving rise to the liability until the date of the constitution of the fund.52 Where a limitation fund has been constituted by a person liable, any person having made a claim against the person liable may not exercise any right against any assets of the person liable. Where any ship or other property belonging to the person constituting the fund has been arrested or attached, or, where a security has been provided by such person, the court shall without delay order the release of the ship arrested or the property attached or the return of the security provided.53 14.24 If a liable person does not apply for the constitution of the limitation fund for maritime claims, his right of defence of limitation of liability in respect of a maritime claim in the CMC 1992 is not affected.54 However, if a liable person does not raise the defence of the limitation of liability for maritime claims, the maritime court shall not render a ruling by applying the provisions of the CMC 1992 regarding the limitation of liability for maritime claims.55 Furthermore, if a liable person did not raise the defence of limitation of liability for maritime claims before the first instance decision was rendered, but raises such defence in the second instance or during the retrial, such defence cannot be supported.56

52 53 54 55 56

CMC 1992, art 213. ibid, art 214. Provisions on Limitation of Liability 2010, art 13. ibid, art 14. ibid, art 15.

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CHAPTER 15

Marine insurance

15.1 Marine insurance in China is mainly governed by the CMC 1992. For matters not covered by the CMC 1992, the Insurance Law 1995 as amended in 2002, 2009, 2014 and 2015 applies (Insurance Law 2015).1 Besides the law, the practice of marine insurance also follows the Provisions of the Supreme People’s Court on Several Issues on the Trial of Cases Concerning Marine Insurance Disputes 2006 (Provisions on Marine Insurance 2006).2 In the practice of maritime insurance, if there is no such provision in the CMC 1992 and the Insurance Law 2015, the relevant legal provisions in the Contract Law 1999 apply.3 For example, the Insurance Law 2015 applies to disputes over marine insurance contracts with port facilities or docks as insurance objects that do not result from marine accidents.4 In other words, the CMC 1992 shall apply to cases in which the insurer exercises the right of subrogation due to an insurance accident arising out of the collision between ships and port facilities or docks.5 15.2 Protection and indemnity insurance, commonly known as P&I insurance, is a form of mutual maritime insurance provided by P&I Clubs, e.g. China Shipowners Mutual Assurance Association and China Fishing Vessels Owners Mutual Insurance Association.6 A P&I insurance contract, evidenced by the membership certificate and the club rules, is a valid insurance contract.7 However, unlike marine insurers that usually are for-profit companies, P&I Clubs are non-profit associations of members, e.g. shipowners.8 Therefore, the P&I insurance contract between China Shipowners Mutual Assurance Association and its members is not considered as a commercial contract of insurance, and the Contract Law 1999 rather than the Insurance Law 2015 applies to the P&I insurance contract.9 This rule

1 Insurance Law 2015, art 184. 2 Fa Shi [2006] 10 (SPC). 3 Provisions on Marine Insurance 2006, art 1. 4 ibid, art 2. 5 ibid, art 3. 6 China Shipowners Mutual Assurance Association provides services including P&I cover, marine hull cover, FD&D cover and loss prevention service. 7 China Shipowners Mutual Assurance Association v China Marine Bunker Supply Qingdao Co Ltd (2002) Qing Hai Fa Shang Chu Zi No. 96 (Qingdao Maritime Court). 8 P&I Club members include shipowners, charterers and ship manager or operators. Some Clubs have freight forwarders and warehouse operators as members. 9 Reply of the Supreme People’s Court on Request for Instructions on the Application of Law in Appeal of Marine Insurance Contract Case in China Shipowners Mutual Assurance Association v Nanjing Hongyou Shipping Co Ltd [2003] Min Si Ta Zi No. 34 (SPC) (Reply).

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of applicable law applies to the P&I insurance contract between China Fishing Vessels Owners Mutual Insurance Association and its members.10 Although the CMC 1992 and the Insurance Law 2015 do not apply to the P&I insurance contract, the SMPL 1999 applies to the P&I Clubs’ claim for indemnity against the third party by exercising the right of subrogation.11 Marine insurance contract 15.3 Under the CMC 1992, a contract of marine insurance is a contract whereby the insurer undertakes, as agreed, to indemnify the loss of the subject-matter insured and the liability of the assured caused by perils covered by the insurance against the payment of an insurance premium by the assured.12 In the conclusion of a marine insurance contract, the assured provides a proposal for insurance, and the insurer will decide whether or not to accept the proposal. A contract of marine insurance is concluded when the insurer and the assured agree on the terms and conditions of the insurance. After the conclusion of the marine insurance contract, the insurer issues an insurance policy or other certificate of insurance to the assured in time and the contents of the contract are contained therein.13 If there is no agreement of marine insurance, even if the insurer arranges for an examination, assesses the loss and supervises the consequential works after the occurrence of accident, it cannot be presumed that a contract of marine insurance has been concluded.14 Perils 15.4 The covered perils under the CMC 1992 mean any maritime perils agreed upon between the insurer and the assured, including perils occurring in inland waters or on land that is related to a maritime peril.15 In other words, the CMC 1992 may apply to the marine insurance for carriage of goods by inland waters, even if it does not apply directly to only the carriage of goods by inland waters.16 The subject-matter insured includes but is not limited to, the ship, cargo, income from the operation of the ship including freight, charter hire and passenger’s fare, expected profit on cargo, crew’s wages and other remuneration, liabilities to a third person and other property that may sustain loss from a maritime peril, and the liability and expenses arising therefrom. The insurer may reinsure the insurance of the subject-matter. Unless otherwise agreed by contract, the original assured is not entitled to the benefit of the reinsurance.17

10 Lin Yawei v China Fishing Vessels Owners Mutual Insurance Association (2005) Hai Shang Chu Zi No. 108 (Beihai Maritime Court); (2006) Gui Min Si Zhong Zi No. 5 (Guangxi High People’s Court) (CA). 11 China Fishing Vessels Owners Mutual Insurance Association v Lin Yawei and Another (2005) Hai Shi Chu Zi No. 034 (Beihai Maritime Court). 12 CMC 1992, art 216, para 1. 13 ibid, art 221. 14 China Grains & Oils Group Shanghai Co Ltd v PICC P&C Co Ltd Dalian Branch and PICC P&C Co Ltd Dalian Ganjingzi Branch (2014) Min Shen Zi No. 568 (SPC) (Retrial). 15 CMC 1992, art 216, para 2. 16 Contract Law 1999 applies to the carriage of goods by inland waters in China. 17 CMC 1992, art 218.

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Insurable value and insured amount 15.5 The insurable value of the subject-matter insured shall be agreed upon between the insurer and the assured. Where no insurable value has been agreed, the insurable value shall be calculated as follows:18 (1)

(2) (3) (4)

The insurable value of the ship shall be the value of the ship at the time when the insurance liability commences, being the total value of the ship’s hull, machinery, equipment, fuel, stores, gear, provisions and fresh water on board as well as the insurance premium. The insurable value of the cargo shall be the aggregate of the invoice value of the cargo or the actual value of the non-trade commodity at the place of shipment, plus freight and insurance premium when the insurance liability commences. The insurable value of the freight shall be the aggregate of the total amount of freight payable to the carrier and the insurance premium when the insurance liability commences. The insurable value of other subject-matter insured shall be the aggregate of the actual value of the subject-matter insured and the insurance premium when the insurance liability commences.

The insured amount shall be agreed upon between the insurer and the assured. The insured amount shall not exceed the insured value. Where the insured amount exceeds the insured value, the portion in excess is null and void.19 Freight 15.6 Unless otherwise agreed in the insurance contract, the assured shall pay the premium immediately upon conclusion of the contract. The insurer may refuse to issue the insurance policy or other insurance certificate before the premium is paid by the assured.20 It is commonly agreed in marine insurance practice that the insurer is not liable under insurance for any loss occurs before the payment of insurance premium if the assured fails to pay the premium according to the insurance contract. In Rizhao Deyun Logistics Co Ltd v Taiping General Insurance Co Ltd Shandong Branch,21 the insurance contract contained such a common agreement and the assured failed to pay the premium before the insured accident occurred. The Xiamen Maritime Court held that the insurer was discharged from liability under insurance if such a common agreement had been informed to the assured. 15.7 Where the assured fails to pay the premiums to the insurer although the assured agrees to pay the premium immediately upon conclusion of the contract, the insurer has the right to rescind the insurance contract before the insurance liability begins, unless the insurer has already issued insurance documents. However, the insurer is not entitled to rescind the insurance contract after the insurance liability begins,22 unless the parties

18 19 20 21 22

ibid, art 219. ibid, art 220. ibid, art 234. (2016) Min 72 Min Chu 13 (Xiamen Maritime Court). Provisions on Marine Insurance 2006, art 5.

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otherwise agreed. In Hong Kong Jinxi Shipping Ltd v China Continent Property & Casualty Insurance Co Ltd Ningbo Branch,23 it was agreed that the ship insurance contract was terminated when the insurance premium became overdue. Because the assured failed on the second instalment of the premium, the insurer refused to indemnify the loss of the ship due to an accident occurred after the termination of the contract. The Ningbo Maritime Court held that the insurer was entitled to terminate the insurance contract according to freedom of contract. In other words, unless otherwise agreed, the assured is entitled to be indemnified by the insurer although he is still liable for the payment of the premium to the insurer.24 15.8 In case neither the insurer nor the assured knows that the subject-matter insured has suffered any loss under the insurance coverage when the insurance contract is concluded, or the subject-matter insured could not suffer any loss under the insurance coverage, the effectiveness of the insurance contract is not affected.25 Therefore, the assured is still liable for the payment of premium. However, where the assured was aware or ought to be aware that the subject-matter insured had suffered a loss due to the incidence of a peril insured against when the contract was concluded, the insurer shall not be liable for indemnity but is entitled to the premium. Where the insurer was aware or ought to be aware that the occurrence of a loss of the subject-matter insured due to a peril insured against was impossible, the assured shall have the right to recover the premium paid.26 Double insurance 15.9 Double insurance in the Insurance Law 2015 means such insurance wherein a policy holder enters into separate insurance contracts with two or more insurers on the same subject insured, the same insurable interests and the same insured incident and the total insured amount exceeds the insurable value. In the event of double insurance, a policy holder shall notify all insurers concerned of relevant information with respect to such double insurance.27 Under the CMC 1992, where the assured concludes contracts with more than one insurer for the same subject-matter insured on the same risk, and the sums insured exceed the insurable value, the assured is said to be over-insured by double insurance.28 15.10 In the event of double insurance of marine insurance, unless the insurance contract otherwise provides, the assured may claim payment from any of the insurers, provided that the aggregate amount to be indemnified shall not exceed the value of loss of the subject-matter insured.29 The CMC 1992 does not provide for the legal consequences if the assured receives any sum in excess of the loss value of the subject-matter insured. It is believed that the insurers are entitled to recover the exceeding amount according

23 (2009) Yong Hai Fa Shang Chu Zi No. 276 (Ningbo Maritime Court). 24 Tavorn Rubber Industry (1982) Co Ltd v China Pacific Insurance Co Ltd Guangzhou Branch (2000) Guang Hai Fa Chong Zi No. 1 (Guangzhou Maritime Court). 25 Provisions on Marine Insurance 2006, art 10. 26 CMC 1992, art 224. 27 Insurance Law 2015, art 56. 28 CMC 1192, art 225. 29 ibid.

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to their right of contribution among themselves.30 The payment of each insurer shall be in proportion to the amount the insured has paid to the total of the amounts insured by all insurers. Any insurer who has paid in an amount more than his proportion shall have the right of recourse against those who have not paid in the amounts for which they are liable.31 Open cover 15.11 The assured may conclude an open cover with the insurer for the goods to be shipped or received in batches within a given period. The open cover should be evidenced by an open policy issued by the insurer.32 Apart from the open policy, the insurer shall, at the request of the assured, issue insurance certificates separately for the cargo shipped in batches according to the open cover. Where the contents of the insurance certificates differ from those of the open policy, the contents of the insurance certificates prevail.33 15.12 A question arose as to whether an assured had rights to sue under open cover. In Changchun Dacheng Corn Development Co Ltd v PICC P&C Co Ltd Jilin Branch,34 one of the legal issues was whether the open cover in dispute was a binding contract based on which the assured was entitled to sue the insurer for indemnity. The SPC pointed out that the open cover did not have the substantial content that a contract of marine insurance should otherwise have under the CMC 1992.35 Therefore, there was no legal obligation of indemnity on the insurer under the open cover, and the assured had no right to sue against the insurer based on the open cover.36 Of course, the assured has the rights of suit for claiming indemnity based on a separate policy for a specified shipment of goods under the open cover. 15.13 Under the CMC 1992, the assured shall notify the insurer immediately when he is aware that the cargo assured under the open cover has been shipped or has arrived. The notification should include the name of the carrying ship, the voyage, the value of the cargo and the insured amount.37 However, where the assured has become aware that an insurance accident has occurred on the goods shipped in batches according to an open policy but still informs the insurer to issue the relevant insurance documents as under normal conditions, the insurer may be exempted from liability for insurance indemnity unless otherwise specified by the contract.38

30 Cf UK Marine Insurance Act 1906, s 32 (2) (d). 31 CMC 1992, art 225. 32 ibid, art 231. 33 ibid, art 232. 34 (2001) Liao Jing Yi Zhong Zi No. 13 (Liaoning High People’s Court) (CA). 35 Article 217 of the CMC 1992 provides that a contract of marine insurance mainly includes name of the insurer, name of the assured, subject matter insured, insured value, insured amount, risks covered and exceptions, duration of insurance coverage and insurance premium. The open cover normally does not provide the details of insured value and insured amount of each shipment under the open cover. 36 Reply of the Supreme People’s Court on Dispute of Marine Insurance Contract in Changchun Dacheng Corn Development Co Ltd v PICC P&C Co Ltd Jilin Branch [2001] Min Si Ti Zi No. 25 (SPC) (Reply). 37 CMC 1992, art 233. 38 Minutes of the Second National Working Conference on the Trial of Foreign-Related Commercial and Maritime Cases, Fa Fa [2005] No. 26 (Minutes of the Second National Working Conference 2005), art 122.

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Assignment of insurance contract 15.14 Under the CMC 1992, a contract of marine insurance for the carriage of goods by sea may be assigned by the assured by endorsement or otherwise,39 and the rights and obligations under the contract are assigned accordingly. However, the assured and the assignee are jointly and severally liable for the payment of the premium if such premium remains unpaid up to the time of the assignment of the contract.40 The joint liability for the payment of the premium aims to protect the interests of insurers. A contract of marine insurance for the carriage of goods by sea may be assigned more than once and the final assignee obtains the rights of suit under the marine insurance contract.41 15.15 The assignment of a marine cargo insurance contract has no direct relationship with the assignment of goods carried by sea. In Hubei New Torch Science & Technology Co Ltd v Taiping General Insurance Co Ltd Xiangfan Central Branch,42 the assured claimed against the insurer for damage to the goods but was rejected. The insurer argued that the bill of lading had been assigned to the buyer and the goods insured had been delivered to the buyer as well and, therefore, the assured had no rights of suit under the marine insurance contract. This argument was accepted by the Wuhan Maritime Court but was rejected by the Hubei High People’s Court on appeal.43 In the retrial of this case, the SPC upheld the decision of the court of appeal and clarified that the marine cargo insurance was not assigned with certainty when the cargo insured under the insurance contract was assigned, but might be assigned by the assured by endorsement or otherwise separately. 15.16 Unlike the assignment of a marine cargo insurance contract, the consent of the insurer shall be obtained where the ship insurance contract is assigned as a consequence of the transfer of the ownership of the ship insured. In the absence of such consent, the contract is terminated from the time of the transfer of the ownership of the ship. Where the transfer takes place during a voyage, the contract is terminated when the voyage ends.44 It means that the assignment of the ship insurance contract is valid during the period of such a voyage. The assignee has the rights of suit for indemnity for that period under the ship insurance contract if he can provide the valid insurance policy and the contract of the assignment of insurance.45 Upon termination of the contract, the insurer shall refund the unexpired premium to the assured calculated from the date of the termination to the date of its expiry.46 Termination of insurance contract 15.17 Before the insurance commences, the assured may terminate the marine insurance contract but must pay the handling fee to the insurer, and the insurer shall refund 39 Delivery of a marine insurance contract to an assignee is also considered as a valid assignment of the marine insurance even if there is no endorsement on it. See Nipponkoa Insurance Co Ltd v Shanghai Puxin International Container Storage and Transportation Co Ltd and Shanghai Huahang International Transportation Co Ltd (2003) Hu Hai Fa Shang Chu Zi No. 473 (Shanghai Maritime Court). 40 CMC 1992, art 229. 41 Shaoxing Textile City Xingxing Knitting Co Ltd v Huatai Property Insurance Co Ltd Shaoxing Central Branch (2009) Hai Fa Shang Chu Zi No. 236 (Ningbo Maritime Court). 42 (2011) Min Shen Zi No. 1084 (SPC) (Retrial). 43 (2011) E Min Si Zhong Zi No. 1 (Hubei High People’s Court) (CA). 44 CMC 1992, art 230, para 1. 45 Provisions on Marine Insurance 2006, art 9. 46 CMC 1992, art 230, para 2.

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the premium. After commencement of the insurance, unless otherwise agreed in the contract, neither the insurer nor the assured is entitled to terminate the insurance contract. Where it is agreed that the insurance contract may be terminated after commencement, upon the request of the assured to terminate the contract, the insurer is entitled to the premium payable from the date of commencement to the date of termination of the contract and refund the remaining portion, and upon the request of the insurer to terminate the contract, the unexpired premium from the date of the termination of the contract to the date of the expiry of the period of insurance shall be refunded to the assured.48 Notwithstanding the rights of termination after commencement, the assured is not allowed to terminate the contracts for cargo insurance and voyage insurance of ship after commencement of insurance.49 47

Interpretation of contract clauses Literal rule 15.18 The principle of use in the interpretation of an insurance contract clause is the literal rule. Chinese judges interpret contract clauses according to the literal meaning of the words and clauses of the contract. According to the Insurance Law 2015, where the insurer and policy holder, assured or beneficiary have a dispute over a clause of an insurance contract concluded by using the standard clauses provided by the insurer, the clause is interpreted as commonly understood.50 In Wang Sanju v PICC P&C Co Ltd Zhaoqing Branch,51 the marine insurance coverage included the liability for damage to docks, port facility and navigation mark due to ships collision. The dispute in this case was whether the damaged observation room of the hydrologic station, approach bridge and observation apparatus were covered under “docks”. For interpretation purposes, the SPC examined the meaning of “dock” in authoritative dictionaries. 15.19 A “dock” in the Xinhua Dictionary in general use means a construction on water for ships to berth, load and unload, and passengers to embark and disembark. The “dock” in the professional Dictionary of Maritime Law means the constructions on water for ships to berth, load and unload, passengers to embark and disembark, and supply, inspection and quarantine of ships, including the matching warehouses, yards, handling facilities, roadways, railways, etc. The SPC in Wang Sanju v PICC P&C Co Ltd Zhaoqing Branch concluded that the dock means an architectural complex on water for ships and passengers including the matching facilities. The observation room of the hydrologic station, approach bridge and observation apparatus were hydrological monitoring facilities that were not for ships and passengers. Therefore, the damage to those hydrological monitoring facilities was not covered by the marine insurance.

47 48 49 50 51

ibid, art 226. ibid, art 227. ibid, art 228. Insurance Law 2015, art 30. (2015) Min Shen Zi No. 129 (SPC) (Retrial).

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Contra proferentem rule 15.20 It is common that insurers provide a standard contract for marine insurance in the Chinese market. According to the Insurance Law 2015, if there are two or more different interpretations of a standard clause in an insurance contract, the standard clause shall be interpreted in favour of the assured and beneficiary.52 This is the contra proferentem rule whereby the ambiguous standard clause in an insurance contract is interpreted against the insurer seeking to rely on it. In Huarun Dadong Dockyard Co Ltd v Pingan Property Insurance Co Ltd Shanghai Branch,53 because of the problem of paint coating, the ship’s bottom lost waterproof function and consequently the value of the ship insured depreciated. The dispute in this case was whether the painting problem was damage to the ship covered by marine insurance. The common understanding of damage is the depreciation of value due to the loss of function or effectiveness. The assured claimed that the damage to the ship included both the apparent damage to the ship and the damage that was not found temporarily but would appear eventually. However, the insurer argued that the damage to the ship meant physical and visible damage only. The Shanghai Maritime Court held that the term “damage” in the standard marine insurance contract should be interpreted in favour of the assured when there was an ambiguity about the meaning of the term. It was also pointed that the insurer should inform the assured before the conclusion of the insurance contract if he wanted to exclude his liability for any latent damage to the ship. 15.21 Chinese courts may rely on Chinese law and judicial interpretation to solve the problem of ambiguity of contract terms in marine insurance contracts. In Panama Floating Mountain Shipping Ltd SA v PICC P&C Co Ltd Qingdao Branch,54 the ship Floating Mountain, which was under the cover of all risks plus war risk, suffered damages caused by waves between Floating Mountain and another ship. The insurer refused to indemnify the damages and argued that such damages were not caused by collision and thus not covered. The general meaning of collision is a contact-based collision. However, the CMC 1992 provides that relevant provisions relating to ships collision apply to circumstances where a ship has caused damage to another ship and persons, goods or other property on board that ship, either by the execution or non-execution of a manoeuvre or by the non-observance of navigation regulations, even if no collision has actually occurred.55 The concept of ship collision in the SPC’s Provisions on Compensation for Vessel Collisions 1995 also includes the non-contact collision of ships.56 The Convention for the Unification of Certain Rules of Law with respect to Collisions between Vessels 1910 also applies to non-contact collision of ships.57 Therefore, it was held that ships collision in the marine insurance contract should include the non-contact collision of ships in favour of the assured.58

52 Insurance Law 2015, art 30. 53 (2013) Hu Hai Fa Shang Chu Zi No. 797 (Shanghai Maritime Court). 54 (2001) Lu Jing Zhong Zi No. 314 (Shandong High People’s Court) (CA). 55 CMC 1992, art 170. 56 Provisions on Compensation for Vessel Collisions 1995, art 16. 57 Collisions Convention 1910, art 13. 58 It has been reaffirmed by the SPC in its Reply of the Supreme People’s Court on Request for Instructions on Dispute of Marine Insurance Contract in Panama Floating Mountain Shipping Ltd SA v PICC P&C Co Ltd Qingdao Branch [2002] Min Si Ta Zi No. 12 (SPC) (Reply).

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15.22 It should be noted that the interpretation in favour of the assured and beneficiary must be in the context of the standard contract of insurance. In other words, if there is an ambiguity of terms in an agreement of insurance rather than a standard contract of insurance, the general principles of interpretation of contract in contract law apply.59 According to the Contract Law 1999, where there is a dispute about the understanding of a clause of the contract, the actual meaning of the clause shall be inferred and determined on the basis of the words and sentences used in the contract, related clauses of the contract, aim of the contract, trade practices and the principle of good faith. If a contract is made in two or more languages that are equally authentic as contracted, the words and sentences used in the different language texts shall be assumed to be identical in denotation. If the words and sentences used in different language texts contain discrepancies, they shall be interpreted according to the intention of the contract.60 Exemption clause 15.23 Although the standard clauses of an insurance contract should be interpreted as commonly understood,61 a standard exemption clause may be void even if it can be commonly understood. According to the Insurance Law 2015, any clause in an insurance contract concluded by using the standard clauses provided by the insurer exempting the insurer from any legal obligation or imposing heavier liability on the policy holder or assured, and any clause excluding any legal right of the policy holder, assured or beneficiary shall be void.62 It is not difficult to identify whether an exemption clause exempts the insurer from any obligation in law or excludes any right of the policy holder, assured or beneficiary in law because the legal obligation and right can be identified by law. 15.24 However, whether an exemption clause imposes a heavier liability on the policy holder or assured should be interpreted on a case-by-case basis. In Liu Guocheng v China Continent Property & Casualty Insurance Co Ltd Liaoning Branch,63 a standard exemption clause in the cargo insurance contract provided that the insurer was entitled to avoid the insurance contract and exempted from the liability of indemnity if the assured breached the obligations to choose a carrier carefully and urge the carrier to strictly comply with the regulations on safe transport from the relevant authorities. It was held that this exemption clause was void. It was not clarified by the Chinese courts which obligation was a heavier obligation. It is believed that it is unreasonable to enforce against the assured, e.g. cargo interests, to urge the carrier to comply with law for safe transport. However, an exemption clause requiring the assured to choose a carrier carefully may not be unreasonable. All risks 15.25 In most standard Ocean Marine Cargo Clauses in the Chinese market, the insurance is classified into three conditions – Free From Particular Average (FPA), With Average 59 Nanjing Hengxing Shipping Co Ltd v PICC P&C Co Ltd Cangzhou Yunhe Branch Fuyang Division (2015) Min Shen Zi No. 137 (SPC) (Retrial). 60 Contract Law 1999, art 125. 61 Insurance Law 2015, art 30. 62 ibid, art 19. 63 (2011) Liao Min San Zhong Zi No. 111 (Liaoning High People’s Court) (CA).

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(WA) and All Risks. If a cargo is insured by all risks, aside from the risks covered under the FPA and WA, this insurance also covers all risks of loss of or damage to the insured goods whether partial or total, arising from external causes in the course of transit. Still, all risks do not cover all real risks because there are five exclusions under all risks coverage. All risks insurance does not cover: 1. loss or damage caused by the intentional act or fault of the assured; 2. loss or damage falling under the liability of the consignor; 3. loss or damage arising from the inferior quality or shortage of the insured goods prior to the attachment of this insurance; 4. loss or damage arising from normal loss, inherent vice or nature of the insured goods, loss of market and/or delay in transit and any expenses arising therefrom; and 5. risks and liabilities covered and excluded by the ocean marine (cargo) war risks clauses and strike, riot and civil commotion clauses. 15.26 The interpretation of the term “all risks” had remained controversial for a long time. The issue of controversy focused on the understanding of the phrase “arising from external causes in the cause of transit”. In Hainan Fenghai Cereals & Oils Industrial Co Ltd v PICC P&C Co Ltd Hainan Branch,64 the cargo insured under all risks was stolen and sold by the shipowner for smuggling. The assured claimed for indemnity of the loss of the cargo, but was rejected by the insurer. The Haikou Maritime Court pointed out that the cargo was lost due to the act of smuggling of the shipowner, which was an external cause in the cause of transit. Since this cause was not excluded by the five exclusions, it was held that the loss of the cargo should be covered by all risks cargo insurance.65 15.27 However, the Hainan High People’s Court reversed the decision of the Haikou Maritime Court and rejected the claim from the assured. The legal authority of the judgment of the second instance was the Reply of the People’s Bank of China on Request for Instructions on the Interpretation of “all risks” in Ocean Marine Cargo Clauses.66 The People’s Bank of China, as the administrative authority for insurance in China,67 interpreted that all risks include FPA, WA and other additional risks including theft, pilferage and nondelivery, rain fresh water damage, risk of shortage, risk of contamination, risk of leakage, risk of clashing and breakage, risk of odour, damage caused by sweating and/or heating, hook damage, loss and/or damage caused by breakage of packing and risk of rusting. It was pointed out by the court of appeal that the loss of the cargo caused by the shipowner’s smuggling was not one of the additional risks specified by the People’s Bank of China and, therefore, the loss of the cargo in this case was not covered by the all risks insurance.68 15.28 In the retrial of this case, the SPC upheld the decision of the court of first instance. It was pointed out that the reply from the People’s Bank of China regarding the meaning of “all risks” was an administrative interpretation made after the conclusion of the insurance contract in this case. Therefore, this administrative interpretation should not apply to this case. Furthermore, it was clarified by the SPC that the insurer should indemnify any loss arising from external causes in the cause of transit under the “all risks” insurance except the five exclusions. The decision of the SPC in this case clarified the judicial interpretation

64 65 66 67 68

(2003) Min Si Ti Zi No. 5 (SPC) (Retrial), Guiding Case No. 52. (1996) Hai Shang Chu Zi No. 096 (Beihai Maritime Court). Yin Han [1997] 210, People’s Bank of China. Now the authority for insurance in China is China Insurance Regulatory Commission established in 1998. (1997) Qiong Jing Zhong Zi No. 44 (Hainan High People’s Court) (CA).

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of the term “all risks” in cargo insurance, which replaced the administrative interpretation from the People’s Bank of China. 15.29 This judicial interpretation has been followed by the Chinese courts. In the Reply of the Supreme People’s Court on Request for Instructions on the Applicable Law in Dispute of Marine Insurance Contract in Dazhong Insurance Company Ltd Suzhou Central Branch and Dazhong Insurance Company Ltd v Suzhou Zheshen Industrial Co Ltd,69 the cargo under all risks insurance loaded on deck was lost during the carriage by sea. The insurer refused to indemnify the loss and argued that all risks did not cover the risk of deck cargo. The SPC pointed out that the risks under the all risks insurance should be non-listed risks. If any loss was caused by external causes in the cause of transit and there was no evidence to prove that the loss should be excluded under the five exclusions, such a loss should be within the coverage of the all risks insurance. 15.30 However, the loss of goods caused by delivery of goods without a bill of lading may not be covered by the all risks cargo insurance. In Reply of the Supreme People’s Court on Request for Instructions on Dispute of Marine Insurance Contract in China Drawnwork Shanghai Import & Export Co Ltd v China Pacific Insurance Co Ltd Shanghai Branch,70 the SPC interpreted that the risk of nondelivery under all risks does not mean any kind of nondelivery of goods. In the view of the SPC, the nondelivery of goods caused by delivery of goods without a bill of lading was not an external cause in the cause of transit but a commercial risk that is taken by the assured. The SPC further interpreted that any loss resulting from the delivery of goods without the original bill of lading does not fall within the scope of the coverage of the insurer under the all risks cargo insurance, unless it is otherwise stipulated by both parties in the insurance contract.71 Some Chinese insurers also interpreted that the risk of nondelivery under the all risks insurance must be nondelivery of cargo without reason and the cargo cannot be tracked. However, this interpretation has no binding effect on the assured unless it is cited as a clause in an insurance contract.72 Insurable interest 15.31 Under the Insurance Law 2015, insurable interest refers to legally recognised interests owned by a policy holder or an assured in the subject insured.73 Insurable interest is significant for the assured. It is required that the assured in property insurance shall have an insurable interest in the subject insured at the time when an incident covered by the insurance occurs.74 An assured who does not have an insurable interest in the subject insured when an incident covered by insurance occurs is not entitled to claim the indemnity from the insurer.75 15.32 In ship insurance, the shipowner has an insurable interest in his ship even though the shipowner is not the registered owner but a beneficial owner. In Ease Faith Ltd v

69 [2007] Min Si Ta Zi No. 8 (SPC) (Reply). 70 [2000] Jiao Ta Zi No. 8 (SPC) (Reply). 71 Provisions on Marine Insurance 2006, art 11. 72 Reply of the China Insurance Regulatory Commission on Request for Instructions on Interpretation of Risk of Nondelivery in All Risks in Ocean Marine Cargo Clauses, Bao Jian Chan [2000] 6 China Insurance Regulatory Commission. 73 Insurance Law 2015, art 12, para 6. 74 ibid, para 2. 75 ibid, art 48.

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Pingan Property Insurance Co Ltd Beijing Branch and Pingan Property Insurance Co Ltd,76 the assured purchased a second-hand ship but the transfer of ownership of the ship was not registered accordingly. The insurer argued that the assured did not have an insurable interest in the ship because of the lack of registration. It was held that the assured as the lawful buyer had the insurable interest when he paid the price of the ship and began to take the risk of the ship after taking delivery of the ship. In other words, the lack of registration of ownership does not affect the existence of the insurable interest of the beneficial owner of the ship. 15.33 Not only the shipowner, but also the ship manager may have an insurable interest in the insured ship. In Shanghai Zhongfu Shipping Co Ltd v PICC Shanghai Branch,77 the assured claimed that he had an insurable interest in the ship because he was the beneficiary of the income from the management of the ship, but the insurer argued that the assured had no property rights or interests because he was not the owner of the ship. The Shanghai Maritime Court pointed out that an insurable interest in a ship relied on the assumption of risk of the ship, rather than the ownership of the ship. It was found in this case that the ship manager had the right to lawfully possess and use the ship, and obtain the proceeds from the management of the ship. In fact, any damage to or loss of the ship during the management period would affect the interest of the ship manager. Therefore, the ship manager had an insurable interest in the ship during the management period. 15.34 In cargo insurance, it is important to distinguish an insurable interest from the risk of the cargo in transit. In Jiangsu Hualin Chemical Ltd v China Pacific Insurance Co Ltd Jiangsu Branch and China Pacific Insurance Co Ltd,78 the goods were damaged due to the ship collision. The seller of the goods as the assured claimed indemnity from the insurer but was rejected. The insurer argued that the sale of goods was based on CIF terms, which meant that the buyer would assume the risk when the goods were on board and, therefore, the seller had no insurable interest when the damage to the goods occurred during the carriage. This argument was rejected by the Shanghai Maritime Court. It was pointed out that the legally recognised interest does not mean the “risk”, but the assured’s interest in the subject insured recognised by law. This interest could be a legal or economic connection between the assured and the insured subject. When the assured suffered any loss due to the damage to the insured goods, he should be entitled to claim against the insurer for the indemnity of the loss. 15.35 The assured in cargo insurance may have an insurable interest even if the loss is not immediate. In Shi Lu Yi Trading (Shanghai) Co Ltd v Huatai Property Insurance Co Ltd and Huatai Property Insurance Co Ltd Shanghai Branch,79 it was agreed that the buyer would pay for the price of the goods 240 days after taking the delivery of the goods. The insurer refused to indemnify the buyer as the assured and argued that the assured had no insurable interest in the goods because he had not paid the price of the goods. The Shanghai Maritime Court pointed out that the damage to the goods was caused by the insured risk rather than the latent defect of the goods and the assured was not entitled to refuse to pay the price of the goods according to the sale of goods contract. In other words, the assured 76 77 78 79

(2008) Jin Gao Min Si Zhong Zi No. 58 (Tianjin High People’s Court) (CA). (2003) Hu Hai Fa Shang Chu Zi No. 77 (Shanghai Maritime Court). (2009) Hu Hai Fa Shang Chu Zi No. 335 (Shanghai Maritime Court). (2005) Hu Hai Fa Shang Chu Zi No. 632 (Shanghai Maritime Court).

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would suffer a loss once he paid according to the sale of goods contract. Therefore, it was believed that the agreement of payment method did not affect the assured’s interest in the insured goods. 15.36 The assured in cargo insurance may also have an insurable interest even if the loss is not obvious. In Guangxi Qinzhou Sanhe Trade Co Ltd v Pingan Property Insurance Co Ltd Nanning Division,80 the goods insured were lost but the insurer refused to indemnify the loss of the buyer as the assured. It was found that the assured cooperated with his business partner in the business of the insured goods and the assured’s profit in such business was fixed according to the cooperation agreement between them. The insurer argued that the assured had no insurable interest in the goods because he might not profit from the import of the goods. The Beihai Maritime Court rejected this argument and pointed out that the profit in the business was not equal to the legally recognised interest in law. In the view of the court, non-profit in the business of the goods does not mean the assured had no insurable interest in the goods. In fact, the cooperation in the business was a whole business and the assured was involved in the whole business. Therefore, the assured had the insurable interest in the context of the cooperation with his business partner. Disclosure of material circumstances 15.37 Before a marine insurance contract is concluded, the assured shall faithfully disclose to the insurer all material circumstances that are known to the assured or that ought to be known by him in his ordinary business that would influence the insurer in fixing the premium, or determining whether he will take the risk. However, in the absence of inquiry the assured need not disclose any circumstance that is known or presumed to be known to the insurer in the ordinary course of his business.81 The presumption of the knowledge of the insurer shall be reasonable within the extent of the insurer’s ordinary business. In Shaoguan Qujiang Jiaxing Mineral Products Processing Factory v Yong An Property Insurance Co Ltd Weifang Central Branch,82 the assured did not disclose that the insured cargo, lead zinc ore, had a high marine risk when the water content was more than 8 per cent. It was held by the SPC that the high risk of the cargo under this special condition was not a circumstance that was presumed to be known to the insurer in his ordinary course of business. 15.38 The knowledge of the insurer is presumed to be normal. In Nishitani & Co Ltd v PICC Qingdao Branch,83 the insured equipment was fixed on a barge, which was towed by a tug from Qingdao China to Japan. The assured provided the letter of credit and the commercial invoice to the insurer, which stated vessel “HANGTUO2001”. There was no doubt that the insured equipment would be at high risk if it was carried by a tug. The dispute in this case was whether this material circumstance should be known to the insurer from the information in those commercial documents or through other ways. The assured argued that the vessel “HANGTUO2001” referred to a tug because “TUO” meant tug in Chinese Pinyin. However, it was held that it was unreasonable for the insurer to presume 80 81 82 83

(1999) Hai Shang Chu Zi No. 011 (Beihai Maritime Court). CMC 1992, art 222. (2012) Min Shen Zi No. 1502 (SPC) (Retrial). (2002) Lu Min Si Zhong Zi No. 45 (Shandong High People’s Court) (CA).

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that “HANGTUO2001” was a tug without the disclosure of the assured. The assured also argued that the carriage of this equipment was reported by Qingdao local media including newspapers and television. However, in the view of the Chinese courts, the carriage by a tug was not presumed to be known through the media to the insurer in the ordinary course of insurance business. 15.39 If an insurer is informed of the material circumstances in a reasonable way, the insurer is not entitled to avoid the marine insurance contract. In Yantai Weisheng International Shipping Management Co Ltd v China Continent Property & Casualty Insurance Co Ltd Weihai Central Branch,84 the assured disclosed on the insurance slip that the insured ship was built in Japan but the ship’s nationality certificate stated that the building place was China. The insurer did not raise any issue on this point. In the second insurance year, the assured was not required to submit another insurance slip and the ship insurance was renewed. The insurer argued that the assured wrongfully disclosed the building place of the insured ship and the renewed insurance contract should be avoided. The Qingdao Maritime Court pointed out that the insurer should have raised the doubt when the insurance was to be renewed. Since the insurer did not raise this doubt but renewed the insurance contract anyway, it could be induced that the insurer knew the building place from the ship’s nationality certificate, or the building place was not a material circumstance. 15.40 Whether any particular circumstance, which is not disclosed, is material or not is a question of fact. In Nanjing Qiangquan Transport Trade Co Ltd v Taiping General Insurance Co Ltd Fujian Branch,85 the SPC took the view that the management quality and the history of administrative penalty of the assured were not material circumstances that needed to be disclosed to the insurer in the hull and machinery insurance because there was no law that required such disclosure. The legal reasoning in this case may not be appropriate because law does not decide whether any particular circumstance in marine insurance is material. It is a question of fact that shall be decided case by case. The management quality and the history of penalty may not be material if they are not related to the hull and machinery of the insured ship. Conversely, they should be disclosed to the insurer if they are related to the insured ship that may influence the judgment of an insurer in fixing the premium, or determining whether he will take the risk. 15.41 If the assured deliberately fails to make such disclosure, the insurer has the right to avoid the contract without refunding the premium. The insurer shall not be liable for any loss arising from the insured risks occurred before the contract is avoided. If the assured’s failure of non-disclosure is not deliberate, the insurer has the option to avoid the contract or continue it with the increase of premium. Where the insurer chooses to avoid a marine insurance contract in the second circumstance, he is liable for any loss arising from the insured risks occurred before the contract is avoided, except where the undisclosed or wrongfully disclosed material circumstances have influenced the occurrence of such risks.86 However, where the insurer knows that the assured failed to faithfully disclose the material circumstance but still charges an insurance premium or pays insurance

84 (2009) Qing Hai Fa Hai Shang Chu Zi No. 353 (Qingdao Maritime Court). 85 (2012) Min Shen Zi No. 712 (SPC) (Retrial). 86 CMC 1992, art 223.

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indemnity, the insurer is not entitled to avoid the marine insurance contract because of such non-disclosure.87 Warranties of the assured 15.42 There is no definition of warranty in the Insurance Law 2015 or the CMC 1992. In marine insurance practice, the warranty is normally a promissory warranty by which the assured undertakes that some particular thing shall or shall not be done, or that some condition shall be fulfilled, or where the assured affirms or negatives the existence of a particular state of facts.88 Whether a warranty is breached is a question of fact. In Chenco International Inc v China Pacific Insurance Co Ltd Shanghai Branch,89 it was agreed that towage would commence from 20 April under a towing voyage insurance contract. However, the towage actually commenced on 30 May. It was held that the roughly 40 days’ delay was unreasonable for this towing voyage and the assured had breached the warranty of commencement date of the voyage in the insurance contract. 15.43 Parties may agree for express warranties in their insurance contract. There is no implied warranty under Chinese law although the SPC has set up a warranty of seaworthiness of ship through judicial interpretation. In voyage insurance there is an implied warranty that at the start of the voyage the ship is seaworthy. Where the assured breaches this implied warranty, the insurer will no longer be liable for indemnity from the date of breach of such warranty. In time insurance where, if the assured is privy and the ship is sent to sea in an unseaworthy state, the insurer is not liable for any loss attributable to unseaworthiness.90 There is no implied warranty that goods are seaworthy under Chinese law and judicial interpretation. 15.44 The assured shall notify the insurer in writing immediately where the assured has not complied with the expressed warranties in the contract. The insurer may, upon receipt of the notice, terminate the contract or request to amend the clauses of the insurance coverage or increase the premium.91 The insurer’s right of termination of insurance contract starts from the date of the assured’s breach of warranty. However, the insurer shall be liable for compensating the assured’s losses resulting from insurance accidents that occur before the date of the assured’s breach of warranty.92 15.45 Where the assured has not paid the premium in full before the rescission of the contract, the insurer is entitled to claim the premium for the time before the contract rescission at a certain proportion. The premium received by the insurer in full shall not be returned.93 The insurer, who continues to collect premiums or pay insurance indemnity after the receipt of the notice of the breach of warranty in an insurance contract, is not entitled to rescind the insurance contract. Where an insurer requests to amend the clauses of an insurance contract or increase the premium, if the assured does not agree to the request,

87 88 89 90 91 92 93

Provisions on Marine Insurance 2006, art 4. Cf UK Marine Insurance Act 1906, s 33 (1). (1997) Hu Hai Fa Shang Zi No. 486 (Shanghai Maritime Court). Minutes of the Second National Working Conference 2005, art 120. CMC 1992, art 235. Minutes of the Second National Working Conference 2005, art 118, para 1. ibid, para 2.

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the insurer may send a notice in writing to rescind the contract.94 In this circumstance, the insurance contract is rescinded as from the date of the breach of warranty.95 Loss and abandonment 15.46 A loss in marine insurance may be either total or partial under the CMC 1992. A total loss may be either an actual total loss, or a constructive total loss. Where after the occurrence of a peril insured against the subject-matter insured is destroyed or is so seriously damaged that it is completely deprived of its original structure and usage, or the assured is irretrievably deprived thereof, it shall constitute an actual total loss.96 15.47 Any loss other than an actual total loss or a constructive total loss is a partial loss.97 Where a ship’s total loss is considered to be unavoidable after the occurrence of a peril insured against or the expenses necessary for avoiding the occurrence of an actual total loss would exceed the insured value,98 it shall constitute a constructive total loss. Where an actual total loss is considered to be unavoidable after the cargo has suffered a peril insured against, or the expenses to be incurred for avoiding the total actual loss plus that for forwarding the cargo to its destination would exceed its insured value,99 it shall constitute a constructive total loss.100 15.48 Furthermore, where a ship fails to arrive at its destination within a reasonable time from the place where it was last heard of, unless the insurance contract provides otherwise, if no news of her has been received upon the expiry of two months,101 it shall be constituted as missing. Such missing shall be deemed to be an actual total loss.102 There is no similar presumption of actual total loss of missing cargo under the CMC 1992. It means that only the assured of a ship may declare his missing ship and an actual total loss of the missing ship may be presumed. An actual total loss of a cargo may not be presumed when the assured does not know the path of the carrying ship. Only when a ship was presumed missing according to the CMC 1992 can the cargo on board the missing ship be presumed missing accordingly.103 15.49 Where the subject-matter insured has become a constructive total loss and the assured claims indemnity from the insurer on the basis of a total loss, the subject-matter insured shall be abandoned to the insurer.104 The insurer may accept the abandonment or not,

94 ibid, art 119. 95 Provisions on Marine Insurance 2006, art 8. 96 CMC 1992, art 245. 97 ibid, art 247. 98 Unlike “the value insured” in the CMC 1992, it is “the value of the ship when repaired” in the UK Marine Insurance Act 1906, s 61 (2) (ii). 99 Unlike “its insured value” in the CMC 1992, it is “value on arrival” of cargo in the UK Marine Insurance Act 1906, s 61 (2) (iii). 100 CMC 1992, art 246. 101 Unlike “expiry of two months” in the CMC 1992, it is “the lapse of a reasonable time” in the UK Marine Insurance Act 1906, s 58. 102 CMC 1992, art 248. 103 Wuhan Huamei Feed Co Ltd v PICC P&C Co Ltd Jiangxi Branch (2004) Hu Gao Min Si (Hai) Zhong Zi No. 151 (Shanghai High People’s Court) (CA). 104 Unlike compulsory abandonment under the CMC 1992, under the UK Marine Insurance Act 1906, s 62, the assured can elect to abandon the subject-matter insured to the insurer. If the assured elects to do so, he must give notice of abandonment. If he fails to do so the loss can only be treated as a partial loss.

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and shall inform the assured of his decision within a reasonable time. The abandonment shall not be attached with any conditions. Once the abandonment is accepted by the insurer, it may not be withdrawn.105 Where the insurer has accepted the abandonment, all rights and obligations relating to the subject-matter insured are transferred to the insurer.106 Where the insurer does not accept abandonment, it does not affect the right of the assured to require the insurer to compensate the loss incurred in the full amount.107 There is no requirement of notice of abandonment under the CMC 1992, but it is always required in marine insurance practice. Indemnity from insurer Liability of indemnity 15.50 Under the CMC 1992, the insurer shall indemnify the assured promptly after the loss arising from a peril insured against has occurred.108 After the occurrence of a peril insured against and before the payment of indemnity, the insurer may require the assured to submit evidence and materials related to the ascertainment of the nature of the peril and the extent of the loss.109 If the amount of indemnity cannot be determined within 60 days upon receipt of a claim for indemnity, together with relevant evidence and information in respect thereof, the insurer shall make a partial payment that can be determined by the available evidence and materials. The insurer shall accordingly pay the balance after the amount of indemnity is finally determined.110 The assured has the burden of proof as to the peril and the loss,111 and whether the peril is within the coverage of insurance.112 15.51 The Insurance Law 2015 provides detailed formalities for the payment of indemnity. The insurer shall, after receiving a claim for indemnity from the assured, determine the matter without delay. If the circumstances are complex, the insurer shall determine the matter within 30 days, unless the insurance contract provides otherwise. If there is a liability of indemnity, the insurer shall fulfil its obligation for such indemnity within ten days after an agreement is reached with the assured on such indemnity. If there are stipulations in the insurance contract on the period within which indemnity should be made, then the insurer shall fulfil its obligation accordingly. If the insurer fails to fulfil its obligation of indemnity, then, in addition to paying the indemnity, the insurer shall compensate the assured for any damage incurred thereby.113 If there is no liability of indemnity, the insurer shall send to the assured, within three days upon making determination, a notice refusing to pay indemnity with justifications.114 105 CMC 1992, art 249. 106 ibid, art 250. 107 Minutes of the Second National Working Conference 2005, art 124. 108 CMC 1992, art 237. 109 ibid, art 251. 110 Insurance Law 2015, art 25. 111 Leqing Ocean Shipping Co Ltd v China Pacific Insurance Co Ltd Leqing Branch (2011) Yong Hai Fa Shang Chu Zi No. 29 (Ningbo Maritime Court). 112 CMEC (Nantong) Machinery Import & Export Co Ltd Import Branch v Pingan Insurance (Group) Company of China (2012) Min Shen Zi No. 34 (SPC) (Retrial). 113 Insurance Law 2015, art 23, paras 1 and 2. 114 ibid, art 24.

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Amount of indemnity 15.52 The insurer’s indemnity for the loss from the peril insured against is limited to the insured amount. Where the insured amount is less than the insured value, the insurer shall indemnify in the proportion that the insured amount bears to the insured value.115 The insurer shall be liable for successive losses of the subject-matter insured arising from several perils during the period of the insurance even though the aggregate of the amounts of successive losses exceeds the insured amount. However, the insurer shall only be liable for the total loss where a partial loss, which has not been repaired, is followed by a total loss.116 Where the insured amount is less than the value for contribution under the general average, the insurer shall be liable for the general average contribution in the proportion that the insured amount bears to the value for contribution.117 15.53 The insurer shall pay, in addition to the indemnity, the necessary and reasonable expenses incurred by the assured for avoiding or minimising the loss recoverable under the insurance contract, the reasonable expenses for survey and assessment of the value for the purposes of ascertaining the nature and extent of the peril insured against and the expenses incurred for acting on the special instructions of the insurer. The payment by the insurer of such expenses is limited to the equivalent of the insured amount. Where the insured amount is less than the insured value, the insurer is liable for such expenses in the proportion that the insured amount bears to the insured value, unless the contract provides otherwise.118 In ship insurance, salvage expenses for avoiding or minimising the loss of a ship insured is recovered by the insurer. Even if both the ship and the goods on board the ship are salved together, such expenses shall not be deducted according to the proportion of the values of the ship and the goods on board the ship.119 15.54 In effecting payment of indemnity to the assured, the insurer may make a corresponding reduction of the amount already paid by a third person to the assured. Where the indemnity obtained by the insurer from the third person exceeds the amount of indemnity paid by the insurer, the part in excess shall be returned to the assured.120 If the assured has obtained a full indemnity from a liable person, he is not entitled to claim against the insurer for the same indemnity, even if the former indemnity is based on a different contract rather than an insurance contract.121 15.55 However, if the assured has not obtained any indemnity from a liable person or the insurer, he can claim indemnity from any of them. In CCCC Second Harbour Engineering Co Ltd v Guangxi Tianlong Shipping Co Ltd,122 the assured claimed against the liable person for the damage to the subject-matter insured and the insurer was a third party

115 CMC 1992, art 238. 116 ibid, art 239. 117 ibid, art 241. 118 ibid, art 240. 119 Yangzhou Shipping Co Ltd v An Bang Property & Casualty Insurance Co Ltd Zhejiang Branch (2011) Hu Gao Min Si (Hai) Zhong Zi No. 83 (Shanghai High People’s Court) (CA). 120 CMC 1992, art 254. 121 Ningbo Iron & Steel Co Ltd v Pingan Property Insurance Co Ltd Ningbo Branch and Pingan Property Insurance Co Ltd (2008) Yong Hai Fa Shang Chu Zi No. 137 (Ningbo Maritime Court). 122 (2015) Min Si Ti Zi No. 14 (SPC) (Retrial).

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to the litigation. The Wuhan Maritime Court held that the insurer should be liable for the damage under the insurance contract and the liable person did not need to indemnify the assured again.124 However, the SPC reversed the decision in the retrial of the case and held that both the insurer and the liable person should be liable for the indemnity. Once the assured obtained the indemnity from one of them, the other should be discharged from the payment of indemnity. The court seems to conclude that the liable person and the insurer should jointly and severally be liable for the indemnity. Of course, the right of the assured to claim indemnity from the liable person is subrogated to the insurer if the insurer paid the indemnity. 15.56 Where a total loss occurs to the subject-matter insured and the full insured amount is paid, the insurer shall acquire the full right to the subject-matter insured. In the case of under-insurance, the insurer shall acquire the right to the subject-matter insured in the proportion that the insured amount bears to the insured value.125 Meanwhile, after the occurrence of a peril insured against, the insurer is entitled to waive his right to the subjectmatter insured and pay the assured the amount in full to discharge the obligations under the contract. In exercising such a right, the insurer shall notify the assured within seven days from the date of the receipt of the notice from the assured for the purpose of indemnity. The insurer shall remain liable for the necessary and reasonable expenses paid by the assured for avoiding or minimising the loss prior to his receipt of the said notice.126 123

Exemption of liability 15.57 Upon the occurrence of a peril that is insured against, the assured shall notify the insurer immediately and shall take necessary and reasonable measures to avoid or minimise the loss. Where special instructions for the adoption of reasonable measures to avoid or minimise the loss are received from the insurer, the assured shall act accordingly. The insurer shall not be liable for the extended loss caused by the assured’s breach of those requirements.127 Where the assured takes reasonable measures without success, the insurer shall not be liable for the expenses occurred.128 The insurer shall not be liable for the loss caused by the intentional act of the assured.129 15.58 Unless otherwise agreed in the insurance contract, the insurer shall not be liable for the loss of or damage to the insured cargo arising from any of the following causes: (1) delay in the voyage or in the delivery of cargo or change of market price; (2) fair wear and tear, inherent vice or nature of the cargo; and (3) improper packing.130 The change of

123 Where the outcome of a case will affect a third party’s legal interest, such party, though having no independent claim to the subject matter of action of both parties, may file a request to participate in the proceedings or the court shall notify the third party to participate. A third party that is to bear civil liability in accordance with the judgment of the court shall be entitled to the rights and obligations of a party in litigation. See Civil Procedure Law 1991, as amended in 2007 and 2012, art 56, para 2. 124 (2011) Wu Hai Fa Shi Zi No. 00057 (Wuhan Maritime Court); (2013) E Min Si Zhong Zi No. 00099 (Hubei High People’s Court) (CA). 125 CMC 1992, art 256. 126 ibid, art 255. 127 ibid, art 236. 128 Provisions on Marine Insurance 2006, art 12. 129 CMC 1992, art 242. 130 ibid, art 243.

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market price refers to the difference of price of the markets between the place of shipment and the place of delivery. In Shanghai Shenfu Chemical Co Ltd v PICC P&C Co Ltd Shanghai Branch,131 the assured sold the damaged goods at the place of delivery at RMB 4,780 per ton. It was found that the average price of the same goods in the local market was RMB 5,750 per ton. The Shanghai Maritime Court calculated that the depreciation rate was 16.87 per cent. The insured value of the goods on policy was RMB 13,964,215 and, therefore, the real damage that should be indemnified by the insurer was RMB 2,355,763.07.132 This method of calculation of indemnity avoids the influence from the change of market price and was upheld by the SPC in the retrial of the case. 15.59 For ship insurance, unless otherwise agreed in the insurance contract, the insurer shall not be liable for the loss of or damage to the insured ship arising from any of the following causes: (1) unseaworthiness of the ship at the time of the commencement of the voyage, unless where under a time policy the assured has no knowledge; and (2) wear and tear or corrosion of the ship. This exemption of liability applies mutatis mutandis to the insurance of freight.133 Subrogation 15.60 Where the loss of or damage to the subject-matter insured within the insurance coverage is caused by a third person, the right of the assured to claim indemnity from the third person shall be subrogated to the insurer from the time when the indemnity is paid by the insurer. The assured shall provide the insurer with the necessary documents and information that the insurer requires and shall endeavour to assist the insurer in pursuing recovery from the third person.134 In the recourse action, the insurer can only claim the loss or damage caused by the third person. The third person shall not be liable for the expenses occurred by law between the insurer and the assured. For example, the insurer shall pay the reasonable expenses for survey and assessment of the value for the purpose of ascertaining the nature and extent of the peril insured against,135 however, the third person is not liable for those expenses in the insurer’s recourse action because those are not losses caused by the third person.136 15.61 In insurance practice, the assured may issue a letter of subrogation to the insurer when he receives an indemnity from the insurer. However, the letter of subrogation is not a condition of subrogation but evidence of it. Even if there is no letter of subrogation, the insurer may have the rights to sue against the third person if he has paid the indemnity to the assured.137 In Chinese judicial practice, the insurer shall submit to the maritime court the certificate evidencing the payment of the indemnity by the insurer when he exercises the right of subrogation.138 131 (2011) Min Shen Zi No. 1517 (SPC) (Retrial). 132 (2010) Hu Hai Fa Shang Chu Zi No. 1022 (Shanghai Maritime Court); (2011) Hu Gao Min Si (Hai) Zhong Zi No. 134 (Shanghai High People’s Court) (CA). 133 CMC 1992, art 244. 134 ibid, art 252. 135 ibid, art 240, para 1. 136 Pingan Property Insurance Co Ltd Suzhou Branch v Shanghai Speedier Logistics Co Ltd and Speedier Logistics Co Ltd (2010) Hu Gao Min Si (Hai) Zhong Zi No. 195 (Shanghai High People’s Court) (CA). 137 Huatai Property Insurance Co Ltd Beijing Branch v COSCO Zhejiang International Freight Co Ltd Wenzhou Branch and Others (2010) Hu Hai Fa Shang Chu Zi No. 349 (Shanghai Maritime Court). 138 Special Maritime Procedure Law 1999, art 96.

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15.62 After paying out an indemnity, an insurer may be entitled to enforce the insured’s rights against the third party who is responsible for the loss. Therefore, in disputes over the insurer’s exercise of the right of subrogation to claim for indemnity against a third party, Chinese courts only examine whether the insurer has paid an indemnity and the legal relationship between the third party that caused the insurance accident and the assured.139 In Nipponkoa Insurance Co Ltd v Sinotrans Container Lines Co Ltd,140 the Shanghai Maritime Court rejected the argument from the third party that the insurer indemnified the assured beyond the insurance coverage. Similarly, in Tokio Marine & Nichido Fire Insurance (China) Co Ltd v Grieg Star Shipping AS and Grieg Shipping AS (Tokio Marine v Grieg Star),141 the SPC rejected the argument from the third party that non-payment of the price of goods by the buyer was not a peril that was insured against. In Tokio Marine v Grieg Star, the SPC clarified that the claim raised by the insurer exercising the right of subrogation against the third party was a dispute of carriage of good by sea. Therefore, any issue in the insurance contract should not be tried in this case and would not affect the insurer’s recourse action against the third party. 15.63 Where the assured waives his right of claim against the third person without the consent of the insurer or the insurer is unable to exercise the right of recourse due to the fault of the assured, the insurer may make a corresponding reduction from the amount of indemnity.142 In Ningbo Boda Shipbuilding Co Ltd v Pingan Property Insurance Co Ltd Ningbo Branch,143 the assured settled the dispute with the third party who paid partial damages to the assured. The Ningbo Maritime Court held that the assured was entitled to claim indemnity at the amount of the partial damage as paid by the third party and was not entitled to the remaining part of the damage that had been waived by the assured. 15.64 After obtaining the right of subrogation, the legal effect of discontinuation of limitation of actions as a result of bringing an action or submitting the case for arbitration by the assured against the third person, application for arrest of ship or the admission to fulfil obligations by the third person shall extend to the insurer.144 Meanwhile, the insurer is entitled to the right of guaranty of the assured because of the application for the arrest of ship.145 However, after obtaining the right of subrogation, the agreement on jurisdiction and arbitration concluded between the assured and the third person for settling their dispute shall not bind the insurer.146 15.65 Furthermore, the arbitration agreement concluded between the assured and the third person before the insurer obtains the right of subrogation also does not bind the insurer when he exercises the right of subrogation. In the Reply of the Supreme People’s Court on Request for Instructions on Validity of Arbitration Clause in the Dispute over Insurance Subrogation under Contract for Carriage of Goods by Sea in China Pacific Insurance Co Ltd Jiangsu Branch v COSCO Logistics (Beijing) Co Ltd and Others,147 the SPC pointed

139 140 141 142 143 144 145 146 147

Provisions on Marine Insurance 2006, art 14. (2012) Hu Hai Fa Shang Chu Zi No. 963 (Shanghai Maritime Court). (2014) Min Shen Zi No. 445 (SPC) (Retrial). CMC 1992, art 253. (2009) Yong Hai Fa Shang Chu Zi No. 51 (Ningbo Maritime Court). Provisions on Marine Insurance 2006, art 15. ibid, art 16. Minutes of the Second National Working Conference 2005, art 127. [2009] Min Si Ta Zi No. 11 (SPC) (Reply).

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out that the insurer was not party to the contract of carriage of goods by sea that contained an arbitration clause between the assured and the carrier and, therefore, the insurer was not bound by the arbitration agreement except where he otherwise expressly agreed to be bound by the arbitration agreement. This approach had also applied to the jurisdiction agreement in Chinese judicial practice.148 However, the SPC changed this approach for jurisdiction agreements. In PICC P&C Co Ltd Guangdong Branch and Others v Shanghai Electric Group Co Ltd,149 the SPC held that the jurisdiction agreement between the assured and the third person should bind the insurer without the consent of the insurer. It is unclear whether this change will apply to arbitration agreements. A further explanation from the SPC on this legal issue is expected.

148 Qinzhou Port Weilong Shipping Co Ltd v PICC P&C Co Ltd Ningbo Branch (2015) Hai Fa Shang Chu Zi No. 606 (Ningbo Maritime Court); (2015) Zhe Xia Zhong Zi No. 200 (Zhejiang High People’s Court) (CA). 149 (2015) Min Si Ti Zi No. 165 (SPC) (Retrial).

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CHAPTER 16

Marine pollution

16.1 The CMC 1992 does not include provisions on marine pollution although it is a traditional and important component of maritime law. Marine pollution in China is governed by the relevant conventions concluded or acceded to by the PRC and national law including the General Principles of the Civil Law 2009, the Tort Liability Law 2009 and the Marine Environment Protection Law 2013.1 Other relevant authorities for marine pollution include administrative regulations, namely the Administrative Regulations on the Prevention of Marine Pollution Caused by Vessels 2009, as amended in 2013, 2014 and 2016 (Regulations on Marine Pollution 2016),2 and judicial interpretations including the relevant provisions in the Minutes of the Second National Working Conference on the Trial of Foreign-Related Commercial and Maritime Cases 2005 (Minutes of the Second National Working Conference 2005)3 and the Provisions of the Supreme People’s Court on Several Issues Concerning the Trial of Cases involving Disputes over Compensation for Vessel Oil Pollution Damage 2011 (Provisions on Oil Pollution Damage 2011).4 International regime 16.2 Compensation for pollution damage caused by spills from oil tankers is governed by an international regime elaborated under the auspices of the IMO. The framework for the regime was originally the International Convention on Civil Liability for Oil Pollution Damage, 1969 (CLC 1969) and the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1971 (FUND 1971). The current international compensation regime is based on the International Convention on Civil Liability for Oil Pollution Damage, 1992 (CLC 1992) based on the Protocol of 1992 to amend the CLC 1969, and the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1992 (FUND 1992) based on the Protocol of 1992 to amend the FUNC 1971. The purpose of the CLC 1992 is to ensure that adequate compensation is available to persons who suffer damage caused 1 In judicial practice, if the Tort Liability Law 2009 and the Marine Environment Protection Law 2013 apply as special law relating to the marine pollution, the General Principles of the Civil Law 2009 will not apply. See Yantai Rescue and Salvage Bureau v Shandong Rongcheng Longxudao Fishery Co Ltd [2002] Min Si Ti Zi No. 3 (SPC) (Retrial). 2 (2016) Order of State Council No. 666, State Council of the PRC. The maritime administration authorities may impose administrative fines for the infringement the Regulations on Marine Pollution 2016. 3 Fa Fa [2005] No. 26 (SPC). 4 Fa Shi [2011] No. 14 (SPC).

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by pollution resulting from the escape or discharge of oil from ships. The FUND 1992 is supplementary to the CLC 1992, which establishes a regime for compensating victims when the compensation under the CLC Protocol 1992 is inadequate. China is a State party to the CLC Protocol 1992 but not to the FUND Protocol 1992.5 China has also adopted the 2000 Amendments of the Limitation Amount in the CLC 1992.6 16.3 The CLC 1992 only concerns pollution caused by tankers including bunkers of tankers, not by bunkers of vessels other than tankers. It was found that the escape or discharge of oil from the bunkers were also an important cause of marine pollution.7 The International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001 (Bunker Convention 2001) was adopted to ensure that adequate, prompt, and effective compensation is available to persons who suffer damage caused by spills of oil, when carried as fuel in ships’ bunkers. China is a State party to the Bunker Convention 2001. The SPC’s Provisions on Oil Pollution Damage 2011 apply to disputes over compensation for vessel oil pollution damage under the CLC 1992 and the Bunker Convention 2001. Concepts and applications Concepts 16.4 Under the CLC 1992, a “ship” means any sea-going vessel and seaborne craft of any type whatsoever constructed or adapted for the carriage of oil in bulk as cargo, provided that a ship capable of carrying oil and other cargoes shall be regarded as a ship only when it is actually carrying oil in bulk as cargo and during any voyage following such carriage unless it is proved that it has no residues of such carriage of oil in bulk aboard.8 Unlike the CLC 1992, which is for oil pollution from tankers, a “ship” under the Bunker Convention 2001 means any seagoing vessel and seaborne craft, of any type whatsoever.9 For the purposes of the Provisions on Oil Pollution Damage 2011, “ship” refers to seagoing ships and other vehicles used for travelling in the sea for non-military and non-governmental purposes, including oil tankers and other vessels operating on international and domestic routes, and oil tankers refer to vessels built or reconstructed for persistent cargo oil bulk transportation, and other vessels actually used for persistent cargo oil bulk transportation.10 It means that the Provisions on Oil Pollution Damage 2011 covers oil pollution under both the CLC 1992 and the Bunker Convention 2001. 16.5 An “owner” under the CLC 1992 means the person or persons registered as the owner of the ship or, in the absence of registration, the person or persons owning the ship. However, in the case of a ship owned by a State and operated by a company that in that State is registered as the ship’s operator, “owner” mean such company.11 “Shipowner” 5 The FUND Protocol 1992 applies to the Hong Kong Special Administrative Region of the PRC. 6 (2003) Announcement No. 16 of the Ministry of Communications of the PRC. 7 In 1996, the legal committee of IMO received a report from U.K. P&I Club that found that in 1993 about half of maritime pollution claims were due to bunkers. 8 CLC 1992, art 1, para 1. 9 Bunker Convention 2001, art 1, para 1. 10 Provisions on Oil Pollution Damage 2011, art 31, para 1. 11 CLC 1992, art 1, para 3. China COSCO SHIPPING Corporation Limited which is the merged entity of China Ocean Shipping (Group) Company (COSCO) and China Shipping (Group) Company (China Shipping) is a typical example of such company as owner under the CLC 1992 in China.

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under the Bunker Convention 2001 means the owner, including the registered owner, bareboat charterer, manager and operator of the ship.12 Obviously, for oil pollution caused by bunkers, the shipowner under the Bunker Convention 2001 covers a wider class of persons as shipowners compared to the CLC 1992. 16.6 “Oil” under the CLC 1992 means any persistent hydrocarbon mineral oil such as crude oil, fuel oil, heavy diesel oil and lubricating oil, whether carried on board a ship as cargo or in the bunkers of such a ship.13 “Bunker oil” under the Bunker Convention 2001 means any hydrocarbon mineral oil, including lubricating oil, used or intended to be used for the operation or propulsion of the ship, and any residues of such oil.14 “Oil” under the Provisions on Oil Pollution Damage 2011 covers both oil under the CLC 1992 and bunker oil under the Bunker Convention 2001 excluding non-persistent cargo oil carried as goods by ships.15 Applications 16.7 The CLC 1992 applies exclusively to pollution damage caused in the territory, including the territorial sea, of a contracting State, and in the exclusive economic zone of a contracting State, established in accordance with international law, or, if a contracting State has not established such a zone, in an area beyond and adjacent to the territorial sea of that State determined by that State in accordance with international law and extending not more than 200 nautical miles from the baselines from which the breadth of its territorial sea is measured. The CLC 1992 also applies to preventive measures, wherever taken, to prevent or minimise such damage.16 However, the CLC 1992 does not apply to warships or other ships owned or operated by a State and used, for the time being, only on government non-commercial service. With respect to ships owned by a contracting State and used for commercial purposes, each State shall waive all defences based on its status as a sovereign State.17 16.8 Like the CLC 1992, the Bunker Convention 2001 applies to pollution damage caused in the territory, including the territorial sea, of a State party, and in the exclusive economic zone of a State party.18 Similarly, the provisions of the Convention shall not apply to warships, naval auxiliary or other ships owned or operated by a State and used, for the time being, only on government non-commercial service. With respect to ships owned by a State party and used for commercial purposes, each State shall be subject to suit in the jurisdictions set forth in article 9 and shall waive all defences based on its status as a sovereign State. Furthermore, the Bunker Convention 2001 does not apply to pollution damage as defined in the CLC 1992, whether or not compensation is payable in respect of it under the CLC 1992.19 12 13 14 15 16 17 18 19

Bunker Convention 2001, art 1, para 3. CLC 1992, art 1, para 5. Bunker Convention 2001, art 1, para 5. Provisions on Oil Pollution Damage 2011, art 31, para 2. CLC 1992, art 2. ibid, art 11. Bunker Convention 2001, art 2. ibid, art 4.

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Damage and compensation Claimants 16.9 In the litigation of marine pollution in China, any citizens, legal persons, or other organisations who incur property losses directly from oil pollution are entitled to claim for compensation against the parties liable for pollution.20 Besides the claimants for property losses, the competent maritime administrative authority of the State or other enterprises and institutions may directly lodge lawsuits against the parties liable for oil pollution, by claiming for compensation for the cost for preventing or mitigating oil pollution damage, including the costs for cleaning up pollution.21 Besides these maritime authorities, Chinese local governments may also lodge such lawsuits as claimants if they partake in activities for preventing or mitigating oil pollution damage, including cleaning up any pollution.22 Furthermore, maritime environmental supervision and administrative authorities, authorised by the Maritime Environment Protection Law 2013,23 are entitled to lodge lawsuits against liable parties on behalf of the State within the authorised scope for maritime environmental losses caused by oil pollution.24 In disputes over compensation for oil pollution damage, where parties request compensation for clean-up costs incurred and damages for pollution, they shall be paid in proportion to the amount of the parties’ rights as determined by the courts.25 Pollution damage 16.10 “Pollution damage” in the CLC 1992 means: (a) loss or damage caused outside the ship by contamination resulting from the escape or discharge of oil from the ship, wherever such escape or discharge may occur, provided that compensation for impairment of the environment other than loss of profit from such impairment shall be limited to the costs for reasonable measures of reinstatement actually undertaken or to be undertaken; and (b) the costs of preventive measures and further loss or damage caused by preventive measures.26 Similarly, “pollution damage” in the Bunker Convention 2001 means: (a) loss or damage caused outside the ship by contamination resulting from the escape or discharge of bunker oil from the ship, wherever such escape or discharge may occur, provided that compensation for impairment of the environment other than loss of profit from such impairment shall be limited to the costs of reasonable measures of reinstatement actually undertaken or to be undertaken; and (b) the costs of preventive measures and further loss or damage caused by preventive measures. The difference between them is that the pollution damage under the CLC 1992 is caused by the oil from the ship but under the Bunker Convention 2001 it is caused by the bunker oil. 20 Minutes of the Second National Working Conference 2005, art 144. 21 ibid, art 145. 22 Xiamen Haicang People’s Government v Xiamen Gangwu Shipping Co Ltd and Xiamen Qianhe Shipping Co Ltd (2013) Xia Hai Fa Shi Chu Zi No. 55 (Xiamen Maritime Court). 23 Maritime Environment Protection Law 2013, art 90. 24 Minutes of the Second National Working Conference 2005, art 146. 25 ibid, art 151. 26 CLC 1992, art 1, para 6.

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16.11 In Chinese judicial practice, oil pollution damage caused by both oil from a ship and bunker oil covers: (1) the costs of preventive measures to prevent or minimise the damage caused by oil pollution, and further loss or damage caused by such preventive measures; (2) damage caused by oil pollution incidents to properties other than the ships involved, and the consequential loss of income; (3) loss of income arising from environmental damage caused by oil pollution; and (4) expenses incurred by reasonable restoration measures taken or to be taken for the polluted environment.27 Compared with pollution damage under the CLC 1992 and the Bunker Convention 2001, oil pollution damage in Chinese judicial practice covers additional loss of profit, namely the consequential loss of income of the polluted properties and the loss of income arising from environmental damage. The loss of profit recognised is based on the Chinese judicial practice of Chinese tort law, which is subject to causation and remoteness.28 16.12 Chinese courts will determine the costs of preventive measures and further loss and damage caused by such preventive measures by taking into consideration all relevant factors such as the scale and degree of pollution, amount of oil leakage, the appropriateness of the preventive measures, and manpower and equipment costs involved in oil cleaning operations.29 In the case of pollution prevention measures adopted for ships involved in an accident, if the sole objective at the beginning of the operation is to prevent or minimise oil pollution damage, expenses so incurred shall be identified as the cost of preventive measures. Where an operation is intended both for rescuing the ship in distress and other property and for minimising oil pollution damage, the cost of preventive measures and the cost of rescue measures shall be determined according to the priority given to the two objectives respectively. Where there is no reasonable grounds on which primary and secondary objectives can be identified, relevant costs shall be shared equally. However, costs incurred after the elimination of relevant pollution hazards shall not be included in the cost of preventive measures.30 16.13 In the case of pollution caused by oil leakage from ships to other ships, fishing gear, fishery facilities and other properties, the victims can claim compensation against the parties liable for the oil pollution, for reasonable expenses paid for cleaning and/or repairing polluted properties. Where the polluted properties cannot be cleaned or repaired, or the relevant cleaning or repairing costs exceed the value of such properties, the victims can request compensation from the parties liable for oil pollution, for reasonable replacement costs, provided that reasonable deductions shall be made according to the difference between the actual in-service term and the expected service life of the polluted properties.31 Claims for loss of income by victims engaging in marine cultivation and/or ocean fishing without the permission of relevant competent administrative departments are not allowed; however, those victims may claim for compensation for reasonable costs of cleaning, repairing or replacing cultivation or fishery facilities.32 16.14 Where the victim is unable to carry on normal business operations due to the effect of ship oil pollution on its property, its loss of income is calculated based on the reasonable

27 28 29 30 31 32

Provisions on Oil Pollution Damage 2011, art 9. For causation and remoteness, see paras 11.13 and 11.14. Provisions on Oil Pollution Damage 2011, art 10. ibid, art 11. ibid, art 12. ibid, art 15.

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length of time needed for cleaning, repairing or replacing such properties.33 Ocean fishing and coastal tourism industries and other organisations or individuals engaging in sea/ offshore-related businesses may claim for loss of income caused by environmental pollution, if they satisfy all the following conditions so that a causal relationship is established between such loss of income and environmental pollution: (1) the claimant’s production and operating activities are conducted within or near the polluted area; (2) the claimant’s production and operating activities mainly rely on the polluted resources or the coastal areas; (3) the claimant is unable to find any alternative resources or business opportunities; and (4) the claimant’s production and operating businesses belong to relatively stable local industries.34 16.15 Where the victim claims for loss of income caused by polluted properties or environmental pollution, such loss shall be reasonably calculated by deducting the actual net income during the affected period of time from the average net income for the same period during the last three years, and taking into appropriate consideration any other factors that have a bearing on income. Where the loss of income cannot be so determined, such losses shall be reasonably determined by making reference to relevant statistics and information released by government departments, or the average income of the producers and operators within the same area and engaging in the same businesses during the affected period of time. Victims may claim for compensation for reasonable expenses incurred in taking reasonable measures to prevent loss of income, but the claim shall be limited to the amount of income loss actually prevented.35 Where environmental damage is caused by ship oil pollution, compensation for such environmental damage shall be limited to the cost for reasonable restoration measures already taken or to be taken. The cost of restoration measures shall include the cost for reasonable monitoring, assessment and research.36 Liability and proportion Liability under the conventions 16.16 Where the CLC 1992 applies, no claim for compensation for pollution damage may be made against the owner otherwise than in accordance with the CLC 1992.37 Under the CLC 1992, the owner of a ship at the time of an incident, or, where the incident consists of a series of occurrences, at the time of the first such occurrence, shall be liable for any pollution damage caused by the ship as a result of the incident.38 However, no liability for pollution damage shall attach to the owner if he proves that the damage: (a) resulted from an act of war, hostilities, civil war, insurrection or a natural phenomenon of an exceptional, inevitable and irresistible character, or (b) was wholly caused by an act or omission done with intent to cause damage by a third party, or (c) was wholly caused by the negligence or other wrongful act of any government or other authority responsible for the maintenance of lights or other navigational aids in the exercise of that function.39 33 34 35 36 37 38 39

ibid, art 13. ibid, art 14. ibid, art 16. ibid, art 17. CLC 1992, art 3, para 4. ibid, art 3, para 1. ibid, art 3, para 2.

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16.17 Nothing in the CLC 1992 shall prejudice any right of recourse of the owner against third parties.40 Subject to this right of recourse, no claim for compensation for pollution damage under the Convention or otherwise may be made against: (a) the servants or agents of the owner or the members of the crew; (b) the pilot or any other person who, without being a member of the crew, performs services for the ship; (c) any charterer (how ever described, including a bareboat charterer), manager or operator of the ship; (d) any person performing salvage operations with the consent of the owner or on the instructions of a competent public authority; (e) any person taking preventive measures; (f ) all servants or agents of persons mentioned in subparagraphs (c), (d) and (e); unless the damage resulted from their personal act or omission, committed with the intent to cause such damage, or recklessly and with knowledge that such damage would probably result.41 If the owner proves that the pollution damage resulted wholly or partially either from an act or omission done with intent to cause damage by the person who suffered the damage or from the negligence of that person, the owner may be exonerated wholly or partially from his liability to such person.42 16.18 Where the Bunker Convention 2001 applies, no claim for compensation for pollution damage shall be made against the shipowner otherwise than in accordance with the Convention.43 Similar to an owner’s liability under the CLC 1992, the shipowner under the Bunker Convention 2001 at the time of an incident shall be liable for pollution damage caused by any bunker oil on board or originating from the ship, provided that, if an incident consists of a series of occurrences having the same origin, the liability attaches to the shipowner at the time of the first of such occurrences. Where more than one person is liable, under the Bunker Convention 2001, their liability shall be joint and several.44 However, nothing in the Bunker Convention 2001 shall prejudice any right of recourse of the shipowner that exists independently of the Convention.45 Like the owner under the CLC 1992, the shipowner under the Bunker Convention 2001 has the same exemption of liability and exoneration of liability.46 Unlike the CLC 1992, there is no restriction of claims against the servants or agents of the owner or the members of the crew, against the pilot or any other person who, without being a member of the crew, performs services for the ship, any charterer, manager or operator of the ship,47 any person performing salvage operations with the consent of the owner or on the instructions of a competent public authority, and any person taking preventive measures. Joint and several liabilities 16.19 Under the CLC 1992, when an incident involving two or more ships occurs and pollution damage results, the owners of all the ships concerned, unless otherwise

40 ibid, art 3, para 5. 41 ibid, art 3, para 4. 42 ibid, art 3, para 3. 43 Bunker Convention 2001, art 3, para 5. 44 ibid, art 3, paras 1 and 2. 45 ibid, art 3, para 6. 46 ibid, art 3, paras 3 and 4. 47 Shipowner in the Bunker Convention 2001 means the owner, including the registered owner, bareboat charterer, manager and operator of the ship.

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exonerated, shall be jointly and severally liable for all such damage that is not reasonably separable.48 Like in the CLC 2001, under the Bunker Convention 2001 there is the same joint and several liability on the shipowners of all ships involved where an incident occurs with two or more ships, and pollution damage results.49 16.20 In Chinese judicial practice, in the case of oil pollution damage caused by leakage from two or more ships, if the victim requests that the owners of all oil-leaking ships be liable for compensation, the owners shall assume their respective liabilities where it is possible to reasonably differentiate between damages caused by them according to the amount of oil leakage, damages caused by different types of oil and other factors; where it is impossible to differentiate between damages caused by them respectively, the owners shall assume joint and several liability, except where owners are exempt from liability. Where the owners of all the oil-leaking ships assume joint and several liability, the amount of compensation for which they are liable shall be determined according to their respective shares of relevant responsibility; where it is impossible to determine the share of responsibility, responsibility shall be shared equally between the owners. In the event that any of the owners makes payment of compensation in excess of the payable amount, it shall be entitled to recover the overpaid amount from other owners of oil-leaking ships.50 16.21 Furthermore, in the case of oil pollution damage caused by oil leakage resulting from collisions of ships that are both at fault, the victim may request that the owners of oil-leaking ships bear full compensation liability.51 However, if the colliding ships are all in fault, each ship shall be liable for the damage caused by oil pollution in proportion to the extent of its fault.52 If the respective faults are equal in proportion or it is impossible to determine the extent of the proportion of the respective faults, the liability of the colliding ships for the damage caused by oil pollution shall be apportioned equally.53 However, if only one of the colliding ships is the oil-leaking ship, only the owner of the oil-leaking ship shall be liable for the damage caused by oil pollution even if the owner may exercise the right of recourse to claim against the other colliding ship for compensation.54 If one of the colliding ships in the accident has been bareboat chartered when the accident occurs but the bareboat charter was not registered, the shipowner and the charterer shall be joint and severally liable for the damage caused by oil pollution in the accident.55 Liability not under the conventions 16.22 According to the Marine Environment Protection Law 2013, any party that is directly liable for pollution damage to the marine environment shall relieve the damage and 48 CLC 1992, art 4. 49 Bunker Convention 2001, art 5. 50 Provisions on Oil Pollution Damage 2011, art 3. 51 ibid, art 4. 52 Department of Ocean and Fisheries of Guangdong Province v China Shipping Raw Material Supply Fujian Co Ltd and Taizhou Donghai Shipping Co Ltd (2000) Yue Gao Fa Jing Er Zhong Zi No. 328 (Guangdong High People’s Court) (CA). 53 CMC 1992, art 169, para 1. 54 Xiamen Haicang People’s Government v Xiamen Gangwu Shipping Co Ltd and Xiamen Qianhe Shipping Co Ltd (2013) Xia Hai Fa Shi Chu Zi No. 55 (Xiamen Maritime Court). 55 Department of Ocean and Fisheries of Guangdong Province v China Shipowners Mutual Assurance Association and Others (2001) Guang Hai Fa Chu Zi No. 89 (Guangzhou Maritime Court).

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compensate for the losses; where the pollution damage to the marine environment is entirely caused by an intentional act or a fault of a third party, that third party shall relieve the damage and be liable for the compensation.56 In judicial practice of disputes over the damage to marine environment, Chinese court may apply the Tort Liability Law 2009, which provides the regime of liability without fault for damage to the marine environment.57 It means that the polluter shall compensate for the damage to the marine environment regardless of whether the polluter is at fault in the pollution incident.58 However, where the damage to the marine environment caused by pollution cannot be avoided despite prompt and reasonable measures, the parties concerned held responsible shall be exempt from liability where the pollution is entirely attributable to any of the following circumstances: (1) war; (2) unpreventable natural calamities; or (3) negligence or other wrongful acts in the performance of a department responsible for the maintenance of beacons or other navigation aids.59 Evidence and burden of proof 16.23 Without evidence to the contrary, the investigation reports made by the State competent maritime administrative authority may serve as the basis for the maritime court in trials.60 In judicial practice, the proportion of liability to the extent of the fault of the shipowners determined by the maritime administrative authority may also be accepted if there is no evidence to the contrary.61 In the case of indemnification litigation with respect to oil pollution caused by ships, the affected parties shall be responsible for providing evidence of oil pollution damage, and the parties subject to liability shall be responsible for providing evidence use to support their general defences, and that there is no causal relationship between oil pollution and the damage.62 Limitation of liability 16.24 There is a limitation of liability in the CLC 1992, as amended by the 2000 Amendments to CLC Protocol 1992,63 which applies to China, including the Hong Kong SAR.64 The owner of a ship shall be entitled to limit his liability under the CLC 1992 in respect of any one incident to an aggregate amount calculated as follows: (a) 4,510,000 units of account for a ship not exceeding 5,000 units of tonnage; (b) for a ship with a tonnage in excess thereof, for each additional unit of tonnage, 631 units of account in addition to the amount mentioned in sub-paragraph (a); provided, however, that this aggregate amount shall not in any event exceed 89,770,000 units of account.65 For the purpose of the 56 Marine Environment Protection Law 2013, art 90, para 1. 57 Tort Liability Law 2009, art 65. 58 Department of Ocean and Fisheries of Shandong Province v UNTED Ocean Shipping Sdn Bhd and Others (2007) Qing Hai Fa Yan Que Zi No. 1 (Qingdao Maritime Court). 59 ibid, art 92. 60 Minutes of the Second National Working Conference 2005, art 147. 61 Xiamen Haicang People’s Government v Xiamen Gangwu Shipping Co Ltd and Xiamen Qianhe Shipping Co Ltd (2013) Xia Hai Fa Shi Chu Zi No. 55 (Xiamen Maritime Court). 62 Minutes of the Second National Working Conference 2005, art 148. 63 Resolution LEG.1(82). They were adopted by the IMO on 18 October 2000. 64 (2003) Announcement No. 16 of the Ministry of Communications of the PRC. 65 CLC 1992, art 5, para 1.

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limitation of liability, the ship’s tonnage shall be the gross tonnage calculated in accordance with the tonnage measurement regulations of the International Convention on Tonnage Measurement of Ships, 1969.66 The owner shall not be entitled to limit his liability under the CLC 1992 if it is proved that the pollution damage resulted from his own personal act or omission, committed with the intent to cause such damage, or recklessly and with knowledge that such damage would probably result.67 16.25 China has ratified the CLC 1992 without reservation, so the CLC 1992 should apply without any restrictions. The CMC 1992 also provides that the provisions in respect of the limitation of liability in the CMC 1992 shall not apply to claims for oil pollution damage under the CLC 1992.68 However, the SPC interpreted that the CLC 1992 applies only to ships sailing on international lines. For oil pollution caused by ships sailing on noninternational lines, the CMC 1992, the Marine Environment Protection Law 2013 and other relevant administrative regulations apply. Therefore, the limitation of liability for maritime claims for oil pollution caused by ships sailing on non-international lines is governed by the CMC 1992.69 This judicial interpretation is obviously inconsistent with the concept of the ship in the CLC 1992 and the requirement for the application of the CLC 1992.70 16.26 Unlike the CLC 1992, there is no independent limitation of liability in the Bunker Convection 2001. The shipowners and the person or persons providing insurance or other financial security may limit liability under any applicable national or international regime, such as the Convention on Limitation of Liability for Maritime Claims, 1976 (LLMC 1976).71 China is not a State party to the LLMC 1976 but the CMC 1992 provides the same limitation of liability as the LLMC 1976. Like the owner in the CLC 1992, where the bunker oil pollution damage is proved to be caused by the shipowner’s intentional act or reckless act or omission with the knowledge of possible occurrence of the damage, the shipowner under the Bunker Convention 2001 shall not be entitled to limit his liability according to the CMC 1992.72 16.27 In practice, in the case of oil pollution damage caused by persistent oil substances carried by oil tankers, limitation of liability is determined in accordance with the CLC 1992. In the case of oil pollution damage caused by non-persistent fuel carried by oil tankers, or by fuel carried by vessels other than oil tankers, limitation of liability shall be determined in accordance with provisions concerning limitation of liability for maritime claim in the CMC 1992.73 Where the same maritime incident causes the damage by non-persistent fuel carried by oil tankers, or by fuel carried by vessels other than oil tankers and other damage eligible for the limitation of liability in the CMC 1992, the relevant shipowner may apply for limitation of liability for compensation within the same limitation of liability under the CMC 1992.74 66 ibid, art 5, para 1. China is a State party to the International Convention on Tonnage Measurement of Ships 1969. 67 ibid, art 5, para 2. 68 CMC 1992, art 208. 69 Reply of the Supreme People’s Court on Request for Instructions on the Application of Law in respect of Civil Liability for oil pollution in Chinese territorial sea caused by Ships registered in China Sailing on nonInternational Lines [2008] Min Si Ta Zi No. 20 (SPC) (Reply). 70 See paras 16.4 and 16.7. 71 Bunker Convention 2001, art 6. 72 CMC 1992, art 209. 73 Provisions on Oil Pollution Damage 2011, art 5. 74 ibid, art 19, para 2.

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16.28 With respect to cases involving disputes over compensation for oil pollution caused by ships that are subject to the CLC 1992, the relevant shipowners and the insurers or persons providing financial guarantee, for the purpose of obtaining the right of liability limitation under the CLC 1992, may constitute a limitation fund with a Chinese maritime court for claims in respect to oil pollution damage according to Special Maritime Procedure Law 1999.75 Insurance and financial guarantee 16.29 Under the CLC 1992, the owner of a ship registered in China and carrying more than 2,000 tons of oil in bulk as cargo is required to maintain insurance or other financial security, such as the guarantee of a bank or a certificate delivered by an international compensation fund, in the sums fixed by applying the limits of liability under the CLC 1992 to cover his liability for pollution damage under the CLC 1992.76 Any sums provided by insurance or by other financial security maintained under the CLC 1992 shall be available exclusively for the satisfaction of claims under the CLC 1992.77 If the requirements for insurance or financial security have been complied with, a certificate attesting for insurance or other financial security shall be issued by Chinese maritime authorities. The certificate shall be in Chinese, with a translation in English. The certificate is to be carried on board the ship and a copy shall be deposited with Chinese maritime authorities or, if the ship is not registered in China, with the authorities of the State issuing or certifying the certificate.78 China does not permit a ship with a Chinese flag to trade unless a certificate has been issued.79 16.30 Under the CLC 1992, any claim for compensation for pollution damage caused by tanker oil may be brought directly against the insurer or other person providing financial security for the owner’s liability for pollution damage. In such case, the defendant may, even if the owner is not entitled to limit his liability under the CLC 1992, avail himself of the owner’s limits of liability under the CLC 1992. He may further avail himself of the defences (other than the bankruptcy or winding up of the owner) to which the owner himself would have been entitled to invoke. Furthermore, the defendant may avail himself of the defence that the pollution damage resulted from the wilful misconduct of the owner himself, but the defendant shall not avail himself of any other defence that he might have been entitled to invoke in proceedings brought by the owner against him. The defendant shall in any event have the right to require the owner to be joined in the proceedings.80 16.31 The Bunker Convention 2001 provides a similar regime of compulsory insurance or financial security. Under the Bunker Convention 2001, the registered owner of a ship having a gross tonnage greater than 1,000 tonnes registered in China shall be required to maintain insurance or other financial security, such as the guarantee of a bank or similar financial institution, to cover the liability of the registered owner for pollution damage in

75 76 77 78 79 80

Minutes of the Second National Working Conference 2005, art 143. CLC 1992, art 7, para 1. ibid, art 7, para 9. ibid, art 7, paras 2–4. ibid, art 7, para 10. ibid, art 7, para 8.

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an amount equal to the limits of liability under CMC 1992. A certificate attesting for insurance or other financial security is also required and shall be issued by Chinese maritime authorities.81 The certificate is in Chinese with English translation. The certificate shall be carried on board the ship and a copy shall be deposited with the maritime authorities or, if the ship is not registered in China, with the authorities issuing or certifying the certificate.82 China does not permit a ship with a Chinese flag to operate at any time, unless a certificate has been issued.83 16.32 Similar to the CLC 1992, any claim for compensation for pollution damage caused by bunker oil may be brought directly against the insurer or other person providing financial security for the registered owner’s liability for pollution damage. In such a case the defendant may invoke the defences (other than bankruptcy or winding up of the shipowner) that the shipowner would have been entitled to invoke, including limitation pursuant to the CMC 1992. Furthermore, even if the shipowner is not entitled to limitation, the defendant may limit liability to an amount equal to the amount of the insurance or other financial security required to be maintained in an amount equal to the limits of liability under CMC 1992. Moreover, the defendant may invoke the defence that the pollution damage resulted from the wilful misconduct of the shipowner, but the defendant may not invoke any other defence that the defendant might have been entitled to invoke in proceedings brought by the shipowner against the defendant. The defendant shall in any event have the right to require the shipowner to be joined in the proceedings.84 16.33 According to the Regulations on Marine Pollution 2016, owners of ships navigating within waters under the jurisdiction of China shall, in accordance with the Measures of the People’s Republic of China for Implementation of Civil Liability Insurance for Oil Pollution Damage Caused by Ships 2010, as amended in 2013,85 ensure that there is insurance for civil liability for oil pollution and damage caused by vessels, or procure corresponding financial guarantees. The insured amount under the insurance on civil liability for oil pollution and damage caused by vessels or the financial guarantees procured by the shipowners shall be no less than the compensation limit prescribed by the CLC 1992 and the CMC 1992.86 Furthermore, owners or agents who receive persistent oily substances carried by sea within waters under the jurisdiction of China should also contribute to the vessel oil pollution compensation fund.87 16.34 In judicial practice, where oil pollution damage is caused by an owner’s intentional act, the victim is not allowed to request compensation by the insurer or financial guarantor of liability for vessel oil pollution damage.88 This practice is consistent with the provisions in the CLC 1992 and the Bunker Convention 2001 which provide that the insurer or financial guarantor may avail himself of the defence that the pollution damage resulted from the wilful misconduct of the owner himself.89 Furthermore, when a claim for

81 82 83 84 85 86 87 88 89

Bunker Convention 2001, art 7, paras 1 and 2. ibid, art 7, para 4. ibid, art 7, para 11. ibid, art 7, para 10. Order No. 11 [2013] of the Ministry of Transport of the PRC. Regulations on Marine Pollution 2016, art 53, paras 1 and 2. ibid, art 56. Provisions on Oil Pollution Damage 2011, art 7. CLC 1992, art 7, para 8 and Bunker Convention 2001, art 7, para 10.

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compensation for pollution damage caused by bunker oil was brought against both the shipowner and the insurer for the shipowner’s liability for the pollution damage, the shipowner and the insurer shall bear joint and several liability for the pollution damage.90 Similarly, when a claim for compensation for pollution damage caused by tanker oil may be brought against both the owner of ship and the insurer, the shipowner and the insurer shall bear joint and several liability for the pollution damage.

90 Yantai Dongyao Fishery Co Ltd v UNTED Ocean Shipping Sdn Bhd and Others (2008) Qing Hai Fa Yan Que Zi No. 22 (Qingdao Maritime Court) and Fuzhou Baiyang Hengfeng Ship Services Co Ltd v Shantou Fushun Shipping Co Ltd and Pingan Property Insurance Co Ltd (2014) Xia Hai Fa Shang Chu Zi No. 182 (Xiamen Maritime Court).

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CHAPTER 17

Applicable law and time limits

17.1 The issues of applicable law and time limits are commonly raised in Chinese judicial practice. Besides the principle of party autonomy, which is recognised by Chinese law, the CMC 1992 and the Law on Application of Laws to Foreign-Related Civil Relations 2010 (Law on Application of Laws 2010) apply to the issue of applicable law if there is no agreement on the applicable law. Time limits for maritime claims are mainly governed by the CMC 1992 and the General Principles of Civil Law 1986, as amended in 2009. Applicable law Party autonomy and closest connection 17.2 The principles of party autonomy and closest connection in Chinese law are embodied by the CMC 1992, the Contract Law 1999 and the Law on Application of Laws 2010. The CMC 1992 provides that the parties to a contract may choose the law applicable to such contract, unless the law provides otherwise. Where the parties to a contract have not made a choice, the law of the country having the closest connection with the contract apply.1 17.3 Similarly, Contract Law 1999 provides that the parties to a foreign-related contract may choose those laws applicable to the resolution of contract disputes, unless this is otherwise stipulated by law. Where the parties to a foreign-related contract fail to make such a choice, the laws of the country having the closest connection with the contract apply.2 Of course, Contract Law 1999 does not prohibit party autonomy for contracts without foreignrelated issues. Although Contract Law 1999 allows for the parties to a contract to choose laws for dispute resolution, such laws chosen by the parties must be consistent with and the same as the applicable law of the contract. 17.4 The Law on Application of Laws 2010 reaffirms the principle of party autonomy for foreign-related contracts. It also provides that where the parties have made no choice of applicable law, the laws of the habitual residence of the party whose performance of obligations best reflects the characteristics of the contract or the laws of the country having the closest connection with the contract shall apply.3 It provides one more choice of applicable 1 CMC 1992, art 269. 2 Contract Law 1999, art 126, para 1. Paragraph 2 of this article provides that “for the contracts to be fulfilled in the territory of the People’s Republic of China on Chinese-foreign equity joint ventures, on Chinese-foreign contractual joint ventures and on Chinese-foreign cooperation in exploring and exploiting natural resources, the laws of the People’s Republic of China shall apply”. 3 Law on Application of Laws 2010, art 41.

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law found by court besides the laws of the country having the closest connection with the contract. 17.5 In Chinese judicial practice, the principle of party autonomy in the CMC 1992 applies to maritime contracts governed by the CMC 1992, e.g. charterparties, salvage contracts, towage contracts and marine insurance contracts. For contracts not governed by the CMC 1992 but still considered as maritime contracts with foreign elements, e.g. shipbuilding contracts, ship agency contracts, ship management contracts, the principles of party autonomy and closest connection under the Contract Law 1999 and the Law on Application of Laws 2010 shall apply. Intention of the parties 17.6 The choice of applicable law must be within the intention of the parties to a contract. In American President Liners Co Ltd v Feida Electric Appliance Factory, Feili Company and Great Wall Company,4 the shipper claimed against the carrier for delivery of goods without the presentation of a bill of lading. The Guangzhou Maritime Court denied the applicable law clause and held that Chinese law applied to the dispute according to the principle of closest connection.5 It was upheld in the court of appeal.6 However, in the retrial of the case, the SPC pointed out that such a dispute was a contractual dispute and the applicable law in the clause paramount on the reverse side of the bills of lading in dispute should be recognised as the governing law of the bills of lading. 17.7 The relevant intention of the parties must be the intention of the contractual parties to a contract, and not a third party to the contract. In Baoding Condiment Co Ltd and Baoding Tianpeng Import & Export Group Co Ltd v Merzario (Hong Kong) Ltd and Mediterranean Shipping Company SA,7 the bills of lading holders claimed against the carrier for delivery of goods without the bill of lading. It was found that the Hong Kong law was the applicable law on the bill of lading. However, the Tianjin Maritime Court denied the application of Hong Kong law as the applicable law in this dispute. It was pointed out that the bills of lading holders were not the original parties to the contract, as evidenced by the bills of lading, and thus the agreement of the applicable law was not the intention of the bills of lading holders. Thus the applicable law on the bills of lading should not bind the bills of lading holders. Consequently, Chinese law applied to the dispute according to the principle of closest connection. This judicial practice seems inconsistent with shipping practice, in which the bills of lading holders shall have accepted all terms and conditions on the bills of lading when the holders accepted the bills. 17.8 In a dispute over the delivery of goods without the presentation of a bill of lading, Chinese maritime courts may also deny the applicable law on the bill of lading because the bill of lading is a standard form of contract. In Baron Motorcycles Inc v Awell Logistics Group Inc,8 the consignee of the bill of lading, who was holding the bill of lading, claimed against the carrier for the delivery of goods without the bill of lading. It was found that

4 5 6 7 8

(1998) Jiao Ti Zi No. 3 (SPC) (Retrial). (1994) Guang Hai Fa Shang Zi No. 66 (Guangzhou Maritime Court). (1996) Yue Fa Jing Er Shang Zi No. 29 (Guangdong High People’s Court) (CA). (2003) Hai Shang Chu Zi No. 68–72 (Tianjin Maritime Court). (2009) Hu Gao Min Si (Hai) Zhong Zi No. 27 (Shanghai High People’s Court) (CA).

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US law applied to the bill of lading. However, the Shanghai Maritime Court denied the application of US law. It was held that the bill of lading in dispute was a standard form with standard clauses (including the US law clause), and the standard clauses were not the intention or agreement of the parties. Therefore, Chinese law applied according to the principle of closest connection.9 However, the decision was reversed in the court of appeal. 17.9 In Baron Motorcycles Inc v Awell Logistics Group Inc, the court of appeal found that the carrier named the claimant as the consignee on the bill of lading upon the request of the consignee. The Shanghai High People’s Court held that the bill of lading in dispute should bind the consignee and the carrier and, therefore, the US law should apply. It is, however, unclear whether the applicable law on the bill of lading should apply if the consignee is not named on the bill of lading as the consignee at his request. In other words, the applicable law on the bill of lading may not apply where the intention of the parties is not found. The Shanghai Maritime Court continued the judicial practice of denying the applicable law clause on the standard bill of lading.10 This judicial practice may cause practical problems because all bills of lading in shipping practice are standard forms with printed terms and conditions on the reverse side of the bills or short form bills of lading without details of the terms and conditions. In such circumstances, no applicable law clause will be considered as valid unless it is proved that the terms and conditions of the bill of lading were made within the intention of the parties.11 International law and public policy 17.10 According to the CMC 1992, if any international treaty concluded or acceded to by China contains provisions differing from those contained in the CMC, the provisions of the relevant international treaty apply, unless the provisions are those on which China has announced reservations. Furthermore, international practice may be applied to matters for which neither the relevant Chinese laws nor any international treaty concluded or acceded to by China contain any relevant provisions.12 However, the application of foreign laws or international practices pursuant to the provisions of the CMC shall not prejudice the public interests of China.13 There is no concept of public policy in the CMC or other Chinese statutory laws, although Chinese maritime courts may examine whether an agreement of applicable law on the bill of lading prejudices the public interests of China.14 In Chinese judicial practice, a liberty clause entitling the carrier to deliver goods without the original straight bill of lading may be considered as prejudicial to China’s interests because it infringes the relevant provisions of the CMC.15 9 (2007) Hu Hai Fa Shang Chu Zi No. 706 (Shanghai Maritime Court). 10 Jiangsu Holly Corporation v CTS International Logistics Co Ltd (2011) Hu Hai Fa Shang Chu Zi No. 232 (Shanghai Maritime Court). 11 See also Ningbo Oudian Audio Electronics Co Ltd v West Consolidators Inc and Others (2009) Yong Hai Fa Shang Chu Zi No. 400 (Ningbo Maritime Court). 12 CMC 1992, art 268. 13 ibid, art 276. 14 Guangzhou Zhaoying Hardware Co Ltd v Expeditors International Washington Inc and Others (2004) Guang Hai Fa Chu Zi No. 59 (Guangzhou Maritime Court). 15 Baoding Condiment Co Ltd and Baoding Tianpeng Import & Export Group Co Ltd v Merzario (Hong Kong) Ltd and Mediterranean Shipping Company SA (2003) Hai Shang Chu Zi No. 68–72 (Tianjin Maritime Court).

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Statutory applicable law 17.11 Under the CMC 1992, the law of the flag State of the ship shall apply to the acquisition, transfer and extinction of the ownership of the ship.16 The law of the flag State of the ship shall apply to the mortgage of the ship. The law of the original country of registry of a ship shall apply to the mortgage of the ship if its mortgage is established before or during its bareboat charter period.17 The law of the place where the court hearing the case is located shall apply to disputes over maritime liens.18 This means that when Chinese maritime courts hear the case of maritime liens, Chinese law will apply. 17.12 The law of the place where the infringing act is committed shall apply to claims for damages arising from the collision of ships. If the collision of ships occurs on the high seas, the law of the place where the court hearing the case is located applies. In other words, Chinese law shall apply to claims for damages arising from the collision of ships on the high seas in Chinese maritime courts. However, if the colliding ships have the same nationality, no matter where the collision occurs, the law of the flag State shall apply to claims against one another for damages arising from such collision.19 17.13 The law where the adjustment of general average is made shall apply to the adjustment of general average.20 However, the parties in dispute of general average may agree to apply foreign laws to the adjustment in China. The law of the place where the court hearing the case is located shall apply to the limitation of liability for maritime claims.21 This means that Chinese law shall apply if Chinese maritime courts have the jurisdiction of the dispute over the limitation of liability for maritime claims. Time limits for maritime claims Time limits for carriage of goods claims 17.14 Under the CMC 1992, the limitation period for claims against the carrier with regard to the carriage of goods by sea (excluding charterparties) is one year, commencing from the date on which the goods were delivered or should have been delivered by the carrier.22 According to the judicial interpretation of the SPC, the limitation period for the carrier’s claims against the shipper, consignee or bill of lading holder is also one year, commencing from the date on which the carrier knew or should have known that his right had been infringed.23 In Guanfeng Shipping Co Ltd v Liang Zhaoxiong,24 the time limit for the carrier’s claim for the non-payment of freight was one year, commencing from the date when the last payment became due.

16 CMC 1992, art 270. 17 ibid, art 271. 18 ibid, art 272. 19 ibid, art 273. 20 ibid, art 274. 21 ibid, art 275. 22 ibid, art 257, para 1. 23 Reply of the Supreme People’s Court on Request for Instructions on the Limitation Period for Carrier’s Claim Against Shipper, Consignee or Bill of Lading Holder for Damages, Fa Shi [1997] 3 (SPC). 24 (2002) Guang Hai Fa Chu Zi No. 381 (Guangzhou Maritime Court).

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17.15 If the goods at the port of discharge were not taken by cargo interests, the carrier may claim against the shipper for damages thus caused. However, the one-year time limit does not commence from the date on which the carrier knew that no one would take the delivery of the goods. In COSCO Container Lines Co Ltd v Hunan Jiali International Trade Co Ltd,25 the carrier claimed against the shipper for the costs and damages in the port of discharge because the consignee did not take delivery of the goods. The goods arrived at the port of discharge on 25 August 2007. According to the CMC 1992, the carrier may exercise a lien on the goods if any due payment is not paid to the carrier. If the goods under lien have not been taken delivery of within 60 days from the next day of the ship’s arrival at the port of discharge, the carrier may apply to the court for an order on selling the goods by auction.26 Therefore, the one-year time limit commenced from the date 25 October 2007. 17.16 Furthermore, the SPC interpreted that the limitation period for shipper and consignee’s claims against the carrier with regard to the coastal and inland water carriage of goods and for carrier’s claims against shipper and consignee was one year, commencing from the date on which the goods were delivered or should have been delivered by the carrier.27 Although these judicial interpretations of the SPC are not real interpretations of law because there is no relevant law providing for the basis of interpretation, Chinese maritime courts apply these judicial interpretations in judicial practice. 17.17 The limitation period for claims with regard to charterparties including voyage charters, time charters and bareboat charters is two years, commencing from the date on which the claimant knew or should have known that his right had been infringed.28 If the claim concerns damage to goods, the limitation period shall commence from the date of the incident causing damage to the goods.29 If the claim concerns the payment of hire, the limitation period shall commence from the date of the last payment of hire.30 “Should have been delivered” 17.18 In judicial practice, if the delivery date has been agreed in a contract for carriage of goods by sea, but the goods are not actually delivered, the agreed date is the date that the goods should have been delivered as agreed.31 If the goods were not actually delivered, it is necessary to determine when the goods should have been delivered for the commencement of the time limit in claims for carriage of goods. In Shanxi Xinghuacun International Trade Co Ltd v Airsea Worldwide Logistics Ltd (Xinghuacun v Airsea),32 the SPC interpreted that the date that the goods should have been delivered meant a reasonable date on which the goods carried by the carrier to the port of destination in a normal voyage were ready for delivery and the bill of lading holder could take delivery of the goods. The SPC clarified 25 (2010) Qing Hai Fa Shang Chu Zi No. 166 (Qingdao Maritime Court). 26 CMC 1992, arts 87 and 88. 27 Reply of the Supreme People’s Court on Request for Instructions on the Limitation Period for Claims for Damages in Coastal and Inland Water Carriage of Goods, Fa Shi [2001] 18 (SPC). 28 CMC 1992, art 257, para 2 and art 259. 29 Haikou Nanqing Lines Co Ltd v Xiamen Nantai Shipping Co Ltd (2009) Hu Gao Min Si (Hai) Zhong Zi No. 62 (Shanghai High People’s Court) (CA). 30 Guangzhou Yongyu Petroleum Trading Co Ltd v Guangzhou Zhuhai Xinhai Shipping Transport Co Ltd (2002) Guang Hai Fa Chu Zi No. 344 (Guangzhou Maritime Court). 31 Zhejiang Orient Holding Huaye Import & Export Co Ltd v Kuehne & Nagel (China) Feight Forwarding Co Ltd and Transpac Container System Ltd (2012) Hu Hai Fa Shang Chu Zi No. 827 (Shanghai Maritime Court). 32 (2013) Min Ti Zi No. 5 (SPC) (Retrial).

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two conditions that would commence the time limit: when the delivery is ready, and when taking delivery is also ready. Therefore, where the bill of lading holder was able to take delivery of goods that were ready for delivery but did not take such a delivery, the commencement of the one-year time limit should not be affected by the bill of lading holder’s refusal to take the goods. In shipping practice, a free storage period is always agreed and the commencement of the one-year time limit may start from the date of expiry of the free storage period if the two conditions in Xinghuacun v Airsea are satisfied.33 17.19 In judicial practice, if the goods are claimed by the shipper to whom the bill of lading is returned, the time limit for the shipper’s claim against the carrier shall commence from the date when the goods are ready for delivery to the bill of lading holder. In China National Packaging Import & Exports Company Shandong Branch v Hecny Transportation Ltd,34 the shipper claimed against the carrier for delivery of goods without presentation of the bill of lading when he received the returned bill of lading from banks. The Qingdao Maritime Court held that the time limit should commence from the date when the goods were ready for delivery and when the shipper claimed delivery of the goods from the carrier.35 However, the Shandong High People’s Court reversed the decision and held that the time limit should commence from the date when the goods were ready for delivery in the port of discharge. Obviously the decision of the court of appeal was inconsistent with the decision of the SPC in Xinghuacun v Airsea. One of the conditions to commence the time limit in Xinghuacun v Airsea is that the bill of lading holder is ready to take the delivery of the goods. If the claim is from the shipper rather than the bill of lading holder as a third party to the bill of lading, the time limit shall commence from the date when the goods are ready for delivery and the shipper is ready to take the delivery of the goods. The decision of the Qingdao Maritime Court should be upheld. Time limits for action for indemnity in carriage claims 17.20 Within the one-year limitation period or after the expiration thereof for claims of carriage of goods by sea excluding charterparties, if the person allegedly liable has brought a claim of recourse against a third person, the limitation period of the recourse action is 90 days, commencing from the date on which the person claiming for the recourse settled the claim, or was served with a copy of the process by the court handling the claim against him.36 In judicial practice, if the time limit for recourse action commences from the date on which the person claiming for the recourse was served with a copy of the process by the court handling the claim against him, the recourse action may have to stay to wait for the result of the original claim. It is also possible that the person claiming for the recourse may not be held liable in the original claim. Due to this, the SPC has interpreted that the time limit for recourse action commences from the date on which the person claiming for the recourse received the decision from the court handling the claim against him holding that he was liable in the claim.37 33 Kena Import & Export Co Ltd v China Shipping Container Lines (Hong Kong) Co Ltd and China Shipping Container Lines Zhejiang Branch (2014) Yong Hai Fa Shang Chu Zi No. 369 (Ningbo Maritime Court). 34 (2002) Lu Min Si Zhong Zi No. 35 (Shandong High People’s Court) (CA). 35 (2001) Qing Hai Fa Hai Shang Chu Zi No. 237 (Qingdao Maritime Court). 36 CMC 1992, art 257, para 1. 37 Reply of the Supreme People’s Court on Request for Claim for Recourse Action for Damage to Goods in Carriage of Goods by Sea in Dalian Port Authority v COSCO Dalian International Freight Co Ltd [2002] Min Si Ta Zi No. 21 (SPC) (Reply).

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17.21 The time limit for recourse action may be contrasted with the relevant rule in the Hague Visby Rules. Article III, rule 6bis of the Hague Visby Rules provides that “[A]n action for indemnity against a third person may be brought even after the expiration of the year provided for in the preceding paragraph38 if brought within the time allowed by the law of the Court seized of the case. However, the time allowed shall be not less than three months, commencing from the day when the person bringing such action for indemnity has settled the claim or has been served with process in the action against himself.”39 17.22 It can be seen from the relevant provisions that the time limit for recourse action in the CMC 1992 is 90 days maximum, but is three months minimum in the Hague Visby Rules. It is unclear why the CMC 1992 provides such a short time limit for recourse action, but the consequence is that the claimant in recourse action has a very short time to raise the recourse action in comparison with the time limit for recourse action under the Hague Visby Rules. For example, if a charterer who was held liable for the damage to the goods wants to bring up a claim of recourse against the shipowner, the time limit for his claim is 90 days, commencing from the date on which he settled the claim, or was served with a copy of the process by the court handling the claim against him under the CMC 1992, but the time limit is six years under the English Law, in which the Hague Visby Rules are adopted. 17.23 The 90-day time limit for recourse action under the CMC 1992 is a special time limit for claims in carriage of goods by sea. It does not therefore apply to the time limit for the insurer’s right to subrogation of litigation.40 In PICC P&C Co Ltd Beijing Branch v Dalian Glorious Ocean International Logistics Co Ltd and New Orient Shipping Ltd,41 it was interpreted by the Liaoning High People’s Court that the one-year time limit and the 90-day time limit are for the same dispute in the carriage of goods by sea. The insurer’s position is the same as the assured after compensation. Therefore, only the one-year time limit applies to the insurer’s claim against the third liable party although his claim may in practice be called a recourse action. 17.24 The 90-day time limit for recourse action also does not apply to the recourse action in tort. In Nippon Yusen Kabushiki Kaisha v Quanzhou Port Group Co Ltd,42 the carrier, after compensating the cargo interests for the damage to the goods, claimed against the stevedore company who damaged the goods during operation. Because there was no contract for the loading and/or discharge operation between the carrier and the stevedore company, the Xiamen Maritime Court held that it was a tort claim and the time limit should be two years. However, if there was a contractual relationship between the carrier and the stevedore company, the carriage may bring the recourse action against the stevedore company and the 90-day time limit may apply. 17.25 The typical recourse action is the NVOCC’s claim against the ocean carrier for his liability to the shipper on the NVOCC’s bill of lading.43 In Beijing Profit Sail International

38 The relevant part in the preceding paragraph art III, r 6 of the Hague Visby Rules is that “the carrier and the ship shall in any event be discharged from all liability whatsoever in respect of the goods, unless suit is brought within one year of their delivery or of the date when they should have been delivered. This period, may however, be extended if the parties so agree after the cause of action has arisen.” 39 There is no time limit for the recourse actions in the Hague Rules. 40 For the time limit for marine insurance claims, see paras 17.36–17.38. 41 (2011) Liao Min San Zhong Zi No. 14 (Liaoning High People’s Court) (CA). 42 (2003) Xi Hai Fa Shang Chu Zi No. 159 (Xiamen Maritime Court). 43 For the concept of NVOCC, see chapter 8, paras 8.21–8.27.

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Express Co Ltd Shanghai Branch v Shanghai AMASS International Freight Co Ltd,44 the NVOCC was held liable for damages to the goods to the shipper on the NVOCC’s bill of lading. The NVOCC, after receiving the judgment against him, brought a recourse action for the same damages to the goods against the ocean carrier who had issued the ocean bill of lading on which the NVOCC was the shipper. The 90-day time limit for recourse action applied to the NVOCC’s claim against the ocean carrier. This time limit also applies to the recourse action relating to the original claims in multimodal carriage.45 17.26 In judicial practice, even where a recourse action is not time barred, a recourse action may still not be supported by Chinese courts if the time limit for the original claim has been time barred. In Marittima SPA v Ningbo Ocean Shipping Co Ltd and Ningbo Shunzhou Shipping Co Ltd,46 the claimant in the recourse action settled the dispute with cargo interests in Italy and brought a recourse action against the sub-carrier as the liable party in the Ningbo Maritime Court. It was found that the recourse action was brought within the 90-day time limit, commencing from the date on which the claimant settled the claim in Italy. However, it was also found that the claim against the claimant in Italy had been time barred although the dispute was eventually settled. The Ningbo Maritime Court pointed out that the settlement of dispute by the claimant after the time limit in the original claim had actually infringed the interests of the sub-carrier in the recourse action. Therefore, the claimant’s recourse action could not be supported despite it being not time barred. 17.27 Although both the CMC 1992 and the SPC’s judicial interpretation have clarified on the issue of the time limit for recourse action in carriage of goods by sea, some Chinese maritime courts did not comply with the law and judicial interpretations. In China Container Line (Shanghai) Ltd v Shanghai Guanyun Freight Forwarding Co Ltd,47 the freight forwarder was held liable to the ocean carrier for the detention charge for the extended use of the containers in another action. The freight forwarder brought the recourse action against the shipper who was liable for the detention of containers. The Shanghai Maritime Court held that the one-year time limit should apply to the freight forwarder’s recourse action against the shipper. Time limit for container detention claim 17.28 When the container goods arrive at the port of discharge, the containers may be detained if no one takes delivery of the goods from the containers. In this circumstance, the carrier may claim against the shipper or other merchants for the damage from the detention of the containers. The difficulty in practice is the determination of the commencement of the time limit. The key point of this difficulty is the understanding of the carrier’s right in his claim, namely the entitlement of the damage for detention of containers. In A.P. MollerMaersk A/S v Shanghai XEN Freight Agency Ltd and Shanghai XEN Freight Agency Ltd Shenzhen Branch (Maersk v XEN ),48 the containers with the goods were detained at the 44 Beijing Profit Sail International Express Co Ltd Shanghai Branch v Shanghai AMASS International Freight Co Ltd (2009) Hu Gao Min Si (Hai) Zhong Zi No. 103 (Shanghai High People’s Court) (CA). 45 Guangdong Dyna International Freight Agency Co Ltd Beihai Branch and Guangdong Dyna International Freight Agency Co Ltd v Beihai Chengdong Transportation Co Ltd (2003) Hai Shang Chu Zi No. 020 (Beihai Maritime Court). 46 (2008) Yong Hai Fa Shang Chu Zi No. 37 (Ningbo Maritime Court). 47 (2014) Hu Hai Fa Shang Chu Zi No. 603 (Shanghai Maritime Court). 48 (2015) Min Shen Zi No. 559 (SPC) (Retrial).

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port of discharge because nobody took delivery of the goods. The detention charge for the extended use of containers was calculated from 1 March 2010. On 30 March, the shippers agreed to pay the detention charge but did not actually pay for it. On 28 February 2011, the local customs informed the carrier that the goods had been auctioned. The carrier claimed against the shippers for the detention charge for the extended use of containers on 27 February 2012 at the Guangzhou Maritime Court. It was held that the carrier’s claim was within the one-year time limit.49 The Guangzhou Maritime Court pointed out that the shipper’s infringement had ceased when the goods were sold by the local customs and the time limit should commence when the infringement had ceased, namely on 28 February 2011. Therefore, the carrier’s claim on 27 February 2012 was not time barred. The shippers appealed but the appeal was dismissed.50 17.29 The understanding of the Guangzhou Maritime Court in Maersk v XEN is obviously inconsistent with the SPC’s judicial interpretation, which provides that the time limit for such claims is one year, commencing from the date on which the carrier knew or should have known that his right had been infringed.51 So, the time limit in Maersk v XEN should commence from the date when the carrier knew or should have known that his right had been infringed by the shippers, not the date when the infringement had ceased. This inconsistent understanding seems common in judicial practice. In Wanhai Lines Pte Ltd v Global Express Logistics (Xiamen) Co Ltd Shanghai Branch,52 the containers were detained until container devanning. The Shanghai Maritime Court held that the one-year time limit for the carrier’s claim for the detention charge commenced from the date when the empty containers were returned to the container yard and the detention charge was consequently confirmed. However, this judicial practice was changed by the SPC. 17.30 The shippers in Maersk v XEN applied to the SPC for a retrial of the case. The SPC pointed out that the carrier knew or should have known that his right had been infringed when the detention charge started on 1 March 2010. Therefore, the carrier’s right of claim for the detention charged commenced from that day, and not the date when the infringement had ceased. Whether the detention charge could be finalised would not affect the carrier’s title to sue. In this case, the time limit was discontinued when the shippers agreed to pay the detention charge on 30 March 2010. Therefore, the SPC held that the one-year time limit of the carrier’s claim for the detention charge for the extended use of containers should commence from 30 March 2010 and thus the carrier’s claim on 27 February 2012 was time barred. 17.31 The SPC’s decision in Maersk v XEN seems consistent with the SPC’s judicial interpretation for the commencement of the one-year time limit for the carrier’s claim in relation to the carriage of goods by sea. However, there is a serious misunderstanding of the time limit for container detention claims in the SPC’s decision in Maersk v XEN. It relates to the nature of the claim for the detention charge for the extended use of the container. According to the SPC’s decision in Maersk v XEN, the nature of the detention charge is an infringement of the carrier’s right. On this basis, the time limit shall commence when the

49 (2012) Guang Hai Fa Chu Zi No. 329 (Guangzhou Maritime Court). 50 (2013) Yue Gao Fa Min Si Zhong Zi No. 162 (Guangdong High People’s Court) (CA). 51 Reply of the Supreme People’s Court on Request for Instructions on the Limitation Period for Carrier’s Claim Against Shipper, Consignee or Bill of Lading Holder for Damages, Fa Shi [1997] 3 (SPC). 52 (2014) Hu Hai Fa Shang Chu Zi No. 163 (Shanghai Maritime Court).

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detention charge starts, namely when the carrier’s right is infringed. However, it must be pointed out that the nature of the detention charge is the agreed charge between the carrier and the cargo interests. Like the demurrage in the voyage charter, the carrier agrees to the extended use of his containers, but charges for such detention. The carrier’s entitlement of the detention charge is infringed only when the cargo interests fail or refuse to pay the detention charge as agreed. Therefore, the one-year time limit of the carrier’s claim for the detention charge should commence when the carrier knows or should have known that payment of detention charge is due. Applied to the facts, the earliest date of the commencement of the time limit in Maersk v XEN was 28 February 2011 if the payment of detention charge was due immediately after the container devanning, and the commencement date of the time limit may be later than that date if there should be a reasonable period for the payment of the detention charge in shipping practice. Furthermore, the SPC in Maersk v XEN held that even if the detention charge could be finalised, the carrier’s title to sue would not be affected. However, if the containers are still detained when the carrier raises his claim, how much should the carrier claim? In judicial practice, a claim may be rejected by Chinese maritime courts if the amount of claim is not confirmed.53 So, the carrier’s claim for the detention charge will be affected if the detention charge is not finalised. Time limit for claims of delivery of goods without the presentation of a bill of lading 17.32 In Chinese judicial practice, a claim for damage caused by delivery of goods without the bill of lading may be raised on a contractual basis or tortious basis. The time limits for those two types of claim are the same, which is a one-year time limit according to the SPC’s judicial interpretation, although the general time limit for claims in tort is two years.54 Where the bill of lading holder files an action on the ground that the carrier delivers goods without the original bill of lading, the one-year time limit shall apply commencing from the date of delivery of goods by the carrier. If the bill of lading holder files an action involving the claim in tort on the ground that the carrier and a person taking delivery of the goods without the original bill of lading jointly commit the act of delivery of goods without the bill of lading, the same one-year time limit shall apply.55 Of course, the bill of lading holder may claim against only the carrier in tort although he must prove the joint liability of the carrier and the person taking the goods without the bill of lading.56 17.33 If the claim for damages due to the delivery of goods without the bill of lading is not against the carrier, but other parties who are responsible for such a delivery, the oneyear time limit does not apply. In Hyosung (HK) Ltd v China Marine Shipping Agency Co Ltd Fangchenggang Branch and Others,57 the bill of lading holder claimed against the agent of the carrier, customs agent and the guarantor of delivery for the damages due to the delivery of goods without the bill of lading. The SPC held that the one-year time limit 53 Pingan Property Insurance Co Ltd Beijing Branch v Front Saga Inc (2015) Yong Hai Fa Shou Chu Zi No. 5 (Ningbo Maritime Court); (2015) Zhe Min Shou Zhong Zi No. 7 (Zhejiang High People’s Court) (CA). 54 General Principles of Civil Law 1986, as amended in 2009, art 135. 55 Provisions on Delivery of Goods without Original Bills of Lading 2009, art 14. 56 Shandong Foreign Trade Group Co Ltd v Liaoning Shipping Co Ltd (1996) Qing Hai Fa Hai Shang Chu Zi No. 62 (Qingdao Maritime Court); (1997) Lu Jing Zhong Zi No. 492 (Shandong High People’s Court) (CA); (2004) Min Si Ti Zi No. 2 (SPC) (Retrial). 57 (2002) Min Si Zhong Zi No. 27 (SPC) (Retrial).

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should apply to the carrier’s agent only when the agent proved that his activity was within the authority of the carrier, namely the carrier’s agent was authorised to deliver the goods without a bill of lading. Otherwise, the two-year time limit under the General Principles of Civil Law 1986, as amended in 2009, applies.58 The SPC also held that the same two-year time limit should apply to the claim against the customs agent and the guarantor of delivery. Time limit for multimodal carriage and freight forwarding claim 17.34 It was previously understood in Chinese judicial practice that the one-year time limit applied to the claims on multimodal carriage because the provisions regarding multimodal carriage in the CMC 1992 are within the chapter of carriage of goods by sea.59 This understanding has been changed. In China Pacific Property Insurance Co Ltd Zhejiang Branch v COSCO Container Lines Co Ltd,60 the Shanghai Maritime Court clarified that the CMC 1992 contains the provisions of liability and limitation of liability regarding the multimodal carriage but does not provide a time limit for multimodal carriage claims. Therefore, the two-year time limit in the General Principles of Civil Law 1986, as amended in 2009 applies to the multimodal carriage claims. It was also clarified by Zhejiang High People’s Court in Wenzhou Dongfeng Transport Co Ltd v Shanghai Asian Development International Trans Pudong Co Ltd and Others that a two-year time limit should apply because the multimodal carriage includes but is not limited to ocean carriage.61 The twoyear time limit from the General Principles of Civil Law 1986, as amended in 2009, also applies to freight forwarding claims.62 Time limits for carriage of passengers’ claims 17.35 The limitation period for claims against the carrier with regard to the carriage of passengers by sea is two years, calculated respectively as follows:63 (1) (2)

(3)

Claims for personal injury: commencing from the date on which the passenger disembarked or should have disembarked; Claims for death of passengers that occurred during the period of carriage: commencing from the date on which the passenger should have disembarked; whereas those for the death of passengers that occurred after the disembarkation but resulted from an injury during the period of carriage by sea, commencing from the date of the death of the passenger concerned, provided that this period does not exceed three years from the time of disembarkation. Claims for loss of or damage to the luggage: commencing from the date of disembarkation or the date on which the passenger should have disembarked.

58 General Principles of Civic Law 1986, as amended in 2009, arts 135 and 137. 59 Stolt-Nielsen Transportation (Shanghai) Co Ltd v Anhui Shine Chemical Co Ltd (2008) Hu Hai Fa Shang Chu Zi No. 741 (Shanghai Maritime Court); (2009) Hu Gao Min Si (Hai) Zhong Zi No. 26 (Shanghai High People’s Court) (CA). 60 (2011) Hu Hai Fa Shang Chu Zi No. 40 (Shanghai Maritime Court). 61 (2010) Zhe Hai Zhong Zi No. 64 (Zhejiang High People’s Court) (CA). 62 Shaoxing Hengchang Group Co Ltd v Shanghai Dongsue International Logistics Co Ltd (2014) Hu Hai Fa Shang Chu Zi No. 1148 (Shanghai Maritime Court). 63 CMC 1992, art 258.

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Notwithstanding the above time limits in the CMC 1992, the Athens Convention provides that the period of limitation may be extended by a declaration of the carrier or by agreement of the parties after the cause of action has arisen. The declaration or agreement shall be in writing.64 Time limits for marine insurance claims 17.36 The limitation period for claims with regard to contracts of marine insurance is two years commencing from the date on which the insured peril occurred.65 In judicial practice, if the damage might not be known to the assured when the peril occurred, the date on which the insured peril occurred shall be the date on which the assured knew or should have known of the insured peril.66 If the amount of damage might not be finalised when the damage occurred, the limitation period may not commence from the date of occurrence of the insured peril. In SAICG International Trade Co Ltd v Pingan Property Insurance Co Ltd Shanghai Branch,67 the insurer argued that the time limit of the assured’s claim for the damage to the goods should commence when the goods arrived at the port of discharge and damage was found at the beginning of the discharge operation. This argument was rejected by the Shanghai Maritime Court. It was pointed out that the occurrence of the insured peril, namely the damage to the goods, did not occur at a single moment, but was a continued process. The insured peril should be considered as having occurred only when the damage was found through examination after the discharge of the whole goods. Ergo, the time limit should commence when the goods were discharged and examined so that the damaged was ascertained. 17.37 If the damage to the goods could not be ascertained because of reasons out of the control of the assured, the assured’s claim against the insurer may commence when the assured was able to examine the goods and ascertain the damage. In Zhejiang Zhonghua Group Co Ltd v Huatai Property Insurance Co Ltd Ningbo Branch,68 the goods arrived but the assured could not take delivery of the goods so as to examine them because the goods were arrested by a Chinese court. About one year later, the goods were released and the damage was found after the examination by the assured. The Ningbo Maritime Court held that the time limit of the assured’s claim should commence when the assured actually took delivery of the goods and examined them so that the damage was found. Similarly, in Huarun Dadong Dockyard Co Ltd v Pingan Property Insurance Co Ltd Shanghai Branch,69 the ship repairer as the assured, informed the insurer when a problem with the ship’s painting (the insured peril) was found. However, the assured could not claim the damage because the amount of damage was not ascertained without the ship’s investigation and evaluation. After the insurer’s confirmation on the ship’s investigation and evaluation, the assured settled the dispute with the shipowner and the amount of the damage was ascertained. It 64 Athens Convention, art 16, para 4. 65 CMC 1992, art 264. 66 Ferpinta – Industrias De Tubos De Aço De Fernando Pinho Teixeira, SA v Huatai Property Insurance Co Ltd Shanghai Branch (2011) Hu Hai Fa Shang Chu Zi No. 180 (Shanghai Maritime Court). 67 (2000) Hai Shang Chu Zi No. 011 (Beihai Maritime Court). 68 (2011) Yong Hai Fa Shang Chu Zi No. 47 (Ningbo Maritime Court). 69 (2013) Hu Hai Fa Shang Chu Zi No. 797(Shanghai Maritime Court); (2014) Hu Gao Min Si (Hai) Zhong Zi No. 78 (Shanghai High People’s Court) (CA).

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was held that the two-year time limit should not commence until the amount of the damage was ascertained after the settlement. 17.38 Where insurers exercise subrogation rights under marine insurance contracts to claim against liable parties for the insured perils, the commencement date of the time limit for insurers shall be determined in accordance with the commencement date of time limits for relevant claims under the CMC 1992.70 In Zurich International (Deutschland) Versicherungs AG v Chinese-Polish Joint Stock Shipping Company,71 the damaged goods were delivered on 25 November 1997 and the time limit for the claim against the carrier commenced thereafter. After the payment for the damage to the assured, the insurer exercised subrogation rights to claim against the carrier on 13 January 1999. It was held that the time limit for the insurer’s claim was one year, commencing from the date of delivery of the goods and the claim was therefore time barred. However, if the assured claims against the liable party within the time limit, the insurer’s claim against the same liable party in the same Chinese court will not be time barred even if the insurer’s claim is not within the time limit when the insurer exercised the rights of subrogation after the payment of the damage to the assured.72 Time limits for other claims 17.39 Under the CMC 1992, the limitation period for claims with regard to sea towage is one year, commencing from the date on which the claimant knew or should have known that his right had been infringed.73 The limitation period for claims with regard to collision of ships is two years, commencing from the date on which the collision occurred. The limitation period for claims with regard to the right of recourse in the collision of a ship is one year, commencing from the date on which the parties concerned jointly and severally paid the amount of compensation for the damage occurred.74 The limitation period for claims with regard to salvage at sea is two years, commencing from the date on which the salvage operation was completed.75 According to the Salvage Convention, if the salvage operation was not completed but terminated, the limitation period commences on the date on which the salvage operations are terminated. The person against whom a claim is made may at any time during the running of the limitation period extend that period by a declaration to the claimant. This period may in the like manner be further extended.76 17.40 The limitation period for claims with regard to contribution in general average is one year, commencing from the date on which the adjustment was finished.77 The limitation period for claims with regard to compensation for oil pollution damage from ships is three 70 Reply of the Supreme People’s Court on the Commencement Date of the Limitation Period for Insurers under Marine Insurance Contracts to Exercise Subrogation Rights, Fa Shi [2014] No. 15. 71 (1998) Guang Hai Fa Shang Zi No. 96 (Guangzhou Maritime Court). 72 PICC P&C Co Ltd Zhanjiang Economic and Technological Development Zone Branch v Cross Seas Shipping Corporation and Others (1999) Guang Hai Fa Zhan Zi No. 47 (Guangzhou Maritime Court). 73 CMC 1992, art 260. 74 ibid, art 261. If the ships at fault have caused loss of life or personal injury to a third party, they shall be jointly and severally liable. If a ship has paid an amount of compensation in excess of the proportion, it shall have the right of recourse against the other ship(s) at fault. See the CMC 1992, art 169, para 3. 75 ibid, art 262. 76 Salvage Convention, art 23, paras 1 and 2. 77 ibid, art 263.

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years, commencing from the date on which the pollution damage occurred. However, in no case shall the limitation period exceed six years, commencing from the date on which the accident causing the pollution occurred.78 According to the CLC 1992, where this incident consists of a series of occurrences, the six years’ period shall run from the date of the first such occurrence.79 The time limits for bunker oil pollution claims are the same in the Bunker Convention 2001.80 17.41 For maritime disputes not governed by the CMC 1992, e.g. disputes over shipbuilding, ship repairing and etc., the time limits for the claims of those disputes are not governed by the CMC 1992, but the General Principles of the Civil Law 1986, as amended in 2009, namely two years, commencing from the date when the claimant knew or should have known that his rights were infringed.81 The discontinuation of the time limits for the claims not governed by the CMC 1992 is also governed by the General Principles of the Civil Law 1986, as amended in 2009 in which the conditions to discontinue the time limits are different from those of the CMC 1992.82 Suspension and discontinuation Suspension of time limit 17.42 Within the last six months of the limitation period if on account of an event of force majeure or other causes, a claim is prevented from being made, the limitation period shall be suspended. The counting of the limitation period resumes when the cause of suspension no longer exists.83 Force majeure in the Contract Law 1999 means any objective situation that cannot be foreseen, avoided or overcome.84 Discontinuation of time limit 17.43 The limitation of time shall be discontinued when the claimant brings an action to a court or submits the case for arbitration, or the person against whom the claim was brought agrees to perform his obligations. The time limit for the claim of a dispute can be discontinued by the action for the same dispute only.85 The limitation period shall be counted anew from the time of discontinuance. Furthermore, where the claimant makes a claim for the arrest of a ship, the limitation of time shall be discontinued from the date on which the claim is made. However, the limitation of time shall not be discontinued if the claimant withdraws his action or his submission for arbitration, or his action has been rejected by the court.86 Nevertheless, if the claimant withdraws his claim brought within the time limit and brings the claim again

78 ibid, art 265. 79 CLC 1992, art 3, para 8. 80 Bunker Convention 2001, art 8. 81 General Principles of the Civil Law 1986, as amended in 2009, arts 135 and 137. 82 Yizheng Kangping Ship Building and Repairing Factory v Xiao Yiyuan and Others (2012) Min Shen Zi No. 1052 (SPC) (Retrial). For discontinuation of time limits in the General Principles of the Civil Law 1986, as amended in 2009, see para 17.47. 83 CMC 1992, art 266. 84 Contract Law 1999, art 117, para 2. 85 Shenzhen Guangda Shipping Co Ltd v PICC P&C Co Ltd Shenzhen Branch (2000) Guang Hai Fa Shen Zi No. 7 (Guangzhou Maritime Court). 86 CMC 1992, art 267.

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beyond the time limit because of the requirement of formalities, e.g. modification of the business certificate, the second claim shall not be time barred.87 Similarly, when the claimant brings his claim to a Chinese maritime court within the time limit under the CMC 1992, the modification of the claim after the time limit shall not be barred because the time limit has been discontinued by the claim.88 Furthermore, if the claimant brings his claim in a Chinese maritime court within the time limit but applies for adding a new liable party in the claim beyond the time limit, the claim against the new liable party shall not be time barred.89 17.44 For the discontinuation of time limit under the CMC 1992, the consent of the person against whom the claim was brought that he agrees to perform his obligations must be definite and affirmative. In Guangdong Yongyu Petroleum Trade Co Ltd v Guangzhou Haizhu Xinhai Shipping Co Ltd,90 the defendant expressed his intentions to settle the dispute and discharge from the duty of payment after his partial payment to the claimant. It was held by the Guangzhou Maritime Court that those intentions were not consent to pay for the remaining amount of the payment and, therefore, the time limit was not discontinued. In Yancheng Foreign Trade Co Ltd v Tianjin Marine Shipping Co Ltd,91 the agreement for the return of carriage of goods was not considered as the consent of the carrier to continue to perform his obligations under the original contract of carriage of goods by sea and the time limit was thus not discontinued. 17.45 In marine insurance disputes, only the request for insurance claims cannot discontinue the time limit for marine insurance claims.92 Even if the insurer, upon the request of the assured, conducted an investigation and claim assessment, it does not mean that the insurer agreed to fulfill the obligation of insurance compensation. In the view of the SPC, the investigation and claim assessment are just the conditions and bases for the insurer to decide whether to compensate the assured, and, therefore, do not discontinue the time limit for a marine insurance claim.93 17.46 If the insurer agrees to compensate the assured, it seems that the condition to discontinue the time limit is satisfied and the time limit shall be discontinued. However, the Tianjin Maritime Court gave a different answer in Beston Chemical Corporation v PICC P&C Co Ltd Beijing Branch (Beston v PICC).94 In this case, although the insurer agreed to compensate the assured, the amount of compensation was not agreed by the insurer and the assured. The Tianjin Maritime Court held that the time limit for the assured’s claim was not discontinued because the amount of compensation was not agreed. This decision was upheld by the Tianjin High People’s Court as the court of appeal.95 It seems from Beston v 87 Longteng Trading Co Ltd v China Pacific Proerty Insurance Co Ltd Zhejiang Branch (2009) Hu Gao Min Si (Hai) Zhong Zi No. 214 (Shanghai High People’s Court) (CA). 88 PICC P&C Co Ltd Guangdong Branch v Chongqing Ruichi Logistics Co Ltd and Others (2009) Hu Gao Min Si (Hai) Zhong Zi No. 164 (Shanghai High People’s Court) (CA). 89 Teda Enterprises (Canada) Inc v CSAV SA and NCL Shipping Agencies Ltd (2003) Jin Gao Min Si Zhong Zi No. 47 (Tianjin High People’s Court) (CA). 90 (2002) Guang Hai Fa Chu Zi No. 344 (Guangzhou Maritime Court). 91 (2000) Hai Shen Jian Shang Zai Chu Zi No. 1–6 (Tianjin Maritime Court). 92 Shanghai Jinrongxiang Enterprise Development Co Ltd v China Pacific Property Insurance Co Ltd Shanghai Branch (2012) Hu Hai Fa Shang Chu Zi No. 166(Shanghai Maritime Court); (2012) Hu Gao Min Si (Hai) Zhong Zi No. 73 (Shanghai High People’s Court) (CA). 93 Australia China Metal Corporation Pty Ltd v PICC P&C Co Ltd Tianjin Jinnan Branch (2013) Min Shen Zi No. 2358 (SPC) (Retrial). 94 (2004) Jin Hai Fa Shang Chu Zi No. 562 (Tianjin Maritime Court). 95 (2005) Jin Gao Min Si Zhong Zi No. 160 (Tianjin High People’s Court) (CA).

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PICC that only when the insurer agrees to compensate the assured for a certain amount of payment, can the time limits of the assured’s claim for compensation not be discontinued. However, this implication is inconsistent with the CMC 1992, which requires only the consent of the party to perform the obligation, and not extent to which the party shall perform the obligation. If the time limits of the assured’s claim is discontinued and thus not time barred, the Chinese courts shall determine the reasonable compensation if the parties cannot conclude an agreement for it. Special discontinuation of time limit 17.47 The discontinuation of time limits in the General Principles of the Civil Law 1986, as amended in 2009 is different from that of the CMC 1992. Under the General Principles of the Civil Law 1986, as amended in 2009, a limitation of action shall be discontinued if a suit is brought or if one party makes a request for damage or agrees to perform obligations. The limitation period shall be counted anew from the time of discontinuance.96 The first substantial difference of the discontinuation of time limits between the two legislations is whether the time limit is discontinued when a party makes a request for damages. A request raised to the debt warrantor, the agent of the debtor or the custodian of property also discontinues the time limit.97 Under the General Principles of the Civil Law 1986, as amended in 2009, the time limit shall be discontinued, but a mere request without the consent of the counter party will not discontinue the time limit under the CMC 1992.98 The second difference is the effect of the withdrawal of litigation or arbitration and the dismissal of claim by court. Under the General Principles of the Civil Law 1986, as amended in 2009, the time limit shall be discontinued if one party brings a suit in a Chinese court, no matter whether the suit is withdrawn or dismissed. Conversely, the time limit will not be discontinued in those circumstances under the CMC 1992. It can be seen from the differences that the time limits may be discontinued easily if the General Principles of the Civil Law 1986, as amended in 2009, apply. Therefore, the time limit for maritime claims not governed by the CMC 1992, e.g. disputes over marine freight forwarding, may be discontinued according to the General Principles of the Civil Law 1986, as amended in 2009,99 although it may not be discontinued under the CMC 1992. 17.48 A special difficulty may arise in Chinese judicial practice if the civil rights were infringed before the establishment of the PRC in 1949. In Granville Shipping Company, Chen Zhen and Chen Chun v Mitsui OSK Lines Ltd (Granville v Mitsui),100 Granville Shipping Company chartered its two ships to Tatung Shipping Co Ltd (Tatung Shipping) in 1936. During the period of charter, the two ships were withheld by the Japanese Navy and then were handed over to Tatung Shipping for continuous operation until they sank.

96 General Principles of the Civil Law 1986, as amended in 2009, art 140. 97 Art 173, para 2 of the Opinions of the Supreme People’s Court on Certain Issues Concerning the Implementation of the General Principles of the Civil Law 1986 (Trial) 1998, Fa (Ban) Fa [1998] No. 6. 98 Chaoyang Xiongwei Industrial Co Ltd v China Ocean Shipping Agency Shantou Co Ltd (2003) Guang Hai Fa Chu Zi No. 290 (Guangzhou Maritime Court). 99 Complant International Transportation Co Ltd Shandong Branch v Dalian Fortune International Freight & Forwarding Agency Company (2004) Qing Hai Fa Shang Chu Zi No. 256 (Qingdao Maritime Court). 100 (2010) Min Shen Zi No. 1269 (SPC) (Retrial). This case has been selected by the SPC as one of the ten typical cases in maritime adjudication in China in 2014 and one of the ten typical cases regarding arrest and auction of ships by the maritime courts in China in 2015.

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Afterwards, Granville Shipping Company claimed for damages through political, diplomatic and judicial approaches, but all failed. In December 1988, Granville Shipping Company and others filed a lawsuit in the Shanghai Maritime Court, requesting Japan Shipping Co Ltd (the successor of Tatung Shipping Co Ltd) to pay charter hires and compensate for damages. During the period of litigation, Japan Shipping Co Ltd was changed into Mitsui OSK Lines Ltd. In 2007, the Shanghai Maritime Court gave a judgment that the Mitsui OSK Lines Ltd should pay the claimants charter hires, ships’ operating losses, ships’ losses and interests thereof.101 Both the claimants and the defendant appealed but the Shanghai High People’s Court dismissed the appeals.102 Mitsui OSK Lines Ltd applied for a retrial by the SPC but this was dismissed by the SPC. 17.49 One of the legal issues in Granville v Mitsui is the limitation period of the claim. Although the disputes arose in the 1930s, where an infringement upon civil rights exceeded 20 years before the implementation of the General Principles of the Civil Law 1986, after the implementation of the General Principles of the Civil Law 1986, the period of statute of limitations in which the obligee requested protection from a Chinese court should start from 1 January 1987.103 The General Principles of the Civil Law 1986, as amended in 2009, provide that the limitation of action regarding applications to a Chinese court for protection of civil rights shall be two years.104 The claimants in this case filed their lawsuit in December 1988, so the claim was not time barred.

101 (1989) Hu Hai Fa Shang Chu Zi No. 25 (Shanghai Maritime Court). 102 (2008) Hu Gao Min Si (Hai) Zhong Zi No. 80 (Shanghai High People’s Court) (CA). 103 Opinions of the Supreme People’s Court on Certain Issues concerning the Implementation of the General Principles of the Civil Law (Trial) 1988, art 165. 104 General Principles of the Civil Law 1986, as amended in 2009, art 135.

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PART II

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CHAPTER 18

Introduction to Chinese maritime procedure law and the Chinese maritime court system

Introduction 18.1 This chapter will give an introduction to the sources of Chinese maritime procedure law, the Chinese maritime court system and a brief review of the Special Maritime Procedure Law and relevant judicial practice directions promulgated by the Supreme People’s Court of the People’s Republic of China (the “SPC”). The Chinese court system 18.2 Chinese courts are divided into a four-level court system, namely, the SPC, the High People’s Court, the Intermediate People’s Court and the Basic People’s Court. There are specialised courts such as the Military Court, the Railway Transport Court and the Maritime Court. 18.3 The SPC is the highest court in China, located in Beijing, the capital city of China. In December 2014, the First Circuit Court of SPC was inaugurated in Shenzhen, Guangdong Province. Since then, the Second Circuit Court of SPC has been set up in Shenyang, Liaoning Province. But, these circuit courts do not deal with maritime cases, which are still handled by the SPC in Beijing. 18.4 The SPC supervises the administration of justice by the local and special people’s courts. The local people’s courts, comprising the High People’s Courts of the provinces and the municipal cities (i.e. Beijing, Tianjin, Shanghai and Chongqing), the Intermediate People’s Court (normally in cities) and the Basic People’s Court (in the city’s districts or counties), are courts of first instance, which handle criminal and civil cases. The special people’s courts include the Military Court, the Railway Transport Court and the Maritime Court. The developments of the Chinese maritime courts system 18.5 When the People’s Republic of China was established in 1949, maritime-related cases were handled by the civil divisions of the local courts. In the mid 1950s, the Water Transportation Courts in Shanghai, Tianjin and Changjiang were established. These courts mainly handled criminal, casualty, cargo damages etc. within the governmental water transportation system. These courts were later abolished, after which maritime cases were handled by the intermediate people’s courts in the coastal port cities.1 1 Yuan Faqiang, Maritime Procedure Law (1st edn, Peking University Press 2014) 9; Han Lixin, Yuan Shaochun, Yin Weiming, Maritime Litigation and Arbitration (1st edn, Dalian Maritime University Press 2014) 5, 6.

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18.6 In 1984, China decided to establish special maritime courts to deal with maritime matters and six maritime courts were established, namely, the Guangzhou Maritime Court, the Shanghai Maritime Court, the Qingdao Maritime Court, the Tianjin Maritime Court, the Dalian Maritime Court and the Wuhan Maritime Court.2 In 1990, the Haikou Maritime Court and the Xiamen Maritime Court were established. The Ningbo Maritime Court and the Beihai Maritime Court were also established in 1992 and 1999 respectively.3 18.7 There are now a total of ten maritime courts in China. The maritime courts are considered to be at the same level as the ordinary intermediate people’s courts. The maritime courts have jurisdiction over maritime cases of first instance. Nevertheless, the maritime courts do not have jurisdiction over criminal cases and other civil cases that will fall within the jurisdiction of the ordinary courts. The High People’s Court in the relevant provinces (Liaoning, Shandong, Jiangsu, Fujian, Guangdong, Hainan, Guangxi and Zhejiang) or the municipal cities (Tianjin or Shanghai) where a maritime court is located, has jurisdiction over appeals from the maritime court. The development of Chinese maritime procedural law 18.8 For a very long time, China did not have a comprehensive code on maritime procedure. The main source of law in this regard was the Civil Procedural Law of the People’s Republic of China (the “CPL”)4 as well as the judicial interpretations of SPC since 1984. 18.9 The CPL played a very important role in the development of China’s maritime procedural law because it clearly specified the jurisdiction of the people’s courts in some maritime cases including collision, general average, salvage.5 18.10 On 25 December 1999, the Special Maritime Procedure Law of the People’s Republic of China (the “SMPL”) was promulgated at the thirteenth meeting of the Ninth Standing Committee of the National People’s Congress. The SMPL is a product of a mixture of experience gained from the adjudication of maritime cases since the establishment of maritime courts in China, and references to international practices. The purpose of the SMPL was filling in the gaps to the legal provisions relating to special procedures for special issues arising out of maritime cases, for example, the adjudication of cases that involve ship arrest, the compulsory auction of ships, and vessel collision. In the adjudication of such cases, it was particularly useful and necessary to look to well-established international practices and customs, as this would ensure international compatibility and strengthen China’s quality and operability in its adjudication of maritime cases, which would in turn be beneficial to China’s trade and shipping industry. 18.11 According to article 2 of the SMPL, the SMPL applies to maritime cases simultaneously with the CPL. Where the provisions of the SMPL are applicable, they prevail over

2 Decision of the Standing Committee of the National People’s Congress on the Establishment of Maritime Courts in Coastal Port Cities; Decision of the SPC Concerning the Issues on Setting up Maritime Courts; Notice of the SPC and the Ministry of Communications on the Establishment of a Maritime Court. 3 Decision of the SPC on the Establishment of Haikou Maritime Court and Xiamen Maritime Court; Decision of the SPC on the Establishment of Ningbo Maritime; Official Reply of the SPC on the establishment of the Beihai Maritime Court in Guangxi Zhuang Autonomous Region. 4 Civil Procedural Law of the People’s Republic of China (Trail) (1982) (repealed) and Civil Procedural Law of the People’s Republic of China 1991 (revised in 2012). 5 Civil Procedural Law of the People’s Republic of China 1991 (revised in 2007 and 2012)

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the provisions of the CPL. As a further supplement, the SPC has also promulgated some judicial interpretations to the SMPL, which will be discussed later in this chapter. A brief review of the Special Maritime Procedure Law 18.12 The SMPL has 12 chapters, namely: (I) general principles, (II) jurisdiction, (III) preservation of maritime claims, (IV) maritime injunction, (V) preservation of maritime evidence, (VI) maritime security, (VII) service, (VIII) trial procedures, (IX) procedure for constitution of limitation fund for maritime claims, (X) procedure for registration and repayment of debt, (XI) procedure for exigence of maritime liens, and (XII) supplemental provisions. General principles 18.13 Article 1 of chapter I clearly stipulates that the purpose of the SMPL is to safeguard the rights to litigation of the parties to maritime cases and ensure that the people’s courts shall ascertain the facts, establish the liabilities, properly apply the laws and promptly hear and determine maritime cases. Article 2 states that the SMPL applies to maritime cases simultaneously with the Civil Procedure Law of the People’s Republic of China (“CPL”), but where the provisions of the SMPL are applicable, they shall prevail over the provisions of the CPL. Jurisdiction 18.14 Chapter II addresses maritime jurisdiction. This chapter provides for special regulations on jurisdiction over maritime cases. This is supplemental to the provisions in the CPL on territorial jurisdiction. For example, the SMPL provides that in maritime tort cases, the maritime court at the port of registry of the vessel additionally has jurisdiction over the case; in contract of carriage by sea disputes, the maritime court at the port of transshipment additionally has jurisdiction over the case. For charterparty disputes, the maritime courts at the port of delivery, port of redelivery, port of registry and location of the defendant’s domicile would all have jurisdiction. In actions arising from disputes over protection and indemnity contracts, the maritime courts of the place where the subject-matter of insurance is located, where the accident occurred or where the domicile of the defendant is located would all have jurisdiction. In actions arising from disputes over the contracts of the crew of a sea-going ship, the maritime courts of the place where the domicile of the plaintiff is located, where the contract is signed, the location of the port of embarkation or disembarkation of the ship’s crew, or the domicile of the defendant would all have jurisdiction (this is largely favourable to crew members who wish to assert their rights over remuneration and other benefits against their employers or the shipowners). In actions arising from disputes over ship mortgage, the maritime court at the port of registry shall additionally have jurisdiction; while in actions arising from a dispute over the ownership, possession, employment and maritime lien of a ship, the maritime court of the location of the ship, the location of the ship’s port of registry, or the domicile of the defendant, also all have jurisdiction over the dispute. 18.15 The above provisions on jurisdiction are extremely important to the litigation of such cases. This is especially so for the plaintiff, as the plaintiff is permitted to choose a 217

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jurisdictional court that is most convenient to itself, and allows for legal action to proceed in a timely and efficient manner. 18.16 The SMPL also provides for the exclusive jurisdiction of maritime courts (exclusive jurisdiction means the parties concerned have no liberty to choose which court to go to) in certain circumstances. For example, for an action arising from a dispute over a coastal port operation, the maritime court of the place where the port is located shall have jurisdiction; while for an action brought against pollution damage to sea areas caused by discharge, spill or dumping of oil or other hazardous substances from ships, by production or operation at sea or by ship demolition or repair, the maritime courts of the place where the pollution occurred, the place that is suffering from the harmful consequences or the place where pollution prevention measures were taken shall have jurisdiction – this article encourages taking legal action against the polluter in a timely and efficient manner. Lastly, for an action arising from a dispute over an offshore exploration and exploitation contract performed within the territory of the People’s Republic of China or in the sea area under the jurisdiction of the People’s Republic of China, the maritime court of the place where the contract is performed shall have jurisdiction. 18.17 Any party who wishes to apply for the enforcement of a maritime arbitration award, the recognition and enforcement of a judgment or order of a foreign court or a foreign maritime arbitration award is to file an application with the maritime court of the place where the property against which enforcement is sought or the domicile of the person against whom enforcement is sought is located. In the absence of a maritime court at the said place, the application is to be filed with the intermediate people’s court of the place where the property against which enforcement is sought or the domicile of the person against whom enforcement is sought is located. The enactment of this provision has a strong significance because there had been no provision on this area of law before and parties seeking to assert their rights had difficulties when choosing courts, and there had been different interpretations even within the maritime judicial sector. The enactment of this provision enables people to save time and benefits all parties concerned. Preservation of maritime claims 18.18 Chapter III of the SMPL regulates the law relating to preservation of maritime claims, including the arrest of ships and the auction of ships. As to the law relating to the arrest of ships, the SMPL has laid down regulations according to principles of practicality, such as providing that any party who wishes to apply for preservation of a maritime claim before instituting an action should file an application with the maritime court of the place where the property subject to preservation is located; providing that preservation of a maritime claim shall not be bound by the jurisdiction agreement or arbitration agreement reached between the parties to an action in respect of the maritime claim; providing that a maritime court, having accepted an application, shall make an order within 48 hours and where the order involves adoption of measures for preservation of the maritime claim, it shall be executed forthwith. 18.19 Moreover, it is provided that where preservation of a maritime claim is objected by an interested person, the maritime court, having examined the objection and considering the reasons justified, shall discharge preservation against his property. This provision 218

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attempts to avoid any further loss suffered by an interested person that might be caused from an applicant’s wrongful arrest through timely measures. Where a person against whom a claim is made provides security, the maritime court shall discharge the preservation promptly. Moreover, the SMPL provides that if, within the time limit prescribed by SMPL, the maritime claimant fails to bring an action or apply for arbitration in accordance with an arbitration agreement, the maritime court shall discharge the preservation or return the security promptly – this regulation provides that the claimant should initiate normal litigation or legal procedures as soon as possible after obtaining preservation measures, so that the dispute can be solved and any loss that either party may suffer from delay after preservation can be reduced. Ship arrests 18.20 The SMPL provides that apart from the specified maritime claims set out in the SMPL, in which an application may be made for the arrest of a ship, no application may be made except for the enforcement of a judgment, an arbitral award or other legal document. In this regard, the SMPL lists 22 maritime claims where an application may be made for the arrest of a ship. These are finite and include almost all possible contractual or tortious claims in connection with ship operation. Arrest of ships and sister ships 18.21 As to the actual arrest of ships, the SMPL also has specific provisions the main purpose of which is to make sure that shipowners of ships that are arrested shall be liable towards the maritime claim and to make sure that they remain the legal owner of the ships. The SMPL goes further to provide that apart from arresting the ship concerned, it is also possible to arrest other ships owned by the person liable for the maritime claim (i.e. sister ships), except for claims related to ownership or possession of a ship. The same article in the SMPL provides that no ships engaged in military or governmental services may be subject to arrest. Second arrests 18.22 The SMPL provides that no maritime claimant may, on account of the same maritime claim, apply for arrest of a ship that has already been arrested once, except in any of the following circumstances: (1) the person against whom the claim is made fails to provide sufficient security; (2) it is likely that the surety cannot perform the obligations under the security in full or in part; or (3) the maritime claimant agrees, on reasonable grounds, to release the arrested ship or the return of the security provided. In particular, it is necessary to bring the reader’s attention to the third circumstance, which may prove troublesome in enforcement stages. 18.23 Furthermore, a maritime claimant who wishes to apply for arrest of the ship concerned but cannot promptly ascertain the name of the person against whom the claim is made may still apply for its arrest. This provision is practically beneficial to a claimant, because in the modern shipping industry, it is not common for the public to know who the real registered owner is; the person who is known may usually only be the manager. 219

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“Live” arrests 18.24 At this juncture, it is necessary to bring the reader’s attention to article 27 of the SMPL, which is a special provision. This article provides that after ordering to preserve a ship, i.e. after ship arrest, the maritime court may, with the consent of the maritime claimant, allow continued operation of the ship by means of a restraining disposition or mortgaging of the ship. This regulation means that if the maritime claimant consents, all risks arising from the continued operation of the ship would be borne by the claimant himself. Therefore, it is submitted that a maritime claimant should be extremely cautious before giving any consent, and should make preparations if planning to take on such risks. The duration of arrests 18.25 The SMPL provides that the time limit for ship arrest in preservation of a maritime claim is 30 days. The maritime claimant shall bring an action or apply for arbitration within the 30 days, or else the arrested ship or any security provided might be released. After bringing an action or after arbitration commences, it does not affect the arrest of the ship, and does not lead to the release of the security already provided. Therefore, maritime claimants should pay special attention to the time limit prescribed. Auction of ships 18.26 As to the auctioning of the arrested ships, the SMPL has the following provisions. 18.27 The application for auction shall be made by the maritime claimant. The maritime court shall, after receipt of an application for auction of a ship, examine the application and make an order to allow or disallow the auction. The maritime court that orders the auction of a ship must then issue an announcement in the newspapers or other news media. In the case of auction of a foreign ship, such announcement is issued in the newspapers or other news media of overseas distribution. Such announcement contains: the name and nationality of the ship for auction; the reasons and grounds for auction of the ship; the composition of the ship auction committee; the time and venue of the ship auction; the time and venue for display of the ship for auction etc. The period of announcement for ship auction must not be less than 30 days. At the same time, the maritime court shall issue a notice to the ship registrar of the State of registry of the ship for auction and to the maritime lien holder, mortgagee and shipowner already known 30 days before an auction of a ship. The ship auction committee mainly arranges the assessment and evaluation of the ship, arranges and presides over the auction, signs the auction confirmation with the bidder and completes ship delivery formalities etc. 18.28 As to the formalities a bidder has to abide by and details on the qualifications of the bidder, the SMPL also sets out detailed and specific regulations. These mainly include: identity qualifications of the bidder, payment of 20 per cent of the purchase price immediately after the auction is confirmed, and payment of the balance within seven days after the date of the purchase. When a buyer has paid the purchase price in full, the shipowner shall, within the designated time limit, deliver to the buyer the ship as is at the berthing place. One point to note is that the law fails to clearly stipulate what happens where the original owner of the vessel refuses to deliver the ship. Under such circumstances, it seems that the ship 220

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auction committee should take over and carry out and handle the delivery of the ship. After a ship has been delivered, the maritime court shall issue an announcement in newspapers or other news media stating that the ship has been sold by auction and delivered to the buyer. Attachment and auction of cargo carried by ships 18.29 The regulations in this section are shaped from practical experience from the adjudication of maritime cases. There is no clear guidance on the definition of “cargo”, but it is likely that it would include third party cargo and bunker fuel and other material used by the ship. The pre-condition for attachment to happen is that the cargo against which an attachment is applied for is owned by the debtor and the person against whom the claim is made. The time limit for attachment of the cargo carried by a ship for preservation of a maritime claim is 15 days, and the rules relating to the auctioning of the cargo are the same as those relating to the auctioning of ships as stipulated above. Maritime injunctions 18.30 The provisions on maritime injunctions are also a product of experience from years of adjudication of maritime cases by Chinese courts. One of the causes for the need of maritime injunctions is for situations where the ship’s master refuses to sign on a bill of lading, but the cargo has already been loaded onto the vessel. Under such circumstances, maritime injunctions can be very useful for the shipper. A maritime injunction is where on the application of a maritime claimant, compulsory measures are ordered by the maritime court to compel the person against whom a claim is made to do or not to do certain things (i.e. either mandatory or prohibitory), so as to prevent the lawful rights and interests of the claimant from being infringed. 18.31 A party who wishes to apply for a maritime injunction before bringing an action must file an application with the maritime court of the place where the maritime dispute arose. A maritime injunction is not bound by any jurisdiction agreement or arbitration agreement reached between the parties in respect of the maritime claims. The application must be in writing and made to the maritime court, upon which if the maritime court accepts the application, an order is made within 48 hours. Where the order grants a maritime injunction, it shall be executed forthwith, where the conditions for a maritime injunction are not met, it shall make an order to reject the application. The court that orders the maritime injunction should have jurisdiction over the case, unless a jurisdiction agreement or arbitration agreement has been concluded between the parties, then the latter shall take priority. Preservation of maritime evidence 18.32 The procedure relating to preservation of maritime evidence is founded upon the peculiarity of maritime adjudication and litigation – all records relating to a vessel’s navigation are kept onboard and are mobile wherever the vessel travels; if evidence or records are not preserved or copied from the vessel in a timely manner, this may lead to difficulties for the maritime claimant to introduce evidence, and may lead to unfairness. Some vessels may only berth once in a few years and some engage in free trade in international seas and do not even have a fixed navigational route. 221

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18.33 Preservation of maritime evidence is not bound by the jurisdiction agreement or arbitration agreement reached between the parties in respect of the maritime claim. A party who wishes to apply for preservation of maritime evidence before instituting an action shall file an application with the maritime court of the place where the evidence is to be preserved. The SMPL furthermore stipulates that the following conditions have to be met before preservation of maritime evidence shall be granted: (1) the applicant is a party to the maritime claim; (2) the evidence, preservation of which is requested, substantiates the maritime claim; (3) the person against whom the application is made is a party relevant to the evidence, preservation of which is requested; and (4) in a situation of emergency, the evidence relevant to the maritime claim might be lost or hard to obtain, unless the evidence is immediately preserved. The above four conditions have to all be satisfied. Maritime security 18.34 Preservation of maritime claims, maritime injunction and preservation of maritime evidence all involve securities. Chapter VI regulates the types and manner of security, amount of security, to whom security is requested and provided etc. The types of security include cash, guarantee, mortgage or pledge. The type and amount of the security provided by a maritime claimant is determined by the maritime court. The type and amount of the security provided by a person against whom the claim is made is determined through consultation by the maritime claimant and the person against whom the claim is made; if consultation fails, the matter is determined by the maritime court. The security provided by the maritime claimant is provided to the maritime court, and the security provided by a person against whom the claim is made can be provided to the maritime court or the maritime claimant – providing the security to the maritime court will better protect his rights. Service 18.35 The SMPL provides that apart from the relevant provisions in the CPL on the service of legal documents in maritime actions, service may also be conducted in the following ways: (1) on the agent ad litem duly entrusted by the person on whom the document is to be served; (2) on the representative office or branch established in the People’s Republic of China by the person on whom the document is to be served, or on the business agent appointed by the person on whom the document is to be served (this provision is advantageous to the operation of legal procedure); and (3) in other appropriate ways whereby such service can be acknowledged. For the third option, the courts can appoint the plaintiff or the applicant as agent to serve the documents, etc. According to Certain Opinions of the Supreme People's Court on Further Distinguishing Simple Cases from Complicated Ones and Optimizing the Allocation of Judicial Resources promulgated by the SPC on 12 September 2016 (the “Opinion on Allocation of Judicial Resources”)6, where the parties have agreed on the address for service before their disputes arise, the competent people's court may serve the litigation documents at such agreed address. The courts may also serve the court documents by electronic means such as fax, email, Wechat based on the parties’ agreement.

6 Fa Fa [2016] No.21, came into effect on 12 September 2016.

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18.36 Moreover, the SMPL also stipulates that the legal documents in respect of an arrest of a ship may be served on the master of the ship concerned. Where a person is under an obligation to accept legal documents, but refuses to acknowledge receipt, the server shall make a record on the receipt of service of the fact and have the receipt signed or sealed by the server and the witness, and leave the legal documents in the domicile or on the business premises of the person on whom the documents are to be served, then the service is deemed to be completed. Special trial procedures 18.37 The SMPL generally provides for the trial procedure in cases of ship collision, general average and the exercising of rights of subrogation by marine insurers. Trial of ship collision cases 18.38 As to provisions for trial of collision cases, article 82 of the SMPL states that both the plaintiff and the defendant shall fill in the Investigation Form for Maritime Accident truthfully at the time of bringing an action and submitting a defence respectively. This provision ensures that parties concerned will not provide false statements or evidence. Moreover, the statements made in the Investigation Form may not be reversed easily, unless new evidence has come to light and there is good reason for being unable to submit such new evidence within the period of producing evidence. The SMPL goes further to provide that the parties can only apply to consult the evidential documents concerning the ship collision only after they have discharged their burden of proof and furnished the maritime court with the statement to this effect. The survey and appraisal of a ship shall be conducted by institutions or individuals with due authorisation of the PRC or by professionally qualified institutions or individuals. The recognition and respect towards the work of individuals (experts) providing surveying and appraisal services is a big step in this area of law. Trial of general average cases 18.39 Concerning the law on trial of general average cases, the SMPL has shed light on some areas, but left some areas uncertain. For example, article 88 provides that with respect to general average, the parties may either mutually agree to entrust to average adjusters with the adjustment, or directly bring an action in a maritime court. In dealing with an unadjusted average dispute, the maritime court may entrust average adjusters with the adjustment. The purpose of this provision is difficult to understand, and potentially leads to disputes in its enforcement: if both parties have agreed on average adjusters to deal with adjustment, can one party directly bring an action in a maritime court after a dispute arises without having adjusted the average dispute? And when a maritime court entertains an unadjusted average dispute, can the maritime court entrust average adjusters that were not agreed by the parties? If the maritime court entrusts average adjusters that were not agreed by the parties, and one party voices disagreement, what should be done then? As can be seen, this provision may lead to difficulties in practice. The SMPL also stipulates that the general average statement made by average adjusters may be admissible as the proper basis for contribution if no objection is raised by any of the parties; otherwise, the maritime 223

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court shall decide whether to accept the statement or not. The purpose of this provision is to make sure that the court has control over the matter when the parties concerned raise any objection. It is submitted that unless the objection has strong justification and reasonable evidence in support, the maritime courts will not accept the objection. 18.40 A case of general average shall be tried and concluded by a maritime court within one year after a case is filed. Exercising rights of subrogation by marine insurers 18.41 The SMPL sets out the relationship of different parties. For example, the SMPL states that where an accident covered was caused by a third party and the insurer has indemnified the insured, the insurer is entitled to claim compensation against the third party by exercising the right of subrogation up to the amount of the indemnity paid. In exercising the right of subrogation, the insurer brings an action in its own name against the third party. If the insurer has already brought an action against the third party, an insurer may apply to the court entertaining the case for an alteration of the party to the lawsuit. If the losses of the insured caused by the third party cannot be fully covered by insurance indemnity, the insurer and the insured may act as co-plaintiffs to claim compensation against the third party. This provision has solved a long-term problem in maritime litigation, i.e. the scope of coverage of subrogation. When an insurer brings an action or files an application for participating in the action, the precondition is that the insurer should submit the certificate evidencing payment of indemnity by the insurer to the maritime court that entertains the case, 18.42 As for cases where an aggrieved party claims for oil pollution damage caused by a ship, the SMPL lays out mandatory regulations, i.e. the aggrieved party may claim either against the owner of the ship causing oil pollution damage or directly against the insurer who is answerable for the liabilities of the owner of the ship causing oil pollution damage, or against the person who provides financial security therefor. This increases the chances for which an aggrieved party can exercise his rights. Limitation fund for maritime claims 18.43 Chapter IX of the SMPL provides for the procedure for the constitution of a limitation fund for maritime claims. The provisions are aimed at regulating that the person liable may apply for liability limitation in accordance with law, and may apply to a maritime court for constitution of the limitation fund for maritime claims, in order to avoid actions to arrest its vessel or attach its property. The constitution of a limitation fund should be applied for before the first hearing and should be filed with the maritime court of the place where the accident occurred, or the place where the contract is performed or the place where the ship is under arrest. 18.44 The constitution of a limitation fund for maritime claims is not bound by the jurisdiction agreement or arbitration agreement reached between the parties. The maritime court shall, within seven days of the acceptance of an application for constitution of a limitation fund for maritime claims, notify all the interested persons already known and issue an announcement of the same in the newspapers or other news media. Such notice and announcement shall contain: the name of the applicant, the facts and reasons for application, the particulars for constitution of the limitation fund for maritime claims, the 224

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particulars necessary in registration of claims and other matters that need to be announced. Any interested person who objects to the application filed must raise such objection in writing with the maritime court within seven days from the date of the receipt of the notice, or within 30 days from the date of the announcement if no notice is received, and the maritime court will examine the objection and make an order within the prescribed period on whether the order is well founded. If no objection is raised or if any objection is not well founded, the maritime court will make an order to allow the applicant to constitute a limitation fund for maritime claims. After a limitation fund for maritime claims has been constituted, the parties shall bring an action in respect of the maritime dispute with the maritime court with which the limitation fund for maritime claims has been constituted. Procedure of registration and repayment of debt 18.45 The SMPL deals with registration of debts in several places. As to common features of debt registration, the SMPL provides that: after announcement of the maritime court’s order for forced auction of a ship, the creditors shall, within the time limit announced, apply for registration of their claims pertaining to the ship to be auctioned. Creditors who fail to register their claims before the expiry of the said time limit period are deemed to have abandoned their rights to be satisfied from the proceeds of the auction. After the maritime court’s announcement of acceptance of the application to constitute a limitation fund for maritime claims, the creditors shall, within the time limit announced, apply for registration of their claims relevant to the maritime accident that occurred at a particular scene. The creditors who fail to register their claims before expiry of the time limit announced shall be deemed to have abandoned their rights to the debt. All injured parties should pay very special attention to this strict provision. An application for registration of claims should be in writing and the maritime court shall examine the application in accordance with law. After examining and confirming the debts, the maritime court shall issue a notice to the creditors for a creditor’s meeting, and make arrangements for and convene the creditor’s meeting. The creditors’ meeting may, through negotiation, put forward a plan for distribution of the proceeds from auction of the ship or the limitation fund for maritime claims and sign an agreement on satisfaction, and the agreement on satisfaction shall be legally binding after the maritime court makes an order to confirm it. If the consultation at the creditors’ meeting fails, the maritime court shall, according to the ranking of the claims provided for in the Maritime Code of the People’s Republic of China (the “Maritime Code”) and other related laws, decide on the plan for distribution of the proceeds from auction of the ship or the limitation fund for maritime claims. Procedure for exigence of maritime liens 18.46 The provisions in chapter XI on the operational procedure for exigence of maritime liens are founded upon article 26 of the Maritime Code. Before the SMPL was enacted, there was no procedural law on the operation of article 26 and it was thus difficult to enforce. Now, the SMPL provides that where a ship is transferred, the transferee may apply to the maritime court for exigence of the maritime lien, demanding the maritime lien holder to assert his right promptly so as to extinguish the maritime lien attached to the ship. However, article 121 states that a transferee who wishes to apply for exigence of the maritime lien shall file an application with the maritime court of the place where the ship is to be delivered 225

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or where the domicile of the transferee is located. Article 121 is quite narrow and limits the operability in this area of law – for example, if both the transferor and the transferee are foreign-registered companies, and the place for delivery is not in the mainland, the transferee then cannot apply to the maritime court for exigence of the maritime lien (which is different from past precedents). As for the documents needed for such an application, they include a written application stating the name of the ship, the facts and grounds thereof, the contract for ship transfer, technical data of the ship and other documents. The maritime court, having received the application and the relevant documents, shall examine them and make an order to approve or disapprove the application within seven days. The period for exigence of a maritime lien is 60 days. A lien holder who fails to assert his right within the period of exigence shall be deemed to have waived the maritime lien. Where on the expiry of the period of exigence, no one asserts the maritime lien, the maritime court shall, on the application of a party, make a judgment, declaring that the ship to be transferred is free from maritime lien. Other sources of law for maritime actions 18.47 The Special Maritime Procedure Law of the People’s Republic of China (the “SMPL”) and the Civil Procedural Law of the People’s Republic of China (the “CPL”)7 constitute the main source of law for maritime action in China. Besides, the judicial interpretations of SPC and the international conventions/treaties to which China is a party are also the source of law in this regard. 18.48 The introduction of the judicial interpretations is to supplement the SMPL and the CPL. Judicial interpretation provide guidance for the effective enforcement of legislation in order to fill gaps and to solve conflicts and some vagueness among the laws. 18.49 The main judicial interpretations in relation to maritime action of SPC since 19848 include: (1)

Opinions of the Supreme People’s Court on Several Issues Concerning the Application of the Special Maritime Procedural Law of the People’s Republic of China (2002);

7 Civil Procedural Law of the People’s Republic of China (Trail) (1982) (repealed) and Civil Procedural Law of the People’s Republic of China 1991 (revised in 2012). 8 The following interpretations and practice directors are abolished but they have played important roles in the past: (1) (2) (3) (4)

Decision of the SPC Concerning the Issues on Setting up Maritime Courts (1984) (repealed); Provisions of the SPC Concerning Jurisdiction Issues of Foreign Maritime Action (1986) (repealed); Specific Provisions of the SPC Concerning Ship Arrest before Action (1986) (repealed); Specific Provisions of the SPC Concerning Compulsory Sale of Seized Vessels by Maritime Courts for Debt Settlement (1987) (repealed); (5) Provisions of the SPC Concerning the Scope of Accepting Case of Maritime Court (1989) (repealed); (6) Notice of the SPC on Further Implementing the Scope of Accepting Case of Maritime Court (1989) (repealed); (7) Opinions of the SPC on Certain Issues Concerning the Application of the Civil Procedure Law of the People’s Republic of China (1992) (repealed); (8) Provisions of the SPC on Auction of Seized Vessels by Maritime Courts for Debt Settlement (1994) (repealed); (9) Provisions of the SPC Concerning Ship Arrest before Action (1994) (repealed); (10) Provisions of the SPC Concerning the Scope of Accepting Case of Maritime Court (2001) (repealed).

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(2) (3) (4) (5)

Provisions of the Supreme People’s Court on Several Issues Concerning the Application of Law to the Arrest and Auction of Vessels (2015); Opinions of the Supreme People’s Court Concerning the Application of the Civil Procedure Law of the People’s Republic of China (2015); Certain Provisions of the Supreme People’s Court on the Acceptance Scope of Maritime Courts (2016); Provisions of the Supreme People’s Court on the Jurisdiction over Maritime Lawsuits (2016).

18.50 International conventions are also important sources of law for maritime actions in China. For example, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958,9 Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters.10 18.51 Treaties between China and other countries for enforcement of foreign judgments are another source of laws for maritime action. China has entered into bilateral treaties on reciprocal judgment recognition and enforcement (the “R&E Treaties”) with some countries, including Spain, Russia, France, Italy, Australia, Turkey and Argentina.11 For the Special Administrative Regions of Hong Kong and Macau, there is an Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region and Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Macau Special Administrative Region. 18.52 Chinese courts may also recognise and enforce foreign judgments under multilateral treaties acceded to by China, for example, the International Convention on Civil Liability for Oil Pollution Damage 1969. The court fees 18.53 If one commences proceedings before a court, the claimant is required to pay a court fee based on the claim amount.12 The court fee will be finally borne by the losing party. The court fees generally include the court’s acceptance case fees, the application fees and other costs such as the travelling expenses of relevant witness, translators, etc.13 The rate of the acceptance fees is set out in article 13 of the Measures for the Payment of Court Fees, ranging from 0.5 per cent to 2.5 per cent of the claim amount. A party who make an application to the court for proceedings such as preservation measures, order of payment, setting

9 The New York Convention took effect in China in 1987. 10 The Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters took effect in China in 1992. 11 Other countries are Peru, Romania, Poland, Hungary, Lithuania, Ukraine, White Russia, Greek, Cyprus, Egypt, United Arab Emirates, Kuwait, Tunisia, Morocco, DPRK, Laos, Vietnam, Uzbekistan, Tajikistan, Kyrgyzstan, Kazakhstan, Bulgaria, Cuba, Mongolia, Kazakhstan and Brazil – please see the link of the Ministry of Foreign Affairs of the People’s Republic of China: http://www.fmprc.gov.cn/web/ziliao_674904/tytj_674911/ wgdwdjdsfhzty_674917/t1215630.shtml. 12 CPL, art 118; Measures for the Payment of Court Fees promulgated by the State Council on 19 December 2006. 13 Measures for the Payment of Court Fees, art 6.

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aside arbitration award, etc shall also pay application fees in accordance with article 14 of the Measures for the Payment of Court Fees. 18.54 Lawyers’ fees incurred in relation to the court proceedings are normally un-recoverable. However, in accordance with Article 22 of the Opinion on Allocation of Judicial Resources, if the parties abuse litigation rights, delay in performing litigation obligations or commit other acts that are apparently improper, causing direct losses to the counterparties or third parties, the people’s courts may, depending on specific circumstances, allow the innocent party to recover a reasonable amount of lawyers’ fee. Given that this is a new guidance of the SPC, we need to wait and see how the courts will award the lawyers’ fees against the wrongdoing parties. 18.55 In arbitration proceedings, lawyers’ fees may be awarded by the arbitration tribunal if the arbitration rules chosen by the parties allow such types of costs awards.14

14 For example, art 57 of the Arbitration Rules of China Maritime Arbitration Commission provides that the arbitration tribunal has the power to decide in the arbitral award that the losing party shall pay the winning party as compensation a proportion of the expenses reasonably incurred by the winning party in dealing with the case.

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CHAPTER 19

Maritime jurisdictions

Introduction 19.1 Under Chinese law, jurisdiction in civil litigation means the division of work and power among courts at different levels and courts at the same level to entertain cases at first instance. The main legislation governing maritime jurisdiction include the Civil Procedure Law of the People’s Republic of China (the “CPL”) and the Special Maritime Procedure Law of the People’s Republic of China (the “SMPL”) supplemented by other interpretations, practice directions and guidances issued by the Supreme People’s Court of People’s Republic of China (the “SPC”). 19.2 As to the hierarchical jurisdiction, as referred to in Chapter 18 of this book, Chinese courts are divided into four levels, namely the primary people’s court, the intermediate people’s court, the high people’s court and the SPC.1 The primary people’s court and intermediate people’s court generally entertain cases at first instance. Whether the first instance case will be tried by primary people’s court or intermediate people’s court will depend on the sum and nature of the disputes. Due to the special features of maritime disputes, first instance maritime cases are usually tried by the maritime courts. 19.3 Maritime jurisdiction is largely prescribed by law and the interpretations or directions promulgated the SPC. Chapter II of the SMPL provides for the rules relating to maritime jurisdiction. 19.4 In addition, the maritime courts can also entertain cases by an order of a superior court. Jurisdiction may be transferred from a local people’s court to a maritime court or be transferred from one maritime court to another maritime court under such order. Article 10 of the SMPL provides that where controversy arises between a maritime court and a local people’s court over jurisdiction, the matter shall be resolved by the two courts through consultation. If the consultation fails, the matter should then be submitted to their common superior people’s court for a designation of jurisdiction. 19.5 Parties to a dispute are also allowed to privately reach an agreement on the jurisdiction issue either before or after the dispute arises. 19.6 There are certain circumstances where several maritime courts all have maritime jurisdiction to a dispute. For example, section 3 of article 6 of SMPL provides that an action arising from a charterparty dispute of a seagoing vessel shall be under the jurisdiction of the maritime court of the place where the port of delivery, the port of redelivery, the ship’s port of registry and the domicile of the defendant is located. For such disputes, various claimants to the same dispute may refer the case to different maritime courts. Under such circumstances, 1 Organic Law of the People’s Courts of the People’s Republic of China, art 2.

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the court that has already accepted the case should not transfer the case to another court that shares the same jurisdiction over the matter. If a maritime court that has accepted the case finds that another court that also has jurisdiction has also accepted the case earlier, the court should transfer the case to the maritime court that has already accepted the case.2 19.7 The maritime courts may also entertain cases by “extended jurisdiction”. After a maritime court has accepted a case for preservation of maritime claim before litigation, or in maritime evidence preservation or maritime injunction cases, this maritime court may change the original preservation case or injunction case into a litigation case upon the parties’ application, and thus the jurisdiction of the original maritime court will extend to the litigation cases. It should be noted that in order to establish such extended jurisdiction, the dispute in question may not be one which is subject to any exclusive jurisdiction, agreed jurisdiction or arbitration. Jurisdiction of maritime courts 19.8 As discussed in the previous chapter, there are currently ten maritime courts in China, which have been gradually established since 1984 with the development of the shipping industry in China. Due to the complexity of maritime disputes and the special rules found under maritime law, the general people’s courts are not able to deal with maritime disputes. The maritime courts were thus established for especially hearing maritime disputes. Maritime courts are treated as a special people’s court, which is similar to other special courts such as military courts. The level of maritime court is the equivalent of an intermediate people’s court. 19.9 The court system of PRC is shown diagrammatically below:

Supreme People’s Court

Special People’s Court

Local People’s Court

High People’s Courts

Military Courts

Intermediate People’s Courts Maritime Courts Primary People’s Courts Railway Transportation Courts

Forestry Courts

2 Interpretations of the Supreme People’s Court on the Application of the CPL (“Interpretation of the CPL”), art 36.

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19.10 In 1984, six maritime courts were first established. Their jurisdiction was set out in the Decisions of Supreme People’s Court on Several Issues of Establishing Maritime Court. These have since been changed by the subsequent decisions of the Supreme People’s Court, promulgated in 1989, 2001 and 2016 respectively. 19.11 The current case acceptance scope of the maritime courts is laid down in the Provision of the Supreme People’s Court on the Case Acceptance Scope of Maritime Courts (the “Case Acceptance Scope Provision”),3 which was promulgated on 24 February 2016 and came into effect on 1 March 2016. 19.12 The Case Acceptance Scope Provision divides maritime disputes tried by the maritime court into six groups, namely: I.

Cases concerning maritime tortious disputes 1. cases concerning disputes over liability for damage arising from collisions of vessels, including cases concerning disputes over liability for damage caused by indirect collisions, including damage by waves; 2. cases concerning disputes over liability for damage arising from collisions of vessels with facilities or other property at sea, in water areas leading to the sea, in ports, or on the shore, including cases concerning disputes over liability for damage caused by collisions of vessels with such facilities as wharfs, breakwater, landing stages, vessel locks, bridges, navigation marks, and drilling platforms; 3. cases concerning disputes over liability for damage caused by vessels to facilities and other property that are set up in the air or laid at the bottom of the sea, or in the water areas leading to the sea; 4. cases concerning disputes over liability for damage arising from oil, polluted water, or other harmful substances discharged, leaked, or dumped from vessels, causing pollution to water areas or damage to other vessels, goods, or other property; 5. cases concerning disputes over liability for damage to fishing, breeding facilities, or aquatic-bred products arising from navigation or operation of vessels; 6. cases concerning disputes over liability for damage arising from sunken vessels or articles as well as their wreckages and abandoned articles in the sea-lane, or temporary or permanent facilities or devices at sea or in water areas leading to the sea, affecting navigation of vessels and causing damage to vessels, goods, and other property; 7. cases concerning disputes over liability for infringement upon other persons’ rights and interests arising from the navigation, service, and operation of vessels and other activities; 8. cases concerning disputes over liability for illegal lien or impoundment of vessels, goods on board, and materials, fuel oil, or reserved parts of vessels; 9. cases concerning disputes over liability for product quality arising from defects of key vessel parts and special items provided for marine projects; and 10. other cases concerning maritime tortious disputes.

3 Fa Shi [2016] No. 4.

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II.

Cases concerning disputes over maritime contracts 11. cases concerning disputes over vessel purchase and sales contracts; 12. cases concerning disputes over vessel engineering project contracts; 13. cases concerning disputes over such contractual disputes as the subcontracting and construction, commissioned building, customisation, and transaction of key vessel parts and special items; 14. cases concerning disputes over vessel engineering project operation contracts (in forms of affiliation, partnership, and contracting); 15. cases concerning disputes over vessel inspection contracts; 16. cases concerning disputes over contracts on venue rental for marine projects; 17. cases concerning disputes over contracts on operation and management of vessels (in forms of affiliation, partnership, and contracting) and contracts on cooperative operation of shipping lines; 18. cases concerning disputes over contracts on supply of materials, fuel oil, and reserved parts relating to the operation of specific vessels; 19. cases concerning disputes over shipping agency contracts; 20. cases concerning disputes over vessel pilotage contracts; 21. cases concerning disputes over contracts on mortgage of vessels; 22. cases concerning disputes over charterparties (including time charterparties and bareboat charterparties); 23. cases concerning disputes over contracts on financial lease of vessels; 24. cases concerning disputes over payment of remunerations and compensation for casualties relating to seaman boarding, services on board, and repatriation upon disembarking under contracts on employment of seamen and service contracts (including agreements on labour dispatching of seamen); 25. cases concerning disputes over contracts on carriage of goods at sea or in water areas leading to the sea, including cases concerning disputes over contracts of international multimodal transport containing shipping sections, and waterland transshipment, and other freight transport contracts; 26. cases concerning disputes over contracts on carriage of passengers or luggage at sea or in water areas leading to the sea; 27. cases concerning disputes over contracts on freight forwarding at sea or in water areas leading to the sea; 28. cases concerning disputes over contracts on rental of transport containers at sea or in water areas leading to the sea; 29. cases concerning disputes over contracts on transport tally at sea or in water areas leading to the sea; 30. cases concerning disputes over contracts on towage at sea or in the water areas leading to the sea; 31. cases concerning disputes over ferry transport contracts; 32. cases concerning disputes over contracts on storage, custody, and warehousing of goods in ports; 33. cases concerning disputes over guarantee contracts on mortgage or pledge of goods in ports; 34. cases concerning disputes over contracts on supervision over pledge of goods in ports; 232

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35. cases concerning disputes over contracts on warehousing, storage, and custody of marine containers; 36. cases concerning disputes over guarantee contracts on mortgage or pledge of marine containers; 37. cases concerning disputes over contracts on financial lease of marine containers; 38. cases concerning disputes over contracts on lease of ports or wharfs; 39. cases concerning disputes over contracts on operation and management of ports or wharfs; 40. cases concerning disputes over contracts on marine insurance or protection and indemnity; 41. cases concerning disputes over insurance contracts or protection and indemnity contracts with such subject matters of insurance as transport vessels in water areas leading to the sea and the operational income thereof, goods and the expected profits thereof, crew wages and other remunerations, and liabilities to third parties; 42. cases concerning disputes over insurance contracts with such subject matters of insurance as equipment and facilities in marine projects and expected proceeds, and liabilities to third parties; 43. cases concerning disputes over insurance contracts with such subject matters of insurance as equipment and facilities for production and operation in ports and expected benefit, and liabilities to third parties; 44. cases concerning disputes over insurance contracts with subject matters of insurance including equipment and facilities utilised in such activities as marine fishery, ocean development and utilisation, and marine project construction and expected benefit, and liabilities to third parties; 45. cases concerning disputes over insurance contracts with subject matters of insurance including equipment and facilities utilised in project construction in sea waters leading to the sea and expected benefit, and liabilities to third parties; 46. cases concerning disputes over contracts on financial lease of port and shipping equipment and facilities; 47. cases concerning disputes over guarantee contracts on mortgage or pledge of port and shipping equipment and facilities; 48. cases concerning disputes over loan contracts with vessels, marine containers, and port and shipping equipment and facilities set as guarantee, excluding cases where the parties file lawsuits only for disputes over loan contracts; 49. cases concerning disputes over loan contracts incurred by purchase, building, and operation of specific vessels; 50. cases concerning disputes over guarantee, independent letter of guarantee, and letter of credit incurred by securing and satisfying of creditor’s rights relating to marine transport, vessel purchase and sales, marine project and port production and operation; 51. cases concerning disputes over brokerage or commission contracts relevant to contracts or behaviour as prescribed in the preceding items 11 to 50; and 52. other cases concerning disputes over maritime contracts. 233

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III. Cases relating to disputes over development and utilisation of oceans and water areas leading to the sea and environmental protection 53. cases concerning disputes over exploration, development, and transport of resources of oceans and water areas leading to the sea, and mineral resources; 54. cases concerning disputes over desalination and comprehensive utilisation of sea water; 55. cases concerning disputes over project construction at sea or in water areas leading to the sea (including underwater dredging, land reclamation from the sea, laying of cables or pipelines as well as construction of wharfs, docks, drilling platforms, man-made islands, tunnels, and bridges); 56. cases concerning disputes relating to development and utilisation of coastal zones; 57. cases concerning disputes relating to scientific investigation of oceans; 58. cases concerning disputes over contracts on fishery operation in seas or water areas leading to the sea (including fishing and aquaculture); 59. cases concerning disputes over contracts on financial lease of equipment and facilities for ocean development and utilisation; 60. cases concerning disputes over guarantee contracts on mortgage or pledge of equipment and facilities for ocean development and utilisation; 61. cases concerning disputes over loan contracts with equipment and facilities for ocean development and utilisation set as guarantee, excluding cases where the party files a lawsuit only for disputes over loan contracts; 62. cases concerning disputes over guarantee, independent letter of guarantee, and letter of credit incurred by securing and satisfying of creditor’s rights relating to such maritime production and operation activities as project construction in the sea and water areas leading to the sea and ocean development and utilisation; 63. cases concerning disputes over right to use sea areas (including disputes over contracts of contracting, transfer, and mortgage and corresponding infringement disputes), excluding cases concerning disputes over right confirmation arising from application for using sea waters; 64. cases concerning disputes over brokerage or commission contracts relevant to contracts or behaviour as prescribed in the preceding items 53 to 63; 65. cases concerning disputes over liability for pollution of marine environment and damage to marine ecology; 66. cases concerning disputes over liability for the environmental pollution of water areas leading to the sea and damage to the ecology of water areas leading to the sea; and 67. cases concerning disputes over other tort liability arising from development and utilisation of oceans and water areas leading to the sea, project construction as well as disputes of adjacent relations. IV. Other cases concerning disputes over maritime affairs 68. cases concerning disputes over property rights of vessels, including ownership of vessel, maritime lien, possessory lien of vessels, and maritime mortgage; 234

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V.

69. cases concerning disputes over property rights of goods in ports, marine containers, and port and shipping equipment and facilities, including ownership, lien, and mortgage; 70. cases concerning disputes over property rights of equipment and facilities for development and utilisation of oceans and water areas leading to the sea, including ownership, lien, and mortgage; 71. cases concerning disputes arising from transfer of bills of lading or pledge; 72. cases concerning disputes over marine salvage; 73. cases concerning disputes over salvage and wreck removal at sea or in the water areas leading to the sea; 74. cases concerning disputes over general average; 75. cases concerning disputes over port operations; 76. Cases concerning disputes over negotiorum gestio of property at sea or in water areas leading to the sea; 77. cases concerning disputes over shipping frauds; and 78. cases concerning disputes relating to shipping agency and transaction of shipping derivatives. Maritime administrative cases 79. Administrative cases filed due to failure to accept maritime administrative organs’ administrative actions involving vessels, goods, equipment and facilities, marine containers, and other property at sea or in water areas leading to the sea and ports; 80. administrative cases filed due to failure to accept maritime administrative organs’ administrative actions involving transport operations at sea or in water areas leading to the sea and such qualification and legal matters as corresponding auxiliary operations, freight forwarding, seafarer competency, and boarding services; 81. administrative cases filed due to failure to accept maritime administrative organs’ administrative actions involving such activities as development and utilisation of oceans and water areas leading to the sea, and protection of the fishery industry and environmental and ecological resources; 82. administrative cases filed since the relevant maritime administrative organs refuse to perform administrative duties involved in the aforesaid items 79 to 81 or refuse to make a reply; 83. cases concerning requesting the relevant administrative organs to assume state compensation liabilities on the ground that the relevant maritime administrative organs and the personnel thereof carry out administrative actions as prescribed in items 79 to 81 or their exercise of the corresponding administrative functions impairs the lawful rights and interests of the applicant; 84. cases concerning requesting the relevant administrative organs to assume state compensation liabilities on the ground that the relevant maritime administrative organs and the personnel thereof carry out administrative actions as prescribed in items 79 to 81 or their exercise of the corresponding administrative functions affects the lawful rights and interests of the applicant; and 235

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85. cases concerning application for enforcement according to the law since the relevant maritime administrative organs carry out administrative actions as prescribed in the aforesaid items 79 to 81. VI. Cases concerning special maritime procedures 86. cases concerning application for determining the effectiveness of maritime arbitration agreements; 87. cases concerning application for recognising and enforcing foreign maritime arbitration awards, application for recognising and enforcing maritime arbitral awards of Hong Kong Special Administrative Region, Macao Special Administrative Region, and Taiwan Region, and application for enforcing or setting aside domestic maritime arbitral awards; 88. cases concerning application for recognising and enforcing maritime judicial adjudicative documents issued by foreign courts and application for recognising and enforcing maritime judicial adjudicative documents issued by courts of Hong Kong Special Administrative Region, Macao Special Administrative Region, and Taiwan Region; 89. cases concerning application for determining property at sea or in water areas leading to the sea as ownerless; 90. cases concerning application for negotiorum gestio of property at sea or in water areas leading to the sea; 91. cases concerning application for declaring disappearance or death due to activities or accidents at sea or in water areas leading to the sea; 92. cases concerning application for arresting vessels, goods on board, marine stores, or marine fuel oil or application for preserving other property with respect to maritime disputes before instituting legal proceedings; 93. cases concerning disputes over liabilities arising from wrongful application for property preservation or excessive amount of guaranty by maritime claimants; 94. cases concerning application for maritime injunction; 95. cases concerning application for preservation of maritime evidence; 96. cases concerning disputes over liabilities arising from wrongful application for maritime injunction or preservation of maritime evidence; 97. cases concerning application for maritime payment order with respect to maritime disputes; 98. cases concerning application for publicising public notice with respect to maritime disputes; 99. cases concerning application for establishing liability limitation funds for maritime claims (including liability limitation funds for oil pollution damage compensation); 100. cases concerning registration and indemnification of creditor’s rights relating to auction of vessels or establishment of liability limitation funds for maritime claims (including liability limitation funds for oil pollution damage compensation); 101. cases concerning litigation for confirmation of rights relating to auction of vessels or establishment of liability limitation funds for maritime claims (including liability limitation funds for oil pollution damage compensation); 236

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102. cases concerning application for subrogation against the liability limitation funds for oil pollution damage compensation; 103. cases concerning public notice on maritime lien; 104. cases concerning application for judicial confirmation of mediation agreements with respect to maritime disputes; 105. cases concerning application for realising security interest with collaterals of such property as vessels, goods on board, marine stores, containers, port and shipping equipment and facilities, and equipment and facilities for ocean development and utilisation. 106. cases concerning local people’s courts’ authorisation of arrest and auction of vessels for enforcing effective legal documents; 107. cases concerning application for enforcement of effective legal documents issued by maritime courts and their appellate high people’s courts and the Supreme People’s Court with respect to maritime disputes; and 108. cases concerning application for enforcement of notarial obligatory right documents with respect to maritime disputes. 19.13 If the cases fall within the case acceptance scope of the maritime courts, the parties in disputes are not allowed to agree to submit such disputes to a local people’s court by a jurisdiction agreement. 19.14 In Yingkou New Port Ore Terminal Co., Limited v China Railway Materials Co., Limited,4 the issue of jurisdiction of a maritime court was considered by the SPC. The disputes in this case concerned a coal storage agreement according to which the coal was stored at the port area. The agreement provided that any disputes were to be submitted to the court of the place where the domicile of the claimant was located. The defendant contended that this jurisdiction agreement was void and the local court should not have jurisdiction, since the disputes fell within the jurisdiction of the relevant maritime court in accordance with the Case Acceptance Scope Provision. This case was finally decided by the SPC, which held that this case was to be tried by the relevant Maritime Court since disputes arising from cargo storage in the port area fell within the case acceptance scope of the maritime court. The parties were not allowed to exclude such jurisdiction by agreement. Maritime territorial jurisdiction 19.15 As mentioned above, China currently has in total ten maritime courts, namely Dalian Maritime Court, Tianjin Maritime Court, Qingdao Maritime Court, Wuhan Maritime Court, Shanghai Maritime Court, Ningbo Maritime Court, Xiamen Maritime Court, Guangzhou Maritime Court, Beihai Maritime Court, and Haikou Maritime Court. They are distributed across ten important watersheds. In particular, Wuhan Maritime Court is the only court that is established over the Yangtze River. Each of the maritime courts divide themselves up according to their first instance territorial jurisdiction, and the locations that they are in. 19.16 By the Provisions of the Supreme People’s Court on the Jurisdiction over Maritime Lawsuits (the “Provisions of Jurisdiction over Maritime Lawsuits”), which is a newly 4 (2015) Min Ti Zi No. 13 (SPC).

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published judicial interpretation of the SPC in 2016,5 the territorial jurisdiction of Wuhan Maritime Court and Dalian Maritime Court has been changed. Currently, the territorial jurisdiction of the ten maritime courts is: a.

b.

c.

d.

e.

f. g.

h.

Dalian Maritime Court: the southern boundary extends to the junction of Liaoning Province and Hebei Province, and the eastern boundary extends to the extended sea waters of the mouth of the Yalu River and the waters of the Yalu River, including a part of the Yellow Sea, a part of the Bohai Sea and the onshore islands; the Songhua River, the Tumen River and other sea-connecting navigable waters and ports in Jilin Province; and, the Amur River, the Songhua River, the Ussuri River and other sea-connecting navigable waters and ports in Heilongjiang Province; Tianjin Maritime Court: its territorial jurisdiction ranges south from Heibei Province to the juncture at Shandong Province, North from Hebei Province to the extended seawaters at Liaoning Province. It includes parts of the Yellow Sea, part of the Bohai Sea, the islands on the sea, and major ports such as Tianjin, Qinhuangdao etc.; Qingdao Maritime Court: its territorial jurisdiction ranges south from Shandong Province to the juncture at Jiangsu Province, north from Shandong Province to the extended sea area juncture at Hebei Province. It includes parts of the Yellow Sea, part of the Bohai Sea, the islands on the sea and major ports such as Shijiusuo, Qingdao, Weihai, and Yantai; Wuhan Maritime Court: its territorial jurisdiction includes waters in the Yangtze River trunk lines and feeder lines between the Hejiangmen port of Yibin City in Sichuan Province and the mouth of Liuhe in Jiangsu Province, including Yibin, Luzhou, Chongqing, Fuling, Wanzhou, Yichang, Jingzhou, Chenglingji, Wuhan, Jiujiang, Anqing, Wuhu, Ma’anshan, Nanjing, Yangzhou, Zhenjiang, Jiangyin, Zhangjiagang, Nantong and other major ports; Shanghai Maritime Court: its territorial jurisdiction ranges south from Shanghai City and the juncture at Zhejiang Province, north to Jiangsu Province and the extended sea areas at the juncture of Shandong Province, the sea areas from Yangtze estuary to the sea areas in Liuhekou. It includes major ports such as Shanghai Port, Yangshan Port, Lianyun Port, Yangkou Port, etc; Ningbo Maritime Court: its territorial jurisdiction includes the ports and sea areas in Zhejiang Province; it includes the islands and the inland waters that are connected to the sea in Zhejiang Province; Xiamen Maritime Court: its territorial jurisdiction is south from Fujian Province to the juncture at Guangdong Province, north to Fujian Province and Zhejiang’s extended sea areas. It includes the southern part of the East China Sea, Taiwan Province, its islands, and the ports of Shandong Province; Guangzhou Maritime Court: its territorial jurisdiction includes the ports and sea areas belonging to Guangdong Province, the inland waters, which includes its sea ports;

5 Provisions of the Supreme People’s Court on the Jurisdiction over Maritime Lawsuits, Fa Shi [2016] No. 2. This regulation was published on 24 February 2016 and came into effect on 1 March 2016.

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i. j.

Haikou Maritime Court: its territorial jurisdiction includes the ports and seawaters of Hainan Province; and Paracel (Xisha) Islands, Zhongsha Islands, Spratly (Nansha) Islands, Huangyan Islands and sea areas; Beihai Maritime Court: its territorial jurisdiction includes the Guangxi Province Zhuang Autonomous Region ports and seawaters, Beibu Gulf sea areas, its islands and sea waters, and the navigable waters that are connected to the seas from Lancang River in Yunnan Province to the Mekong River.

19.17 According to article 21 of the CPL, the territorial jurisdiction is mainly determined according to the domicile of the parties, especially the domicile of the defendant, and the proximity with the maritime court. This general rule is applied together with the special territorial jurisdiction such as those set out in article 6 of SMPL and the relevant provisions in Chapter 2 of CPL. 19.18 The special territorial jurisdiction of maritime cases includes the following: (1) Tort actions Ship collision is the typical kind of tort action in maritime disputes. Actions that arise due to vessel collisions or claims for compensation arising out of other maritime accidents that cause damage to the vessel come under the jurisdiction of the courts that are located at the place where the collision occurred, the first place where the collided vessel arrives, the place where the offending vessel was arrested, and the place of the vessel’s registered port, or the domicile of the defendant.6 The place where the collision occurred means the seawaters or ports where the collision occurs, which is the place where the tortious act is committed. The “first place where the vessel arrives at” is defined as the first port or sea that the vessels, including the injuring vessel and the injured vessel, berth at after the collision. The same rules apply to other accidents that happen on the sea, such as grounding, fire, explosions, etc. These rules in relation to the jurisdiction of maritime accidents have been further confirmed by the Provisions of Supreme People’s Court on Several Issues related to the Trial of Relevant Disputes Occurring within the Sea Areas under the Jurisdiction of China (I), which was promulgated on 1 August 2016 and came into effect on 2 August 2016.7 (2) Disputes arising from contract for carriage by sea An action arising from a dispute over a contract for carriage by sea may be under the jurisdiction of the maritime court at the place of the loading port, the destination port, the transhipment port, or the domicile of the defendant.8 (3) Disputes arising from a charterparty dispute of a seagoing ship Charterparty disputes come under the jurisdiction of the maritime court at the place of the port of delivery, the port of redelivery, the ship’s port of registry and where the domicile of the defendant is located.9

6 7 8 9

CPL, arts 28, 29 and 30; SMPL, art 6. Fa Shi [2016] No. 16, art 5. CPL, art 27; SMPL; art 6(2). SMPL, art 6(3).

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(4) P&I disputes An action arising from a dispute over a protection and indemnity contract shall be under the jurisdiction of the maritime court at the place where the subject-matter of the insurance is located, where the accident occurred or where the domicile of the defendant is located.10 (5) Crew employment contract disputes An action arising from a dispute over the service contract of the crew of a seagoing ship shall be under the jurisdiction of the maritime court at the place where the domicile of the plaintiff is located, where the contract is signed, where the port of embarkation or disembarkation of the ship’s crew is located, or where the domicile of the defendant is located.11 (6) Disputes in relation to maritime security An action arising from a dispute over maritime security shall be under the jurisdiction of the maritime court at the place where the collateral is located or where the domicile of the defendant is located; an action arising from a dispute over ship mortgage may also be under the jurisdiction of the maritime court at the place where the ship’s port of registry is located.12 (7) Disputes in relation to ownership of vessel An action arising from a dispute over the ownership, possession, employment and maritime lien of a sea-going ship shall be under the jurisdiction of the maritime court at the place where the ship is located, where the ship’s port of registry is located, or where the domicile of the defendant is located.13 (8) Disputes in relation to the salvage award An action arising from salvage is subject to the jurisdiction of the maritime court at the place of salvage or at the place where the salvaged vessel first arrives.14 (9) Disputes in relation to general average A lawsuit arising from general average is subject to the jurisdiction of the maritime court at the initial place of arrival of the ship, the place where general average adjustment takes place or the final destination of the voyage.15 (10) Other kinds of contract disputes For actions arising from other kinds of disputes, including but not limited to shipbuilding, repair, sale and purchase of vessels, ship management, lease of port facilities, shipping agency, supply of materials for the vessel, the disputes come under the jurisdiction of courts that are located at the defendant’s domicile, or the place where the contract is performed.16 The place of performance, if any, agreed upon under a contract shall be the place where the contract is performed. In the absence of any agreement or any clear agreement on the place of performance

10 11 12 13 14 15 16

SMPL, art 6(4). SMPL, art 6(5). SMPL, art 6(6). SMPL, art 6(7). CPL, art 31. CPL, art 32. Since SMPL has no special provision in relation to these kinds of disputes, art 23 of CPL shall apply.

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(11) (12)

(13)

(14)

(15) (16)

17 18 19 20 21 22 23

under a contract, if the disputed subject matter is payment of monetary funds, the domicile of the party receiving the monetary payment shall be the place of performance of the contract. If the disputed subject is the delivery of a real estate, the locus of the real estate shall be the place of performance. In other circumstances, the domicile of the party performing the relevant obligation shall be the place of performance of the contract. Where a contract is for immediate settlement, the place where the transaction activities are conducted shall be the place of performance.17 Application for determining ownerless property An application for determining a maritime property as ownerless is subject to the jurisdiction of the maritime court at the place where the property is located.18 Declaring a person as dead An application for declaring a person as dead due to a maritime accident is subject to the jurisdiction of the maritime court at the place where the competent organ responsible for handling the accident or the maritime court that entertains the relevant maritime case is located.19 Enforcement of foreign judgment or arbitration award Any party who wishes to apply for the enforcement of a maritime arbitration award, the recognition and enforcement of a judgment or order of a foreign court or a foreign maritime arbitration award shall file an application with the maritime court at the place where the property against which enforcement is sought or the domicile of the person against whom enforcement is sought is located. In the absence of a maritime court at the said place, the application shall be filed with the intermediate people’s court of the place where the property against which enforcement is sought or the domicile of the person against whom enforcement is sought is located.20 Preservation of maritime claim An application for preservation of a maritime claim before instituting an action shall be filed with the maritime court at the place where the property subject to preservation is located.21 Maritime injunction The application for a maritime injunction before instituting an action shall be filed with the maritime court at the place where the maritime dispute arose.22 Preservation of maritime evidence The application for preservation of maritime evidence before instituting an action shall be filed with the maritime court of the place where the evidence is to be preserved.23

Interpretation of the CPL, art 18. SMPL, art 9. SMPL, art 9. SMPL, art 11. SMPL, art 13. SMPL, art 52. SMPL, art 63.

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(17) Constitution of limitation fund The application for constitution of a limitation fund for maritime claims before an action is brought shall be filed with the maritime court of the place where the accident occurred, the contract is performed or the ship is under arrest.24 Hierarchical jurisdiction 19.19 Hierarchical jurisdiction refers to the division of authority between maritime courts and the courts of higher levels for accepting the maritime cases of first instance. 19.20 The level of a maritime court is equivalent to a local intermediate people’s court, which is higher than the primary people’s court (which usually hears civil and commercial disputes as a first instance court). Consequently, unlike the four-level courts for other civil and commercial matters, maritime jurisdiction is allocated to the courts at three levels, namely the maritime court, the high people’s court and the supreme people’s court. For jurisdiction over appeal cases, these cases should be appealed to the high people’s court in the province where the maritime court is located. 19.21 Usually, maritime and admiralty cases at first instance are dealt with by the ten maritime courts. There is no restriction on the disputed amount of the cases accepted by maritime courts as first instance courts. However, depending on the complexity of the disputes and their social impact, the high people’s court where the maritime court is located and the Supreme People’s Court may also hear a maritime and admiralty case at first instance. 19.22 The high people’s court has jurisdiction over maritime and admiralty cases of the first instance which have a major impact within its own jurisdiction.25 For cases that have major impact on the whole country or the cases that the Supreme People’s Court deems it should try, the Supreme People’s Court will entertain the case as first instance court.26 19.23 Further, considering the limited number of maritime courts and that they are located only in some provinces, the maritime courts have set up dispatched tribunals at major ports. A dispatched tribunal tries cases in the same manner as the maritime court and they are considered to be on the same level. Appeals for cases tried by dispatched tribunal should be lodged to the high people’s court. Agreed jurisdiction and exclusive jurisdiction 19.24 A party to the contract or other property dispute may choose by written agreement to come under the jurisdiction of the court in the location of the defendant’s domicile, or where the contract is performed or signed, or in the location of the plaintiff’s domicile, or in the location of the subject matter or in any location which has actual connections with the dispute.27 However, such choice may not be contrary to the provisions of hierarchical and

24 25 26 27

SMPL, art 102. CPL, art 19. CPL, art 20. CPL, art 34.

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exclusive jurisdictions of the relevant legislation or the regulations of the Supreme People’s Court. Further, the parties cannot choose the jurisdiction for appeal cases. 19.25 If the parties agree that more than one court will have jurisdiction of the relevant disputes in the contract, the parties are allowed to commence proceedings at any of the chosen courts.28 19.26 The parties are allowed to enter into a jurisdiction agreement either before or after disputes have arisen. The jurisdiction agreement can be evidenced by written agreement or can be reached prior to an action.29 19.27 Although the express jurisdiction agreement needs to be made in writing, if the defendant of the case does not oppose the jurisdiction of a maritime court where the maritime litigation takes place, and continues to defend the litigation, its defence will be treated as an affirmation of the chosen court’s jurisdiction.30 This is treated as an implied agreement on jurisdiction between the parties. Similarly, such choice cannot be contrary to the hierarchical jurisdiction and the exclusive jurisdiction. 19.28 Apart from the above rules on agreed jurisdiction, article 8 of SMPL also sets out a special rule for the agreed jurisdiction for foreign disputes. Where all the parties to a maritime dispute are aliens, stateless persons, foreign enterprises or organisations and have agreed in writing to be subject to the jurisdiction of a maritime court of China, notwithstanding that the place that is actually related to the dispute is not within the territory of China, the agreed maritime court of China shall have jurisdiction over the dispute. 19.29 However, the jurisdiction agreement between the parties is restricted by the exclusive jurisdiction provisions set out in both CPL and SMPL. China has jurisdiction over its sea areas including the internal waters, the territorial seas, the contiguous zone, the exclusive economic zone and the continental shelf.31 Where certain disputes occur within these areas, specific maritime courts of China will have exclusive jurisdiction over the disputes. 19.30 Article 7 of the SMPL set out three kinds of maritime disputes that are subject to the exclusive jurisdiction of certain maritime courts: (1)

(2)

An action arising from a dispute over coastal port operation shall be under the jurisdiction of the maritime court of the place where the port is located. Such coastal port operations include coastal port operations and operations occurring in waters connected to the sea. Operations usually include productivity and operational activities such as measuring, prospecting, port construction, salvage, towing, on/ under water engineering, port loading and discharging, lightering, storage, and tallying, etc. Any disputes occurring during the process of these operations shall come under the jurisdiction of the maritime court at which the port is located.32 An action brought against pollution damage to sea areas caused by discharge, spill or dumping of oil or other hazardous substances from ships, by production

28 Interpretation of the CPL, art 30. 29 Interpretation of CPL, art 29. 30 CPL, art 127. 31 The Provisions of the Supreme People’s Court on Several Issues Related to the Trial of Disputes Occurring within the Sea Areas under the Jurisdiction of China (I), art 1. 32 Yuan Faqiang, Maritime Procedure Law (1st edn, Peking University Press 2014) 40.

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(3)

or operation at sea or by ship demolition or repair shall be under the jurisdiction of the maritime courts of the place where the pollution occurred, the place that is suffering from the harmful consequences or the place where pollution prevention measures were taken. For the circumstances where the same oil pollution case covers a large water area and the pollution come under the jurisdiction of more than one maritime court, the maritime courts in different sea areas all have jurisdiction over the case. An action arising from a dispute over an offshore exploration and exploitation contract performed within the territory of the People’s Republic of China or in the sea area under the jurisdiction of the People’s Republic of China shall be under the jurisdiction of the maritime court of the place where the contract is being performed. The Chinese sea areas over which it has jurisdiction includes the contiguous zone, the exclusive economic zone and the continental shelf. The contiguous zone means the sea areas within 12 sea miles of China’s territorial waters. Exclusive economic zone means the sea areas within 200 sea miles of China’s territorial waters. The continental shelf is the underwater landmass that naturally extends from a continent, beyond China’s territorial seas. As a result, disputes arising from offshore exploration contracts performed in these areas are all subject to the jurisdiction of Chinese maritime courts and the parties are not allowed to agree on foreign litigation or arbitration.

Disputes about maritime jurisdiction 19.31 Jurisdiction disputes in maritime cases frequently arise between different maritime courts, or between the maritime courts and other local people’s court. Such disputes may also occur when there is an arbitration agreement between the parties while the claimant commences proceedings in a maritime court. This might lead to a further dispute over the validity of the arbitration agreement. This issue will be discussed in Chapter 26, while this chapter will mainly discuss maritime jurisdiction disputes between different courts. 19.32 If a party to an action objects to the jurisdiction of a maritime court after the court has accepted the case, the party must raise the objection within the period prescribed for the submission of defence.33 If the objection is accepted by the court, the court shall order the case to be transferred to the court that has jurisdiction to the disputes. If the objection is dismissed by the maritime court, the relevant parties can appeal the decision to the high people’s court at the domicile of the relevant maritime court.34 19.33 Where jurisdiction disputes occur between two courts and such disputes cannot be resolved by consultation, it shall be reported to the common superior court of the two courts for designation of jurisdiction.35 If the disputes are between a maritime court and a primary or intermediate court of another province, the common superior court would be the SPC. For such circumstances, article 40 of the Interpretation of CPL provides that if the

33 CPL, art 127. 34 Provisions of Jurisdiction over Maritime Lawsuits, art 3. 35 CPL, art 37.

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two courts are in different provinces and the consultation between the high people’s courts concerned fails, the Supreme People’s Court shall promptly designate jurisdiction. 19.34 During the period of reporting the case to superior court for designating jurisdiction, the hearing of the case is suspended. Where the court renders a ruling on the case before the superior court designates jurisdiction, such ruling will be set aside by the superior court.36

36 Interpretation of the CPL, art 41.

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CHAPTER 20

Preservation of maritime claims

Introduction 20.1 According to article 12 of the Special Maritime Procedure Law (the “SMPL”), the preservation of maritime claims means the compulsory measures taken by a maritime court on the application of a maritime claimant against the property of the person against whom a claim is made, for the purpose of ensuring satisfaction of the claim of the maritime claimant. 20.2 The rules in relation to the preservation of maritime claims are set out in chapter III of SMPL as well as Part 2 of the Interpretation of the Special Maritime Procedure Law of the Supreme People’s Court1 (the “Interpretation of the SMPL”). 20.3 The preservation of maritime claims is a special method of preservation, and the relevant rules are different from those for general litigation set out in the Civil Procedure Law of People’s Republic of China (the “CPL”). For example, in accordance with article 100 of the CPL, with regards to property preservation in general litigation, a people’s court may make determination on an application of a party concerned or it may take the initiative to make a determination according to its own authority. In contrast, preservation of maritime claims must be applied for by the party concerned.2 Procedures and requirements for applying preservation of maritime claims Jurisdiction 20.4 The preservation of maritime claims, as a procedure in relation to maritime disputes, should be submitted to the maritime court at the place where the property subject to preservation is located.3 20.5 The jurisdiction of a maritime court for preservation procedures is not restricted by any jurisdiction agreements or arbitration agreements entered into between the parties.4 Even if the applicant commences proceedings or arbitration in a foreign country, the maritime court will also accept the application, provided that the subject matter to be preserved is within the jurisdiction of China.5

1 2 3 4 5

Promulgated by the Supreme People’s Court on 6 January 2003 and came into effect on 1 February 2003. SMPL, art 12. SMPL, art 13. SMPL, art 14. Interpretation of SMPL, art 21.

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20.6 For the preservation of maritime claims, the place where the property is located is generally considered to be the place where the vessel or the cargo is located. If the cargo has been removed by the carrier out of the jurisdiction of the maritime court, the applicant can make the application to the local people’s court where the cargo is located.6 20.7 Where legal proceedings or arbitral proceedings have not yet been commenced in respect of a maritime dispute, any party may bring an action in respect of the maritime claim in the maritime court that adopts measures for preservation of the maritime claim. A party may also commence action at another maritime court that has jurisdiction, unless a jurisdiction agreement or arbitration agreement has been reached between the parties otherwise.7 Application form 20.8 Generally, a written application needs to be submitted to the maritime court. In the application, the particulars of the maritime claim, reasons for the application, subjectmatter to be preserved and the amount of security required must be specified, along with evidence attached.8 In judicial practice, a maritime court usually requests the claimant to submit an original written application. However, in especially urgent situations, some maritime courts may accept an application by other means, such as by fax, but in such situations the court would request the applicant to promptly provide the original application form.9 20.9 Generally, the name of the person against whom the preservation application is made also needs to be specified in the application submitted to the maritime court. However, there might be certain circumstances where the applicant cannot identify the respondent in time, for example, when the respondent is a shipowner. Under such circumstances, the applicant can simply list the respondent as the owner of a certain vessel. Article 25 of the SMPL clearly provides that a maritime claimant who wishes to apply for arrest of the ship concerned but cannot promptly ascertain the name of the person against whom the claim is made may still apply for its arrest. Evidence 20.10 Given that in most circumstances the application for preservation is made urgently and the applicant does not have enough time to obtain sufficient evidence, the maritime court generally does not have strict requirements on evidence. The relevant documentary evidence attached to an application document need only be preliminary, so long as it is sufficient to prove the existence of the maritime claim and the necessity to make a preservation of maritime claim.

6 Interpretation of the SMPL, art 20. 7 SMPL, art 19. 8 SMPL, art 15. 9 Han Lixin, Yuan Shaochun, Yin Weimin, Maritime Litigation and Arbitration (1st edn, Dalian Maritime University Press, 2007).

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Security 20.11 The maritime court, having entertained an application for preservation of a maritime claim, may require the claimant to provide counter-security.10 20.12 This is different from the security requirements for the preservation for general civil and commercial litigation. Under the CPL, after the action has been commenced, a counter-security must be provided when applying for pre-litigation property preservation. The applicant may be ordered to provide a counter-security when the application is made in the process of a legal action.11 Under the SMPL, whether security is needed in the application for preservation during either period all depends on the court’s discretion. 20.13 However, it should be noted that when the method of preservation is to arrest a ship, the court shall order the claimant to provide counter-security, unless the claimant applies for arrest of the vessel due to disputes over crew labour contracts or compensation for personal injuries suffered at sea or in waters connecting the sea, and the facts are clear and the relationship of rights and obligations are undisputed.12 20.14 The security provided by a maritime claimant should be submitted to the maritime court.13 20.15 The mode and amount of security provided by a maritime claimant shall be determined by the maritime court. The mode and amount of security to be provided by the respondent may be agreed between the claimant and the respondent, failing which the matter shall be determined by the maritime court.14 The issue of maritime security is discussed in detail in Chapter 23. Order of preservation and discharge of the preservation 20.16 An application for preservation of a maritime claim is usually made on a tight timeline, since there may be a possibility that the ship or cargoes that the application for maritime preservation is made against may be moved out of the maritime court’s jurisdiction. As a result, the SMPL requires the maritime court to make a determination whether or not to grant the order of preservation within 48 hours after accepting the application15 in order to avoid the ship to be arrested from leaving its jurisdiction, or the cargoes to be arrested from being resold or disposed of. 20.17 No hearing is required before the court renders such an order. The court shall only conduct an examination on the formalities of the application, and the scope of examination mainly includes: whether there is a valid maritime claim, whether the evidence submitted by the claimant is authentic or not, whether it is necessary to take the preservation measures, and whether the counter-security provided by the claimant is reliable or not. 20.18 Any party who is dissatisfied with the order of preservation may, within five days after receiving the order, apply for review of the decision not more than once. The

10 SMPL, art 16. 11 CPL, arts 100 and 101. 12 Provisions of the Supreme People’s Court on Several Issues concerning the Application of Law to the Arrest and Auction of Vessels (the “Provisions of Ship Arrest and Auction”), art 4. 13 SMPL, art 74. 14 SMPL, art 75 and 76. 15 SMPL, art 17.

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maritime court upon receipt of such application should render the result of the review within five days. 20.19 It should be noted that the execution of the original order of preservation is not suspended during the period of reviewing such order by the maritime court.16 20.20 Apart from the party against whom the preservation order is made, if an interested third party is of the view that the order of the maritime court causes damage to its own interests, it may raise an objection to the maritime court. The maritime court shall examine the objection and discharge the preservation order against the property it considers that the reasons are justified.17 Unlike the objection raised by the respondent himself, there is no express time limit for raising an objection by an interested third party. 20.21 If the maritime court grants the order of preservation, the order shall be executed immediately. If the preservation order is to arrest a vessel, the general procedure would be for the officer for enforcement to go on board the vessel to deliver the ruling and the order of arrest to the master and read the contents to him. 20.22 After the preservation order has been executed and the relevant property has been arrested, there are three circumstances where the maritime court will discharge the preservation of maritime claim:18 a.

b.

16 17 18 19

The party against whom the claim is made has provided security The amount of the security requested for the preservation of a maritime claim by a maritime claimant from a person against whom the claim is made shall be equal to the amount of his credit, but shall not exceed the value of the property preserved.19 The claimant may negotiate with the party against whom the claim is made on the method and amount of the security. The security provided by the party against whom the claim is made may be submitted to the maritime court, or to the maritime claimant. After the security is provided, the person providing the security may, for any justified reason, file an application to the maritime court to reduce, modify or discharge such security. The abovementioned justified reasons include where: (1) the amount of the guarantee requested by a maritime claimant is excessive; (2) the party against whom the claim is made has taken another effective mode of guarantee; (3) the maritime claimant’s right to claim has been extinguished. The claimant fails to bring a lawsuit or commence arbitration within the time limit required by the law After the preservation measures have been taken, the claimant must promptly bring a lawsuit or commence arbitration to realise its maritime claims. The reason is that the court only examines the formality of the application before making the order. If the preservation is applied wrongfully, the other party may face huge financial losses. In accordance with the provisions of article 25 of the Interpretation of SMPL, the time limit on the arrest of ships is 30 days, while that of arrest of cargoes or other property is 15 days. If the maritime claimant fails to

SMPL, art 17. SMPL, art 17. SMPL, art 18. SMPL, art 76.

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c.

bring a lawsuit or commence arbitration within the abovementioned time limit, the maritime court shall discharge the preservation order and return the security in a timely manner. However, if the claimant and the defendant have reached an agreement on the period of the preservation measure, the maritime court may order the recognition of such an agreement in accordance with the claimant’s application. A party concerned or an interested party has justified reasons to file an application to discharge the preservation of maritime claim If the disputes have been resolved through settlement between the parties, or the claimant is of the view that the preservation is wrongfully made or no longer necessary, or the defendant or the interested party has evidence to prove that the preservation was applied wrongfully, the maritime court will discharge the preservation upon examining the parties’ application.

Liability for wrongful application 20.23 If it is established that the preservation application was wrongfully made, the claimant should compensate the party against whom the claim is made or an interested party for the corresponding loss incurred due to maritime preservation. The purpose of this rule is to protect the legal interests of the party against whom the claim is made and to avoid the maritime claimant from abusing the preservation procedure.20 20.24 The two major types of preservation for maritime claims are the arrest of the vessel and the attachment of the cargo. Claims for losses resulting from a wrongful application for the arrest of a vessel may include various maintenance charges and expenses incurred during the period of berth when the ship is detained, the loss of hire during the period of arrest and the expenses incurred by the defendant to provide security to release the arrest of the ship.21 If the cargoes on board the vessel were wrongfully attached, the loss shall be actual loss directly caused by the cargoes’ wrongful attachment, which generally includes loss of cargoes, loss of profit, storage fees, interests and, etc.22 20.25 If the court is of the view that the claimant is not entitled to the maritime claims or the defendant is not liable for the maritime claims, the preservation may be treated as a wrongful application and the claimant shall be liable for the relevant losses. 20.26 If the subject matter of the preservation of maritime claim is wrongful, the claimant may also be liable for the loss caused by wrongful preservation. There are strict limitations on the scope of property of preservation of maritime claim. In accordance with the provisions of the SMPL, the scope of the arrest of ships is limited to ships owned by the defendant or bareboat chartered by the defendant, while the scope of arrest of cargoes on board is limited to cargoes owned by the defendant. Arrested property that falls outside the scope of the preservation law provisions are deemed to be wrong subjects of preservation, and hence may amount to wrongful preservation.

20 SMPL, art 20. 21 Interpretation of the SMPL, art 24. 22 Yuan Faqiang, Maritime Procedure Law (1st edn, Peking University Press, 2014) 63.

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Arrest of ships General introduction to ship arrest 20.27 Ship arrest is a major method for the preservation of maritime claims. There are several international conventions on ship arrest, including the International Convention Relating to the Arrest of Sea-Going Ships 1952 (the “1952 Arrest Convention”) and the International Conventions on Arrest of Ships 1999 (the “1999 Arrest Convention”). China is not a contracting State to either of them. 20.28 Currently, the rules in relation to ship arrest in China are set out in section 2 of chapter III of the SMPL, section 2 of the Interpretation of the SMPL and the Provisions of the Supreme People’s Court on Several Issues concerning the Application of Law to the Arrest and Auction of Vessels (the “Provisions of Ship Arrest and Auction 2015”),23 which was promulgated by the Supreme People’s Court on 28 February 2015 and which came into effect on 1 March 2015. 20.29 The SMPL and relevant provisions have made reference to relevant international conventions and international practices and combined them with the maritime trial practices of the Chinese courts. This has established a system of arrest of ships in China. Unlike some common law jurisdictions, there is no concept of an in rem claim in China. The system of ship arrest in China is similar to that of other civil law systems, which interpret the arrest of ships as actions in personam. 20.30 With regard to the jurisdiction arising from the arrest of ships, on the one hand, it is established that a court that has ordered the arrest of the ship has jurisdiction over the case; on the other hand, the jurisdiction of other courts over the case is not excluded. Meanwhile, where the two parties agree on a jurisdiction, the agreed jurisdiction takes priority. “Fixed arrest” and “live arrest” 20.31 The SMPL sets out two ways to arrest a vessel, which are generally defined as a “fixed arrest” or “live arrest”. A “fixed arrest” means that during the arrest period, the ship may not depart from the port, or be brought into use. A “live arrest” is another method taken to limit the rights over a particular ship. While a shipowner may retain the possession or the use of the arrested ship, it may be prevented from exercising certain other rights over the arrested ship, such as the right to transfer ownership 20.32 According to article 27 of the SMPL, after ordering to preserve a ship, the maritime court may, with the consent of the maritime claimant, allow for the continued operation of the ship by means of a restraining disposal or mortgaging of the ship. As a result, the “live arrest” will only apply with the consent of the claimant. 20.33 However, since the vessel still operates while under “live arrest”, there are some risks to the vessel being damaged or being arrested by other courts. The most critical problem is that the maritime court and the claimant do not have effective control over the vessel under arrest. In order to reduce the risks associated with “live arrests”, and to further improve the system of “live arrest” and provide full protection to the interests of maritime

23 Fa Shi [2015] No. 6.

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claimants, the law limits “live arrest” to allow for the vessel to sail on domestic routes to finish its current voyage.24 Further, since article 4 of the CMC provides that maritime transportation and towage services between the domestic ports shall be undertaken by ships flying the national flag of the People’s Republic of China, it seems that the “live arrest” will only apply to vessels flying Chinese flag in practice. Conditions for ship arrest 20.34 Ship arrest is a method of preservation of claim that applies to only a limited number of claims. The restriction on the scope for where ship arrest can be applied to maritime claims mostly protects the interests of shipowners. This encourages shipowners to invest more human resources and material resources into the shipping industry. Furthermore, this regime can help to avoid or minimise incidences of the abuse of ship arrest or wrongful arrest, and to maintain the thriving and healthy development of the shipping market. 20.35 In accordance with articles 21 and 22 of the SMPL, ships may not be arrested for the purposes of preservation unless the claim falls within any of the following categories: (1) (2) (3) (4)

(5)

(6) (7) (8) (9) (10) (11) (12)

loss of or damage to property caused by ship operation; loss of life or personal injury in direct connection with ship operation; salvage at sea; damage or threat of damage caused by a ship to the environment, coast or relevant interested persons; measures adopted to prevent, diminish or eliminate such damage; compensation paid for such damage; expenses for reasonable measures actually adopted or to be adopted to restore environment; losses caused by such damage to or likely to a third party; and damage, expenses or losses of a similar nature as those specified in this subparagraph; expenses related to re-floating, removal, reclamation or destruction of a sunken ship, wreck, ship run aground, abandoned ship or to making them harmless, including the expenses related to re-floating, removal, reclamation or destruction of the objects that have remained or no longer remain on board the ship or to make them harmless, and expenses related to the maintenance of an abandoned ship and her crew; agreement in respect of employment or charting of a ship; agreement in respect of carriage of cargoes or passengers; cargo (including luggage) carried by a ship or loss or damage relating thereto; general average; towage; pilotage; provision of supplies or rendering of services in respect of ship operation, management, maintenance or repair;

24 Article 29 of the Interpretation of the SMPL provides that “where a maritime court allows a ship upon which preservation is imposed to continue the operation in accordance with the provisions of Article 27 of the SMPL, it is generally limited to allowing a ship sailing on a domestic route to finish its current voyage.”

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(13) construction, re-construction, repair, refurbishment or equipment of a ship; (14) dues or expenses for ports, canals, docks, harbours or other waterways; (15) crew’s wages and other moneys, including repatriation expenses and social insurance premium payable for the crew; (16) expenses paid for a ship or a shipowner; (17) insurance premium for a ship (including protection and indemnity calls) payable by or paid for a shipowner or bareboat charterer; (18) commission, brokerage or agency fee related to ships payable by or paid for a shipowner or bareboat charterer; (19) a dispute over ownership or possession of a ship; (20) a dispute between joint owners of a ship over the employment or earnings of the ship; (21) ship mortgage or rights of a similar nature; and (22) a dispute arising out of a ship sale contract. 20.36 It is worthy to note that the above restrictions on the types of claim are only applied when the purpose of arresting is for the preservation of a maritime claim. If the vessel is arrested for the enforcement of a judgment or an arbitral award, there are no such restrictions on the type of claims. 20.37 Apart from the restrictions on the range of the claim, the SMPL also sets out rules in respect of the kinds of ships that may be arrested. 20.38 According to article 23 of the SMPL, the claimant can only proceed against the actual ship in connection with which the claim arose in any of the following circumstances: 1, the shipowner is liable for the maritime claim and is the shipowner at the time of arrest; 2, the bareboat charterer of the ship is liable for the maritime claim and is the bareboat charterer or the shipowner at the time of the arrest; 3, the maritime claim involves ship mortgage or rights of the same nature; 4, the maritime claim is relevant to the ship’s ownership or possession; and 5, the maritime claim involves a maritime lien on the ship. 20.39 Similar with many other jurisdictions, Chinese law also allows for the arrest of a “sister ship”, which is any ship that belongs to the same shipowner at the time when the ship is arrested. Paragraph 2 of article 23 of the SMPL provides that “the maritime court may arrest other ships owned, at the time of arrest, by the shipowner, bareboat charterer, time charterer or voyage charterer who is liable for the maritime claim, except for claims relating to the ownership or possession of a ship”. The “other ships” referred therein include all sister ships owned by the party liable for the maritime claim of the claimant. 20.40 Another requirement for ship arrest is that the preservation must be necessary. It must be an urgent situation where if there is no immediate arrest of a ship it will cause irreparable damage to the interests of the claimant. If the application for arrest is made during existing legal proceedings, there must be a risk that the judgment will be difficult to enforce in the future, or that the judgment liability will unlikely be satisfied. 20.41 There is no definition of “necessary” or “urgent” in the relevant law. Generally speaking, if the vessel is owned by a small single vessel company or the shipowner has a bad reputation, the court may consider preservation necessary. In addition, ships owned by a foreign party may satisfy this condition. Given that the duration that a ship owned by a foreign party stays at a Chinese port is usually short, and that the ship may never return once she leaves, it would usually be less likely that a foreign-owned vessel will wait for 253

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enforcement and remain in the jurisdiction until after the judgment.25 Furthermore, if the claimant can prove to the court that the defendant shipowner or bareboat charterer is trying to sell the vessel, the court may also take such facts into account in making an arrest order. Re-arrest and multiple arrest 20.42 Re-arrest refers to the arrest of the same ship for the same maritime claim, while multiple arrests means that more than two arrests are made on the same ship at the same time based on different maritime claims. 20.43 Article 24 of the SMPL provides that no maritime claimant may, on account of the same maritime claim, apply for arrest of a ship that was once arrested, except in any of the following circumstances: (1) (2) (3)

where the person against whom the claim is made fails to provide sufficient security; it is likely the surety cannot perform the obligations under the security in full or in part; or the maritime claimant agrees, on reasonable grounds, to release the arrested ship or to return the security provided, or the claimant cannot, by reasonable grounds, stop the release of the arrested ship or the return of the security provided.

20.44 In practice, the re-arrest of a ship is in fact extremely rare. A court would usually require the defendant to provide sufficient amounts of security before releasing the arrested ship. 20.45 The other question arising in situations of re-arrest is whether the claimant is allowed to arrest the sister ship for the same maritime claim. There is no clear rule on this question under the SMPL or its interpretation. Generally speaking, it may be reasonable to arrest a sister ship of the ship that has already been arrested if the claimant still need to take further action to preserve its claim. 20.46 In contrast, multiple arrests of the ship are allowed in China. Multiple arrests of a ship means that more than two arrests are made on the same ship based on different maritime claims. According to article 2 of the Provisions of Ship Arrest and Auction 2015, a maritime court may, based on the applications by different maritime claimants, take measures to arrest a ship that has already been arrested by itself or another maritime court. This is different from the relevant rules in respect of the preservations under the CPL for general civil and commercial cases, which provides that properties that have already been seized or frozen shall not be seized or frozen repeatedly.26 Compulsory auction of ship 20.47 There are two types of compulsory auction of ships, namely compulsory auction of ships in a preservation procedure and compulsory auction of ships in an enforcement procedure. This section will mainly discuss the compulsory auction of vessels in

25 Yuan Faqiang, Maritime Procedure Law (1st edn, Peking University Press, 2014). 26 CPL, art 103.

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a preservation procedure. The relevant rules of this procedure are set out in section 2 of chapter III of the SMPL and the Provisions of Ship Arrest and Auction 2015.27 20.48 The compulsory auction of ships in a preservation procedure means a compulsory measure taken in the course of preservation of maritime claims in which the court sells a ship arrested in accordance with the law, by means of auction pursuant to the statutory procedures based on an applicant’s application. The sale proceeds of the ship are kept to ensure the satisfaction and enforcement of a valid judgment or an arbitral award that will be made in the future. The auction of ships is in fact a change in the form of security used for preservation. Conditions for compulsory auction of ships 20.49 The conditions for compulsory auction of ships are set out in article 29 of the SMPL. Where on the expiry of the time limit for ship arrest, a person against whom a claim is made fails to provide security and it is not appropriate to keep the ship under arrest, the maritime claimant, having brought legal action or commenced arbitration, may apply to the maritime court ordering the ship arrest for an auction of the ship. 20.50 An application for a compulsory auction of a ship must be made by the party concerned to a maritime court arresting the ship. Article 29 of the SMPL provides that such application shall be made by the claimant. Further, article 30 of the Interpretation of SMPL also provides that if the claimant does not make such application, the court may also auction the ship on the basis of the respondent’s application. If the shipowner believes that he is unlikely to win the case, in order to avoid costs associated with keeping a ship under arrest he may still wish to have the ship auctioned. 20.51 Commencing litigation or arbitration proceedings is another requisite condition for conducting a compulsory auction of a ship arrested before a lawsuit. Despite the fact that a compulsory auction of ships is an extension of an arrest of a ship, when compared with an arrest, an auction has a greater impact on the defendant. As a result, this procedure is not invoked easily. 20.52 In addition, the time limit for the arrest of a ship for the preservation of a maritime claim is 30 days. A claimant may only file an application for auction of a ship to a maritime court on the expiry of the said period.28 The law also permits that the period of the arrest of a ship may be extended if a maritime claimant brings a lawsuit or commences arbitration within 30 days, and applies for an arrest in the course of the litigation or arbitration.29 However, for the purposes of applying for an auction, the period is set at the statutory period of 30 days. 20.53 The most important requirement for an auction of a ship is that the defendant must have failed to provide security. The purpose of an arrest is not for a compulsory auction of a ship, but instead to obtain enough security for the claimant to realise his maritime claim. Therefore, if the party against whom the claim is made provides security for the purpose of releasing an arrested ship, the maritime claim will be satisfied later by that security. Given

27 These provisions will also apply to auction of ship for satisfaction of debts in the execution procedure. 28 SMPL, art 28. 29 SMPL, art 28.

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that an auction would have a severe impact on the shipowner, the court will not make such order if the shipowner can provide security to release the vessel. 20.54 The last requirement is that it must be unsuitable for the ship to remain under arrest. Under normal circumstances, if the party against whom the claim is made does not provide security, the ship continues to be arrested until it is auctioned in an enforcement procedure to settle the confirmed debt after a judgment or an arbitration award is rendered, which can be a long period of time. However, in practice, the condition of the ship may not allow for it to be under arrest for such a long period, like where the ship is too old or there are defects in the parts or equipment of the ship. Under such circumstances, the ship may depreciate substantially and become a wasting asset. Another circumstance that may arise is that the fees incurred during the period of arrest of the ship can be too high, hence the ship would not be suitable for remaining under arrest because this would lead to a substantial diminution of the value of the property being preserved. Procedure of compulsory auction of ships Application, examination and reconsideration 20.55 As mentioned above, an application for auction can be made by the claimant or the parties that the preservation order is made against. There is no clear rule about the form of the application for auction of a ship. In practice, the application is made in writing and should clearly state the reasons for auction of the ship, as well as reasons why the arrested ship is unsuitable for remaining under arrest, along with corresponding evidence. 20.56 The maritime court shall, after receipt of an application for auction of a ship, examine the application and make an order to allow or disallow the auction. Such examination will be made based mainly on the conditions of auction set out in the SMPL. The maritime court does not exam the claim at this stage, and it is simply a procedural examination. Such examination procedures do not exempt the claimant from the liability for compensation for the loss caused to the defendant due to a wrongful application for auction of a ship. 20.57 A party concerned may not appeal against a determination made by a maritime court but may apply once for reconsideration. After the maritime court makes a decision, any party who is dissatisfied with such an order may, within five days after receipt thereof, apply for a one-time review. Within five days after the receipt of the application, the maritime court shall render the result of the review. 20.58 Unlike the rules in respect of the reconsideration of a decision for ship arrest, the enforcement of the order of auction is suspended during the period of reconsideration. Termination of compulsory auction of ship 20.59 In practice, parties generally commence settlement discussions after a vessel is arrested or after an application for auction. If a settlement agreement is finally reached between the parties, they may wish to withdraw the auction application. Considering such practice, Chinese law allows for the claimant or other interested party30 to apply to terminate the compulsory auction seven days prior to the date of the auction as determined in the 30 Article 32 of the Interpretation of the SMPL allows the interested party to apply to terminate the auction proceeding.

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public announcement. However, the maritime court has discretion to determine whether or not to allow such application.32 20.60 Generally, if the maritime court is still conducting the examination and has not yet made an auction order, an application for termination of auction will be permitted. In contrast, if the maritime court has published an announcement of auction or has accepted the registration for ship purchase and registration of a creditor’s rights, or has finished the preparation work for auction, a maritime court would be reluctant to allow such application of termination. If the maritime court renders a ruling to terminate the auction of a vessel under such circumstances, it shall at the same time render a ruling to terminate the procedures for debt registration and the application fees already paid shall likewise be refunded to the creditors.33 20.61 If the maritime court determines that the auction should be terminated, the expenses incurred by the preparation for auction of ships are borne by the maritime claimant.34 However, there is no provision in the SMPL regarding whether the claimant should compensate the losses caused to a third party due to the termination of an auction. 31

Announcement and notice of the auction 20.62 According to article 32 of the SMPL, the maritime court that orders an auction should issue an announcement in newspapers or other news media. In the case of an auction of a foreign ship, such announcement is issued in the newspapers or other news media of overseas distribution. The period of announcement for the ship auction must be no less than 30 days. There are two purposes of the announcement: one is to make the public aware of the auction in order to attract as many bidders as possible so as to realise the maximum value of a ship and, two, to notify the relevant creditors to report their claim and other lawful rights with the court. 20.63 The contents of the announcement include: a. b. c. d. e. f. g. h.

name and nationality of the ship for auction; reasons and grounds for auction of the ship; composition of the ship auction committee; time and venue of the ship auction; time and venue for display of the ship for auction; formalities to be completed for taking part in bidding; particulars necessary for the registration of debts; and other matters that need to be announced.

20.64 Apart from a public announcement, in order to inform all the relevant parties about the auction, the maritime court should also issue a notice to the ship registrar of the State of registry of the ship, and to the parties entitled to maritime lien, the mortgagee and shipowner, who are already known within 30 days before an auction of a ship. Information on the party entitled to maritime lien, the mortgagee and the shipowner shall be provided

31 32 33 34

Interpretation of the SMPL, art 33. SMPL, art 31. Provisions of Ship Arrest and Auction, art 19. SMPL, art 31.

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by the claimant and respondent to the maritime court.35 Such notice shall contain the name of the ship for auction, time and venue of the ship auction, reasons and grounds for the ship auction, registration of debts, etc.36 Court’s preparation for the auction 20.65 The auction is run by an auction committee. A maritime court cannot entrust any other auction agency with the auction. The auction committee is a temporary institution for the auction of ships, which is accountable to and supervised by the maritime court. The duties of the auction committee include organising the ship appraisal and valuation, organising and presiding over the auction, signing a letter of confirmation for the conclusion of auction with the auctioneer, and going through the handover formalities for the ship. 20.66 A ship auction committee consists of three or five persons, including the person of the maritime court in charge of execution designated by the court, the auctioneer and ship surveyor invited by the maritime court. The ship auction committee is responsible to and under the supervision of the maritime court.37 20.67 Before the ship is auctioned, the auction committee should appoint a ship inspection institution to conduct an appraisal of the ship and the appraisal report shall be provided to the bidders as a reference for bid price. Furthermore, the maritime court will conduct a valuation of the ship to be auctioned based on the result of the appraisal of the ship with reference to the international and domestic ship market situation and other factors. In order to ensure an accurate valuation, advice from the ship inspection institution, a sale and purchase brokerage firm for the ship or other professional institutions may also be sought if necessary, save and except at the advice given by a surveyor of the auction committee. 20.68 A maritime court shall also determine the reserve price of a vessel based on its valuation. The reserve price shall not be disclosed.38 20.69 In addition, the ship auction committee shall, before auction of a ship, display the ship for auction and make the ship available for inspection and provide relevant information about the ship.39 20.70 A bidder shall register at the auction committee within the prescribed deadline. Chinese law does not set out any restriction on the scope of the bidder; thus any individual or enterprise or other organisation having capacity for civil rights and capacity for civil conduct may participate in the bidding. For registration, it is necessary to pay a certain amount of security for ship purchase, which in practice is in the form of a performance guarantee. The specific amount of security for ship purchase is decided by the maritime court based on the specific situation, or may be agreed between the maritime court and the bidders. Auction 20.71 The specific method of auction is decided by the maritime court. General provisions in relation to auction under the Auction Law will apply for detailed procedures and matters that are not provided in the SMPL and its relevant interpretations.

35 36 37 38 39

Interpretation of the SMPL, art 34. SMPL, art 33. SMPL, art 34. Provisions of Ship Arrest and Auction, art 12. SMPL, art 36.

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20.72 In practice, the auction may be aborted if the bidding price does not pass the reserve price. Chinese law has a restriction on the reserve price of the compulsory auction of ship in order to guarantee the satisfaction of relevant debts. During the first auction, the reserve price shall not be less than 80 per cent of the valuation price. Where a new auction is necessary because the previous auction is aborted, the maritime court may appropriately lower the reserve price, provided that the amount lowered for each new auction may not exceed 20 per cent of the reserve price of the previous auction.40 20.73 If, after two auctions, they have both been aborted, the maritime court may sell the vessel. The selling price shall not be less than 50 per cent of the vessel’s valuation price. If the vessel cannot be sold at such price, the vessel may be put up for sale at a price lower than 50 per cent of its valuation upon the consent of creditors holding at least two-thirds of the creditors’ rights that have been accepted for registration. However, if the vessel still cannot be sold, the relevant maritime court may lift the arrest order.41 20.74 After the conclusion of the auction, the auction committee shall sign a letter of confirmation for the conclusion of auction with the buyer. The letter of confirmation for the conclusion shall be sealed and confirmed by the maritime court and has binding contractual effect. 20.75 After a buyer has signed the letter of confirmation for the conclusion of auction, he must immediately pay a sum of no less than 20 per cent of the auction price of the ship. The remaining auction price must be fully paid within seven days of the date of conclusion unless it is otherwise agreed between the auction committee and the buyer.42 20.76 The partial auction price paid by the buyer after the conclusion of an auction is not of a guarantee nature as a security or deposit. If a buyer wants to go back on his purchase after having paid the partial auction price of the ship, but fails to fully pay the remaining auction price within seven days as prescribed, the paid partial auction price is refunded. However, the buyer should compensate for any losses caused by the buyer’s breach of contract and for any expenses incurred by a separate auction organised by the maritime court, and the compensation can be deducted from the paid partial auction price. If the paid auction price is insufficient to cover the loss and expenses, the buyer shall make it up.43 20.77 When a buyer has paid the purchase price in full, the shipowner shall, within the designated time limit, deliver the ship to the buyer at the berthing place as is. The ship auction committee should arrange and supervise the delivery of the ship and sign the letter of confirmation of delivery and acceptance with the buyer after delivery of the ship. After delivery of the ship, the maritime court then issues an order to release the ship. In addition, when a ship is delivered, the maritime court will issue an announcement in newspapers or other news media outlets, stating that the ship has been sold by auction and delivered to the buyer. 20.78 It shall be noted that the SMPL also sets out that an auction may be void if there is malicious collusion between the bidders. The bidders who take part in malicious collusion are liable for the expenses of the ship auction and should make good the relevant losses. 40 41 42 43

Provisions of Ship Arrest and Auction, art 12. Provisions of Ship Arrest and Auction, arts 13 and 14. SMPL, art 37. Yuan Faqiang, Maritime Procedure Law (1st edn, Peking University Press 2014).

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The maritime court may impose on the bidders who take part in malicious collusion a fine of not less than 10 per cent but not more than 30 per cent of the highest bidding.44 Attachment of cargo on board the ship 20.79 Apart from ship arrest, another preservation method available for the claimant is to attach the cargoes onboard the ship. Chapter III of the SMPL also sets out relevant rules in relation to attachment of cargoes. “Cargoes onboard” refers to cargoes taken in charge by a carrier that has not yet been loaded on board, has been loaded on board, or has been unloaded but is still in the control of the carrier.45 20.80 Apart from attachment of cargoes, the claimant is also allowed to attach the ship’s bunker and materials.46 The rules set out in section 1 and section 3 of the SMPL also regulate the attachment of bunkers and materials of a ship.47 20.81 Where cargoes on board are attached, the claimant is usually the carrier who enters into the contract for carriage of cargoes by sea, including a shipowner, a charterer, an operator, etc. Meanwhile, a person against whom a claim is made is usually the cargo interests, including a shipper, a consignor, or a consignee, etc. 20.82 Although the attachment of cargoes on board is not conditional upon the possession of the cargoes by a claimant, under most of the circumstances the attached cargoes is within the possession of the claimant. Under such circumstances, a claimant may exercise lien on the cargoes and may also make an application to the maritime court for the attachment of cargoes. 20.83 Section 3 of chapter 3 of the SMPL sets out relevant restrictions on the attachment of cargoes on board, including: (1)

(2)

The claimant must have a maritime claim against the respondent. In respect of the maritime claims made by a claimant for attachment of cargoes on board, it is mainly based on the claims for expenses incurred by the carriage of cargoes. These claims mainly include freight, hire, demurrage, general average contribution, salvage award, etc. The target cargo must belong to the respondent. It shall be noted that for cargoes that are in the possession of the person against whom a claim is made, but where the ownership has not yet been transferred, this does not fall within the ambit for attachment.

20.84 The value of the cargo against which an attachment is applied for shall be equal to the amount of the maritime claimant’s claim. The amount of claim is not the amount of claim filed by the claimant on its own, but the amount that shall be paid to a claimant by the person against whom the claim is made, in accordance with the facts of the case and the relevant legal provisions. However, since the court or arbitration tribunal would not have rendered a judgment or an award in respect of the disputes at that stage, it would be impractical to request that the value of the attached cargo is exactly the same as the final 44 45 46 47

SMPL, art 41. Interpretation of SMPL, art 19. SMPL, art 50. Interpretation of SMPL, art 38.

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amount of compensation. In practice, it is generally requested that the value of the cargoes on board to be arrested may not exceed 120-150 per cent of the amount of compensation in the final judgment or award.48 20.85 The time limit for attachment of the cargo carried by a ship for preservation of a maritime claim is 15 days, which is less than the period allowed for the arrest of a ship. Where within the 15 days a maritime claimant brings an action or commences arbitration, or where the application for attachment of cargo is made in the process of a legal action or arbitration, the attachment of the cargo is not subject to the time limit of 15 days. Compulsory auction of cargoes 20.86 Similarly, under certain circumstances, the maritime court may auction the cargo under attachment. 20.87 The conditions for compulsory auction of cargoes is the same as those for the compulsory auction of vessels under arrest, which includes: (1) (2) (3)

a person against whom the claim is made fails to provide the security within the time limit; a claimant has brought an action or commenced arbitration; and the cargoes are unsuitable for remaining under arrest.

20.88 Unlike the auction of ships, the SMPL allows the claimant to apply to auction cargoes under certain circumstances even if the above conditions are not satisfied. According the article 47 of the SMPL, where the cargo cannot be preserved or is difficult to preserve, or the expenses for its preservation are likely to exceed its value, a maritime claimant may apply for an earlier auction. For example, for cargoes such as fresh cargoes, cargoes that are easily decomposed and deteriorated, cargoes with a shelf life or retention period, the court may order an earlier auction. 20.89 The maritime court shall, after receipt of an application for auction of the cargo carried by a ship, examine the application and, within seven days, make an order to allow or disallow the auction. Any party who is dissatisfied with such an order may, within five days after receipt apply for a review not more than once. The maritime court shall, within five days after receipt of the application therefor, give the result of the review. During the period of review, execution of the order is suspended.49 Where there are no specific provisions in section 3 of chapter 3 to govern auction of the cargo on board the ship, the provisions of section 2 of chapter 3 regarding auction of ships may be applied mutatis mutandis. 20.90 In addition, compulsory auction of cargoes on board includes two situations, namely compulsory auction of the arrested cargoes and compulsory auction of cargoes not subject to arrest. The SMPL only sets out rules on compulsory auction of arrested cargoes. In accordance with the CMC, a claimant may apply to the court for auction of cargoes on board that have not been arrested under certain circumstances. It specifically includes two situations, which are the cargoes subject to lien by a carrier under article 88 of the CMC as well as the salved cargoes under article 190 of the CMC. The procedure for auction of cargoes subject to carrier’s lien follows the relevant rules set out in chapter 3 of the SMPL. 48 Yuan Faqiang, Maritime Procedure Law (1st edn, Peking University Press 2014). 49 SMPL, art 48.

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CHAPTER 21

Maritime injunction

Introduction 21.1 The maritime injunction is a statutory remedy by which claimants may obtain a measure of protection against a respondent whose act has infringed or will potentially infringe the legitimate rights and interest of the claimants. By way of a maritime injunction order of the court, a respondent will be ordered to act or not to act. For example, a carrier may be compelled to issue a bill of lading upon the application of the shipper or the owners may be compelled not to sail at the request of the charterers. 21.2 The basic requirements for a maritime injunction to be granted by a Chinese maritime court are conveniently and succinctly set out in chapter IV of the Special Maritime Procedure Law of the People’s Republic of China (the “SMPL”). 21.3 The relevant provisions in the Supreme People’s Court’s Interpretations on certain issues in relation to the application of the Special Maritime Procedure Law (Fa Shi [2003] No. 3) (the “Interpretations of the SMPL”) regarding the maritime injunction will also be discussed below in conjunction with chapter IV of the SMPL. The general nature of the remedy 21.4 A maritime injunction is a measure with legal force, namely, the court by making an order will force one party to act or not to act. 21.5 The SMPL is the first procedure law that introduced the mechanism of preservation of actions. Before the amended Civil Procedure Law of the PRC (the “CPL”) came into force on 31 August 2012, other than some rules scattered in the General Rules of Civil Law and some special laws, such as Patent Law, Trademark Act or Copyright Law, there was no systematic legal mechanism conferring a legal remedy on a claimant to obtain an injunction against a respondent’s action in civil litigation. The CPL as amended in 2012 formally introduced the remedy of injunction against a respondent’s action as one of the preservation measures in civil litigation.1 21.6 Unlike the preservation of maritime claims where the target of preservation is property, it is the action of a respondent that is preserved under maritime injunctions. However, the preservation of maritime claims and maritime injunctions are similar in that the ultimate purpose of preservation is to aid future execution of the judgment, if the claimant is successful at trial. 1 CPL, art 100.

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Application for a maritime injunction Before or during the arbitration/litigation 21.7 A maritime injunction can be applied not only prior to arbitration or litigation, but also after a party has commenced proceedings. The court Before arbitration/litigation 21.8 It is not doubted that the maritime courts in China have jurisdiction to grant maritime injunctions. When a party makes an application for a maritime injunction before bringing an action, it will not be bound by the jurisdiction agreement or arbitration agreement between the parties2 and such an application shall be made to a maritime court of the place where the maritime disputes arose.3 21.9 It is not crystal clear what is meant by “the maritime disputes” as referred to in the phrase “where the maritime disputes arose” under Chinese law, but it is commonly recognised that it does not mean the underlying disputes between the parties; instead it means disputes arising out of the respondent’s acts or omissions.4 21.10 The maritime court that has granted a maritime injunction may also exercise jurisdiction over the underlying disputes if the parties submit the disputes to the same court, provided that there is no jurisdiction agreement or arbitration agreement between the parties.5 Of course, the parties are entitled to submit the underlying disputes to other competent maritime courts after the injunction order has been granted.6 After the proceedings have been commenced 21.11 If parties have agreed to submit their disputes to an arbitration commission in China such as the China Maritime Arbitration Commission (“CMAC”) for resolution, and in the event that a party applies for a maritime injunction, such arbitration commission shall submit the party’s application to the maritime court at the place where the maritime dispute arises.7 Therefore, the party shall first make an application to the tribunal constituted according to the arbitration rules of such arbitration commission and the arbitration commission will then pass on such an application to a competent maritime court. 21.12 If a foreign court has seized the case or relevant disputes have been referred to an arbitration the seat of which is not China, any party to the proceedings may still apply to a competent maritime court of PRC for a maritime injunction,8 namely, the maritime court in the place where the maritime disputes arose. 21.13 If a maritime case is being heard by the High People’s Court in the place where the lower level maritime court is located or by the Supreme Peoples’ Court, such as when 2 3 4 5 6 7 8

SMPL, art 53. SMPL, art 52; CMAC Rules 2015, art 25. Yuan Faqiang, Maritime Procedure Law (1st edn, Peking University Press 2014) 133. SMPL, art 61. ibid. For example, if CMAC is chosen. CMAC Rules 2015, art 25. Interpretations of the SMPL, art 41.

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the parties appeal the case to the aforementioned courts, the High People’s Court or the Supreme People’s Court will also hear the application for a maritime injunction made by the concerned parties. Making the application 21.14 The court can only make such an order upon the claimants’ application and cannot make any maritime injunction ex officio. 21.15 A claimant shall file a written application stating the reasons with the relevant evidence attached.9 The requirements of the contents of the petition papers for a maritime injunction are similar to those for a petition paper for preservation of maritime claims. 21.16 The petition papers for a maritime injunction shall set out the names of the applicant(s) and the respondent(s), the requested matters and the reasons why the conditions for granting a maritime injunction as provided by SMPL are satisfied. Security 21.17 The maritime court, having entertained an application for a maritime injunction, may request the claimant to provide security. If the claimant fails to do so, the court shall reject the application.10 It is noteworthy that the counter security will be provided to the court only. 21.18 Once a maritime injunction order is made, the court shall proceed to execute against the respondent and the respondent will be compelled to act or not to act. For this reason, all maritime courts are usually very cautious when considering the application and usually will ask the claimant to provide a counter security. 21.19 In practice, a counter security may be in the form of: (a) (b) (c) (d) (e) (f )

a bank guarantee to be issued by a Chinese bank; a letter of undertaking issued by a reputable Chinese insurance company or reinsurance company; a letter of undertaking issued by a Chinese P&I Club; a corporate guarantee issued by a reputable Chinese company (this form has now become rare); cash deposit; a guarantee issued by court-recognised guarantee companies. In some maritime courts, such as Ningbo Maritime Court and Qingdao Maritime Court, a guarantee to be issued by their recognised guarantee companies can be accepted. Such guarantee can be arranged by entering into an agreement with the guarantee companies against some paid fees.

21.20 In practice, for each individual case, the local Chinese lawyers will usually discuss with the court in respect of the acceptable form of counter security before the formal application is made.

9 SMPL, art 54. 10 SMPL, art 55.

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21.21 The counter security should be sufficient to compensate any loss caused by such a maritime injunction, if wrongfully obtained. The amount differs in different maritime courts and will be subject to the discretion of the court. The amount of the counter security may be negotiable. Unlike preservation of maritime claims for which the counter security amount is usually in a sum equivalent to the claim amount or an amount of 30 days’ hire for arresting a vessel, there is no practical standard for the amount of counter security in a maritime injunction case. 21.22 In practice, if the claim amount is quite high, the court would sometimes require cash security in addition to a company bond to be issued by a local security company in order for the total security amount to be equivalent to the total claim amount. 21.23 The court will normally return the counter security to the applicant 15 days after the maritime injunction order is issued if no objection is filed by any other party, including the respondent and other parties who have interests in the pertaining case.11 Further, if the respondent brings a lawsuit against the claimant or commenced arbitration proceedings against the claimant, the court may also not return the counter security despite the fact that the respondent does not make a direct objection to the court. Conditions for granting a maritime injunction 21.24 Obtaining a maritime injunction is one of the “nuclear weapons” in the legal armoury available to litigants. For this reason, the need for caution should be stressed and the conditions are strict. 21.25 Article 56 of the SMPL has set out the three conditions to be satisfied before a maritime court may consider to grant a maritime injunction, which are: (a) (b) (c)

the claimant has a specific maritime claim; a breach of statutory law or contractual obligations by the person against whom an application is made to rectify such breach; and imminent risk of losses will be caused or enlarged if a maritime injunction is not granted forthwith.

21.26 The above conditions will be discussed in detail hereunder in turn. The claimant has a specific maritime claim 21.27 The statutory law does not have any provisions as to how to interpret “a specific maritime claim”. The court may nevertheless require that “a good arguable case” be made as a minimum threshold condition for the grant of such a relief. 21.28 Unlike an application for the arrest of vessel(s), which requires a maritime claim to fall into one of the 22 categories of claims as set out in article 21 of the SMPL, “a specific maritime claim” does not have such restrictions. It may be a claim made by cargo owners against shipowners, and vice versa, it could also be a claim made by the shipowners against cargo owners so far as such right to make a claim is derived from a statutory right.

11 Interpretations of SMPL, art 45.

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A breach of statutory law or contractual obligations by the person against whom an application is made to rectify such breach 21.29 To obtain a maritime injunction order, it also must be proved that the respondent’s act is in breach of either statutory law or contractual obligation(s). To reach that, ample evidence must be submitted in support of the application, including all material facts of which the court should be made aware. 21.30 In practice, a separate statement of facts may be prepared and attached to the application papers when submitting to the court with a view to presenting a stronger case. Imminent risk of losses will be caused or enlarged if a maritime injunction is not granted forthwith 21.31 There is no universally applied standard that the court could refer to as to what circumstance would constitute “imminent”. Therefore, it will be subject to the court’s discretion based on the factual background of an individual case. The “imminence” could be reflected in “time” or “consequence” or both. 21.32 On the surface of the prima facie evidence, even if the act(s) of the respondent has beached law or contract, the court may not grant the application if there is no feature of imminence. Review and issue of a maritime injunction order 21.33 The court after reviewing the application for a maritime injunction must make an order to either grant or reject the application. If all the conditions as above discussed are satisfied, the court shall make a civil order followed by an injunction order.12 If any of the conditions are not satisfied, or if the claimant refuses to provide counter security or the counter security is not sufficient, the court will make an order to reject the application.13 21.34 Article 57 provides that the maritime court, having accepted an application, shall make an order within 48 hours. 21.35 In practice, given the difficulties to evaluate the “imminence” of the case and the uncontrollable consequence if an injunction is wrongfully granted, the court is generally very reluctant to grant an injunction order. In some complicated matters, the court may hold a hearing to give the respondent a chance to defend its case. After having considered the case from both parties, the court will then make an order. In the circumstances, the abovementioned 48 hours might already have long expired when the court makes the order. Execution 21.36 Where an order for granting a maritime injunction is made, it shall be executed forthwith.14 The maritime injunction order shall be executed by the court.15 If the respondent or other related parties refuse to comply with the injunction order, the maritime court

12 13 14 15

Interpretation of the SMPL, art 42. SMPL, art 57. Supra, n 12. Interpretation of the SMPL, art 43.

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should enforce the execution against the party in accordance with the relevant provisions under the CPL.16 21.37 Where a respondent refuses to comply with the maritime injunction, the maritime court may, depending on the seriousness of the circumstances, impose a fine or put the person under detention, if the act constitutes a crime, the party will be prosecuted for the crime committed.17 21.38 A fine imposed upon an individual shall fall into the range of RMB 1,000 and RMB 30,000 while a fine imposed on a company shall fall into the range of RMB 30,000 and RMB 100,000. As to the detention period, it shall be no more than 15 days.18 Reconsideration and objection 21.39 Where the respondent is not satisfied with an injunction order made, he may within five days after receipt of the order, apply to the same maritime court for reconsideration.19 Such application for reconsideration can only be made once.20 The court, upon receipt of such application shall within five days after receipt of the application make a decision.21 During the reconsideration period by the court, the execution of the order shall not be suspended.22 If the court considers the reasons are justified not to grant an injunction, it shall withdraw the order timely and cease the execution.23 The court also has to try to mitigate the losses caused by wrongful execution. 21.40 A party with interest may also file an objection to the maritime court; the maritime court, having reviewed such objection, shall either withdraw the injunction order if they find that the reasons are justified or notify the party in writing that the court considers their objection is not grounded.24 “A party with interests” refers to those who have legal interests in the actions or omission of the respondent under the law. Maritime injunctions wrongfully obtained 21.41 If the maritime injunction is wrongfully obtained, the claimant shall indemnify the person against whom the injunction is made or the other interested parties for the losses they have incurred.25 21.42 However, the law does not provide the test for determining a wrongful maritime injunction. 21.43 In practice, the claims for wrongful maritime injunction would be very rare because the court will take steps to ensure that the injunction is granted on a sound basis; otherwise, the court will reject the application so long as there is some suspicion for such risks.

16 17 18 19 20 21 22 23 24 25

ibid. SMPL, art 59. ibid. SMPL, art 58. ibid. ibid. ibid. ibid. ibid. Interpretation of the SMPL, art 44. SMPL, art 60.

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Comparison with a Mareva injunction 21.44 A Mareva injunction is an interim order of the court restraining the respondent under English law. The expression “Mareva injunction” takes its name from the leading case of Mareva Compania Naviera SA v International Bulkcarriers SA.26 In England, the expression now used is “freezing injunction”. 21.45 A Mareva injunction does not create rights in rem. It creates no property or security in the frozen assets (and does not, therefore, render the applicant a secured creditor of the respondent for any damages that may ultimately be awarded) and generates exclusive rights in personam rendering a breach a contempt of court. It is an order prohibiting the respondent from doing defined act or actions, which are confined to disposing of or dealing with his assets. 21.46 In contrast, in China, if one party is seeking for a similar outcome to refrain someone from disposing of or dealing with his assets, he has to apply for preservation of the maritime claims or properties instead of applying for a maritime injunction. 21.47 In addition, a Mareva injunction could be made before and after judgment while a maritime injunction can only be obtained before or during the proceedings.

26 [1980] 1 All ER 213.

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CHAPTER 22

Preservation of maritime evidence

Introduction 22.1 Preservation of maritime evidence means the compulsory measures imposed by the maritime court, upon the application by a maritime claimant, to take, preserve or seal up the evidence relating to a maritime claim.1 22.2 The basic requirements for making an application for preservation of maritime evidence are generally set out in chapter V of the Special Maritime Procedure Law (the “SMPL”).2 22.3 The relevant provisions in the Interpretations on SMPL regarding the preservation of maritime evidence will also be discussed below in conjunction with the above chapter V of the SMPL. The general nature of the remedy 22.4 Unlike other civil cases in which the court has the power to preserve the evidence when it considers necessary,3 the measures of preservation of maritime evidence can only be taken upon application by a maritime claimant. 22.5 The provisions in relation to preservation of maritime evidence only apply to maritime cases. In other words, one cannot, by applying for the preservation of maritime evidence, apply to preserve those types of evidence unrelated to a maritime claim. The SMPL does not provide what kinds of evidence could be preserved. In practice, the maritime court would refer to article 63 of Civil Procedure Law (the “CPL”), which sets out the eight types of evidence that can be preserved in civil cases, namely (1) statements of the parties, (2) documentary evidence, (3) physical evidence, (4) audio-visual material, (5) electronic data, (6) testimony of witnesses, (7) expert evidence, and (8) records of inspection. The typical examples of maritime evidence that a claimant would apply to preserve in a collision case (if applicable) are: (1) certificate of registry; (2) international tonnage certificate; 1 SMPL, art 62. 2 SMPL, arts 62 to 72; arts 47 to 51 of the Interpretation of Certain Issues relating to the Special Maritime Procedure Law of the People’s Republic of China by the Supreme People’s Court of the People’s Republic of China which was promulgated by the Supreme People’s Court on 1 January 2003 and came into force on 1 February 2003 as amended by Decision of the Supreme People’s Court on the Adjustment of the Order Numbers of Quotation of the Civil Procedure Law of the People’s Republic of China in the Legal Interpretations promulgated by the Supreme People’s Republic of China 16 December 2008 which came into force on 31 December 2008 (“Interpretation of the SMPL”). 3 See art 81 of the CPL.

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(3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) (17) (18) (19) (20) (21) (22) (23) (24) (25) (26) (27) (28) (29) (30) (31) (32) (33) (34) (35) (36) (37) (38) (39) (40)

safe manning certificate; ISM document of compliance; crew list; certificates of officers and engineering officers; ship’s particulars; turning circle and manoeuvering data; radar specification; bridge layout plan with specification/list of bridge equipment; cargo details; passage plan; last port departure condition report/details; original working chart; GPS position log; noon reports; radar log; radar blind sector diagram; course recorder trace; deck log book; official log book; radio log; VHF log; bridge bell; weather reports/facsimiles; collision damage sketch/plan; sketch of angle of blow between the two ships; written communications to/from other ship concerning the collision; written communications to/from owners/managers concerning the collision; written communication to/from flag State concerning the collision; any written report(s) concerning the collision; any statement(s) of fact; note of protest; electronically preserved data (e.g. ECDIS, VDR); captain’s standing orders and night order book; bridge departure checklist; engine room log; engine telegraph logger printout; engine room bell book; engine alarm printout.

22.6 The application for preservation of maritime evidence will only be permitted in a situation of emergency where the evidence might be lost or would be difficult to be obtained in the future unless immediately preserved.4 Sea carriage compared to carriage by land has the feature of high risks and uncertainties. When a casualty occurs on the open sea, such as collision or grounding, it is difficult to preserve the evidence at the casualty 4 SMPL, art 67(4).

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site and it is essential for the parties to immediately take measures to preserve the evidence in aid of further dispute resolution as much as possible once the vessel arrives at the first port after the accident. 22.7 The specific measures taken against the evidence, depending on the specific circumstances, could be to seal up the evidence, or take reproductions, duplicates, photographs into evidence, or make video recordings, extracts or records of inquests.5 Sometimes, it would be permitted to take in the original evidence where the court considers necessary.6 Application for preservation of maritime evidence Before or during the arbitration/litigation 22.8 Preservation of maritime evidence can be applied for not only prior to arbitration or litigation, but also after a party has commenced proceedings. The court Before arbitration/litigation 22.9 When a party makes an application for preservation of maritime evidence before bringing proceedings, it will not be bound by the jurisdiction agreement or arbitration agreement between the parties7 and such an application shall be made to a maritime court of the place where the evidence is to be preserved.8 22.10 Where a party applies for preservation of evidence before the commencement of arbitral proceedings administered by an arbitration commission such as CMAC,9 it shall, according to the provisions of SMPL or other provisions concerned, submit its application directly to the maritime court or other people’s court at the place where the evidence to be preserved is located. 22.11 The maritime court that has undertaken the preservation of the maritime evidence may also exercise jurisdiction over the underlying disputes if the parties submit the disputes to the same court, provided that there is no jurisdiction agreement or arbitration agreement between the parties.10 Of course, the parties are entitled to submit the underlying disputes to other competent maritime courts thereafter.11 If there is no jurisdiction agreement or arbitration agreement, the parties may also submit the underlying disputes to another competent maritime court that has jurisdiction over the matter in accordance with the law. After the proceedings have been commenced 22.12 It is not clear under the law which court has the jurisdiction to hear the application for preservation of maritime evidence after the proceedings have been brought. In

5 SMPL, art 70. 6 ibid. 7 SMPL, art 64. 8 SMPL, art 63. 9 CMAC Rules 2015, art 24. 10 SMPL, art 61. 11 ibid.

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practice, it is deemed that the application shall be made to the same maritime court that hears the case. 22.13 When a party applies for preservation of evidence in an arbitration proceeding in an arbitration commission such as CMAC arbitration, the arbitration commission shall submit the party’s application to the maritime court or other people’s court at the place where the evidence to be preserved is located.12 Therefore, the party shall first make an application to the arbitration commission according to the arbitration rules and the arbitration commission will then pass on such an application to a competent maritime court. 22.14 If a foreign court has seized the case or relevant disputes have been referred to arbitration the seat of which is not China, any party to the proceedings may still apply to a competent maritime court of the PRC for the preservation of maritime evidence, namely, the maritime court in the place where the evidence is to be preserved.13 Making the application 22.15 The court can only make such an order upon the claimants’ application and cannot preserve any maritime evidence ex officio. 22.16 A party shall apply to the maritime court for preservation of maritime evidence seven days before the time limit for producing evidence is due.14 22.17 The application papers shall set out the following items: (a) (b) (c)

the list of evidence to be preserved; the connection between the evidence and the maritime claims, namely, the evidential purpose of the evidence on the maritime claims; the reasons for the application. In the part of requested reasons, an applicant shall set out the basic background of the maritime claim and make a prima facie case that the claimant is entitled to make such a claim as well as explain the emergency for obtaining such an order.

Security 22.18 The maritime court, having entertained an application for preservation of evidence, may enjoin the claimant to provide security. If the claimant fails to do so, the court shall reject the application.15 It is noteworthy that the counter security will be provided to the court only. 22.19 In practice, the counter security may be in the form of: a) b)

a bank guarantee to be issued by a Chinese bank; a letter of undertaking issued by a reputable Chinese insurance company or reinsurance company;

12 Supra, see n 9. 13 Han Lixin, Yuan Shaochun, Yin Weimin, Maritime Litigation and Arbitration (1st edn, Dalian Maritime University Press 2007) 100–111; Interpretation of the SMPL, art 47. 14 Supreme People’s Court’s Rules on Issues in relation to Civil Litigation Evidence, art 23. 15 SMPL, art 66.

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c) d) e) f )

a letter of undertaking issued by a Chinese P&I Club; a corporate guarantee issued by a reputable Chinese company (this form has become rare now); cash deposit; a guarantee issued by court-recognised guarantee companies. In some maritime courts, such as Ningbo Maritime Court and Qingdao Maritime Court, a guarantee to be issued by their recognised guarantee companies can be accepted. Such guarantee can be arranged by entering into an agreement with the guarantee companies against some paid fees.

22.20 For each individual case, local Chinese lawyers shall discuss with the court in respect of the acceptable form of a security. The amount of the security would not be a substantial amount given that the damages or losses caused by the execution of such preservation would be very limited. 22.21 The security should be sufficient to compensate any loss caused by preservation of maritime evidence, if wrongfully obtained. The amount differs in different maritime courts and will be subject to the discretion of the court. The amount of the counter security may be negotiable. Conditions for obtaining an order to preserve maritime evidence Qualifications of subject – a claimant is a party concerned of a maritime claim 22.22 The conditions for being a subject of application for evidence preservation are satisfied only if a party concerned has both the elements of having a maritime claim and being the party concerned of such maritime claim.16 22.23 A maritime claim is a substantive claim arising from a certain statutory maritime cause in fact. The so-called maritime cause in fact is the legal relation between a claimant and a person against whom the claim is made in maritime transportation, production and operation, or operational activities related to a ship. The scope of a maritime cause in fact shall be consistent with the scope of maritime cases accepted by Chinese maritime courts. 22.24 Further, a claimant must have a direct interest in the maritime claim. In respect of pre-trial evidence preservation, parties concerned with a maritime claim are usually the subjects of the substantive legal relation in dispute; in respect of evidence preservation during litigation, a party concerned with a maritime claim is usually a plaintiff, a defendant and a third party of the lawsuit. Therefore, the scope of a claimant of maritime evidence preservation not only includes the subject of civil rights of a maritime claim but also includes the subject of obligations to a maritime claim. As long as there is a possibility of loss of evidence or difficulty in obtaining evidence, anyone who has an interest in the civil rights and interests in dispute is entitled to apply for evidence preservation to prove the existence of a maritime claim.

16 Zhang Shuanglan, Guo Yi, “Analysis of the System of Maritime Evidence Preservation before Litigation” Legal Review, 2005, Issue No. 1.

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Standards of evidence – evidence to be preserved on claims must have evidential effect on a maritime claim 22.25 The purpose for a claimant to apply for evidence preservation is to prove whether its maritime claim exists or not. Therefore, evidence to be preserved on claims shall have evidential effect on a maritime claim. It includes two aspects of meaning as below. 22.26 Firstly, there is relevance between the evidence to be preserved and a maritime claim. Relevance is an important legal nature of litigious evidence. Evidence that is able to become the evidence for determining the facts of a case shall inherently have certain relevance to the facts to be proved. Otherwise, it does not have the litigious value. In other words, evidence to be preserved on application made to the court by a party concerned must be evidential materials relevant to the facts to be claimed. In a case of ship collision, evidential materials are anything relevant to the occurrence of collision such as log books, sea charts, traces of collision, paint samples of collided position(s), etc of the ship of the opposite party, which can all prove that the collision incident has certainly taken place, which helps to determine the liability for collision. 22.27 Secondly, evidence to be preserved on claims will prove a maritime claim. Evidence to be preserved on claims must also have evidential effect on the maritime claim. This evidential effect could be direct evidence, i.e. the evidence to be preserved must have direct relevance to the maritime claim, which solely proves whether the maritime claim exists or not; or it could be an indirect evidence, i.e. the evidence to be preserved has indirect relevance to the maritime claim, which cannot prove the maritime claim by itself but it is necessary to combine with other evidence to prove so.17 22.28 Indeed, in a case, there is probably a lot of evidence relevant to the case. Evidence of litigious value refers to the evidence that has evidential effect on the actual situation of the case. The same evidence in different cases may not have exactly the same evidential effect on the facts of cases because the specific situations vary. It depends on the specific situation of a maritime claim to see if certain evidence to be preserved on claims has evidential effect on the maritime claim.18 Requirements for targets – a person against whom the claim is made is relevant to the evidence to be preserved on claims 22.29 The scope of persons against whom the claim is made in respect of maritime evidence preservation has a wider range than the scope of the claimant of a maritime claim. A person against whom the claim in respect of maritime evidence preservation is made is a person relevant to the evidence to be preserved on claims. The so-called “a person relevant to” refers to a party concerned of a maritime claim or other persons related to the evidence to be preserved on claims, who not only includes a party concerned of a maritime claim but also includes a body and an individual who holds the evidence other than a party concerned of a maritime claim as well as a body and an individual who is aware of the situation of the case. For example, under the specific context of maritime pre-trial evidence preservation,

17 Supra, see n 13, p 108. 18 Yang Shuming, Civil Procedure Law and Special Maritime Procedure Law (1st edn, Xiamen University Press 2008) 127.

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some witnesses have no legal relation with a claimant of evidence preservation but the materials held by these people is very likely to prove the actual situation of the maritime claim in dispute and they are favourable to the investigation of future cases. Therefore, it is necessary to preserve these evidential materials held by these witnesses. Applicable situations – an urgent situation where no immediate steps to preserve evidence taken will lead to the loss of evidence or difficulty in obtaining evidence 22.30 The possibility of loss of evidence or the difficulty in obtaining evidence is a prerequisite of evidence preservation. Loss of evidence means that evidence no longer exists, e.g. the decomposition or deterioration of physical evidence, the death of a witness. Difficulty in obtaining evidence means that evidence still exists but it is difficult to obtain the same objectively, e.g. evidence on board of a foreign outgoing ship. Furthermore, the difficulty in obtaining evidence not only means that it is difficult for a party concerned to obtain the same but it is also difficult for the court to collect. If a party concerned is unable to collect the evidence of its own accord due to objective reasons but it could do so through the investigation of a court, this does not fall within the difficulty in obtaining evidence and thus this does not satisfy the condition for evidence preservation.19 22.31 Loss of evidence or difficulty in obtaining evidence has a distinction of urgency and non-urgency in terms of time. Maritime evidence preservation shall be done on the condition that the situation is urgent. The so-called “urgent situation” means that under certain circumstances where no immediate evidence preservation taken will probably cause the loss of evidence of a maritime claim or the difficulty in obtaining the same subsequently, or inability to obtain the same of one’s own accord due to objective reasons. 22.32 Maritime evidence has special features. Firstly, a maritime dispute often involves parties concerned from different countries. Therefore, what often happens is that a foreign ship relies upon relevant provisions to reject a claimant to collect evidence for an investigation against her, or provides no cooperation with the claimant in the investigation and collection of evidence, which makes it unable to collect evidence for the relevant maritime claim. 22.33 Secondly, subject to the restriction of objective conditions, a claimant is neither able to control nor grasp the timing of investigation and collection of evidence because the situation is urgent. For example, it is impossible for a claimant to go to a foreign ship to obtain evidence such as the navigation information of a foreign ship, the record of cargo loading and unloading, communication record, etc. A trace of collision of ships is left on the marine equipment, which will be flooded by the water if no preservation is undertaken.20 For example, pollution caused in the sea water area by oil spill of a ship, trace of collision left on a ship after collision of ships, trace left on portal facilities struck by a ship, the sea condition and weather condition of the place where general average has taken place, etc.21 Indeed, it is unnecessary to embark on evidence preservation before litigation and during

19 Jin Zhengjia, Law of Maritime Action (Dalian Maritime University Press 2001) 236. 20 Zhang Shuanglan, “The System of the Establishment of Maritime Evidence Preservation before Litigation”, Legal Review, 1997, Issue No. 2. 21 Supra, see n 16.

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litigation if the situation is not urgent and it is impossible that the evidence would be at a risk of loss or it would be difficult to obtain the evidence. Evidence may be collected by a party concerned of his/her own accord after entering litigation, or collected and investigated by a maritime court. Review and issue an order to preserve the evidence 22.34 The court after reviewing the application for preservation maritime evidence must make an order to either grant or reject the application. Article 68 provides that the maritime court, having accepted an application, shall make an order within 48 hours. 22.35 In practice, it may be easier to obtain an order to preserve the maritime evidence if such an application is made together with an application for preservation of maritime claims. Execution 22.36 The preservation of evidence shall be executed by the court. In practice, the judge will physically attend the vessel on board to execute the preservation on board the vessel. 22.37 The respondent shall cooperate with the court in the preservation of the evidence. The evidence preserved by the court shall be kept by the maritime court. After the claimant brings an action before the same maritime court, he will be entitled to apply to the court to make a copy of the evidence. If the claimant brings an action in other competent maritime courts in China or commences arbitration administered by a Chinese arbitration institution, the claimant could apply to the court hearing the case or the arbitration institution for making a copy of the evidence preserved by the previous maritime court. Reconsideration and objection 22.38 Where the respondent is not satisfied with the preservation order, he may, within five days after receipt of the order, apply to the same maritime court for reconsideration.22 Such application for reconsideration can only be made once.23 The court upon receipt of such application shall within five days after receipt of the application make a decision.24 During the reconsideration period by the court, the execution of the order shall not be suspended.25 If the court considers the reasons are justified not to make an order to allow the preservation, it shall withdraw the order in a timely fashion and return all the evidence.26 22.39 A party with interest may also file an objection to the maritime court, and the maritime court, having reviewed such objection, shall either withdraw the order for preservation if they find the reasons are justified, or notify the party in writing that the court considers

22 23 24 25 26

SMPL, art 69. ibid. ibid. ibid. ibid.

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their objection to be not grounded.27 “A party with interest” refers to those who have legal interest in the actions or omission of the respondent under the law. 22.40 A foreign master may request the court to allow him to report to his employer before he complies with the court’s order. Normally, this will be allowed. If the ship master does not comply with the court’s order, he may be subject to a criminal or fine sanction. According to article 110 of the CPL, if any person using violence, threats or other means to hinder judicial officers or personnel from performing their duties, the people’s court shall, according to the seriousness of the act, impose a fine on him or detain him; if the act constitutes a crime, the offender shall be investigated for criminal responsibility according to the law. Wrongfully obtained order for preservation of maritime evidence 22.41 If the order for preservation of maritime evidence is wrongfully obtained, the claimant shall indemnify the person against whom the injunction is made or the other interested parties for the losses they have incurred.28 Such claim shall be submitted to the same court that made the order for preservation.29 22.42 However, the law does not provide the test for determining what is “wrongful”. In practice, the claims for wrongful application would be very rare because the court will take steps to ensure the order is made on a sound basis, otherwise, the court will reject the application so long as there is some suspicion for such risks.

27 ibid. 28 SMPL, art 71. 29 Interpretation of the SMPL, art 51.

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CHAPTER 23

Maritime security

Introduction 23.1 The maritime security discussed in this chapter refers to both: (1) the security that is put up by the person against whom the claim is made in court proceedings, for the preservation of a maritime claim; and (2) the security that is put up by the claimant in court proceedings for the preservation of a maritime claim, maritime injunction or the preservation of maritime evidence.1 In practice, the latter is usually termed “counter security”. The performance guarantee or refund guarantee involved in charterparties, shipbuilding contracts and other maritime contracts may sometimes be also called a maritime security. Such guarantees, however, are not governed by the Special Maritime Procedure Law and therefore are not the subject of the discussions of this chapter. 23.2 The Special Maritime Procedure Law (the “SMPL”) and the Interpretation of the Special Maritime Procedure Law of the PRC Supreme People’s Court (the “Interpretation of the SMPL”) provide for the rules on maritime security.2 On 28 February 2015, the PRC Supreme People’s Court (the “SPC”) issued “Certain Rules on the Application of Law in the Arrest and Sale of Ship by Auction” (the “Rules on the Arrest and Sale of Ships”). The Rules on the Arrest and Sale of Ships address the issues of, among others, the exemption of the claimant from putting up a counter security, the requirements for further counter security, and the return of the counter security in ship arrest cases.3 Apart from the SMPL and the judicial interpretations, the pertinent provisions of the Civil Procedure Law (the “CPL”) and the Security Law, as well as the interpretations of these two laws, may also be applicable to maritime security. In addition, the following rules and cases may be referred to by the maritime court in adjudicating on a case involving maritime security: (a)

(b) (c) (d) (e)

“Answers to the Questions involved in Foreign-Related Commercial and Maritime Trial Practice (No. 1) of Division 4 of the Supreme People’s Court” (the “Answers to the Questions involved in Foreign-Related Commercial and Maritime Trial Practice (No. 1)”); typical cases published by the SPC; replies by the SPC to lower courts; directions or guidance promulgated by the SPC; and judgments of the maritime courts, High People’s Court and SPC.

1 SMPL, art 73. 2 SMPL, chapter 6; Interpretation of the SMPL, s 5. 3 Rules on the Arrest and Sale of Ships, arts 4, 5, 6.

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Security put up by a defendant in proceedings involving a maritime claim 23.3 To secure the fulfilment of a maritime claim, a claimant can either prior to commencing legal proceedings of the claim, or during the course of legal proceedings, apply to the competent maritime court for compulsory measures against the property of the defendant. Compulsory measures include the arrest of the ship, as well as cargo, bunkers and other types of property.4 The purpose of making such an application is normally to obtain security for the fulfilment of a claim. The claimant must set out in its application the amount of security required.5 The maritime court will then state the amount of security in its civil ruling for compulsory measures. After the defendant has provided the required security to the court or the claimant, the court then lifts the arrest order to release the property from the compulsory measures.6 Amount of security 23.4 The amount of security as required should be equal to the claimant’s credit amount but should not exceed the value of the preserved property.7 If the amount required is so excessive as to cause losses to the defendant, the claimant bears the liability to compensate for such losses.8 Negotiation between the two parties concerning the amount and type of security is permissible. In the absence of an agreement, the security shall be determined by the court.9 Sufficiency, reliability and enforceability of a security are essential factors to be taken into account. The SMPL does not provide for the scope of the credit for which the security can cover. The claimant may refer to the pertinent provisions of the Security Law. Pursuant to this law, the security amount consists of the principal, interest, damages, costs and fees incurred for the preservation of property as well as court fees.10 Claimant’s liability for requirement of an excessive amount of security 23.5 The law does not provide for the criteria of an excessive amount of security. The maritime court may return the counter security to the claimant if the final judgment or arbitration award determines that the defendant or respondent (as the case may be) is liable and the quantum is by and large equal to the amount of security as required by the claimant.11 It may be inferred from this provision that if the security amount is larger than the judgment or arbitration award amount, the claimant would likely be exposed to a claim from the respondent for requiring an excessive amount of security. As a broad indication, some scholars believe that the security amount should be regarded as excessive when the amount is higher than the judgment or arbitration award amount by 50 per cent.12 4 SMPL, chapter 3. 5 SMPL, art 15. 6 SMPL, art 18. 7 SMPL, art 76. 8 SMPL, art 78. 9 SMPL, art 75. 10 Security Law, art 21. 11 Rules on Ship Arrest and Sale, art 6. 12 Chen Yao ‘Four Circumstances Where the Counter Security is Not Required in Preservation of Maritime Claim’ (Xiamen Maritime Court, 17 September 2014) www.chinacourt.org.

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23.6 The above criteria of simply linking the claimant’s liability to the difference between the security amount and the final judgment or arbitration award amount does appear to be very harsh to the claimant. In the majority of cases for the preservation of maritime claims, a claimant makes an application for security prior to commencing the legal proceedings for the underlying maritime claim. In such cases, in order to fully secure the claims, very likely, the claimant will request a sufficient amount of security. Therefore, it would be very likely that the required security amount is more than the amount to be awarded by the final judgment or arbitration award. If the security amount is reasonably assessed by the claimant in good faith and supported by preliminary evidence at the time when the claimant demands the security, the claimant should not be liable for the excessive security unless it is proved that the claimant was malicious to require such a security. In Zhong Shan Port Shipping Enterprises Group v Haikou Nanqing Container Lines Co., Ltd.13 in respect of a maritime security dispute, Haikou Maritime Court held that the defendant shall not be liable for the alleged claim for requiring an excessive security because the court took the view that the defendant had provided preliminary evidence in support of the security amount when they applied for the arrest of the plaintiff’s ship. Meanwhile, the plaintiff had also failed to prove that the defendant was malicious to demand such a security. In this case, two vessels that were respectively owned by the plaintiff and defendant collided and the defendant’s vessel sank as a result of the collision. The defendant demanded a security in the sum of RMB 15,000,000 from the plaintiff as damages for the collision. The plaintiff rejected this requirement, on the ground that the security amount should be restricted to the limitation of liability of the plaintiff’s vessel, which was in the sum of about RMB 2,000,000. The defendant then arrested the plaintiff’s vessel. The Guangzhou Maritime Court granted the defendant’s application, and held that the plaintiff was to put up a security in the sum of RMB 15,000,000. The plaintiff filed an objection to the rulings on the ground that they had applied to Haikou Maritime Court for the constitution of the limitation of liability fund in the sum of about RMB 2,000,000 in respect of the collision and therefore the defendant could not then arrest their vessel. The Guangzhou Maritime Court rejected the plaintiff’s application, holding that the application for the limitation of liability fund was pending before the Haikou Maritime Court. The plaintiff further contended that the security amount required by the defendant well exceeded the value of the arrested vessel. This contention was also rejected by the court because the plaintiff failed to prove the value of the vessel. After hearing the collision case, the Haikou Maritime Court finally adjudged that the plaintiff was liable to the defendant in the sum of RMB 2,261,264.85, as damages for the collision claim. After the judgment, the plaintiff then commenced legal proceedings against the defendant claiming for a wrongful request of security. The Haikou Maritime Court rejected the plaintiff’s claim. When making the request for security, the defendant had already provided preliminary evidence in support of their credit amount including salvage, cargo claims and property losses, etc. It could not have been determined in advance whether the plaintiff could restrict their liability for the collision claim, at least until the plaintiff’s application for the establishment of the limitation of liability fund had been approved by the court. Thus, the court held that it was not unjustified for the defendant to require a security in the full amount of the claim. Moreover, the plaintiff failed to prove

13 (2007) Qiong Min Er Zhong Zi No. 21 (Hainan High People’s Court, CA).

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that the defendant was malicious in making the request for security. In fact, the plaintiff was within its rights to apply to the court for a reduction of the amount of security from when it was able to provide a proof of the ship’s value and also when the court had approved the establishment of the limitation of liability fund, but the plaintiff failed to exercise their rights. The plaintiff later appealed the judgment to the Hainan High People’s Court but withdrew the appeal during the trial of the case. Reduction, alteration and cancellation of security 23.7 The security amount as required shall not exceed the value of the preserved property.14 For example, in a ship arrest, if the security amount exceeds the arrested ship’s value, the shipowners can refuse to provide the security as required. This is much the same as the provisions of International Convention on the Arrest of Ships (Geneva, 12 March 1999).15 If the person against whom the claim is made believes that the security amount as required is excessive, it can also apply to the court for the reduction of the security amount either before or after it has provided the security.16 The challenge to the security amount must be substantiated by the proof of the value of the preserved property. For example, in ship arrest cases, the shipowner would carry the burden of proving the value of the arrested ship. For example, the shipowner can provide an appraisal report on the ship’s value, notwithstanding that there are no specific requirements for an appraisal report in the law. However, it is worth noting that the maritime court may likely refer to article 86 of the SMPL which provides that in trials involving ship collision claims, the survey and appraisal of a ship shall be undertaken by a PRC-authorised or other qualified institute or individual, otherwise the appraisal or survey report may not be admitted by the court. 23.8 Even after the security has been put up, the party who provides the security can still apply to the court for the reduction, alteration or cancellation of such security if the party has good reasons to do so.17 Good reasons include where the amount of security is obviously excessive, or if the person against whom the claim is made has provided alternative and effective security, or where the claimant’s right of the claim has been distinguished.18 Claimant’s liability for wrongful request of security 23.9 The claimant’s liability for wrongful requirement of a security is associated with the wrongful application of the compulsory measure against the property. The claimant shall indemnify the person against whom the claim is made or the interested person against the losses caused by wrongful application.19 The SMPL does not provide for the criteria of a wrongful application. Generally, the maritime court may hold that an application is wrongful if the conditions of the compulsory measures against the property have not been met without

14 15 16 17 18 19

SMPL, art 76. International Convention on the Arrest of Ships, art 4.2. SMPL, art 17 and 77; (2007) Qiong Min Er Zhong Zi No. 21 (Hainan High People’s Court, CA). SMPL, art 77. Interpretation of the SMPL, art 52. SMPL, art 20.

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regard to whether the claimant is malicious to make the application.20 In ship arrest for example, a wrongful application may happen in one of the following circumstances: the underlying claim based upon which the ship arrest application is made is not a maritime claim as identified in article 21 of the SMPL; the underlying maritime claim has been totally rejected by the court or arbitration tribunal or has been withdrawn by the claimant; the arrested ship is neither owned nor bareboat chartered by the person against whom the claim is made. 23.10 The claimant’s liability for the wrongful application includes, among others, the fees and costs incurred for the provision of the security. In Polembros Shipping Ltd. v Shenzhen Chiwan Wharf Holdings Limited in respect of wrongful application for ship arrest,21 the defendant arrested MV Milos in Shenzhen and required the plaintiff to provide a security in the sum of RMB 3,000,000 for an alleged cargo shortage claim. The plaintiff provided a letter of guarantee issued by a P&I Club in the sum as required to the court and then the vessel was released. The defendant proceeded to commence the proceedings against the plaintiff for the cargo claim before Guangzhou Maritime Court. The claim was totally rejected by both the maritime court and the Guangdong High People’s Court. The plaintiff then claimed against the defendant damages for wrongful requirement of the security. The damages as claimed included the commission charge, service and correspondence fee of the P&I Club for the provision of the letter of guarantee and the lawyers’ fee. As the cargo claim had been totally rejected by both courts, the maritime court took the view that the defendant was not entitled to arrest the ship and require the plaintiff to put up the security. The court adjudged further that the charges and fees paid to the P&I Club for the provision of the security were recoverable from the defendant, but the lawyers’ fees incurred arrest were not recoverable due to lack of legal basis. However, the parties may now recover lawyers’ fees based on a new judicial interpretation published by the SPC on 12 September 2016. Type of security Cash 23.11 The security can be by cash, letter of guarantee, mortgage or pledge.22 Compared with other types of security, cash security is more reliable and easier to enforce. However, if the security amount is substantial, it might not be practical to provide the security entirely in cash. The cash security can be deposited into the court’s designated bank account, or into an account as agreed by the parties – usually an escrow account. If the cash is deposited into the court’s designated account, the interest accrued upon the principal during the deposit time period belongs to the party that provides the cash security. The cash remitted in foreign currency is usually converted into the local currency Renminbi automatically when it is deposited into the court’s designated account due to the foreign currency control policy. The claimant can require the payment of the judgment or arbitration award or settlement agreement from the cash security unless the parties have agreed

20 Yangpu Zhongxingyun Shipping Co., Ltd. v Zhang Xuefeng, Zhou Sigeng in respect of wrong application of Preservation of Maritime Claim, 29 August 2013, www.ccmt.org; Chen Longlong and Yang Sheng, “Discussions on Some Issues concerning Wrongful Application of Maritime Claim” (30 November 2005) www.chinacourt.org. 21 (2004) Guang Hai Fa Chu Zhi No. 106 (Guangzhou Maritime Court). 22 SMPL, art 73.

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otherwise. The claimant or the party that provides the cash security is allowed to convert the cash security into foreign currency and then remit it abroad by showing the judgment or arbitration award or settlement agreement and other documents as required to the bank. 23.12 It appears that the claimant has no right to claim priority to the cash security over other creditors of the defendant when the defendant becomes bankrupt. In COSCO (Nantong) Clavon Ship Engineering Co. v Zhejiang Jingang Shipbuilding Co., Ltd.,23 COSCO applied to Ningbo Maritime Court for the freezing of the bank account of Zhejiang Jingang in respect of shipbuilding contract disputes. After Zhejiang Jingang had put up a cash security in the sum of RMB 850,000, the court lifted the freezing order. Shortly after that, Zhejiang Jingang went into bankruptcy. The receiver in bankruptcy determined that COSCO’s credit was an ordinary credit without security. COSCO commenced proceedings against the receiver requiring a declaration judgment, inter alia, that its credit was secured by the cash in the sum of RMB 850,000 and COSCO should have been able to claim priority to the cash over other creditors of Zhejiang Jingang. Both the Ningbo Maritime Court and the Zhejiang High People’s Court ruled against COSCO, holding that the security put up by Zhejiang Jingang was to secure the enforcement of a future judgment that may be in COSCO’s favour rather than to secure COSCO’s claim in itself, and therefore COSCO’s credit was an ordinary one. Accordingly, COSCO could not claim priority to the cash security over the other creditors of the shipyard. Letter of guarantee 23.13 The letter of guarantee is widely adopted in the preservation of maritime claim proceedings either by the claimant or by the person against whom the claim is made. The letter of guarantee can be provided to the court or to the claimant.24 A letter of guarantee should be examined from the perspective of its sufficiency, reliability and enforceability; for example, whether the guarantor has the capability to pay the debt and has a good credit record to honour its promise, whether there is any compulsory requirement of the guarantor for the provision of the letter of guarantee pursuant to the laws of the place where the guarantor company is incorporated, and whether the letter of guarantee can be successfully enforced pursuant to its governing law. In principle, the maritime court can only accept a letter of guarantee issued by a PRC bank or insurance company or other substantial company.25 Of course, a claimant would also likely agree to accept a letter of guarantee issued by a company other than these mentioned entities, for example by a P&I Club in a ship arrest situation. In recent years, the letter of guarantee issued by companies that are engaged in the business of providing security may also be accepted by the maritime court. However, the court usually strictly examines the licences and qualifications of such companies and may also set up a limit to the amount of the security that the companies may provide. For example, the Shanghai High People’s Court requires that a qualified security company must be established with the approval of the State financial administration and must have the licence for providing security in court litigation matters. Moreover the security amount

23 At 1st Instance (2012) Tai Wen Shang Chu Zi No. 2037; at 2nd Instance (2013) Zhe Tai Shang Zhong Zi No. 340. 24 SMPL, art 74. 25 Answers to Questions in Foreign-Related Commercial and Maritime Trial, item 106.

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provided by such a company in each individual case cannot exceed 30 per cent of its net assets.26 23.14 The parties can negotiate the terms and conditions of a letter of guarantee themselves. If the parties cannot reach an agreement on it, it shall be determined by the court. The main terms and conditions of a letter of guarantee include the details of the guarantor, debtor and guarantee, the payment conditions, the maximum security amount, time period of the security, and a law and jurisdiction clause. 23.15 The enforcement of a letter of guarantee must be in accordance with the requirements for the guarantee and its governing laws. For letters of guarantee governed by PRC law, where the letter of guarantee provides for a time period of the guarantee, the claimant shall require the guarantor to perform its payment obligation under the letter of guarantee within such time period; conversely, where the letter of guarantee does not provide for the time period of the guarantee, the claimant shall make the requirement for payment within six months counting from the last day of the payment period of the credit that is secured by the letter of guarantee, otherwise the guarantor’s obligation under the letter of guarantee is distinguished.27 Where a letter of guarantee provides that the guarantor’s obligation remains valid until the secured credit has been fully paid up, the claimant shall require the guarantor to make payment within two years counting from the last day of the payment period of the credit that is secured by the letter of guarantee; otherwise the claimant’s right under the letter of guarantee is distinguished.28 It is of course best to require the guarantor to honour the letter of guarantee as soon as the payment conditions provided in the letter of guarantee have been met. Mortgage and pledge 23.16 The security can also be provided by way of mortgage or pledge. The properties that can be mortgaged include real estate, ships, motor vehicles, equipment and machines, etc.29 Movable assets and some kinds of property rights can be pledged.30 The claimant and the defendant should sign the security agreement to set out the terms and conditions of the mortgage or pledge. It is permissible for a third party to provide its own property to create a mortgage or pledge.31 If the mortgaged or pledged property is provided by a third party, such a third party should sign the security agreement as a party. The agreement should include the particulars of the property, maximum security amount, any insurance of the property, the exercising of the right to the mortgaged or pledged property, and other particulars that the parties believe necessary. The agreement becomes effective only after the mortgaged or pledged property has been registered with the authorities in accordance with the Security Law and the Property Law; meanwhile if it is pledged, it is only effective if the property has been delivered to the claimant.32

26 Rules on Preservation of Property of Shanghai High People’s Court, art 30. 27 Security Law, art 26. 28 Interpretation of the Supreme People’s Court on Several Issues concerning the Application of the PRC Security Law, art 32. 29 Security Law, art 34. 30 The rights include bills of exchange, cheques, promissory notes, bonds, certificates of deposit, warehouse receipts, bills of lading, shares of stocks or certificates of stocks, the rights to exclusive use of trademarks, the property right among patent rights and copyrights. 31 Security Law, art 33. 32 Security Law, arts 41, 42, 76, 77 and 78.

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23.17 Before agreeing to accept the mortgage or pledge, it is necessary for the claimant to investigate the status of the mortgaged or pledged property in order to make sure that there exist no claims, other security or other compulsory measures against the property and that the property has been sufficiently and properly insured. It is likely for the value of the mortgaged or pledged property to change during the security period. This should be taken into account when the claimant considers accepting a mortgage or pledge as security. The pledged property must be delivered to the claimant during the security period.33 This may bring about some inconvenience to the claimant in keeping the property. There also exists the risk that the value of the pledged property depreciates during the security period. For these reasons, a pledge is rarely accepted by the claimant as security. 23.18 Pursuant to the Property Law, the claimant shall exercise its right to the mortgaged or pledged property by the last day of the time limit of the claim that is secured by the mortgage or pledge; otherwise the claimant’s right to the mortgaged or pledged property cannot be recognised and enforced by the court.34 The claimant is better advised to require the person who provides the mortgaged or pledged property to pay the secured claim from the value of the property as soon as the judgment or arbitration award or settlement agreement of the claim has become effective and enforceable. Return of security 23.19 The claimant shall return the security to the party that provides it if the claim secured by the security has been extinguished, such that the claim has either been totally rejected in the final judgment or arbitration award, the claimant has withdrawn the proceedings of the claim or the claim has been fully paid up. To prevent the claimant from abusing the right to apply for compulsory measures, it is required by law that the claimant must commence legal proceedings of the underlying claim within 30 days of a ship being arrested or within 15 days of cargo, bunkers or other property being attached, otherwise the court will lift the preservation order and return the security to the party that provides the same.35 That said, given that the parties may negotiate the settlement of the claim without commencing legal proceedings immediately, the law may permit the claimant to keep the security even if the claimant does not act within the time limit. The claimant may produce the settlement agreement or the agreement for the security period, and apply to the court for recognition of the agreements.36 23.20 The party that provides the security can apply to the court for the return of the security. Before allowing the return of the security, the court usually gives notice of such application to the claimant. If the claimant raises no objection within a certain time period (for example, 30 days) or has no good reasons for the objection, the court may order the return of the security to the provider of the security. If the security is provided to the claimant, the party that provides the security can directly require the claimant to return it. If the claimant refuses to return the security, the person can apply to the court for a maritime injunction order against the claimant to return it. 33 34 35 36

Security Law, art 63. Property Law, art 202. SMPL, art 18. Interpretation of the SMPL, art 25.

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Counter security put up by claimant 23.21 To prevent the claimant from abusing the right to make the application for compulsory measures against the property, maritime injunction or preservation of evidence, the court may require the claimant to provide a security to assure that it will compensate for any losses that may be caused to the defendant arising from a wrongful application. If the claimant fails to provide the security according to the court’s requirement, the court will not grant the claimant’s application.37 The security provided by the claimant is called counter security, in contrast with a security provided by a defendant. The amount of counter security shall be equal to the loss that may be caused as a result of such preservation or injunction. The court has the discretion to decide the exact amount and type of the counter security.38 Counter security in ship arrest 23.22 In ship arrest, the claimant must put up the counter security to the court regardless of whether or not the party has commenced legal proceedings for the underlying claim when it applies for the arrest of the ship.39 The court may allow the claimant not to provide a counter security in circumstances where the cause of action arises from crew employment contracts or marine casualty accidents that occur in the sea or in water linked to the sea; in addition, the background facts of the claim should be clear, and the rights and obligations involved in the claim should be unequivocal.40 Amount of counter security 23.23 The amount of the counter security shall be equal to the losses that may be caused as a result of wrongful application of the arrest.41 The amount consists of the arrested ship’s maintenance costs, expenses and loss of earnings during the arrest period and the fees incurred for the provision of the security for the release of the ship from the arrest.42 Usually, the court assesses the loss of earnings by reference to the market charter hire rate of the arrested ship on a monthly basis. In the absence of a market rate, it may be assessed by reference to the daily net profit of the ship, which is calculated according to the last two voyages of the ship. Alteration and reduction of counter security 23.24 The court may require the claimant to provide further security after the ship has been arrested if the court believes that the security provided by the claimant is not sufficient.43 For example, if a ship has been arrested beyond one month, the original security provided by the claimant may not be enough to cover the maintenance costs and expenses and

37 38 39 40 41 42 43

SMPL, arts 16, 55 and 56. SMPL, art 76. Rules on the Arrest and Sale of Ships, art 4. ibid. SMPL, art 76. Rules on the Arrest and Sale of Ships, art 5. ibid.

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the loss of earnings of the ship that are to be further incurred. If the claimant fails to provide further security according to the court’s requirements, the court may lift the arrest order.44 23.25 The loss of earnings of the arrested ship can be less than one month’s charter hire of the ship if she is released shortly after it has been arrested. An issue may therefore arise as to whether the claimant can apply to the court for the reduction of the amount of the counter security in proportion to the actual arrest time. In the arrest of the MV Coral, the cargo interests arrested the vessel in respect of a cargo damage claim in Shenzhen in November 1999, after which the cargo interests had put up a letter of guarantee issued by China Merchant Corporation Shekou in the sum of US Dollar (USD) 250,000. About six days after the vessel was arrested, the shipowners provided the security as required and then the vessel was released. Subsequently, the cargo interests applied to Guangzhou Maritime Court to replace the letter of guarantee with cash in the sum of USD 100,000. The maritime court granted the application on the ground that the vessel was arrested for only six days and the loss that may be caused to the shipowners could not exceed USD 100,000; moreover, the security in cash was more reliable than a letter of guarantee.45 23.26 Since the Interpretation of the SMPL has come into force, it has become unclear whether the claimant can still apply for the reduction, alteration or cancellation of the counter security. Article 77 of the SMPL provides that the person who provides the security can apply to the court for the reduction, alteration or cancellation of the security after the security has been provided if the person has good reasons to do so. According to this article, both the claimant and the defendant may make such an application. However, article 52 of the Interpretation of the SMPL provides that the “good reasons” referred to in article 77 of the SMPL means that: (1) the security amount required by the claimant is excessive; (2) the defendant has put up other types of enforceable security; and (3) the claimant’s right to require a security has been distinguished. According to this interpretation, only the defendant can make the application while the claimant cannot, on the basis that it has no “good reasons” to do so. This issue has not been resolved by the Rules on the Arrest and Sale of Ships. The claimant may argue that the SMPL does not restrict its right to apply for the reduction, alteration and cancellation of the counter security. Type of counter security 23.27 The counter security must be provided to the court. The claimant can provide security by cash or a letter of guarantee. If the counter security is cash, the court usually also requires the claimant to provide a letter of guarantee. The letter of guarantee is not a separate security but is attached to the cash security. It is to assure that the claimant will take the liability for the wrongful arrest of a ship to the extent of the amount of the cash security provided. The cash is deposited into the court’s designated bank account. The interest accrued upon the cash belongs to the arresting party (provider of the counter security). 23.28 The claimant can provide a letter of guarantee as a counter security. The letter of guarantee can be issued by the claimant itself or by a third party. The maritime court may accept that a PRC bank, insurance company or other substantial company issue a letter of 44 Interpretation of the SMPL, art 26. 45 ‘Arrest of MV Coral prior to Proceedings’ (Guangzhou Maritime Court, 5 June 2003) http://www.gzhsfy. gov.cn/showanli.php?id=3652.

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guarantee. Similarly, the court may also accept a company that is engaged in the business of providing security for court litigation to issue a letter of guarantee. For example, as mentioned previously, according to the Rules on Preservation of Property of Shanghai High People’s Court, which was promulgated on 25 June 2014, the court may accept a letter of guarantee provided by a major company with universal recognition by the public, a financial company of substantial assets, or a company that is established by the approval of the State financial administration and has the licence of providing security for court litigation.46 23.29 The letter of guarantee should usually identify the guarantor, the guarantee and the beneficiary. It should also state the maximum security amount and the liability assured by it. 23.30 The court may also accept that the claimant provides property other than cash or a letter of guarantee. The claimant must prove the value of the property and that there exist no claim, security or other compulsory measures against such property. The court will take the compulsory measures against the property provided by the claimant as counter security.47 The compulsory measures will not be lifted by the court until the underlying claim has been settled. Return of counter security 23.31 The claimant can apply to the court for the return of the counter security after the underlying claim has been settled. The court shall first inform such application to the defendant. If the person does not commence legal proceedings against the claimant for wrongful arrest within 30 days of such information, the court may return the counter security to the claimant.48 If the person has commenced legal proceedings within the statutory time limit, the court shall not return the security, but shall wait for the result of the proceedings. The court may also directly return the security to the claimant without informing the defendant of the application if the final judgment or arbitration award determines that the defendant is liable to the claimant and the amount of the liability is by and large equal to the security amount as required by the claimant.49 Counter security in the proceedings of the attachment of other types of property 23.32 In addition to ship arrest, the claimant can also apply to the court for the attachment of bunker, cargo and other property that belongs to the defendant. While the law does not provide that the claimant must provide the counter security in the attachment of these types of property, the maritime court usually requires the claimant to put up counter security if the claimant has not commenced legal proceedings of the underlying claim when it makes the application for such an attachment. The court may exempt the claimant from this obligation in certain kinds of claims, such as crews’ claims for the payment of wages and claims arising from marine casualty accidents. If the application is made during the course of the legal proceedings of the underlying claim, the court may decide according to the merits of the case. 46 47 48 49

Rules on the Preservation of Property of Shanghai High People’s Court, arts 29 and 30. Rules on the Preservation of Property of Shanghai High People’s Court, art 35. Rules on the Preservation of Assets of Shanghai High People’s Court, art 6. ibid.

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23.33 The amount of counter security shall be equal to the amount of loss that may be caused by the attachment of property.50 For example, in the attachment of cargo, the amount of counter security may be assessed by reference to the cargo’s storage fee, physical damage or loss, loss of market value during the attachment period, and fees incurred for the provision of security. If the claimant has not commenced legal proceedings of the underlying claim when making the attachment application, the court may even require a counter security in the full amount of the attached property’s value.51 Different maritime courts may have different approaches to the assessment of the amount of the counter security. It is prudent for the claimant to seek the court’s directions before filing an application. Counter security in the proceedings of maritime injunctions and the preservation of maritime evidence 23.34 As mentioned in the previous chapters, a claimant can apply to the maritime court for an injunction order to compel the defendant to do or not to do certain things so as to prevent the lawful rights and interest of the claimant from being prejudiced.52 The claimant shall satisfy the court that he has a specific maritime claim and, furthermore, that the party subject to the injunction order violates the law or is in breach of contract, and that in such a situation losses will likely be caused or will likely become worse if the injunction order is not granted immediately.53 A common maritime injunction order will order the release of withheld bills of lading or cargoes, and for the party subject to the injunction to refrain from arresting a ship. The court may order the claimant to provide the counter security and reject the claimant’s application if it is not provided.54 23.35 The court has the discretion to decide the exact amount and type of the counter security.55 There is no universal approach to the assessment of the amount of counter security. In principle, it is to be decided according to the facts of each individual case. In an injunction case concerning the release of a withheld cargo, the Qingdao Maritime Court decided that the claimant should provide the counter security both by cash and a letter of guarantee and that the total amount of the counter security be equal the value of the cargo.56 In another injunction case heard by the Guangzhou Maritime Court, the shipowners applied to the maritime court for an injunction order to forbid the stevedores from arresting the vessel in respect of a security for a personal injury. In this case, the stevedores were injured during the unloading of cargo on board. The stevedores claimed against the shipowners for damages in the sum of RMB 1.6 million. The shipowners were unable to put up a cash guarantee as required by the stevedores and offered to provide a letter of guarantee for the claims but this was rejected by the stevedores. To avoid vessel arrest by the stevedores, the shipowners applied to the maritime court for an order for the stevedores to accept the letter of guarantee to be issued by China Reinsurance Company in the sum of RMB 2.5 million 50 51 52 53 54 55 56

SMPL, art 76. Rules on the Preservation of Assets of Shanghai High People’s Court, art 28. SMPL, art 51. SMPL, art 56. SMPL, art 55. SMPL, art 76. This case is an unreported case made by the Qingdao Maritime Court.

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and not to arrest the vessel. The Guangezhou Maritime Court granted the shipowners’ application.57 23.36 If the party against whom the order is made does not raise an objection to the order and also does not commence legal proceedings in respect of the injunction order against the claimant within 15 days of the injunction order, the maritime court may, upon the application of the claimant, return the counter security to it.58 It is further provided in the Answers to the Questions in Foreign-Related Commercial and Maritime Trial that if the person against whom the injunction is made or the interested party neither raises objection nor commences legal proceedings in respect of the injunction order within 30 days of the completion of the execution of the injunction order, the counter security shall become null and void.59 In practice, some maritime courts apply the provision of the 30-day time period to return the counter security to the claimant. Counter security in applications for the preservation of evidence 23.37 As mentioned in the previous chapter on the preservation of evidence, a claimant can apply to the maritime court for preservation measures against the evidence that can substantiate the maritime claim but is out of the claimant’s possession and control. The claimant must prove to the court that it is in such emergency situations that the evidence will likely be lost or would be hard to obtain unless the preservation measures are taken immediately.60 Preservation measures include photocopying, taking pictures or videos, or the sealing up of the evidence. Unlike the preservation of property or injunction orders, the preservation of evidence may unlikely cause loss to the person against whom the preservation application is made. However, in some circumstances, in carrying out the preservation measures, it may possibly have some impact upon the person against whom the application is made. For example, photocopying shipping documents kept on board might cause some delay to the voyage of the vessel. Depending upon the likely result of the preservation, the court may require the claimant to provide the counter security. Likewise, the type and exact amount of the counter security are at the court’s discretion. If the claimant fails to act according to the court’s requirement, the court will reject the application.61 The claimant shall compensate the person against whom the application is made for the loss suffered as a result of a wrongful application.62 23.38 In Shanghai Baosteel International Economic & Trading Co., Ltd. v the Owners of MV Redestos, the shipowners declared general average because the main engine of the vessel broke down after she departed from the loading port in Brazil in June 2002. The cargo interests applied to the Shanghai Maritime Court for the preservation of the engine book of the vessel and other proof of the alleged breakdown of the main engine as well as the repairing records of the main engine that were kept on board when the vessel arrived at Shanghai and Ningbo. The cargo interests provided to the court a letter of guarantee to undertake that they will assume the liability of the shipowners for any loss that may be

57 58 59 60 61 62

This case is an unreported case made by the Guangzhou Maritime Court. Interpretation of the SMPL, art 45. Answers to the Questions in Foreign-Related Commercial and Maritime Trial, item 109. SMPL, art 67. SMPL, art 66. SMPL, art 71.

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caused by the wrongful application for the preservation measures. The court granted the application.63 In Guangxi Wanxin International Trade Co., Ltd. v the owners of MV Michal Akis, due to a voyage charter dispute, Guangxi Wanxin as the voyage charterers applied to the Beihai Maritime Court for the preservation measures of the shipping documents including the log book, statement of facts at both loading and discharge ports, sea protest, manifest, mate’s receipt and other pertinent documents kept on board the vessel. Guangxi Wanxin provided counter security as required by the court. The court granted the application and took measures to preserve the documentary evidence accordingly.64 23.39 It is not provided for in the law as to how and when the court may return the counter security to the claimant. The court may refer to the rules on the return of the counter security under the maritime injunction. The court may upon the application of the claimant return the counter security if the party against whom the application is made does not raise an objection to the preservation order nor commences legal proceedings against the claimant in respect of the preservation of evidence within 15 days of the completion of the execution of the preservation order. Security involved in the constitution of a limitation fund and advanced payment prior to judgment 23.40 Apart from the maritime security as discussed above, the proceedings of the constitution of the limitation of liability fund and any advance payment prior to judgment also involves the provision of security. The discussion and the applicable rules mentioned above may also apply to such security where they are applicable.65 In the proceedings of the constitution of the limitation of liability fund, the law allows the fund to be paid by cash or by way of security.66 Such security must be a letter of guarantee issued by a PRC bank or other financial institution.67 In the circumstances where the claimant claims for alimony, allowance, pension, medical expense and wages, or the claim is in an emergency situation, the court may upon the claimant’s application require that the defendant pay the claim before the court has rendered a final judgment on the claim.68 The advance payment prior to judgment happens only in identified claims or situations. The requirements for the advance payment prior to judgment are very strict. The claimant shall prove that: (1) the background facts are clear; (2) the liability of the defendant is indisputable; (3) the life or business operation of the claimant will be significantly impaired if the defendant does not pay in advance; and (4) the defendant is able to pay.69 The court may require the claimant to provide the counter security for the application according to the facts of the claim.70 Generally, the claimant is in a poor economic state, thus negating the rationale behind this possible requirement. If the requirements have been met, the court would unlikely require the claimant to put up a counter security. 63 64 65 66 67 68 69 70

(2002) Hu Hai Fa Shang Bao Zhi No. 20. (2006) Bei Hai Fa Zheng Zhi No. 002–1. SMPL, art 79. SMPL, art 108. Interpretation of the SMPL, art 85. CPL, art 106 ; Interpretation of the CPL, art 170. ibid. CPL, art 107.

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CHAPTER 24

Procedures for trial, constitution of limitation fund for maritime claim, recognition and payment of debts, exigence of maritime lien

Introduction 24.1 The maritime courts and its higher courts shall apply the Civil Procedure Law (the “CPL”) and the Special Maritime Procedure Law (the “SMPL”) in the trial of a maritime case. Where the SMPL provides for the rules of the trial of a maritime case, the court shall apply the special rules; otherwise the general rules as provided for in the CPL shall be applied.1 The SMPL lays out some special rules on the trial of certain maritime cases, namely, collision of ships, general average and marine insurer’s subrogating claim. In addition, it also specifically provides for trial procedures that are unique to certain kinds of maritime cases (i.e., the procedure for the constitution of limitation fund for marine claims, procedure for the registration and payment of debts and procedure for the exigence of maritime liens). Moreover, it adds some rules to those procedures that are applied in the trial of a maritime case (i.e., the summary procedure, the procedure for urging the payment of debt and the procedure for the public notice of exigence of claim) in order to adapt them for the character of a maritime case.2 This chapter will review both the general rules and special rules that are applied in the trial of a maritime case. General trial procedure The first instance trial procedure 24.2 In general, the first instance trial procedure consists of the following stages, which happen chronologically:3 • • • •

filing and acceptance of a claim; pre paration for the trial; hearing for the trial; and judgment.

Filing and acceptance of a claim 24.3 To bring an action with the court, the plaintiff shall submit a statement of claim with the court which has jurisdiction over the claim. The statement of claim shall set out 1 SMPL, art 2. 2 Chapter VIII Trial Procedure, chapter IX Procedure for the Constitution of the Limitation Fund, chapter X Procedure for the Registration and Payment of Debts, and chapter XI Procedure for the Exigence of Maritime Liens of the SMPL. 3 CPL, Chapter 2 Trial Procedure.

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the plaintiff’s name and domicile, the name, position and contact details of the plaintiff’s legal representative (if the plaintiff is a natural person, it must set out the name, gender, age, nation, occupation, employer of the plaintiff), the defendant’s name and domicile, the claim, the facts and reasons of the claim, the proof and its source, the name and domicile of the witness.4 Apart from the statement of claim, the plaintiff shall also submit the plaintiff’s certificate of incorporation, the certificate of the identity of the legal representative of the plaintiff,5 the power of attorney of the agent ad litem,6 the certificate of identity of the agent ad litem, the information which show the defendant’s name and domicile, and the relevant proof.7 24.4 The court shall accept the statement of claim filed by the plaintiff and issue the receipt to the plaintiff. If the filing complies with requirements of law, the court shall immediately register the acceptance of the filing of the claim; otherwise the court shall explain to the plaintiff the reasons for not accepting the filing of the claim.8 If the court decides not to accept the filing of the claim, the court shall issue a ruling setting out the reasons.9 The plaintiff can appeal the ruling.10 After accepting the case filing, the court may mediate 4 CPL, arts 119, 120 and 121. 5 If the plaintiff is a company or organisation incorporated outside the PRC, the certificate of incorporation and the certificate of the identity of the legal representative must be notarised in the country or the area where the company or the organisation is incorporated or registered to operate business, and further authenticated by the PRC embassy or consulate in such country or area. However, if there is an agreement between the PRC and the country or area where the company or organisation is incorporated or registered to operate business in respect of the authentication of document, the plaintiff shall conduct the authentication of the certificate of incorporation and certificate of identity of the legal representative according to the agreement. If the plaintiff is a foreign natural person including Hong Kong, Macau and Taiwan person, it shall submit the certificate of its identity. The law does not require that such certificate of the identity be notarised or further authenticated; see art 523 of the Interpretation of the CPL of the PRC Supreme People’s Court (in effect as from 4 February 2015). The above rules are also applicable to the defendant if it is a company or organisation incorporated outside the PRC or a foreign natural person including Hong Kong, Macau and Taiwan person. 6 If the plaintiff is a company or organisation incorporated outside the PRC including Hong Kong, Macau and Taiwan person, the power of attorney which is issued to the agent ad litem by such company or organization outside the PRC must be notarised in the country or area where the company or organisation is incorporated or registered to operate business, and then further authenticated by the PRC embassy or consulate in such country or area. However, if there is an agreement between the country or area where the company or organisation is incorporated or registered to operate business and the PRC in respect of the authentication of document, the plaintiff shall conduct the authentication of POA according to the agreement. Alternatively, the legal representative can sign the POA personally in the PRC: if the POA is signed personally before the judge of the trial court, it is not required to be notarised and further authenticated; otherwise, it must be notarized by a PRC notary public. See art 264 of the CPL and art 523 of the Interpretation of the CPL. If the plaintiff is a foreign natural person inclusive of Hong Kong, Macau and Taiwan, the power of attorney which is issued by such a person to its agent ad litem outside the PRC is required to be notarised and further authenticated. The CPL and the Interpretation of the CPL do not provide for where such POA shall be notarised and further authenticated. If the natural person signs the POA in the place within its nationality country or area, the POA should be notarised and further authenticated in its nationality country or area. However, if the POA is signed somewhere else, it is unclear as to where the POA should be notarised and authenticated. There needs to be a consultation with the maritime court first. The foreign natural person can sign a POA in the PRC: if the POA is signed personally before the judge of the trial court, it is not required to be notarized and authenticated; otherwise it is required to be notarised by a PRC notary public. See art 264 of the CPL and art 523 of the Interpretation of the CPL. The above are also applicable to the defendant if it is a company incorporated outside the PRC or a foreign natural person. 7 Rules on Several Issues concerning Registration of Acceptance of Case Filing of the Supreme People’s Court of the PRC, art 6. 8 Rules on Several Issues concerning Registration of Acceptance of Case Filing of the Supreme People’s Court of the PRC, art 2. 9 Rules on Several Issues concerning Registration of Acceptance of Case Filing of the Supreme People’s Court of the PRC, art 9. 10 CPL, art 123.

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between the plaintiff and the defendant in respect of the claim unless either of the parties refuses to accept the mediation.11 Preparation for trial 24.5 The court shall serve the copy of the statement of claim upon the defendant within five days of the acceptance of the case filing. the defendant shall file the statement of defence within 15 days of the receipt of the statement of claim. Where the defendant is a company incorporated outside the PRC, or a foreign natural person including Hong Kong, Macau and Taiwan person, the time limit of the submission of the statement of defence is 30 days.12 Despite the requirement of the submissions of the statement of defence, the defendant’s failure to file the statement of defence does not deprive the defendant of its right to defend the case and affect the trial of the case.13 24.6 If the defendant believes that the court has no jurisdiction over the claim, it can object to the jurisdiction of the court within the time limit of the submission of the statement of defence. Where the defendant challenges the court’s jurisdiction, the court shall first examine and determine whether it has jurisdiction over the claim. Where the defendant objects to the jurisdiction beyond the time limit of the submission of the statement of defence, the court will not examine and determine the jurisdiction issue but proceed with the trial of the case.14 The defendant can also challenge the court’s jurisdiction over the claim on the ground that there is an arbitration agreement in writing in respect of the claim. The defendant can make such a challenge beyond the time limit of the submission of the statement of defence but no later than the first hearing for trial.15 Where the court decides not to recognise the existence or validity of a foreign-related arbitration agreement but retains its jurisdiction over the claim, it must report the decision to its higher court, which in turn refers the matter up to the Supreme People’s Court (the “SPC”) for approval.16 24.7 The court shall constitute a collegiate bench usually consisting of three judges for the trial of the case unless the summary procedure is applied. The court shall give notice of the members of the collegiate bench to the plaintiff and defendant within three days of the constitution of the bench. 24.8 When the time limit of the submission of the statement of defence has expired; the court may schedule a pre-trial conference to make the preparation for the trial. The pre-trial conference is to deal with following issues:17 (i) to identify the plaintiff’s claim and the defendant’s defence; (ii) to examine and deal with issue of adding a party or parties into the action, any alteration of the claim, the counterclaim and the claim made by an interested third party; 11 CPL, art 122. 12 CPL, art 268. 13 CPL, art 125. 14 The Reply to the Issue concerning the Time Limit of Making Challenge to the Court Jurisdiction in the Case involving Economic Disputes of the PRC Supreme People’s Court (Fa (Jing) Fu (1990) No. 10). 15 Interpretation of the CPL, art 216. 16 The Notice of Some Issues concerning the People’s Court’s Dealing with Foreign-Related or Foreign Arbitration of the PRC Supreme People’s Court’s (Fa Fa (1995) No. 18); Section III (1) of the Speech at the Working Conference on the Trail of Marine Case by Mr. Liu Guixiang, the Presiding Judge of Division No. 4 of the Supreme People’s Court on 18 July 2012. 17 Interpretation of the CPL, art 224.

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(iii) to decide whether to investigate and search evidence, consign the appraisal, require the plaintiff and/or defendant to produce evidence, inspect and preserve evidence; (iv) to arrange for the exchange of evidence; (v) to summarise the issues in dispute; and (vi) to mediate between the plaintiff and defendant. Hearing 24.9 The court shall give notice to the plaintiff and defendant of the time of the hearing three days in advance and announce the names of the plaintiff and defendant, the cause of action, time and place of the hearing to open to the public unless the trial of the case is not open to the public.18 The hearing is composed of two stages: investigation into facts and debates. The plaintiff and defendant shall state their respective opinions on the issues in the dispute, produce evidence and debate. The court may, after the hearing for the trial, mediate between the plaintiff and the defendant for a settlement. Judgment 24.10 The court may hand down the judgment at the close of the hearing or after the hearing. The judgment shall include the following items: (i) cause of action, claim, facts and reasons in dispute; (ii) facts determined by judgment and the reasons for the determination, applicable law and reasons; (iii) judgment and the party to bear the court fee; and (iv) time limit of the appeal of the judgment and the appellate court. 24.11 The trial of a case by general procedure must be closed within six months counting from the date of the acceptance of the case filing until the judgment being handed down. The six-month time limit does not incude the time period of the public announcement, appraisal, mediation and dealing with the challenge to jurisdiction. The six-month time limit can be extended for another six months with the approval of the president court, and may be extended further by the approval of its higher court. There is no requirement of the time limit of the trial of foreign-related cases.19 The second instance trial procedure 24.12 If the plaintiff or the defendant is not satisfied with the first instance judgment, he is allowed to appeal the judgment to the appellate court within 15 days of the service of the judgment.20 Where the plaintiff or the defendant has no domicile in the PRC, the time limit of the appeal is 30 days.21 The appellant shall submit a statement of appeal to the first instance court. The statement of appeal shall state the names of appellant and appellee, the first instance court, case number, cause of action, and the request and reasons for the appeal. 18 19 20 21

CPL, art 136. CPL, arts 149 and 270; Interpretation of the CPL, art 243. CPL, art 164. CPL, art 269.

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The first instance court shall serve the statement of appeal upon the appellee within five days of the receipt of the same. The appellee shall submit the statement of defence within 15 days of the receipt of the statement of appeal.22 Where the appellee has no domicile in the PRC, the time limit of the service of the statement of defence is 30 days.23 That the appellee fails to submit the statement of defence does not affect the trial. The first instance court shall deliver the statement of claim, the statement of defence and case file to the appellate court. 24.13 The appellate court shall address the appeal request and examine facts and the applicable law concerned with the appeal request only, unless the first instance judgment violates prohibitive rules of the law, or prejudices the State’s interest or any third party’s rights and interest. The appellate court shall constitute a collegiate bench for the trial of the appeal by way of hearing. However, if there are no new facts, evidence or reasons that are raised in the trial, the collegiate bench can proceed with the judgment without a hearing. The appellate court can mediate the appellant and the appellee in respect of the appeal for a settlement. 24.14 The appellate court can deal with the appeal request as below:24 (a) (b) (c) (d)

where the first instance court determines facts clearly and applies the law correctly, to affirm the first instance judgment or ruling; where the first instance court determines facts wrongly or applies the law incorrectly, to amend, revoke or alter the first instance judgment or ruling; where the first instance court determines facts unclearly, to rule to revoke the first instance judgment and remand to the first instance court for retrial or to alter the judgment directly; where the first instance court violates procedure rules seriously, such as omitting a litigant or making the judgment in default illegally, to revoke the judgment and remand to the first instance court for retrial.

Special rules on the trial of the collision of ships The collision of ships that is governed by the Chinese Maritime Code (the “CMC”) and the SMPL 24.15 The collision of ships refers to the accident of the touching of ships at sea or in other navigable waters adjacent thereto. Where a ship has caused damage to another ship, person, goods or other property on board the ship, either by the execution or non-execution of a manoeuvre or by the non-observance of navigation regulations, even if no collision has actually occurred, the provisions of the CMC and the SMPL shall apply as well. The collision involving ships or crafts to be used for military or public service purpose or happening at waters that are not linked to the sea such as inland rivers and lakes is not subject to the CMC and the SMPL.25

22 CPL, art 167. 23 CPL, art 268. 24 CPL, art 170. 25 CMC, arts 3, 165 and 170; art 1 of Rules on Some Issues concerning Trial of Disputes over the Collision of Ships of the PRC Supreme People’s Court.

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Investigation form for maritime accident 24.16 When the plaintiff submits the statement of claim and the defendant submits the statement of defence, they shall fill out and submit to the court the maritime accident investigation form.26 The maritime accident investigation form is the statement of the course and cause of the collision.27 The form is usually composed of two parts. The first part is the basic information of the ship involved in the collision: the ship’s name, registry port and particulars, the time, date and position of the collision, weather condition and water current of the place where the collision occurred, the status of the ship prior to the collision (the time, position, course and speed of the ship at the first sight of the opposite ship, the distance between the ships involved in the collision at the first sight of each other), course of the collision, collision angle, etc. The second part is about the allegation of the collision liability and the claim for damages, etc. The form shall be filled out by the master or the duty officer or other interested person of ships involved in the collision. The plaintiff or the defendant shall fill out the form truthfully and correctly. If the plaintiff or the defendant forges the contents of the form, they shall assume the liability accordingly.28 24.17 The plaintiff and the defendant shall provide the evidence in support of these facts as stated in the marine accident investigation form. The evidence shall be submitted to the court prior to the first hearing of the trial. The plaintiff or the defendant shall also submit the following documents of the ships involved in the collision prior to the first hearing of the trial:29 (a) (b) (c) (d) (e) (f) (g) (h) (i)

certificate of registry; certificate of survey; certificate of seaworthiness; trading certificate; log book, engine book, bell book, records of radio and radar; table of compass deviation; navigation chart; AIS records; certificates of competence of master, duty officer and engineer, and crew list (name, address and certificate of position); (j) documents in proof of the meteorology and hydrology of the water where the collision occurred; (k) sea protest or marine report; (l) witness statement; (m) other proof. 24.18 The maritime accident investigation form is a type of proof, i.e. a party’s statement.30 Those facts that are stated in the form can be admitted by the court if the opposite 26 SMPL, art 82. 27 Interpretation of the SMPL, art 57. 28 The SPC designed the Maritime Accident Investigation Form and requires that maritime courts adopt the Form. See The Notice of the Release of Maritime Litigation Form (Trail Version) of the SPC (Fa Fa [2003] No. 4). 29 SMPL, art 84; Interpretation of the SMPL, arts 56 and 58; the Maritime Accident Investigation Form published by the PRC Supreme People’s Court. 30 Interpretation of the SMPL, art 57; The civil proof is divided into eight types: a party’s statement, documentary evidence, material evidence, audio-visual material, electronic data, witness’ statement, appraisal opinion, and inquest records; CPL, art 63.

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party to the collision admits them or the court has verified that they are true.31 To avoid the plaintiff or the defendant misrepresenting facts of the collision, the maritime court will not serve the form and other evidence of collision facts when the court serves the statement of claim and the statement of defence upon the plaintiff or the defendant.32 The plaintiff and defendant are not allowed to produce further evidence to disprove the statements that they have made in the maritime accident investigation form and other factual evidence which they have submitted, unless they are able to convince the court that the evidence was not in their control and also could not be obtained prior to the first hearing of the trial and therefore could not be submitted at the first hearing of the trial.33 Completion of production of factual evidence 24.19 The plaintiff and the defendant shall complete the production of the evidence of the collision facts inclusive of the maritime accident investigation form prior to the first hearing of the trial. Only when the plaintiff or the defendant has completed the production of the factual evidence and also submitted the certificate of the completion of the production of evidence to the court, can they exchange the factual evidence inclusive of the maritime accident investigation form with each other and apply to the court for the review of the factual evidence. The court shall reject the application for the review of the evidence of collision facts before the applicant has completed the production of the factual evidence. For example, the court shall not allow the applicant to review the factual evidence that the court preserves at the request of a party until the party who has applied for the preservation of the evidence has confirmed to the court that it has completed the production of the factual evidence.34 If the plaintiff or the defendant intends to apply to the court for the preservation of evidence or the investigation and collection of the evidence of collision facts, they shall submit such an application to the court prior to the completion of the production of evidence.35 The court may not grant such application that is submitted after the completion of the production of evidence. The investigation materials by the Maritime Safety Administration 24.20 The Maritime Safety Administration of the People’s Republic of China (the “MSA”) is responsible for the administration and supervision of maritime safety in China. The MSA has the power to investigate the ships’ collision.36 The court may admit the investigation materials that have been obtained by the MSA through its investigation of the collision according to the law, and determine the facts leading to the collision based upon 31 Interpretation of the SMPL, art 57. 32 SMPL, art 83. 33 SMPL, art 85; Interpretation of the SMPL, art 59. 34 Rules on Some Issues concerning Trial of Disputes over the Collision of Ships of the PRC Supreme People’s Court, art 10. 35 The plaintiff or the defendant can apply to the court for the investigation and collection of the evidence if the evidence is kept by the authorities which only the court can access, or the evidence is concerned with the state’s or commercial confidence or personal privacy, or the evidence cannot be obtained by the plaintiff or the defendant for objective reasons whatever: see art 64 of the CPL and art 94 of the Interpretation of the CPL. 36 The PRC Maritime Traffic Safety Law; The PRC Regulations of the Investigation and Handling of Maritime Traffic Accident; The Regulations of the Investigation of the Safety of the Foreign-related Maritime Accident or Event (Hai An Quan [2011] No. 91).

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those investigation materials of the MSA if such materials have been acknowledged by the parties involved in the collision, unless there is evidence in the contrary that can sufficiently disprove the investigation materials.37 The court may also admit the MSA’s maritime accident investigation report or its conclusions on the collision of ships accident, and make a judgment on the collision liability based upon the MSA’s report and conclusions, unless there is sufficient factual evidence or reasons that can disprove the investigation report or conclusions.38 During the course of the trial, the court may, at the request of the party, ask the MSA to explain and illustrate the relevant issues that have been dealt with in the investigation report and conclusions.39 24.21 In Orient Overseas Container Line (U.K.) Limited v Beihai Honghai Shipping Co., Ltd. in respect of the claim for the collision of ships,40 during the course of the re-trail by the SPC, OOCL applied to the SPC to obtain the investigation materials of the collision, which were kept by the Guangdong MSA in order to prove that MV “Xing Hai 668” as owned by Beihai Honghai Shipping was unseaworthy at the time of the collision. The SPC granted the application and asked the Guangzhou Maritime Court to assist in obtaining the investigation materials from Guangdong MSA. The Guangzhou Maritime Court obtained from Guangdong MSA the shipping certificates, crew’s certificates, and inquiry records of the crew. The SPC took the view that the inquiry records were witness statements, which were not acknowledged by Beihai Honghai Shipping and, further, the crew and other interested people who were interviewed by the MSA were not cross-examined by OOCL or Beihai Honghai Shipping. Further, the MSA did not make an investigation report on the collision nor determine whether the crew of MV “Xing Hai 668” was competent. Based on those findings, the SPC did not believe that the investigation materials obtained from Guangdong MSA could adequately prove the facts regarding the collision. Requirement of inspection of a ship and appraisal of a ship’s value 24.22 The inspection of a ship and appraisal of a ship’s value must be done by an institution or individual who has been authorised by the authorities or has the professional qualification; otherwise the inspection or appraisal conclusion cannot be admitted by the court.41 This requirement is applied not only in the trial of the collision of ships but also in the inspection and appraisal of a ship in the trial of the maritime case other than the collision of ships.42 A qualified inspection institution refers to an institution that has the PRC Approval Certificate of the Qualification of the Statutory Ship’s Inspection Institution.43

37 Rules on Some Issues concerning Trial of Disputes over the Collision of Ships of the PRC Supreme People’s Court (Fa Shi [2008] No. 7), art 11. 38 Guidance of the Standardizing of the Maritime Traffic Accident Investigation and the Maritime Trial of the PRC Supreme People’s Court Division No. 4 and the PRC State Maritime Safety Administration (Fa Min Si (2006) No. 1), section I (5). 39 Guidance of the Standardizing of the Maritime Traffic Accident Investigation and the Maritime Trial of the PRC Supreme People’s Court Division No. 4 and the PRC State Maritime Safety Administration (Fa Min Si (2006) No. 1), Section I (6). 40 (2012) Min Ti Zi No. 142 (Supreme People’s Court). 41 SMPL, art 86. 42 Interpretation of the SMPL, art 60. 43 The PRC Regulations of the Survey of the Ship and Offshore Facilities; the PRC Rules of the Approval and Administration of the Qualification of the Ship’s Survey Institution.

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A qualified inspection individual refers to a person who has the Registered Ship’s Inspector Qualification Certificate.44 The MSA is responsible for the approval and issuing of the qualification certificates. The registered ship’s inspector must practise within a qualified ship’s inspection institution. A qualified appraisal institution of ship’s value refers to an institution that has the PRC Qualification Certificate of Price Appraisal Institution. A qualified appraisal individual refers to a person who has the PRC Qualification Certificate of the Price Appraisal Personnel.45 The Qualification Certificate is approved and issued by the PRC National Development and Form Commission Price Certification Centre.46 The time period of the trial of collision of ships 24.23 The maritime court shall complete the trial of the collision of ships case within one year counting from the date of the acceptance of the case filing, unless the president of the maritime court approves the extension of the time limit.47 This requirement is also applied in foreign-related collision cases. It is different from the general civil case where there is no time limit for the trial of a foreign-related civil case. Special rules on the trial of general average Jurisdiction of general average cases 24.24 The maritime court of the place where the ship first arrives, the adjustment of general average is made or the voyage is ended, has the jurisdiction over the claim arising out of general average.48 The parties who are involved in general average can choose by an agreement the maritime court that has substantive connection with the general average accident to hear the claim arising out of the general average.49 The parties can either mutually agree to entrust average adjusters with the adjustment, or directly bring an action in respect of the general average claim with a maritime court.50 In dealing with an unadjusted general average dispute, the maritime court shall order the parties to entrust average adjusters with the adjustment themselves, unless the court believe it necessary for the court to make the entrustment. If it is entrusted by the court, the adjustment fees shall be paid by the party who claims the general average in advance.51 General average adjustment report 24.25 The general average report made by average adjusters may be admissible as the proper basis for the contribution if no objection is raised by any of the parties; otherwise,

44 45 46 47 48 49 50 51

The Provisional Regulations of the Registered Ship’s Inspector System. The Administration Measures of the Approval of the Qualification of Price Appraisal Personnel. The Administration Measures of the Approval of the Qualification of Price Appraisal Institution. SMPL, art 87. CPL, art 32. CPL, art 34. SMPL, art 88. Interpretation of the SMPL, art 62.

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the maritime court shall decide whether to accept the report or not.52 If any party raises an objection to the adjustment report and the objection has been admitted by the court, the party who has entrusted the adjustment shall notify the adjuster to re-adjust or supplement the adjustment report, whichever is necessary. If the party fails to give notice to the adjuster, the court may notify the adjuster to re-adjust the general average. The party who raises the objection shall pay the re-adjustment fees in advance; otherwise it shall be regarded that the party has withdrawn the objection.53 24.26 In Ming Yang Shipping Co., Ltd. v The People’s Insurance Company (Group) of China54 in respect of a claim for the contribution of general average, MV “Ming Yang” encountered bad weather en route from a Japanese port to Shanghai and the main engine of the vessel was broken. The vessel was then towed to a Japanese port for repair. Afterwards, Ming Yang Shipping as the owners of the vessel declared general average. At the request of Ming Yang Shipping, PICC as the insurer of the cargo on board the vessel issued a letter of general average guarantee to Ming Yang Shipping. At the time of the accident, the vessel was performing a voyage charter. According to the voyage charterparty, the general average adjustment shall be made in accordance with the Beijing Adjustment Rules 1995. The China Council for the Promotion of International Trade Average Adjuster Department adjusted the general average and made the adjustment statement, according to which PICC should contribute USD 453,520.95. PICC had paid the salvage fee in sum of USD 321,913.82, and therefore PICC’s final contribution amount was USD 131,606.77. PICC refused to make the contribution on the ground that the accident was caused due to the unseaworthiness of the vessel. Ming Yang Shipping then brought an action against PICC in the Shanghai Maritime Court claiming for the contribution of the general average. Before Ming Yang Shipping commenced the action, PICC had sued Ming Yang Shipping in the same court for the recovery of the salvage fees that it had paid in advance. Both the maritime court and the Shanghai High People’s Court held that due to the breakdown of the main engine, the vessel and cargoes on board encountered the common risks. In such circumstances, it was necessary and reasonable for Ming Yang Shipping to seek the salvage of the vessel and the cargoes on board, and the conditions of general average were met. The courts also accepted the adjustment report made by China Council for the Promotion of International Trade Average Adjuster Department. The courts further held that before the maritime court made a decision on the issue as to whether the vessel was seaworthy and whether the general average accident was caused due to the unseaworthiness of the vessel, Ming Yang Shipping was entitled to require PICC to contribute in the general average. If the court determined that the vessel was unseaworthy and the general average accident was caused therefor, PICC could file a recourse claim against Ming Yang Shipping for the contribution it had made.55 The courts therefore held that PICC should perform its undertakings in the letter of general average guarantee.

52 SMPL, art 89. 53 Interpretation of the SMPL, art 63. 54 www.ccmt.org.cn. 55 Contrary to the viewpoint of the Shanghai Maritime Court and Shanghai High People’s Court, the Qingdao Maritime Court believes that if the general average accident is caused due to a party’s act for which the party cannot be exempted from liability, such party cannot require other interested party to contribute in general average. See Hanjin Shipping Company Ltd. v China Oil & Foodstuffs International Storage and Transportation Corporation (Shan Dong), AT Container Line Ltd., and Lianyungang Chemical, Medicine and Health Products Import & Export Co., Ltd (2001) Qing Hai Fa Hai Shang Chu Zi No. 140.

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Claim for non-general average losses 24.27 A party may bring an action against the liable person for non-general average losses without being prejudiced by the proceedings commenced for the general average claim arising from the same maritime accident. Actions brought by the parties in respect of the same maritime accident for non-general average losses and for general average contribution by recourse claim against the liable person in the maritime court that entertains the general average case can be consolidated by the same court.56 A case of general average shall be tried and concluded within one year counting from the date of the acceptance of the filing of the case. Where an extension of the period is necessary under special circumstances, it shall be subject to approval by the president of the court. The provision of the trial period shall also apply in the trial of the claim for non-general average losses.57 Special rules on the trial of marine insurer’s subrogation claim 24.28 Where an accident covered was caused by a third party and the insurer has indemnified the insured, the insurer is entitled to claim compensation against the third party by exercising the right of subrogation up to the amount of the indemnity paid.58 In exercising the right of subrogation, an insurer shall bring an action in its own name against the third party that caused the accident covered if no action has been brought by the insured against the third party. Where the insured has already brought an action against the third party, an insurer may apply to the court entertaining the case for the alteration of the party to the lawsuit and subrogate the rights of the insured against the third party. Where the losses of the insured caused by a third party cannot be fully covered by insurance indemnity, the insurer and the insured may act as co-plaintiffs to claim compensation against the third party.59 24.29 Where an insurer brings a subrogation action or applies for the alteration of the party to the lawsuit or for acting as co-plaintiffs, the insurer shall submit to the maritime court evidence showing that it has indemnified the insured the insurance loss.60 The evidence refers to the receipt of the payment of the insurance indemnity, the bank slip of the payment or other document in proof of the payment of the indemnity.61 The insurer is not required to submit the certificate of the assignment of rights and interests issued by the insured. If the insurer submits only the certificate of the assignment of rights and interests issued by the insured but no evidence of the payment of the indemnity, the insurer cannot prove that it has subrogated the right of the insured to claim for the third party.62 The court shall examine the evidence submitted by the insurer. If through examination the court believes that the insurer fails to submit the evidence as required, the court shall make a ruling not to entertain 56 SMPL, arts 90 and 91. 57 SMPL, art 92; Interpretation of the SMPL, art 64. 58 SMPL, art 93. 59 SMPL, arts 94 and 95; Interpretation of the SMPL, art 65. 60 SMPL, art 96. 61 Interpretation of the SMPL, art 68. 62 ibid. Section II (160) of the Answers to Practical Issues concerned in Foreign-Related Commercial and Maritime Trial by the Division IV of the PRC Supreme People’s Court (I); On Understanding and Application of the Interpretation of the SMPL by Ms. Justice Wang Shumei of the PRC Supreme People’s Court (People’s Justice 2003. 3).

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the insurer’s filing of the subrogation action or not to grant the insurer’s application for the alteration of the party or acting as the co-plaintiffs.63 The insurer is allowed to appeal such rulings.64 If an insurer’s application is made during the course of the second instance trial, the appellate court shall remand the case to the maritime court for retrial in order to ensure the insurer has the right to appeal the civil ruling of its application.65 24.30 In the trial of the insurers’ subrogation claim, the maritime court shall examine and determine whether the third party is liable to the insured and whether the insurer has actually indemnified the insured for the insurance loss. The court shall not examine whether the insurance contract is valid and whether the insurer wrongfully pays the insurance indemnity. The third party cannot defend the subrogation claim on the grounds of the validity of the insurance contract or defective or wrongful payment of the insurance loss by the insurer.66 When the insurer has subrogated the right to claim, it is entitled to argue that the time limit of the claim against the third party is discontinued if the insured has commenced legal proceedings against the third party or the insured has arrested the vessel or the third party has agreed to perform its obligation to the insured.67 Where the insurer has replaced the insured or acted as co-plaintiffs in the lawsuit against the third party, the insurer is entitled to claim benefit from the attachment of property of the third party that the insured has obtained including the security obtained by way of ship arrest. However, the insurer shall not take the liability for wrongful attachment of property or ship arrest for which the insured shall be liable for its own fault.68 24.31 In respect of a claim for oil pollution damage caused by a ship, the aggrieved party may claim either against the owner of the ship causing the oil pollution damage, or directly against the insurer who is answerable for the liabilities of such shipowner, or against the person who provides financial security therefor. Where the insurer for oil pollution damage or the person who provides the financial security therefor is sued in an action, such insurer or person is entitled to demand the shipowner to join the proceedings. At the request of the liability insurer or the financial security provider, the court may notify the shipowner to join the proceedings as a party who has no independent claim in the subject of the proceedings.69 24.32 The insured may have concluded an arbitration agreement with a third party before the insurer subrogates the right of claim against the third party. The Supreme People’s Court is of the view that in foreign-related subrogation claim cases, given that the insurer does not negotiate the conclusion of an arbitration agreement between the insured and the third party and the arbitration agreement is not concluded by the meeting of minds of the insurer and the third party, the insurer shall not be bound by the arbitration 63 The Regulations of Some Issues concerned in the Trial of Marine Insurance by the PRC People’s Supreme People’s Court (Fa Shi (2006) No. 10), art 13; Interpretation of the SMPL, art 66. 64 ibid. 65 Section III (4) of the Speech at the Working Conference on the Trail of Marine Case by Mr. Justice Liu Guixiang, the Presiding Judge of Division No. 4 of the Supreme People’s Court on 18 July 2012. 66 The Regulations of Some Issues concerned in the Trial of Marine Insurance by the PRC People’s Supreme People’s Court (Fa Shi (2006) No. 10), art 14; Speech on the Working Conference on the Trail of Marine Case by Mr. Justice Liu Guixiang, the Presiding Judge of Division No. 4 of the Supreme People’s Court on 18 July 2012, section III (4). 67 The Regulations of Some Issues concerned in the Trial of Marine Insurance by the PRC People’s Supreme People’s Court (Fa Shi (2006) No. 10), art 15. 68 Interpretation of the SMPL, art 67; Regulations of Some Issues concerned in the Trial of Marine Insurance by the PRC People’s Supreme People’s Court (Fa Shi (2006) No. 10), art 16. 69 SMPL, art 97; Interpretation of the SMPL, art 69.

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agreement unless the insurer expressly acknowledges that the arbitration agreement is binding upon it.70 Summary procedure, procedure for urging payment of debt and procedure for public notice of exigence of claim Summary procedure 24.33 In hearing a simple maritime case in which the facts are evident, the rights and obligations are clear and the dispute is a minor one, the maritime court may apply the provisions governing summary procedure in the CPL in the trial of the maritime case.71 That the facts are evident means that the parties’ statements on the facts in dispute are by and large the same and the parties are able to provide the evidence in proof to the facts, and the court does not need to investigate and collect the evidence in order to determine the facts. That the rights and obligations are clear means that the court can definitely determine who shall bear liability. That the dispute is a minor one means that in principle the parties have no dispute on those issues as to the case merit, who shall bear the liability and the subject of the action.72 However, the court shall not apply the summary procedure in the trial of a case in the following circumstances:73 (a) (b) (c) (d) (e) (f) (g)

the defendant’s whereabouts are unknown when the plaintiff brings an action; the case is remanded by appellate court for retrial; there are a number of persons within one part to the lawsuit; the case is heard by applying the trial supervision procedure; the case concerns the interests of the State or the public; a third party brings an action for the alteration or cancellation of an effective judgment, ruling or mediation order; other circumstances where it is improper to apply summary procedure.

24.34 In the trial of a case by applying summary procedure, the plaintiff can bring an action orally. The court may summon the parties, serve documents and hear the case in a simple way. The case shall be heard by a single judge only and concluded within three months. The court shall convert the summary procedure into ordinary procedure if it finds that it is improper to hear the case by applying the summary procedure during the course of the trial.74

70 The PRC Supreme People’s Court’s Reply Letter to the Request on the Validity of Arbitration Clause involved in The PICC Shenzhen v Guangzhou Ocean Shipping in Respect of the Claim for Cargo Damage in the Contract of the Carriage of Goods by Sea. ([2005] Min Si Ta Zhi No. 29); The PRC Supreme People’s Court’ Reply Letter to the Request on the Validity of the Arbitration Clause involved in China Pacific Insurance Corporation Beijing Branch v COSCO Logistics Co., Ltd. Beijing, Tianjin Zhenhua International Shipping Agency Co., Ltd., Nile Dutch Services in respect of the Subrogation Claim in the Contract of the Carriage of Goods by Sea ([2009] Min Si Ta Zhi No. 11); Section X (127) of The Meeting Minutes of the PRC People’s Supreme Court National Working Conference on Foreign-Related Commercial and Maritime Trial (Fa Fa [2005] No. 26). 71 SMPL, art 98. 72 Interpretation of the CPL, art 256. 73 Interpretation of the CPL, art 257. 74 CPL, chapter 13 Summary Procedure.

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Small claim procedure 24.35 In the trial of a case by applying summary procedure, if the amount of the subject matter of the case is no more than 30 per cent of the last year’s average yearly wage of the employee of the province, autonomous or municipality where the maritime court or its dispatched tribunal is located, the judgment made by the maritime court on the case is final and enforceable and the parties cannot appeal to the appellate court.75 However, the maritime court cannot apply the small claim procedure in the following circumstances:76 (1) (2) (3) (4)

the case concerns a dispute of personal relationship or the affirmation of the ownership of property; the case concerns a foreign-related dispute; the case involves appraisal or evaluation or there is dispute on the appraisal or evaluation that is conducted prior to the action; any other dispute that is not properly heard by way of the small claim procedure.

Procedure for urging payment of debt 24.36 Where a creditor, on the basis of a maritime-related matter, requests a debtor to pay a debt in cash or in securities, if it is found to be in conformity with those provisions of the procedure for urging payment of debt in the CPL, the creditor can apply to the maritime court for an order of the payment of the debt. Where the debtor is an alien, a stateless person or a foreign enterprise or organisation that has a domicile or representative office or branch within the territory of the PRC on which the payment order can be served, the creditor can apply to the maritime court that has jurisdiction for such a payment order.77 24.37 To apply for an order of payment, the creditor shall meet the conditions as below:78 (a) (b) (c) (d) (e) (f) (g)

the debtor shall pay a debt in cash or in securities; the creditor is not in debt to the debtor; the debt is due and its amount is certain; the debtor is in the PRC and its whereabouts are known, or it has a domicile or representative office or branch within the territory of the PRC; the order of payment can be served upon the debtor; the court has jurisdiction over the application; the creditor has not applied to the court for the attachment of the property of the debtor.

24.38 If the debtor objects to the order of payment, he can raise the objection within 15 days of the receipt of the order. Where the court, through the examination of the debtor’s objection, finds that the creditor’s application for the order of payment falls within any one of the circumstances where the court shall not entertain the application, or shall reject the application, or shall rule to terminate the procedure for urging the payment of debt, or has

75 CPL, art 162; Interpretation of the CPL, art 273; The Supreme Court’s Reply to the Issue concerning Whether Maritime Courts May Apply Small Claim Procedure in the Trial of Marine Cases (Fa Shi (2013) No. 16). 76 Interpretation of the CPL, art 275. 77 SMPL, art 99. 78 CPL, art 214; Interpretation of the CPL, art 429.

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reasonable doubt about the conditions of issuing the order of payment, the court shall grant the debtor’s objection and rule to terminate the procedure for urging the payment of debt.79 Where the debtor does not deny the debt but only raises that he has no capability to pay the debt, or proposes to delay the payment of the debt or pay the debt in an alternative way, the court shall reject the objection and affirm the order of payment.80 Procedure for public notice of exigency of claim 24.39 The holder of a bill of lading or similar document for taking the delivery of cargo can apply to the maritime court where the cargo is located for the public notice of exigency of claim where such documents are out of control or lost.81 Out of control means that the bills of lading or similar documents for taking the delivery of cargo are stolen or lost.82 The applicant shall submit to the court an application in writing in which are stated the type and number of the bill of lading or the similar document for taking the delivery of cargo, the description, quantity, carrier, shipper and consignee of the cargo, the name of the carrying vessel, voyage, and endorsement of the bill of lading or the similar document, the reasons and facts of the application, etc. 24.40 When the court grants the application for the public notice of exigency of claim, the court shall notify the carrier, its agent or the person who takes into custody the cargo to cease to deliver the cargo and issue a public notice to urge the interested person to assert his right. The period of public notice shall not be less than 30 days. After having received the notice from the court, the carrier, its agent or the person who takes into custody the cargo shall cease to deliver the cargo until the procedure for public notice of exigence of claim has been terminated. The applicant shall bear the storage fees and the risks of the cargo during the public notice period. During the period of the public notice, the assignment of bill of lading or the similar document for taking delivery of the cargo is invalid. Where the cargo is to be used for an important State construction project or for relief purposes, or it is improper to store the cargo for a long time period due to the character of the cargo, or the cargo is seasonal, the court may, at the request of the applicant, rule that the applicant can take delivery of the cargo prior to the expiration of the public notice period, if the applicant provides sufficient security.83 24.41 During the public notice period, the interested party can declare its title to the bill of lading or similar document for taking delivery of the cargo in the maritime court. After receiving the declaration, the court shall terminate the procedure for the public notice of the assertion of the claim and notify the applicant, the carrier, its agent or the person who takes the cargo into custody accordingly. The applicant and the interested person can bring an action in respect of the dispute on the title to the bill of lading or similar document for taking delivery of the cargo. Where no person declares its title to the bill of lading or similar document for taking the delivery of cargo during the public notice period, the court shall make a judgment to declare that the bill of lading or similar document has become invalid.

79 80 81 82 83

Interpretation of the CPL, art 437. Interpretation of the CPL, art 438. SMPL, art 100. Interpretation of the SMPL, art 70. Interpretation of the SMPL, art 72 through 75.

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The judgment shall be published and be notified to the carrier, its agent or the person who takes into custody the cargo accordingly. The applicant of the public notice of the exigence of claim is entitled to request the carrier, its agent or the person who takes into custody the cargo to deliver the cargo to it when the court has published the declaration judgment. The interested party who has good reason for not declaring its title to the bill of lading or similar document in the court can bring an action to the court within one year of being aware of or should have been aware of the court’s public notice of the exigence of the claim.84 Procedure for constitution of liability limitation fund for maritime claims Parties who can apply for constitution of limitation fund 24.42 After the occurrence of a maritime accident, the shipowner, charterer, operator, salvor or insurer who wishes to apply for limitation of liability in accordance with the law can apply to a maritime court for the constitution of a limitation fund for maritime claims. In the event of oil pollution damage caused by a ship, the shipowner and insurer or the person who provides financial security therefor shall, for the purpose of obtaining the right of liability limitation provided by law, constitute with the maritime court a limitation fund for the maritime claim in respect of the oil pollution damage.85 The shipowner refers to the person who is stated as the owner of the ship in the ship’s registry certificate.86 The operator refers to the person who is registered as the operator of the ship or entrusted by the shipowner to actually employ and control the ship as well as take liability for the ship but does not include the non-vessel operating operator.87 Jurisdiction of the maritime court 24.43 The application for the constitution of limitation fund can be made either before an action is brought or during the course of the legal proceedings but no later than the first instance judgment being made. Where the application is made before an action is brought, the applicant shall file the application with the maritime court of the place where the accident occurs, or the contract is performed, or the ship is arrested. Where the marine accident occurs outside Chinese territory, the place where the accident occurs refers to the first port where the ship arrives after the accident. The constitution of the limitation fund shall not be bound by the jurisdiction agreement or arbitration agreement concluded between the parties. If the application is made during the course of the court proceedings, the applicant shall file the application with the maritime court of the trial of the maritime claim.88 24.44 In the event of oil pollution damage caused by the persistent oil carried on board an oil tanker, the maritime court of the place where the oil pollution accident occurs has jurisdiction over the oil pollution damage claim and the application for the constitution 84 Interpretation of the SMPL, art 76 through 78. 85 SMPL, art 101. 86 Interpretation of the SMPL, art 79. 87 Regulations of the Trial of Cases concerning Limitation of Marine Claims of the PRC Supreme People’s Court (Fa Shi (2010) No. 11), art 12. 88 SMPL, arts 101, 102 and 103.

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of the limitation fund for the oil pollution claim. Where the oil pollution accident caused by persistent oil carried on board oil tankers occurs outside the PRC territorial waters but causes oil pollution damage or poses the threat of oil pollution damage to PRC territorial waters, the maritime court of the place where the consequence of the oil pollution damage occurs or preventive measures are taken has jurisdiction over the oil pollution damage claim and the application for the constitution of the limitation fund.89 24.45 Where in the same marine accident, different liable parties apply to different maritime court for the constitution of a limitation fund, the court that accepts the case filing later shall transfer the case to the court that accepts the case filing later. After the limitation fund is constituted, the maritime court with which the fund is constituted has jurisdiction over the claim against the liable party in respect of the marine accident unless there is a jurisdiction agreement between the parties.90 Application for constitution of limitation fund and examination of application by court 24.46 The applicant shall state in the application the amount of the limitation fund, reasons for the application, interested person’s name, address and communication methods that are known to the applicant, and submit the evidence in support of the application. The maritime court shall, within seven days of the acceptance of an application for the constitution of a limitation fund for maritime claims, notify all the interested persons already known and issue an announcement of the same in newspapers or other news media for three consecutive days. If the ship involved in the limitation fund navigates internationally, the maritime court shall also announce the constitution of the limitation fund in newspapers or other news media issued abroad. The notice and announcement shall contain:91 (a) (b) (c) (d) (e)

name of the applicant; facts and reasons for the application; particulars for the constitution of the limitation fund for maritime claims; particulars necessary in registration of claims; other matters that need to be announced.

24.47 Any interested person who objects to the application for the constitution of the limitation fund shall file a written objection in the maritime court within seven days of the receipt of the notice or within 30 days of the announcement if he does not receive the notice. The maritime court shall examine the objection and make an order within 15 days of the receipt of the objection. If the objection is well founded, it shall make an order to reject the application for the constitution of the limitation fund. Otherwise, it shall make an order to grant the application. Any party who is not satisfied with the order can appeal to the appellate court.92

89 Regulations of Some Issues concerning the Trial of Oil Pollution Damage Claim caused by Ship of the PRC Supreme People’s Court (Fa Shi (2011) No. 14), art 2. 90 Regulations of the Trial of Cases concerning Limitation of Marine Claims of the PRC Supreme People’s Court (Fa Shi (2010) No. 11), arts 2 and 4. 91 SMPL, arts 104 and 105. 92 SMPL, art 106.

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24.48 After receiving the objection to the constitution of the limitation fund, the court shall examine whether the applicant is a proper party who can make the application for the constitution of the limitation fund and whether claims arising from the marine accident are those claims for which a liable party is entitled to limit its liability according to the provisions of article 207 of the CMC and whether the amount of the limitation fund is in compliance with the provisions of the CMC. According to article 209 of the CMC, a liable person shall be deprived of his right to limit his liability if it is proved that the loss results from his act or omission done with the intent to cause such loss or recklessly and with knowledge that such loss would probably result. When the court examines the objection filed by an interested party to the constitution of the limitation fund, the court shall not examine whether the applicant of the constitution of the limitation fund can be deprived of his right to limit his liability in accordance with article 209 of the CMC. This issue shall be examined after the limitation fund has been constituted and an interested person has registered his claim with the court and requests the court to affirm his right.93 24.49 In the case of the constitution of the limitation fund by Sekwang Shipping Co., Ltd.,94 MV “Dae Myong” owned by Sekwang Shipping collided with MV “Great Prestige” in the water near the mouth of the Yangtze River. As a result of the collision, about 700 mts of toxic chemical product carried on board MV “Dae Myong” leaked into the sea water causing pollution to the sea. Sekwang Shipping applied to the Shanghai Maritime Court for the constitution of limitation fund for its liability for the claims arising from the accident. Shanghai Environmental Protection Bureau, the East China Sea Fishery Supervision Bureau and the Shanghai Maritime Safety Bureau claimed that Sekwang Shipping should be deprived of the right to limit its liability to them for their claims arising from the pollution accident because MV “Dae Myong” was unseaworthy, and therefore requested that the court should not allow Sekwang Shipping to constitute the limitation fund. The Shanghai High People’s Court held that at the stage of the constitution of the limitation fund, the court should examine whether the applicant of the constitution of the limitation is a proper party and whether the claims arising from the marine accident are those claims for which the applicant can limit its liability according to the law and whether the amount of the limitation fund is in compliance with the provision of the law. As to whether the applicant should be deprived of the right to limit its liability, this should be examined after the limitation fund had been constituted. The court therefore rejected the objection to the constitution of the limitation fund by Sekwang Shipping. Constitution of the limitation fund 24.50 The applicant shall constitute the limitation fund within three days of the court’s order to allow the constitution of the limitation fund to become effective. Otherwise, it shall be regarded that the applicant withdraws the application. The limitation fund may be constituted either by depositing cash or by providing a security acceptable to the court. The security acceptable to the court refers to a letter of guarantee that is issued by a bank or other financial company in China. The sum of the limitation fund shall cover the amount of liability to be limited and any interest accruing from the date of the accident up to the date 93 Interpretation of the SMPL, art 83. 94 See www.ccmt.org.cn.

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of the constitution of the limitation fund. Where the fund is constituted by way of security, the amount of the security shall cover the sum of the limitation fund and any interest accruing thereon during the period of such constitution. Where the fund is constituted by cash, the day of the applicant’s remitting the limitation fund into the bank account designated by the court shall be deemed to be the day of the constitution of the limitation fund. Where the fund is constituted by way of security, the day of the maritime court’s accepting the security shall be deemed to be the day of the constitution of the fund.95 Court’s dealing with property preservation 24.51 After the limitation fund is constituted, any party who has filed a claim in respect of the limitation fund shall not exercise any right against any other property of the party who constitutes the limitation fund or the party in whose name the limitation fund is constituted in respect of the claim as filed against the limitation fund. However, a party can still apply to the court for the preservation of the property of the party who constitutes the limitation fund or the party in whose name the limitation fund is constituted in respect of any claim for which the party is not entitled to limit its liability. In respect of the oil pollution damage caused by the persistent oil carried on board an oil tanker, if, during the time period as designated by the court to raise objection to the shipowner’s application for the constitution of the limitation fund, no interested party objects to the shipowner to limit its liability for the oil pollution damage, the court shall, after the limitation fund has been constituted, lift the property preservation measures or return the security that is provided by the shipowner or insurer or other party in order to lift the property preservation measures. If an interested party objects to the shipowner to limit its liability for the oil pollution damage within the time period designated by the court, the court shall, after the court’s judgment that the shipowner is entitled to limit its liability has become effective, lift the property preservation measures or return the security that is provided in order to lift the property preservation measures.96 Registration of claims and distribution of limitation fund among creditors 24.52 After the maritime court publicises the announcement of accepting the application for the constitution of limitation fund for marine claims, a creditor shall register his claim arising out of the marine accident with the maritime court within the time period designated by the court. Otherwise, it shall be regarded that a creditor has waived his claim. A creditor shall file an application in writing with the maritime court and provide the evidence in proof of its claim. The evidence includes a final and enforceable judgment, ruling, mediation statement, arbitration award, notarised documents concerning the credit and other documents and material evidencing the credit. The maritime court shall examine the creditor’s application for the registration of the credit, and rule to allow the registration of the credit if the evidence as required is provided or not to register the credit if the evidence as required is not provided.

95 SMPL, art 108; Interpretation of the SMPL, art 84 and 85. 96 Interpretation of the SMPL, art 86; Regulations of the Trial of Cases concerning Limitation of Marine Claims of the PRC Supreme People’s Court (Fa Shi (2010) No. 11), art 8; Regulations of Some Issues concerning the Trial of Oil Pollution Damage Claim caused by Ship of the PRC Supreme People’s Court (Fa Shi (2011) No. 14), arts 23 and 24.

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24.53 Where a creditor submits a judgment, ruling, mediation agreement, arbitration award, or the notarised documents concerning his claim, the court shall, after having examined and determined that these documents are authentic and lawful, make an order to recognise these documents. Where a creditor submits other documents in support of its claim, he shall bring an action in respect of his claim before the maritime court or commence arbitration proceedings if there is an arbitration agreement concluded between the creditor and the party who applies for the constitution of a limitation fund within seven days of the registration of the claim with the court. The parties cannot appeal the judgment of the claim made by the maritime court. However, where the creditor claims that the party who constitutes the limitation fund is not entitled to limit the liability for the marine claim, the creditor and the liable party can appeal the judgment or ruling of the claim. Where the court needs to determine the ratio of liability for the collision of ships accident in the trial of the creditor’s claim, the creditor and the liable party can appeal the court’s judgment or ruling of the creditor’s claim.97 Where the persistent oil carried on board an oil tanker causes oil pollution damage and the aggrieved party brings an action against the shipowner of the oil tanker and claims that the shipowner is not entitled to limit its liability for oil pollution damage, the maritime court may first determine whether the shipowner is entitled to limit its liability for the oil pollution damage and make a judgment on it first.98 24.54 After examining and affirming the creditors’ marine claims, the maritime court shall issue a notice to the creditors for a creditors’ meeting. The creditors’ meeting may through negotiation put forward a plan for the distribution of the limitation fund and sign a distribution agreement. The agreement shall be binding upon the parties after the court has recognised it. Where the distribution plan cannot be agreed in the creditors’ meeting, the court shall decide on the plan according to the rankings of maritime claims as provided for in the CMC. The limitation fund shall be distributed among the creditors together with the interest accruing on the limitation fund at the same time.99 Procedure for the registration of claims in auction of a ship and distribution of the proceeds from the auction 24.55 After the announcement of the maritime court’s order for forced auction of a ship, creditors shall, within the time limit announced, apply for the registration of their claims pertaining to the ship to be auctioned. Creditors who fail to register their claims within 60 days of the last announcement date of the forced auction of a ship shall be deemed to have waived their rights to be satisfied from the proceeds from the auction.100 However, the party who applies for the auction of a ship can directly participate in the distribution of the proceeds from the auction with no need to apply for the registration of its credit first.101

97 Regulations of the Trial of Cases concerning Limitation of Marine Claims of the PRC Supreme People’s Court (Fa Shi (2010) No. 11), arts 10 and 11. 98 Regulations of Some Issues concerning the Trial of Oil Pollution Damage Claim caused by Ship of the PRC Supreme People’s Court (Fa Shi (2011) No. 14), art 25. 99 SMPL, arts 117, 118 and 119. 100 SMPL, art 111; Regulations of Some Issues concerning the Application of Law in the Arrest and Auction of a Ship of the PRC Supreme People’s Court (Fa Shi (2015) No. 6), art 16. 101 Regulations of Some Issues concerning the Application of Law in the Arrest and Auction of a Ship of the PRC Supreme People’s Court (Fa Shi (2015) No. 6), art 18.

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24.56 A creditor shall file an application in writing with the maritime court and provide the evidence in proof of its credit. The evidence includes final and enforceable judgment, ruling, mediation statement, arbitration award, notarised documents concerning the credit and other documents and material evidencing the credit. The maritime court shall examine the creditor’s application for the registration of the credit, and rule to allow the registration of the credit if the evidence as required is provided; otherwise rule not to register the credit. Where the creditor submits a judgment, ruling, mediation statement, arbitration award, or the notarised documents concerning the credit, the court shall make an order to recognise these documents after having examined and believed that these documents are authentic and lawful. Where a creditor submits other documents in support of its credit, he shall bring an action before the maritime court in respect of his claim pertaining to the ship to be auctioned or commence arbitration proceedings if there is an arbitration agreement concluded between the creditor and the owner of the ship to be auctioned. The parties cannot appeal the judgment of the claim made by the maritime court.102 However, where a creditor has already brought an action before a maritime court in respect of the maritime claim pertaining to the ship to be auctioned before he registers his credit, the creditor can appeal the judgment of the maritime claim made by the maritime court. Moreover, where the court needs to determine the ratio of liability for the collision of ships in the trial of the creditor’s claim, the creditor can appeal the judgment of his claim made by the court.103 24.57 After examining and affirming the creditors’ credits, the maritime court shall issue a notice to the creditors for a creditors’ meeting. The creditors’ meeting may through negotiation put forward a plan for the distribution of the proceeds from the auction of a ship and sign a distribution agreement. The agreement shall be binding upon the parties after the court has recognised it. Where the distribution plan cannot be agreed in the creditors’ meeting, the court shall decide on the plan for the distribution according to the rankings of maritime claims as provided for in the CMC. The legal costs to be borne by the liable person, expenses incurred in order to preserve the ship or to procure its auction and to distribute the proceeds from the auction, as well as other expenses incurred in the common interests of the creditors shall first be paid out of the proceeds from such auction. After the payment of these costs and expenses, the balance of the proceeds shall be distributed in accordance with the ranking of claims as below: (a) (b) (c) (d)

the maritime lien on the ship auctioned; the maritime claim secured by possessory lien on the ship auctioned; the maritime claim secured by mortgage of the ship auctioned; and other maritime claim pertaining to the ship auctioned.

24.58 Where a party applies for the arrest and auction of a sister ship,104 although the maritime claim based upon which the party makes such applications does not pertain to the ship and therefore cannot apply for the registration of its credit in the auction of the ship according to the law, the party can still participate in the distribution of the balance 102 SMPL, arts 113 through art 116. 103 Regulations of Some Issues concerning the Application of Law in the Arrest and Auction of a Ship of the PRC Supreme People’s Court (Fa Shi (2015) No. 6), arts 20 and 21. 104 SMPL, art 23 s 2.

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of the proceeds from the auction of the ship if any after the above listed claims have been distributed from the proceeds.105 Procedure for exigence of maritime lien106 24.59 The maritime lien shall not be extinguished by virtue of the transfer of the ownership of a ship, except those that have not been enforced within 60 days of a public notice on the transfer of the ownership of the ship made by a maritime court at the request of the transferee when the transfer was affected.107 Where a ship is transferred, the transferee of the ship, i.e. the buyer of the ship or the party who intends to buy the ship, can apply to the maritime court of the place where the ship is to be delivered or transferred for the exigence of the maritime lien, demanding the maritime lien holder to assert his right promptly so as to extinguish the maritime lien attached to the ship. The transferee shall submit to the maritime court a written application, the contract for the ship transfer, technical data of the ship and other documents. After receiving the application, the maritime court shall examine them and rule to approve or disapprove the application within seven days of the receipt of the application. The transferee who is dissatisfied with the court’s ruling can apply to the maritime court for review once only but not appeal it to the appellate court. 24.60 After the court’s ruling to approve the application for the exigence of the maritime lien becomes effective, the court shall issue an announcement in newspapers or other news media for three consecutive days urging the maritime lien holder to assert his right within 60 days of the last announcement date. If the ship navigates internationally, the announcement shall be publicised in the newspapers or other media issued abroad. A maritime lien holder who asserts his right within the period of exigence shall complete registration of his right with the maritime court; otherwise he shall be deemed to have waived the maritime lien. Where no one asserts the maritime lien on the expiry of the period of exigence of the maritime lien, the maritime court shall, on the application of the transferee of the ship, make a judgment declaring that the ship is free from the maritime lien. Where an interested person asserts the maritime lien during the period of the exigence of the maritime lien, the maritime court shall rule to terminate the procedure for the exigence of the maritime lien.

105 Regulations of Some Issues concerning the Application of Law in the Arrest and Auction of a Ship of the PRC Supreme People’s Court (Fa Shi (2015) No. 6), art 22. 106 SMPL, chapter 11; Interpretation of the SMPL, s 10. 107 CMC, art 26.

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CHAPTER 25

Conflict of laws

Introduction 25.1 The conflict of laws, or private international law, is a set of rules applied when disputes involve foreign elements. A foreign element may exist in various forms, for example, where a contract is performed in a foreign country or the domicile of the parties is outside China. Under Chinese law, whether the dispute is a foreign-related dispute can be identified in accordance with article 1 of the Interpretation (I) of the Supreme People’s Court on Certain Issues Concerning Application of the Law of the People’s Republic of China on Choice of Law for Foreign-related Civil Relationship1 (the “Interpretation I”), which provides that when either party to a civil relationship is a foreign citizen, or the habitual residence of either party or the subject matter of the civil relationship is outside the jurisdiction of China, or the legal fact that leads to the establishment, change or termination of the civil relationship happens outside the territory of China, the people’s court of China may identify it as a foreign-related civil relationship. 25.2 Conflict of laws is of particular importance for maritime disputes due to the international nature of marine transportation. The major contracts used for marine transportation, including charterparties and bills of lading, are nearly always made in one country and performed in another. In addition, the vessel itself carries an international nature, since its flag States and nationalities of the owners and charterers are also nearly always different. 25.3 Due to the international nature of maritime law, large numbers of maritime international treaties have been adopted and have been ratified by major shipping countries, including China. In China, the international treaties will be applied by the contracting States first to the relevant foreign-related issues without considering the conflict rules. Apart from the international treaties, China has its own legislation regulating the choice of laws in a foreign-related civil relationship, the Law of People’s Republic of China on Application of Laws to Foreign-Related Civil Relations2 (the “Law of Application of Laws”), which also applies to maritime disputes. However, it is important to note that the

1 Fa Shi [2012] No. 24; this is a judicial interpretation promulgated by the Supreme People’s Court on 28 December 2012 and came into effect on 7 January 2013. 2 The Law of Application of Laws was promulgated by the Standing Committee of the National Committee of the National People’s Congress on 28 October 2010 and came into effect on 1 April 2011. This law was formulated in order to codify the conflict rules applicable to foreign related matters which were previously only set out separately in the General Principle of the Civil Law of People’s Republic of China, the Contract Law of People’s Republic of China and CMC etc. The relevant rules set out in these laws are still effective and shall be considered as conflict rules of PRC together with the Law of Application of Laws.

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Law of Application of Laws is not a complete set of conflict rules for Chinese Law. The conflict rules can also be found in other legislation such as the General Principles of the Civil Law of the People’s Republic of China (the “General Principle of the Civil Law”) and the Contract Law of People’s Republic of China (the “Contract Law”). Chapter 14 of the Maritime Code of People’s Republic of China (the “CMC”) (Application of Law in Relation to Foreign-related Matters) also provides for special rules that apply for maritime disputes, which will prevail if there is any inconsistency between it and other conflict rules applied for general civil and commercial matters.3 General principles Supremacy of the international treaty 25.4 The general principles of conflict of laws are set out in Chapter 8 of the General Principle of the Civil Law (Application of Law in Civil Relations with Foreigners) with the starting point that if there is any difference between international treaties concluded or acceded to by China and the civil laws of China, the international treaties shall prevail. This principle is also reemphasised in the CMC, which sets out in article 268 that international treaties shall apply first if they are in any conflict with the provisions of the CMC, unless the provisions are those on which China has announced a reservation. China is the contracting State to some major international maritime conventions, such as International Convention on Civil Liability for Bunker Oil Pollution Damage 2001, Convention on the International Regulations for Preventing Collisions at Sea 1972, Athens Convention relating to the Carriage of Passengers and their Luggage by Sea 1974, International Convention on Salvage 1989, etc. 25.5 International practice may also apply to disputes for which neither the relevant laws of China nor any international treaty concluded or acceded to by China contains any relevant provisions.4 Lex voluntatis 25.6 Lex voluntatis means the autonomy of parties in choosing the governing law, which is an important principle in international private law and is widely adopted by most jurisdictions in the world. It is provided in the Law of Application of Laws that the parties concerned may, in accordance with the law, expressly choose laws applicable to foreignrelated civil relationships.5 CMC also sets out similar rules that apply to contracts in relation to maritime disputes. 25.7 There is no restriction on the timing of such an agreement. The parties are allowed to choose the governing law when the contract is concluded, after the dispute arises or even at trial.6

3 Law of Application of Laws, art 2. 4 CMC, art 268. 5 Law of Application of Laws, art 3; Interpretation I, art 3. 6 For example, in Rickmers Genoa Schiffahrtsgesellschaft mbH&Cie.KG and Rickmers- Linie GmbH&Cie. KG v CS Marine Co., Ltd (2009) Hu Gao Min Si (Hai) Zhong Zi No. 241 (Shanghai High People’s Court, CA), the parties reached an agreement on the application of Chinese law in trial and thus Chinese law applied.

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25.8 In addition, there is no requirement that such agreement must be made expressly. Where all the parties concerned invoke the laws of the same country and do not raise any objection to the application of the laws, the court may determine that the parties concerned have already selected the laws applicable to the foreign-related civil relationship.7 For example, in Beau Corporation v Shanghai Lizhi International Logistics Co., Ltd,8 the claimant was a company registered in Korea and thus it was a foreign-related dispute. Since both of the parties applied Chinese law to argue the case at trial, the court held that the parties had reached agreement on the governing law and thus Chinese law should be the governing law. Ascertainment of foreign law 25.9 After deciding which laws should apply, the next step is the ascertainment of the content of foreign law. The relevant rules regarding which party shall be responsible for the ascertainment of foreign law is set out in article 10 of the Law of Application of Laws, which provides that “foreign laws applicable to foreign-related civil relations shall be ascertained by people’s court, arbitration commission or administrative organs; parties concerned shall provide laws of the relevant foreign country if they choose to be governed by foreign laws”. The detail of the methods of ascertainment is mentioned in article 193 of the Opinion of Supreme People’s Court on Certain Issues Concerning the Implementation of the “General Principles of the Civil Law of People’s Republic of China” (Trial).9 These methods include those provided by the parties concerned, by a central organ of another country which has entered into any agreements or conventions in respect of judicial assistance in China, by the Chinese embassy or consulate of the foreign country,10 by the embassy of the foreign country in China, and by legal experts of the foreign country and China. 25.10 However, in practice, it is not uncommon that the foreign law cannot be ascertained, especially for those maritime disputes where the governing law is sometimes the law of the flag State, which might be difficult to find out. Under such circumstances, Chinese law would apply even if foreign law is actually the proper law in accordance with the parties’ agreement or the conflict rules.11 Here arises a problem about the definition of the “unable to be ascertained”. Guidelines of this issue are set out in article 17 of Interpretation I which provides that “where a people’s court fails to obtain foreign laws through providing by foreign parties concerned, or channels specified by international treaty that has been

7 Interpretation I, art 8. 8 (2013) Hu Hai Fa Shang Chu Zi No. 1588 (Shanghai Maritime Court). 9 This Opinion came into force on 26 January 1988 and was revised in 2008. Part of this Opinion is still valid, and includes the cited clause. 10 China has concluded civil and commercial judicial assistance convention with more than 30 countries, including France, Singapore, UAE, Korea etc. Some of the conventions mention rules in relation to ascertainment of foreign law. For example, art 28 of the Agreement between People’s Republic of China and the Republic of France on Mutual Judicial Assistance in Civil and Commercial Matters provides that the laws, regulations and practice of one party of the agreement can be proved by issuing a certificate by its diplomatic or consular organ or other competent authority and providing the same to the court of the other party. 11 Law of Application of Laws, art 10; see also Shanghai Ocean Shipping Co., Ltd v Star Holdings (2003) Hu Hai Fa Shang Chu Zi No. 113 (Shanghai Maritime Court). In this case, the defendant argued that the law of the flag State, i.e. the Bahamas, applied. However, the defendant did not provide the law of the Bahamas and thus the court held that PRC law should be applied.

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applicable to the People’s Republic of China or other reasonable channels such as provided by domestic and foreign legal experts, such laws may be treated as foreign laws that cannot be ascertained”. If the parties are required to provide the foreign law in accordance with article 10 of the Law of Application of Laws themselves, and if they fail to do so within the time limit specified by the court without a legitimate reason, such laws may also be treated as foreign laws that cannot be ascertained and the Chinese law would then apply. For example, in Wing Wah Oil Ship Co., Ltd v Jiangxi Xinghai Shipping Co., Ltd,12 the claimant argued that Hong Kong law shall be applied while the defendant wanted to apply Chinese law. The court held that Hong Kong was the proper law in accordance with rules of conflict of laws. However, the claimant, as the party that contended that Hong Kong law should apply, did not provide the evidence of Hong Kong law to the court; the court held that it was unable to ascertain the law by itself. Thus Chinese law applied to the subject dispute. Although this case is not a case reported in the Gazette of the Supreme People’s Court and does not have any special effect on the following decisions of other courts, it did show that, in Chinese proceedings, it is crucial to provide the court with the evidence of the foreign law if a party wishes to apply the same. 25.11 Sometimes, even if the party concerned can provide foreign legal expert’s legal opinion on the foreign law, the court is still entitled to exercise its discretion to decide whether to accept such opinion as the foreign law when the parties are in dispute in relation to its content.13 In Hangzhou Cogeneration Import and Export Company Limited v J. Friend Shipping Company Limited,14 the relevant bill of lading provided that the dispute should be governed by English Law. The defendant, who argued that English law should apply, submitted a legal opinion on relevant English law, which cited a few cases and the content of the book Scrutton on Charterparties in the legal opinion but without a case report supporting the legal opinion. The claimant challenged the authority of this legal opinion and argued that English law could not be proved by this legal opinion. The court held that since English law is based on case law, relevant cases and authorities should be carefully considered when determining its content. However, since the relevant case reports and the book authority were not submitted to the court, the court was unable to examine whether the contents of the legal opinion were correct. Consequently, the court held that English law was unable to be ascertained and thus Chinese law applied to the case. Reservation of public order and the application of mandatory provisions 25.12 Reservation of public order is also an important principle under private international law, which allows the domestic court to refuse to apply foreign law when such application would undermine the public interest of that country. Chinese law also adopts the same principle.15 Apart from the principle of reservation of public order, part of Chinese law would have mandatory application even if the conflict rules lead the court to the foreign law.16 Those provisions that have mandatory application includes those involving the

12 13 14 15 16

(2013) Xia Hai Fa Shang Chu Zi No. 166 (Xiamen Maritime Court). Interpretation I, art 18. (2010) Xia Hai Fa Shang Chu Zi No. 353 (Xiamen Maritime Court). Law of Application of Laws, art 5; CMC, art 276. Law of Application of Laws, art 4.

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protection of the interests of workers, food or public health safety, environmental safety, financial safety such as foreign exchange administration, anti-monopoly or anti-dumping or any other situations that should be recognised as mandatory provisions.17 Nature of disputes and application of laws 25.13 The starting point for determining the applicable law is characterisation, which requires the court to characterise the nature of the issues in dispute first since the different conflict rules would apply to different kinds of disputes. It shall be noted that the characterisation issue itself is governed by the lex fori. Thus, the law of the place where the court hearing the dispute is located shall govern the determination of the nature of a foreignrelated civil relationship directly. The application of the laws of a foreign country does not include this country’s law on the conflict of laws.18 Contract 25.14 The conflict rules applied to contract is not a rigid one. In most cases, the governing law depends on the intention of the parties to be ascertained in each case on a consideration of the terms of the contract, the situation of the parties and generally on all of the surrounding facts. The freedom of contract is fully respected in relation to conflict of laws. The principle of party autonomy and the doctrine of closest connection are two major principles to be considered in determining the applicable law for a contract dispute. 25.15 It is a general principle adopted by almost all jurisdictions that the parties’ express choice of governing law will generally be respected by the court. For example, article 3 of the EU Convention on the Law Applicable to Contractual Obligations (Rome 1980) provides that “A contract shall be governed by the law chosen by the parties. The choice must be expressed and demonstrated with reasonable certainty by the terms of the contract or the circumstances of the case. By their choice the parties can select the law applicable to the whole or a part of the contract.” Similarly, under Chinese law, the parties to a contract are allowed to choose the applicable law to the foreign-related contracts, unless the law provides otherwise.19 The parties are also allowed to agree to leave the right of choosing the governing law to one party in the contract, and the court will respect the said party’s choice based on such clause. For example, in Zhejiang Textiles Import & Export Group Co., Ltd v Uniglory Marine Corporation (UGMC),20 the bill of lading provided that all disputes shall be governed by the law chosen by the carrier, that is UGMC, a Taiwan company. UGMC expressly chose the CMC and the Contract Law of the People’s Republic of China after disputes arose and thus the case was decided by applying the CMC and Contract Law. 25.16 It is a common practice in the shipping industry for the parties to agree on the applicable law by including a law and arbitration clause in a charterparty or a bill of lading.

17 Interpretation I, art 10. 18 Law of Application of Laws, arts 8 and 9. 19 General Principles of the Civil Law, art 145; CMC, art 269; Contract Law, art 126; Law of Application of Laws, art 41. 20 Shanghai High People’s Court (CA). This is a case published on the Gazette of Supreme People’s Court of People’s Republic of China.

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The standard charterparty forms, such as GENCON and NYPE, which are also broadly used by Chinese shipping practitioners, contain such clauses. The parties will generally accept the applicable law clause set out in these standard forms, usually being English law and US law.21 The governing law clause in the bills of lading is also important. Since the bills of lading are considered as evidence of contract between the shipper/consignee and the carrier, any claim for cargo damage will be made under the clauses and laws applied to the bills of lading. The Hague Rules, Hague-Visby Rules and Hamburg Rules are major international conventions governing disputes arising from carriage of goods by sea. China has not ratified any of them, but has its own set of rules regulating carriage of goods by sea contracts set out in chapter 4 of the CMC. The obligations and liabilities of carriers and shippers might be different under different rules and laws, and thus choice of law would have a substantial effect on the result of disputes arising from bills of lading. 25.17 If the parties expressly choose to apply Chinese law in the contract, Chinese courts will uphold the parties’ choice. Generally, Chinese courts will also uphold the parties’ choice and apply the foreign law provided in the contract to solve disputes if that foreign law can be sufficiently provided and proved. For example, in Jiangsu Oversea Group Corporation v Shanghai Fengtai Insurance Co., Ltd, the insurance policy clearly provided that the English Marine Insurance Act 1906 shall be applied and thus the court applied the said law to the dispute.22 In another case, Cheong Fu Li (Hong Kong) Company Limited v ATC Shipping Co. Ltd,23 in a dispute regarding the release of cargo without production of the original bill of lading, it was provided on the reverse side of the bill of lading that Japanese law was the governing law. The bill of lading was also issued in Japan. The defendant argued that Chinese law should apply given that the claimant did not provide the court with the relevant Japanese law. The court rejected this argument and held that Japanese law should apply since it was so provided on the back of the bill of lading and Japanese law could also be ascertained. 25.18 In addition, under the Chinese legal system, the laws of the Hong Kong Special Administrative Region and Macau Special Administration are also treated as foreign laws.24 25.19 Further, there is no requirement that the parties’ choice must be made by a written agreement. The parties are also allowed to change the governing law agreed in the contract by an oral agreement, even after the commencement of legal proceedings. Article 8 of the Interpretation I provides that where the parties concerned agree on the selection or change of selection of the applicable laws before the end of the debate at the court of the first instance, the courts shall give their approval to such selection or change of selection. For example, in Oriental Scientific Instrument Import & Export Co. Ltd v Zim Israel Navigation Co. Ltd,25 the bill of lading provided that Israel law shall apply to relevant disputes.

21 For example, in clause 19 of GENCON 1994 and clause 45 of NYPE 1993, the parties are allowed to choose English law or US law and the governing law of the disputes arising under the charterparty. 22 Shanghai Maritime Court. This is a case published on the Gazette of Supreme People’s Court of People’s Republic of China. 23 (2013) Yong Hai Fa Shang Chu Zi No. 636 (Ningbo Maritime Court). 24 Due to its special history and political reasons, the Hong Kong Special Administrative Region of People’s Republic of China and Macau Special Administrative Region of People’s Republic of China retains its own legal system although they are a part of China. Article 19 of Interpretation I provides that the issue of application of laws involving civil relations in Hong Kong and Macau shall also apply the Law of Application of Laws. 25 (2000) Yong Hai Fa Shang Chu Zi No. 218 (Ningbo Maritime Court).

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However, the parties all agreed to apply Chinese law for trial. The court accordingly held that the parties had reached a new agreement to change the governing law of the bill of lading and thus Chinese law should apply. 25.20 However, in practice, some Chinese courts have refused to recognise the governing law clause in the contract, especially those printed on the standard form bills of lading without parties’ negotiation. Some courts consider that such clause does not represent the parties’ true intention and thus cannot be considered as the parties’ agreement. In Mikilines Co. Ltd v Hong Kong Rich Star Shipping Forwarding Co. Ltd,26 the bill of lading provided that Japanese law should apply. However, the Ningbo Maritime Court held that the relevant bill of lading was a standard form and the defendant carrier who issued the bill of lading cannot prove that he had drawn the claimant shipper’s attention to the governing law clause set out on the reverse side of the standard form bill of lading, thus the parties had reached no agreement on the application of Japanese law. Finally, the court held that Chinese law should be the governing law based on the doctrine of closest connection. It seems that, in practice, courts will place the burden of proof on the party who issued the standard form bills of lading and require them to prove that other parties had agreed to be bound by the governing law clause contained in the standard form. 25.21 Some courts are also reluctant to uphold such a governing law clause printed on the standard bill of lading when the parties challenging the governing law clause are not the shipper, but the consignee of the bills of lading or the insurer. In Gothaer Allgemeine Versicherung AG v SK Shipping Co., Ltd, Sunrise Shipping S.A., Shanghai Huagang International Shipping Agency Co., Ltd, P&F Marine Co., Ltd,27 a cargo damage dispute, it was provided on the back of the standard form bill of lading that the 1936 Carriage of Goods by Sea Act of United States should apply. The claimant cargo insurer argued that since the cargo owner as the consignee had no knowledge of the governing law clause at the time of the bill of lading issued, the governing law clauses did not show the parties’ true intention and thus could not be applied. The first instance court, the Shanghai Maritime Court, accepted this argument and held that the relevant parties did not reach an agreement on the application of the 1936 Carriage of Goods by Sea and finally Chinese law was applied to this dispute. This decision was upheld by the Shanghai High People’s Court on appeal. 25.22 In addition, if the governing law clauses on the front and reverse side of the bill of lading are inconsistent, the courts may refuse to admit that the parties had chosen the governing law. In Anhui Light Industries International Co., Ltd. v Shanghai Chuangjian International Freight Forwarding Co., Ltd.,28 it was marked on the front of the bill of lading that the law of United State should apply, while a clause on the reverse side said that Chinese law was the governing law. The Shanghai Maritime Court held that, due to the inconsistency, the parties reached no agreement on the applicable law and Chinese law was the proper law as the law of closest connection with the disputes. 25.23 Under Chinese law, there is no restriction that the law chosen by the parties must have a real connection with the parties or the subject matter of the contract.29 26 (2013) Yong Hai Fa Shang Chu Zi No. 404 (Ningbo Maritime Court). 27 Gothaer Allgemeine Versicherung AG v SK Shipping Co., Ltd, Sunrise Shipping S.A., Shanghai Huagang International Shipping Agency Co., Ltd, P&F Marine Co., Ltd (2011) Hu Gao Min Si (Hai) Zhong Zi No. 184 (Shanghai High People’s Court, CA). 28 (2011) Hu Hai Fa Shang Chu Zi No. 1255 (Shanghai Maritime Court). 29 Interpretation I, art 7.

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25.24 In the absence of the parties’ express choice on the governing law, the law of the country having the closest connection with the dispute shall apply.30 Article 4 of Rome Convention provides that in a contract for carriage of goods, if the country in which, at the time the contract is concluded, the carrier has his principal place of business is also the country in which the place of loading or the place of discharge or the principal place of business of the consignor is situated, it shall be presumed that the contract is most closely connected with that country. Unlike the Rome Convention, there is no definition of “closest connection” in Chinese law regarding the contract of carriage of goods by sea. In this respect, the courts have discretion to decide which law has the closest connection to the contract for carriage of goods by sea. 25.25 The factors that might need to be taken into consideration when determining the law of closest connection include the nature of the contract, the place of loading and discharging, the place where the contract is concluded or performed, the place where the bill of lading is issued, the domicile of the parties, etc,31 while the decisive factors may vary from case to case. 25.26 In addition, it seems that the nature of releasing cargo without the presentation of bill of lading is classified as a contractual dispute in practice (although there still exist some different opinions that argue that it is a tortious action) and thus the governing law set out in the bill of lading shall also apply to disputes in relation to releasing cargo without presentation of bill of lading. In American President Lines v Guangzhou Feida Electrical Apparatus Factory,32 a case reheard by the Supreme People’s Court in relation to a dispute of releasing cargo without presentation of bill of lading, the Supreme People’s Court overturned the decision of the Guangdong High People’s Court that the law of the place where the tort occurred, i.e. Chinese law should apply and held that, since the bill of lading provided that the US Carriage of Goods by Sea Act was the governing law, the same should apply to disputes arising from the bill of lading, including the release of cargo without production of the bill of lading. Ownership and mortgage 25.27 Under Chinese law, the acquisition, transference or extinction of the ownership of a ship shall be registered at the ship registration authorities and no acquisition, transference or extinction of the ship’s ownership shall bind against a third party unless registered.33 It is also a common practice that the ship mortgage is registered together with the ownership in the same country. Currently, in most countries of the world, the law of the flag State would apply to any ownership or mortgage dispute of a vessel, including China. Articles 270 and 271 of the CMC provides that the law of the flag State of the ship shall apply to the

30 General Principles of the Civil Law, art 145; CMC, art 269; Contract Law, art 126; and Law of Application of Laws, art 41. 31 See Translink Shipping v Wuxi Yifeng Clothing Co., Ltd. (2013) Hu Hi Fa Shang Chu Zi No. 1721 (Shanghai Maritime Court); Hongxin Investment (HK) Co., Ltd v Henan Tianyu Transportation Co. Ltd, Zhengzhou Kunkai Trading Co., Ltd, Ma Yinming, Ma Dongfeng, Wang Changchang (2014) Xia Hai Fa Shang Chu Zi No. 44 (Xiamen Maritime Court). 32 Supreme People’s Court, 25 June 2002. This is a case published on the Gazette of Supreme People’s Court of People’s Republic of China. 33 CMC, art 9.

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acquisition, transfer, extinction and mortgage of the ship. Article 271 also provides that the law of the original country of registry of a ship shall apply to the mortgage of the ship if its mortgage is established before or during its bareboat charter period. However, disputes might arise if the ship, as occasionally happens, is double registered in two jurisdictions. For example, in a ship mortgage dispute, Leqing Branch of Agricultural Bank of China v Hong Kong Samwo International Shipping Co., Ltd,34 the ship was first registered in China and then sold to a Hong Kong company that registered the ship again in Hong Kong. The defendant Hong Kong company argued that Hong Kong law should apply to the ship mortgage dispute. However, Ningbo Maritime Court held that since the ship was first registered in China and this registration was not cancelled when it was later registered in Hong Kong again, PRC law should apply to the mortgage dispute. Maritime lien 25.28 Maritime lien refers only to a selected group of maritime claims, and is set out in article 22 of the CMC. Since the scope of maritime lien and their ranking differ from country to country, the governing law for disputes in relation to maritime lien is of crucial importance given that this would have a decisive effect on whether a specific item can be compensated prior to other claims. This is actually an issue of whether the court of one jurisdiction will recognise a foreign maritime lien. Under English law, maritime lien is generally categorised as a procedural remedy rather than a substantive right and thus the law of forum would apply. This is a principle set out in the English case The Halcyon Isle,35 where Lord Diplock held that maritime liens involve rights that are procedural or remedial only, and accordingly the question of whether a particular class of claim gives rise to a maritime lien or not is one to be determined by English law as the lex fori. In contrast, some other jurisdictions characterise the maritime lien as a substantive right for conflict of law purpose and thus a foreign law might apply if the connecting factors lead the disputes to another jurisdiction. 25.29 The position of Chinese law is same as that of English law in this respect, where the law of forum shall apply to disputes pertaining to maritime lien.36 25.30 The rationale behind this clause is easy to discern. Considering the fact that maritime lien is not extinguished by virtue of the transfer of ownership and the flag State of the target vessel might change after the maritime lien arises, applying the law of the flag State might cause some difficulties in practice. In addition, more than one foreign maritime lien might exist in the same dispute and thus applying different foreign laws might lead to some disorder in ranking. In light of the above, the CMC provides that the law of forum shall apply.37 Further, maritime lien is closely related to the arrest of the vessel in practice. Vessel arrest is apparently a procedural matter and the law of forum applies and thus it might be 34 Leqing Branch of Agricultural Bank of China v Dongfang Shipbuilding Group Co., Ltd, Zhejiang Shengang Shipping Co., Ltd, Dongfang Shipbuilding Co., Ltd, Hong Kong Samwo International Shipping Co., Ltd (2012) Yong Hai Fa Wen Shang Chu Zi No. 30 (Ningbo Maritime Court). 35 Bankers Trust International Limited v Todd Shipyards Corporation (The “Halcyon Isle”) [1980] 2 Lloyd’s Rep 325. 36 CMC, art 272. 37 Wang Guohua, Private International Maritime Law (Conflict of Laws) (1st edn, Peking University Press 2009) 73.

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a better choice to apply the same laws for the following claims pertaining to the maritime lien in order to avoid unnecessary inconvenience.38 Collision 25.31 Ship collision is a special kind of tort action. Generally, the law of the place where the tortious act is committed would apply to the disputes.39 However, since the ships sometimes collide on the high seas where no governing law can be applied, the general principle of tort action is difficult to apply. Further, due to the fact that the collided ships sometimes fly different flags, it is also impractical to apply the law of the flag State under such circumstances. Thus the governing law of ship collision disputes is a relatively complex issue. 25.32 Since ship collision is a special kind of tort action, the conflict rules of tort disputes sometimes apply to collision when it happens within the territorial water of one jurisdiction. For example, article 4 of 1977 International Convention for the Unification of Certain Rules Concerning Civil Jurisdiction, Choice of Laws and Recognition and Enforcement of Judgment in Matters of Collision provides that when the collision happened within the water of one jurisdiction, the law of the same country shall apply unless the parties agree otherwise. It also provides that if the collision happens on the high seas where no country has jurisdiction over the area, the law of the forum will generally apply. 25.33 Chinese law also follows the principles mentioned in the above convention. Article 273 of CMC provides that the law of the place where the infringing act is committed shall apply to claims for damages arising from collision of ships; the law of the place where the court hearing the case is located shall apply to claims for damages arising from collision of ships on the high seas; if the colliding ships fly the same flag, the law of the flag State shall apply to claims against one another for damages arising from such collision no matter where the collision occurs. 25.34 For ship collision disputes, Chinese law would apply in most circumstances if the case is heard by a Chinese court. The reason is that even if the foreign law is the appropriate governing law in accordance with article 273 of the CMC, Chinese law might still apply if the foreign law cannot be ascertained. In Trade Quicker Inc v Golden Light Overseas Management S.A.,40 a ship collision dispute, the two ships involved were registered in Panama and thus the law of Panama should apply in accordance with CMC. The court required the parties to provide the law of Panama. The parties failed to do so, and the court was also unable to find out the law of Panama itself. Accordingly, the law of forum, i.e. Chinese law, finally applied to the dispute. 25.35 The major disputes of a large amount of collision cases are for the determination of the proportion of the respective fault of the two colliding ships. For the purpose of determining liability of the parties, the 1972 Convention on the International Regulations for Prevention Collisions at Sea (the “1972 Prevention Collision Convention”) would apply since China is a contracting State of this convention. The 1972 Prevention Collision Convention sets out, inter alia, detailed navigation rules that need to be applied for the purpose

38 Si Yuzhuo, Maritime Law Monograph (2nd edn, Remin University of China Press 2010) 429. 39 Law of Application of Laws, art 44. 40 Trade Quicker Inc. v Golden Light Overseas Management S.A., 1992 (Tianjin Maritime Court).

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of determining the liability of the colliding ships. Thus, in most collision cases, the 1972 Prevention Collision Convention is applied together with the CMC to the disputes. Salvage 25.36 The conflict rules applied to salvage might be affected by the nature of the salvage service. There are mainly two types of salvage services. Pure salvage is the salvage conducted by the salvor as a volunteer when the vessel is in danger. There is no contract involved in this action and the salvor can claim for award if the salvage succeeds. Another type of salvage service is the contract service. For most contract salvage, the salvage is also conducted based on the principle of “no cure no pay”. The CMC follows the principle of “no cure no pay” and sets out in article 179 that if the salvage operations had a useful result, the salvor shall be entitled to a reward except as otherwise mentioned in the contract or the special compensation mentioned in article 182 of the CMC. However, under the CMC, there is no clause expressly mentioning which law shall apply to the salvage service if there is a foreign element involved in the salvage action. 25.37 For contract salvage, the general principle for contract disputes shall apply since there is no special rule in the CMC regarding the salvage service. Thus the law chosen by the parties in the salvage contract shall apply even if the salvage was carried out in the territorial waters of another jurisdiction. If the parties make no express choice in the contract, the law of the jurisdiction that has the closest connection to the salvage service would apply. In addition, it is important to notice that China is a contracting party to the 1989 International Convention on Salvage thus the same would apply to all disputes to be heard by the Chinese court or arbitral tribunal in China.41 The content of the CMC in relation to salvage (chapter 9) is similar to that of the 1989 International Convention on Salvage on many issues. For example, the elements need to be taken into consideration when fixing the reward to salvage operations are almost the same in the CMC as with the Convention. In a dispute relating to the salvage award, PRC Shantou Marine Safety Administration v Hsin Ying Shipping Co., Ltd, Ever Success (HK) Shipping Company Limited,42 the defendants were foreign companies and thus it was a foreign-related dispute. The defendants applied the CMC in the trial, while the claimant argued that the 1989 International Convention on Salvage shall be applied prior to the application of the CMC. The Court held that since the content of the relevant clauses in the 1989 International Salvage Convention applied by the claimant were the same as the provisions of the CMC, it shall be deemed that the parties had reached an agreement on the application of the CMC in trial. 25.38 However, where the salvage operation is pure salvage with no contract involved, the rules of the conflict of laws are relatively complex. The law of the flag State, the law of the place where the salvage service conducted, or the law of the forum might be relevant. Different jurisdictions hold different opinions on this issue. Under Chinese law, where the parties reach no agreement on the applicable law, it seems that the law of the flag State shall apply if the vessels involved in the dispute both fly the same flag. If, in contrast, the flag States are different and the salvage is operated within the territorial water of one jurisdiction, the

41 1989 International Convention on Salvage, art 2. 42 (2007) Guang Hai Fa Chu Zi No. 352 (Guangzhou Maritime Court).

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law of that jurisdiction shall apply. If the salvage service is conducted on the high seas, the law of the forum shall apply.43 General average 25.39 Article 274 of the CMC provides that the law of the place where the adjustment of general average is made shall apply to the adjustment of general average. Chapter 10 of the CMC sets out the adjustment rules of general average. Nevertheless, since most of the charterparties and bills of lading include a general average clause, which provides that the adjustment shall be made in accordance with the York-Antwerp Rules, the Rules shall be applied instead of the CMC even if the adjustment is made in China.44 It shall be noted that York-Antwerp Rules, which are the most commonly used rules for general average adjustment, are not an international convention compulsorily applied to the jurisdictions that have ratified it. Instead, it will only apply based on parties’ choice. 25.40 Apart from the adjustment of general average, disputes in relation to general average also include other issues such as the nature of the claim, the contribution of general average and general average security, etc. It seems that although article 274 of the CMC provides that the law of the place where adjustment is made shall apply to the “adjustment of general average”, this “adjustment of general average” shall be broadly interpreted to cover other issues.45 For example, in Hainan Hualian Shipping Co., Ltd v Guangxi International Coorperation Trading Company and PICC Guangxi Brach,46 the main engine of MV QINHAI108 completely broke down and thus the owner hired a tug to tow the vessel to the discharge port. The owner claimed that the cost of the tug was a general average loss and the defendant as the cargo owner should contribute for the loss. The defendants, however, argued that the vessel was unseaworthy, thus they were not obliged to contribute. Although the main issue of this case was whether the shipowner was entitled to claim the general average contribution instead of the adjustment of general average, the court also clearly mentioned in the judgment that the law of the place where adjustment was made, i.e. Chinese law, should apply to the current case in accordance with article 274 of the CMC. 25.41 However, when the adjustment is made in a foreign country other than the place of forum, issues such as contribution of general average might not be decided by the law of the place of adjustment.47 Under such circumstances, it seems that, if the parties cannot reach an agreement on the governing law, the law of closest connection, such as the law of the flag State or the law of forum will apply.48

43 Wang Guohua, Private International Maritime Law (Conflict of Laws) (1st edn, Peking University Press 2009) 131. 44 Article 203 of CMC provides that “The adjustment of general average shall be governed by the average adjustment rules agreed upon in the relevant contract. In the absence of such an agreement in the contract, the relevant provisions contained in this Chapter shall apply”. 45 Si Yuzhuo, Maritime Law Monograph (2nd edn, Remin University of China Press 2010) 431. 46 (2000) Hai Shang Chu Zi No. 54 (Beihai Maritime Court). 47 Si Yuzhuo, Maritime Law Monograph (2nd edn, Remin University of China Press 2010) 431. 48 Wang Guohua, Private International Maritime Law (Conflict of Laws) (1st edn, Peking University Press 2009) 145.

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Limitation of liability for maritime claims 25.42 Generally, matters concerning limitation of liability and the establishment of a limitation fund are characterised as a procedural issue in nature and thus the law of forum and the law of the place where the fund was established would apply according to the conflict rules. This principle is followed by most of the important international conventions concerning the limitation of liability for maritime claims, including the 1957 International Convention Relating to the Limitation of Liability of Owners of Sea-Going Ship (the “1957 Convention”) and the 1976 Convention on Limitation of Liability for Maritime Claims (the “LLMC”). According to the 1957 Convention, the question upon whom lies the burden of proving whether or not the occurrence giving rise to the claim resulted from the actual fault or privity of the owner shall be determined by the law of the forum;49 the rules relating to the constitution and distribution of the limitation fund and all rules of procedure shall be governed by the national law of the State in which the fund is constituted;50 questions of procedure relating to the actions and also the time limit for these actions shall be decided in accordance with the national law of the contracting State in which the action takes place.51 The LLMC applies a similar set of rules, which provide that the procedural questions shall be decided in accordance with the national law of the contracting State in which the action is brought while the rule relating to the constitution and distribution of a limitation fund and all rules of relevant procedures shall be governed by the law of the contracting State in which the fund is constituted.52 25.43 However, China is not a contracting State to the above conventions. The rule applied by Chinese court is set out in article 275 of the CMC, which provides that the law of the place where the court hearing the case is located shall apply to the limitation of liability for maritime claims. The CMC is silent on the conflict rules applied to the constitution and distribution of the limitation fund. In practice, it seems that article 275 is construed broadly to cover the constitution and distribution of the limitation fund and thus would have the same application to these issues. In a case of the constitution of a limitation fund, the claimant applied to the Xiamen Maritime Court to set up a limitation fund, while the application was challenged by the defendants. Since one vessel involved in the disputes was flying a foreign flag, the disputes was characterised as a foreign-related dispute and the conflict of law issue arose. The court in this case directly applied article 275 of the CMC and held that the law of forum, i.e. Chinese law, should apply to disputes in relation to the constitution of a limitation fund.53 25.44 China is a contracting State to the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea and its 1976 Protocol.54 That said, in relation to the limitation of liability arising from carriage of passenger and their luggage by sea, the Athens Convention shall apply first.

49 1957 Convention, art 1(6). 50 1957 Convention, art 4. 51 1957 Convention, art 5(5). 52 LMCC, art 10 rule 3 and art 14. 53 Fujian Shipping Company’s Application on Constitution of Limitation Fund, (2007) Xia Hai Fa Xian Zi No. 3 (Xiamen Maritime Court). 54 The Athens Convention and its Protocol started to apply to China from 30 August 1994.

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Jurisdiction of Chinese court in foreign-related disputes 25.45 It is, of course, the claimant who decides where to begin legal proceedings and a Chinese claimant would usually choose a Chinese court to sue the defendant, even if the defendant is a foreign company that does not have domicile in China. Such a choice might be affected by a series of factors, such as the low costs, its convenience or a simple wish of “playing on one’s home turf”. The choice of forum might also have a crucial effect on the application of the governing law since the courts of different countries apply their own sets of conflict rules and this might in the end result in different outcomes for cases. 25.46 Similar as the choice of law issue, the clauses in relation to maritime jurisdiction contained in the international conventions to which China is a contracting State shall be applied first. For example, the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea 1972 provides that only four kinds of courts are competent jurisdictions for actions arising under the said convention, including the court of the place of permanent residence or principle place of business of the defendant, the court of the place of the departure or the destination according to the contract of carriage, the court of the State of the domicile or permanent residence of the claimant if the defendant has a place of business and is subject to jurisdiction in that State, or a court of the State where the contract of carriage was made if the defendant has a place of business and is subject to the jurisdiction in that State.55 25.47 Where there is no international convention involved, the rules in relation to the jurisdiction of Chinese courts under Chinese law shall be applied in foreign-related disputes. In the case of an action concerning a contractual dispute or other disputes over property rights brought against a defendant who has no domicile within China, if the contract is concluded or performed within China, or the subject matter of the action is located within China, or the defendant has distrainable property within China, or the defendant has its representative office within China, the court of the place where the contract is concluded or performed, or where the subject matter of the action is, or where the defendant’s distrainable property is located, or where the torts are done, or where the defendant’s representative office is located shall have jurisdiction over the case.56 It seems that Chinese law requires a real connection between the defendant and the chosen forum, i.e. the Chinese court when the foreign defendant has no domicile in China according to the aforementioned clause. However, as mentioned in the previous chapter on jurisdiction, article 8 of the Special Maritime Procedure Law of People’s Republic of China (the “SMPL”) also provides that where all the parties to a maritime dispute are aliens, stateless persons, foreign enterprises or organisations and have agreed in writing to be subject to the jurisdiction of a maritime court of China, notwithstanding that the place that is actually related to the dispute is not within the territory of China, the said maritime court shall have jurisdiction of the dispute. 25.48 For certain kinds of foreign-related disputes, the Chinese courts have exclusive jurisdiction that cannot be contracted out by parties’ agreement. These include disputes arising from the performance of contract for Chinese-foreign equity joint ventures, or

55 Athens Convention relating to the Carriage of Passengers and their Luggage by Sea 1972, art 17. 56 CPL, art 265.

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Chinese-foreign contractual joint ventures, or Chinese-foreign cooperative exploration and development of the natural resources in the China.57 In addition, the exclusive jurisdiction set out in article 33 of the Civil Procedure Law of PRC (the “CPL”) and article 7 of SMPL also cannot be contracted out by the parties. 25.49 In addition, Chinese courts may also acquire jurisdiction even if the contract provides that relevant disputes shall be submitted to the court or arbitration in another jurisdiction. Such are not uncommon in maritime disputes, especially those disputes arising from contracts of carriage of goods by sea. 25.50 The standard charterparties generally contain an arbitration clause that provides that any disputes arising from the charterparty shall be submitted to arbitration in London or in New York at the parties’ choice. Although some bills of lading themselves do not contain such arbitration clauses, it is usually marked that the provisions of the relevant charterparty shall be incorporated into the bills of lading and thus the disputes shall be solved by arbitration too. Generally, the parties would follow such clause since it is the express choice agreed between them in the contract. However, when the discharge port is in China and, especially in cargo damage cases, the disputes arise under the bill of lading, the claimant cargo receivers or insurers might commence proceeding in a Chinese court even if the carrier argues that there is an arbitration clause under the relevant bill of lading. 25.51 Here arises an issue about whether Chinese courts would recognise the validity of the arbitration clause in the bill of lading, and in most circumstances the actual question is whether the arbitration clause of the charterparty can be incorporated into the bill of lading. 25.52 In respect of this issue, the CMC provides that if the clauses of a voyage charter are incorporated into a bill of lading, the charterparty clauses shall govern the relationship between the carrier and bill of lading holder.58 However it does not mention under what circumstances a clause in the charterparty can be successfully incorporated into the bill of lading. Further, according to the CMC, it appears that only the clauses of voyage charter are allowed to be incorporated into a bill of lading. There is no such provision in the chapter on time charterparty in the CMC. 25.53 Apart from the CMC, the issue of validity of an arbitration clause incorporated into the bill of lading has been provided in the Explanations concerning Relevant Issues of Foreign Related Commercial and Maritime Trial Practice published by the Fourth Civil Court of the SPC (the “Explanation”).59 According to article 98 of the Explanation, after the clauses of the charterparty have been incorporated into the bill of lading, the relation between the carrier and the holder of the bill of lading shall be governed by the bill of lading, instead of the charterparty; further, unless the incorporation clause expressly provides that the arbitration clause, jurisdiction clause and applicable law clause shall be incorporated into the bill of lading, those clauses in the charterparty shall not bind the holder of the bill of lading. 25.54 In practice, it seems that Chinese courts are very reluctant to recognise such incorporations of an arbitration clause. First, the words of incorporation of an arbitration clause

57 CPL, art 266. 58 CMC, art 95. 59 The Fourth Civil Court of Supreme People’s Court is especially in charge of supervising and guiding the foreign related commercial and maritime trial in the country. The court published several Guidance and Explanation on the issues related to the practice of commercial and maritime trial.

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must be marked on the front page of the bill of lading.60 Second, the date of charterparty and the name of the parties shall also be expressly mentioned on the front page of the bill of lading.61 Even so, the Chinese courts may refuse to recognise the validity of the arbitration clause such as where the holder of the bill of lading (such as the consignee and insurer) does not participate in the negotiation of the arbitration agreement and thus the clause does not bind them.62 25.55 It seems that, in practice, the Chinese court will hold that it has jurisdiction even if the bill of lading contains or is incorporated into an arbitration clause. It is usually difficult to challenge the jurisdiction of the Chinese court once the Chinese cargo receiver has submitted the case to the court. There might be a policy reason for Chinese courts not to give up the jurisdiction in relation to bills of lading. 25.56 Under such circumstance, the carrier might try to obtain an anti-suit injunction from an applicable foreign court. However, any anti-suit injunction granted by the foreign court would not be recognised by the Chinese courts. An anti-suit injunction would only have a limited use in China if the bill of lading holder does not have any assets in such applicable foreign country or if the company’s directors have no association with the relevant foreign country.

60 Chongqing Xinpei Food Co. Ltd v Strength Shipping Corporation, Liberia [2006] Min Si Ta Zi No. 26, (Supreme People’s Court). 61 China Pacific Property Insurance Co. Ltd Shanghai Branch v Sunglide Maritime Ltd., Ocean Freighters Ltd. and the United Kingdom Mutual Steam Ship Assurance Association [2008] Min Si Ta Zi No. 50 (Supreme People’s Court). 62 PICC Xiamen Branch v Chinese Polish Joint Stock Shipping Company [2004] Min Si Ta Zi No. 43 (Supreme People’s Court); Beijing Ellison Import Export Co. Ltd v Solar Shipping Angtrading S.A. and Songa Shipholding Pte Limited [2007] Min Si Ta Zi No. 14 (Supreme People’s Court).

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CHAPTER 26

Maritime arbitration, conciliation and recognition and enforcement of foreign arbitration awards and foreign judgments

Introduction 26.1 Maritime arbitration has a long history, which has developed in step with worldwide maritime trade. A large number of maritime disputes are referred to arbitration in London, of which a notable amount is administrated under the terms of the London Maritime Arbitrators Association. London, as one of world’s largest maritime disputes resolution centres, is a preferred choice for the seat of arbitration and is usually used as a standard choice in the major standard forms of charterparties and bills of lading. 26.2 With the development of the shipping industry in China, increasing numbers of Chinese shipping companies began to be involved in maritime disputes. Occasionally these companies will choose to conduct arbitration in China in order to avoid the high legal costs for arbitration in foreign countries such as England. 26.3 The main maritime arbitration institution, the China Maritime Arbitration Commission (the “CMAC”), was established in China in 1958. The CMAC focuses on the resolution of contractual and non-contractual maritime disputes arising from, or in the process of, transportation, production and navigation by or at sea, in coastal waters and other navigable waters adjacent to sea, by arbitration. 26.4 There is now no restriction that maritime disputes can only be referred to the CMAC for arbitration. Thus other major arbitration commissions in China can also handle maritime arbitrations. 26.5 Conciliation (mediation) is another dispute resolution method available for solving maritime disputes. Same as with other civil disputes, the court can conduct conciliation between the parties at trial upon the agreement of the parties.1 The arbitral tribunals are also allowed to arrange conciliation during the arbitration.2 In addition, there is a special kind of mediation procedure for certain maritime accidents, known as the maritime administrative mediation. This kind of mediation is conducted by a competent authority of the government. 26.6 This chapter will also discuss the recognition and enforcement of foreign court judgments and arbitration awards in China. Generally speaking, it is easier to recognise and enforce a foreign arbitration award than a court judgment in China, since China is a contracting State to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Award (the “New York Convention”). The recognition and enforcement of

1 Chapter 8 of the CPL. 2 Arbitration Law, art 51. Some of the arbitration rules also set out certain requirements for conciliation during arbitration, for example, arbitration 52 of the Arbitration Rules of CMAC.

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a foreign court judgment is mainly made based on bilateral treaties entered into between China and other countries. Review of the Arbitration Law of People’s Republic of China (the “Arbitration Law”) Types of arbitration 26.7 Unlike in many other countries, there is no concept of an ad hoc arbitration in China. The only type of arbitration available in China is an institutional arbitration. Thus, article 16 of the Arbitration Law requires that a valid arbitration agreement must choose a valid arbitration commission. The Arbitration Law and its judicial interpretation 26.8 The Arbitration Law is the major legislation regulating arbitration in China. The Arbitration Law was promulgated on 31 August 1994 and was later revised in 2009. The Arbitration Law provides detailed rules in relation to the arbitration institution, the arbitration agreement, the arbitration procedure, the setting aside of an arbitral award, and the enforcement of an arbitration award. The Arbitration Law also contains a special chapter that provides for the relevant rules of foreign-related arbitration. 26.9 All contractual disputes and other disputes over rights and interests in property between citizens, legal persons and other organisations can be referred to arbitration in China and such arbitrations are regulated by the Arbitration Law. Maritime arbitrations are generally regulated by the Arbitration Law, the Maritime Code of People’s Republic of China (the “CMC”) and the Special Maritime Procedure Law (the “SMPL”) together with the arbitration rules of the arbitration institutions. 26.10 Another major legislation that regulates arbitration in China is the “Interpretation of the Supreme People’s Court on Certain Issues Concerning the Application of the Arbitration Law of the People’s Republic of China” (the “Interpretation of Arbitration Law”). This judicial interpretation was promulgated by the Supreme People’s Court (the “SPC”) on 23 August 2006 and came into effect on 8 September 2006, providing interpretations for certain unclear issues in the Arbitration Law. Valid arbitration agreement 26.11 Maritime arbitration agreements can generally be divided into two types, namely arbitration clauses and the separate arbitration agreements.3 26.12 Article 16 of the Arbitration Law sets out the rule for a valid arbitration agreement, which will also apply to a maritime arbitration: an arbitration agreement shall contain three elements, including an expression of intention to apply for arbitration, the matters for arbitration and a designated arbitration commission.

3 See art 16 of the Arbitration Law, which provides that an arbitration agreement shall include the arbitration clauses provided in the contract and any other written forms of agreement concluded before or after the disputes providing for submission to arbitration.

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26.13 Among the three requirements, the last one, i.e. an agreement for a designated arbitration commission, is sometimes omitted by some foreign-related arbitration agreements as there is generally no such requirement in other countries that allow for ad hoc arbitration. However, it should be noted that under certain circumstances an arbitration agreement can be considered valid even if there is no designated arbitration commission. For example, where parties have reached a supplementary agreement or an arbitration institution may be identified through the agreed arbitration rules in the agreement.4 In addition, if an arbitration agreement provides that arbitration shall be conducted by an arbitration institution at a certain place, and there is only one arbitration institution at that place, although the name of the arbitration institution is not identified, such arbitration institution can be deemed the agreed-upon arbitration institution.5 26.14 The Arbitration Law also provides that the establishment of an arbitration commission needs to be registered with the administrative department of justice of the relevant province. As a result, there was an issue of the validity of the arbitration agreement if the parties had agreed that the arbitration should be conducted in China but administered by a foreign arbitration institution not registered in China. However, this issue has now been considered by the SPC in a recent case, Anhui Longlide Packing and Printing Co., Ltd v BP Agnati S.R.L.6 In this case, the arbitration agreement provided that any disputes were to be submitted to arbitration by the International Chamber of Commerce (the “ICC”) and the place of arbitration was to be Shanghai. A dispute arose as to whether this arbitration agreement was a valid one. This case was reported to the SPC for their review and it was held that since the three elements of a valid arbitration agreement under article 16 of the Arbitration Law had been satisfied, the arbitration clause was valid. According to this response from the SPC, it seems that there is no longer a restriction for a foreign arbitration institution to conduct arbitrations in China and the validity of such arbitration agreements may be upheld. 26.15 Apart from the requirements set out in article 16 of the Arbitration Law, article 17 provides three circumstances where an arbitration agreement will be considered as an invalid one, including where the agreed matters for arbitration exceed the range of arbitrable matters as specified by law, where one party that concluded the arbitration agreement has no capacity for civil conduct or has limited capacity for civil conduct or where one party has coerced the other party into concluding the arbitration agreement. 26.16 That the parties to the arbitration agreement must be “qualified” refers to the requirement that parties who conclude the arbitration agreement must have capacity for civil acts. Thus an arbitration agreement concluded by persons without or with limited capacity for civil acts is invalid. To determine whether the person has capacity or not, different criteria are adopted according to whether the person is a natural person or a legal person. Under the conflict laws of China, the natural person’s civil capacity for concluding an arbitration agreement is determined according to the law of habitual residence. The legal person’s civil capacity for concluding an arbitration agreement is determined according to its domestic law, namely the law of its place of registration or the location of the headquarters of the legal person.7

4 Interpretation of the Arbitration Law, art 4. 5 Interpretation of the Arbitration Law, art 6. 6 (2013) Min Si Ta Zi No. 13 (SPC). 7 Law of the People’s Republic of China on Application of Laws to Foreign Related Civil Relations, art 12 and art 14.

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26.17 An arbitration agreement must be a true and voluntary declaration of intention of the parties to submit to arbitration. If one party adopts the use of fraud, duress or any other means to force the counter party against their true will to sign an arbitration agreement, such arbitration agreement is invalid. 26.18 In addition, the contents of the arbitration agreement must be legitimate. The scope of arbitrable matters is referred to in articles 2 and 3 of the Arbitration Law. Article 2 provides that disputes over contracts and disputes over property rights and interests between citizens, legal persons and other organisations as equal subjects of law may be submitted to arbitration. In contrast, article 3 sets out the disputes that cannot be submitted to arbitration, including (1) disputes over marriage, adoption, guardianship, child maintenance and inheritance; and (2) administrative disputes falling within the jurisdiction of the relevant administrative departments according to law. 26.19 Apart from the circumstances as set out in the Arbitration Law, the Interpretation of the Arbitration Law also provides several other circumstances where an arbitration agreement will be considered invalid. For example, where the parties agree on two arbitration commissions in the agreement or where the parties agree in the arbitration agreement that disputes may be resolved either through arbitration or by court, the arbitration agreement will be deemed invalid.8 26.20 There is also a form requirement of valid arbitration agreement, which is that the arbitration agreement must be made in written form.9 Such written forms may include an arbitration clause in a contract, or any other agreement on arbitration concluded in the form of letter or by electronic text.10 The New York Convention also has the same requirements11 and thus makes it not only important for the commencement of arbitration but also for the recognition and enforcement of the arbitration award. 26.21 As to foreign-related arbitration agreements, there is an “Inside Review Regime” on the validity of arbitration agreement in China, which requires a lower court that considers the arbitration agreement an invalid one to report the case for the higher court’s review. This is the Notice of the Supreme People’s Court Concerning Some Issues on Disposal of Foreign-related Arbitration and Foreign Arbitration12 (the “Notice”) published by the SPC in 1995, which provides that: As to all the foreign related, Hong Kong, Macau or Taiwan related commercial, maritime or admiralty disputes, in the event that the contract contains an arbitration clause or the parties reach an arbitration agreement after the disputes have arisen, and the People’s Court considers that an arbitration clause is invalid, ceases to be valid or cannot be performed due to uncertainty, it shall be reported to the High People’s Court for a review first; if the High People’s Court agrees with the lower courts, the High Court is then required to report to the Supreme People’s Court for its confirmation. Without the confirmation from the Supreme People’s Court, the court shall not exercise its jurisdiction.

26.22 The second section of the Notice also requires the lower courts to report their decisions for refusing to recognise and enforce arbitration award to the higher courts and

8 Interpretation of the Arbitration Law, art 5 and art 7. 9 Arbitration Law, art 16. 10 Interpretation of the Arbitration Law, art 1. 11 New York Convention, art II. 12 Fa Fa [1995] No. 18, published on 28th August 1995.

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the SPC. It appears that since China is a contracting State to the New York Convention, and the judicial decisions made by PRC court should strictly follow the requirements of the Convention, such decisions of refusal to recognise and enforce an award should only be reviewed and finally decided by the SPC based on this regime. This procedural requirement can effectively reduce the mistakes and inconsistencies of the decisions of lower courts regarding this issue, as well as protect the interests of the parties that have agreed on an arbitration clause. This also helps to ensure the due performance of the New York Convention in China. Arbitration proceedings 26.23 According to article 21 of the Arbitration Law, the parties applying for arbitration shall fulfil the following conditions. There must be an arbitration agreement 26.24 An arbitration agreement is the foundation of an arbitration and is the basis for the parties to authorise an arbitration institution to resolve the dispute. Only when there is an arbitration agreement between the parties, can an arbitration institution accept an arbitration case and can arbitrators hear the case. Article 4 of the Arbitration Law provides that the parties adopting arbitration for dispute settlement shall reach an arbitration agreement on a mutually voluntary basis and an arbitration commission shall not accept an application for arbitration submitted by one of the parties in the absence of an arbitration agreement. 26.25 At the same time, the arbitration agreement is the basis for excluding the jurisdiction of the courts.13 However, it shall be noted that if a party commences proceedings in court and the other party does not raise any objection about the jurisdiction of the court before the first hearing, it would operate as a waiver and the court would then have jurisdiction over disputes even if the parties had a valid arbitration agreement.14 There must be a specific claim with facts and argument on which the claim is based 26.26 When the parties apply for arbitration in accordance with the arbitration agreement, they must raise a specific claim with facts and arguments on which the claim is based. The “claim for arbitration” refers to the particular problems to be solved by arbitration and the purpose to be achieved when the claimant requests an arbitration commission for arbitration, namely the claimant’s substantive claims. The aforesaid facts and arguments refer to the underlying facts and corresponding argument on which the claimant applies for arbitration. The “facts” refer mainly to the facts on which the dispute arises, namely the objective factual situation, while the “argument” primarily refers to the related legal provisions. The arbitration must be within the jurisdiction of the arbitration commission 26.27 The arbitration matters agreed by the parties in the arbitration agreement must be within the arbitration matters permitted and allowed by the Arbitration Law and the rules of the relevant arbitration commission.

13 Arbitration Law, art 5. 14 Arbitration Law, art 26.

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26.28 Article 22 of the Arbitration Law also stipulates that the party applying for arbitration shall submit to an arbitration commission the arbitration agreement, an application for arbitration and copies of the respective documents. An arbitration application shall state clearly the basic information of the parties, the arbitration claim and the facts and reason on which it is based, and the evidence, the source of the evidence and the names and domiciles of witness.15 26.29 After the claimant applies for arbitration to the arbitration commission, it does not immediately signify the beginning of the arbitration proceedings. Only from the date after the applicant’s application for arbitration is reviewed by the arbitration commission, and the commission has accepted and issued a notice of arbitration, can the arbitration proceedings begin. Arbitrators and arbitration tribunal 26.30 The arbitrator is the host and the inquisitor of the arbitration case, and is the basic element in the composition of the arbitration institution. Foreign laws may have no strict conditions or limits to the qualifications of arbitrators. Because one of the inherent characteristics of arbitration is that the selection and appointment of arbitrators entirely depends on the will of the parties, so long as the parties agree, the law does not set a limit on the nationality, work or legal experience, and others factors of the arbitrators. Instead, parties may determine and authorise the qualifications of arbitrators, and the appointment of participants in various economic, trade and legal activities is not only allowed, but may be encouraged. 26.31 In contrast, the Arbitration Law in China makes very detailed provision about a prospective arbitrator’s qualifications. Article 13 of the Arbitration Law provides that the arbitrators must fulfil at least one of the following conditions: (1) have been engaged in arbitration work for at least eight years; (2) have worked as a lawyer for at least eight years; (3) have been a judge for at least eight years; (4) are engaged in legal research or legal teaching and in senior positions; or (5) have legal knowledge and are engaged in professional work relating to economics and trade, are in senior positions or of the equivalent professional level. 26.32 As to the formation of the arbitration institution, the Arbitration Law provides that the arbitration tribunal can be composed by one arbitrator or three arbitrators. Generally, this would depend on the agreement of parties. In addition, sole arbitrator tribunals are generally applied to expedited arbitration procedures in disputes over small amounts. The standard for the application of the expedited arbitration procedure is variously based on the arbitration rules of the different arbitration institutions. For example, the Arbitration Rules of CMAC provide that the expedited procedure would apply to any disputes where the amount in dispute does not exceed RMB 2,000,000.16 In contrast, the standard of the China International Economic and Trade Arbitration Commission is RMB 5,000,000.17 Hearings 26.33 Article 41 of the Arbitration Law provides that the arbitration commission shall notify the two parties of the date of the hearing within the time limit provided by the 15 Arbitration Law, art 23. 16 Arbitration Rules of CMAC, art 61. 17 Arbitration Rules of CIETAC, art 56.

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Arbitration Rules. Either party may request to postpone the hearing within the time limit provided by the Arbitration Rules if there is a genuine reason. The arbitral tribunal shall decide whether to postpone the hearing. According to the Arbitration Rules of CMAC, the notification shall be made no less than 20 days before the date of the hearing.18 A proper notification of the hearing is important for the enforcement of a foreign-related arbitration award as one of the possible reasons of refusing to recognise and enforce an arbitration award in the New York Convention is that the party against whom the award is invoked was not given proper notice of the arbitration proceedings.19 26.34 At the beginning of the hearing, generally two things should be done: first, the presiding arbitrator or the sole arbitrator should check the basic situation of the parties and their agents in the case and announce the cause of action; second, they should announce the list of persons in composition and persons on record to the arbitral tribunal, and inform the concerned parties of their rights and obligations, and ask whether the parties apply for withdrawal of the composition of the arbitral tribunal. 26.35 The parties shall submit evidence of the facts on which their claim, defence and counterclaims are based. The arbitral tribunal may undertake investigations and collect evidence on its own initiative, if it deems it necessary.20 The evidence shall be presented during the hearing and may be examined by the parties.21 26.36 For specialised matters, an arbitral tribunal may submit for appraisal to an appraisal organ agreed upon by the parties or to the appraisal organ appointed by the arbitral tribunal if it deems such appraisal to be necessary. According to the claim of the parties or the request of the arbitral tribunal, the appraisal organ shall appoint an appraiser to participate in the hearing. Upon permission of the arbitral tribunal, the parties may question the appraiser.22 26.37 Unlike in some other jurisdictions,23 the Arbitration Law does not entitle the arbitration tribunal to make an order to preserve evidence directly and even if the arbitration rules entitle the tribunal to grant certain emergency relief, such orders made by the tribunal may not be enforceable by the PRC court.24 The order of preservation of evidence can only be granted by the court in China. However, it is provided in article 46 of the Arbitration Law that where the evidence may be destroyed or lost or difficult to obtain at a later time, a party may apply for preservation of the evidence and the arbitration commission shall submit his application to the basic people’s court in the place where the evidence is located. Similarly, parties can also apply for property preservation if it may become impossible or difficult for the party to enforce the award and such application shall be submitted by the arbitration commission to the people’s court in accordance with the Civil Procedure Law of the 18 Arbitration Rules of CMAC, art 41. 19 New York Convention, art V s 1(b). 20 Arbitration Law, art 43. 21 Arbitration Law, art 44. 22 Arbitration Law, art 44. 23 For example, the Arbitration Ordinance of Hong Kong (Cap.609) provides that emergency relief granted by the emergency arbitrator in relation to preserve evidence that may be relevant and material to resolving the dispute is enforceable in the same manner as an order or direction of the court that has the same effect with the leave of the court. 24 For example, art 27 of the Arbitration Rules of CMAC provides that the emergency arbitrator may grant an emergency relief and such order has binding authority on the parties. However, there is no provisions in the PRC law provides that such order will be enforced by the court.

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People’s Republic of China (the “CPL”).25 For maritime arbitrations, the application may be submitted to the maritime court at the place where the evidence is located26 as discussed in the previous chapter in respect of maritime evidence preservation. 26.38 The parties are also allowed to apply for property preservation or preservation of maritime claim, for example, to arrest a vessel. The arbitration commission shall submit the application of the applicant to the maritime court of the place where the property is located, or the domicile of the defendant or other court that has jurisdiction, and if the party applies for property preservation or preservation of maritime claim before the beginning of arbitration proceedings, he shall make such application in accordance with the CPL or other regulations and file the application with the maritime court or any other court of the place where the property subjected to preservation is located27 as discussed in the previous chapter in respect of the maritime claims preservation. 26.39 The arbitration proceedings might be suspended under certain circumstances. The suspension of the arbitral proceedings is not stipulated in the Arbitration Law, but is reflected in the arbitration rules of the related arbitration commission. Generally, the situations that may cause a suspension of arbitration include where (1) the parties decide to settle disputes among themselves;28 (2) the dispute needs to be resolved based on the results of another case that has not yet been concluded; (3) one of the parties is unable to participate in the proceedings for justified reasons, etc. Enforcement and setting aside of domestic arbitration award 26.40 In arbitration proceedings, if parts of the facts involved have already become clear, the arbitration tribunal may first make an award in respect of such partial facts.29 According to article 55 of the Arbitration Rules of CMAC, such partial awards have binding authority on the parties and would have no impact on issuing the final arbitration award if such partial award is not performed by the parties. 26.41 An arbitration award should specify the arbitration claim, the facts of the dispute, the reasons for the decision, the results of the award, the allocation of arbitration fees and the date of the award. If the parties agree that they do not wish for the facts of the dispute and the reasons for the decision to be specified in the arbitration award, the same may be omitted. The arbitration award shall be signed by the arbitrators and sealed by the arbitration commission. An arbitrator with dissenting opinions as to the arbitration award may sign the award or choose not to sign it.30 26.42 An arbitration award starts to have binding authority from the date it is issued and the parties are not allowed to appeal such award. If a party refuses to perform an arbitration award, the other party may apply to the court to enforce the same. However, under 25 Arbitration Law, art 28. 26 Arbitration Rules of CMAC, art 23. 27 Arbitration Rules of CMAC, art 23. 28 According to art 49 of the Arbitration Law, if a settlement agreement has been reached, the parties may apply to the arbitral tribunal for an award based on the conciliation agreement, or may withdraw the arbitration application. However, it should be noted that if a party repudiates the settlement agreement after the application for arbitration has been withdrawn, he may apply for arbitration again in accordance with the original arbitration agreement. 29 Arbitration Law, art 55. 30 Arbitration Law, art 54.

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the following circumstances, the court may refuse to recognise and enforce a domestic arbitration award:31 (a) (b) (c) (d) (e) (f) (g)

the parties have had no arbitration clause in their contract, nor have they subsequently reached a written agreement on arbitration; the matters dealt with by the award fall outside the scope of the arbitration agreement or are matters that the arbitral institution has no power to arbitrate; the composition of the arbitration tribunal or the procedure for arbitration contradicts the procedure prescribed by the law; the evidence based on which the arbitration award is made was falsified; the other party concealed evidence from the arbitration institution that would have been sufficient to affect the impartiality of the arbitral award; the arbitrators have committed embezzlement, accepted bribes or committed malpractice for personal benefits or perverted the law in the arbitration of the case; or the enforcement of such arbitration award is against the public interest.

26.43 The reasons for refusing to enforce a domestic arbitration award are different from the reasons for refusing to enforce foreign arbitration awards, which is decided based on the New York Convention. If the court refuses to enforce a domestic arbitration award, the parties are allowed to apply for arbitration again or commence court proceedings to solve disputes. In addition, the parties can apply to the court to set aside the arbitration award based on the abovementioned reasons.32 The application for setting aside the arbitration award must be made within six months from the date of receipt of the arbitration award.33 After receiving the application for setting aside the arbitration award, the court may order the arbitral tribunal to re-arbitrate the case.34 Maritime arbitration and the CMAC The CMAC and the arbitration rules of CMAC 26.44 The major arbitration institution for maritime disputes is the China Maritime Arbitration Commission (the “CMAC”). The CMAC was founded by the China Chamber of International Commerce and includes the Shanghai Sub-Commission, Fishery Dispute Resolution Centre, Shanghai Maritime Conciliation Centre, Logistics Dispute Resolution Centre and a number of liaison offices. The head office of CMAC is in Beijing. It has also established a Hong Kong Arbitration Centre in 2014. 26.45 The CMAC will accept the following disputes upon the parties’ application:35 (a)

31 32 33 34 35

disputes arising from charterparties, contracts of multimodel transport, bills of lading, waybills or any other transport documents in connection with carriage of goods by sea or waters, or carriage of passengers;

CPL, art 237. See art 58 of the Arbitration Law; see also arts 17 to 22 of the Interpretation of the Arbitration Law. Arbitration Law, art 59. Arbitration Law, art 61. Arbitration Rules of CMAC, art 3.

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(b) (c) (d) (e) (f)

(g) (h)

disputes arising from the sale, construction, repair, chartering, financing, towage, collision, salvage or raising of ships or other offshore mobile units, or from the sale, construction, chartering, financing of containers; disputes arising from marine insurance, general average and ship’s protection and indemnity; disputes arising from the supply or security of ship’s stores or fuel, ship’s agency, seamen’s labour service or port handling; disputes arising from exploitation and utilisation of marine resources or pollution damage to marine environment; disputes arising from freight forwarding, non-vessel operating common carriage, transport by road, rail or air, transport, consolidation and devanning of containers, express delivery, storing, processing, distributing, warehouse distributing, logistics information management, or from construction, sale and leasing of tools of transport, tools of carrying and handling, storage facilities, or from logistics centres and distribution centres, logistics project planning and consulting, insurance related to logistics, tort or others related to logistics; disputes arising from fishery production or fishing; and other disputes submitted for arbitration by agreement between the parties.

26.46 However, there is no restriction that the arbitration in relation to the above dispute must be administrated by the CMAC if they are referred to arbitration. The parties are allowed to agree to submit maritime disputes to other arbitration institutions. 26.47 The current Arbitration Rules of CMAC were revised in 2014 and came into force on 1 January 2015. In the latest amendment, the new version of Arbitration Rules of the CMAC also adds an additional chapter that provides for special rules of arbitration in Hong Kong. 26.48 In order to follow the recent development of international maritime arbitration, the new version adds a few articles about the procedures to be taken when there are more than two parties or two arbitrations involved in the maritime disputes, such as joinder of additional parties, consolidation of arbitrations, etc. 26.49 According to article 18 of the Arbitration Rules of CMAC, the parties to the arbitration can apply to the arbitration commission to join an additional party to the existing arbitration provided that prima facie the additional party is bound by the arbitration agreement. However, this clause does not allow an additional party itself to apply to join the arbitration proceeding. Under such restrictions, an additional party might need to commence a separate arbitration if he wants to claim against the parties to the existing arbitration. In this regard, the arbitrations might be consolidated in order to save time and costs. 26.50 Upon the satisfaction of either of the following conditions set out in article 19 and upon the application of a party, the arbitration commission may consolidate two or more arbitrations into one: (a) (b)

all of the claims in the arbitration are made under the same arbitration agreement; the claims in the arbitration are made under multiple arbitration agreements that are identical or compatible and the arbitrations involve the same parties as well as legal relationships of the same nature; 339

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(c) (d)

the claims in the arbitrations are made under multiple arbitration agreements that are identical or compatible and the multiple contracts involved consist of the principal contract and the ancillary contracts; or all the parties to the arbitrations have agreed to consolidation.

26.51 There are some special provisions of the CMAC relating to the preservation for maritime claims,36 maritime injunction37 and the establishment of a limitation fund for a maritime claim.38 However, even where the application was made to the arbitration commission, such applications shall be submitted by the arbitration commission to the relevant courts that have jurisdiction and only the courts are entitled to make these orders. If the parties want to make such applications before the commencement of arbitration proceedings, the application should be made to the relevant court directly. 26.52 Chapter 5 of the Arbitration Rules of CMAC applies to those maritime arbitrations administered by the Hong Kong Arbitration Centre of CMAC. The place of arbitration is Hong Kong. It is important to note that the relevant arbitration law regulating such arbitration is the Hong Kong Arbitration Ordinance instead of the Arbitration Law, and such arbitration would be considered to be held in Hong Kong.39 A special issue for maritime arbitration – the validity of an arbitration clause in the bill of lading 26.53 As mentioned in the previous chapter on the conflict of laws, a valid arbitration agreement under the Arbitration Law of PRC needs to show the true intention of the parties to submit disputes to arbitration. Thus it is arguable whether an arbitration clause contained in a bill of lading will bind the consignee in such a bill of lading. In some other circumstances, the bill of lading itself does not contain an arbitration clause, but simply states that the clauses of the relevant charterparty will be incorporated into the bill of lading. Under a charterparty, the legal relationship between an owner and a charterer is governed by the charterparty while under a bill of lading the cargo receiver and the carrier’s legal relationship is usually governed by the terms and conditions of the bill of lading. Most shipowners are anxious to ensure that their liability as a carrier is not extended by issuing bills of lading by the charterers. In order to avoid this, they insist on the inclusion of a clause incorporating the terms of the charterparty in such bills. In addition, another reason for bills of lading to incorporate terms from charterparties is to bind receivers or purchasers to pay freight and demurrage, even if they are not parties to the charterparty. Such incorporation may also provide shipowners with a lien enforceable against the cargo receivers. 26.54 The validity of such arbitration clauses incorporated into the bill of lading is extremely important, since it may decide which jurisdiction the case is to be referred to and may have certain levels of impact on the final result of the dispute. After disputes have arisen, cargo receivers will typically seek to commence proceedings against the carriers 36 Arbitration Rules of CMAC, art 23. 37 Arbitration Rules of CMAC, art 25. 38 Arbitration Rules of CMAC, art 26. 39 Arbitration Rules of CMAC, art 71; s 5(1) of the Hong Kong Arbitration Ordinance (Cap 609) provides that “Subject to subsection (2), this Ordinance applies to an arbitration under an arbitration agreement, whether or not the agreement is entered into in Hong Kong, if the place of arbitration is in Hong Kong.”

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in the jurisdiction where the goods are delivered mainly based on three reasons. First, it is their home jurisdiction. Second, it might be because they do not have knowledge of the arbitration clause that may have to be incorporated into the relevant bills of lading. Third, there might be an action against the vessel and security has been obtained at the local court. Accordingly, it might be convenient to continue the court proceeding there. While the carriers might bring an objection to the jurisdiction and argue that an arbitration agreement exists between the parties. Arbitration clauses are rarely found in bills of lading themselves and, hence, by incorporating the arbitration clause of the charterparty into the bills of lading, it is possible for a ship owner to challenge the jurisdiction of the local court. 26.55 The China Maritime Code and the Arbitration Law set out no provision to regulate the validity of such arbitration clauses. This issue was discussed in the Explanations concerning Relevant Issues of Foreign Related Commercial and Maritime Trial Practice published by the Fourth Civil Court of the SPC (the “Explanation”).40 According to article 98 of the Explanation, after the clauses of the charterparty are incorporated into the bill of lading, the relation between the carrier and the holder of the bill of lading shall be regulated by the bill of lading, instead of the charterparty; unless the incorporation clause expressly states that the arbitration clause, jurisdiction clause and applicable law clause shall be incorporated into the bill of lading, those clauses shall not bind the holder of the bill of lading. 26.56 However, in practice, it seems that the Chinese courts are reluctant to recognise the validity of such arbitration clauses. In recent years, the SPC has issued several replies for various cases to set out restrictions for the validity of arbitration clauses in bills of lading. Incorporated from voyage charters rather than time charters 26.57 It appears that the SPC takes the view that a bill of lading cannot incorporate the clauses in a time charter. 26.58 In Tianjin Iron and Steel Group Co., Ltd and PICC Tianjin v Niagara Maritime S.A.,41 the defendant Niagara Maritime S.A. (the “Niagara”) entered a time charter with the Vale International S.A. (the “Vale”) for the vessel MV Jiayun (the “Vessel”). The time charter provided that all disputes arising from this time charterparty were to be submitted to London under the terms of the London Maritime Arbitrators’ Association and the charterparty was governed by English law. For this particular voyage, the receiver was Tianjin Iron and Steel Group (the “Tianjin Iron”). The master of the vessel signed a Congenbill, which was marked with “to be used with charterparties” on the face of the bill of lading. In addition, on the back of the bill of lading, it stated that “All of the terms, conditions, liberties and exceptions of the Charterparty, dated as overleaf, including the Law and Arbitration Clause, are herewith incorporated.” A dispute arose, and Tianjin Iron and its insurer PICC Tianjin commenced the proceedings before the Tianjin Maritime Court. The defendant Niagara challenged the jurisdiction of the Tianjin Maritime Court. Niagara argued that the arbitration agreement in the time charter was incorporated into the bill of lading, thus any dispute should be decided by arbitration in London. 40 The Fourth Civil Court of Supreme People’s Court is especially in charge of supervising and guiding the foreign related commercial and maritime trail in the country. The court published several Guidance and Explanation on the issues related to the practice of commercial and maritime trail. 41 [2011] Min Si Ta Zi No. 12 (SPC).

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26.59 The Tianjin Maritime Court held that the arbitration clause in the time charter was not successfully incorporated into the bill of lading. The case was submitted for the SPC’s review in accordance with the Inner Review Regime. In the Reply of SPC, the SPC took the view that the “charterparty” mentioned on the front page of the Congenbill 1994 should refer to a voyage charter, instead of a time charter. Further, the front page of the bill of lading neither expressly indicated the date of the charterparty, nor the incorporation of a specific arbitration clause. As a result, the arbitration clause in the time charterparty was not duly incorporated into the bill of lading and thus Tianjin Maritime Court had jurisdiction of the case. General statement of incorporation of a charterparty and an arbitration clause on the reverse side are not enough 26.60 In another case, Chongqing Xinpei Food Co. Ltd v Strength Shipping Corporation, Liberia,42 the front page of the bill of lading was marked with “the bill of lading to be used with charterparties” and “Charterparty dated 30th March 2004” is incorporated. On the revised side of the bill of lading, the bill of lading stated that “All terms and condition, liberties and exceptions of the Charterparty, dated as overleaf, including the Law and Arbitration Clause, are herewith incorporated.” In the Reply of the SPC regarding this case, the SPC took the view that the incorporation of the arbitration clause stated on the reverse side of the bill of lading and the general wording “to be used with charterparties” on the front page of the bill of lading did not successfully incorporate the arbitration clause. Thus the SPC held that Wuhan Maritime Court had jurisdiction to the case. The date of the charterparty and the party names shall be mentioned 26.61 In China Pacific Property Insurance Co. Ltd Shanghai Branch v Sunglide Maritime Ltd., Ocean Freighters Ltd. and the United Kingdom Mutual Steam Ship Assurance Association,43 it was marked on the face of the bill of lading that “All terms, (including arbitration clause) conditions as incorporated herein as if fully written, anything to the contrary contained in this bill of lading notwithstanding.” It appears that an arbitration clause on the front page of the bill of lading had met the requirements set out in the previous Replies of the SPC mentioned above. However, the SPC took the view that the date and the parties’ names should be stated and hence it is uncertain which charterparty should be incorporated into the bill of lading. Accordingly, the arbitration clause was deemed as not successfully incorporated. The arbitration clause in a bill of lading does not bind the subrogated insurer 26.62 The SPC held in the case PICC Xiamen Branch v Chinese Polish Joint Stock Shipping Company44 that an arbitration clause in a bill of lading does not bind the subrogated insurer. The SPC took the view that an arbitration clause was a clause independent from the main terms of the contract, and the independent arbitration clause should have been negotiated between the relevant parties of the bill of lading. The right of subrogation simply transfers the substantive right of the bill of lading to the insurer. The procedural issue, 42 [2006] Min Si Ta Zi No. 26 (SPC). 43 [2008] Min Si Ta Zi No. 50 (SPC). 44 [2004] Min Si Ta Zi No. 43 (SPC).

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i.e. the applicability of the arbitration clause, did not bind the insurer, unless the insurer expressly accepted this clause. The arbitration clause in a bill of lading does not bind the holder of the bill of lading 26.63 In the case Beijing Ellison Import Export Co. Ltd v Solar Shipping Angtrading S.A. and Songa Shipholding Pte Limited,45 the SPC answered the question about whether the arbitration clause in the bill of lading binds the consignee. The SPC gave a negative answer. It was held by the SPC that a valid arbitration agreement must represent the parties’ true intention, but the arbitration agreement in the bill of lading was only the intention of the carrier. Since the bill of lading holder did not participate in the negotiation of the arbitration agreement, the arbitration agreement would not bind the consignee. 26.64 However, it shall be noted that this Reply of the SPC was published in 2007. There have been a few later cases regarding the incorporation of arbitration clauses into the bill of lading and the SPC did not use this reason to dismiss the objection to jurisdiction in those cases. However, it would not be unexpected that if the requirements for valid incorporation are all satisfied, the SPC might use this reason, i.e. lack of intention to arbitrate, to dismiss the objection to the jurisdiction of the Chinese courts over a dispute in respect of the bill of lading. 26.65 It seems that the validity of arbitration clauses in the bill of lading is still an outstanding question and needs to be clarified by future legislation and regulations. Currently, based on the replies issued by SPC, it might be difficult to challenge the jurisdiction of the Chinese courts based on an arbitration clause contained in or incorporated in the bill of lading. Conciliation/mediation Conciliation by court 26.66 Apart from arbitration, there is another dispute resolution method known as conciliation. According to the CPL and the Arbitration Law, both the courts and arbitral tribunals are allowed to arrange conciliation upon the parties’ agreement during the proceedings. 26.67 Chapter 8 of the CPL and chapter 6 of the Interpretation of the CPL set out the rules for conciliation conducted by the court. The conciliation is arranged based on the free will of the parties and the court cannot force the parties to discuss and settle the dispute. In addition, there is no restriction that the conciliation must be conducted after a hearing. The court is allowed to proceed to conciliation directly after the acceptance of the case upon both parties’ agreement provided the case is a straightforward matter and the facts of the case are clear.46 26.68 There are certain kinds of disputes that cannot be resolved by conciliation, including cases subject to special procedures, cases subject to procedures for urging the

45 [2007] Min Si Ta Zi No. 14 (SPC). 46 Interpretation of the CPL, art 142.

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performance of liabilities or procedures for public summons for exhortation, cases for confirming marriage or other identity relationships.47 26.69 The conciliation procedure and the agreement made accordingly are confidential unless the parties agree to make them open to the public.48 26.70 The parties might enter into a settlement agreement after the conciliation and as such the content of such agreement is not restricted to the range of the claims submitted to court.49 If the parties can settle disputes through the conciliation conducted by court, the court will issue a conciliation document, which clearly set out the claims, the facts and the result of the conciliation.50 Such conciliation document would have the same effect as the judgment and if a party does not perform according to a valid conciliation document, the other party is allowed to apply to the court to enforce it. The conciliation document will become legally binding on the parties when it is signed for receipt by the parties.51 However, the court will refuse to recognise the agreement if the contents of the settlement agreement made under the conciliation harms the interests of the State or the public interest, the interests of a third party, is contrary to the true intentions of the parties concerned, or violates the prohibitory provisions of the laws or regulations.52 26.71 Apart from the conciliation arranged by the court, the parties are allowed to settle the dispute by themselves without the involvement of the court during the civil procedure. Similarly, where the parties concerned reach a settlement agreement on their own during the course of litigation, a Chinese court may, on the basis of the application of the parties concerned, affirm the settlement agreement and issue a settlement document in accordance with the law. However, the court will not issue a judgment based on the settlement agreement reached by the parties even if the parties make such application.53 Conciliation in arbitration 26.72 During maritime arbitration proceedings, upon the parties’ agreement, the arbitration tribunal may also mediate the parties for a settlement. If the mediation fails, the proceedings shall be resumed. 26.73 Article 51 of the Arbitration Law provides that before giving an award, an arbitration tribunal may first attempt to conciliate and, if the parties apply for conciliation voluntarily, the arbitration tribunal shall conciliate. If the conciliation is unsuccessful, an award shall be made promptly. According to this provision, the beginning of the arbitration conciliation can be divided into two situations: first, the arbitral tribunal begins to conciliate on its own; second, the arbitral tribunal conciliates upon application of the parties. Article 52 47 Interpretation of the CPL, art 143. 48 Interpretation of the CPL, art 146. 49 Provisions of the Supreme People’s Court on Certain Issues concerning Work of Civil Conciliation of People’s Courts (the “Provisions of Conciliation”), art 9. 50 CPL, art 97. 51 There are certain circumstances where the court does not need to issue the conciliation statement, for example, when the claims can be satisfied by the parties immediately after settlement. Under such circumstance, the settlement agreement between the parties shall be entered into written record and shall become legally effective after being signed or sealed by other parties concerned together with the judge and the court clerk (see art 98 of the CPL). 52 Provisions of Mediation, art 12. 53 Interpretation of the CPL, art 148.

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of the Arbitration Rules of the CMAC sets out the more detailed rules for conciliation in maritime arbitration. 26.74 No matter how the conciliation proceedings begin, the proceedings must be based on the parties’ complete voluntariness. The parties may agree at any time to the conciliation of the case by the arbitral tribunal or arbitrators, and may withdraw the consent to conciliation to suspend or terminate the conciliation proceedings. For cases without a conciliation basis, the arbitrator cannot force the conciliation, but shall resume the arbitration procedure. In this regard, article 52 of the Arbitration Rules of the CMAC provides that the arbitration tribunal shall terminate the conciliation when one of the parties requests a termination of conciliation or when the arbitration tribunal believes that further efforts to conciliate will be futile. 26.75 The arbitral tribunal may conciliate cases in the manner it considers appropriate. “The manner it considers appropriate” mainly includes the following.54 Conciliation meeting attended by the tribunal together with the parties 26.76 This is the conciliation conducted with the arbitral tribunal presiding, with both parties’ presence, and the arbitral tribunal may require the parties to put forward their solutions, or the tribunal may propose a solution for the parties to discuss. Discussion with the parties separately 26.77 A party to the dispute may not discuss with the other party directly. The arbitral tribunal may hear their opinions separately and communicate the idea to the other party. Under the arrangement of the tribunal, the parties may eventually reach a settlement agreement. The parties settle disputes by themselves 26.78 The settlement agreement reached by the parties themselves will have the same nature and effect as the settlement agreement made through the conciliation of the arbitration tribunal. Where the parties have reached a settlement agreement through their negotiation, they can apply to the tribunal to issue a settlement document or an arbitration award by consent. The Arbitration Rules of the CMAC also provide that even before the commencement of the arbitration proceedings, either party may, based on the arbitration agreement concluded between the parties that provides for arbitration by CMAC and the settlement agreement, apply to CMAC to constitute an arbitral tribunal to render an arbitration award.55 Conciliation by government 26.79 For some special kinds of maritime disputes, a competent government authority can arrange conciliation for disputes. Article 46 of the Maritime Traffic Safety Law of the People’s Republic of China provides that civil disputes arising from maritime traffic accidents may be settled through conciliation by a competent authority. The Regulations of 54 Han Lixin, Yuan Shaochun, Yin Weimin, Maritime Litigation and Arbitration (1st edn, Dalian Maritime University Press 2007). 55 Arbitration Rules of CMAC, art 52.

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the People’s Republic of China on the Investigation and Handing of Maritime Traffic Accidents further set out detailed rules on conciliation by a competent government authority. If a maritime traffic accident involving vessels gives rise to a civil dispute as to tort liability, the parties may apply to the harbour superintendent administration, which is now known as the Maritime Safety Administration (the “MSA”) for conciliation. This kind of conciliation is also made based on the principle of voluntariness of the parties. Once the parties have commenced a court proceeding or an arbitration, they are prohibited from making an application for mediation to the harbour superintendent administration.56 Recognition and enforcement of foreign arbitration award Procedures for recognition and enforcement of foreign maritime arbitral awards in China 26.80 The application for recognition and enforcement of a general arbitration award shall be made to the intermediate people’s court, while the application for recognition and enforcement of a foreign maritime arbitration award shall be made to the relevant maritime courts in China. Article 11 of the SMPL provides that an application shall be filed with the maritime court of the place where the property subject to execution or the place where the person subject to execution has its domicile. Where there is no maritime court in the place where the property subject to execution or in the place where the person subject to execution has its domicile, an application shall be filed with the intermediate people’s court of the place where the property subject to execution or the place where the person subject to execution has its domicile. 26.81 The application for recognition and enforcement of arbitration award must be made to a proper court with jurisdiction, or the court will refuse to recognise and enforce the award. In Swissmarine Services SA v YYF International Ltd BVI,57 Guangzhou Maritime Court refused to enforce an award based on this reason. In this case, the dispute arose from a COA between Swissmarine (“claimants”) and YYF (“respondents”). A performance guarantee was provided by a Zhuhai YYF Co Ltd (“guarantor”) to the claimants for the due performance of the COA. There was a breach of the COA, and the claimants commenced arbitration proceedings in accordance with the terms of London Maritime Arbitrators Association against the respondents. The respondents did not respond to the claimants’ arbitration notice and failed to make an appointment of their arbitrator, and the claimants obtained an award from the sole arbitrator. The claimants sought to enforce the award against the respondents and the guarantor. In making their application to the Guangzhou Maritime Court, the claimants filed the arbitration award, the COA, and the performance guarantee issued by the guarantor, along with translations to all of the above documents. The Guangzhou Maritime Court refused to enforce the award. It held that article 11 of SMPL provided that the claimant must seek to enforce its award at the maritime court at the domicile of the respondent, or the place of the property subject to the award. According to the Guangzhou

56 The Regulations of the People’s Republic of China on the Investigation and Handing of Maritime Traffic Accidents, art 21. 57 [2014] Guang Hai Fa Ta Zi No. 2 (Guangzhou Maritime Court).

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Maritime Court, the claimants failed to provide any evidence that the domicile of the respondents or the place of the property subject to the award was within the jurisdiction of the Guangzhou Maritime Court. Further, the claimants only produced the performance guarantee issued by the guarantor, which was not a subject to the arbitration award. The Guangzhou Maritime Court held that it did not have jurisdiction over the arbitration award, and refused the enforcement application. 26.82 According to article 283 of the CPL, the application for recognition and enforcement of a foreign arbitration award shall be dealt by the court in accordance with the international treaties concluded or acceded to by China or with the principle of reciprocity. The international treaty mentioned in this clause is the 1958 New York Convention, which was acceded to by the People’s Republic of China in 1987. 26.83 According to article 4 of the 1958 New York Convention, the party applying for recognition and enforcement of the foreign arbitral award must submit the following documents: (a) (b) (c)

the duly authenticated original award or a duly certified copy thereof; the original agreement referred to in the Convention or a duly certified copy thereof; and the Chinese translation of the award and arbitration agreement. The translation shall be certified by an official or sworn translator or by a diplomatic or consular agent.

26.84 Under the 1958 New York Convention, procedures for the enforcement of foreign awards shall be prescribed by national laws. However, it shall not be in violation of the provisions of article 3 of the Convention, which states that there shall not be imposed substantially more onerous conditions or higher fees or charges on the recognition or enforcement of arbitral awards to which this Convention applies than are imposed on the recognition or enforcement of domestic arbitral awards. 26.85 There are no special provisions for the recognition and enforcement of the foreign arbitral award under the domestic law of China. Thus after receiving the application, the court will only review whether there is any reason for refusing to recognise and enforce the foreign arbitration award in accordance with article 5 of the New York Convention. 26.86 For arbitral awards made in a non-contracting party to the Convention, the court will recognise and enforce following the principle of reciprocity. 26.87 After the review, in case of no violation of the above matters of review, the court will recognise the effectiveness of the foreign arbitral award, and enforce in accordance with the execution procedures in the CPL. Reasons for refusing the recognition and enforcement of foreign arbitral awards 26.88 If any of the following events set out in article 5 of the New York Convention happens, the court may refuse to recognise and enforce the arbitration award: (a)

the parties to the agreement referred to in article 2 of the Convention were, under the law applicable to them, under some incapacity, or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made; or 347

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(b) (c)

(d) (e)

the party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case; the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award that contains decisions on matters submitted to arbitration may be recognised and enforced; or the composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.

26.89 Recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that: (a) (b)

the subject matter of the difference is not capable of settlement by arbitration under the law of that country; or the recognition or enforcement of the award would be contrary to the public policy of that country.

26.90 The above standard regulated in the New York Convention is limited to the review of procedural matters, and does not involve the review of substantive matters. This is different from the reasons for refusing to enforce domestic arbitration awards in China set out in article 237 of the CPL. 26.91 As China is a contracting State to the 1958 New York Convention, it is thus obliged to enforce the arbitration awards made in other contracting States as long as it does not fall within the range of article 5 of the New York Convention. In order to ensure the obligation is duly performed by the intermediate people’s court, as previously discussed, there is an inner review regime set up by the SPC, which requires the intermediate people’s court to report the cases to the higher court and then the SPC for their review if it considers the arbitration award cannot be recognised and enforced in accordance with the 1958 New York Convention.58 The SPC will generally issue the reply letters in respect of the cases reported to it so that the lower courts and the public are informed of why the recognition of an arbitration award made by a contracting State should be allowed or not. These reply letters can be used for future reference. 26.92 For example, in 2012, the Tianjin High People’s Court intended to decline to enforce an arbitration award made in accordance with the terms of the London Maritime Arbitrators Association (the “LMAA”) based on the reason that the arbitration tribunal was not properly constituted (article V(1)(d) of the 1958 New York Convention).59 This 58 Fa Fa [1995] No. 18 (Notice of the SPC). 59 [2012] Min Si Ta Zi No. 12 (SPC).

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decision was reported to the SPC, who in response affirmed the Tianjin High People’s Court decision. 26.93 The main thrust of this judgment was that the arbitration clause had called for the two parties, Western Bulk and Zhonggang Tiantie, to appoint a sole arbitrator if both parties agree. If not, the tribunal was to be constituted by two parties, each to be appointed by the respective parties. On the facts, the arbitrator who was appointed by Zhonggang Tiantie subsequently resigned from the tribunal. In this case, since the LMAA terms did not make provision for this situation, section 27 (2) and (3) (which also refers to sections 16 and 18) of the English Arbitration Act 1996 should apply. In the event of a vacancy on the tribunal, the usual procedure for the appointment of an arbitrator should have been followed. As Zhonggang Tiantie failed to appoint a substitute arbitrator, Western Bulk should have followed section 18 (2), which allows for an application to be made (a party “may. . . apply to the court to exercise its powers under this section”). The Tianjin High People’s Court took the view that since there was a failure to appoint a replacement arbitrator under this section, the tribunal was not properly constituted. Recognition and enforcement of Hong Kong arbitration awards 26.94 Hong Kong became a special administrative region of People’s Republic of China after China resumed its sovereignty in July 1997 but its legal system remained largely the same. 26.95 The recognition and enforcement of Hong Kong arbitration awards in mainland China will be made based on the Arrangement of the Mutual Enforcement of Arbitration Awards between the Mainland and the Hong Kong Special Administrative Region (the “Arrangement between Mainland and Hong Kong”). 26.96 When making an application for recognition and enforcement of arbitration award, the parties shall submit an application for enforcement, the arbitration award and the arbitration agreement. Similar with article V of the 1958 New York Convention, article 7 of the Arrangement between the Mainland and Hong Kong sets out seven circumstances under which the courts can refuse to recognise and enforce the arbitration award. 26.97 A similar arrangement between mainland China and the Macau Special Administrative Region was entered into in 2008. 26.98 As mentioned in the previous chapters, under Chinese law, cases related to Hong Kong, Macau and Taiwan are generally treated as foreign-related cases. Thus, the previously mentioned replies given by the SPC and Inner Review Regime on recognition of foreign arbitration awards will also apply. Recognition and enforcement of Taiwan arbitration awards 26.99 Due to special historic reasons, Taiwan and mainland China currently operate two separate jurisdictions, and arbitration awards made in Taiwan cannot be recognised and enforced in China as domestic arbitration awards. In addition, Taiwan is not a party to the New York Convention. 26.100 Before 2015, the authority for the recognition and enforcement of Taiwan arbitration award was the Provisions of the Supreme People’s Court on Recognition by 349

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People’s Courts of Relevant Civil Judgments of Courts in Taiwan, which was promulgated by the SPC in 1998 (the “1998 Provisions”).60 The 1998 Provisions applied both to the enforcement of Taiwan court judgments and Taiwan arbitration awards. This apparently caused some problems in practice. 26.101 In 2015, the SPC promulgated the Provisions of the Supreme People’s Court on the Recognition and Enforcement of the Arbitral Awards Rendered in Taiwan Region (the “Provisions of Taiwan Arbitral Awards”).61 The Provisions of Taiwan Arbitral Awards apply to all the arbitration awards in civil and commercial disputes that are rendered by permanent arbitration institutions and temporary arbitration tribunals in the Taiwan region pursuant to arbitration provisions of the Taiwan region, including arbitral awards, arbitral reconciliation and arbitral mediation. 26.102 Article 14 of the Provisions of Taiwan Arbitral Awards sets out five circumstances where the people’s court of PRC may refuse to recognise and enforce the arbitration award: (a)

(b) (c)

(d)

(e)

Where one party to the arbitration agreement in question has no civil capacity upon the conclusion of the arbitration agreement pursuant to the laws applicable thereto; or, where the arbitration agreement is invalid pursuant to the governing laws agreed upon by the parties concerned or pursuant to arbitration provisions of the Taiwan region in the absence of any applicable governing law agreed upon by the parties concerned; or, where the parties concerned have not reached any written arbitration agreement, unless the application is for the recognition of an arbitration mediation rendered in the Taiwan region; where the respondent concerned is not properly notified of the choice and appointment of arbitrators or the commencement of arbitration procedures, or has failed to state its opinions due to other reasons not attributable thereto; where the disputes dealt with during arbitration are not the disputes submitted for arbitration, or are beyond the scope of the arbitration agreement in question; or, where the arbitral award contains decisions on matters beyond those submitted for arbitration by the parties concerned, provided that the decisions on matters submitted for arbitration as specified in the arbitral award may be recognised if they can be separated from the decisions on matters beyond those submitted for arbitration as specified in the arbitral award; where the composition of the arbitration tribunal or the arbitration procedures are against the agreements of the parties concerned, or are against the arbitration provisions of the Taiwan region in the absence of relevant agreements between the parties concerned; or where the arbitral award is not yet binding on the parties concerned, or where a court in the Taiwan region has revoked the arbitral award or dismissed an application for enforcing the arbitral award.

26.103 The time limit for the application for recognition and enforcement of Taiwan arbitration awards is two years.62 In addition, before or after accepting an application for 60 This Provision was promulgated on 15 January 1998 and came into effect on 26 May 1998 and has been repealed pursuant to the Provisions of Taiwan Arbitral Awards 2015. 61 Fa Shi [2015] No. 14, which was promulgated on 29 June 2015 and came into effect on 1 July 2015. 62 Provisions of Taiwan Arbitral Awards, art 19.

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the recognition of an arbitration award rendered in Taiwan, the competent people’s court may, in accordance with the CPL and relevant judicial interpretations, render a ruling to take preservation measures according to the party’s application. Recognition and enforcement of foreign judgments in China General procedure 26.104 Unlike the recognition and enforcement of foreign arbitration awards, China has a more conservative attitude towards the recognition and enforcement of foreign judgments. China has not entered into any international conventions about the recognition and enforcement of foreign judgments other than certain bilateral treaties with certain countries. This makes it difficult to recognise and enforce the foreign judgment in China. 26.105 Pursuant to article 281 of CPL, if a legally effective judgment or written order made by a foreign court requires recognition and enforcement by a people’s court of the People’s Republic of China, the party concerned may directly apply for recognition and enforcement to the intermediate people’s court of the People’s Republic of China which has jurisdiction. 26.106 After having received the application, the relevant court should review the judgment to check if it contradicts the primary principles of the law of the People’s Republic of China or violates State sovereignty, security and the social and public interest of the country.63 26.107 The Interpretation of the CPL sets out the detailed requirements for the application for the recognition and enforcement of a foreign judgment in China, which can be summarised as follows: (a) (b) (c)

the original legally binding judgment/ruling rendered by the foreign court and the Chinese translations shall be provided;64 if the application for recognition and enforcement is dismissed, the party concerned may file a lawsuit to the competent people’s court;65 and referring to article 239 of the CPL, the time limit for submission of an application for execution shall be two years.66

26.108 It should be noted that recognition and enforcement are two separate procedures though, in most cases, the party concerned applies for recognition and enforcement at the same time. If the party concerned only applies for recognition but does not apply for enforcement, then the court shall only make order as if only the recognition is approved.67 26.109 An application for recognition and enforcement of foreign judgment should be reviewed and approved by the panel of the court and the application should be sent to the respondent, who can express their views.68

63 64 65 66 67 68

CPL, art 282. Interpretation of the CPL, art 543. Interpretation of the CPL, art 544. Interpretation of the CPL, art 547. Interpretation of the CPL, art 546. Interpretation of the CPL, art 548.

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Basis on which the application can be approved 26.110 There are two potential barriers for the recognition and enforcement of the judgment. First, the legally binding judgment may contradict the primary principles of the law of the People’s Republic of China or violate State sovereignty, security and social and public interests of the country. There are no detailed explanations in legislation as to what amounts to violation of the public interest and, therefore, this will be assessed on a case-by-case basis. Second, pursuant to the CPL, the foreign judgment can only be recognised and enforced in accordance with the provisions of the international treaties concluded or acceded to by that foreign country and the People’s Republic of China or under the principle of reciprocity. International treaties 26.111 Unlike the international convention on the recognition and enforcement of the foreign arbitration award, i.e. the 1958 New York Convention, there is no international convention ratified by China governing the recognition and enforcement of foreign judgments. Such recognition and enforcement can only be approved in accordance with bilateral treaties entered between China and a specific country. 26.112 Up until January 2016, China had entered into civil and criminal mutual legal assistance treaties with 19 countries69 and has also entered into civil and commercial legal assistance treaties with 17 countries,70 and many of these treaties include the legal assistance to enforce the court judgment of another country.71 26.113 Take France for example. In 1987, China and France entered into the Treaty between China and France on Mutual Legal Assistance in Civil and Commercial Matters (the “France Treaty”). Pursuant to article 2 of the France Treaty, the judicial assistance includes recognition and enforcement of foreign civil and commercial court judgments. 26.114 Pursuant to article 22 of the France Treaty, the application will not be approved under six circumstances, including: (1) (2) (3) (4) (5)

subject to the rules of the jurisdiction of the requested party, the judgment is issued by an incompetent court; as to the identity and ability of a natural person, the court of the requesting party does not apply the rule that the court of the requested party shall apply in accordance with its international private law, unless the two rules lead to the same result; according to the law of the requesting party, such judgment has not been confirmed or has no enforcement effect; the judgment is made in the absence of the party that failed in the case who was not given a proper notice; the enforcement of the judgment violates State sovereignty, security and the social and public interest of the requested party; or

69 These countries include Poland, Mongolia, Romania, Russia, Turkey, Ukraine, Cuba, Belarus, Kazakhstan, Egypt, Greece, Cyprus, Kirghizia, Tajikistan, Uzbekistan, Vietnam, Laos, Lithuania, and North Korea. 70 These countries include France, Italy, Spain, Bulgaria, Thailand, Hungary, Morocco, Singapore, Tunisia, Argentina, Korea, United Arab Emirates, Kuwait, Brazil, Algeria, Peru, and Bosnia and Herzegovina. 71 For example, an Italian insolvency judgment was recognised and enforced in China by Guangdong Foshan Intermediate People’s Court based on the Treaty between China and Italy on the mutual judicial assistance in civil matters (B&T Ceramic Group S.R.1 v E.N. Group s.p.a) (2000) Fo Zhong Fa Jing Chu Zi No.633.

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(6)

the court of the requested party has made a judgment for the case with the same facts and claims between the same applicant and respondent, or the court of the requested party has recognised the judgment of a third country of the case with the same facts and claims between the same applicant and respondent.

The principle of reciprocity 26.115 As mentioned above, the recognition and enforcement of the foreign judgment can also be granted based on the principle of reciprocity. Generally speaking, the principle of reciprocity is the expectation that people will respond favourably to each other by returning benefit for benefit, and responding with either indifference or hostility to harm. Applying the principle to the recognition and enforcement of a foreign judgment, if one country recognises and enforces a foreign judgment, that country will also approve the same on similar terms. 26.116 The principle of reciprocity was discussed in a case where the party applied to a Chinese court for the recognition and enforcement of a Japanese judgment. This case confirmed that only when another country has enforced a Chinese judgment can the relationship of reciprocity be established and then the judgment of that country can be enforced in China. In a case published in issue No.1 of the Gazette of SPC 2006, Itsumi as the applicant applied for recognition and enforcement of a judgment made by Yokohama District Court regarding a dispute over a loan contract in Dalian Intermediate People’s Court, China (the “Dalian Court”). As there is no mutual judicial assistance treaty entered into between Japan and China and the principle of reciprocity was not established, the application for recognition and enforcement of the judgment was not granted under the CPL and other relevant legislation. Enforcement of court judgments of Hong Kong, Macau and Taiwan 26.117 The court judgments of Hong Kong can be enforced in mainland China based on the Arrangement of the Supreme People’s Court between the Courts of the Mainland and the Hong Kong Special Administrative Region on Mutual Recognition and Enforcement of Judgments of Civil and Commercial Cases under the Jurisdiction as Agreed to by the Parties Concerned (the “Mainland and Hong Kong Judgment Arrangement”).72 In order to apply this Arrangement, there must be a choice of court agreement between the parties. The “choice of court agreement” refers to any agreement in written form made between the parties, which provides that the court of Hong Kong is designated as the court having sole jurisdiction for resolving disputes. Hong Kong Court judgments, and orders that can be enforced in mainland China, include all such judgments and orders made by the Court of Final Appeal, the Court of Appeal and the Court of First Instance of the High Court and the District Court.73 26.118 Similarly, there is also an Arrangement of Mainland and Macao Special Administrative Region on Mutual Recognition and Execution of Civil and Commercial Judgments (the “Mainland and Macau Judgment Arrangement”).74 Macau judgments that can be

72 Fa Shi [2008] No. 9. This Arrangement was promulgated on 3 July 2008 and came into force on 1 August 2008. 73 Mainland and Hong Kong Judgment Arrangement, art 2. 74 Fa Shi [2006] No. 2. This Arrangement was promulgated by SPC on 21 March 2006 and came into effect on 1 April 2006.

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enforced in the mainland in accordance with this Arrangement include judgments, verdicts, mediation rulings, and the judges’ instructions, directions or decisions. 26.119 In 2015, the SPC also promulgated the Provisions of the Supreme People’s Court on the Recognition and Enforcement of the Civil Judgments Rendered by Courts in Taiwan Region (the “Provisions of Enforcement of Taiwan Judgment”),75 according to which the binding civil judgments, rulings, reconciliation transcripts, mediation transcripts, payment orders, etc rendered by the courts of Taiwan can be enforced in mainland China.

75 Fa Shi [2015] No. 13. It was promulgated on 29 June 2015 and came into effect on 1 July 2015.

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ANNEX I

中华人民共和国海商法 Maritime Code of the People’s Republic of China

: Promulgating Date: : Effective Date: : Validity Status:

7 November199 27 November 1992 1 July 1993 1 July 1993 有效 Valid

目 第一章 第二章 第一节 第二节 第三节 第三章 第一节 第二节 第四章 第一节 第二节 第三节 第四节 第五节 第六节 第七节 第八节 第五章 第六章 第一节 第二节 第三节 第七章 第八章 第九章

总则 船舶 船舶所有权 船舶抵押权 船舶优先权 船员 一般规定 船长 海上货物运输合同 一般规定 承运人的责任 托运人的责任 运输单证 货物交付 合同的解除 航次租船合同的特别规定 多式联运合同的特别规定 海上旅客运输合同 船舶租用合同 一般规定 定期租船合同 光船租赁合同 海上拖航合同 船舶碰撞 海难救助 355

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第十章 共同海损 第十一章 海事赔偿责任限制 第十二章 海上保险合同 第一节 一般规定 第二节 合同的订立、解除和转让 第三节 被保险人的义务 第四节 保险人的责任 第五节 保险标的的损失和委付 第六节 保险赔偿的支付 第十三章 时效 第十四章 涉外关系的法律适用 第十五章 附则 Contents Chapter I: General Provisions Chapter II: Ships Section 1: Ownership of Ships Section 2: Mortgage of Ships Section 3: Maritime Liens Chapter III: Crew Section 1: Basic Principles Section 2: The Master Chapter IV: Contract of Carriage of Goods by Sea Section 1: Basic Principles Section 2: Carrier’s Responsibilities Section 3: Shipper’s Responsibilities Section 4: Transport Documents Section 5: Delivery of Goods Section 6: Cancellation of Contract Section 7: Special Provisions Regarding Voyage Charterparty Section 8: Special Provisions Regarding Multimodal Transport Contract Chapter V: Contract of Carriage of Passengers by Sea Chapter VI: Charterparties Section 1: Basic Principles Section 2: Time Charterparty Section 3: Bareboat Charterparty Chapter VII: Contract of Sea Towage Chapter VIII: Collision of Ships Chapter IX: Salvage at Sea Chapter X: General Average Chapter XI: Limitation of Liability for Maritime Claims Chapter XII: Contract of Marine Insurance Section 1: Basic Principles Section 2: Conclusion, Termination and Assignment of Contract Section 3: Obligations of the Insured 356

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Section 4: Liability of the Insurer Section 5: Loss of and Damage to the Subject Matter Insured and Abandonment Section 6: Payment of Indemnity Chapter XIII: Limitation of Time Chapter XIV: Application of Law in Relation to Foreign-related Matters Chapter XV: Supplementary Provisions 第一章 Chapter I: General Provisions 第一条 为了调整海上运输关系、船舶关系，维护当事人各方的合法权益，促进 海上运输和经济贸易的发展，制定本法。 Article 1 This Code is enacted with a view to regulating the relations arising from maritime transport and ships, to securing and protecting the legitimate rights and interests of the parties concerned, and to promoting the development of maritime transport, economy and trade. 第二条 本法所称海上运输，是指海上货物运输和海上旅客运输，包括海江之 间、江海之间的直达运输。 本法第四章海上货物运输合同的规定，不适用于中华人民共和国港口之间的海上 货物运输。 Article 2 “Maritime transport” as referred to in this Code means the carriage of goods and passengers by sea, including the sea-river and river-sea direct transport. The provisions concerning contracts of carriage of goods by sea as contained in Chapter IV of this Code shall not be applicable to the maritime transport of goods between the ports of the People’s Republic of China. 第三条 本法所称船舶，是指海船和其他海上移动式装置,但是用于军事的、政 府公务的船舶和20总吨以下的小型船艇除外。 前款所称船舶，包括船舶属具。 Article 3 “Ship” as referred to in this Code means sea-going ships and other mobile units, but does not include ships or craft to be used for military or public service purposes, or small ships of less than 20 tons gross tonnage. The term “ship” as referred to in the preceding paragraph shall also include ship’s apparel. 第四条 中华人民共和国港口之间的海上运输和拖航，由悬挂中华人民共和国国 旗的船舶经营。但是，法律、行政法规另有规定的除外。 非经国务院交通主管部门批准，外国籍船舶不得经营中华人民共和国港口之间的 海上运输和拖航。 Article 4 Maritime transport and towage services between the ports of the People’s Republic of China shall be undertaken by ships flying the national flag of the People’s Republic of China, except as otherwise provided for by laws or administrative rules and regulations. No foreign ships may engage in the maritime transport or towage services between the ports of the People’s Republic of China unless permitted by the competent authorities of transport and communications under the State Council. 357

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第五条 船舶经依法登记取得中华人民共和国国籍，有权悬挂中华人民共和国国 旗航行。 船舶非法悬挂中华人民共和国国旗航行的，由有关机关予以制止，处以罚款。 Article 5 Ships are allowed to sail under the national flag of the People’s Republic of China after being registered, as required by law, and granted the nationality of the People’s Republic of China. Ships illegally flying the national flag of the People’s Republic of China shall be prohibited and fined by the authorities concerned. 第六条 海上运输由国务院交通主管部门统一管理，具体办法由国务院交通主管 部门制定，报国务院批准后施行。 Article 6 All matters pertaining to maritime transport shall be administered by the competent authorities of transport and communications under the State Council. The specific measures governing such administration shall be worked out by such authorities and implemented after being submitted to and approved by the State Council. 第二章 船舶 Chapter II: Ships 第一节 船舶所有权 Section 1: Ownership of Ships 第七条 船舶所有权，是指船舶所有人依法对其船舶享有占有、使用、收益和处 分的权利。 Article 7 The ownership of a ship means the shipowner’s rights to lawfully possess, utilise, profit from and dispose of the ship in his ownership. 第八条 国家所有的船舶由国家授予具有法人资格的全民所有制企业经营管理 的，本法有关船舶所有人的规定适用于该法人。 Article 8 With respect to a State-owned ship operated by an enterprise owned by the whole people having a legal person status granted by the State, the provisions of this Code regarding the shipowner shall apply to that legal person. 第九条 船舶所有权的取得、转让和消灭，应当向船舶登记机关登记;未经登记 的，不得对抗第三人。 船舶所有权的转让，应当签订书面合同。 Article 9 The acquisition, transference or extinction of the ownership of a ship shall be registered at the ship registration authorities; no acquisition, transference or extinction of the ship’s ownership shall act against a third party unless registered. The transference of the ownership of a ship shall be made by a contract in writing. 第十条 船舶由两个以上的法人或者个人共有的，应当向船舶登记机关登记;未 经登记的，不得对抗第三人。 Article 10 Where a ship is jointly owned by two or more legal persons or individuals, the joint ownership thereof shall be registered at the ship registration authorities. The joint ownership of the ship shall not have legal effect against a third party unless registered. 358

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第二节 船舶抵押权 Section 2: Mortgage of Ships 第十一条 船舶抵押权，是指抵押权人对于抵押人提供的作为债务担保的船舶， 在抵押人不履行债务时，可以依法拍卖，从卖得的价款中优先受偿的权利。 Article 11 The right of mortgage with respect to a ship is the right of priority in compensation of the mortgagee of that ship from the proceeds of the auction sale made in accordance with law where and when the mortgagor fails to pay his debt to the mortgagee secured by the mortgage of that ship. 第十二条 船舶所有人或者船舶所有人授权的人可以设定船舶抵押权。 船舶抵押权的设定，应当签订书面合同。 Article 12 The owner of a ship or those authorised thereby may establish the mortgage of the ship. The mortgage of a ship shall be established by a contract in writing. 第十三条 设定船舶抵押权,由抵押权人和抵押人共同向船舶登记机关办理抵押 权登记;未经登记的,不得对抗第三人。 船舶抵押权登记，包括下列主要项目: (一) 船舶抵押权人和抵押人的姓名或者名称、地址; (二) 被抵押船舶的名称、国籍、船舶所有权证书的颁发机关和证书号码; (三) 所担保的债权数额、利息率、受偿期限。 船舶抵押权的登记状况，允许公众查询。 Article 13 The mortgage of a ship shall be established by registering the mortgage of the ship with the ship registration authorities jointly by the mortgagee and the mortgagor. No mortgage shall have legal effect against a third party unless registered. The main items for the registration of the mortgage of a ship shall be: (1) (2) (3)

Name or designation and address of the mortgagee and the name or designation and address of the mortgagor of the ship; Name and nationality of the mortgaged ship and the authorities that issued the certificate of ownership and the certificate number thereof; Amount of debt secured, the interest rate and the period for the repayment of the debt.

Information about the registration of mortgage of ships shall be accessible to the public for enquiry. 第十四条 建造中的船舶可以设定船舶抵押权。 建造中的船舶办理抵押权登记，还应当向船舶登记机关提交船舶建造合同。 Article 14 Mortgage may be established on a ship under construction. In registering the mortgage of a ship under construction, the building contract of the ship shall also be submitted to the ship registration authorities. 第十五条 除合同另有约定外，抵押人应当对被抵押船舶进行保险;未保险的， 抵押权人有权对该船舶进行保险，保险费由抵押人负担。 359

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Article 15 The mortgaged ship shall be insured by the mortgagor unless the contract provides otherwise. In case the ship is not insured, the mortgagee has the right to place the ship under insurance coverage and the mortgagor shall pay for the premium thereof. 第十六条 船舶共有人就共有船舶设定抵押权，应当取得持有三分之二以上份额 的共有人的同意，共有人之间另有约定的除外。 船舶共有人设定的抵押权，不因船舶的共有权的分割而受影响。 Article 16 The establishment of mortgage by the joint owners of a ship shall, unless otherwise agreed upon among the joint owners, be subject to the consent of those joint owners who have more than two thirds of the shares thereof. The mortgage established by the joint owners of a ship shall not be affected by virtue of the division of ownership thereof. 第十七条 船舶抵押权设定后，未经抵押权人同意，抵押人不得将被抵押船舶转 让给他人。 Article 17 Once a mortgage is established on a ship, the ownership of the mortgaged ship shall not be transferred without the consent of the mortgagee. 第十八条 抵押权人将被抵押船舶所担保的债权全部或者部分转让他人的，抵押 权随之转移。 Article 18 In case the mortgagee has transferred all or part of his right to debt secured by the mortgaged ship to another person, the mortgage shall be transferred accordingly. 第十九条 同一船舶可以设定两个以上抵押权，其顺序以登记的先后为准。 同一船舶设定两个以上抵押权的，抵押权人按照抵押权登记的先后顺序，从船舶 拍卖所得价款中依次受偿。同日登记的抵押权，按照同一顺序受偿。 Article 19 Two or more mortgages may be established on the same ship. The ranking of the mortgages shall be determined according to the dates of their respective registrations. In case two or more mortgages are established, the mortgagees shall be paid out of the proceeds of the auction sale of the ship in the order of registration of their respective mortgages. The mortgages registered on the same date shall rank equally for payment. 第二十条 被低押船舶灭失，抵押权随之消灭。由于船舶灭失得到的保险赔偿， 抵押权人有权优先于其他债权人受偿。 Article 20 The mortgages shall be extinguished when the mortgaged ship is lost. With respect to the compensation paid from the insurance coverage on account of the loss of the ship, the mortgagee shall be entitled to the priority in compensation over other creditors. 第三节 船舶优先权 Section 3: Maritime Liens 第二十一条 船舶优先权，是指海事请求人依照本法第二十二条的规定，向船舶 所有人、光船承租人、船舶经营人提出海事请求，对产生该海事请求的船舶具有优 先受偿的权利。 360

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Article 21 A maritime lien is the right of the claimant, subject to the provisions of Article 22 of this Code, to take priority in compensation against shipowners, bareboat charterers or ship operators with respect to the ship which gave rise to the said claim. 第二十二条

下列各项海事请求具有船舶优先权:

(一) 船长、船员和在船上工作的其他在编人员根据劳动法律、行政法规或者 劳动合同所产生的工资、其他劳动报酬、船员遣返费用和社会保险费用 的给付请求; (二) 在船舶营运中发生的人身伤亡的赔偿请求; (三) 船舶吨税、引航费、港务费和其他港口规费的缴付请求; (四) 海难救助的救助款项的给付请求; (五) 船舶在营运中因侵权行为产生的财产赔偿请求。 载运2000吨以上的散装货油的船舶,持有有效的证书，证明已经进行油污损害民 事责任保险或者具有相应的财务保证的，对其造成的油污损害的赔偿请求，不属于 前款第(五)项规定的范围。 Article 22 The following maritime claims shall be entitled to maritime liens: (1)

(2) (3) (4) (5)

Payment claims for wages, other remuneration, crew repatriation and social insurance costs made by the Master, crew members and other members of the complement in accordance with the relevant labour laws, administrative rules and regulations or labour contracts; Claims in respect of loss of life or personal injury occurred in the operation of the ship; Payment claims for ship’s tonnage dues, pilotage dues, harbour dues and other port charges; Payment claims for salvage payment; and Compensation claims for loss of or damage to property resulting from tortious act in the course of the operation of the ship.

Compensation claims for oil pollution damage caused by a ship carrying more than 2,000 tons of oil in bulk as cargo that has a valid certificate attesting that the ship has oil pollution liability insurance coverage or other appropriate financial security are not within the scope of sub-paragraph (5) of the preceding paragraph. 第二十三条 本法第二十二条第一款所列各项海事请求，依照顺序受偿。但是， 第（四）项海事请求，后于第（一）项至第（三）项发生的，应当先于第一）项至 第（三）项受偿。 本法第二十二条第一款第（一）、（二）、（三）、（五）项中有两个以上海事 请求的，不分先后，同时受偿;不足受偿的，按照比例受偿。第（四）项中有两个 以上海事请求的，后发生的先受偿。 Article 23 The maritime claims set out in paragraph 1 of Article 22 shall be satisfied in the order listed. However, any of the maritime claims set out in sub-paragraph (4) arising later than those under sub-paragraph (1) through (3) shall have priority over those under sub-paragraph (1) through (3). In case there are more than two maritime claims under sub-paragraphs (1), (2), (3) or (5) of paragraph 1 of Article 22, they shall be satisfied at the same time regardless of their respective occurrences; where they could not be paid in full, 361

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they shall be paid in proportion. Should there be more than two maritime claims under subparagraph (4), those arising later shall be satisfied first. 第二十四条 因行使船舶优先权产生的诉讼费用，保存、拍卖船舶和分配船舶价 款产生的费用，以及为海事请求人的共同利益而支付的其他费用，应当从船舶拍卖 所得价款中先行拨付。 Article 24 The legal costs for enforcing the maritime liens, the expenses for preserving and selling the ship, the expenses for distribution of the proceeds of sale and other expenses incurred for the common interests of the claimants, shall be deducted and paid first from the proceeds of the auction sale of the ship. 第二十五条 船舶优先权先于船舶留置权受偿，船舶抵押权后于船舶留置权 受偿。 前款所称船舶留置权，是指造船人、修船人在合同另一方未履行合同时，可以留 置所占有的船舶，以保证造船费用或者修船费用得以偿还的权利。船舶留置权在造 船人、修船人不再占有所造或者所修的船舶时消灭。 Article 25 A maritime lien shall have priority over a possessory lien, and a possessory lien shall have priority over ship mortgage. The possessory lien referred to in the preceding paragraph means the right of the ship builder or repairer to secure the building or repairing cost of the ship by means of detaining the ship in his possession when the other party to the contract fails in the performance thereof. The possessory lien shall be extinguished when the ship builder or repairer no longer possesses the ship he has built or repaired. 第二十六条 船舶优先权不因船舶所有权的转让而消灭。但是，船舶转让时,船 舶优先权自法院应受让人申请予以公告之日起满六十日不行使的除外。 Article 26 Maritime liens shall not be extinguished by virtue of the transfer of the ownership of the ship, except those that have not been enforced within 60 days of a public notice on the transfer of the ownership of the ship made by a court at the request of the transferee when the transfer was effected. 第二十七条 本法第二十二条规定的海事请求权转移的，其船舶优先权随之 转移。 Article 27 In case the maritime claims provided for in Article 22 of this Code are transferred, the maritime liens attached thereto shall be transferred accordingly. 第二十八条 船舶优先权应当通过法院扣押产生优先权的船舶行使。 Article 28 A maritime lien shall be enforced by the court by arresting the ship that gave rise to the said maritime lien. 第二十九条

船舶优先权,除本法第二十六条规定的外,因下列原因之一而消灭:

(一) 具有船舶优先权的海事请求，自优先权产生之日起满一年不行使; (二) 船舶经法院强制出售; (三) 船舶灭失。 前款第(一)项的一年期限,不得中止或者中断。 362

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Article 29 A maritime lien shall, except as provided for in Article 26 of this Code, be extinguished under one of the following circumstances: (1) (2) (3)

The maritime claim attached by a maritime lien has not been enforced within one year of the existence of such a maritime lien; The ship in question has been the subject of a forced sale by the court; or The ship has been lost.

The period of one year specified in sub-paragraph (1) of the preceding paragraph shall not be suspended or interrupted. 第三十条 本节规定不影响本法第十一章关于海事赔偿责任限制规定的实施。 Article 30 The provisions of this Section shall not affect the implementation of the limitation of liability for maritime claims provided for in Chapter Xl of this Code. 第三章 船 Chapter III: Crew 第一节 一般规定 Section 1: Basic Principles 第三十一条 船员，是指包括船长在内的船上一切任职人员。 Article 31 The term “crew” means the entire complement of the ship, including the Master. 第三十二条 船长、驾驶员、轮机长、轮机员、电机员、报务员，必须由持有相 应适任证书的人担任。 Article 32 The Master, deck officers, chief engineer, engineers, electrical engineer and radio operator must be those in possession of appropriate certificates of competency. 第三十三条 从事国际航行的船舶的中国籍船员，必须持有中华人民共和国港务 监督机构颁发的海员证和有关证书。 Article 33 Chinese “crew” engaged in international voyages must possess Seaman’s Book and other relevant certificates issued by the harbour superintendence authorities of the People’s Republic of China. 第三十四条 船员的任用和劳动方面的权利、义务，本法没有规定的，适用有关 法律、行政法规的规定。 Article 34 In the absence of specific stipulations in this Code as regards the employment of the crew as well as their labour-related rights and obligations, the provisions of the relevant laws and administrative rules and regulations shall apply. 第二节 船长 Section 2: The Master 第三十五条 船长负责船舶的管理和驾驶。 船长在其职权范围内发布的命令，船员、旅客和其他在船人员都必须执行。 363

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船长应当采取必要的措施，保护船舶和在船人员、文件、邮件、货物以及其他 财产。 Article 35 The Master shall be responsible for the management and navigation of the ship. Orders given by the Master within the scope of his functions and powers must be carried out by other members of the crew, the passengers and all persons on board. The Master shall take necessary measures to protect the ship and all persons on board, the documents, postal matters, the goods as well as other property carried. 第三十六条 为保障在船人员和船舶的安全，船长有权对在船上进行违法、犯罪 活动的人采取禁闭或者其他必要措施，并防止其隐匿、毁灭、伪造证据。 船长采取前款措施，应当制作案情报告书，由船长和两名以上在船人员签字，连 同人犯送交有关当局处理。 Article 36 To ensure the safety of the ship and all persons on board, the Master shall be entitled to confine or take other necessary measures against those who have committed crimes or violated laws or regulations on board, and to guard against their concealment, destruction or forging of evidence. The Master, having taken actions as referred to in the preceding paragraph of this Article, shall make a written report of the case, which shall bear the signature of the Master himself and those of two or more others on board, and shall be handed over, together with the offender, to the authorities concerned for disposition. 第三十七条 船长应当将船上发生的出生或者死亡事件记入航海日志，并在两名 证人的参加下制作证明书。死亡证明书应当附有死者遗物清单。死者有遗嘱的，船 长应当予以证明。死亡证明书和遗嘱由船长负责保管，并送交家属或者有关方面。 Article 37 The Master shall make entries in the log book of any occurrence of birth or death on board and shall issue a certificate to that effect in the presence of two witnesses. The death certificate shall be attached with a list of personal belongings of the deceased, and attestation shall be given by the Master to the will, if any, of the deceased. Both the death certificate and the will shall be taken into safe keeping by the Master and handed over to the family members of the deceased or the organisations concerned. 第三十八条 船舶发生海上事故，危及在船人员和财产的安全时，船长应当组织 船员和其他在船人员尽力施救。在船舶的沉没、毁灭不可避免的情况下，船长可以 作出弃船决定;但是，除紧急情况外，应当报经船舶所有人同意。 弃船时，船长必须采取一切措施，首先组织旅客安全离船，然后安排船员离船， 船长应当最后离船。在离船前，船长应当指挥船员尽力抢救航海日志、机舱日志、 油类记录簿、无线电台日志、本航次使用过的海图和文件，以及贵重物品、邮件和 现金。 Article 38 Where a sea casualty has occurred to a ship and the life and property on board have thus been threatened, the Master shall, with crew members and other persons on board under his command, make best efforts to run to the rescue. Should the foundering and loss of the ship have become inevitable, the Master may decide to abandon the ship. However, such abandonment shall be reported to the shipowner for approval except in case of emergency. 364

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Upon abandoning the ship, the Master must take all measures first to evacuate the passengers safely from the ship in an orderly way, then make arrangements for crew members to evacuate, while the Master shall be the last to evacuate. Before leaving the ship, the Master shall direct the crew members to do their utmost to rescue the deck log book, the engine log book, the oil record book, the radio log book, the charts, documents and papers used in the current voyage, as well as valuables, postal matters and cash money. 第三十九条 船长管理船舶和驾驶船舶的责任，不因引航员引领船舶而解除。 Article 39 The duty of the Master in the management and navigation of the ship shall not be absolved even with the presence of a pilot piloting the ship. 第四十条 船长在航行中死亡或者因故不能执行职务时，应当由驾驶员中职务最 高的人代理船长职务;在下一个港口开航前，船舶所有人应当指派新船长接任。 Article 40 Should death occur to the Master or the Master be unable to perform his duties for whatever reason, the deck officer with the highest rank shall act as the Master; before the ship sails from its next port of call, the shipowner shall appoint a new Master to take command. 第四章 海上 物运 合同 Chapter IV: Contract of Carriage of Goods by Sea 第一节 一般规定 Section 1: Basic Principles 第四十一条 海上货物运输合同，是指承运人收取运费,负责将托运人托运的货 物经海路由一港运至另一港的合同。 Article 41 A contract of carriage of goods by sea is a contract under which the carrier, against payment of freight, undertakes to carry by sea the goods contracted for shipment by the shipper from one port to another. 第四十二条

本章下列用语的含义:

(一) “承运人”，是指本人或者委托他人以本人名义与托运人订立海上货物运输 合同的人。 (二) “实际承运人”，是指接受承运人委托，从事货物运输或者部分运输的人， 包括接受转委托从事此项运输的其他人。 (三) “托运人”，是指: 1. 2.

本人或者委托他人以本人名义或者委托他人为本人与承运人订立海上 货物运输合同的人; 本人或者委托他人以本人名义或者委托他人为本人将货物交给与海上 货物运输合同有关的承运人的人。

(四) “收货人”，是指有权提取货物的人。 (五) “货物”，包括活动物和由托运人提供的用于集装货物的集装箱、货盘或者 类似的装运器具。

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Article 42 For the purposes of this Chapter: (1) (2) (3)

“Carrier” means the person by whom or in whose name a contract of carriage of goods by sea has been concluded with a shipper; “Actual carrier” means the person to whom the performance of carriage of goods, or of part of the carriage, has been entrusted by the carrier, and includes any other person to whom such performance has been entrusted under a sub-contract; “Shipper” means: a) b)

(4) (5)

The person by whom or in whose name or on whose behalf a contract of carriage of goods by sea has been concluded with a carrier; The person by whom or in whose name or on whose behalf the goods have been delivered to the carrier involved in the contract of carriage of goods by sea;

“Consignee” means the person who is entitled to take delivery of the goods; “Goods” includes live animals and containers, pallets or similar articles of transport supplied by the shipper for consolidating the goods.

第四十三条 承运人或者托运人可以要求书面确认海上货物运输合同的成立。但 是，航次租船合同应当书面订立。电报、电传和传真具有书面效力。 Article 43 The carrier or the shipper may demand confirmation of the contract of carriage of goods by sea in writing. However, the voyage charter shall be concluded in writing. Telegrams, telexes and telefaxes have the effect of written documents. 第四十四条 海上货物运输合同和作为合同凭证的提单或者其他运输单证中的 条款，违反本章规定的，无效。此类条款的无效，不影响该合同和提单或者其 他运输单证中其他条款的效力。将货物的保险利益转让给承运人的条款或者类似 条款，无效。 Article 44 Any stipulation in a contract of carriage of goods by sea or a bill of lading or other similar documents evidencing such contract that derogates from the provisions of this Chapter shall be null and void. However, such nullity and voidness shall not affect the validity of other provisions of the contract or the bill of lading or other similar documents. A clause assigning the benefit of insurance of the goods in favour of the carrier or any similar clause shall be null and void. 第四十五条 本法第四十四条的规定不影响承运人在本章规定的承运人责任和义 务之外，增加其责任和义务。 Article 45 The provisions of Article 44 of this Code shall not prejudice the increase of duties and obligations by the carrier besides those set out in this Chapter. 第二节 承运人的责任 Section 2: Carrier’s Responsibilities 第四十六条 承运人对集装箱装运的货物的责任期间，是指从装货港接收货物时 起至卸货港交付货物时止，货物处于承运人掌管之下的全部期间。承运人对非集装 箱装运的货物的责任期间，是指从货物装上船时起至卸下船时止，货物处于承运人 366

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掌管之下的全部期间。在承运人的责任期间，货物发生灭失或者损坏，除本节另有 规定外，承运人应当负赔偿责任。 前款规定，不影响承运人就非集装箱装运的货物，在装船前和卸船后所承担的责 任，达成任何协议。 Article 46 The responsibilities of the carrier with regard to the goods carried in containers covers the entire period during which the carrier is in charge of the goods, starting from the time the carrier has taken over the goods at the port of loading, until the goods have been delivered at the port of discharge. The responsibility of the carrier with respect to noncontainerised goods covers the period during which the carrier is in charge of the goods, starting from the time of loading of the goods onto the ship until the time the goods are discharged therefrom. During the period the carrier is in charge of the goods, the carrier shall be liable for the loss of or damage to the goods, except as otherwise provided for in this Section. The provisions of the preceding paragraph shall not prejudice any carrier’s agreement concerning his responsibilities with regard to non-containerised goods prior to loading onto and after discharging from the ship. 第四十七条 承运人在船舶开航前和开航当时，应当谨慎处理，使船舶处于适航 状态，妥善配备船员、装备船舶和配备供应品，并使货舱、冷藏舱、冷气舱和其他 载货处所适于并能安全收受、载运和保管货物。 Article 47 The carrier shall, before and at the beginning of the voyage, exercise due diligence to make the ship seaworthy, properly man, equip and supply the ship and to make the holds, refrigerating and cool chambers and all other parts of the ship in which goods are carried, fit and safe for their reception, carriage and preservation. 第四十八条 承运人应当妥善地、谨慎地装载、搬移、积载、运输、保管、照料 和卸载所运货物。 Article 48 The carrier shall properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried. 第四十九条 承运人应当按照约定的或者习惯的或者地理上的航线将货物运往卸 货港。 船舶在海上为救助或者企图救助人命或者财产而发生的绕航或者其他合理绕航， 不属于违反前款规定的行为。 Article 49 The carrier shall carry the goods to the port of discharge on the agreed or customary or geographically direct route. Any deviation in saving or attempting to save life or property at sea or any reasonable deviation shall not be deemed to be an act deviating from the provisions of the preceding paragraph. 第五十条 货物未能在明确约定的时间内，在约定的卸货港交付的，为迟延 交付。 除依照本章规定承运人不负赔偿责任的情形外，由于承运人的过失，致使货物因 迟延交付而灭失或者损坏的，承运人应当负赔偿责任。 除依照本章规定承运人不负赔偿责任的情形外，由于承运人的过失，致使货物因 迟延交付而遭受经济损失的，即使货物没有灭失或者损坏，承运人仍然应当负赔偿 责任。 367

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承运人未能在本条第一款规定的时间届满六十日内交付货物，有权对货物灭失提 出赔偿请求的人可以认为货物已经灭失。 Article 50 Delay in delivery occurs when the goods have not been delivered at the designated port of discharge within the time expressly agreed upon. The carrier shall be liable for the loss of or damage to the goods caused by delay in delivery due to the fault of the carrier, except those arising or resulting from causes for which the carrier is not liable as provided for in the relevant Articles of this Chapter. The carrier shall be liable for the economic losses caused by delay in delivery of the goods due to the fault of the carrier, even if no loss of or damage to the goods had actually occurred, unless such economic losses had occurred from causes for which the carrier is not liable as provided for in the relevant Articles of this Chapter. The person entitled to make a claim for the loss of goods may treat the goods as lost when the carrier has not delivered the goods within 60 days from the expiry of the time for delivery specified in paragraph 1 of this Article. 第五十一条 在责任期间货物发生的灭失或者损坏是由于下列原因之一造成的， 承运人不负赔偿责任: (一)

船长、船员、引航员或者承运人的其他受雇人在驾驶船舶或者管理船舶 中的过失; (二) 火灾，但是由于承运人本人的过失所造成的除外; (三) 天灾，海上或者其他可航水域的危险或者意外事故; (四) 战争或者武装冲突; (五) 政府或者主管部门的行为、检疫限制或者司法扣押; (六) 罢工、停工或者劳动受到限制; (七) 在海上救助或者企图救助人命或者财产; (八) 托运人、货物所有人或者他们的代理人的行为; (九) 货物的自然特性或者固有缺陷; (十) 货物包装不良或者标志欠缺、不清; (十一) 经谨慎处理仍未发现的船舶潜在缺陷; (十二) 非由于承运人或者承运人的受雇人、代理人的过失造成的其他原因。

承运人依照前款规定免除赔偿责任的，除第(二)项规定的原因外，应当负举证 责任。 Article 51 The carrier shall not be liable for the loss of or damage to the goods occurred during the period of carrier’s responsibility arising or resulting from any of the following causes: (1) Fault of the Master, crew members, pilot or servant of the carrier in the navigation or management of the ship; (2) Fire, unless caused by the actual fault of the carrier; (3) Act of God and perils, dangers and accidents of the sea or other navigable waters; (4) War or armed conflict; (5) Act of the government or competent authorities, quarantine restrictions or seizure under legal process; (6) Strikes, stoppages or restraint of labour; (7) Saving or attempting to save life or property at sea; 368

ANNEX I

(8) (9) (10) (11) (12)

Act of the shipper, owner of the goods or their agents; Nature or inherent vice of the goods; Inadequacy of packing or insufficiency or illegibility of marks; Latent defect of the ship not discoverable by due diligence; and Any other cause arising without the fault of the carrier or his servant or agent.

The carrier who is entitled to exoneration from the liability for compensation as provided for in the preceding paragraph shall, with the exception of the causes given in subparagraph (2), bear the burden of proof. 第五十二条 因运输活动物的固有的特殊风险造成活动物灭失或者损害的，承运 人不负赔偿责任。但是，承运人应当证明业已履行托运人关于运输活动物的特别要 求，并证明根据实际情况，灭失或者损害是由于此种固有的特殊风险造成的。 Article 52 The carrier shall not be liable for the loss of or damage to the live animals arising or resulting from the special risks inherent in the carriage thereof. However, the carrier shall be bound to prove that he has fulfilled the special requirements of the shipper with regard to the carriage of the live animals and that under the circumstances of the sea carriage, the loss or damage has occurred due to the special risks inherent therein. 第五十三条 承运人在舱面上装载货物，应当同托运人达成协议，或者符合航运 惯例，或者符合有关法律、行政法规的规定。 承运人依照前款规定将货物装载在舱面上，对由于此种装载的特殊风险造成的货 物灭失或者损坏，不负赔偿责任。 承运人违反本条第一款规定将货物装载在舱面上，致使货物遭受灭失或者损坏 的，应当负赔偿责任。 Article 53 In case the carrier intends to ship the goods on deck, he shall come into an agreement with the shipper or comply with the custom of the trade or the relevant laws or administrative rules and regulations. When the goods have been shipped on deck in accordance with the provisions of the preceding paragraph, the carrier shall not be liable for the loss of or damage to the goods caused by the special risks involved in such carriage. If the carrier, in breach of the provisions of the first paragraph of this Article, has shipped the goods on deck and the goods have consequently suffered loss or damage, the carrier shall be liable therefore. 第五十四条 货物的灭失、损坏或者迟延交付是由于承运人或者承运人的受雇 人、代理人的不能免除赔偿责任的原因和其他原因共同造成的，承运人仅在其不能 免除赔偿责任的范围内负赔偿责任;但是，承运人对其他原因造成的灭失、损坏或 者迟延交付应当负举证责任。 Article 54 Where loss or damage or delay in delivery has occurred from causes from which the carrier or his servant or agent is not entitled to exoneration from liability, together with another cause, the carrier shall be liable only to the extent that the loss, damage or delay in delivery is attributable to the causes from which the carrier is not entitled to exoneration from liability; however, the carrier shall bear the burden of proof with respect to the loss, damage or delay in delivery resulting from the other cause. 369

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第五十五条 货物灭失的赔偿额，按照货物的实际价值计算;货物损坏的赔偿 额，按照货物受损前后实际价值的差额或者货物的修复费用计算。 货物的实际价值，按照货物装船时的价值加保险费加运费计算。 前款规定的货物实际价值，赔偿时应当减去因货物灭失或者损坏而少付或者免付 的有关费用。 Article 55 The amount of indemnity for the loss of the goods shall be calculated on the basis of the actual value of the goods so lost, while that for the damage to the goods shall be calculated on the basis of the difference between the values of the goods before and after the damage, or on the basis of the expenses for the repair. The actual value shall be the value of the goods at the time of shipment plus insurance and freight. From the actual value referred to in the preceding paragraph, deduction shall be made, at the time of compensation, of the expenses that had been reduced or avoided as a result of the loss or damage occurred. 第五十六条 承运人对货物的灭失或者损坏的赔偿限额，按照货物件数或者其他 货运单位数计算，每件或者每个其他货运单位为666.67计算单位，或者按照货物毛 重计算，每公斤为2计算单位，以二者中赔偿限额较高的为准。但是，托运人在货 物装运前已经申报其性质和价值，并在提单中载明的，或者承运人与托运人已经另 行约定高于本条规定的赔偿限额的除外。 货物用集装箱、货盘或者类似装运器具集装的，提单中载明装在此类装运器具中 的货物件数或者其他货运单位数，视为前款所指的货物件数或者其他货运单位数; 未载明的，每一装运器具视为一件或者一个单位。 装运器具不属于承运人所有或者非由承运人提供的，装运器具本身应当视为一件 或者一个单位。 Article 56 The carrier’s liability for the loss of or damage to the goods shall be limited to an amount equivalent to 666.67 Units of Account per package or other shipping unit, or 2 Units of Account per kilogramme of the gross weight of the goods lost or damaged, whichever is the higher, except where the nature and value of the goods had been declared by the shipper before shipment and inserted in the bill of lading, or where a higher amount than the amount of limitation of liability set out in this Article had been agreed upon between the carrier and the shipper. Where a container, pallet or similar article of transport is used to consolidate goods, the number of packages or other shipping units enumerated in the bill of lading as packed in such article of transport shall be deemed to be the number of packages or shipping units. If not so enumerated, the goods in such article of transport shall be deemed to be one package or one shipping unit. Where the article of transport is not owned or furnished by the carrier, such article of transport shall be deemed to be one package or one shipping unit. 第五十七条 承运人对货物因迟延交付造成经济损失的赔偿限额，为所迟延交付 的货物的运费数额。货物的灭失或者损坏和迟延交付同时发生的，承运人的赔偿责 任限额适用本法第五十六条第一款规定的限额。 Article 57 The liability of the carrier for the economic losses resulting from delay in delivery of the goods shall be limited to an amount equivalent to the freight payable for the goods so delayed. Where the loss of or damage to the goods has occurred concurrently with 370

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the delay in delivery thereof, the limitation of liability of the carrier shall be that as provided for in paragraph 1 of Article 56 of this Code. 第五十八条 就海上货物运输合同所涉及的货物灭失、损坏或者迟延交付对承运 人提起的任何诉讼，不论海事请求人是否合同的一方，也不论是根据合同或者是根 据侵权行为提起的，均适用本章关于承运人的抗辩理由和限制赔偿责任的规定。 前款诉讼是对承运人的受雇人或者代理人提起的，经承运人的受雇人或者代理人 证明，其行为是在受雇或者受委托的范围之内的，适用前款规定。 Article 58 The defence and limitation of liability provided for in this Chapter shall apply to any legal action brought against the carrier with regard to the loss of or damage to or delay in delivery of the goods covered by the contract of carriage of goods by sea, whether or not the claimant is a party to the contract or whether the action is founded in contract or in tort. The provisions of the preceding paragraph shall apply if the action referred to in the preceding paragraph is brought against the carrier’s servant or agent, and the carrier’s servant or agent proves that his action was within the scope of his employment or agency. 第五十九条 经证明，货物的灭失、损坏或者迟延交付是由于承运人的故意或者 明知可能造成损失而轻率地作为或者不作为造成的，承运人不得援用本法第五十六 条或者第五十七条限制赔偿责任的规定。 经证明，货物的灭失、损坏或者迟延交付是由于承运人的受雇人、代理人的故意 或者明知可能造成损失而轻率地作为或者不作为造成的，承运人的受雇人或者代理 人不得援用本法第五十六条或者第五十七条限制赔偿责任的规定。 Article 59 The carrier shall not be entitled to the benefit of the limitation of liability provided for in Article 56 or 57 of this Code if it is proved that the loss of, damage to or delay in delivery of the goods resulted from an act or omission of the carrier done with the intent to cause such loss, damage or delay or recklessly and with knowledge that such loss, damage or delay would probably result. The servant or agent of the carrier shall not be entitled to the benefit of limitation of liability provided for in article 56 or 57 of this Code, if it is proved that the loss, damage or delay in delivery resulted from an act or omission of the servant or agent of the carrier done with the intent to cause such loss, damage or delay or recklessly and with knowledge that such loss, damage or delay would probably result. 第六十条 承运人将货物运输或者部分运输委托给实际承运人履行的，承运人仍 然应当依照本章规定对全部运输负责。对实际承运人承担的运输，承运人应当对实 际承运人的行为或者实际承运人的受雇人、代理人在受雇或者受委托的范围内的行 为负责。 虽有前款规定，在海上运输合同中明确约定合同所包括的特定的部分运输由承运 人以外的指定的实际承运人履行的，合同可以同时约定，货物在指定的实际承运人 掌管期间发生的灭失、损坏或者迟延交付，承运人不负赔偿责任。 Article 60 Where the performance of the carriage or part thereof has been entrusted to an actual carrier, the carrier shall nevertheless remain responsible for the entire carriage according to the provisions of this Chapter. The carrier shall be responsible, in relation to the carriage performed by the actual carrier, for the act or omission of the actual carrier and of his servant or agent acting within the scope of his employment or agency. 371

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Notwithstanding the provisions of the preceding paragraph, where a contract of carriage by sea provides explicitly that a specified part of the carriage covered by the said contract is to be performed by a named actual carrier other than the carrier, the contract may nevertheless provide that the carrier shall not be liable for the loss, damage or delay in delivery arising from an occurrence which takes place while the goods are in the charge of the actual carrier during such part of the carriage. 第六十一条 本章对承运人责任的规定，适用于实际承运人。对实际承运人的受 雇人、代理人提起诉讼的，适用本法第五十八条第二款和第五十九条第二款的规定。 Article 61 The provisions with respect to the responsibility of the carrier contained in this Chapter shall be applicable to the actual carrier. Where an action is brought against the servant or agent of the actual carrier, the provisions contained in paragraph 2 of Article 58 and paragraph 2 of Article 59 of this Code shall apply. 第六十二条 承运人承担本章未规定的义务或者放弃本章赋予的权利的任何特别 协议，经实际承运人书面明确同意的，对实际承运人发生效力;实际承运人是否同 意，不影响此项特别协议对承运人的效力。 Article 62 Any special agreement under which the carrier assumes obligations not provided for in this Chapter or waives rights provided by this Chapter shall be binding upon the actual carrier when the actual carrier has agreed in writing to the contents thereof. The provisions of such special agreement shall be binding upon the carrier no matter whether the actual carrier accepts it. 第六十三条 承运人与实际承运人都负有赔偿责任的，应当在此项责任范围内负 连带责任。 Article 63 Where both the carrier and the actual carrier are liable for compensation, they shall jointly and severally be liable within the scope of such liability. 第六十四条 就货物的灭失或者损坏分别向承运人、实际承运人以及他们的受 雇人、代理人提出赔偿请求的，赔偿总额不超过本法第五十六条规定的限额 Article 64 If claims for compensation have been separately made against the carrier, the actual carrier and their servants or agents with regard to the loss of or damage to the goods, the aggregate amount of compensation shall not be in excess of the limitation provided for in Article 56 of this Code. 第六十五条 本法第六十条至第六十四条的规定，不影响承运人和实际承运人之 间相互追偿。 Article 65 The provisions of Article 60 through 64 of this Code shall not affect the recourse between the carrier and the actual carrier. 第三节托运人的责任 Section 3: Shipper’s Responsibilities 第六十六条 托运人托运货物，应当妥善包装，并向承运人保证，货物装船时所 提供的货物的品名、标志、包数或者件数、重量或者体积的正确性;由于包装不良 或者上述资料不正确，对承运人造成损失的，托运人应当负赔偿责任。 372

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承运人依照前款规定享有的受偿权利，不影响其根据货物运输合同对托运人以外 的人所承担的责任。 Article 66 The shipper shall have the goods properly packed and shall guarantee the accuracy of the name, mark, number of packages or pieces, weight or quantity of the goods at the time of shipment and shall indemnify the carrier against any loss resulting from the improper package or the inaccuracies in the above-mentioned information. The carrier’s right to indemnification as provided for in the preceding paragraph shall not affect the obligation of the carrier under the contract of carriage of goods towards those other than the shipper. 第六十七条 托运人应当及时向港口、海关、检疫、检验和其他主管机关办理货 物运输所需要的各项手续，并将已办理各项手续的单证送交承运人;因办理各项手 续的有关单证送交不及时、不完备或者不正确，使承运人的利益受到损害的，托运 人应当负赔偿责任。 Article 67 The shipper shall perform all necessary procedures at the port, customs, quarantine, inspection or other competent authorities with respect to the shipment of the goods and shall furnish to the carrier all relevant documents concerning the procedures the shipper has gone through. The shipper shall be liable for any damage to the interest of the carrier resulting from the inadequacy or inaccuracy or delay in delivery of such documents. 第六十八条 托运人托运危险货物，应当依照有关海上危险货物运输的规定，妥 善包装，作出危险品标志和标签，并将其正式名称和性质以及应当采取的预防危害 措施书面通知承运人;托运人未通知或者通知有误的，承运人可以在任何时间、任 何地点根据情况需要将货物卸下、销毁或者使之不能为害，而不负赔偿责任。托运 人对承运人因运输此类货物所受到的损害，应当负赔偿责任。 承运人知道危险货物的性质并已同意装运的，仍然可以在该项货物对于船舶、人 员或者其他货物构成实际危险时，将货物卸下、销毁或者使之不能为害，而不负赔 偿责任。但是，本款规定不影响共同海损的分摊。 Article 68 At the time of shipment of dangerous goods, the shipper shall, in compliance with the regulations governing the carriage of such goods, have them properly packed, distinctly marked and labelled and notify the carrier in writing of their proper description, nature and the precautions to be taken. In case the shipper fails to notify the carrier or notified him inaccurately, the carrier may have such goods landed, destroyed or rendered innocuous when and where circumstances so require, without compensation. The shipper shall be liable to the carrier for any loss, damage or expense resulting from such shipment. Notwithstanding the carrier’s knowledge of the nature of the dangerous goods and his consent to carry, he may still have such goods landed, destroyed or rendered innocuous, without compensation, when they become an actual danger to the ship, the crew and other persons on board or to other goods. However, the provisions of this paragraph shall not prejudice the contribution in general average, if any. 第六十九条 托运人应当按照约定向承运人支付运费。 托运人与承运人可以约定运费由收货人支付;但是，此项约定应当在运输单证中 载明。 Article 69 The shipper shall pay the freight to the carrier as agreed. 373

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The shipper and the carrier may reach an agreement that the freight shall be paid by the consignee. However, such an agreement shall be stated in the transport documents. 第七十条 托运人对承运人、实际承运人所遭受的损失或者船舶所遭受的损坏， 不负赔偿责任;但是，此种损失或者损坏是由于托运人或者托运人的受雇人、代理 人的过失造成的除外。 托运人的受雇人、代理人对承运人、实际承运人所遭受的损失或者船舶所遭受的 损坏，不负赔偿责任;但是，这种损失或者损坏是由于托运人的受雇人、代理人的 过失造成的除外。 Article 70 The shipper shall not be liable for the loss sustained by the carrier or the actual carrier, or for the damage sustained by the ship, unless such loss or damage was caused by the fault of the shipper, his servant or agent. The servant or agent of the shipper shall not be liable for the loss sustained by the carrier or the actual carrier, or for the damage sustained by the ship, unless the loss or damage was caused by the fault of the servant or agent of the shipper. 第四节 运输单证 Section 4: Transport Documents 第七十一条 提单，是指用以证明海上货物运输合同和货物已经由承运人接收或 者装船，以及承运人保证据以交付货物的单证。提单中载明的向记名人交付货物， 或者按照指示人的指示交付货物，或者向提单持有人交付货物的条款，构成承运人 据以交付货物的保证。 Article 71 A bill of lading is a document which serves as evidence of the contract of carriage of goods by sea and the taking over or loading of the goods by the carrier, and based on which the carrier undertakes to deliver the goods against surrendering the same. A provision in the document stating that the goods are to be delivered to the order of a named person, or to order, or to bearer, constitutes such an undertaking. 第七十二条 货物由承运人接收或者装船后，应托运人的要求，承运人应当签发 提单。 提单可以由承运人授权的人签发。提单由载货船舶的船长签发的，视为代表承运 人签发。 Article 72 When the goods have been taken over by the carrier or have been loaded on board, the carrier shall, on demand of the shipper, issue a bill of lading. The bill of lading may be issued by a person authorised by the carrier. A bill of lading issued by the Master of the ship carrying the goods is deemed to have been issued on behalf of the carrier. 第七十三条 提单内容,包括下列各项: (一) (二) (三) (四)

货物的品名、标志、包数或者件数、重量或者体积，以及运输危险货物 时对危险性质的说明; 承运人的名称和主营业所; 船舶名称; 托运人的名称; 374

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(五) (六) (七) (八) (九) (十) (十一)

收货人的名称; 装货港和在装货港接收货物的日期; 卸货港; 多式联运提单增列接收货物地点和交付货物地点; 提单的签发日期、地点和份数; 运费的支付; 承运人或者其代表的签字。

提单缺少前款规定的一项或者几项的,不影响提单的性质;但是,提单应当符合本 法第七十一条的规定。 Article 73 A bill of lading shall contain the following particulars: (1) Name of the goods, mark, number of packages or pieces, weight or quantity, and a statement, if applicable, as to the dangerous nature of the goods; (2) Name and principal place of business of the carrier; (3) Name of the ship; (4) Name of the shipper; (5) Name of the consignee; (6) Port of loading and the date on which the goods were taken over by the carrier at the port of loading; (7) Port of discharge; (8) Place where the goods were taken over and the place where the goods are to be delivered in case of a multimodal transport bill of lading; (9) Date and place of issue of the bill of lading and the number of originals issued; (10) Payment of freight; (11) Signature of the carrier or of a person acting on his behalf. In a bill of lading, the lack of one or more particulars referred to in the preceding paragraph does not affect the function of the bill of lading as such, provided that it nevertheless meets the requirements set forth in Article 71 of this Code. 第七十四条 货物装船前，承运人已经应托运人的要求签发收货待运提单或者其 他单证的，货物装船完毕，托运人可以将收货待运提单或者其他单证退还承运人， 以换取已装船提单;承运人也可以在收货待运提单上加注承运船舶的船名和装船日 期，加注后的收货待运提单视为已装船提单。 Article 74 Where the carrier has issued, on demand of the shipper, a received-forshipment bill of lading or other similar documents before the goods are loaded on board, the shipper may surrender the same to the carrier for the issue of a shipped bill of lading when the goods have been loaded on board. The carrier may also note on the received-forshipment bill of lading or other similar documents with the name of the carrying ship and the date of loading, and, when so noted, the received-for-shipment bill of lading or other similar documents shall be deemed as a shipped bill of lading. 第七十五条 承运人或者代其签发提单的人，知道或者有合理的根据怀疑提单记 载的货物的品名、标志、包数或者件数、重量或者体积与实际接收的货物不符，在 签发已装船提单的情况下怀疑与已装船的货物不符，或者没有适当的方法核对提单 记载的，可以在提单上批注，说明不符之处、怀疑的根据或者说明无法核对。 375

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Article 75 If the bill of lading contains particulars concerning the name, mark, number of packages or pieces, weight or quantity of the goods with respect to which the carrier or the other person issuing the bill of lading on his behalf has the knowledge or reasonable grounds to suspect that such particulars do not accurately represent the goods actually received, or, where a shipped bill of lading is issued, loaded, or if he has had no reasonable means of checking, the carrier or such other person may make a note in the bill of lading specifying those inaccuracies, the grounds for suspicion or the lack of reasonable means of checking. 第七十六条 承运人或者代其签发提单的人未在提单上批注货物表面状况的，视 为货物的表面状况良好。 Article 76 If the carrier or the other person issuing the bill of lading on his behalf made no note in the bill of lading regarding the apparent order and condition of the goods, the goods shall be deemed to be in apparent good order and condition. 第七十七条 除依照本法第七十五条的规定作出保留外，承运人或者代其签发提 单的人签发的提单，是承运人已经按照提单所载状况收到货物或者货物已经装船的 初步证据;承运人向善意受让提单的包括收货人在内的第三人提出的与提单所载状 况不同的证据，不予承认。 Article 77 Except for the note made in accordance with the provisions of Article 75 of this Code, the bill of lading issued by the carrier or the other person acting on his behalf is prima facie evidence of the taking over or loading by the carrier of the goods as described therein. Proof to the contrary regarding the description of the goods contained in the bill of lading from the carrier shall not be admissible if the bill of lading has been transferred to a third party including a consignee in good faith. 第七十八条 承运人同收货人、提单持有人之间的权利、义务关系，依据提单的 规定确定。 收货人、提单持有人不承担在装货港发生的滞期费、亏舱费和其他与装货有关的 费用，但是提单中明确载明上述费用由收货人、提单持有人承担的除外。 Article 78 The relationship between the carrier and consignee and the holder of the bill of lading with respect to their rights and obligations shall be defined by the clauses of the bill of lading. Neither the consignee nor the holder of the bill of lading shall be liable for the demurrage, dead freight and all other expenses in respect of loading occurred at the loading port unless the bill of lading clearly states that the aforesaid demurrage, dead freight and all other expenses shall be borne by the consignee and the holder of the bill of lading. 第七十九条

提单的转让,依照下列规定执行:

(一) 记名提单: 不得转让; (二) 指示提单: 经过记名背书或者空白背书转让; (三) 不记名提单: 无需背书，即可转让。 Article 79 The negotiability of a bill of lading shall be governed by the following provisions: (1)

A straight bill of lading is not negotiable; 376

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(2) (3)

An order bill of lading may be negotiated with endorsement to order or endorsement in blank; A bearer bill of lading is negotiable without endorsement.

第八十条 承运人签发提单以外的单证用以证明收到待运货物的，此项单证即为 订立海上货物运输合同和承运人接收该单证中所列货物的初步证据。 承运人签发的此类单证不得转让 Article 80 Where a carrier has issued a document other than a bill of lading as an evidence of the receipt of the goods to be carried, such a document is prima facie evidence of the conclusion of the contract of carriage of goods by sea and the taking over by the carrier of the goods as described therein. Such documents that are issued by the carrier shall not be negotiable.

第五节 货物交付 Section 5: Delivery of Goods 第八十一条 承运人向收货人交付货物时，收货人未将货物灭失或者损坏的情况 书面通知承运人的，此项交付视为承运人已经按照运输单证的记载交付以及货物状 况良好的初步证据。 货物灭失或者损坏的情况非显而易见的，在货物交付的次日起连续七日内，集装 箱货物交付的次日起连续十五日内，收货人未提交书面通知的，适用前款规定。 货物交付时，收货人已经会同承运人对货物进行联合检查或者检验的，无需就所 查明的灭失或者损坏的情况提交书面通知。 Article 81 Unless notice of loss or damage is given in writing by the consignee to the carrier at the time of delivery of the goods by the carrier to the consignee, such delivery shall be deemed to be prima facie evidence of the delivery of the goods by the carrier as described in the transport documents and of the apparent good order and condition of such goods. Where the loss of or damage to the goods is not apparent, the provisions of the preceding paragraph shall apply if the consignee has not given the notice in writing within 7 consecutive days from the next day of the delivery of the goods, or, in the case of containerised goods, within 15 days from the next day of the delivery thereof. The notice in writing regarding the loss or damage need not be given if the state of the goods has, at the time of delivery, been the subject of a joint survey or inspection by the carrier and the consignee. 第八十二条 承运人自向收货人交付货物的次日起连续六十日内，未收到收货人 就货物因迟延交付造成经济损失而提交的书面通知的，不负赔偿责任。 Article 82 The carrier shall not be liable for compensation if no notice on the economic losses resulting from delay in delivery of the goods has been received from the consignee within 60 consecutive days from the next day on which the goods had been delivered by the carrier to the consignee. 第八十三条 收货人在目的港提取货物前或者承运人在目的港交付货物前，可以 要求检验机构对货物状况进行检验;要求检验的一方应当支付检验费用，但是有权 向造成货物损失的责任方追偿。 377

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Article 83 The consignee may, before taking delivery of the goods at the port of destination, and the carrier may, before delivering the goods at the port of destination, request the cargo inspection agency to have the goods inspected. The party requesting such inspection shall bear the cost thereof but is entitled to recover the same from the party causing the damage. 第八十四条 承运人和收货人对本法第八十一条和第八十三条规定的检验，应当 相互提供合理的便利条件。 Article 84 The carrier and the consignee shall mutually provide reasonable facilities for the survey and inspection stipulated in Articles 81 and 83 of this Code. 第八十五条 货物由实际承运人交付的，收货人依照本法第八十一条的规定向实 际承运人提交的书面通知，与向承运人提交书面通知具有同等效力;向承运人提交 的书面通知，与向实际承运人提交书面通知具有同等效力。 Article 85 Where the goods have been delivered by the actual carrier, the notice in writing given by the consignee to the actual carrier under Article 81 of this Code shall have the same effect as that given to the carrier; the notice given to the carrier shall have the same effect as that given to the actual carrier. 第八十六条 在卸货港无人提取货物或者收货人迟延、拒绝提取货物的，船长可 以将货物卸在仓库或者其他适当场所，由此产生的费用和风险由收货人承担。 Article 86 If the goods were not taken delivery of at the port of discharge or if the consignee has delayed or refused the taking delivery of the goods, the Master may discharge the goods into warehouses or other appropriate places, and any expenses or risks arising therefrom shall be borne by the consignee. 第八十七条 应当向承运人支付的运费、共同海损分摊、滞期费和承运人为货物 垫付的必要费用以及应当向承运人支付的其他费用没有付清，又没有提供适当担保 的，承运人可以在合理的限度内留置其货物。 Article 87 If the freight, contribution in general average, demurrage to be paid to the carrier and other necessary charges paid by the carrier on behalf of the owner of the goods as well as other charges to be paid to the carrier have not been paid in full, nor has appropriate security been given, the carrier has a lien, to a reasonable extent, on the goods. 第八十八条 承运人根据本法第八十七条规定留置的货物，自船舶抵达卸货港的 次日起满六十日无人提取的，承运人可以申请法院裁定拍卖;货物易腐烂变质或者 货物的保管费用可能超过其价值的，可以申请提前拍卖。 拍卖所得价款，用于清偿保管、拍卖货物的费用和运费以及应当向承运人支付的 其他有关费用;不足的金额，承运人有权向托运人追偿;剩余的金额，退还托运人; 无法退还、自拍卖之日起满一年又无人领取的，上缴国库 Article 88 If the goods under lien in accordance with the provisions of Article 87 of this Code have not been taken delivery of within 60 days from the next day of the ship’s arrival at the port of discharge, the carrier may apply to the court for an order on selling the goods by auction; where the goods are perishable or the expenses for keeping such goods would exceed their value, the carrier may apply for an earlier sale by auction. 378

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The proceeds from the auction sale shall be used to pay off the expenses for the storage and auction sale of the goods, the freight and other related charges to be paid to the carrier. If the proceeds fall short of such expenses, the carrier is entitled to claim the difference from the shipper, whereas any amount in surplus shall be refunded to the shipper. If there is no way to make the refund and such surplus amount has not been claimed at the end of one full year after the auction sale, it shall go to the State Treasury.

第六节 合同的解除 Section 6: Cancellation of Contract 第八十九条 船舶在装货港开航前，托运人可以要求解除合同。但是，除合同另 有约定外，托运人应当向承运人支付约定运费的一半;货物已经装船的，并应当负 担装货、卸货和其他与此有关的费用。 Article 89 The shipper may request the cancellation of the contract of carriage of goods by sea before the ship sails from the port of loading. However, except as otherwise provided for in the contract, the shipper shall in this case pay half of the agreed amount of freight; if the goods have already been loaded on board, the shipper shall bear the expenses for the loading and discharge and other related charges. 第九十条 船舶在装货港开航前，因不可抗力或者其他不能归责于承运人和托 运人的原因致使合同不能履行的，双方均可以解除合同，并互相不负赔偿责任。 除合同另有约定外，运费已经支付的，承运人应当将运费退还给托运人;货物已 经装船的，托运人应当承担装卸费用;已经签发提单的，托运人应当将提单退还 承运人。 Article 90 Either the carrier or the shipper may request the cancellation of the contract and neither shall be liable to the other if, due to force majeure or other causes not attributable to the fault of the carrier or the shipper, the contract could not be performed prior to the ship’s sailing from its port of loading. If the freight has already been paid, it shall be refunded to the shipper, and, if the goods have already been loaded on board, the loading and discharge expenses shall be borne by the shipper. If a bill of lading has already been issued, it shall be returned by the shipper to the carrier. 第九十一条 因不可抗力或者其他不能归责于承运人和托运人的原因致使船舶不 能在合同约定的目的港卸货的，除合同另有约定外，船长有权将货物在目的港邻近 的安全港口或者地点卸载，视为已经履行合同。 船长决定将货物卸载的，应当及时通知托运人或者收货人，并考虑托运人或者收 货人的利益。 Article 91 If, due to force majeure or any other causes not attributable to the fault of the carrier or the shipper, the ship could not discharge its goods at the port of destination as provided for in the contract of carriage, unless the contract provides otherwise, the Master shall be entitled to discharge the goods at a safe port or place near the port of destination and the contract of carriage shall be deemed to have been fulfilled. In deciding the discharge of the goods, the Master shall inform the shipper or the consignee and shall take the interests of the shipper or the consignee into consideration. 379

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第七节 航次租船合同的特别规定 Section 7: Special Provisions Regarding Voyage Charterparty 第九十二条 航次租船合同，是指船舶出租人向承租人提供船舶或者船舶的部分 舱位，装运约定的货物，从一港运至另一港，由承租人支付约定运费的合同。 Article 92 A voyage charterparty is a charterparty under which the shipowner provides the whole or part of the ship’s space to the charterer for the carriage by sea of the agreed goods from one port to another and the charterer pays the agreed amount of freight. 第九十三条 航次租船合同的内容，主要包括出租人和承租人的名称、船名、船 籍、载货重量、容积、货名、装货港和目的港、受载期限、装卸期限、运费、滞期 费、速遣费以及其他有关事项。 Article 93 A voyage charterparty shall mainly contain, inter alia, name of the shipowner, name of the charterer, name and nationality of the ship, its bale or grain capacity, description of the goods to be loaded, port of loading, port of destination, laydays, laytime, freight, demurrage, dispatch and other relevant matters. 第九十四条 本法第四十七条和第四十九条的规定，适用于航次租船合同的出 租人。 本章其他有关合同当事人之间的权利、义务的规定，仅在航次租船合同没有约定 或者没有不同约定时，适用于航次租船合同的出租人和承租人。 Article 94 The provisions in Article 47 and Article 49 of this Code shall apply to the shipowner under voyage charterparty. The other provisions in this Chapter regarding the rights and obligations of the parties to the contract shall apply to the shipowner and the charterer under voyage charter only in the absence of relevant provisions or in the absence of provisions differing therefrom in the voyage charter. 第九十五条 对按照航次租船合同运输的货物签发的提单，提单持有人不是承租 人的，承运人与该提单持有人之间的权利、义务关系适用提单的约定。但是，提单 中载明适用航次租船合同条款的，适用该航次租船合同的条款。 Article 95 Where a bill of lading is issued under a voyage charter and the holder of the bill of lading is not the charterer, the rights and obligations of the carrier and the holder of the bill of lading shall be governed by the clauses of the bill of lading. However, if the clauses of the voyage charterparty are incorporated into the bill of lading, the relevant clauses of the voyage charterparty shall apply. 第九十六条 出租人应当提供约定的船舶;经承租人同意，可以更换船舶。但是， 提供的船舶或者更换的船舶不符合合同约定的，承租人有权拒绝或者解除合同。 因出租人过失未提供约定的船舶致使承租人遭受损失的，出租人应当负赔 偿责任。 Article 96 The shipowner shall provide the agreed ship. The agreed ship may be substituted with the consent of the charterer. However, if the substituted ship does not meet the requirements of the charterparty, the charterer may reject the ship or cancel the charter. Should the charterer suffer any loss or damage as a result of the shipowner’s failure in providing the agreed ship due to his fault, the shipowner shall be liable for compensation. 380

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第九十七条 出租人在约定的受载期限内未能提供船舶的，承租人有权解除合 同。但是，出租人将船舶延误情况和船舶预期抵达装货港的日期通知承租人的，承 租人应当自收到通知时起四十八小时内，将是否解除合同的决定通知出租人。 因出租人过失延误提供船舶致使承租人遭受损失的，出租人应当负赔偿责任。 Article 97 If the shipowner has failed to provide the ship within the laydays fixed in the charter, the charterer is entitled to cancel the charterparty. However, if the shipowner had notified the charterer of the delay of the ship and the expected date of its arrival at the port of loading, the charterer shall notify the shipowner whether to cancel the charter within 48 hours of the receipt of the shipowner’s notification. Where the charterer has suffered losses as a result of the delay in providing the ship due to the fault of the shipowner, the shipowner shall be liable for compensation. 第九十八条 航次租船合同的装货、卸货期限及其计算办法，超过装货、卸货期 限后的滞期费和提前完成装货、卸货的速遣费，由双方约定。 Article 98 Under a voyage charter, the laytime and the way of calculation thereof, as well as the demurrage that would incur after the expiration of the laytime and the dispatch money to be paid as a result of the completion of loading or discharge ahead of schedule, shall be fixed by the shipowner and the charterer upon mutual agreement. 第九十九条 承租人可以将其租用的船舶转租;转租后，原合同约定的权利和义 务不受影响。 Article 99 The charterer may sublet the ship he chartered, but the rights and obligations under the head charter shall not be affected. 第一百条 承租人应当提供约定的货物;经出租人同意，可以更换货物。但是， 更换的货物对出租人不利的，出租人有权拒绝或者解除合同。 因未提供约定的货物致使出租人遭受损失的，承租人应当负赔偿责任。 Article 100 The charterer shall provide the agreed goods, but he may substitute the goods with the consent of the shipowner. However, if the substituted goods are detrimental to the interests of the shipowner, the shipowner shall be entitled to reject such goods or cancel the charter. Where the shipowner has suffered losses as a result of the failure of the charterer in providing the intended goods, the charterer shall be liable for compensation. 第一百零一条 出租人应当在合同约定的卸货港卸货。合同订有承租人选择卸货 港条款的，在承租人未按照合同约定及时通知确定的卸货港时，船长可以从约定的 选卸港中自行选定一港卸货。承租人未按照合同约定及时通知确定的卸货港，致使 出租人遭受损失的，应当负赔偿责任。出租人未按照合同约定，擅自选定港口卸货 致使承租人遭受损失的，应当负赔偿责任。 Article 101 The shipowner shall discharge the goods at the port of discharge specified in the charterparty. Where the charterparty contains a clause allowing the choice of the port of discharge by the charterer, the Master may choose one from among the agreed picked ports to discharge the goods, in case the charterer did not, as agreed in the charter, instruct in time as to the port chosen for discharging the goods. Where the charterer did not instruct in time as to the chosen port of discharge, as agreed in the charter, and the shipowner suffered losses thereby, the charterer shall be liable for compensation; where 381

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the charterer has suffered losses as a result of the shipowner’s arbitrary choice of a port to discharge the goods, in disregard of the provisions in the relevant charter, the shipowner shall be liable for compensation. 第八节 多式联运合同的特别规定 Section 8: Special Provisions Regarding Multimodal Transport Contract 第一百零二条 本法所称多式联运合同，是指多式联运经营人以两种以上的不同 运输方式，其中一种是海上运输方式，负责将货物从接收地运至目的地交付收货 人，并收取全程运费的合同。 前款所称多式联运经营人，是指本人或者委托他人以本人名义与托运人订立多式 联运合同的人。 Article 102 A multimodal transport contract as referred to in this Code means a contract under which the multimodal transport operator undertakes to transport the goods, against the payment of freight for the entire transport, from the place where the goods were received in his charge to the destination and to deliver them to the consignee by two or more different modes of transport, one of which being sea carriage. The multimodal transport operator as referred to in the preceding paragraph means the person who has entered into a multimodal transport contract with the shipper either by himself or by another person acting on his behalf. 第一百零三条 多式联运经营人对多式联运货物的责任期间，自接收货物时起至 交付货物时止。 Article 103 The responsibility of the multimodal transport operator with respect to the goods under multimodal transport contract covers the period from the time he takes the goods in his charge to the time of their delivery. 第一百零四条 多式联运经营人负责履行或者组织履行多式联运合同，并对全程 运输负责。 多式联运经营人与参加多式联运的各区段承运人，可以就多式联运合同的各区段 运输，另以合同约定相互之间的责任。但是，此项合同不得影响多式联运经营人对 全程运输所承担的责任。 Article 104 The multimodal transport operator shall be responsible for the performance of the multimodal transport contract or the arrangement of the performance therefore, and shall be responsible for the entire transport. The multimodal transport operator may enter into separate contracts with the carriers of the different modes defining their responsibilities with regard to the different sections of the transport under the multimodal transport contract. However, such separate contracts shall not affect the responsibility of the multimodal transport operator with respect to the entire transport. 第一百零五条 货物的灭失或者损坏发生于多式联运的某一运输区段的，多式联 运经营人的赔偿责任和责任限额，适用调整该区段运输方式的有关法律规定。 Article 105 If loss of or damage to the goods has occurred in a certain section of the transport, the provisions of the relevant laws and regulations governing that specific section of the multimodal transport shall be applicable to matters concerning the liability of the multimodal transport operator and the limitation thereof. 382

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第一百零六条 货物的灭失或者损坏发生的运输区段不能确定的，多式联运经营 人应当依照本章关于承运人赔偿责任和责任限额的规定负赔偿责任。 Article 106 If the section of transport in which the loss of or damage to the goods occurred could not be ascertained, the multimodal transport operator shall be liable for compensation in accordance with the stipulations regarding the carrier’s liability and the limitation thereof as set out in this Chapter. 第五章 海上旅客运 合同 Chapter V: Contract of Carriage of Passengers by Sea 第一百零七条 海上旅客运输合同,是指承运人以适合运送旅客的船舶经海路将 旅客及其行李从一港运送至另一港，由旅客支付票款的合同。 Article 107 A contract of carriage of passengers by sea is a contract whereby the carrier undertakes to carry passengers and their luggage by sea from one port to another by ships suitable for that purpose against payment of fare by the passengers. 第一百零八条

本章下列用语的含义:

(一) “承运人”，是指本人或者委托他人以本人名义与旅客订立海上旅客运输合 同的人。 (二) “实际承运人”，是指接受承运人委托，从事旅客运送或者部分运送的人， 包括接受转委托从事此项运送的其他人。 (三) “旅客”，是指根据海上旅客运输合同运送的人; 经承运人同意，根据海上 货物运输合同，随船护送货物的人，视为旅客。 (四) “行李”，是指根据海上旅客运输合同由承运人载运的任何物品和车辆，但 是活动物除外。 (五) “自带行李”，是指旅客自行携带、保管或者放置在客舱中的行李。 Article 108 For the purposes of this Chapter: (1) (2) (3) (4) (5)

“Carrier” means the person by whom or in whose name a contract of carriage of passengers by sea has been entered into with the passengers; “Actual carrier” means the person by whom the whole or part of the carriage of passengers has been performed as entrusted by the carrier, including those engaged in such carriage under a sub-contract. “Passenger” means a person carried under a contract of carriage of passengers by sea. With the consent of the carrier, a person supervising the carriage of goods aboard a ship covered by a contract of carriage of goods is regarded as a passenger; “Luggage” means any article or vehicle shipped by the carrier under the contract of carriage of passengers by sea, with the exception of live animals. “Cabin luggage” means the luggage which the passenger has in his cabin or is otherwise in his possession, custody or control.

第一百零九条 本章关于承运人责任的规定,适用于实际承运人。本章关于承运 人的受雇人、代理人责任的规定,适用于实际承运人的受雇人、代理人。 Article 109 The provisions regarding the responsibilities of the carrier as contained in this Chapter shall be applicable to the actual carrier, and the provisions regarding the 383

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responsibilities of the servant or agent of the carrier as contained in this Chapter shall be applicable to the servant or agent of the actual carrier. 第一百一十条 旅客客票是海上旅客运输合同成立的凭证。 Article 110 The passage ticket serves as evidence that a contract of carriage of passengers by sea has been entered into. 第一百一十一条 海上旅客运输的运送期间，自旅客登船时起至旅客离船时止。 客票票价含接送费用的，运送期间并包括承运人经水路将旅客从岸上接到船上和从 船上送到岸上的时间，但是不包括旅客在港站内、码头上或者在港口其他设施内的 时间。 旅客的自带行李，运送期间同前款规定。旅客自带行李以外的其他行李，运送期 间自旅客将行李交付承运人或者承运人的受雇人、代理人时起至承运人或者承运人 的受雇人、代理人交还旅客时止。 Article 111 The period of carriage for the carriage of passengers by sea commences from the time of embarkation of the passengers and terminates at the time of their disembarkation, including the period during which the passengers are transported by water from land to the ship or vice versa, if such cost of transport is included in the fare. However, the period of carriage does not include the time when the passengers are at a marine terminal or station or on a quay or in or on any other port installations. The period of carriage for the cabin luggage of the passengers shall be the same as that stipulated in the preceding paragraph. The period of carriage for luggage other than the cabin luggage commences from the time when the carrier or his servant or agent receives it into his charge and terminates at the time when the carrier or his servant or agent redelivers it to the passengers. 第一百一十二条 旅客无票乘船、越级乘船或者超程乘船，应当按照规定补足票 款，承运人可以按照规定加收票款;拒不交付的，船长有权在适当地点令其离船， 承运人有权向其追偿。 Article 112 A passenger travelling without a ticket or taking a higher class berth than booked or going beyond the distance paid for shall pay for the fare or the excess fare as required by relevant regulations, and the carrier may, according to the relevant regulations, charge additional fare. Should any passenger refuse to pay, the Master is entitled to order him to disembark at a suitable place and the carrier has the right of recourse against him. 第一百一十三条 旅客不得随身携带或者在行李中夹带违禁品或者易燃、易爆、 有毒、有腐蚀性、有放射性以及有可能危及船上人身和财产安全的其他危险品。 承运人可以在任何时间、任何地点将旅客违反前款规定随身携带或者在行李中夹 带的违禁品、危险品卸下、销毁或者使之不能为害，或者送交有关部门，而不负赔 偿责任。 旅客违反本条第一款规定，造成损害的，应当负赔偿责任。 Article 113 No passenger may take on board or pack in their luggage contraband goods or any article of an inflammable, explosive, poisonous, corrosive or radioactive nature or other dangerous goods that would endanger the safety of life and property on board. The carrier may have the contraband or dangerous goods brought on board by the passenger or packed in his luggage in breach of the provisions of the preceding paragraph 384

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discharged, destroyed or rendered innocuous at any time and at any place or sent over to the appropriate authorities, without being liable for compensation. The passenger shall be liable for compensation if any loss or damage occurs as a result of his breach of the provisions of paragraph 1 of this Article. 第一百一十四条 在本法第一百一十一条规定的旅客及其行李的运送期间，因承 运人或者承运人的受雇人、代理人在受雇或者受委托的范围内的过失引起事故，造 成旅客人身伤亡或者行李灭失、损坏的，承运人应当负赔偿责任。 请求人对承运人或者承运人的受雇人、代理人的过失，应当负举证责任;但是， 本条第三款和第四款规定的情形除外。 旅客的人身伤亡或者自带行李的灭失、损坏，是由于船舶的沉没、碰撞、搁浅、 爆炸、火灾所引起或者是由于船舶的缺陷所引起的，承运人或者承运人的受雇人、 代理人除非提出反证，应当视为其有过失。 旅客自带行李以外的其他行李的灭失或者损坏，不论由于何种事故所引起，承运 人或者承运人的受雇人、代理人除非提出反证，应当视为其有过失。 Article 114 During the period of carriage of the passengers and their luggage as provided for in Article 111 of this Code, the carrier shall be liable for the death of or personal injury to passengers or the loss of or damage to their luggage resulting from accidents caused by the fault of the carrier or his servant or agent committed within the scope of his employment or agency. The claimant shall bear the burden of proof regarding the fault of the carrier or his servant or agent, with the exception, however, of the circumstances specified in paragraphs 3 and 4 of this Article. If the death of or personal injury to the passengers or loss of or damage to the passengers’ cabin luggage occurred as a result of shipwreck, collision, stranding, explosion, ire or the defect of the ship, it shall be presumed that the carrier or his servant or agent has committed a fault, unless proof to the contrary has been given by the carrier or his servant or agent. As to any loss of or damage to the luggage other than the passenger’s cabin luggage, unless the carrier or his servant or agent proves to the contrary, it shall be presumed that the carrier or his servant or agent has committed a fault, no matter how the loss or damage was caused. 第一百一十五条 经承运人证明，旅客的人身伤亡或者行李的灭失、损坏，是由 于旅客本人的过失或者旅客和承运人的共同过失造成的，可以免除或者相应减轻承 运人的赔偿责任。 经承运人证明，旅客的人身伤亡或者行李的灭失、损坏，是由于旅客本人的故意造 成的，或者旅客的人身伤亡是由于旅客本人健康状况造成的，承运人不负赔偿责任。 Article 115 If it is proved by the carrier that the death of or personal injury to the passenger or the loss of or damage to his luggage was caused by the fault of the passenger himself or the faults of the carrier and the passenger combined, the carrier’s liability may be exonerated or appropriately mitigated. If it is proved by the carrier that the death of or personal injury to the passenger or the loss of or damage to the passenger’s luggage was intentionally caused by the passenger himself, or the death or personal injury was due to the health condition of his, the carrier shall not be liable therefore. 385

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第一百一十六条 承运人对旅客的货币、金银、珠宝、有价证券或者其他贵重物 品所发生的灭失、损坏，不负赔偿责任。 旅客与承运人约定将前款规定的物品交由承运人保管的，承运人应当依照本法第 一百一十七条的规定负赔偿责任;双方以书面约定的赔偿限额高于本法第一百一十 七条的规定的，承运人应当按照约定的数额负赔偿责任。 Article 116 The carrier shall not be liable for any loss of or damage to the monies, gold, silver, jewellery, negotiable securities or other valuables of the passengers. If the passenger has entrusted the above-mentioned valuables to the safe-keeping of the carrier under an agreement for that purpose, the carrier shall be liable for compensation in accordance with the provisions of Article 117 of this Code. Where the limitation of liability agreed upon between the carrier and the passenger in writing is higher than that set out in Article 117 of this Code, the carrier shall make the compensation in accordance with that higher amount. 第一百一十七条 除本条第四款规定的情形外，承运人在每次海上旅客运输中的 赔偿责任限额，依照下列规定执行: （一）旅客人身伤亡的，每名旅客不超过46666计算单位; （二）旅客自带行李灭失或者损坏的，每名旅客不超过833计算单位; （三）旅客车辆包括该车辆所载行李灭失或者损坏的，每一车辆不超过3333计 算单位; （四）本款第（二）、（三）项以外的旅客其他行李灭失或者损坏的，每名旅 客不超过1200计算单位。 承运人和旅客可以约定，承运人对旅客车辆和旅客车辆以外的其他行李损失的免 赔额。但是，对每一车辆损失的免赔额不得超过117计算单位，对每名旅客的车辆 以外的其他行李损失的免赔额不得超过13计算单位。在计算每一车辆或者每名旅客 的车辆以外的其他行李的损失赔偿数额时，应当扣除约定的承运人免赔额。 承运人和旅客可以书面约定高于本条第一款规定的赔偿责任限额。 中华人民共和国港口之间的海上旅客运输，承运人的赔偿责任限额，由国务院交 通主管部门制定，报国务院批准后施行。 Article 117 Except the circumstances specified in paragraph 4 of this Article, the limitation of liability of the carrier under each carriage of passengers by sea shall be governed by the following: (1) (2) (3) (4)

For death of or personal injury to the passenger: not exceeding 46,666 Units of Account per passenger; For loss of or damage to the passengers’ cabin luggage: not exceeding 833 Units of Account per passenger; For loss of or damage to the passengers’ vehicles including the luggage carried therein: not exceeding 3,333 Units of Account per vehicle; For loss of or damage to luggage other than those described in sub-paragraphs (2) and (3) above: not exceeding 1,200 Units of Account per passenger.

An agreement may be reached between the carrier and the passengers with respect to the deductibles applicable to the compensation for loss of or damage to the passengers’ vehicles and luggage other than their vehicles. However, the deductible with respect to the loss of or damage to the passengers’ vehicles shall not exceed 117 Units of Account 386

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per vehicle, whereas the deductible for the loss of or damage to the luggage other than the vehicle shall not exceed 13 Units of Account per piece of luggage per passenger. In calculating the amount of compensation for the loss of or damage to the passenger’s vehicle or the luggage other than the vehicle, deduction shall be made of the agreed deductibles the carrier is entitled to. A higher limitation of liability than that set out in sub-paragraph (1) above may be agreed upon between the carrier and the passenger in writing. The limitation of liability of the carrier with respect to the carriage of passengers by sea between the ports of the People’s Republic of China shall be fixed by the competent authorities of transport and communications under the State Council and implemented after its being submitted to and approved by the State Council. 第一百一十八条 经证明，旅客的人身伤亡或者行李的灭失、损坏，是由于承运 人的故意或者明知可能造成损害而轻率地作为或者不作为造成的，承运人不得援用 本法第一百一十六条和第一百一十七条限制赔偿责任的规定。 经证明，旅客的人身伤亡或者行李的灭失、损坏，是由于承运人的受雇人、代理 人的故意或者明知可能造成损害而轻率地作为或者不作为造成的，承运人的受雇 人、代理人不得援用本法第一百一十六条和第一百一十七条限制赔偿责任的规定。 Article 118 If it is proved that the death of or personal injury to the passenger or the loss of or damage to the passenger’s luggage resulted from an act or omission of the carrier done with the intent to cause such loss or damage or recklessly and with knowledge that such death or personal injury or such loss or damage would probably result, the carrier shall not invoke the provisions regarding the limitation of liability contained in Articles 116 and 117 of this Code. If it is proved that the death of or personal injury to the passenger or the loss of or damage to the passenger’s luggage resulted from an act or omission of the servant or agent of the carrier done with the intent to cause such loss or damage or recklessly and with knowledge that such death or personal injury or such loss or damage would probably result, the servant or agent of the carrier shall not invoke the provisions regarding the limitation of liability contained in Articles 116 and 117 of this Code. 第一百一十九条 行李发生明显损坏的，旅客应当依照下列规定向承运人或者承 运人的受雇人、代理人提交书面通知: （一）自带行李，应当在旅客离船前或者离船时提交; （二）其他行李，应当在行李交还前或者交还时提交。 行李的损坏不明显，旅客在离船时或者行李交还时难以发现的，以及行李发生灭 失的，旅客应当在离船或者行李交还或者应当交还之日起十五日内，向承运人或者 承运人的受雇人、代理人提交书面通知。 旅客未依照本条第一、二款规定及时提交书面通知的，除非提出反证，视为已经 完整无损地收到行李。 行李交还时，旅客已经会同承运人对行李进行联合检查或者检验的，无需提交书 面通知。 Article 119 In case of apparent damage to the luggage, the passenger shall notify the carrier or his servant or agent in writing according to the following: (1)

Notice with respect to cabin luggage shall be made before or at the time of his embarkation; 387

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(2)

Notice regarding luggage other than cabin luggage shall be made before or at the time of redelivery thereof.

If the damage to the luggage is not apparent and it is difficult for the passenger to discover such damage at the time of his disembarkation or of the redelivery of the luggage, or if the luggage has been lost, the passenger shall notify the carrier or his servant or agent in writing within 15 days from the next day of disembarkation of the passenger or of the redelivery of the luggage. If the passenger fails to send in the notice in writing in time in accordance with the provisions of sub-paragraphs (1) and (2) of this Article, it shall be presumed that the luggage has been received undamaged, unless proof to the contrary is made. Where the luggage has been jointly surveyed or inspected by the passenger and the carrier at the time of redelivery thereof, the above-mentioned notice need not be given. 第一百二十条 向承运人的受雇人、代理人提出的赔偿请求，受雇人或者代理人 证明其行为是在受雇或者受委托的范围内的，有权援用本法第一百一十五条、第一 百一十六条和第一百一十七条的抗辩理由和赔偿责任限制的规定。 Article 120 With regard to the claims made to the carrier’s servant or agent, such servant or agent shall be entitled to invoke the provisions regarding defence and limitation of liability contained in Articles 115, 116 and 117 of this Code if such servant or agent proves that his act or omission was within the scope of his employment or agency. 第一百二十一条 承运人将旅客运送或者部分运送委托给实际承运人履行的，仍 然应当依照本章规定，对全程运送负责。实际承运人履行运送的，承运人应当对实 际承运人的行为或者实际承运人的受雇人、代理人在受雇或者受委托的范围内的行 为负责。 Article 121 Where the performance of the carriage of passengers or part thereof has been entrusted by the carrier to an actual carrier, the carrier shall, as stipulated in this Chapter, remain liable for the entire carriage. Where the carriage is performed by the actual carrier, the carrier shall be liable for the act or omission of the actual carrier or the act or omission of his servant or agent within the scope of his employment or agency. 第一百二十二条 承运人承担本章未规定的义务或者放弃本章赋予的权利的任何 特别协议，经实际承运人书面明确同意的，对实际承运人发生效力;实际承运人是 否同意，不影响此项特别协议对承运人的效力。 Article 122 Any special agreement under which the carrier assumes obligations not provided for in this Chapter or waives the rights conferred by this Chapter shall be binding upon the actual carrier where the actual carrier has expressly agreed in writing to the contents thereof. Such a special agreement shall be binding upon the carrier whether the actual carrier has agreed to its contents or not. 第一百二十三条 承运人与实际承运人均负有赔偿责任的，应当在此项责任限度 内负连带责任。 Article 123 Where both the carrier and the actual carrier are liable for compensation, they shall be liable jointly and severally within the scope of such liability. 388

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第一百二十四条 就旅客的人身伤亡或者行李的灭失、损坏，分别向承运人、实 际承运人以及他们的受雇人、代理人提出赔偿请求的，赔偿总额不得超过本法第一 百一十七条规定的限额。 Article 124 Where separate claims have been brought against the carrier, the actual carrier and their servants or agents with respect to the death of or personal injury to the passengers or the loss of or damage to their luggage, the aggregate amount of compensation shall not be in excess of the limitation prescribed in Article 117 of this Code. 第一百二十五条 本法第一百二十一条至第一百二十四条的规定,不影响承运人 和实际承运人之间相互追偿。 Article 125 The provisions of Articles 121 through 124 of this Code shall not affect the right of recourse between the carrier and the actual carrier. 第一百二十六条 (一) (二) (三) (四)

海上旅客运输合同中含有下列内容之一的条款无效:

免除承运人对旅客应当承担的法定责任; 降低本章规定的承运人责任限额; 对本章规定的举证责任作出相反的约定; 限制旅客提出赔偿请求的权利。

前款规定的合同条款的无效,不影响合同其他条款的效力。 Article 126 Any of the following clauses contained in a contract of carriage of passengers by sea shall be null and void: (1) (2) (3) (4)

Any clause that exonerates the statutory responsibility of the carrier in respect of the passenger; Any clause that reduces the limitation of liability of the carrier as contained in this Chapter; Any clause that contains provisions contrary to those of this Chapter concerning burden of proof; and Any clause that restricts the right of claim of the passenger.

The nullity and voidness of the clauses set out in the preceding paragraph shall not prejudice the validity of the other clauses of the contract.

第六章 船舶租用合同 Chapter VI: Charterparties 第一节 一般规定 Section 1: Basic Principles 第一百二十七条 本章关于出租人和承租人之间权利、义务的规定，仅在船舶租 用合同没有约定或者没有不同约定时适用。 Article 127 The provisions concerning the rights and obligations of the shipowner and the charterer in this Chapter shall apply only when there are no stipulations or no different stipulations in this regard in the charterparty. 389

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第一百二十八条 船舶租用合同，包括定期租船合同和光船租赁合同，均应当书 面订立。 Article 128 Charterparties including time charterparties and bareboat charterparties shall be concluded in writing. 第二节 定期租船合同 Section 2: Time Charterparty 第一百二十九条 定期租船合同，是指船舶出租人向承租人提供约定的由出租 人配备船员的船舶，由承租人在约定的期间内按照约定的用途使用，并支付租金 的合同。 Article 129 A time charterparty is a contract under which the shipowner provides a designated manned ship to the charterer, and the charterer employs the ship during the contractual period for the agreed service against payment of hire. 第一百三十条 定期租船合同的内容，主要包括出租人和承租人的名称、船名、 船籍、船级、吨位、容积、船速、燃料消耗、航区、用途、租船期间、交船和还船 的时间和地点以及条件、租金及其支付，以及其他有关事项。 Article 130 A time charterparty mainly contains the name of the shipowner, the name of the charterer; the name, nationality, class, tonnage, capacity, speed and fuel consumption of the ship; the trading area; the agreed service, the contractual period, the time, place and conditions of delivery and redelivery of the ship; the hire and the way of its payment and other relevant matters. 第一百三十一条 出租人应当按照合同约定的时间交付船舶。 出租人违反前款规定的，承租人有权解除合同。出租人将船舶延误情况和船舶预 期抵达交船港的日期通知承租人的，承租人应当自接到通知时起四十八小时内，将 解除合同或者继续租用船舶的决定通知出租人。 因出租人过失延误提供船舶致使承租人遭受损失的，出租人应当负赔偿责任。 Article 131 The shipowner shall deliver the ship within the time agreed upon in the charterparty. Where the shipowner acts against the provisions of the preceding paragraph, the charterer is entitled to cancel the charter. However, if the shipowner has notified the charterer of the anticipated delay in delivery and has given an estimated time of arrival of the ship at the port of delivery, the charterer shall notify the shipowner, within 48 hours of the receipt of such notice from the shipowner, of his decision whether to cancel the charter or not. The shipowner shall be liable for the charterer’s loss resulting from the delay in delivery of the ship due to the shipowner’s fault. 第一百三十二条 出租人交付船舶时，应当做到谨慎处理，使船舶适航。交付的 船舶应当适于约定的用途。 出租人违反前款规定的，承租人有权解除合同，并有权要求赔偿因此遭受的 损失。 Article 132 At the time of delivery, the shipowner shall exercise due diligence to make the ship seaworthy. The delivered ship shall be fit for the contractual service. 390

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Where the shipowner acts against the provisions in the preceding paragraph, the charterer shall be entitled to cancel the charter and claim any losses resulting therefrom. 第一百三十三条 船舶在租期内不符合约定的适航状态或者其他状态，出租人应 当采取可能采取的合理措施，使之尽快恢复。 船舶不符合约定的适航状态或者其他状态而不能正常营运连续满二十四小时的， 对因此而损失的营运时间，承租人不付租金，但是上述状态是由承租人造成的 除外。 Article 133 During the charter period, if the ship does not comply with the seaworthiness or the other conditions agreed upon in the charter, the shipowner shall take all reasonable measures to have them restored as soon as possible. Where the ship has not been operated normally for 24 consecutive hours due to its failure to maintain the seaworthiness or the other conditions as agreed upon, the charterer shall not pay the hire for the operating time so lost, unless such failure was caused by the charterer. 第一百三十四条 承租人应当保证船舶在约定航区内的安全港口或者地点之间从 事约定的海上运输。 承租人违反前款规定的，出租人有权解除合同，并有权要求赔偿因此遭受的 损失。 Article 134 The charterer shall guarantee that the ship shall be employed in the agreed maritime transport between the safe ports or places within the trading area agreed upon. If the charterer acts against the provisions of the preceding paragraph, the shipowner is entitled to cancel the charter and claim any losses resulting therefrom. 第一百三十五条 承租人应当保证船舶用于运输约定的合法的货物。 承租人将船舶用于运输活动物或者危险货物的，应当事先征得出租人的同意。 承租人违反本条第一款或者第二款的规定致使出租人遭受损失的，应当负赔偿 责任。 Article 135 The charterer shall guarantee that the ship shall be employed to carry the lawful merchandise agreed. Where the ship is to be employed by the charterer to carry live animals or dangerous goods, a prior consent of the shipowner is required. The charterer shall be liable for any loss of the shipowner resulting from the charterer’s violation of the provisions of paragraph 1 or paragraph 2 of this Article. 第一百三十六条 承租人有权就船舶的营运向船长发出指示，但是不得违反定期 租船合同的约定。 Article 136 The charterer shall be entitled to give the Master instructions with respect to the operation of the ship. However, such instructions shall not be inconsistent with the stipulations of the time charter. 第一百三十七条 承租人可以将租用的船舶转租，但是应当将转租的情况及时通 知出租人。租用的船舶转租后，原租船合同约定的权利和义务不受影响。 Article 137 The charterer may sublet the ship under charter, but he shall notify the shipowner of the sublet in time. The rights and obligations agreed upon in the head charter shall not be affected by the sub-charter. 391

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第一百三十八条 船舶所有人转让已经租出的船舶的所有权，定期租船合同约定 的当事人的权利和义务不受影响，但是应当及时通知承租人。船舶所有权转让后， 原租船合同由受让人和承租人继续履行。 Article 138 Where the ownership of the ship under charter has been transferred by the shipowner, the rights and obligations agreed upon under the original charter shall not be affected. However, the shipowner shall inform the charterer thereof in time. After such transfer, the transferee and the charterer shall continue to perform the original charter. 第一百三十九条 在合同期间，船舶进行海难救助的，承租人有权获得扣除救助 费用、损失赔偿、船员应得部分以及其他费用后的救助款项的一半。 Article 139 Should the ship be engaged in salvage operations during the charter period, the charterer shall be entitled to half of the amount of the payment for salvage operations after deducting therefrom the salvage expenses, compensation for damage, the portion due to crew members and other relevant costs. 第一百四十条 承租人应当按照合同约定支付租金。承租人未按照合同约定支付 租金的，出租人有权解除合同，并有权要求赔偿因此遭受的损失。 Article 140 The charterer shall pay the hire as agreed upon in the charter. Where the charterer fails to pay the hire as agreed upon, the shipowner shall be entitled to cancel the charterparty and claim any losses resulting therefrom. 第一百四十一条 承租人未向出租人支付租金或者合同约定的其他款项的，出租 人对船上属于承租人的货物和财产以及转租船舶的收入有留置权。 Article 141 In case the charterer fails to pay the hire or other sums of money as agreed upon in the charter, the shipowner shall have a lien on the charterer’s goods, other property on board and earnings from the sub-charter. 第一百四十二条 承租人向出租人交还船舶时，该船舶应当具有与出租人交船时 相同的良好状态，但是船舶本身的自然磨损除外。 船舶未能保持与交船时相同的良好状态的，承租人应当负责修复或者给予赔偿。 Article 142 When the charterer redelivers the ship to the shipowner, the ship shall be in the same good order and condition as it was at the time of delivery, fair wear and tear excepted. Where, upon redelivery, the ship fails to remain in the same good order and condition as it was at the time of delivery, the charterer shall be responsible for rehabilitation or for compensation. 第一百四十三条 经合理计算，完成最后航次的日期约为合同约定的还船日期， 但可能超过合同约定的还船日期的，承租人有权超期用船以完成该航次。超期期 间，承租人应当按照合同约定的租金率支付租金;市场的租金率高于合同约定的租 金率的，承租人应当按照市场租金率支付租金。 Article 143 If, on the basis of a reasonable calculation, a ship may be able to complete its last voyage at around the time of redelivery specified in the charter and probably thereafter, the charterer is entitled to continue to use the ship in order to complete that voyage even if its time of redelivery will be overdue. During the extended period, the charterer shall 392

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pay the hire at the rate fixed by the charter, and, if the current market rate of hire is higher than that specified in the charter, the charterer shall pay the hire at the current market rate. 第三节 光船租赁合同 Section 3: Bareboat Charterparty 第一百四十四条 光船租赁合同，是指船舶出租人向承租人提供不配备船员的船 舶，在约定的期间内由承租人占有、使用和营运，并向出租人支付租金的合同。 Article 144 A bareboat charterparty is a charterparty under which the shipowner provides the charterer with an unmanned ship and the charterer is entitled to possess, employ and operate within an agreed period and for which the charterer shall pay the shipowner the hire. 第一百四十五条 光船租赁合同的内容，主要包括出租人和承租人的名称、船 名、船籍、船级、吨位、容积、航区、用途、租船期间、交船和还船的时间和地点 以及条件、船舶检验、船舶的保养维修、租金及其支付、船舶保险、合同解除的时 间和条件，以及其他有关事项。 Article 145 A bareboat charterparty mainly contains the name of the shipowner and the name of the charterer; the name, nationality, class, tonnage and capacity of the ship; the trading area, the employment of the ship and the charter period; the time, place and condition of delivery and redelivery; the survey, maintenance and repair of the ship; the hire and its payment; the insurance of the ship; the time and condition for the termination of the charter and other relevant matters. 第一百四十六条 出租人应当在合同约定的港口或者地点，按照合同约定的时 间，向承租人交付船舶以及船舶证书。交船时，出租人应当做到谨慎处理，使船舶 适航。交付的船舶应当适于合同约定的用途。 出租人违反前款规定的，承租人有权解除合同，并有权要求赔偿因此遭受的 损失。 Article 146 The shipowner shall deliver the ship and its certificates to the charterer at the port or place and time as stipulated in the charterparty. At the time of delivery, the shipowner shall exercise due diligence to make the ship seaworthy. The ship delivered shall be fit for the agreed service. Where the shipowner acts against the provisions of the preceding paragraph, the charterer shall be entitled to cancel the charter and claim any losses resulting therefrom. 第一百四十七条 在光船租赁期间，承租人负责船舶的保养、维修。 Article 147 The charterer shall be responsible for the maintenance and repair of the ship during the bareboat charter period. 第一百四十八条 在光船租赁期间，承租人应当按照合同约定的船舶价值，以出 租人同意的保险方式为船舶进行保险,并负担保险费用。 Article 148 During the bareboat charter period, the ship shall be insured, at the value agreed upon in the charter and in the way consented to by the shipowner, by the charterer at his expense. 393

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第一百四十九条 在光船租赁期间，因承租人对船舶占有、使用和营运的原因使 出租人的利益受到影响或者遭受损失的，承租人应当负责消除影响或者赔偿损失。 因船舶所有权争议或者出租人所负的债务致使船舶被扣押的，出租人应当保证承 租人的利益不受影响;致使承租人遭受损失的，出租人应当负赔偿责任。 Article 149 During the bareboat charter period, if the charterer’s possession, employment or operation of the ship has affected the interests of the shipowner or caused any losses thereto, the charterer shall be liable for eliminating the harmful effect or compensating for the losses. Should the ship be arrested due to any disputes over its ownership or debts owed by the shipowner, the shipowner shall guarantee that the interest of the charterer is not affected. The shipowner shall be liable for compensation for any losses suffered by the charterer thereby. 第一百五十条 在光船租赁期间，未经出租人书面同意，承租人不得转让合同的 权利和义务或者以光船租赁的方式将船舶进行转租。 Article 150 During the bareboat charter period, the charterer shall not assign the rights and obligations stipulated in the charter or sublet the ship under bareboat charter without the shipowner’s consent in writing. 第一百五十一条 未经承租人事先书面同意，出租人不得在光船租赁期间对船舶 设定抵押权。 出租人违反前款规定，致使承租人遭受损失的，应当负赔偿责任。 Article 151 The shipowner shall not establish any mortgage of the ship during the bareboat charter period without the prior consent in writing by the charterer. Where the shipowner acts against the provisions of the preceding paragraph and thereby causes losses to the charterer, the shipowner shall be liable for compensation. 第一百五十二条 承租人应当按照合同约定支付租金。承租人未按照合同约定的 时间支付租金连续超过七日的，出租人有权解除合同，并有权要求赔偿因此遭受的 损失。 船舶发生灭失或者失踪的，租金应当自船舶灭失或者得知其最后消息之日起停止 支付，预付租金应当按照比例退还。 Article 152 The charterer shall pay the hire as stipulated in the charter. In default of payment by the charterer for seven consecutive days or more after the time as agreed in the charter for such payment, the shipowner is entitled to cancel the charter without prejudice to any claim for the loss arising from the charterer’s default. Should the ship be lost or missing, payment of hire shall cease from the day when the ship was lost or last heard of. Any hire paid in advance shall be refunded in proportion. 第一百五十三条 本法第一百三十四条、第一百三十五条第一款、第一百四十二 条和第一百四十三条的规定，适用于光船租赁合同。 Article 153 The provisions of Article 134, paragraph 1 of Article 135, Article 142 and Article 143 of this Code shall be applicable to bareboat charterparties. 第一百五十四条 订有租购条款的光船租赁合同，承租人按照合同约定向出租人 付清租购费时，船舶所有权即归于承租人。 394

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Article 154 The ownership of a ship under bareboat charter containing a leasepurchase clause shall be transferred to the charterer when the charterer has paid off the lease-purchase price to the shipowner as stipulated in the charter. 第七章 海上拖航合同 Chapter VII: Contract of Sea Towage 第一百五十五条 海上拖航合同，是指承拖方用拖轮将被拖物经海路从一地拖至 另一地，而由被拖方支付拖航费的合同。 本章规定不适用于在港区内对船舶提供的拖轮服务。 Article 155 A contract of sea towage is a contract whereby the tugowner undertakes to tow an object by sea with a tug from one place to another and the tow party pays the towage. The provisions of this Chapter shall not be applicable to the towage service rendered to ships within the port area. 第一百五十六条 海上拖航合同应当书面订立。海上拖航合同的内容，主要包括 承拖方和被拖方的名称和住所、拖轮和被拖物的名称和主要尺度、拖轮马力、起拖 地和目的地、起拖日期、拖航费及其支付方式，以及其他有关事项。 Article 156 A contract of sea towage shall be made in writing. Its contents shall mainly include name and address of the tugowner, name and address of the tow party, name and main particulars of the tug and name and main particulars of the object to be towed, horse power of the tug, place of commencement of the towage and the destination, the date of commencement of the towage, towage price and the way of payment thereof, as well as other relevant matters. 第一百五十七条 承拖方在起拖前和起拖当时，应当谨慎处理，使拖轮处于适 航、适拖状态，妥善配备船员，配置拖航索具和配备供应品以及该航次必备的其他 装置、设备。 被拖方在起拖前和起拖当时，应当做好被拖物的拖航准备，谨慎处理，使被拖物 处于适拖状态，并向承拖方如实说明被拖物的情况，提供有关检验机构签发的被拖 物适合拖航的证书和有关文件。 Article 157 The tugowner shall, before and at the beginning of the towage, exercise due diligence to make the tug seaworthy and towworthy and to properly man the tug and equip it with gears and tow lines and to provide all other necessary supplies and appliances for the intended voyage. The tow party shall, before and at the beginning of the towage, make all necessary preparations therefore and shall exercise due diligence to make the object to be towed towworthy and shall give a true account of the object to be towed and provide the certificate of towworthiness and other documents issued by the relevant survey and inspection organisations. 第一百五十八条 起拖前，因不可抗力或者其他不能归责于双方的原因致使合同 不能履行的，双方均可以解除合同，并互相不负赔偿责任。除合同另有约定外，拖 航费已经支付的，承拖方应当退还给被拖方。 Article 158 Before the commencement of the towage service, if the towage contract could not be performed due to force majeure or other causes not attributable to the fault of either party, either party may cancel the contract and neither shall be liable to the other. In 395

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such event, the towage price that had already been paid shall be returned to the tow party by the tugowner, unless otherwise agreed upon in the towage contract. 第一百五十九条 起拖后，因不可抗力或者其他不能归责于双方的原因致使合同 不能继续履行的，双方均可以解除合同，并互相不负赔偿责任。 Article 159 After the commencement of the towage service, if the towage contract could not be performed due to force majeure or other causes not attributable to the fault of either party, either party may cancel the towage contract and neither shall be liable to the other. 第一百六十条 因不可抗力或者其他不能归责于双方的原因致使被拖物不能拖至 目的地的，除合同另有约定外，承拖方可以在目的地的邻近地点或者拖轮船长选定 的安全的港口或者锚泊地，将被拖物移交给被拖方或者其代理人，视为已经履行 合同。 Article 160 Where the object towed could not reach its destination due to force majeure or other causes not attributable to the fault of either party, unless the towage contract provides otherwise, the tugowner may deliver the object towed to the tow party or its agent at a place near the destination or at a safe port or an anchorage chosen by the Master of the tug, and the contract of towage shall be deemed to have been fulfilled. 第一百六十一条 被拖方未按照约定支付拖航费和其他合理费用的，承拖方对被 拖物有留置权。 Article 161 Where the tow party fails to pay the towage price or other reasonable expenses as agreed, the tugowner shall have a lien on the object towed. 第一百六十二条 在海上拖航过程中，承拖方或者被拖方遭受的损失，由一方的 过失造成的，有过失的一方应当负赔偿责任;由双方过失造成的，各方按照过失程 度的比例负赔偿责任。 虽有前款规定，经承拖方证明，被拖方的损失是由于下列原因之一造成的，承拖 方不负赔偿责任; （一）拖轮船长、船员、引航员或者承拖方的其他受雇人、代理人在驾驶拖轮 或者管理拖轮中的过失; （二）拖轮在海上救助或者企图救助人命或者财产时的过失。 本条规定仅在海上拖航合同没有约定或者没有不同约定时适用。 Article 162 In the course of the sea towage, if the damage suffered by the tugowner or the tow party was caused by the fault of one of the parties, the party in fault shall be liable for compensation. If the damage was caused by the faults of both parties, both parties shall be liable for compensation in proportion to the extent of their respective faults. Notwithstanding the provisions of the preceding paragraph, the tugowner shall not be liable if he proves that the damage suffered by the tow party is due to one of the following causes: (1) (2)

Fault of the Master or other crew members of the tug or the pilot or other servants or agents of the tugowner in the navigation and management of the tug; Fault of the tug in saving or attempting to save life or property at sea. 396

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The provisions of this Article shall only apply if and when there are no provisions or no different provisions in this regard in the sea towage contract. 第一百六十三条 在海上拖航过程中，由于承拖方或者被拖方的过失，造成第三 人人身伤亡或者财产损失的，承拖方和被拖方对第三人负连带赔偿责任。除合同另 有约定外，一方连带支付的赔偿超过其应当承担的比例的，对另一方有追偿权。 Article 163 If death of or personal injury to a third party or damage to property thereof has occurred during the sea towage due to the fault of the tugowner or the tow party, the tugowner and the tow party shall be liable jointly and severally to that third party. Except as otherwise provided for in the towage contract, the party that has jointly and severally paid compensation in an amount exceeding the proportion for which it is liable shall have the right of recourse against the other party. 第一百六十四条 拖轮所有人拖带其所有的或者经营的驳船载运货物，经海路 由一港运至另一港的，视为海上货物运输。 Article 164 Where a tugowner towing a barge owned or operated by him to transport goods by sea from one port to another, it shall be deemed as an act of carriage of goods by sea. 第八章 船舶碰撞 Chapter VIII: Collision of Ships 第一百六十五条 船舶碰撞，是指船舶在海上或者与海相通的可航水域发生接触 造成损害的事故。 前款所称船舶，包括与本法第三条所指船舶碰撞的任何其他非用于军事的或者政 府公务的船艇。 Article 165 Collision of ships means an accident arising from the touching of ships at sea or in other navigable waters adjacent thereto. Ships referred to in the preceding paragraph shall include those non-military or public service ships or craft that collide with the ships mentioned in Article 3 of this Code. 第一百六十六条 船舶发生碰撞，当事船舶的船长在不严重危及本船和船上人员 安全的情况下，对于相碰的船舶和船上人员必须尽力施救。 碰撞船舶的船长应当尽可能将其船舶名称、船籍港、出发港和目的港通知对方。 Article 166 After a collision, the Master of each of the ships in collision is bound, so far as he can do so without serious danger to his ship and persons on board to render assistance to the other ship and persons on board. The Masters of each of the ships in collision is likewise bound so far as possible to make known to the other ship the name of his ship, its port of registry, port of departure and port of destination. 第一百六十七条 船舶发生碰撞，是由于不可抗力或者其他不能归责于任何一方 的原因或者无法查明的原因造成的，碰撞各方互相不负赔偿责任。 Article 167 Neither of the parties shall be liable to the other if the collision is caused by force majeure or other causes not attributable to the fault of either party or if the cause thereof is left in doubt. 397

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第一百六十八条 船舶发生碰撞，是由于一船的过失造成的,由有过失的船舶负 赔偿责任。 Article 168 If the collision is caused by the fault of one of the ships, the one in fault shall be liable therefore. 第一百六十九条 船舶发生碰撞，碰撞的船舶互有过失的，各船按照过失程度 的比例负赔偿责任;过失程度相当或者过失程度的比例无法判定的，平均负赔偿 责任。 互有过失的船舶，对碰撞造成的船舶以及船上货物和其他财产的损失，依照前款 规定的比例负赔偿责任。碰撞造成第三人财产损失的，各船的赔偿责任均不超过其 应当承担的比例。 互有过失的船舶，对造成的第三人的人身伤亡，负连带赔偿责任。一船连带支付 的赔偿超过本条第一款规定的比例的，有权向其他有过失的船舶追偿。 Article 169 If the colliding ships are all in fault, each ship shall be liable in proportion to the extent of its fault; if the respective faults are equal in proportion or it is impossible to determine the extent of the proportion of the respective faults, the liability of the colliding ships shall be apportioned equally. The ships in fault shall be liable for the damage to the ship, the goods and other property on board pursuant to the proportions prescribed in the preceding paragraph. Where damage is caused to the property of a third party, the liability for compensation of any of the colliding ships shall not exceed the proportion it shall bear. If the ships in fault have caused loss of life or personal injury to a third party, they shall be jointly and severally liable therefore. If a ship has paid an amount of compensation in excess of the proportion prescribed in paragraph 1 of this Article, it shall have the right of recourse against the other ship(s) in fault. 第一百七十条 船舶因操纵不当或者不遵守航行规章，虽然实际上没有同其他船 舶发生碰撞，但是使其他船舶以及船上的人员、货物或者其他财产遭受损失的，适 用本章的规定。 Article 170 Where a ship has caused damage to another ship and persons, goods or other property on board that ship, either by the execution or non-execution of a manoeuvre or by the non-observance of navigation regulations, even if no collision has actually occurred, the provisions of this Chapter shall apply. 第九章 海 救助 Chapter IX: Salvage at Sea 第一百七十一条 本章规定适用于在海上或者与海相通的可航水域，对遇险的船 舶和其他财产进行的救助。 Article 171 The provisions of this Chapter shall apply to salvage operations rendered at sea or any other navigable waters adjacent thereto to ships and other property in distress. 第一百七十二条

本章下列用语的含义:

(一) “船舶” ，是指本法第三条所称的船舶和与其发生救助关系的任何其他非用 于军事的或者政府公务的船艇。 398

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(二) “财产” ，是指非永久地和非有意地依附于岸线的任何财产，包括有风险的 运费。 (三) “救助款项” ，是指依照本章规定，被救助方应当向救助方支付的任何救助 报酬、酬金或者补偿。 Article 172 For the purposes of this Chapter: (1) (2) (3)

“Ship” means any ship referred to in Article 3 of this Code and any other non-military, public service ship or craft that has been involved in a salvage operation therewith; “Property” means any property not permanently and intentionally attached to the shoreline and includes freight at risk; “Payment” means any reward, remuneration or compensation for salvage operations to be paid by the salved party to the salvor pursuant to the provisions of this Chapter.

第一百七十三条 本章规定，不适用于海上已经就位的从事海底矿物资源的勘 探、开发或者生产的固定式、浮动式平台和移动式近海钻井装置。 Article 173 The provisions of this Chapter shall not apply to fixed or floating platforms or mobile offshore drilling units when such platforms or units are on location engaged in the exploration, exploitation or production of sea-bed mineral resources. 第一百七十四条 船长在不严重危及本船和船上人员安全的情况下，有义务尽力 救助海上人命。 Article 174 The Master is bound, so far as he can do so without serious danger to his ship and persons on board, to render assistance to any person in danger of being lost at sea. 第一百七十五条 救助方与被救助方就海难救助达成协议，救助合同成立。 遇险船舶的船长有权代表船舶所有人订立救助合同。遇险船舶的船长或者船舶所 有人有权代表船上财产所有人订立救助合同。 Article 175 A contract for salvage operations at sea is concluded when an agreement has been reached between the salvor and the salved party regarding the salvage operations to be undertaken. The Master of the ship in distress shall have the authority to conclude a contract for salvage operations on behalf of the shipowner. The Master of the ship in distress or its owner shall have the authority to conclude a contract for salvage operations on behalf of the owner of the property on board. 第一百七十六条 有下列情形之一，经一方当事人起诉或者双方当事人协议仲裁 的，受理争议的法院或者仲裁机构可以判决或者裁决变更救助合同: (一) 合同在不正当的或者危险情况的影响下订立，合同条款显失公平的; (二) 根据合同支付的救助款项明显过高或者过低于实际提供的救助服务的。 Article 176 The salvage contract may be modified by a judgment of the court which has entertained the suit brought by either party, or modified by an award of the arbitration organization to which the dispute has been submitted for arbitration upon the agreement of the parties, under any of the following circumstances: (1)

The contract has been entered into under undue influence or the influence of danger and its terms are obviously inequitable; 399

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(2)

The payment under the contract is in an excessive degree too large or too small for the services actually rendered.

第一百七十七条 (一) (二) (三) (四)

在救助作业过程中,救助方对被救助方负有下列义务:

以应有的谨慎进行救助; 以应有的谨慎防止或者减少环境污染损害; 在合理需要的情况下，寻求其他救助方援助; 当被救助方合理地要求其他救助方参与救助作业时，接受此种要求，但是 要求不合理的，原救助方的救助报酬金额不受影响。

Article 177 During the salvage operation, the salvor shall owe a duty to the salved party to: (1) (2) (3) (4)

carry out the salvage operation with due care; exercise due care to prevent or minimise the pollution damage to the environment; seek the assistance of other salvors where reasonably necessary; accept the reasonable request of the salved party to seek the participation in the salvage operation of other salvors. However, the amount of the salvor’s reward shall not be prejudiced should it be found that such a request was unreasonable.

第一百七十八条

在救助作业过程中,被救助方对救助方负有下列义务:

(一) 与救助方通力合作; (二) 以应有的谨慎防止或者减少环境污染损害; (三) 当获救的船舶或者其他财产已经被送至安全地点时，及时接受救助方提出 的合理的移交要求。 Article 178 the salvor to: (1) (2) (3)

During the salvage operation, the party salved is under an obligation to

co-operate fully with the salvor; exercise due care to prevent or minimise the pollution damage to the environment; promptly accept the request of the salvor to take delivery of the ship or property salved when such ship or property has been brought to a place of safety.

第一百七十九条 救助方对遇险的船舶和其他财产的救助，取得效果的，有权获 得救助报酬;救助未取得效果的，除本法第一百八十二条或者其他法律另有规定或 者合同另有约定外，无权获得救助款项。 Article 179 Where the salvage operations rendered to the distressed ship and other property have had a useful result, the salvor shall be entitled to a reward. Except as otherwise provided for by Article 182 of this Code or by other laws or the salvage contract, the salvor shall not be entitled to the payment if the salvage operations have had no useful result. 第一百八十条 确定救助报酬,应当体现对救助作业的鼓励,并综合考虑下列各项 因素: (一) 船舶和其他财产的获救的价值; (二) 救助方在防止或者减少环境污染损害方面的技能和努力; 400

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(三) (四) (五) (六) (七) (八) (九) (十)

救助方的救助成效; 危险的性质和程度; 救助方在救助船舶、其他财产和人命方面的技能和努力; 救助方所用的时间、支出的费用和遭受的损失; 救助方或者救助设备所冒的责任风险和其他风险; 救助方提供救助服务的及时性; 用于救助作业的船舶和其他设备的可用性和使用情况; 救助设备的备用状况、效能和设备的价值。

救助报酬不得超过船舶和其他财产的获救价值。 Article 180 The reward shall be fixed with a view to encouraging salvage operations, taking into full account the following criteria: (1) Value of the ship and other property salved; (2) Skill and efforts of the salvors in preventing or minimising the pollution damage to the environment; (3) Measure of success obtained by the salvors; (4) Nature and extent of the danger; (5) Skill and efforts of the salvors in salving the ship, other property and life; (6) Time used and expenses and losses incurred by the salvors; (7) Risk of liability and other risks run by the salvors or their equipment; (8) Promptness of the salvage services rendered by the salvors; (9) Availability and use of ships or other equipment intended for salvage operations; (10) State of readiness and efficiency of the salvor’s equipment and the value thereof. The reward shall not exceed the value of the ship and other property salved. 第一百八十一条 船舶和其他财产的获救价值，是指船舶和其他财产获救后的估 计价值或者实际出卖的收入，扣除有关税款和海关、检疫、检验费用以及进行卸 载、保管、估价、出卖而产生的费用后的价值。 前款规定的价值不包括船员的获救的私人物品和旅客的获救的自带行李的价值。 Article 181 The salved value of the ship and other property means the assessed value of the ship and other property salved or the proceeds of the sale thereof, after deduction of the relevant taxes and customs dues, quarantine expenses, inspection charges as well as expenses incurred in connection with the discharge, storage, assessment of the value and the sale thereof. The value prescribed in the preceding paragraph does not include the value of the salved personal belongings of the crew and that of the cabin luggage of the passengers. 第一百八十二条 对构成环境污染损害危险的船舶或者船上货物进行的救助，救 助方依照本法第一百八十条规定获得的救助报酬，少于依照本条规定可以得到的特 别补偿的，救助方有权依照本条规定，从船舶所有人处获得相当于救助费用的特别 补偿。 救助人进行前款规定的救助作业，取得防止或者减少环境污染损害效果的，船舶 所有人依照前款规定应当向救助方支付的特别补偿可以另行增加，增加的数额可以 达到救助费用的百分之三十。受理争议的法院或者仲裁机构认为适当，并且考虑到 本法第一百八十条第一款的规定，可以判决或者裁决进一步增加特别补偿数额;但 是，在任何情况下，增加部分不得超过救助费用的百分之一百。 401

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本条所称救助费用，是指救助方在救助作业中直接支付的合理费用以及实际使用 救助设备、投入救助人员的合理费用。确定救助费用应当考虑本法第一百八十条第 一款第（八）、（九）、（十）项的规定。 在任何情况下，本条规定的全部特别补偿，只有在超过救助方依照本法第一百八 十条规定能够获得的救助报酬时，方可支付，支付金额为特别补偿超过救助报酬的 差额部分。 由于救助方的过失未能防止或者减少环境污染损害的，可以全部或者部分地剥夺 救助方获得特别补偿的权利。 本条规定不影响船舶所有人对其他被救助方的追偿权。 Article 182 If the salvor has carried out the salvage operations in respect of a ship which by itself or its goods threatened pollution damage to the environment and has failed to earn a reward under Article 180 of this Code at least equivalent to the special compensation assessable in accordance with this Article, he shall be entitled to special compensation from the owner of that ship equivalent to his expenses as herein defined. If the salvor has carried out the salvage operations prescribed in the preceding paragraph and has prevented or minimized pollution damage to the environment, the special compensation payable by the owner to the salvor under paragraph 1 of this Article may be increased by an amount up to a maximum of 30% of the expenses incurred by the salvor. The court which has entertained the suit or the arbitration organization may, if it deems fair and just and taking into consideration the provisions of paragraph 1 of Article 180 of this Code, render a judgment or an award further increasing the amount of such special compensation, but in no event shall the total increase be more than 100% of the expenses incurred by the salvor. The salvor’s expenses referred to in this Article means the salvor’s out-of-pocket expenses reasonably incurred in the salvage operation and the reasonable expenses for the equipment and personnel actually used in the salvage operation. In determining the salvor’s expenses, the provisions of sub-paragraphs (8), (9) and (10) of paragraph 1 of Article 180 of this Code shall be taken into consideration. Under all circumstances, the total special compensation provided for in this Article shall be paid only if such compensation is greater than the reward recoverable by the salvor under Article 180 of this Code, and the amount to be paid shall be the difference between the special compensation and the reward. If the salvor has been negligent and has thereby failed to prevent or minimise the pollution damage to the environment, the salvor may be totally or partly deprived of the right to the special compensation. Nothing in this Article shall affect the right of recourse on the part of the shipowner against any other parties salved. 第一百八十三条 救助报酬的金额,应当由获救的船舶和其他财产的各所有人， 按照船舶和其他各项财产各自的获救价值占全部获救价值的比例承担。 Article 183 The salvage reward shall be made by the owners of the salved ship and other property in accordance with the respective proportions which the salved values of the ship and other property bear to the total salved value. 第一百八十四条 参加同一救助作业的各救助方的救助报酬，应当根据本法第一 百八十条规定的标准，由各方协商确定;协商不成的，可以提请受理争议的法院判 决或者经各方协议提请仲裁机构裁决。 402

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Article 184 The distribution of salvage reward among the salvors taking part in the same salvage operation shall be made by agreement among such salvors on the basis of the criteria set out in Article 180 of this Code; failing such agreement, the matter may be brought before the court hearing the case for judgment, or, upon the agreement of the parties, submitted to the arbitration organisation for an award. 第一百八十五条 在救助作业中救助人命的救助方，对获救人员不得请求酬金， 但是有权从救助船舶或者其他财产、防止或者减少环境污染损害的救助方获得的救 助款项中，获得合理的份额。 Article 185 The salvors of human life may not demand any remuneration from those whose lives are saved. However, salvors of human life are entitled to a fair share of the payment awarded to the salvor for salving the ship or other property or for preventing or minimising the pollution damage to the environment. 第一百八十六条

下列救助行为无权获得救助款项:

(一) 正常履行拖航合同或者其他服务合同的义务进行救助的，但是提供不属于 履行上述义务的特殊劳务除外; (二) 不顾遇险的船舶的船长、船舶所有人或者其他财产所有人明确的和合理的 拒绝，仍然进行救助的。 Article 186 The following salvage operations shall not be entitled to payment : (1) (2)

The salvage operation is carried out as a duty to normally perform a towage contract or other service contract, with the exception, however, of providing special services beyond the performance of the above said duty. The salvage operation is carried out in spite of the express and reasonable prohibition on the part of the Master of the ship in distress, the owner of the ship in question and the owner of the other property.

第一百八十七条 由于救助方的过失致使救助作业成为必需或者更加困难的，或者 救助方有欺诈或者其他不诚实行为的，应当取消或者减少向救助方支付的救助款项。 Article 187 Where the salvage operations have become necessary or more difficult due to the fault of the salvor or where the salvor has committed fraud or other dishonest conduct, the salvor shall be deprived of the whole or part of the payment payable to him. 第一百八十八条 被救助方在救助作业结束后，应当根据救助方的要求，对救助 款项提供满意的担保。 在不影响前款规定的情况下，获救船舶的船舶所有人应当在获救的货物交还前， 尽力使货物的所有人对其应当承担的救助款项提供满意的担保。 在未根据救助人的要求对获救的船舶或者其他财产提供满意的担保以前，未经救 助方同意，不得将获救的船舶和其他财产从救助作业完成后最初到达的港口或者地 点移走。 Article 188 After the completion of the salvage operation, the party salved shall, at the request of the salvor, provide satisfactory security for salvage reward and other charges. Without prejudice to the provisions of the preceding paragraph, the owner of the ship salved shall, before the release of the goods, make best endeavours to cause the owners of 403

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the property salved to provide satisfactory security for the share of the payment that they ought to bear. Without the consent of the salvor, the ship or other property salved shall not be removed from the port or place at which they first arrived after the completion of the salvage operation, until satisfactory security has been provided with respect to the ship or other property salved, as demanded by the salvor. 第一百八十九条 受理救助款项请求的法院或者仲裁机构，根据具体情况，在合 理的条件下，可以裁定或者裁决被救助方向救助方先行支付适当的金额。 被救助方根据前款规定先行支付金额后，其根据本法第一百八十八条规定提供的 担保金额应当相应扣减。 Article 189 The court or the arbitration organisation handling the salvor’s claim for payment may, in light of the specific circumstances and under fair and just conditions, decide or make an award ordering the party salved to pay on account an appropriate amount to the salvor. On the basis of the payment on account made by the party salved in accordance with the provisions of the preceding paragraph, the security provided under Article 188 of this Code shall be reduced accordingly. 第一百九十条 对于获救满九十日的船舶和其他财产，如果被救助方不支付救助 款项也不提供满意的担保，救助方可以申请法院裁定强制拍卖;对于无法保管、不易 保管或者保管费用可能超过其价值的获救的船舶和其他财产，可以申请提前拍卖。 拍卖所得价款，在扣除保管和拍卖过程中的一切费用后，依照本法规定支付救助 款项;剩余的金额，退还被救助方;无法退还、自拍卖之日起满一年又无人认领的， 上缴国库;不足的金额，救助方有权向被救助方追偿。 Article 190 If the party salved has neither made the payment nor provided satisfactory security for the ship and other property salved after 90 days of the salvage, the salvor may apply to the court for an order on forced sale by auction. With respect to the ship or the property salved that cannot be kept or cannot be properly kept, or the storage charge to be incurred may exceed its value, the salvor may apply for an earlier forced sale by auction. The proceeds of the sale shall, after deduction of the expenses incurred for the storage and sale, be used for the payment in accordance with the provisions of this Code. The remainder, if any, shall be returned to the party salved, and, if there is no way to return the remainder or if the remainder has not been claimed after one year of the forced sale, it shall go to the State treasury. In case of any deficiency, the salvor has the right of recourse against the party salved. 第一百九十一条 同一船舶所有人的船舶之间进行的救助，救助方获得救助款项 的权利适用本章规定。 Article 191 The provisions of this Chapter shall apply to the salvor’s right to the payment for the salvage operations carried out between the ships of the same owner. 第一百九十二条 国家有关主管机关从事或者控制的救助作业，救助方有权享受 本章规定的关于救助作业的权利和补偿。 Article 192 With respect to the salvage operations performed or controlled by the relevant competent authorities of the State, the salvors shall be entitled to avail themselves of the rights and compensation in respect of salvage operations provided for in this Chapter. 404

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第十章 共同海 Chapter X: General Average 第一百九十三条 共同海损，是指在同一海上航程中，船舶、货物和其他财产遭 遇共同危险，为了共同安全，有意地合理地采取措施所直接造成的特殊牺牲、支付 的特殊费用。 无论在航程中或者在航程结束后发生的船舶或者货物因迟延所造成的损失，包括 船期损失和行市损失以及其他间接损失，均不得列入共同海损。 Article 193 General average means the extraordinary sacrifice or expenditure intentionally and reasonably made or incurred for the common safety for the purpose of preserving from peril the ship, goods or other property involved in a common maritime adventure. Loss or damage sustained by the ship or goods through delay, whether on the voyage or subsequently, such as demurrage and loss of market as well as other indirect losses, shall not be admitted as general average. 第一百九十四条 船舶因发生意外、牺牲或者其他特殊情况而损坏时，为了安全 完成本航程，驶入避难港口、避难地点或者驶回装货港口、装货地点进行必要的修 理，在该港口或者地点额外停留期间所支付的港口费，船员工资、给养，船舶所消 耗的燃料、物料，为修理而卸载、储存、重装或者搬移船上货物、燃料、物料以及 其他财产所造成的损失、支付的费用，应当列入共同海损。 Article 194 When a ship, after having been damaged in consequence of accident, sacrifice or other extraordinary circumstances, shall have entered a port or place of refuge or returned to its port or place of loading to effect repairs which are necessary for the safe prosecution of the voyage, then the port charges paid, the wages and maintenance of the crew incurred and the fuel and stores consumed during the extra period of detention in such port or place, as well as the loss or damage and charges arising from the discharge, storage, reloading and handling of the goods, fuel, stores and other property on board in order to have the repairs done shall be allowed as general average. 第一百九十五条 为代替可以列为共同海损的特殊费用而支付的额外费用，可以 作为代替费用列入共同海损;但是，列入共同海损的代替费用的金额，不得超过被 代替的共同海损的特殊费用。 Article 195 Any extra expense incurred in place of another expense which would have been allowed as general average shall be deemed to be general average and so allowed, but the amount of such expense incurred shall not be in excess of the general average expense avoided. 第一百九十六条 提出共同海损分摊请求的一方应当负举证责任，证明其损失应 当列入共同海损。 Article 196 The burden of proof shall be upon the party claiming in general average to show that the loss or expense claimed is properly allowable as general average. 第一百九十七条 引起共同海损特殊牺牲、特殊费用的事故，可能是由航程中一 方的过失造成的，不影响该方要求分摊共同海损的权利;但是，非过失方或者过失 方可以就此项过失提出赔偿请求或者进行抗辩。 405

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Article 197 Rights to contribution in general average shall not be affected, though the event which gave rise to the sacrifice or expenditure may have been due to the fault of one of the parties to the adventure. However, this shall not prejudice any remedies or defences which may be open against or to that party in respect of such fault. 第一百九十八条

船舶、货物和运费的共同海损牺牲的金额,依照下列规定确定:

(一) 船舶共同海损牺牲的金额，按照实际支付的修理费，减除合理的以新换旧 的扣减额计算。船舶尚未修理的,按照牺牲造成的合理贬值计算，但是不 得超过估计的修理费。 船舶发生实际全损或者修理费用超过修复后的船舶价值的，共同海损牺牲 金额按照该船舶在完好状态下的估计价值，减除不属于共同海损损坏的估 计的修理费和该船舶受损后的价值的余额计算。 (二) 货物共同海损牺牲的金额，货物灭失的，按照货物在装船时的价值加保险 费加运费,减除由于牺牲无需支付的运费计算。货物损坏,在就损坏程度达 成协议前售出的，按照货物在装船时的价值加保险费加运费,与出售货物 净得的差额计算。 (三) 运费共同海损牺牲的金额，按照货物遭受牺牲造成的运费的损失金额，减 除为取得这笔运费本应支付，但是由于牺牲无需支付的营运费用计算。 Article 198 The amounts of sacrifice of the ship, the goods and the freight shall be respectively determined as follows: (1)

(2)

(3)

The amount of sacrifice of the ship shall be calculated on the basis of the repair cost of the ship actually paid, from which any reasonable deduction in respect of “new for old” being made. Where the ship has not been repaired after the sacrifice, the amount of sacrifice thereof shall be calculated on the basis of the reasonable reduced value of ship after the general average sacrifice. Such amount shall not exceed the estimated cost of repair. Where the ship is an actual total loss or where the cost of repair would exceed the value of the ship after the repair, the amount of sacrifice of the ship shall be calculated on the basis of the estimated sound value of the ship, less the estimated cost of repair not allowable as general average, as well as the value of the ship after the damage. The amount of sacrifice of the goods already lost shall be calculated on the basis of the value of the goods at the time of shipment plus insurance and freight, from which the freight that need not be paid due to the sacrifice made being deducted. For the damaged goods that had already been sold before an agreement was reached on the extent of the damage sustained, the amount of sacrifice thereof shall be calculated on the basis of the difference between the value of the goods at the time of shipment plus insurance and freight, and the net proceeds of the goods so sold. The amount of sacrifice of the freight shall be calculated on the basis of the amount of loss of freight on account of the sacrifice of the goods, from which the operating expenses that ought to be paid in order to earn such freight but need not be paid because of the sacrifice shall be deducted.

第一百九十九条 共同海损应当由受益方按照各自的分摊价值的比例分摊。船 舶、货物和运费的共同海损分摊价值,分别依照下列规定确定: 406

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(一) 船舶共同海损分摊价值，按照船舶在航程终止时的完好价值，减除不属于 共同海损的损失金额计算，或者按照船舶在航程终止时的实际价值，加上 共同海损牺牲的金额计算。 (二) 货物共同海损分摊价值，按照货物在装船时的价值加保险费加运费，减除 不属于共同海损的损失金额和承运人承担风险的运费计算。货物在抵达目 的港以前售出的，按照出售净得金额，加上共同海损牺牲的金额计算。 旅客的行李和私人物品，不分摊共同海损。 (三) 运费分摊价值，按照承运人承担风险并于航程终止时有权收取的运费，减 除为取得该项运费而在共同海损事故发生后，为完成本航程所支付的营运 费用，如上共同海损牺牲的金额计算。 Article 199 The contribution in general average shall be made in proportion to the contributory values of the respective beneficiaries. The contributory value in general average by the ship, goods and freight shall be determined as follows: (1)

(2)

(3)

The contributory value of the ship shall be calculated on the basis of the sound value of the ship at the place where the voyage ends, from which any damage that does not come under general average sacrifice being deducted; alternately, the actual value of the ship at the place where the voyage ends, plus the amount of general average sacrifice. The contributory value of the goods shall be calculated on the basis of the value of the goods at the time of shipment plus insurance and freight, from which the damage that does not come under the general average sacrifice and the carrier’s freight at risk being deducted. Where the goods had been sold before its arrival at the port of destination, its value for contribution shall be the net proceeds plus the amount of general average sacrifice. Passenger’s luggage and personal belongings shall not be included in the value for contribution. The Contributory value of freight shall be calculated on the basis of the amount of freight at the risk of the carrier and which the carrier is entitled to collect at the end of the voyage, less any expense incurred for the prosecution of the voyage after the general average, in order to earn the freight, plus the amount of general average sacrifice.

第二百条 未申报的货物或者谎报的货物，应当参加共同海损分摊;其遭受的特 殊牺牲，不得列入共同海损。 不正当地以低于货物实际价值作为申报价值的，按照实际价值分摊共同海损;在 发生共同海损牺牲时，按照申报价值计算牺牲金额。 Article 200 Goods undeclared or wrongfully declared shall be liable for the contribution to general average, but the special sacrifice sustained by such goods shall not be allowed as general average. Where the value of the goods has been improperly declared at a value below its actual value, the contribution to general average shall be made on the basis of their actual value and, where a general average sacrifice has occurred, the amount of sacrifice shall be calculated on the basis of the declared value. 407

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第二百零一条 对共同海损特殊牺牲和垫付的共同海损特殊费用，应当计算利 息。对垫付的共同海损特殊费用，除船员工资、给养和船舶消耗的燃料、物料外， 应当计算手续费。 Article 201 Interest shall be allowed on general average sacrifice and general average expenses paid on account. A commission shall be allowed for the general average expenses paid on account, except those for the wages and maintenance of the crew and fuel and store consumed. 第二百零二条 经利益关系人要求，各分摊方应当提供共同海损担保。 以提供保证金方式进行共同海损担保的，保证金应当交由海损理算师以保管人名 义存入银行。 保证金的提供、使用或者退还，不影响各方最终的分摊责任。 Article 202 The contributing parties shall provide security for general average contribution at the request of the parties that have an interest therein. Where the security has been provided in the form of cash deposits, such deposits shall be put in a bank by an average adjuster in the name of a trustee. The provision, use and refund of the deposits shall be without prejudice to the ultimate liability of the contributing parties. 第二百零三条 共同海损理算，适用合同约定的理算规则;合同未约定的，适用 本章的规定。 Article 203 The adjustment of general average shall be governed by the average adjustment rules agreed upon in the relevant contract. In the absence of such an agreement in the contract, the relevant provisions contained in this Chapter shall apply. 第十一章 海事 任限制 Chapter XI: Limitation of Liability for Maritime Claims 第二百零四条 船舶所有人、救助人，对本法第二百零七条所列海事赔偿请求， 可以依照本章规定限制赔偿责任。 前款所称的船舶所有人，包括船舶承租人和船舶经营人。 Article 204 Shipowners and salvors may limit their liability in accordance with the provisions of this Chapter for claims set out in Article 207 of this Code. The shipowners referred to in the preceding paragraph shall include the charterer and the operator of a ship. 第二百零五条 本法第二百零七条所列海事赔偿请求，不是向船舶所有人、救助 人本人提出，而是向他们对其行为、过失负有责任的人员提出的，这些人员可以依 照本章规定限制赔偿责任。 Article 205 If the claims set out in Article 207 of this Code are not made against shipowners or salvors themselves but against persons for whose act, neglect or default the shipowners or salvors are responsible, such persons may limit their liability in accordance with the provisions of this Chapter. 第二百零六条 被保险人依照本章规定可以限制赔偿责任的，对该海事赔偿请求 承担责任的保险人,有权依照本章规定享受相同的赔偿责任限制。 408

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Article 206 Where the assured may limit his liability in accordance with the provisions of this Chapter, the insurer liable for the maritime claims shall be entitled to the limitation of liability under this Chapter to the same extent as the assured. 第二百零七条 下列海事赔偿请求，除本法第二百零八条和第二百零九条另有规 定外，无论赔偿责任的基础有何不同，责任人均可以依照本章规定限制赔赔责任: （一）在船上发生的或者与船舶营运、救助作业直接相关的人身伤亡或者财产 的灭失、损坏，包括对港口工程、港池、航道和助航设施造成的损坏， 以及由此引起的相应损失的赔偿请求; （二）海上货物运输因迟延交付或者旅客及其行李运输因迟延到达造成损失的 赔偿请求; （三）与船舶营运或者救助作业直接相关的，侵犯非合同权利的行为造成其他 损失的赔偿请求; （四）责任人以外的其他人，为避免或者减少责任人依照本章规定可以限制赔 偿责任的损失而采取措施的赔偿请求，以及因此项措施造成进一步损失 的赔偿请求。 前款所列赔偿请求，无论提出的方式有何不同，均可以限制赔偿责任。但是， 第（四）项涉及责任人以合同约定支付的报酬，责任人的支付责任不得援用本条赔 偿责任限制的规定。 Article 207 Except as provided otherwise in Articles 208 and 209 of this Code, with respect to the following maritime claims, the person liable may limit his liability in accordance with the provisions of this Chapter, whatever the basis of liability may be: (1)

(2) (3) (4)

Claims in respect of loss of life or personal injury or loss of or damage to property including damage to harbour works, basins and waterways and aids to navigation occurring on board or in direct connection with the operation of the ship or with salvage operations, as well as consequential damages resulting therefrom; Claims in respect of loss resulting from delay in delivery in the carriage of goods by sea or from delay in the arrival of passengers or their luggage; Claims in respect of other loss resulting from infringement of rights other than contractual rights occurring in direct connection with the operation of the ship or salvage operations; Claims of a person other than the person liable in respect of measures taken to avert or minimise loss for which the person liable may limit his liability in accordance with the provisions of this Chapter, and further loss caused by such measures.

All the claims set out in the preceding paragraph, whatever the way they are lodged, may be entitled to limitation of liability. However, with respect to the remuneration set out in sub-paragraph (4) for which the person liable pays as agreed upon in the contract, in relation to the obligation for payment, the person liable may not invoke the provisions on limitation of liability of this Article. 第二百零八条

本章规定不适用于下列各项:

(一) 对救助款项或者共同海损分摊的请求; 409

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(二) 中华人民共和国参加的国际油污损害民事责任公约规定的油污损害的赔偿 请求; (三) 中华人民共和国参加的国际核能损害责任限制公约规定的核能损害的赔偿 请求; (四) 核动力船舶造成的核能损害的赔偿请求; (五) 船舶所有人或者救助人的受雇人提出的赔偿请求，根据调整劳务合同的法 律，船舶所有人或者救助人对该类赔偿请求无权限制赔偿责任，或者该项 法律作了高于本章规定的赔偿限额的规定。 Article 208 The provisions of this Chapter shall not be applicable to the following claims: (1) (2) (3) (4) (5)

Claims for salvage payment or contribution in general average; Claims for oil pollution damage under the International Convention on Civil Liability for Oil Pollution Damage to which the People’s Republic of China is a party; Claims for nuclear damage under the International Convention on Limitation of Liability for Nuclear Damage to which the People’s Republic of China is a party; Claims against the shipowner of a nuclear ship for nuclear damage; Claims by the servants of the shipowner or salvor, if under the law governing the contract of employment, the shipowner or salvor is not entitled to limit his liability or if he is by such law only permitted to limit his liability to an amount greater than that provided for in this Chapter.

第二百零九条 经证明，引起赔偿请求的损失是由于责任人的故意或者明知可 能造成损失而轻率地作为或者不作为造成的，责任人无权依照本章规定限制赔偿 责任。 Article 209 A person liable shall not be entitled to limit his liability in accordance with the provisions of this Chapter, if it is proved that the loss resulted from his act or omission done with the intent to cause such loss or recklessly and with knowledge that such loss would probably result. 第二百一十条 除本法第二百一十一条另有规定外，海事赔偿责任限制，依照下 列规定计算赔偿限额: (一) 关于人身伤亡的赔偿请求 1. 2.

总吨位300吨至500吨的船舶，赔偿限额为333000计算单位; 总吨位超过500吨的船舶，500吨以下部分适用本项第1目的规定，500 吨以上的部分，应当增加下列数额: 501吨至3000吨的部分，每吨增加500计算单位; 3001吨至30000吨的部分，每吨增加333计算单位; 30001吨至70000吨的部分，每吨增加250计算单位; 超过70000吨的部分，每吨增加167计算单位。

(二) 关于非人身伤亡的赔偿请求 1.

总吨位300吨至500吨的船舶，赔偿限额为167000计算单位;

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2.

总吨位超过500吨的船舶，500吨以下部分适用本项第1目的规定，500 吨以上的部分，应当增加下列数额: 501吨至30000吨的部分，每吨增加167计算单位; 30001吨至70000吨的部分，每吨增加125计算单位; 超过70000吨的部分,每吨增加83计算单位。

(三) 依照第 (一) 项规定的限额, 不足以支付全部人身伤亡的赔偿请求的，其差 额应当与非人身伤亡的赔偿请求并列，从第 (二) 项数额中按照比例受偿。 (四) 在不影响第 (三) 项关于人身伤亡赔偿请求的情况下，就港口工程、港 池、航道和助航设施的损害提出的赔偿请求，应当较第 (二) 项中的其他 赔偿请求优先受偿。 (五) 不以船舶进行救助作业或者在被救船舶上进行救助作业的救助人，其责任 限额按照总吨位为1500吨的船舶计算。 总吨位不满300吨的船舶，从事中华人民共和国港口之间的运输的船舶，以及从事 沿海作业的船舶,其赔偿限额由国务院交通主管部门制定，报国务院批准后施行。 Article 210 The limitation of liability for maritime claims, except as otherwise provided for in Article 211 of this Code, shall be calculated as follows: (1)

In respect of claims for loss of life or personal injury: a) b)

333,000 Units of Account for a ship with a gross tonnage ranging from 300 to 500 tons; For a ship with a gross tonnage in excess of 500 tons, the limitation under a) above shall be applicable to the first 500 tons and the following amounts in addition to that set out under a) shall be applicable to the gross tonnage in excess of 500 tons: For each ton from 501 to 3,000 tons: 500 Units of Account; For each ton from 3,001 to 30,000 tons: 333 Units of Account; For each ton from 30,001 to 70,000 tons: 250 Units of Account; For each ton in excess of 70,000 tons: 167 Units of Account;

(2)

In respect of claims other than that for loss of life or personal injury: a) b)

167,000 Units of Account for a ship with a gross tonnage ranging from 300 to 500 tons; For a ship with a gross tonnage in excess of 500 tons, the limitation under a) above shall be applicable to the first 500 tons, and the following amounts in addition to that under a) shall be applicable to the part in excess of 500 tons: For each ton from 501 to 30,000 tons: 167 Units of Account; For each ton from 30,001 to 70,000 tons: 125 Units of Account; For each ton in excess of 70,000 tons: 83 Units of Account.

(3)

Where the amount calculated in accordance with sub-paragraph (1) above is insufficient for payment of claims for loss of life or personal injury set out therein in full, the amount calculated in accordance with sub-paragraph (2) shall be available for payment of the unpaid balance of claims under sub-paragraph 411

ANNEX I

(4)

(5)

(1), and such unpaid balance shall rank rateably with claims set out under subparagraph (2). However, without prejudice to the right of claims for loss of life or personal injury under sub-paragraph (3), claims in respect of damage to harbour works, basins and waterways and aids to navigation shall have priority over other claims under sub-paragraph (2). The limitation of liability for any salvor not operating from any ship or for any salvor operating solely on the ship to, or in respect of which, he is rendering salvage services, shall be calculated according to a gross tonnage of 1,500 tons.

The limitation of liability for ships with a gross tonnage not exceeding 300 tons and those engaging in transport services between the ports of the People’s Republic of China as well as those for other coastal works shall be worked out by the competent authorities of transport and communications under the State Council and implemented after its being submitted to and approved by the State Council. 第二百一十一条 海上旅客运输的旅客人身伤亡赔偿责任限制，按照46666计算单 位乘以船舶证书规定的载客定额计算赔偿限额，但是最高不超过2000000计算单位。 中华人民共和国港口之间海上旅客运输的旅客人身伤亡，赔偿限额由国务院交通 主管部门制定，报国务院批准后施行。 Article 211 In respect of claims for loss of life or personal injury to passengers carried by sea, the limitation of liability of the shipowner thereof shall be an amount of 46,666 Units of Account multiplied by the number of passengers which the ship is authorised to carry according to the ship’s relevant certificate, but the maximum amount of compensation shall not exceed 25,000,000 Units of Account. The limitation of liability for claims for loss of life or personal injury to passengers carried by sea between the ports of the People’s Republic of China shall be worked out by the competent authorities of transport and communications under the State Council and implemented after its being submitted to and approved by the State Council. 第二百一十二条 本法第二百一十条和第二百一十一条规定的赔偿限额，适用于 特定场合发生的事故引起的，向船舶所有人、救助人本人和他们对其行为过失负有 责任的人员提出的请求的总额。 Article 212 The limitation of liability under Articles 210 and 211 of this Code shall apply to the aggregate of all claims that may arise on any given occasion against shipowners and salvors themselves, and any person for whose act, neglect or fault the shipowners and the salvors are responsible. 第二百一十三条 责任人要求依照本法规定限制赔偿责任的，可以在有管辖权的 法院设立责任限制基金。基金数额分别为本法第二百一十条、第二百一十一条规定 的限额，加上自责任产生之日起至基金设立之日止的相应利息。 Article 213 Any person liable claiming the limitation of liability under this Code may constitute a limitation fund with a court having jurisdiction. The fund shall be constituted in the sum of such an amount set out respectively in Articles 210 and 211, together with the interest thereon from the date of the occurrence giving rise to the liability until the date of the constitution of the fund. 412

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第二百一十四条 责任人设立责任限制基金后，向责任人提出请求的任何人，不 得对责任人的任何财产行使任何权利;已设立责任限制基金的责任人的船舶或者其 他财产已经被扣押，或者基金设立人已经提交抵押物的，法院应当及时下令释放或 者责令退还。 Article 214 Where a limitation fund has been constituted by a person liable, any person having made a claim against the person liable may not exercise any right against any assets of the person liable. Where any ship or other property belonging to the person constituting the fund has been arrested or attached, or, where a security has been provided by such person, the court shall order without delay the release of the ship arrested or the property attached or the return of the security provided. 第二百一十五条 享受本章规定的责任限制的人，就同一事故向请求人提出反请 求的，双方的请求金额应当相互抵消，本章规定的赔偿限额仅适用于两个请求金额 之间的差额。 Article 215 Where a person entitled to limitation of liability under the provisions of this Chapter has a counter-claim against the claimant arising out of the same occurrence, their respective claims shall be set off against each other and the provisions of this Chapter shall only apply to the balance, if any. 第十二章 海上保 合同 Chapter XII: Contract of Marine Insurance 第一节 一般规定 Section 1: Basic Principles 第二百一十六条 海上保险合同，是指保险人按照约定，对被保险人遭受保险事 故造成保险标的的损失和产生的责任负责赔偿，而由被保险人支付保险费的合同。 前款所称保险事故，是指保险人与被保险人约定的任何海上事故，包括与海上航 行有关的发生于内河或者陆上的事故。 Article 216 A contract of marine insurance is a contract whereby the insurer undertakes, as agreed, to indemnify the loss to the subject matter insured and the liability of the insured caused by perils covered by the insurance against the payment of an insurance premium by the insured. The covered perils referred to in the preceding paragraph mean any maritime perils agreed upon between the insurer and the insured, including perils occurring in inland rivers or on land which is related to a maritime adventure. 第二百一十七条 (一) (二) (三) (四) (五) (六)

海上保险合同的内容,主要包括下列各项:

保险人名称; 被保险人名称; 保险标的; 保险价值; 保险金额; 保险责任和除外责任;

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(七) 保险期间; (八) 保险费。 Article 217 A contract of marine insurance mainly includes: (1) (2) (3) (4) (5) (6) (7) (8)

Name of the insurer; Name of the insured; Subject matter insured; Insured value; Insured amount; Perils insured against and perils excepted; Duration of insurance coverage; Insurance premium.

第二百一十八条 (一) (二) (三) (四) (五) (六) (七)

下列各项可以作为保险标的:

船舶; 货物; 船舶营运收入，包括运费、租金、旅客票款; 货物预期利润; 船员工资和其他报酬; 对第三人的责任; 由于发生保险事故可能受到损失的其他财产和产生的责任、费用。

保险人可以将对前款保险标的的保险进行再保险。除合同另有约定外，原被保险 人不得享有再保险的利益。 Article 218 The following items may come under the subject matter of marine insurance: (1) (2) (3) (4) (5) (6) (7)

Ship; Cargo; Income from the operation of the ship including freight, charter hire and passenger’s fare; Expected profit on cargo; Crew’s wages and other remuneration; Liabilities to a third person; Other property which may sustain loss from a maritime peril and the liability and expenses arising therefrom.

The insurer may reinsure the insurance of the subject matter enumerated in the preceding paragraph. Unless otherwise agreed in the contract, the original insured shall not be entitled to the benefit of the reinsurance. 第二百一十九条 保险标的的保险价值由保险人与被保险人约定。 保险人与被保险人未约定保险价值的，保险价值依照下列规定计算: （一） 船舶的保险价值，是保险责任开始时船舶的价值，包括船壳、机器、设备的 价值，以及船上燃料、物料、索具、给养、淡水的价值和保险费的总和; （二）货物的保险价值，是保险责任开始时货物在起运地的发票价格或者非贸 易商品在起运地的实际价值以及运费和保险费的总和; 414

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（三）运费的保险价值，是保险责任开始时承运人应收运费总额和保险费的总 和; （四）其他保险标的的保险价值，是保险责任开始时保险标的的实际价值和保 险费的总和。 Article 219 The insurable value of the subject matter insured shall be agreed upon between the insurer and the insured. Where no insurable value has been agreed upon between the insurer and the insured, the insurable value shall be calculated as follows: (1)

(2) (3) (4)

The insurable value of the ship shall be the value of the ship at the time when the insurance liability commences, being the total value of the ship’s hull, machinery, equipment, fuel, stores, gear, provisions and fresh water on board as well as the insurance premium; The insurable value of the cargo shall be the aggregate of the invoice value of the cargo or the actual value of the non-trade commodity at the place of shipment, plus freight and insurance premium when the insurance liability commences; The insurable value of the freight shall be the aggregate of the total amount of freight payable to the carrier and the insurance premium when the insurance liability commences; The insurable value of other subject matter insured shall be the aggregate of the actual value of the subject matter insured and the insurance premium when the insurance liability commences.

第二百二十条 保险金额由保险人与被保险人约定。保险金额不得超过保险价 值; 超过保险价值的，超过部分无效。 Article 220 The insured amount shall be agreed upon between the insurer and the insured. The insured amount shall not exceed the insured value. Where the insured amount exceeds the insured value, the portion in excess shall be null and void. 第二节 合同的订立、解除和转让 Section 2: Conclusion, Termination and Assignment of Contract 第二百二十一条 被保险人提出保险要求，经保险人同意承保，并就海上保险合 同的条款达成协议后，合同成立。保险人应当及时向被保险人签发保险单或者其他 保险单证，并在保险单或者其他保险单证中载明当事人双方约定的合同内容。 Article 221 A contract of marine insurance comes into being after the insured puts forth a proposal for insurance and the insurer agrees to accept the proposal and the insurer and the insured agree on the terms and conditions of the insurance. The insurer shall issue to the insured an insurance policy or other certificate of insurance in time, and the contents of the contract shall be contained therein. 第二百二十二条 合同订立前，被保险人应当将其知道的或者在通常业务中应当 知道的有关影响保险人据以确定保险费率或者确定是否同意承保的重要情况，如实 告知保险人。 保险人知道或者在通常业务中应当知道的情况，保险人没有询问的，被保险人无 需告知。 415

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Article 222 Before the contract is concluded, the insured shall truthfully inform the insurer of the material circumstances which the insured has knowledge of or ought to have knowledge of in his ordinary business practice and which may have a bearing on the insurer in deciding the premium or whether he agrees to insure or not. The insured need not inform the insurer of the facts which the insurer has known of or the insurer ought to have knowledge of in his ordinary business practice if about which the insurer made no inquiry. 第二百二十三条 由于被保险人的故意，未将本法第二百二十二条第一款规定的 重要情况如实告知保险人的，保险人有权解除合同，并不退还保险费。合同解除前 发生保险事故造成损失的，保险人不负赔偿责任。 不是由于被保险人的故意，未将本法第二百二十二条第一款规定的重要情况如实 告知保险人的，保险人有权解除合同或者要求相应增加保险费。保险人解除合同 的，对于合同解除前发生保险事故造成的损失，保险人应当负赔偿责任;但是，未 告知或者错误告知的重要情况对保险事故的发生有影响的除外。 Article 223 Upon failure of the insured to truthfully inform the insurer of the material circumstances set forth in paragraph 1 of Article 222 of this Code due to his intentional act, the insurer has the right to terminate the contract without refunding the premium. The insurer shall not be liable for any loss arising from the perils insured against before the contract is terminated. If, not due to the insured’s intentional act, the insured did not truthfully inform the insurer of the material circumstances set out in paragraph 1 of Article 222 of this Code, the insurer has the right to terminate the contract or to demand a corresponding increase in the premium. In case the contract is terminated by the insurer, the insurer shall be liable for the loss arising from the perils insured against which occurred prior to the termination of the contract, except where the material circumstances uninformed or wrongly informed of have an impact on the occurrence of such perils. 第二百二十四条 订立合同时，被保险人已经知道或者应当知道保险标的已经因 发生保险事故而遭受损失的，保险人不负赔偿责任，但是有权收取保险费。保险人 已经知道或者应当知道保险标的已经不可能因发生保险事故而遭受损失的，被保险 人有权收回已经支付的保险费。 Article 224 Where the insured was aware or ought to be aware that the subject matter insured had suffered a loss due to the incidence of a peril insured against when the contract was concluded, the insurer shall not be liable for indemnification but shall have the right to the premium. Where the insurer was aware or ought to be aware that the occurrence of a loss to the subject matter insured due to a peril insured against was impossible, the insured shall have the right to recover the premium paid. 第二百二十五条 被保险人对同一保险标的就同一保险事故向几个保险人重复订 立合同，而使该保险标的的保险金额总和超过保险标的的价值的，除合同另有约定 外，被保险人可以向任何保险人提出赔偿请求。被保险人获得的赔偿金额总和不得 超过保险标的的受损价值。各保险人按照其承保的保险金额同保险金额总和的比例 承担赔偿责任。任何一个保险人支付的赔偿金额超过其应当承担的赔偿责任的，有 权向未按照其应当承担的赔偿责任支付赔偿金额的保险人追偿。

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Article 225 Where the insured concludes contracts with several insurers for the same subject matter insured and against the same risk, and the insured amount of the said subject matter insured thereby exceeds the insured value, then, unless otherwise agreed in the contract, the insured may demand indemnification from any of the insurers and the aggregate amount to be indemnified shall not exceed the loss value of the subject matter insured. The liability of each insurer shall be in proportion to that which the amount he insured bears to the total of the amounts insured by all insurers. Any insurer, who has paid an indemnification in an amount greater than what he is liable, shall have the right of recourse against those who have not paid their indemnification in the amounts for which they are liable. 第二百二十六条 保险责任开始前，被保险人可以要求解除合同，但是应当向保 险人支付手续费，保险人应当退还保险费。 Article 226 Prior to the commencement of the insurance liability, the insured may demand the termination of the insurance contract but shall pay the handling fees to the insurer, and the insurer shall refund the premium. 第二百二十七条 除合同另有约定外，保险责任开始后，被保险人和保险人均不 得解除合同。 根据合同约定在保险责任开始后可以解除合同的，被保险人要求解除合同，保险 人有权收取自保险责任开始之日起至合同解除之日止的保险费，剩余部分予以退 还;保险人要求解除合同，应当将自合同解除之日起至保险期间届满之日止的保险 费退还被保险人。 Article 227 Unless otherwise agreed in the contract, neither the insurer nor the insured may terminate the contract after the commencement of the insurance liability. Where the insurance contract provides that the contract may be terminated after the commencement of the liability, and the insured demands the termination of the contract, the insurer shall have the right to the premium payable from the day of the commencement of the insurance liability to the day of termination of the contract and refund the remaining portion. If it is the insurer who demands the termination of the contract, the unexpired premium from the day of the termination of the contract to the day of the expiration of the period of insurance shall be refunded to the insured. 第二百二十八条 虽有本法第二百二十七条规定,货物运输和船舶的航次保险， 保险责任开始后，被保险人不得要求解除合同。 Article 228 Notwithstanding the stipulations in Article 227 of this Code, the insured may not demand termination of the contract for cargo insurance and voyage insurance on ship after the commencement of the insurance liability. 第二百二十九条 海上货物运输保险合同可以由被保险人背书或者以其他方式转 让，合同的权利、义务随之转移。合同转让时尚未支付保险费的，被保险人和合同 受让人负连带支付责任。 Article 229 A contract of marine insurance for the carriage of goods by sea may be assigned by the insured by endorsement or otherwise, and the rights and obligations under the contract are assigned accordingly. The insured and the assignee shall be jointly and 417

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severally liable for the payment of the premium if such premium remains unpaid up to the time of the assignment of the contract. 第二百三十条 因船舶转让而转让船舶保险合同的，应当取得保险人同意。未经 保险人同意，船舶保险合同从船舶转让时起解除;船舶转让发生在航次之中的，船 舶保险合同至航次终了时解除。 合同解除后，保险人应当将自合同解除之日起至保险期间届满之日止的保险费退 还被保险人。 Article 230 The consent of the insurer shall be obtained where the insurance contract is assigned in consequence of the transfer of the ownership of the ship insured. In the absence of such consent, the contract shall be terminated from the time of the transfer of the ownership of the ship. Where the transfer takes place during the voyage, the contract shall be terminated when the voyage ends. Upon termination of the contract, the insurer shall refund the unexpired premium to the insured calculated from the day of the termination of the contract to the day of its expiration. 第二百三十一条 被保险人在一定期间分批装运或者接受货物的，可以与保险人 订立预约保险合同。预约保险合同应当由保险人签发预约保险单证加以确认。 Article 231 The insured may conclude an open cover with the insurer for the goods to be shipped or received in batches within a given period. The open cover shall be evidenced by an open policy to be issued by the insurer. 第二百三十二条 应被保险人要求，保险人应当对依据预约保险合同分批装运的 货物分别签发保险单证。 保险人分别签发的保险单证的内容与预约保险单证的内容不一致的，以分别签发 的保险单证为准。 Article 232 The insurer shall, at the request of the insured, issue insurance certificates separately for the cargo shipped in batches according to the open cover. Where the contents of the insurance certificates issued by the insurer separately differ from those of the open policy, the insurance certificates issued separately shall prevail. 第二百三十三条 被保险人知道经预约保险合同保险的货物已经装运或者到达的 情况时，应当立即通知保险人。通知的内容包括装运货物的船名、航线、货物价值 和保险金额。 Article 233 The insured shall notify the insurer immediately on learning that the cargo insured under the open cover has been shipped or has arrived. The items to be notified of shall include the name of the carrying ship, the voyage, the value of the cargo and the insured amount. 第三节 被保险人的义务 Section 3: Obligation of the Insured 第二百三十四条 除合同另有约定外，被保险人应当在合同订立后立即支付保险 费;被保险人支付保险费前,保险人可以拒绝签发保险单证。 Article 234 Unless otherwise agreed in the insurance contract, the insured shall pay the premium immediately upon conclusion of the contract. The insurer may refuse to issue the insurance policy or other insurance certificate before the premium is paid by the insured. 418

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第二百三十五条 被保险人违反合同约定的保证条款时，应当立即书面通知保险 人。保险人收到通知后，可以解除合同，也可以要求修改承保条件、增加保险费。 Article 235 The insured shall notify the insurer in writing immediately where the insured has not complied with the warranties under the contract. The insurer may, upon receipt of the notice, terminate the contract or demand an amendment to the terms and conditions of the insurance coverage or an increase in the premium. 第二百三十六条 一旦保险事故发生，被保险人应当立即通知保险人，并采取必 要的合理措施，防止或者减少损失。被保险人收到保险人发出的有关采取防止或者 减少损失的合理措施的特别通知的，应当按照保险人通知的要求处理。 对于被保险人违反前款规定所造成的扩大的损失，保险人不负赔偿责任。 Article 236 Upon the occurrence of the peril insured against, the insured shall notify the insurer immediately and shall take necessary and reasonable measures to avoid or minimise the loss. Where special instructions for the adoption of reasonable measures to avoid or minimise the loss are received from the insurer, the insured shall act according to such instructions. The insurer shall not be liable for the extended loss caused by the insured’s breach of the provisions of the preceding paragraph. 第四节 保险人的责任 Section 4: Liability of the Insurer 第二百三十七条 发生保险事故造成损失后，保险人应当及时向被保险人支付保 险赔偿。 Article 237 The insurer shall indemnify the insured promptly after the loss from a peril insured against has occurred. 第二百三十八条 保险人赔偿保险事故造成的损失，以保险金额为限。保险金额 低于保险价值的，在保险标的发生部分损失时，保险人按照保险金额与保险价值的 比例负赔偿责任。 Article 238 The insurer’s indemnification for the loss from the peril insured against shall be limited to the insured amount. Where the insured amount is less than the insured value, the insurer shall indemnify in the proportion that the insured amount bears to the insured value. 第二百三十九条 保险标的在保险期间发生几次保险事故所造成的损失，即使损 失金额的总和超过保险金额，保险人也应当赔偿。但是，对发生部分损失后未经修 复又发生全部损失的，保险人按照全部损失赔偿。 Article 239 The insurer shall be liable for the loss to the subject matter insured arising from several perils insured against during the period of the insurance even though the aggregate of the amounts of loss exceeds the insured amount. However, the insurer shall only be liable for the total loss where the total loss occurs after the partial loss which has not been repaired. 第二百四十条 被保险人为防止或者减少根据合同可以得到赔偿的损失而支出的 必要的合理费用，为确定保险事故的性质、程度而支出的检验、估价的合理费用， 419

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以及为执行保险人的特别通知而支出的费用，应当由保险人在保险标的损失赔偿之 外另行支付。 保险人对前款规定的费用的支付，以相当于保险金额的数额为限。 保险金额低于保险价值的，除合同另有约定外，保险人应当按照保险金额与保险 价值的比例，支付本条规定的费用。 Article 240 The insurer shall pay, in addition to the indemnification to be paid with regard to the subject matter insured, the necessary and reasonable expenses incurred by the insured for avoiding or minimising the loss recoverable under the contract, the reasonable expenses for survey and assessment of the value for the purpose of ascertaining the nature and extent of the peril insured against and the expenses incurred for acting on the special instructions of the insurer. The payment by the insurer of the expenses referred to in the preceding paragraph shall be limited to that equivalent to the insured amount. Where the insured amount is less than the insured value, the insurer shall be liable for the expenses referred to in this Article in the proportion that the insured amount bears to the insured value, unless the contract provides otherwise. 第二百四十一条 保险金额低于共同海损分摊价值的，保险人按照保险金额同分 摊价值的比例赔偿共同海损分摊。 Article 241 Where the insured amount is less than the value for contribution under the general average, the insurer shall be liable for the general average contribution in the proportion that the insured amount bears to the value for contribution. 第二百四十二条 对于被保险人故意造成的损失，保险人不负赔偿责任。 Article 242 The insurer shall not be liable for the loss caused by the intentional act of the insured. 第二百四十三条 除合同另有约定外，因下列原因之一造成货物损失的,保险人 不负赔偿责任: (一) 航行迟延、交货迟延或者行市变化; (二) 货物的自然损耗、本身的缺陷和自然特性; (三) 包装不当。 Article 243 Unless otherwise agreed in the insurance contract, the insurer shall not be liable for the loss of or damage to the insured cargo arising from any of the following causes: (1) (2) (3)

Delay in the voyage or in the delivery of cargo or change of market price; Fair wear and tear, inherent vice or nature of the cargo; and Improper packing.

第二百四十四条 除合同另有约定外，因下列原因之一造成保险船舶损失的，保 险人不负赔偿责任: (一) 船舶开航时不适航，但是在船舶定期保险中被保险人不知道的除外; (二) 船舶自然磨损或者锈蚀。 运费保险比照适用本条的规定。 420

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Article 244 Unless otherwise agreed in the insurance contract, the insurer shall not be liable for the loss of or damage to the insured ship arising from any of the following causes: (1) (2)

Unseaworthiness of the ship at the time of the commencement of the voyage, unless where under a time policy the insured has no knowledge thereof; Wear and tear or corrosion of the ship.

The provisions of this Article shall apply mutatis mutandis to the insurance of freight. 第五节 保险标的的损失和委付 Section 5: Loss of or Damage to the Subject Matter Insured and Abandonment 第二百四十五条 保险标的发生保险事故后灭失，或者受到严重损坏完全失去原 有形体、效用,或者不能再归被保险人所拥有的，为实际全损。 Article 245 Where after the occurrence of a peril insured against the subject matter insured is lost or is so seriously damaged that it is completely deprived of its original structure and usage or the insured is deprived of the possession thereof, it shall constitute an actual total loss. 第二百四十六条 船舶发生保险事故后，认为实际全损已经不可避免，或者为避 免发生实际全损所需支付的费用超过保险价值的，为推定全损。 货物发生保险事故后，认为实际全损已经不可避免，或者为避免发生实际全损所 需支付的费用与继续将货物运抵目的地的费用之和超过保险价值的，为推定全损。 Article 246 Where a ship’s total loss is considered to be unavoidable after the occurrence of a peril insured against or the expenses necessary for avoiding the occurrence of an actual total loss would exceed the insured value, it shall constitute a constructive total loss. Where an actual total loss is considered to be unavoidable after the cargo has suffered a peril insured against, or the expenses to be incurred for avoiding the total actual loss plus that for forwarding the cargo to its destination would exceed its insured value, it shall constitute a constructive total loss. 第二百四十七条 不属于实际全损和推定全损的损失，为部分损失。 Article 247 Any loss other than an actual total loss or a constructive total loss is a partial loss. 第二百四十八条 船舶在合理时间内未从被获知最后消息的地点抵达目的地，除 合同另有约定外，满两个月后仍没有获知其消息的，为船舶失踪。船舶失踪视为实 际全损。 Article 248 Where a ship fails to arrive at its destination within a reasonable time from the place where it was last heard of, unless the contract provides otherwise, if it remains unheard of upon the expiry of two months, it shall constitute missing. Such missing shall be deemed to be an actual total loss. 第二百四十九条 保险标的发生推定全损，被保险人要求保险人按照全部损失赔 偿的，应当向保险人委付保险标的。保险人可以接受委付，也可以不接受委付，但 是应当在合理的时间内将接受委付或者不接受委付的决定通知被保险人。 委付不得附带任何条件。委付一经保险人接受，不得撤回。 421

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Article 249 Where the subject matter insured has become a constructive total loss and the insured demands indemnification from the insurer on the basis of a total loss, the subject matter insured shall be abandoned to the insurer. The insurer may accept the abandonment or choose not to, but shall inform the insured of his decision whether to accept the abandonment within a reasonable time. The abandonment shall not be attached with any conditions. Once the abandonment is accepted by the insurer, it shall not be withdrawn. 第二百五十条 保险人接受委付的，被保险人对委付财产的全部权利和义务转移 给保险人。 Article 250 Where the insurer has accepted the abandonment, all rights and obligations relating to the property abandoned are transferred to the insurer. 第六节 保险赔偿的支付 Section 6: Payment of Indemnity 第二百五十一条 保险事故发生后，保险人向被保险人支付保险赔偿前，可以要 求被保险人提供与确认保险事故性质和损失程度有关的证明和资料。 Article 251 After the occurrence of a peril insured against and before the payment of indemnity, the insurer may demand that the insured submit evidence and materials related to the ascertainment of the nature of the peril and the extent of the loss. 第二百五十二条 保险标的发生保险责任范围内的损失是由第三人造成的，被保 险人向第三人要求赔偿的权利，自保险人支付赔偿之日起，相应转移给保险人。 被保险人应当向保险人提供必要的文件和其所需要知道的情况，并尽力协助保险 人向第三人追偿。 Article 252 Where the loss of or damage to the subject matter insured within the insurance coverage is caused by a third person, the right of the insured to demand compensation from the third person shall be subrogated to the insurer from the time the indemnity is paid. The insured shall furnish the insurer with necessary documents and information that should come to his knowledge that the insurer needs to know and shall endeavour to assist the insurer in pursuing recovery from the third person. 第二百五十三条 被保险人未经保险人同意放弃向第三人要求赔偿的权利，或者 由于过失致使保险人不能行使追偿权利的，保险人可以相应扣减保险赔偿。 Article 253 Where the insured waives his right of claim against the third person without the consent of the insurer or the insurer is unable to exercise the right of recourse due to the fault of the insured, the insurer may make a corresponding reduction from the amount of indemnity. 第二百五十四条 保险人支付保险赔偿时，可以从应支付的赔偿额中相应扣减被 保险人已经从第三人取得的赔偿。 保险人从第三人取得的赔偿，超过其支付的保险赔偿的，超过部分应当退还给被 保险人。 Article 254 In effecting payment of indemnity to the insured, the insurer may make a corresponding reduction therefrom of the amount already paid by a third person to the insured. 422

ANNEX I

Where the compensation obtained by the insurer from the third person exceeds the amount of indemnity paid by the insurer, the part in excess shall be returned to the insured. 第二百五十五条 发生保险事故后，保险人有权放弃对保险标的的权利，全额支 付合同约定的保险赔偿，以解除对保险标的的义务。 保险人行使前款规定的权利，应当自收到被保险人有关赔偿损失的通知之日起的 七日内通知被保险人;被保险人在收到通知前，为避免或者减少损失而支付的必要 的合理费用，仍然应当由保险人偿还。 Article 255 After the occurrence of a peril insured against, the insurer is entitled to waive his right to the subject matter insured and pay the insured the amount in full to relieve himself of the obligations under the contract. In exercising the right prescribed in the preceding paragraph, the insurer shall notify the insured thereof within seven days from the day of the receipt of the notice from the insured regarding the indemnity. The insurer shall remain liable for the necessary and reasonable expenses paid by the insured for avoiding or minimizing the loss prior to his receipt of the said notice. 第二百五十六条 除本法第二百五十五条的规定外，保险标的发生全损，保险 人支付全部保险金额的，取得对保险标的的全部权利;但是，在不足额保险的情况 下，保险人按照保险金额与保险价值的比例取得对保险标的的部分权利。 Article 256 Except as stipulated in Article 255 of this Code, where a total loss occurs to the subject matter insured and the full insured amount is paid, the insurer shall acquire the full right to the subject matter insured. In the case of under-insurance, the insurer shall acquire the right to the subject matter insured in the proportion that the insured amount bears to the insured value. 第十三章 效 Chapter XIII: Limitation of Time 第二百五十七条 就海上货物运输向承运人要求赔偿的请求权，时效期间为一 年，自承运人交付或者应当交付货物之日起计算;在时效期间内或者时效期间届满 后，被认定为负有责任的人向第三人提起追偿请求的，时效期间为九十日，自追偿 请求人解决原赔偿请求之日起或者收到受理对其本人提起诉讼的法院的起诉状副本 之日起计算。 有关航次租船合同的请求权，时效期间为二年，自知道或者应当知道权利被侵害 之日起计算。 Article 257 The limitation period for claims against the carrier with regard to the carriage of goods by sea is one year, counting from the day on which the goods were delivered or should have been delivered by the carrier. Within the limitation period or after the expiration thereof, if the person allegedly liable has brought up a claim of recourse against a third person, that claim is time-barred at the expiration of 90 days, counting from the day on which the person claiming for the recourse settled the claim, or was served with a copy of the process by the court handling the claim against him. The limitation period for claims against the carrier with regard to voyage charterparty is two years, counting from the day on which the claimant knew or should have known that his right had been infringed. 423

ANNEX I

第二百五十八条 就海上旅客运输向承运人要求赔偿的请求权,时效期间为二年, 分别依照下列规定计算: (一) 有关旅客人身伤害的请求权，自旅客离船或者应当离船之日起计算; (二) 有关旅客死亡的请求权，发生在运送期间的，自旅客应当离船之日起计算; 因运送期间内的伤害而导致旅客离船后死亡的，自旅客死亡之日起计算， 但是此期限自离船之日起不得超过三年; (三) 有关行李灭失或者损坏的请求权，自旅客离船或者应当离船之日起计算。 Article 258 The limitation period for claims against the carrier with regard to the carriage of passengers by sea is two years, counting respectively as follows: (1) Claims for personal injury: Counting from the day on which the passenger disembarked or should have disembarked; (2) Claims for death of passengers that occurred during the period of carriage: Counting from the day on which the passenger should have disembarked; whereas those for the death of passengers that occurred after the disembarkation but resulted from an injury during the period of carriage by sea, counting from the day of the death of the passenger concerned, provided that this period does not exceed three years from the time of disembarkation. (3) Claims for loss of or damage to the luggage: Counting from the day of disembarkation or the day on which the passenger should have disembarked. 第二百五十九条 有关船舶租用合同的请求权，时效期间为二年，自知道或者应 当知道权利被侵害之日起计算。 Article 259 The limitation period for claims with regard to charterparties is two years, counting from the day on which the claimant knew or should have known that his right had been infringed. 第二百六十条 有关海上拖航合同的请求权，时效期间为一年，自知道或者应当 知道权利被侵害之日起计算。 Article 260 The limitation period for claims with regard to sea towage is one year, counting from the day on which the claimant knew or should have known that his right had been infringed. 第二百六十一条 有关船舶碰撞的请求权，时效期间为二年，自碰撞事故发生之 日起计算;本法第一百六十九条第三款规定的追偿请求权，时效期间为一年，自当 事人连带支付损害赔偿之日起计算。 Article 261 The limitation period for claims with regard to collision of ships is two years, counting from the day on which the collision occurred. The limitation period for claims with regard to the right of recourse as provided for in paragraph 3 of Article 169 of this Code is one year, counting from the day on which the parties concerned jointly and severally paid the amount of compensation for the damage occurred. 第二百六十二条 有关海难救助的请求权，时效期间为二年，自救助作业终止之 日起计算。 Article 262 The limitation period for claims with regard to salvage at sea is two years, counting from the day on which the salvage operation was completed. 424

ANNEX I

第二百六十三条 有关共同海损分摊的请求权，时效期间为一年，自理算结束之 日起计算。 Article 263 The limitation period for claims with regard to contribution in general average is one year, counting from the day on which the adjustment was finished. 第二百六十四条 根据海上保险合同向保险人要求保险赔偿的请求权,时效期间 为二年，自保险事故发生之日起计算。 Article 264 The limitation period for claims with regard to contracts of marine insurance is two years, counting from the day on which the peril insured against occurred. 第二百六十五条 有关船舶发生油污损害的请求权，时效期间为三年，自损害发 生之日起计算;但是，在任何情况下时效期间不得超过从造成损害的事故发生之日 起六年。 Article 265 The limitation period for claims with regard to compensation for oil pollution damage from ships is three years, counting from the day on which the pollution damage occurred. However, in no case shall the limitation period exceed six years, counting from the day on which the accident causing the pollution occurred. 第二百六十六条 在时效期间的最后六个月内，因不可抗力或者其他障碍不能行 使请求权的，时效中止。自中止时效的原因消除之日起，时效期间继续计算。 Article 266 Within the last six months of the limitation period if, on account of force majeure or other causes preventing the claims from being made, the limitation period shall be suspended. The counting of the limitation period shall be resumed when the cause of suspension no longer exists. 第二百六十七条 时效因请求人提起诉讼、提交仲裁或者被请求人同意履行义务 而中断。但是，请求人撤回起诉、撤回仲裁或者起诉被裁定驳回的，时效不中断。 请求人申请扣船的，时效自申请扣船之日起中断。 自中断时起，时效期间重新计算。 Article 267 The limitation of time shall be discontinued as a result of bringing an action or submitting the case for arbitration by the claimant or the admission to fulfil obligations by the person against whom the claim was brought up. However, the limitation of time shall not be discontinued if the claimant withdraws his action or his submission for arbitration, or his action has been rejected by a decision of the court. Where the claimant makes a claim for the arrest of a ship, the limitation of time shall be discontinued from the day on which the claim is made. The limitation period shall be counted anew from the time of discontinuance. 第十四章 涉外关系的法律运用 Chapter XIV: Application of Law in Relation to Foreign-related Matters 第二百六十八条 中华人民共和国缔结或者参加的国际条约同本法有不同规定 的，适用国际条约的规定;但是，中华人民共和国声明保留的条款除外。 中华人民共和国法律和中华人民共和国缔结或者参加的国际条约没有规定的，可 以适用国际惯例。 425

ANNEX I

Article 268 If any international treaty concluded or acceded to by the People’s Republic of China contains provisions differing from those contained in this Code, the provisions of the relevant international treaty shall apply, unless the provisions are those on which the People’s Republic of China has announced reservations. International practice may be applied to matters for which neither the relevant laws of the People’s Republic of China nor any international treaty concluded or acceded to by the People’s Republic of China contain any relevant provisions. 第二百六十九条 合同当事人可以选择合同适用的法律，法律另有规定的除外。 合同当事人没有选择的，适用与合同有最密切联系的国家的法律。 Article 269 The parties to a contract may choose the law applicable to such contract, unless the law provides otherwise. Where the parties to a contract have not made a choice, the law of the country having the closest connection with the contract shall apply. 第二百七十条 船舶所有权的取得、转让和消灭，适用船旗国法律。 Article 270 The law of the flag State of the ship shall apply to the acquisition, transfer and extinction of the ownership of the ship. 第二百七十一条 船舶抵押权适用船旗国法律。 船舶在光船租赁以前或者光船租赁期间，设立船舶抵押权的，适用原船舶登记国 的法律。 Article 271 The law of the flag State of the ship shall apply to the mortgage of the ship. The law of the original country of registry of a ship shall apply to the mortgage of the ship if its mortgage is established before or during its bareboat charter period. 第二百七十二条 船舶优先权，适用受理案件的法院所在地法律。 Article 272 The law of the place where the court hearing the case is located shall apply to matters pertaining to maritime liens. 第二百七十三条 船舶碰撞的损害赔偿，适用侵权行为地法律。 船舶在公海上发生碰撞的损害赔偿，适用受理案件的法院所在地法律。 同一国籍的船舶，不论碰撞发生于何地，碰撞船舶之间的损害赔偿适用船旗国 法律。 Article 273 The law of the place where the infringing act is committed shall apply to claims for damages arising from collision of ships. The law of the place where the court hearing the case is located shall apply to claims for damages arising from collision of ships on the high sea. If the colliding ships belong to the same country, no matter where the collision occurs, the law of the flag State shall apply to claims against one another for damages arising from such collision. 第二百七十四条 共同海损理算，适用理算地法律。 Article 274 The law where the adjustment of general average is made shall apply to the adjustment of general average. 第二百七十五条

海事赔偿责任限制，适用受理案件的法院所在地法律。 426

ANNEX I

Article 275 The law of the place where the court hearing the case is located shall apply to the limitation of liability for maritime claims. 第二百七十六条 依照本章规定适用外国法律或者国际惯例，不得违背中华人民 共和国的社会公共利益。 Article 276 The application of foreign laws or international practices pursuant to the provisions of this Chapter shall not be against the public interests of the People’s Republic of China. 第十五章 附 Chapter XV: Supplementary Provisions 第二百七十七条 本法所称计算单位,是指国际货币基金组织规定的特别提款权; 其人民币数额为法院判决之日、仲裁机构裁决之日或者当事人协议之日按照国家外 汇主管机关规定的国际货币基金组织的特别提款权对人民币的换算办法计算得出的 人民币数额。 Article 277 The Unit of Account referred to in this Code is the Special Drawing Right as defined by the International Monetary Fund; the amount of the Chinese currency (RMB) in terms of the Special Drawing Right shall be that computed on the basis of the method of conversion established by the authorities in charge of foreign exchange control of this country on the date of the judgment by the court or the date of the award by the arbitration organisation or the date mutually agreed upon by the parties. 第二百七十八条 本法自1993年7月1日起施行。 Article 278 This Code shall come into force as of 1 July 1993.

427

ANNEX II

中华人民共和国海事诉讼特别程序法 Special Maritime Procedure Law of the People’s Republic of China

: Promulgating Date: : Effective Date: : Validity Status:

12/25/1999 12/25/1999 07/01/2000 07/01/2000 有效 Valid

目 第一章 总 则 第二章 管 辖 第三章 海事请求保全 第一节 一般规定 第二节 船舶的扣押与拍卖 第三节 船载货物的扣押与拍卖 第四章 海事强制令 第五章 海事证据保全 第六章 海事担保 第七章 送 达 第八章 审判程序 第一节 审理船舶碰撞案件的规定 第二节 审理共同海损案件的规定 第三节 海上保险人行使代位请求赔偿权利的规定 第四节 简易程序、督促程序和公示催告程序 第九章 设立海事赔偿责任限制基金程序 第十章 债权登记与受偿程序 第十一章 船舶优先权催告程序 第十二章 附 则 Contents Chapter I: General Principles Chapter II: Jurisdiction Chapter III: Preservation of Maritime Claims Section 1: General Provisions 428

ANNEX II

Section 2: Arrest and Auction of Ships Section 3: Attachment and Auction of Cargo on board the Ships Chapter IV: Maritime Injunction Chapter V: Preservation of Maritime Evidence Chapter VI: Maritime Security Chapter VII: Service Chapter VIII: Trial Procedures Section 1: Provisions for Trial of Collision Cases Section 2: Provisions for Trial of General Average Cases Section 3: Provisions for Exercising the Right of Subrogation by Marine Insurers Section 4: Summary Procedure, Procedure for Hastening Debt Recovery and Procedure for Public Exigence Chapter IX: Procedure for Constitution of Limitation Fund for Maritime Claims Chapter X: Procedure for Registration and Repayment of Debt Chapter XI: Procedure for Exigence of Maritime Liens Chapter XII: Supplementary Provisions 第一章 Chapter I: General Principles 第一条 为维护海事诉讼当事人的诉讼权利，保证人民法院查明事实，分清责 任，正确适用法律，及时审理海事案件，制定本法。 Article 1 This Law is enacted with a view to safeguarding the parties’ rights of maritime actions and ensuring that the people’s courts shall ascertain the facts, establish the liabilities, properly apply the laws and promptly hear the maritime cases. 第二条 在中华人民共和国领域内进行海事诉讼，适用《中华人民共和国民事诉 讼法》和本法。本法有规定的，依照其规定。 Article 2 The Civil Procedure Law of the People’s Republic of China and this Law shall be applicable to maritime actions brought in the People’s Republic of China. The provisions of this Law shall prevail if they are applicable. 第三条 中华人民共和国缔结或者参加的国际条 约与《中华人民共和国民事诉 讼法》和本法对涉外海事诉讼有不同规定的，适用该国际条 约的规定，但中华人 民共和国声明保留的条款除外。 Article 3 Where any provisions concerning foreign-related maritime actions contained in international conventions entered into or acceded to by the People’s Republic of China are different from those contained in the Civil Procedure Law of the People’s Republic of China and in this Law, the provisions of such international conventions shall prevail, except those on which the People’s Republic of China has announced reservation. 第四条 海事法院受理当事人因海事侵权纠纷、海商合同纠纷以及法律规定的其 他海事纠纷提起的诉讼。 Article 4 The maritime courts shall entertain actions brought by the parties in respect of maritime tort, disputes over maritime contracts and other maritime disputes as provided by the laws. 429

ANNEX II

第五条 海事法院及其所在地的高级人民法院和最高人民法院审理海事案件的， 适用本法。 Article 5 The maritime courts, the high people’s courts of the places where such maritime courts are located and the Supreme People’s Court shall apply this Law when hearing and determining maritime cases. 第二章 管 辖 Chapter II: Jurisdiction 第六条 海事诉讼的地域管辖，依照《中华人民共和国民事诉讼法》的有关规定。 下列海事诉讼的地域管辖，依照以下规定： (一) 因海事侵权行为提起的诉讼，除依照《中华人民共和国民事诉讼法》第二 十九条 至第三十一条 的规定以外，还可以由船籍港所在地海事法院管辖； (二) 因海上运输合同纠纷提起的诉讼，除依照《中华人民共和国民事诉讼法》 第二十八条的规定以外，还可以由转运港所在地海事法院管辖； (三) 因海船租用合同纠纷提起的诉讼，由交船港、还船港、船籍港所在地、被 告住所地海事法院管辖； (四) 因海上保赔合同纠纷提起的诉讼，由保赔标的物所在地、事故发生地、被 告住所地海事法院管辖； (五) 因海船的船员劳务合同纠纷提起的诉讼，由原告住所地、合同签订地、船 员登船港或者离船港所在地、被告住所地海事法院管辖； (六) 因海事担保纠纷提起的诉讼，由担保物所在地、被告住所地海事法院管 辖；因船舶抵押纠纷提起的诉讼，还可以由船籍港所在地海事法院管辖； (七) 因海船的船舶所有权、占有权、使用权、优先权纠纷提起的诉讼，由船舶 所在地、船籍港所在地、被告住所地海事法院管辖。 Article 6 The relevant provisions of the Civil Procedure Law of the People’s Republic of China shall apply to territorial jurisdiction of maritime actions. The territorial jurisdiction of the maritime actions listed hereunder shall be determined as follows: (1)

(2)

(3) (4)

apart from jurisdiction exercised in accordance with the provisions of Articles 29 to 31 in the Civil Procedure Law of the People’s Republic of China, an action brought for maritime tort may also be under the jurisdiction of the maritime court of the place where the ship’s port of registry is located; apart from jurisdiction exercised in accordance with Article 28 of the Civil Procedure Law of the People’s Republic of China, an action arising from a dispute over a contract for carriage by sea may also be under the jurisdiction of the maritime court of the place where the port of transhipment is located; an action arising from a charterparty dispute of a seagoing ship shall be under the jurisdiction of the maritime court of the place where the port of delivery, the port of re-delivery, the ship’s port of registry and the domicile of the defendant is located; an action arising from a dispute over a protection and indemnity contract shall be under the jurisdiction of the maritime court of the place where the subject-matter of insurance is located, where the accident occurred or where the domicile of the defendant is located; 430

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(5)

(6)

(7)

an action arising from a dispute over the employment contract of the crew of a seagoing ship shall be under the jurisdiction of the maritime court of the place where the domicile of the plaintiff is located, where the contract is signed, where the port of embarkation or disembarkation of the crew is located, or where the domicile of the defendant is located; an action arising from a dispute over maritime security shall be under the jurisdiction of the maritime court of the place where collateral is located or where the domicile of the defendant is located; an action arising from a dispute over ship mortgage may also be under the jurisdiction of the maritime court of the place where the ship’s port of registry is located; an action arising from a dispute over the ownership, possession, employment and maritime lien of a sea-going ship shall be under the jurisdiction of the maritime court of the place where the ship is located, where the ship’s port of registry is located, or where the domicile of the defendant is located.

第七条

下列海事诉讼，由本条 规定的海事法院专属管辖：

(一) 因沿海港口作业纠纷提起的诉讼，由港口所在地海事法院管辖； (二) 因船舶排放、泄漏、倾倒油类或者其他有害物质，海上生产、作业或者拆 船、修船作业造成海域污染损害提起的诉讼，由污染发生地、损害结果地 或者采取预防污染措施地海事法院管辖； (三) 因在中华人民共和国领域和有管辖权的海域履行的海洋勘探开发合同纠纷 提起的诉讼，由合同履行地海事法院管辖。 Article 7 The following maritime actions shall be under the exclusive jurisdiction of maritime courts provided in this Article respectively: (1) (2)

(3)

an action arising from a dispute over coastal port operation shall be under the jurisdiction of the maritime court of the place where the port is located; an action brought against pollution damage to sea areas caused by discharge, spill or dumping of oil or other hazardous substances from ships, by production or operation at sea or by ship demolition or repair shall be under the jurisdiction of the maritime court of the place where the pollution occurred, the place that is suffering from the harmful consequences or the place where pollution prevention measures were taken; and an action arising from a dispute over an offshore exploration and exploitation contract performed within the territory of the People’s Republic of China or in the sea area under the jurisdiction of the People’s Republic of China shall be under the jurisdiction of the maritime court of the place where the contract is being performed .

第八条 海事纠纷的当事人都是外国人、无国籍人、外国企业或者组织，当事人 书面协议选择中华人民共和国海事法院管辖的，即使与纠纷有实际联系的地点不在 中华人民共和国领域内，中华人民共和国海事法院对该纠纷也具有管辖权。 Article 8 Where all the parties to a maritime dispute are aliens, stateless persons, foreign enterprises or organisations and have agreed in writing to be subject to the jurisdiction of a maritime court of the People’s Republic of China, notwithstanding that the place that is actually related to the dispute is not within the territory of the People’s Republic of 431

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China, the said maritime court of the People’s Republic of China shall have jurisdiction of the dispute. 第九条 当事人申请认定海上财产无主的，向财产所在地海事法院提出；申请因 海上事故宣告死亡的，向处理海事事故主管机关所在地或者受理相关海事案件的海 事法院提出。 Article 9 Any party who wishes to apply for a decision that certain property at sea is ownerless shall file an application with the maritime court of the place where the said property is located; anyone who wishes to apply for a declaration that a person is dead in an accident at sea shall file an application with the maritime court of the place where the competent authority dealing with the accident is located or with the maritime court that entertains the relevant maritime case. 第十条 海事法院与地方人民法院之间因管辖权发生争议，由争议双方协商解 决；协商解决不了的，报请他们的共同上级人民法院指定管辖。 Article 10 Any controversy that arises between a maritime court and a local people’s court over jurisdiction shall be resolved by the two courts through consultation, failing which the matter shall be submitted to their common superior people’s court for designation of jurisdiction. 第十一条 当事人申请执行海事仲裁裁决，申请承认和执行外国法院判决、裁定 以及国外海事仲裁裁决的，向被执行的财产所在地或者被执行人住所地海事法院提 出。被执行的财产所在地或者被执行人住所地没有海事法院的，向被执行的财产所 在地或者被执行人住所地的中级人民法院提出。 Article 11 Any party who wishes to apply for the enforcement of a maritime arbitration award, the recognition and enforcement of a judgment or order of a foreign court or a foreign maritime arbitration award shall file an application with the maritime court of the place where the property against which enforcement is sought or the domicile of the person against whom enforcement is sought is located. If there is no maritime court located at the said place, the application shall be filed with the intermediate people’s court of the place where the property against which enforcement is sought or the domicile of the person against whom enforcement is sought is located. 第三章 海事 求保全 Chapter III: Preservation of Maritime Claims 第一节 一 般 规 定 Section I: General Provisions 第十二条 海事请求保全是指海事法院根据海事请求人的申请，为保障其海事请 求的实现，对被请求人的财产所采取的强制措施。 Article 12 Preservation of maritime claims are the compulsory measures taken by a maritime court upon the application of a maritime claimant against the property of the person against whom a claim is made, for the purpose of ensuring fulfilment of the claim of the maritime claimant. 432

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第十三条 当事人在起诉前申请海事请求保全，应当向被保全的财产所在地海事 法院提出。 Article 13 Any party who wishes to apply for preservation of a maritime claim before commencement of the action shall file an application with the maritime court of the place where the property subject to preservation is located. 第十四条 海事请求保全不受当事人之间关于该海事请求的诉讼管辖协议或者仲 裁协议的约束。 Article 14 Preservation of a maritime claim shall not be restricted by the jurisdiction agreement or arbitration agreement reached between the parties to an action in respect of the maritime claim. 第十五条 海事请求人申请海事请求保全，应当向海事法院提交书面申请。申请 书应当载明海事请求事项、申请理由、保全的标的物以及要求提供担保的数额，并 附有关证据。 Article 15 A maritime claimant who wishes to apply for preservation of a maritime claim shall file an application in writing with a maritime court. The particulars of the maritime claim, reasons for the application, subject-matter to be preserved and the amount of security required shall be specified in the application with relevant evidence attached. 第十六条 海事法院受理海事请求保全申请，可以责令海事请求人提供担保。海 事请求人不提供的，驳回其申请。 Article 16 The maritime court, having entertained an application for preservation of a maritime claim, may order the maritime claimant to provide security. If the maritime claimant fails to do so, the court shall reject the application. 第十七条 海事法院接受申请后，应当在四十八小时内作出裁定。裁定采取海事 请求保全措施的，应当立即执行；对不符合海事请求保全条件的，裁定驳回其申请。 当事人对裁定不服的，可以在收到裁定书之日起五日内申请复议一次。海事法院 应当在收到复议申请之日起五日内作出复议决定。复议期间不停止裁定的执行。 利害关系人对海事请求保全提出异议，海事法院经审查，认为理由成立的，应当 解除对其财产的保全。 Article 17 The maritime court, having accepted an application, shall make an order within 48 hours. Where the order permitted the adoption of measures for preservation of the maritime claim, it shall be executed forthwith; where the conditions for the preservation of the maritime claim are not met, the court shall make an order to reject the application. Any party who is dissatisfied with such an order may, within 5 days after receipt thereof, apply for review not more than once. The maritime court shall give the result of the review within 5 days after receipt of the application therefor. Execution of the order shall not be suspended during the period of review. Where preservation of a maritime claim is objected by an interested person, the maritime court, having examined the objection and considering the reasons justified, shall discharge preservation against his property. 第十八条 被请求人提供担保，或者当事人有正当理由申请解除海事请求保全 的，海事法院应当及时解除保全。 433

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海事请求人在本法规定的期间内，未提起诉讼或者未按照仲裁协议申请仲裁的， 海事法院应当及时解除保全或者返还担保。 Article 18 Where a person against whom a claim is made provides security or a party applies for discharge of the preservation of the maritime claim on justified grounds, the maritime court shall discharge the preservation promptly. If a maritime claimant fails to bring an action or apply for arbitration in accordance with an arbitration agreement within the time limit prescribed by this Law, the maritime court shall discharge the preservation or return the security promptly. 第十九条 海事请求保全执行后，有关海事纠纷未进入诉讼或者仲裁程序的，当 事人就该海事请求，可以向采取海事请求保全的海事法院或者其他有管辖权的海事 法院提起诉讼，但当事人之间订有诉讼管辖协议或者仲裁协议的除外。 Article 19 Where the legal proceedings or arbitral proceedings have not been commenced in respect of a maritime dispute when the preservation of a maritime claim is made, any party may bring an action in respect of the maritime claim in the maritime court that adopts measures for preservation of the maritime claim or any other maritime court that has jurisdiction, unless a jurisdiction agreement or arbitration agreement has been entered into between the parties. 第二十条 海事请求人申请海事请求保全错误的，应当赔偿被请求人或者利害关 系人因此所遭受的损失。 Article 20 A maritime claimant who has wrongly applied for preservation of a maritime claim shall indemnify the person against whom the claim is made or the interested person for the losses incurred. 第二节 船舶的扣押与拍卖 Section II: Arrest and Auction of Ships 第二十一条 (一) (二) (三) (四)

(五)

(六) (七) (八) (九)

下列海事请求，可以申请扣押船舶：

船舶营运造成的财产灭失或者损坏； 与船舶营运直接有关的人身伤亡； 海难救助； 船舶对环境、海岸或者有关利益方造成的损害或者损害威胁；为预 防、减少或者消除此种损害而采取的措施；为此种损害而支付的赔 偿；为恢复环境而实际采取或者准备采取的合理措施的费用；第三方 因此种损害而蒙受或者可能蒙受的损失；以及与本项所指的性质类似 的损害、费用或者损失； 与起浮、清除、回收或者摧毁沉船、残骸、搁浅船、被弃船或者使其无 害有关的费用，包括与起浮、清除、回收或者摧毁仍在或者曾在该船上 的物件或者使其无害的费用，以及与维护放弃的船舶和维持其船员有关 的费用； 船舶的使用或者租用的协议； 货物运输或者旅客运输的协议； 船载货物 (包括行李) 或者与其有关的灭失或者损坏； 共同海损； 434

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(十) (十一) (十二) (十三) (十四) (十五)

拖航； 引航； 为船舶营运、管理、维护、维修提供物资或者服务； 船舶的建造、改建、修理、改装或者装备； 港口、运河、码头、港湾以及其他水道规费和费用； 船员的工资和其他款项，包括应当为船员支付的遣返费和社会保险 费； (十六) 为船舶或者船舶所有人支付的费用； (十七) 船舶所有人或者光船承租人应当支付或者他人为其支付的船舶保险费 (包括互保会费) ； (十八) 船舶所有人或者光船承租人应当支付的或者他人为其支付的与船舶有 关的佣金、经纪费或者代理费； (十九) 有关船舶所有权或者占有的纠纷； (二十) 船舶共有人之间有关船舶的使用或者收益的纠纷； (二十一) 船舶抵押权或者同样性质的权利； (二十二) 因船舶买卖合同产生的纠纷。 Article 21 An application may be made for the arrest of a ship with respect to the following maritime claims: (1) (2) (3) (4)

(5)

(6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16)

loss of or damage to property caused by ship operation; loss of life or personal injury in direct connection with ship operation; salvage at sea; damage or threat of damage to environment, coast or relevant interested persons caused by ship; the costs for measures adopted to prevent, diminish or eliminate such damage; compensation paid for such damage; expenses for reasonable measures actually adopted or to be adopted to restore environment; losses caused by such damage to or likely to a third party; and damage, expenses or losses of a similar nature as those specified in this subparagraph; expenses related to re-floating, removal, reclamation or destroying of a sunken ship, wreck, aground ship, abandoned ship or to making them harmless, including the expenses related to re-floating, removal, reclamation or destroying of the things which have or no longer remained on board the ship or to making them harmless and expenses related to maintaining of an abandoned ship and her crew; agreement in respect of employment or chartering of a ship; agreement in respect of carriage of goods or passengers; cargo (including luggage) carried by a ship or loss or damage relating thereto; general average; towage; pilotage; providing of supplies or rendering of services in respect of ship operation, management, maintenance or repair; construction, re-construction, repair, refurbishment or equipment of a ship; dues or expenses for ports, canals, docks, harbours or other waterways; crew’s wages and other amounts payable for the crew, including repatriation expenses and social insurance premium; expenses paid for a ship or a shipowner; 435

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(17) insurance premium for a ship (including protection and indemnity calls) payable by or paid for a shipowner or bareboat charterer; (18) commission, brokage or agency fee related to ships payable by or paid for a shipowner or bareboat charterer; (19) a dispute over ownership or possession of a ship; (20) a dispute between joint owners of a ship over the employment or earnings of the ship; (21) ship mortgage or rights of a similar nature; and (22) a dispute arising out of a ship sale contract. 第二十二条 非因本法第二十一条规定的海事请求不得申请扣押船舶，但为执行 判决、仲裁裁决以及其他法律文书的除外。 Article 22 No application may be made for the arrest of a ship on account of maritime claims other than those specified in Article 21 of this Law, except for the enforcement of a judgment, an arbitration award or other legal documents. 第二十三条

有下列情形之一的，海事法院可以扣押当事船舶：

(一) 船舶所有人对海事请求负有责任，并且在实施扣押时是该船的所有人； (二) 船舶的光船承租人对海事请求负有责任，并且在实施扣押时是该船的光船 承租人或者所有人； (三) 具有船舶抵押权或者同样性质的权利的海事请求； (四) 有关船舶所有权或者占有的海事请求； (五) 具有船舶优先权的海事请求。 海事法院可以扣押对海事请求负有责任的船舶所有人、光船承租人、定期租船人 或者航次租船人在实施扣押时所有的其他船舶，但与船舶所有权或者占有有关的请 求除外。 从事军事、政府公务的船舶不得被扣押。 Article 23 The maritime court may arrest the ship concerned in the dispute in any of the following circumstances: (1) (2) (3) (4) (5)

the shipowner is liable for the maritime claim and is the owner of the ship at the time of arrest; the bareboat charterer of the ship is liable for the maritime claim and is the bareboat charterer or owner of the ship at the time of arrest; a maritime claim that gives rise to ship mortgage or to rights of a similar nature; a maritime claim related to ownership or possession of a ship; and a maritime claim that gives rise to maritime lien.

The maritime court may arrest other ships owned by the shipowner, bareboat charterer, time charterer or voyage charterer who is liable for the maritime claim at the time of arrest, except for claims related to ownership or possession of a ship. No ships engaged in military or governmental services may be arrested. 第二十四条 海事请求人不得因同一海事请求申请扣押已被扣押过的船舶，但有 下列情形之一的除外： (一) 被请求人未提供充分的担保； 436

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(二) 担保人有可能不能全部或者部分履行担保义务； (三) 海事请求人因合理的原因同意释放被扣押的船舶或者返还已提供的担保； 或者不能通过合理措施阻止释放被扣押的船舶或者返还已提供的担保。 Article 24 No maritime claimant may, on account of the same maritime claim, apply for re-arrest of a ship which was once arrested, except in any of the following circumstances: (1) (2) (3)

the person against whom the claim is made fails to provide sufficient security; it is likely that the surety cannot perform the obligations under the security in full or in part; or the maritime claimant agrees, on reasonable grounds, to release the arrested ship or to return the security provided; or the maritime claimant cannot, by reasonable means, stop the release of the arrested ship or the return of the security provided.

第二十五条 海事请求人申请扣押当事船舶，不能立即查明被请求人名称的，不 影响申请的提出。 Article 25 A maritime claimant who wishes to apply for arrest of the ship concerned but cannot promptly ascertain the name of the person against whom the claim is made may still apply for the arrest. 第二十六条 海事法院在发布或者解除扣押船舶命令的同时，可以向有关部门发 出协助执行通知书，通知书应当载明协助执行的范围和内容，有关部门有义务协助 执行。海事法院认为必要，可以直接派员登轮监护。 Article 26 While the maritime court issues an order for arresting of a ship, it may send a notice for assistance in execution of the order to relevant departments. The scope and specific tasks of the assistance in execution of the order shall be stated in the notice, and the relevant departments have the obligation to assist in the execution. The maritime court may directly send officers to go aboard for purposes of supervision if the court deems it necessary. 第二十七条 海事法院裁定对船舶实施保全后，经海事请求人同意，可以采取限 制船舶处分或者抵押等方式允许该船舶继续营运。 Article 27 After ordering to preserve a ship, the maritime court may, with the consent of the maritime claimant, allow continued operation of the ship by means of restraining disposition or mortgaging of the ship. 第二十八条 海事请求保全扣押船舶的期限为三十日。 海事请求人在三十日内提起诉讼或者申请仲裁以及在诉讼或者仲裁过程中申请扣 押船舶的，扣押船舶不受前款规定期限的限制。 Article 28 The time limit for ship arrest in preservation of a maritime claim is 30 days. Where a maritime claimant brings an action or applies for arbitration within the 30 days, or where a maritime claimant applies for arrest of a ship in the process of a legal action or arbitration, arrest of the ship is not subject to the time limit prescribed in the preceding paragraph. 第二十九条 船舶扣押期间届满，被请求人不提供担保，而且船舶不宜继续扣押 的，海事请求人可以在提起诉讼或者申请仲裁后，向扣押船舶的海事法院申请拍卖 船舶。 437

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Article 29 Where on the expiry of the time limit for ship arrest, a person against whom a claim is made fails to provide security and it is not appropriate to keep the ship under arrest, the maritime claimant, after brought an action or applied for arbitration, may apply to the maritime court ordering the ship arrest for auction of the ship. 第三十条 海事法院收到拍卖船舶的申请后，应当进行审查，作出准予或者不准 予拍卖船舶的裁定。 当事人对裁定不服的，可以在收到裁定书之日起五日内申请复议一次。海事法院 应当在收到复议申请之日起五日内作出复议决定。复议期间停止裁定的执行。 Article 30 The maritime court shall, after receipt of an application for auction of a ship, examine the application and make an order to allow or disallow the auction application. Any party who is dissatisfied with such an order may, within 5 days after receipt thereof, apply for review not more than once. The maritime court shall, within 5 days after receipt of the application therefor, give the result of the review. During the period of review, execution of the order shall be suspended. 第三十一条 海事请求人提交拍卖船舶申请后，又申请终止拍卖的，是否准许由 海事法院裁定。海事法院裁定终止拍卖船舶的，为准备拍卖船舶所发生的费用由海 事请求人承担。 Article 31 Where a maritime claimant applies for termination of the auction after applying the auction of a ship, the maritime court shall make an order to approve or disapprove the application. If the maritime court makes an order to terminate the auction of the ship, the expenses incurred in preparation for the auction of the ship shall be borne by the maritime claimant. 第三十二条 海事法院裁定拍卖船舶，应当通过报纸或者其他新闻媒体发布公 告。拍卖外籍船舶的，应当通过对外发行的报纸或者其他新闻媒体发布公告。 公告包括以下内容： (一) (二) (三) (四) (五) (六) (七) (八)

被拍卖船舶的名称和国籍； 拍卖船舶的理由和依据； 拍卖船舶委员会的组成； 拍卖船舶的时间和地点； 被拍卖船舶的展示时间和地点； 参加竞买应当办理的手续； 办理债权登记事项； 需要公告的其他事项。

拍卖船舶的公告期间不少于三十日。 Article 32 The maritime court which orders auction of a ship shall issue an announcement in newspapers or other news media. In the case of auction of a foreign ship, such announcement shall be issued in the newspapers or other news media of overseas distribution. Such announcement shall contain: (1) (2)

name and nationality of the ship for auction; reasons and grounds for auction of the ship;

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(3) (4) (5) (6) (7) (8)

composition of the ship auction committee; time and venue of the ship auction; time and venue for display of the ship for auction; formalities to be completed for taking part in bidding; particulars necessary for registration of debts; and other matters which need to be announced.

The period of announcement for ship auction shall be not less than 30 days. 第三十三条 海事法院应当在拍卖船舶三十日前，向被拍卖船舶登记国的登记机 关和已知的船舶优先权人、抵押权人和船舶所有人发出通知。 通知内容包括被拍卖船舶的名称、拍卖船舶的时间和地点、拍卖船舶的理由和依 据以及债权登记等。 通知方式包括书面方式和能够确认收悉的其他适当方式。 Article 33 The maritime court shall, 30 days before an auction of a ship, issue a notice to the ship registrar of the state where the ship for auction is registered and to the maritime lien holder, mortgagee and shipowner already known. Such notice shall contain the name of the ship for auction, time and venue of the ship auction, reasons and grounds for the ship auction, registration of debts, etc. Such notice shall be despatched in written form or by other appropriate means where the receipt thereof can be confirmed. 第三十四条 拍卖船舶由拍卖船舶委员会实施。拍卖船舶委员会由海事法院指定 的本院执行人员和聘请的拍卖师、验船师三人或者五人组成。 拍卖船舶委员会组织对船舶鉴定、估价；组织和主持拍卖；与竞买人签订拍卖成 交确认书；办理船舶移交手续。 拍卖船舶委员会对海事法院负责，受海事法院监督。 Article 34 A ship auction shall be conducted by a ship auction committee. A ship auction committee shall consist of three or five persons, including the person of the maritime court in charge of execution designated by the court, the auctioneer and ship surveyor engaged by the maritime court. The ship auction committee shall arrange the assessment and evaluation of the ship; arrange and preside over the auction; sign auction confirmation with the bidder; and complete ship delivery formalities. The ship auction committee is responsible to and under the supervision of the maritime court. 第三十五条 竞买人应当在规定的期限内向拍卖船舶委员会登记。登记时应当交 验本人、企业法定代表人或者其他组织负责人身份证明和委托代理人的授权委托 书，并交纳一定数额的买船保证金。 Article 35 Bidders shall register with the ship auction committee within the prescribed time limit. At the time of registration, certificates of identification of the person who registers with the committee, the legal representative of the enterprise or the leading official of other organization, and the power of attorney of the authorized proxy shall be submitted for examination and a certain amount of bidding deposit shall be paid. 439

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第三十六条 拍卖船舶委员会应当在拍卖船舶前，展示被拍卖船舶，并提供察看 被拍卖船舶的条件和有关资料。 Article 36 The ship auction committee shall, before auction of a ship, display the ship for auction and make the ship available for inspection and provide information about the ship. 第三十七条 买受人在签署拍卖成交确认书后，应当立即交付不低于百分之二十 的船舶价款，其余价款在成交之日起七日内付清，但拍卖船舶委员会与买受人另有 约定的除外。 Article 37 A buyer shall pay not less than 20% of the purchase price immediately after signing the auction confirmation, and the balance shall be paid within seven days after the date of the purchase, unless the ship auction committee has agreed otherwise with the buyer. 第三十八条 买受人付清全部价款后，原船舶所有人应当在指定的期限内于船舶 停泊地以船舶现状向买受人移交船舶。拍卖船舶委员会组织和监督船舶的移交，并 在船舶移交后与买受人签署船舶移交完毕确认书。 移交船舶完毕，海事法院发布解除扣押船舶命令。 Article 38 When a buyer has paid the purchase price in full, the shipowner shall, within the designated time limit, deliver to the buyer the ship as is at the berthing place. The ship auction committee shall arrange and supervise the delivery of the ship and sign the letter of confirmation of delivery and acceptance with the buyer after delivery of the ship. After delivery of the ship, the maritime court shall issue an order to release the ship. 第三十九条 船舶移交后，海事法院应当通过报纸或者其他新闻媒体发布公告， 公布船舶已经公开拍卖并移交给买受人。 Article 39 The maritime court shall issue an announcement in newspapers or other news media stating that the ship has been sold by auction and delivered to the buyer after the ship has been delivered. 第四十条 买受人接收船舶后，应当持拍卖成交确认书和有关材料，向船舶登记 机关办理船舶所有权登记手续。原船舶所有人应当向原船舶登记机关办理船舶所有 权注销登记。原船舶所有人不办理船舶所有权注销登记的，不影响船舶所有权的 转让。 Article 40 A buyer, having taken delivery of the ship, shall by virtue of the auction confirmation and other relevant documents, complete the formalities of registration with the ship registrar in respect of ownership of the ship. The former shipowner shall cancel the registration with the previous ship registrar in respect of ownership of the ship. The transfer of the ownership is not affected notwithstanding that the former shipowner fails to cancel such registration. 第四十一条 竞买人之间恶意串通的，拍卖无效。参与恶意串通的竞买人应当承 担拍卖船舶费用并赔偿有关损失。海事法院可以对参与恶意串通的竞买人处最高应 价百分之十以上百分之三十以下的罚款。 Article 41 An auction is void if there is malicious collusion between the bidders. The bidders who take part in malicious collusion shall be liable for the expenses of the ship 440

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auction and make good the relevant losses. The maritime court may impose on the bidders who take part in malicious collusion a fine of not less than 10% but not more than 30% of the highest bidding. 第四十二条 除本节规定的以外，拍卖适用《中华人民共和国拍卖法》的有关 规定。 Article 42 In addition to the provisions of this Section, the relevant provisions of the Auction Law of the People’s Republic of China shall apply to auction. 第四十三条 执行程序中拍卖被扣押船舶清偿债务的，可以参照本节有关规定。 Article 43 Where a ship under arrest is to be auctioned for satisfaction of debts during the process of the enforcement, the relevant provisions of this Section may be applied mutatis mutandis. 第三节 船载货物的扣押与拍卖 Section III: Attachment and Auction of Cargo Carried By Ships 第四十四条 海事请求人为保障其海事请求的实现，可以申请扣押船载货物。 申请扣押的船载货物，应当属于被请求人所有。 Article 44 A maritime claimant may apply for attachment of the cargo carried by a ship to ensure the satisfaction of his maritime claim. The cargo against which an attachment is applied for shall be that owned by the person against whom the claim is made. 第四十五条 海事请求人申请扣押船载货物的价值，应当与其债权数额相当。 Article 45 The value of the cargo against which an attachment is applied for by a maritime claimant shall be equal to the amount of his claim. 第四十六条 海事请求保全扣押船载货物的期限为十五日。 海事请求人在十五日内提起诉讼或者申请仲裁以及在诉讼或者仲裁过程中申请扣 押船载货物的，扣押船载货物不受前款规定期限的限制。 Article 46 The time limit for attachment of the cargo carried by a ship for preservation of a maritime claim is 15 days. Where within the 15 days a maritime claimant brings an action or applies for arbitration or, in the process of legal action or arbitration, applies for attachment of the cargo carried by a ship, attachment of the cargo carried by the ship is not subject to the time limit prescribed in the preceding paragraph. 第四十七条 船载货物扣押期间届满，被请求人不提供担保，而且货物不宜继续 扣押的，海事请求人可以在提起诉讼或者申请仲裁后，向扣押船载货物的海事法院 申请拍卖货物。 对无法保管、不易保管或者保管费用可能超过其价值的物品，海事请求人可以申 请提前拍卖。 Article 47 Where on the expiry of the time limit for cargo attachment, the person against whom a claim is made fails to provide security and it is not appropriate to keep the cargo under attachment, the maritime claimant, having brought an action or applied for 441

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arbitration, may apply to the maritime court ordering the attachment of the cargo carried by the ship for auction of the cargo. Where the cargo cannot be preserved or is difficult to preserve, or the expenses for its preservation are likely to exceed its value, a maritime claimant may apply for an earlier auction. 第四十八条 海事法院收到拍卖船载货物的申请后，应当进行审查，在七日内作 出准予或者不准予拍卖船载货物的裁定。 当事人对裁定不服的，可以在收到裁定书之日起五日内申请复议一次。海事法院 应当在收到复议申请之日起五日内作出复议决定。复议期间停止裁定的执行。 Article 48 The maritime court shall, after receipt of an application for auction of the cargo carried by a ship, examine the application and make an order to allow or disallow the auction within seven days. Any party who is dissatisfied with such an order may, within five days after receipt thereof, apply for review not more than once. The maritime court shall, within five days after receipt of the application therefor, give the result of the review. During the period of review, execution of the order shall be suspended. 第四十九条 拍卖船载货物由海事法院指定的本院执行人员和聘请的拍卖师组成 的拍卖组织实施，或者由海事法院委托的机构实施。 拍卖船载货物，本节没有规定的，参照本章第二节拍卖船舶的有关规定。 Article 49 Auction of the cargo carried by a ship shall be conducted by an auction committee composed of the person of the maritime court in charge of execution designated by the court and the auctioneer invited by the maritime court, or conducted by an organisation entrusted by the maritime court. Where there are no provisions in this Section to govern certain auction of the cargo carried by a ship, the provisions of Section 2 of this Chapter regarding auction of ships may be applied mutatis mutandis. 第五十条 海事请求人对与海事请求有关的船用燃油、船用物料申请海事请求保 全，适用本节规定。 Article 50 Where a maritime claimant applies to preserve a ship’s bunkers and materials related to the claim, the provisions of this Section shall apply. 第四章 海事 制令 Chapter IV: Maritime Injunction 第五十一条 海事强制令是指海事法院根据海事请求人的申请，为使其合法权益 免受侵害，责令被请求人作为或者不作为的强制措施。 Article 51 A maritime injunction is the compulsory measures adopted by the maritime court upon the application of a maritime claimant to compel the person against whom a claim is made to do or not to do certain things, so as to prevent the lawful rights and interest of the claimant from being infringed upon. 第五十二条 提出。

当事人在起诉前申请海事强制令，应当向海事纠纷发生地海事法院

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Article 52 A party who wishes to apply for a maritime injunction before bringing an action shall file an application with the maritime court of the place where the maritime dispute arose. 第五十三条 海事强制令不受当事人之间关于该海事请求的诉讼管辖协议或者仲 裁协议的约束。 Article 53 A maritime injunction shall not be restricted by the jurisdiction agreement or arbitration agreement reached between the parties in respect of the maritime claim. 第五十四条 海事请求人申请海事强制令，应当向海事法院提交书面申请。申请 书应当载明申请理由，并附有关证据。 Article 54 A maritime claimant who wishes to apply for a maritime injunction shall file an application in writing with the maritime court. The reasons therefor shall be stated in the application with relevant evidence attached. 第五十五条 海事法院受理海事强制令申请，可以责令海事请求人提供担保。海 事请求人不提供的，驳回其申请。 Article 55 The maritime court, having entertained an application for a maritime injunction, may order the maritime claimant to provide security. Where the maritime claimant fails to do so, it shall reject the application. 第五十六条

作出海事强制令，应当具备下列条件：

(一) 请求人有具体的海事请求； (二) 需要纠正被请求人违反法律规定或者合同约定的行为； (三) 情况紧急，不立即作出海事强制令将造成损害或者使损害扩大。 Article 56 The following conditions shall be met before a maritime injunction is granted: (1) (2) (3)

the claimant has a specific maritime claim; the action of the person against whom a claim is made which is violation of laws or breach of contract needs to be redressed; and there is an emergency situation that the losses will be caused or will become worse if a maritime injunction is not granted forthwith.

第五十七条 海事法院接受申请后，应当在四十八小时内作出裁定。裁定作出海 事强制令的，应当立即执行；对不符合海事强制令条件的，裁定驳回其申请。 Article 57 The maritime court, having accepted an application, shall make an order within 48 hours. Where the court grants a maritime injunction, the order shall be executed forthwith; where the conditions for a maritime injunction are not met, the court shall make an order to reject the application. 第五十八条 当事人对裁定不服的，可以在收到裁定书之日起五日内申请复议一 次。海事法院应当在收到复议申请之日起五日内作出复议决定。复议期间不停止裁 定的执行。 利害关系人对海事强制令提出异议，海事法院经审查，认为理由成立的，应当裁 定撤销海事强制令。 443

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Article 58 A party who is dissatisfied with an order may, within five days after receipt thereof, apply for review not more than once. The maritime court shall, within five days after receipt of the application therefor, give the result of the review. Execution of the order shall not be suspended during the period of review. Where a maritime injunction is challenged by an interested person, the maritime court, having examined the challenge and considering the reasons therefor justified, shall set aside the maritime injunction. 第五十九条 被请求人拒不执行海事强制令的，海事法院可以根据情节轻重处以 罚款、拘留；构成犯罪的，依法追究刑事责任。 对个人的罚款金额，为一千元以上三万元以下。对单位的罚款金额，为三万元以 上十万元以下。 拘留的期限，为十五日以下。 Article 59 Where a person against whom a claim is made refuses to comply with the maritime injunction, the maritime court may, according to the seriousness of the case, impose a fine or put him under detention; if his act constitutes a crime, criminal liability shall be investigated in accordance with law. A fine imposed upon an individual shall be not less than RMB 1,000 yuan but not more than RMB 30,000 yuan. A fine imposed upon a unit shall be not less than RMB 30,000 yuan but not more than RMB 100,000 yuan. The detention period shall be not more than 15 days. 第六十条 海事请求人申请海事强制令错误的，应当赔偿被请求人或者利害关系 人因此所遭受的损失。 Article 60 A maritime claimant who has wrongly applied for a maritime injunction shall indemnify the person against whom the claim is made or the interested person for the losses thus incurred. 第六十一条 海事强制令执行后，有关海事纠纷未进入诉讼或者仲裁程序的，当 事人就该海事请求，可以向作出海事强制令的海事法院或者其他有管辖权的海事法 院提起诉讼，但当事人之间订有诉讼管辖协议或者仲裁协议的除外。 Article 61 Where legal proceedings or arbitral proceedings have not been commenced in respect of a maritime dispute when the maritime injunction is executed, any party may bring an action in respect of the maritime claim in the maritime court granting the maritime injunction or in another maritime court having jurisdiction, unless a jurisdiction agreement or arbitration agreement has been concluded between the parties. 第五章 海事 据保全 Chapter V: Preservation of Maritime Evidence 第六十二条 海事证据保全是指海事法院根据海事请求人的申请，对有关海事请 求的证据予以提取、保存或者封存的强制措施。 Article 62 Preservation of maritime evidence is the compulsory measures adopted, on the application of a maritime claimant, by the maritime court to take, preserve or seal up the evidence related to a maritime claim. 444

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第六十三条 当事人在起诉前申请海事证据保全，应当向被保全的证据所在地海 事法院提出。 Article 63 A party who wishes to apply for preservation of maritime evidence before instituting an action shall file an application with the maritime court of the place where the evidence is to be preserved is located. 第六十四条 海事证据保全不受当事人之间关于该海事请求的诉讼管辖协议或者 仲裁协议的约束。 Article 64 Preservation of maritime evidence shall not be restricted by the jurisdiction agreement or arbitration agreement reached between the parties in respect of the maritime claim. 第六十五条 海事请求人申请海事证据保全，应当向海事法院提交书面申请。申 请书应当载明请求保全的证据、该证据与海事请求的联系、申请理由。 Article 65 A maritime claimant who wishes to apply for preservation of maritime evidence shall file an application in writing with the maritime court. The evidence to be preserved, the connection of the evidence with the maritime claim and the reasons therefor shall be stated in the application. 第六十六条 海事法院受理海事证据保全申请，可以责令海事请求人提供担保。 海事请求人不提供的，驳回其申请。 Article 66 The maritime court, having entertained an application for preservation of maritime evidence, may order the maritime claimant to provide security. When the maritime claimant fails to do so, it shall reject the application. 第六十七条 (一) (二) (三) (四)

采取海事证据保全，应当具备下列条件：

请求人是海事请求的当事人； 请求保全的证据对该海事请求具有证明作用； 被请求人是与请求保全的证据有关的人； 情况紧急，不立即采取证据保全就会使该海事请求的证据灭失或者难以 取得。

Article 67 The following conditions shall be met before preservation of maritime evidence is granted: (1) (2) (3) (4)

the applicant is a party to the maritime claim; the evidence of which preservation is requested, can substantiate the maritime claim; the person against whom the application is made is a party relevant to the evidence of which preservation is requested; and there is an emergency situation that the evidence relevant to the maritime claim might be lost or hard to obtain, unless the evidence is immediately preserved.

第六十八条 海事法院接受申请后，应当在四十八小时内作出裁定。裁定采取海 事证据保全措施的，应当立即执行；对不符合海事证据保全条件的，裁定驳回其 申请。

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Article 68 The maritime court, having accepted an application, shall make an order within 48 hours. Where the court granted the measures for preservation of the maritime evidence, the order shall be executed forthwith; where the conditions for preservation of the maritime evidence are not met, the court shall make an order to reject the application. 第六十九条 当事人对裁定不服的，可以在收到裁定书之日起五日内申请复议 一次。海事法院应当在收到复议申请之日起五日内作出复议决定。复议期间不停 止裁定的执行。被请求人申请复议的理由成立的，应当将保全的证据返还被请 求人。 利害关系人对海事证据保全提出异议，海事法院经审查，认为理由成立的，应当 裁定撤销海事证据保全；已经执行的，应当将与利害关系人有关的证据返还利害关 系人。 Article 69 A party who is dissatisfied with the order may, within five days after receipt thereof, apply for review not more than once. The maritime court shall, within five days after receipt of the application therefor, give the result of the review. Execution of the order shall not be suspended during the period of review. If the reasons submitted by the person against whom a claim is made are justified, the evidence under preservation shall be returned to that person. Where preservation of the maritime evidence is challenged by an interested person, the maritime court, having examined the objection and considering the reasons therefor justified, shall make an order to set aside the preservation of the maritime evidence. 第七十条 海事法院进行海事证据保全，根据具体情况，可以对证据予以封存， 也可以提取复制件、副本，或者进行拍照、录像，制作节录本、调查笔录等。确有 必要的，也可以提取证据原件。 Article 70 To preserve maritime evidence, the maritime court may, taking into account the specific circumstances, seal up the evidence, or take the reproductions, duplicates, photographs, or make video recording, extracts or records of inquests. It may also take the original evidence where indeed necessary. 第七十一条 海事请求人申请海事证据保全错误的，应当赔偿被请求人或者利害 关系人因此所遭受的损失。 Article 71 A maritime claimant who has wrongly applied for preservation of maritime evidence shall indemnify the person against whom the claim is made or the interested person for the losses thus incurred. 第七十二条 海事证据保全后，有关海事纠纷未进入诉讼或者仲裁程序的，当事 人就该海事请求，可以向采取证据保全的海事法院或者其他有管辖权的海事法院提 起诉讼，但当事人之间订有诉讼管辖协议或者仲裁协议的除外。 Article 72 Where legal proceedings or arbitral proceedings have not been commenced in respect of a maritime dispute when the preservation of the maritime evidence is conducted, any party may bring an action in respect of the maritime claim in the maritime court that adopts the measures for preservation of the evidence or any other maritime court that has jurisdiction, unless a jurisdiction agreement or arbitration agreement has been concluded between the parties. 446

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第六章 海 事 担 保 Chapter VI: Maritime Security 第七十三条 海事担保包括本法规定的海事请求保全、海事强制令、海事证据保 全等程序中所涉及的担保。 担保的方式为提供现金或者保证、设置抵押或者质押。 Article 73 Maritime security consists of the securities involved in such procedures as preservation of maritime claims, maritime injunction and preservation of maritime evidence provided for in this Law. The types of security include cash, guarantee, mortgage or pledge. 第七十四条 海事请求人的担保应当提交给海事法院；被请求人的担保可以提交 给海事法院，也可以提供给海事请求人。 Article 74 The security of a maritime claimant shall be submitted to the maritime court; the security of a person against whom a claim is made may be submitted to the maritime court or the maritime claimant. 第七十五条 海事请求人提供的担保，其方式、数额由海事法院决定。被请求人 提供的担保，其方式、数额由海事请求人和被请求人协商；协商不成的，由海事法 院决定。 Article 75 The type and amount of the security provided by a maritime claimant shall be determined by the maritime court. The type and amount of the security provided by a person against whom the claim is made shall be determined through consultation by the maritime claimant and the person against whom the claim is made, failing which the matter shall be determined by the maritime court. 第七十六条 海事请求人要求被请求人就海事请求保全提供担保的数额，应当与 其债权数额相当，但不得超过被保全的财产价值。 海事请求人提供担保的数额，应当相当于因其申请可能给被请求人造成的损失。 具体数额由海事法院决定。 Article 76 The amount of the security requested for preservation of a maritime claim by a maritime claimant from a person against whom the claim is made shall be equal to the amount of his credit, but shall not exceed the value of the property preserved. The amount of the security provided by a maritime claimant shall be equal to the loss the person against whom the claim is made may suffer as a result of his application. The exact amount shall be determined by the maritime court. 第七十七条 担保提供后，提供担保的人有正当理由的，可以向海事法院申请减 少、变更或者取消该担保。 Article 77 After providing security, the provider may apply to the maritime court for reduction, alteration or cancellation of such security where there are justified reasons. 第七十八条 海事请求人请求担保的数额过高，造成被请求人损失的，应当承担 赔偿责任。 Article 78 If the amount of the security requested by the maritime claimant is so excessive as to cause losses to the person against whom the claim is made, the maritime claimant shall be liable to compensate for the losses. 447

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第七十九条 设立海事赔偿责任限制基金和先予执行等程序所涉及的担保，可以 参照本章规定。 Article 79 The provisions of this Chapter may apply mutatis mutandis to securities involved in the procedures such as constitution of maritime limitation fund and advance enforcement. 第七章 送 达 Chapter VII: Service 第八十条 海事诉讼法律文书的送达，适用《中华人民共和国民事诉讼法》的有 关规定，还可以采用下列方式： (一) 向受送达人委托的诉讼代理人送达； (二) 向受送达人在中华人民共和国领域内设立的代表机构、分支机构或者业务 代办人送达； (三) 通过能够确认收悉的其他适当方式送达。 有关扣押船舶的法律文书也可以向当事船舶的船长送达。 Article 80 The service of legal documents in maritime actions is governed by the relevant provisions of the Civil Procedure Law of the People’s Republic of China and may also be conducted in the following ways: (1) (2) (3)

on the agent ad litem duly entrusted by the person on whom the document is to be served; on the representative office or branch established in the People’s Republic of China by the person on whom the document is to be served, or on the business agent appointed by the person on whom the document is to be served ; or in other appropriate ways whereby such service can be acknowledged.

The legal documents in respect of arrest of a ship may be served on the master of the ship concerned. 第八十一条 有义务接受法律文书的人拒绝签收，送达人在送达回证上记明情 况，经送达人、见证人签名或者盖章，将法律文书留在其住所或者办公处所的，视 为送达。 Article 81 Where a person who is under an obligation to accept legal documents refuses to acknowledge the receipt thereof, the server shall make a record on the receipt of service of the fact and, having the receipt of service signed or sealed by the server and the witness, and leave the legal documents in the domicile or on the business premises of the person on whom the documents are to be served, in which case the service shall be deemed as completed. 第八章 判 程 序 Chapter VIII: Trial Procedure 第一节 审理船舶碰撞案件的规定 Section 1: Provisions for Trial of Collision Cases 第八十二条 原告在起诉时、被告在答辩时，应当如实填写《海事事故调查表》。 448

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Article 82 Both the plaintiff and the defendant shall fill in the Investigation Form for Maritime Accident truthfully at the time of bringing an action and of submitting the defence respectively. 第八十三条 海事法院向当事人送达起诉状或者答辩状时，不附送有关证据 材料。 Article 83 No evidential documents shall be attached to the bill of complaint or the bill of defence served by the maritime court on the parties. 第八十四条 当事人应当在开庭审理前完成举证。当事人完成举证并向海事法院 出具完成举证说明书后，可以申请查阅有关船舶碰撞的事实证据材料。 Article 84 The evidences shall be submitted by the parties before a court hearing. After the parties have finished the submitting of evidences and furnished the maritime court with the statement to this effect, they may apply to consult the evidential documents concerning the ship collision. 第八十五条 当事人不能推翻其在《海事事故调查表》中的陈述和已经完成的举 证，但有新的证据，并有充分的理由说明该证据不能在举证期间内提交的除外。 Article 85 The parties cannot reverse the statement previously made in the Investigation Form for Maritime Accident or the evidence they have provided, unless new evidence has come to light and there is good reason for being unable to submit such new evidence within the period for producing evidence. 第八十六条 船舶检验、估价应当由国家授权或者其他具有专业资格的机构或者 个人承担。非经国家授权或者未取得专业资格的机构或者个人所作的检验或者估价 结论，海事法院不予采纳。 Article 86 The survey and appraisal of a ship shall be conducted by institutions or individual with due authorisation of the State or by professionally qualified institutions or individuals. The maritime court shall not accept any conclusion of the survey or appraisal made or drawn up by institutions or individuals without authorisation of the State or without professional qualifications. 第八十七条 海事法院审理船舶碰撞案件，应当在立案后一年内审结。有特殊情 况需要延长的，由本院院长批准。 Article 87 A case of ship collision shall be tried and concluded by the maritime court within one year after filing of the case. Where an extension of the period is necessary under special circumstances, it shall be subject to approval by the president of the court. 第二节 审理共同海损案件的规定 Section 2: Provisions for Trial of General Average Cases 第八十八条 当事人就共同海损的纠纷，可以协议委托理算机构理算，也可以直 接向海事法院提起诉讼。海事法院受理未经理算的共同海损纠纷，可以委托理算机 构理算。 Article 88 With respect to general average, the parties may either mutually agree to entrust average adjusters with the adjustment, or directly bring an action in a maritime 449

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court. In dealing with an unadjusted average dispute, the maritime court may entrust average adjusters to handle the adjustment. 第八十九条 理算机构作出的共同海损理算报告，当事人没有提出异议的，可以 作为分摊责任的依据；当事人提出异议的，由海事法院决定是否采纳。 Article 89 The general average statement made by average adjusters may be admissible as the proper basis for contribution if no objection is raised by any of the parties; otherwise, the maritime court shall decide whether to accept the statement or not. 第九十条 当事人可以不受因同一海损事故提起的共同海损诉讼程序的影响，就 非共同海损损失向责任人提起诉讼。 Article 90 A party may bring an action against the liable person for non-general average losses not being affected by the proceedings commenced for the general average claim arising from the same maritime accident. 第九十一条 当事人就同一海损事故向受理共同海损案件的海事法院提起非共同海 损的诉讼，以及对共同海损分摊向责任人提起追偿诉讼的，海事法院可以合并审理。 Article 91 For the actions brought by the parties in respect of the same maritime accident for non-general average losses and the indemnity claim against the liable person for general average contribution in the maritime court that entertains the general average case, the maritime court can consolidate the actions. 第九十二条 海事法院审理共同海损案件，应当在立案后一年内审结。有特殊情 况需要延长的，由本院院长批准。 Article 92 A case of general average shall be tried and concluded by a maritime court within one year after filing of the case. Where an extension of the period is necessary under special circumstances, it shall be subject to approval by the president of the court. 第三节 海上保险人行使代位请求赔偿权利的规定 Section 3: Provisions for Exercising Right of Subrogation by Marine Insurers 第九十三条 因第三人造成保险事故，保险人向被保险人支付保险赔偿后，在保 险赔偿范围内可以代位行使被保险人对第三人请求赔偿的权利。 Article 93 Where an accident covered was caused by a third party and the insurer has indemnified the insured, the insurer is entitled to claim compensation against the third party by exercising the right of subrogation up to the amount of the indemnity paid. 第九十四条 保险人行使代位请求赔偿权利时，被保险人未向造成保险事故的第 三人提起诉讼的，保险人应当以自己的名义向该第三人提起诉讼。 Article 94 In exercising the right of subrogation, an insurer shall, bring an action in its own name against the third party that caused the accident covered if no action has been brought by the insured against that third party. 第九十五条 保险人行使代位请求赔偿权利时，被保险人已经向造成保险事故的 第三人提起诉讼的，保险人可以向受理该案的法院提出变更当事人的请求，代位行 使被保险人对第三人请求赔偿的权利。 450

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被保险人取得的保险赔偿不能弥补第三人造成的全部损失的，保险人和被保险人 可以作为共同原告向第三人请求赔偿。 Article 95 In exercising the right of subrogation, an insurer may apply to the court entertaining the case for an alteration of the party to the lawsuit and subrogate the rights of the insured against the third party that caused the accident covered if an action has been brought by the insured against that third party. Where the losses of the insured caused by a third party cannot be fully covered by insurance indemnity, the insurer and the insured may act as co-plaintiffs to claim compensation against the third party. 第九十六条 保险人依照本法第九十四条、第九十五条的规定提起诉讼或者申请 参加诉讼的，应当向受理该案的海事法院提交保险人支付保险赔偿的凭证，以及参 加诉讼应当提交的其他文件。 Article 96 Where an action is brought or an application for participating in the action is filed by an insurer pursuant to Articles 94 and 95 of this Law, the insurer shall submit the certificate evidencing payment of indemnity by the insurer and other documents necessary for participating in the action to the maritime court that entertains the case. 第九十七条 对船舶造成油污损害的赔偿请求，受损害人可以向造成油污损害的 船舶所有人提出，也可以直接向承担船舶所有人油污损害责任的保险人或者提供财 务保证的其他人提出。 油污损害责任的保险人或者提供财务保证的其他人被起诉的，有权要求造成油污 损害的船舶所有人参加诉讼。 Article 97 An aggrieved party may claim for oil pollution damage caused by a ship either against the owner of the ship causing oil pollution damage or directly against the insurer who is answerable for the liabilities of the owner of the ship causing oil pollution damage, or against the person who provides financial security therefor. Where the insurer for oil pollution damage or the person who provides financial security therefor is sued in an action, such insurer or person is entitled to demand the owner of the ship causing oil pollution damage to join the proceedings. 第四节 简易程序、督促程序和公示催告程序 Section 4: Summary Procedure, Procedure for Hastening Debt Recovery and Procedure for Public Exigence 第九十八条 海事法院审理事实清楚、权利义务关系明确、争议不大的简单的海 事案件，可以适用《中华人民共和国民事诉讼法》简易程序的规定。 Article 98 In hearing simple maritime cases in which the facts are evident, the rights and obligations are clear and the dispute is minor, the maritime court may apply the provisions governing summary procedure in the Civil Procedure Law of the People’s Republic of China. 第九十九条 债权人基于海事事由请求债务人给付金钱或者有价证券，符合《中 华人民共和国民事诉讼法》有关规定的，可以向有管辖权的海事法院申请支付令。 债务人是外国人、无国籍人、外国企业或者组织，但在中华人民共和国领域内有 住所、代表机构或者分支机构并能够送达支付令的，债权人可以向有管辖权的海事 法院申请支付令。 451

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Article 99 Where a creditor, on the basis of a maritime-related matter, requests a debtor to pay a debt in cash or in securities, if it is found to be in conformity with the relevant provisions in the Civil Procedure Law of the People’s Republic of China, the creditor may apply to the maritime court that has jurisdiction for an order of payment. Where the debtor is an alien, a stateless person or a foreign enterprise or organisation that has a domicile or representative office or branch within the territory of the People’s Republic of China on which the order of payment can be served, the creditor may apply to the maritime court that has jurisdiction for an order of payment. 第一百条 提单等提货凭证持有人，因提货凭证失控或者灭失，可以向货物所在 地海事法院申请公示催告。 Article 100 A holder of a bill of lading or similar documents for taking delivery of cargo may apply for public exigence to the maritime court of the place where the cargo is located where such documents are out of control or lost.

任限制基金程序 第九章 立海事 Chapter IX: Procedure for Constitution of Limitation Fund for Maritime Claims 第一百零一条 船舶所有人、承租人、经营人、救助人、保险人在发生海事事故 后，依法申请责任限制的，可以向海事法院申请设立海事赔偿责任限制基金。 船舶造成油污损害的，船舶所有人及其责任保险人或者提供财务保证的其他人为 取得法律规定的责任限制的权利，应当向海事法院设立油污损害的海事赔偿责任限 制基金。 设立责任限制基金的申请可以在起诉前或者诉讼中提出，但最迟应当在一审判决 作出前提出。 Article 101 Where limitation of liability applied according to the laws after the occurrence of a marine accident, the shipowner, charterer, operator, salvor or insurer may apply to a maritime court for constitution of the limitation fund for maritime claims. In the event of oil pollution damage caused by a ship, the shipowner and the insurer or the person who provides financial security therefor shall, for the purpose of obtaining the right of liability limitation provided for by law, constitute with the maritime court a limitation fund for maritime claims in respect of oil pollution damage. Constitution of limitation fund may be applied for either before an action is brought or during the process of legal proceedings, or, at the latest, before the judgement of first instance is given. 第一百零二条 当事人在起诉前申请设立海事赔偿责任限制基金的，应当向事故 发生地、合同履行地或者船舶扣押地海事法院提出。 Article 102 A party who wishes to apply for constitution of a limitation fund for maritime claims before an action is brought shall file an application with the maritime court of the place where the accident occurred, the contract is performed or the ship is under arrest. 第一百零三条 设立海事赔偿责任限制基金，不受当事人之间关于诉讼管辖协议 或者仲裁协议的约束。 452

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Article 103 Constitution of a limitation fund for maritime claims shall not be restricted by the jurisdiction agreement or arbitration agreement reached between the parties. 第一百零四条 申请人向海事法院申请设立海事赔偿责任限制基金，应当提交书 面申请。申请书应当载明申请设立海事赔偿责任限制基金的数额、理由，以及已知 的利害关系人的名称、地址和通讯方法，并附有关证据。 Article 104 A person who wishes to apply for constitution of a limitation fund for maritime claims shall file an application in writing with a maritime court. The amount of the limitation fund to be constituted for maritime claims, the reasons therefor as well as the names, addresses and means of correspondence of the interested persons already known shall be stated in the application with relevant evidence attached. 第一百零五条 海事法院受理设立海事赔偿责任限制基金申请后，应当在七日内 向已知的利害关系人发出通知，同时通过报纸或者其他新闻媒体发布公告。 通知和公告包括下列内容： (一) (二) (三) (四) (五)

申请人的名称； 申请的事实和理由； 设立海事赔偿责任限制基金事项； 办理债权登记事项； 需要告知的其他事项。

Article 105 The maritime court shall, within seven days of the acceptance of an application for constitution of a limitation fund for maritime claims, notify all the interested persons already known and issue an announcement of the same in the newspapers or other news media. Such notice and announcement shall contain: (1) (2) (3) (4) (5)

name of the applicant; facts and reasons for application; particulars for constitution of the limitation fund for maritime claims; particulars necessary in registration of claims; and other matters which need to be announced.

第一百零六条 利害关系人对申请人申请设立海事赔偿责任限制基金有异议的， 应当在收到通知之日起七日内或者未收到通知的在公告之日起三十日内，以书面形 式向海事法院提出。 海事法院收到利害关系人提出的书面异议后，应当进行审查，在十五日内作出裁 定。异议成立的，裁定驳回申请人的申请；异议不成立的，裁定准予申请人设立海 事赔偿责任限制基金。 当事人对裁定不服的，可以在收到裁定书之日起七日内提起上诉。第二审人民法 院应当在收到上诉状之日起十五日内作出裁定。 Article 106 Any interested person who objects to the application filed by the applicant for constitution of a limitation fund for maritime claims shall file the objection in writing with the maritime court within seven days from the date of receipt of the notice, or within 30 days from the date of the announcement if no notice is received. The maritime court, having received the written objection filed by an interested person, shall examine the objection and make an order within 15 days. If the objection is well 453

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founded, the court shall make an order to reject the application of the applicant. Otherwise, the court shall make an order to allow the applicant to constitute a limitation fund for maritime claims. The party who is dissatisfied with such an order may appeal within seven days from the date of receipt thereof. The people’s court of second instance shall make an order within 15 days from the date of receipt of the appeal. 第一百零七条 利害关系人在规定的期间内没有提出异议的，海事法院裁定准予 申请人设立海事赔偿责任限制基金。 Article 107 Where no objection is raised by an interested person within the prescribed time limit, the maritime court shall make an order to allow the applicant to constitute a limitation fund for maritime claims. 第一百零八条 准予申请人设立海事赔偿责任限制基金的裁定生效后，申请人应 当在海事法院设立海事赔偿责任限制基金。 设立海事赔偿责任限制基金可以提供现金，也可以提供经海事法院认可的担保。 海事赔偿责任限制基金的数额，为海事赔偿责任限额和自事故发生之日起至基金 设立之日止的利息。以担保方式设立基金的，担保数额为基金数额及其在基金设立 期间的利息。 以现金设立基金的，基金到达海事法院指定帐户之日为基金设立之日。以担保设 立基金的，海事法院接受担保之日为基金设立之日。 Article 108 After the order to allow the applicant to constitute a limitation fund for maritime claims becomes effective, the applicant shall constitute the fund with the maritime court. A limitation fund for maritime claims may be constituted either by depositing cash or by providing security acceptable to the maritime court. The sum of the limitation fund for maritime claims shall cover the amount of liability to be limited and any interest accruing from the date of the accident up to the date of constitution. Where the fund is constituted by way of security, the amount of the security shall cover the amount of the fund and any interest accruing thereon during the period of such constitution. Where the fund is constituted with cash deposited, the date on which the fund is transferred into the bank account designated by the maritime court shall be deemed to be the date of constitution of the fund. Where the fund is constituted with security provided, the date on which the maritime court accepts the security shall be deemed to be the date of constitution of the fund. 第一百零九条 设立海事赔偿责任限制基金以后，当事人就有关海事纠纷应当向 设立海事赔偿责任限制基金的海事法院提起诉讼，但当事人之间订有诉讼管辖协议 或者仲裁协议的除外。 Article 109 After a limitation fund for maritime claims has been constituted, the parties shall bring an action in respect of the maritime dispute with the maritime court with which the limitation fund for maritime claims has been constituted, unless a jurisdiction agreement or arbitration agreement has been reached between the parties. 第一百一十条 申请人申请设立海事赔偿责任限制基金错误的，应当赔偿利害关 系人因此所遭受的损失。 454

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Article 110 A person who has wrongly applied for constitution of a limitation fund for maritime claims shall indemnify the interested person for the losses thus incurred. 第十章 Chapter X: Procedure for Registration and Repayment of Debts 第一百一十一条 海事法院裁定强制拍卖船舶的公告发布后，债权人应当在公告 期间，就与被拍卖船舶有关的债权申请登记。公告期间届满不登记的，视为放弃在 本次拍卖船舶价款中受偿的权利。 Article 111 After the maritime court’s order for forced auction of a ship being announced, the creditors shall, within the time limit announced, apply for registration of their claims pertaining to the ship to be auctioned. Creditors who fail to register their claims before expiry of the said time limit period shall be deemed to have abandoned their rights to be satisfied from the proceeds of the auction. 第一百一十二条 海事法院受理设立海事赔偿责任限制基金的公告发布后，债权 人应当在公告期间就与特定场合发生的海事事故有关的债权申请登记。公告期间届 满不登记的，视为放弃债权。 Article 112 After the maritime court’s acceptance of the application to constitute a limitation fund for maritime claims being announced, the creditors shall, within the time limit announced, apply for registration of their claims relevant to the maritime accident that occurred at a particular scene. The creditors who fail to register their claims before expiry of the time limit announced shall be deemed to have abandoned their rights to debt. 第一百一十三条 债权人向海事法院申请登记债权的，应当提交书面申请，并提 供有关债权证据。 债权证据，包括证明债权的具有法律效力的判决书、裁定书、调解书、仲裁裁决 书和公证债权文书，以及其他证明具有海事请求的证据材料。 Article 113 A creditor who wishes to apply for registration of his claims shall file an application in writing with the maritime court and provide relevant debt evidence. Evidences of debt include legally-binding judgements, written orders, conciliation statements, arbitral awards, notarised documents concerning creditors’ rights to debt and other evidential material substantiating the maritime claim. 第一百一十四条 海事法院应当对债权人的申请进行审查，对提供债权证据的， 裁定准予登记；对不提供债权证据的，裁定驳回申请。 Article 114 The maritime court shall examine the application submitted by a creditor, and allow the registration if evidences of the debt is provided, and to reject the application if the evidences are not provided. 第一百一十五条 债权人提供证明债权的判决书、裁定书、调解书、仲裁裁决书 或者公证债权文书的，海事法院经审查认定上述文书真实合法的，裁定予以确认。 Article 115 Where the maritime court, having examined the judgements, written orders, conciliation statements, arbitral awards, or the notarised documents concerning creditors’ rights to debt provided by the creditors, firmly believe that they are all true and lawful, it shall make an order to confirm them. 455

ANNEX II

第一百一十六条 债权人提供其他海事请求证据的，应当在办理债权登记以后， 在受理债权登记的海事法院提起确权诉讼。当事人之间有仲裁协议的，应当及时申 请仲裁。 海事法院对确权诉讼作出的判决、裁定具有法律效力，当事人不得提起上诉。 Article 116 Where a creditor wishes to provide other maritime claim evidence, he shall, after having registered his claims, bring an action to confirm his rights before the maritime court where the claims are registered. Where an arbitration agreement has been concluded between the parties, they shall apply for arbitration promptly. The judgements and written orders made by the maritime court to confirm the rights are legally binding and no parties may appeal against them. 第一百一十七条 海事法院审理并确认债权后，应当向债权人发出债权人会议通 知书，组织召开债权人会议。 Article 117 After examining and confirming the debts, the maritime court shall issue a notice to the creditors for a creditors’ meeting, and make arrangements for and convene the creditors’ meeting. 第一百一十八条 债权人会议可以协商提出船舶价款或者海事赔偿责任限制基金 的分配方案，签订受偿协议。 受偿协议经海事法院裁定认可，具有法律效力。 债权人会议协商不成的，由海事法院依照《中华人民共和国海商法》以及其他有 关法律规定的受偿顺序，裁定船舶价款或者海事赔偿责任限制基金的分配方案。 Article 118 The creditors’ meeting may through negotiation put forward a plan for distribution of the proceeds from auction of the ship or the limitation fund for maritime claims and sign an agreement on repayment. The agreement on repayment shall be legally binding after the maritime court makes an order to confirm it. Where consultation at the creditors’ meeting fails, the maritime court shall, according to the ranking of claims provided for in the Maritime Code of the People’s Republic of China and other related laws, decide on the plan for distribution of the proceeds from auction of the ship or the limitation fund for maritime claims. 第一百一十九条 拍卖船舶所得价款及其利息，或者海事赔偿责任限制基金及其 利息，应当一并予以分配。 分配船舶价款时，应当由责任人承担的诉讼费用，为保存、拍卖船舶和分配船 舶价款产生的费用，以及为债权人的共同利益支付的其他费用，应当从船舶价款 中先行拨付。 清偿债务后的余款，应当退还船舶原所有人或者海事赔偿责任限制基金设立人。 Article 119 The proceeds from auction of a ship and interest thereon, or the limitation fund for maritime claims and interest thereon, shall be distributed at the same time. In distribution of the proceeds from auction of a ship, the legal costs to be borne by the person liable, expenses incurred in order to preserve the ship or to procure its auction and to distribute the proceeds from the auction, as well as other expenses incurred in the common interest of the creditors, shall first be paid out of the proceeds from such auction. The balance, after satisfaction of the debts, shall be refunded to the former shipowner or the person constituting the limitation fund for maritime claims. 456

ANNEX II

第十一章 Chapter XI: Procedure for Exigence of Maritime Liens 第一百二十条 船舶转让时，受让人可以向海事法院申请船舶优先权催告，催促 船舶优先权人及时主张权利，消灭该船舶附有的船舶优先权。 Article 120 Where a ship is transferred, the transferee may apply to the maritime court for exigence of the maritime lien, demanding the maritime lien holder to assert his right promptly so as to extinguish the maritime lien attached to the ship. 第一百二十一条 受让人申请船舶优先权催告的，应当向转让船舶交付地或者受 让人住所地海事法院提出。 Article 121 A transferee who wishes to apply for exigence of the maritime lien shall file an application with the maritime court of the place where the ship is to be delivered or where the domicile of the transferee is located. 第一百二十二条 申请船舶优先权催告，应当向海事法院提交申请书、船舶转让 合同、船舶技术资料等文件。申请书应当载明船舶的名称、申请船舶优先权催告的 事实和理由。 Article 122 A person who wishes to apply for exigence of the maritime lien shall submit a written application, the contract for ship transfer, technical data of the ship and other documents to the maritime court. The name of the ship, the facts and grounds therefor shall be stated in the written application. 第一百二十三条 海事法院在收到申请书以及有关文件后，应当进行审查，在七 日内作出准予或者不准予申请的裁定。 受让人对裁定不服的，可以申请复议一次。 Article 123 The maritime court, having received the application and the relevant documents, shall examine them and, within seven days, make an order to approve or disapprove the application. A transferee who is dissatisfied with such an order may apply for review not more than once. 第一百二十四条 海事法院在准予申请的裁定生效后，应当通过报纸或者其他新 闻媒体发布公告，催促船舶优先权人在催告期间主张船舶优先权。 船舶优先权催告期间为六十日。 Article 124 After an order to approve an application becomes effective, the maritime court shall issue an announcement in newspapers or other news media urging the maritime lien holder to assert his right within the period of exigence. The period for exigence of a maritime lien is 60 days. 第一百二十五条 船舶优先权催告期间，船舶优先权人主张权利的，应当在海事 法院办理登记；不主张权利的，视为放弃船舶优先权。 Article 125 A maritime lien holder who asserts his right within the period of exigence shall complete registration with the maritime court; if the lien holder fails to assert his right, he shall be deemed to have waived the maritime lien. 457

ANNEX II

第一百二十六条 船舶优先权催告期间届满，无人主张船舶优先权的，海事法院 应当根据当事人的申请作出判决，宣告该转让船舶不附有船舶优先权。判决内容应 当公告。 Article 126 Where on the expiry of the period of exigence, no one asserts the maritime lien, the maritime court shall, on the application of a party, make a judgement, declaring that the ship to be transferred is free from maritime lien. The judgement shall be published. 第十二章 附 Chapter XII: Supplementary Provisions 第一百二十七条 本法自2000年7月1日起施行。 Article 127 This Law shall come into force as of July 1, 2000.

458

INDEX

Note: References to paragraph numbers relate to the body of the text. References to page numbers relate to the Annexes. actual carrier 6.6–6.9; contractual carrier 6.7; liability 6.8; meaning 6.6, 9.4 agency: freight forwarder, and 8.4, 8.5 agreed jurisdiction 19.24–19.30 all risks insurance 15.25–15.30 applicable law 17.1–17.13; closest connection 17.2–17.5; intention of parties 17.6–17.9; international law 17.10; party autonomy 17.2–17.5; public policy 17.10; statutory 17.11–17.13 arbitration: clause in bill of lading does not bind holder 26.63–26.65; clause in bill of lading does not bind subrogated insurer 26.62; clause incorporated from voyage charters rather than time charters 26.57–26.59; CMAC 26.44–26.52; conciliation in 26.72–26.78; date of charterparty 26.61; general statement of incorporation of charterparty 26.60; party names 26.61; validity of clause in bill of lading 26.53–26.65 arbitration clause 6.25, 6.2 Arbitration Law 26.7–26.43; arbitrators 26.30–26.32; arbitration agreement 26.24, 26.25; arbitration proceedings 26.23–26.29; arbitration tribunal 26.30–26.32; enforcement of award 26.40–26.43; hearings 26.33–26.39; judicial interpretation 26.8–26.10; jurisdiction of arbitration commission 26.27–26.29; setting aside of award 26.40–26.43; specific claim 26.26; types of arbitration 26.7; valid arbitration agreement 26.11–26.22 arrest of ships 18.20, 20.27–20.46; conditions for 20.34–20.41; duration 18.25; fixed 20.31–20.33; general introduction 20.27–20.30; live 18.24, 20.31–20.33; multiple 20.42–20.46; re-arrest 20.42–20.46; second 18.22, 18.23; sister ships 18.21 ascertainment of foreign law 25.9–25.11

Athens Convention: carriage of passengers by sea 9.2, 9.3 attachment of cargo 18.29 attachment of cargo on board ship 20.79–20.85 auction of cargo 18.29 auction of ships 18.26–18.28 bareboat charter 4.36–4.51; charterer’s rights and obligations 4.40–4.49; delivery of ship 4.37; meaning 4.36; redelivery of ship 4.37; registration 2.40–2.46; shipowner’s rights and obligations 4.38, 4.39 bill of lading 5.1–5.44, 6.1–6.28; actual carrier 6.6–6.9; carrier 6.2–6.5; common carrier 6.10, 6.11; consignee and holder 6.19–6.22; delivery of goods without 5.33–5.39; description of goods 5.10; document of title 5.20–5.26; due diligence, and 5.14; evidence of contract 5.3–5.7; financial lease of ship 4.50, 4.51; functions 5.1–5.44; incorporation of charterparty into 6.23–6.28; incorporation of law and arbitration clause 6.25, 6.26; incorporation of time charters 6.27, 6.28; letter of indemnity 5.40–5.44; liabilities 7.1–7.38; limitation 7.1–7.38; meaning 5.2; obligations 7.1–7.38; obligations of carrier 7.2–7.6; parties 6.1–6.28; property rights, and 5.27–5.32; quality of goods 5.12; receipt of goods 5.8–5.19; shipper 6.12–6.14; steel products 5.17; unknown clause 5.11 bunker oil 16.6 cabin luggage 9.4 cargo: attachment and auction 18.29 carriage of passengers by sea 9.1; actual carrier 9.6, 9.7; Athens Convention 9.2, 9.3; burden of proof 9.17; carriage period 9.10; carrier 9.6, 9.7; compensation 9.19–9.21; damages

459

INDEX

9.19–9.21; definitions 9.4; invalid clauses 9.5; liability of carrier 9.14–9.21; liability and immunity 9.14, 9.15; liability for valuables 9.16; liability of passenger 9.11–9.13; limitation of liability for coastal carriage 9.26, 9.27; limitation of liability of carrier 9.22–9.28; loss of limitation of lability of carrier 9.28; notice for damage to luggage 9.18 carrier 6.2–6.5; freight forwarder as 8.10–8.12; identification 6.3–6.5; meaning 6.2 Case Acceptance Scope Provision 19.12; cases concerning disputes over maritime contracts 19.12; cases concerning disputes over maritime affairs 19.12; cases concerning maritime tortious disputes 19.12; cases concerning special maritime procedures 19.1; cases relating to disputes over environmental protection 19.12; maritime administrative cases 19.12 causation in tort: collision of ships 11.13, 11.14 charterparties 4.1–4.51; incorporation into bill of lading 6.23–6.28 CHINATOW 10.2 Chinese court system 18.2–18.4 Chinese maritime courts and practice 1.6–1.8 Chinese maritime courts system: developments of 18.5–18.7 Chinese maritime law 1.3–1.5 Chinese maritime procedural law: development 18.8–18.12 CMAC: arbitration rules 26.44–26.52 coastal carriage: limitation of liability of carrier 9.26, 9.27 collision: conflict of laws 25.31–25.35 collision of ships 11.1–11.34; burden of proof 11.27–11.34; causation in tort 11.13, 11.14; compensation for damage to property 11.17–11.19; compensation for damages 11.15, 11.16; compensation for personal injury 11.20–11.22; evidence 11.27–11.34; general rules of legal liability 11.6–11.8; liabilities 11.6–11.14; liable persons 11.23–11.26; proportion of liability 11.9–11.12; ships 11.3; vessel 11.4 COLREGS 1972 11.2 common carrier 6.10, 6.11 compulsory auction 20.47–20.78; application 20.55–20.58; auction of 20.62–20.64; cargoes 20.86–20.90; conditions for 20.49–20.54; court’s preparation for 20.65–20.70; examination 20.55–20.58; method of 20.71–20.78; notice of 20.62–20.64; procedure 20.55–20.78; reconsideration 20.55–20.58; termination 20.59–20.61 conciliation: arbitration, in 26.72–26.78; court, by 26.66–26.71; discussion with

parties separately 26.77; government, by 26.79; meeting attended by tribunal and parties 26.76; parties settling disputes by themselves 26.78 conflict of laws 25.1–25.56; application of mandatory provisions 25.12; characterisation 25.13; collision 25.31–25.35; contract 25.14–25.26; general average 25.39–25.41; importance of 25.2; lex voluntatis 25.6–25.8; limitation of liability 25.42–25.44; maritime lien 25.28–25.30; meaning 25.1; mortgage 25.27; ownership 25.27; reservation of public order 25.12; salvage 25.36–25.38; supremacy of international treaty 25.4 consignee 6.20, 6.21 contra proferentem rule 15.20–15.22 contract: conflict of laws 25.14–25.26 contractual carrier 6.7 contribution: general average 13.7–13.10 court fees 18.52–18.54 court system of PRC 19.9 dangerous goods: liability of shipper 7.31–7.33 deck cargo: liability of carrier 7.10 delivery of goods 7.22–7.29; non-delivery of goods 7.25–7.29; notice for damage 7.24; notice for delivery 7.22; without bill of lading 5.33–5.39 disputes about maritime jurisdiction 19.31–19.34 dock: meaning 15.19 document of title: bill of lading 5.20–5.26 double insurance 15.9, 15.10 due diligence: bill of lading, and 5.14 duration of arrests 18.25 duress: sea towage contracts, and 10.11 enforcement of court judgments of Hong Kong, Macau and Taiwan 26.117–26.119 evidence: collision of ships, and 11.27–11.34; maritime pollution 16.23 evidence of contract 5.3–5.7 exclusive jurisdiction 19.24–19.30 fault: liability of shipper, and 7.37, 7.38 force majeure: sea towage contract 10.9, 10.10 freight: liabilities of shipper 7.34–7.36; marine insurance 15.6–15.8; obligation of shipper 7.34–7.36 freight forwarding 8.2–8.20; agency 8.4, 8.5; carrier, as 8.10–8.12; contract 8.8, 8.9; delivery of shipping documents 8.13–8.16; disputes over 8.7; liability 8.17, 8.18; multimodal transport, and 8.30; NVOCC, and 8.23–8.27; obligations 8.17, 8.18;

460

INDEX

rescission of contract 8.20; services 8.2, 8.3; sub-commission 8.19 general average 13.1–13.14; adjustment 13.11–13.14; Beijing Rules 13.11–13.14; claim, in 13.4–13.6; conflict of laws 25.39–25.41; contribution 13.7–13.10; meaning 13.1; sacrifice 13.7–13.10; slope 13.2, 13.3 general average cases: trial of 18.39–18.40 hierarchal jurisdiction 19.19–19.23 inconsistency in adjudication and guiding cases 1.9–1.10 insurable interest 15.31–15.36 insurance: marine pollution, and 16.29–16.34 international law: applicable law 17.10 jurisdiction in civil litigation 19.1 jurisdiction of Chinese court in foreign-related disputes 25.45–25.56 jurisdiction of maritime courts 19.4–19.18 letter of indemnity: bill of lading, and 5.40–5.44 lex voluntatis 25.6–25.8 liabilities of carrier 7.7–7.21; assessment 7.11–7.13; damage 7.7–7.9; deck cargo 7.10; delay 7.7–7.9; exemptions 7.14; limitation 7.15–7.18; live animals 7.10; loss 7.7–7.9; loss of limitation 7.19 liabilities of shipper 7.30–7.38; dangerous goods 7.31–7.33; fault, and 7.37, 7.38; formalities 7.30; freight 7.34–7.36; information 7.30 limitation fund for maritime claims 18.42, 18.43 limitation of liability: conflict of laws 25.42–25.44 limitation of liability for maritime claims 14.1–14.24; aggregating of claims 14.19, 14.20; claims excepted from limitation 14.10; general limits 14.11–14.13; limitation fund 14.23, 14.24; loss of limitation 14.21, 14.22; maritime claims 14.5–14.10; passenger claims 14.17, 14.18; persons entitled to limit 14.3, 14.4; scope of application 14.2–14.4; ships 14.2; special limits 14.14–14.16 live animals: liability of carrier 7.10 live arrests 18.24 luggage: meaning 9.4 Mareva injunctions 21.44–21.47 marine insurance 15.1–15.65; abandonment 15.46–15.49; all risks 15.25–15.30; amount of indemnity 15.52–15.56; assignment of

contract 15.14–15.16; contra proferentem rule 15.20–15.22; contract 15.3–15.17; disclosure of material circumstances 15.37–15.41; exemption clause 15.23, 15.24; exemption of liability 15.57–15.59; freight 15.6–15.8; indemnity from insurer 15.50–15.59; insurable interest 15.31–15.36; insurable value 15.5; insured amount 15.5; interpretation of contract clauses 15.18–15.30; liability of indemnity 15.50, 15.51; literal rule 15.18, 15.19; loss 15.46–15.49; open cover 15.11–15.13; perils 15.4; subrogation 15.60–15.65; termination of contract 15.17; warranties of assured 15.42–15.45 marine pollution 16.1–16.34; application 16.7, 16.8; authorities 16.1; bunker oil 16.6; burden of proof 16.23; claimants 16.9; compensation 16.9–16.15; concepts 16.4–16.6; damage 16.9–16.15; evidence 16.23; financial guarantee 16.29–16.34; insurance 16.29–16.34; international regime 16.2, 16.3; joint and several liabilities 16.19–16.21; liability 16.16, 16.17; liability not under conventions 16.22; limitation of liability 16.24–16.28; oil 16.6; owner 16.5; pollution damage 16.10–16.15; ship 16.4; shipowner 16.5 maritime claims 14.5–14.10; limitation of liability 14.1–14.24 Maritime Code of People’s Republic of China: text 355–427 maritime courts 19.4–19.18 maritime evidence: preservation 18.32–18.33 maritime injunctions 18.30, 18.31, 21.1–21.47; after proceedings commenced 21.11–21.13; application for 21.7–21.23; before arbitration/ litigation 21.8–21.10; before or during arbitration/ litigation 21.7; conditions for granting 21.24–21.32; execution 21.36–21.38; imminent risks of losses, and 21.31, 21.32; issue of order 21.33–21.35; making application 21.14–21.16; Mareva injunction, and 21.44–21.47; nature of 21.4–21.6; objection 21.39, 21.40; reconsideration 21.39, 21.40; review of order 21.33–21.35; security 21.17–21.23; wrongfully obtained 21.41–21.43 maritime jurisdictions 19.1–19.34 Maritime Labour Convention 2006 3.23–3.25 maritime lien: conflict of laws 25.28–25.30; exigence 18.45 maritime procedure 18.1–18.54 maritime security 18.34, 23.1–23.40; advanced payment prior to judgment 23.40; alteration 23.7, 23.8; alteration of counter security 23.24–23.26; amount 23.4; amount of counter security 23.23; cancellation 23.7,

461

INDEX

23.8; cash 23.11, 23.12; claimant’s liability for requirement of excessive amount 23.5, 23.6; claimant’s liability for wrongful request 23.9, 23.10; constitution of limitation fund 23.40; counter security in application for preservation of evidence 23.37–23.39; counter security in proceedings of attachment 23.32, 23.33; counter security in proceedings of injunction and preservation of evidence 23.34–23.36; counter security in ship arrest 23.22; counter security put up by claimant 23.21–23.39; letter of guarantee 23.13–23.15; meaning 23.1; mortgage 23.16–23.18; pledge 23.16–23.18; put up by defendant 23.3; reduction 23.7, 23.8; reduction of counter security 23.24–23.26; return of 23.19, 23.20; return of counter security 23.21; rules 23.2; type of counter security 23.27–23.30 maritime territorial jurisdiction 19.15–19.18; special territorial jurisdiction 19.18; ten maritime courts 19.16 master 3.2–3.9 master and seamen 3.1–3.25 mortgage: conflict of laws 25.27 multimodal transport 8.28–8.35; CMC 1992 8.28–8.31; Contract Law, and 8.29; freight forwarder, and 8.30; liability 8.35; limitation 8.35; responsibility period 8.32–8.34 NVOCC 8.21–8.27; freight forwarder, and 8.23–8.27; non-vessel-operating services, and 8.21, 8.22 obligations of carrier 7.2–7.6; due diligence 7.4; period of responsibility 7.2, 7.3 obligations of shipper 7.30–7.38; dangerous goods 7.31–7.33; formalities 7.30; freight 7.34–7.36; information 7.30 officer: meaning 3.10 oil: meaning 16.6 owner: meaning 16.5 P&I insurance 15.2 passenger: meaning 9.4 passenger claims: limits 14.17, 14.18 passenger ticket 9.8, 9.9 perils: marine insurance 15.4 personal injury: collision of ships, and 11.20–11.22 pollution damage 16.10–16.15 preservation of maritime claims 20.1–20.90; application form 20.8, 20.9; arrest of ships 20.27–20.46 see also arrest of ships; discharge 20.16–20.22; evidence 20.10; jurisdiction

20.4–20.7; liability for wrongful application 20.23–20.26; order 20.16–20.22; procedures for applying 20.4–20.26; requirements for applying 20.4–20.26; security 20.11 preservation of maritime evidence 22.1–22.42; after proceedings commenced 22.12–22.14; applicable situations 22.30–22.33; application before arbitration/litigation 22.9–22.11; application for 22.8–22.21; before or during arbitration/litigation 22.8; conditions for obtaining order 22.22–22.33; execution 22.36, 22.37; general nature of remedy 22.4–22.7; issue of order 22.34, 22.35; making application 22.15–22.7; meaning 22.1; objection 22.38–22.40; qualifications of subject 22.22–22.24; reconsideration 22.38–22.40; requirements for targets 22.29; review of order 22.34, 22.35; security 22.18–22.21; standards of evidence 22.25–22.28; wrongfully obtained order 22.41, 22.42; urgent situations 22.30–22.33 procedure for constitution of liability limitation fund for maritime claims 24.42–24.54; application for constitution of fund 24.46–24.49; constitution of fund 24.50; court’s dealing with property preservation 24.51; distribution of fund 24.52–24.54; examination of application by court 24.46–24.49; jurisdiction of maritime court 24.42–24.45; parties who can apply for constitution of fund 24.42; registration of claims 24.52–24.54 procedure for distribution of proceeds from auction 24.55–24.58 procedure for exigence of maritime liens 24.59, 24.60 procedure for public notice of exigency of claim 24.39–24.41 procedure for registration of claims in auction of ship 24.55–24.58 procedure for urging payment of debt 24.36–24.38 property: meaning 12.3 property right: bill of lading, and 5.27–5.32 public policy: applicable law, and 17.10 receipt of goods 5.8–5.19 recognition and enforcement of foreign arbitration award 26.80–26.93; procedure 26.80–26.87; reasons for refusing 26.88–26.93 recognition and enforcement of foreign judgments 26.104–26.116; basis on which application approved 26.110–26.115; general procedure 26.104–26.109; international

462

INDEX

treaties 26.111–26.114; reciprocity principle 26.115 recognition and enforcement of Hong Kong arbitration awards 26.94–26.98 recognition and enforcement of Taiwan arbitration awards 26.99–26.103 rescission of contract: freight forwarder 8.20 sacrifice: general average 13.7–13.10 salvage: conflict of laws 25.36–25.38 salvage at sea 12.1–12.39; actions 12.35–12.39; annulment of contracts 12.17, 12.18; apportionment 12.22–12/27; apportionment between salvors 12.33; auction sale of salved ship and property 12.36; cargo 12.4; claims 12.35–12.39; concepts 12.2–12.5; contract 12.6, 12.7; duty to provide security 12.35; interest 12.38; interim payment 12.37; meaning 12.1; modification of contracts 12.17, 12.18; no cure no pay 12.19; no entitlement of remuneration 12.32; operations 12.8–12.11; performance 12.14–12.16; property, meaning 12.3; publication of arbitral awards 12.39; rights of salvors 12.19–12.39; salvage of persons 12.34; salvage reward 12.20, 12.21; salved value 12.22–12.27; special compensation 12.28–12.31; state-controlled 12.12, 12.13 sea towage contracts 10.1–10.13; force majeure 10.9, 10.10; immunities 10.12, 10.13; liabilities 10.12, 10.13; meaning 10.1; seaworthiness of tug and tow 10.7, 10.8; third parties 10.3–10.6; towage fee and duress 10.11 seamen 3.10–3.22; benefits 3.18–3.20; competency certificate 3.15; guarantee of profession 3.18–3.22; Maritime Labour Convention 2006 3.23–3.25; meaning 3.10; passport 3.16; registration 3.13; repatriation 3.21, 3.22; requirements 3.12 second arrests 18.22, 18.23 service of documents 18.35, 18.36 ship collision cases: trial of 18.37 ship mortgage 2.25–2.39; establishment 2.27–2.30; registration 2.31–2.39 shipowner: meaning 16.5 shipper 6.12–6.14; meaning 6.12; right of control 6.15–6.18 ship registration 2.13–2.24; amendment 2.18–2.20; cancellation 2.18–2.20; ownership 2.16 ships 2.1–2.46; meaning 2.2–2.5; nationality 2.21–2.24; ownership 2.6–2.12 sister ships: arrests 18.21 small claims procedure 24.35

sources of law for maritime actions 18.46–18.51 special trial procedures 18.36 Special Maritime Procedure Law 18.12–18.28; arrests of ships 18.20; arrests of sister ships 18.21; attachment and auction of cargo 18.29; auction of ships 18.26–18.28; duration of arrests 18.25; exercising rights of subrogation 18.40, 18.41; exigence of maritime liens 18.45; general principles 18.13; jurisdiction 18.14–18.17; limitation fund for maritime claims 18.42, 18.43; live arrests 18.24; maritime injunctions 18.30, 18.31; maritime security 18.34; preservation of maritime claims 18.18, 18.19; preservation of maritime evidence 18.32, 18.33; registration of debts 18.44; repayment of debt 18.44; second arrests 18.22, 18.23; service of documents 18.35, 18.36; special trial procedures 18.36; text 428–458; trial of general average cases 18.38, 18.39; trial of ship collision cases 18.37 steel products: bill of lading 5.17 subrogation: exercising rights of 18.40, 18.41; marine insurance, and 15.60–15.65 summary procedure 24.33–24.34 third parties: sea towage contracts, to 10.3–10.6 time charter 4.20–4.35; charterer’s right and obligations 4.30–4.35; delivery of ship 4.21–4.26; incorporation into bill of lading 6.27, 6.28; redelivery of ship 4.21–4.26; shipowner’s rights and obligations 4.27–4.29 time limits for carriage of goods claims 17.14–17.34; action for indemnity 17.20–17.27; carriage of goods claims 17.14–17.34; container detention claims 17.28–17.31; delivery of goods without presentation of bill of lading 17.32, 17.33; freight forwarding 17.34; multimodal carriage 17.34; “should have been delivered” 17.18, 17.19 time limit for maritime claims 17.14–17.49; carriage of passengers’ claims 17.35; collision of ships 17.39; compensation for oil pollution damage 17.40; contribution in general average 17.40; discontinuation 17.43–17.46; disputes not governed by CMC 1992 17.41; marine insurance claims 17.36–17.38; salvage at sea 17.39; sea towage 17.39; special discrimination 17.47–17.49; suspension 17.42 tort, causation in: collision of ships 11.13, 11.14 towage fee: sea towage contracts 10.11 trial of collision of ships 24.15–24.23; appraisal of ships’ value 24.22; CMC 24.15; completion of production of factual evidence 24.19; investigation form 24.16–24.18;

463

INDEX

investigation materials by Maritime Safety Administration 24.20, 24.21; requirement of inspection of ship 24.22; SMPL 24.15; time period 24.23 trial of general average 24.24–24.27; adjustment report 24.25–24.26; claim for non-general average losses 24.27; jurisdiction 24.24 trial of marine insurer’s subrogation claim 24.28–24.32 trial procedure 24.2–24.41; filing and acceptance of claim 24.3, 24.4; first instance 24.2–24.11;

hearing 24.9; judgment 24.10, 24.11; preparation for trial 24.5–24.8; second instance 24.12–24.14 tug and tow: seaworthiness 10.7, 10.8 voyage charter 4.4–4.19; compulsory provisions 4.6; meaning 4.4; obligations 4.12; rights 4.12; standard forms 4.5 warranties of assured: marine insurance 15.42–15.45

464