[Casebrief]

26

Chen effected an all-risk insurance for ship transport by coastal inland river for the Ship “Ninggaopeng 3368” he owned from PICC Gaochun Subbranch, with an insurance policy issued by PICC Nanjing Branch. According to Paragraph 1, Article 3 of the insurance clauses, the insurer will bear no compensation liability for any damages, liabilities and expenses incurred because the underlying ship is not seaworthy or tow-worthy (including damages, liabilities and expenses of the towed ship caused by the towing activity of towboat and all damages, liabilities and expenses caused by towing activity of any ship that is not a towboat, duetotechnicalstatus,manning, loadingandotherconditionsofthe ships).OnMarch13,2016, theShip “Ninggaopeng3368” hadacollisionaccidentduringtransport,andatthetimeofthe incidentnoneof thethreesailorsontheshiphadanycertificateofcompetence.Accordingtothe conclusion ofYueyang Maritime SafetyAdministration, the direct cause of the accident was the regulation violating steering and improper operation of the on-duty steerer, who did not hold a Certificate of Competence for Crew of Inland River Ships, and the ship should bear all the liabilities for the accident by itself. Chen claimed insurance compensation from PICC Gaochun Subbranch with respect to the accident. In the opinion of PICC Nanjing Branch, improper operationof sailor was the direct cause of the collision accident, the sailors had no certificate of competence,andthe ship didnot meetminimum manningstandards,sothe insurerhadthe right to reject the compensation claim on the ground that unseaworthy ship is excluded from compensationliability.

[Judicialdecision]

In the first-instance judgment made by Tianjin Maritime Court, the claim of the plaintiff was rejected.The plaintiff appealed, but Tianjin Higher People’s Court upheld the original judgment inthesecond-instancejudgment.

[Significance]

For a long time, many enterprises and individuals engaged in inland river freight transport have hired sailors holding no certificate of competence or failed to employ crew for the ships according to the minimum manning standards in order to reduce cost, resulting in high safety risktoinlandriver transportandadverseimpactonthesoundandorderlydevelopmentofinland water transport economy. In 2016, the Supreme People ’ s Court issued the Opinions on Providing Judicial Services and Guarantees for the Development of the Yangtze River Economic Belt, in which it was proposed to guide various market participants to compete on an orderly and benign basis, to guide port, shipping and shipbuilding enterprises to effectively enhance safety awareness and quality awareness, and to provide strong judicial support for the constructionofsafeandsound“goldenwaterway” .Inthiscase,itwas determinedaccordingto law that the underlying ship was not seaworthy as it had no sailor holding certificate of competence, and that the insurer did not have to bear compensation liabilities according to the insurance clauses on the ground that there was causal relationship between the unseaworthiness of the ship and the accident. Such judgment is of great significance for enhancing the inland river transport safety awareness and promoting the high-quality development of inland river transporteconomy.This case was selected as one of the toptentypical cases of maritime trial in Chinain2019releasedbytheSupremePeople’sCourt.