[Casebrief]

In 2016, Zhongshun Lida Company authorized Xinyan Company and Banghai Company, through Haiyongwang Company, to book space from Tianjin COSCO, and then 361 containers ofcargos were transported by a ship operated by PANASIA. After the cargos arrivedattheport, PANASIA detained the containers for the reason that Xinyan Company had arrears. The evidences showedthat ZhongshunLida hadpaid the freight.On November 3, November 22and November 30, 2016, in order to solve the problem of container detention, Zhongshun Lida, as Party B, signed three agreements with Tianjin COSCO, Fujing company and Qinhuangdao COSCO as Party A, in which it was agreed that “as Banghai company and Xinyan company failed to pay freight and port charges to Party A according to agreement, Zhongshun Lida agreed to pay RMB 2,361,063 on their behalf ” . Later, Zhongshun Lida paid the above-mentioned sum and retrieved the detained containers by November 30, 2016 in succession. On July 20, 2018, Zhongshun Lida filed a lawsuit to Tianjin Maritime Court on the ground that the payment made was not for its debt and it had no choice but to pay when the containerwasdetained,claimingtocancelthethreeagreementsmentionedabove.

[Judicialdecision]

In the first-trial judgment of Tianjin Maritime Court, the claim of the plaintiff was rejected.The plaintiff appealed, but Tianjin Higher People’s Court upheld the original judgment in the

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second-instancejudgment.

[Significance]

This is a typical case involving a contract of cargo transport by sea under which the carrier detains the cargos of the shipper due to delayed payment of freight and other related expenses. In this case, the Court held the opinion that PANASIAhad no right to detain the cargos, and its detention of the cargos, without any factual and legal basis, constituted intimidation. The agreement signed by Zhongshun Lida under such circumstance had a good reason for cancellation. However, Zhongshun Lida should exercise the right of cancellation within one year from the date of end of the intimidation, otherwise such right should be eliminated. This casehas the following significance: firstly,it is clarified that the carrier should exercise the legal lien according to law, and should not cause loss to the cargo owner by abusing such right; secondly,itis clarifiedthat the lawdoes notprotectthose whofailtoexercise theirrights during the scheduled period,so as to guide the right holders to exercise their rights on a timely basis.