Preface
The “Belt and Road” initiative is a major strategic decision made by the CPC Central Committee centered by President Xi Jinping to actively respond to the great changes in the global circumstances and to coordinate the overall domestic and international situations. It has a realistic and far-reaching influence for creating a new pattern of China’s all-round opening up, accelerating economic growth, and promoting peaceful development. Tianjin has remarkable geographical advantages in the implementation of the “Belt and Road” initiative, and plays a prominent role of bridgehead. In recent years, Tianjin Maritime Court has effectively enhanced its political standing, firmly established a sense of overall situation, thoroughly implemented the decisions of the CPC Central Committee and the arrangements of the Tianjin Municipal Party Committee, given full play to the functions of maritime trial in accordance with the work requirements of the higher courts, continuously improved its ability of foreign-related commercial and maritime trial, striven to create a diversified dispute resolution mechanism and a modern litigation service system, effectively enhanced the international influence and credibility of Tianjin maritime justice, and provided a strong maritime judicial guarantee for supporting the “Belt and Road” initiative and promoting the opening up of the Beijing-Tianjin-Hebei region.
I. Trial of cases involving the “Belt and Road” initiative by Tianjin Maritime Court
Since the beginning of 2019, Tianjin Maritime Court has accepted a total of 425 cases involving the “Belt and Road” initiative[1] and closed 405 of such cases, with a total underlying value of RMB 600 million. The cases involved more than 30 countries along the “Belt and Road” in Africa, Asia, Europe and America. These cases mainly concern maritime transport contract disputes, marine pollution damage liability disputes, freight forwarding contract disputes, and sailor employment contract disputes. Among the 469 foreign-related cases accepted by Tianjin Maritime Court, a total of 374 cases involved the “Belt and Road”, accounting for 79.74% of the total foreign-related cases. It is an important duty of Tianjin maritime trials, especially foreign-related commercial maritime trials, to create a good business environment under the rule of law for domestic and foreign market players through legitimate and fair exercise of judicial power.
II. Measures taken by Tianjin Maritime Court to support the “Belt and Road” initiative
1. Enhanced the political standing and actively served the overall opening up of China
The Party Group of the Court incorporated General Secretary Xi Jinping’s instructions on the “Belt and Road” initiative and the arrangements of superior organizations into the key learning content of the theory center group, and promoted the supports for the “Belt and Road” initiative as a key task of the whole court. In 2019, the Court formulated the Implementation Opinions of Tianjin Maritime Court on Providing Judicial Supports for the “Belt and Road” Initiative to provide comprehensive guidelines for the Court to support the “Belt and Road” initiative. It strengthened targeted services for companies involved in the “Belt and Road” initiative. Since the beginning of 2019, teams led by the court president have visited more than 100 companies engaged in shipping, warehousing, freight forwarding and export trade, and provided suggestions for various companies to participate in the “Belt and Road” initiative.
2. Strengthened the construction of the litigation service center and strove to build a modern maritime litigation service system
The Court improved the construction of litigation service platform, promoted the application of informatization modules such as mobile micro court and online preservation center, and provided comprehensive online and offline services for disputes involving the “Belt and Road” initiative such as case filing, payment, preservation and pre-litigation mediation. It strengthened the application of Internet court, and has completed more than 40 Internet trials since the beginning of 2019, which effectively reduced the burden of litigants and promoted the efficient resolution of disputes involving the “Belt and Road” initiative during the epidemic. In response to the in-depth implementation of the Tianjin Port’s inland dry port strategy and the rise of the sea-rail combined transport, and relying on the circuit points of trial in the inland areas such as Huinong of Ningxia and Baotou of Inner Mongolia, the Court actively promoted the advancement of service ports, and has accumulatively provided more than 30 door-to-door judicial services, such as circuit case collection and law popularization, for inland export enterprises. It explored diversified maritime dispute resolution mechanisms. It established a maritime dispute entrusted mediation mechanism with China Maritime Arbitration Commission in July 2019, and established a litigation linking mechanism with China International Freight Forwarders Association, Tianjin International Freight Forwarders Association and Hebei International Freight Forwarders Association in September 2020, so that the procedures of litigation, arbitration and mediation of maritime disputes involving the “Belt and Road” initiative can be connected more closely and smoothly.
3. Based on the trial function and deepened the implementation of the strategy of maritime judicial excellence
Relying on the business exchange platforms such as “Haifa Mantan”, the Court organized front-line judges to conduct regular discussions on legal problems in frequently seen disputes involving the “Belt and Road” initiative such as maritime cargo transport, freight forwarding, multimodal transport, and ship financing leasing, so as to unify the judicial judgment scale. It gave full play to the functions of the extraterritorial law ascertainment platform to accurately ascertain and apply extraterritorial laws. In 2018, it entrusted for the first time a foreign law ascertain research base, that is the Foreign Law Ascertainment Center of China University of Political Science and Law, to ascertain Mexican laws, leading to good results. It improved the high-quality case screening and cultivation mechanism, and actively selected and submitted typical cases involving the “Belt and Road” initiative. Among them, 2 cases were selected as typical cases of national maritime trials, and 2 cases were selected as typical cases of the courts in Tianjin in supporting the “Belt and Road” initiative.
4. Strengthened trial management and the supervision mechanism for cases involving the “Belt and Road” initiative
The Court established a whole-process discovery mechanism for cases involving the “Belt and Road” initiative from acceptance to trial, included cases involving the “Belt and Road” initiative into the scope of judicial statistics, and conducted regular and specialized analysis and study of related cases. It strictly controlled the trial periods, and tightened the standards for trial period extension or deduction for cases involving the “Belt and Road” initiative that did not need extraterritorial service, extraterritorial evidence collection, notarization and verification, extraterritorial law ascertainment, and so on, so as to improve trial efficiency. It established specialized trial teams for marine pollution and other cases, and conducted specialized and high-quality trail of typical cases involving the “Belt and Road” initiative. It gave full play to the function of the court president in the trial of major, difficult, and complicated cases involving the “Belt and Road” initiative, and the proportion of the cases involving the “Belt and Road” initiative handled by or with participation of the court president reached 65%, so that the quality and effectiveness of trial were effectively guaranteed.
5. Conducted in-depth judicial research to effectively respond to legal problems involving the “Belt and Road” initiative
The Court strengthened its interaction with universities. In 2019, it signed cooperation agreements with the law schools of Nankai University, Tianjin University and Tianjin University of Finance and Economics, and invited law professors to participate in specialized judge meetings to promote the in-depth integration of maritime justice theory and practice involving the “Belt and Road” initiative. It focused on the hot legal issues related to the “Belt and Road” initiative, enhanced the breadth and depth of maritime judicial study, and formed more than 20 articles of maritime judicial study related to the “Belt and Road” initiative. Among them, many articles such as the Unification of Joint and Several Liabilities of Section Carriers under Multimodal Transport Contracts won awards in major forums or were adopted by relevant journals. The Court actively performed the duty of judicial advising, and promptly reminded the entities concerned in response to the business risks and regulatory flaws found in the trial of cases involving the “Belt and Road” initiative. The judicial suggestion on sailor management related legal issues proposed by the Court was selected as excellent judicial suggestions of the courts in the whole city.
III. Typical cases handled by Tianjin Maritime Court in supporting the “Belt and Road” initiative
1. The maritime cargo transport contract dispute case among China Merchants Logistics Group (Tianjin) Co., Ltd., ZIM Integrated Shipping Services Ltd. and Hefei Salt Chemical Co., Ltd.
[Case brief]
ZIM Integrated Shipping Services Ltd. (“ZIM”), an Israeli company, signed a booking agreement with China Merchants Logistics Group (“CMLG”), based on which CMLG engaged ZIM as carrier of its import and export goods in Tianjin. According to the agreement, if no one picks up the goods at the destination, CMLG and the consigner will bear joint and several liabilities for all the liabilities, consequences, costs and expenses caused thereby to ZIM. In August 2014, CMLG entrusted ZIM to transport a loaded 20-feet container from Tianjin Xingang to Odessa Port in Ukraine. ZIM issued an order B/L, which indicated that the consigner was Hefei Salt Chemical Co., Ltd. (“Hefei Salt”) and specified the free use period of the container and the demurrage rate. After the goods arrived at the destination, no one picked up them upon original B/L. Later, the goods were destroyed at the port of destination, and ZIM paid destruction cost, storage cost, loading/unloading cost and other costs and expenses incurred at the port of destination due to such destruction. Thus, ZIM claimed that CMLG and Hefei Salt should indemnify jointly and severally the costs and expenses incurred at the port of destination, the container demurrage and other damages amounting to USD 20,310 and the interest of this amount. During the trial of this case, ZIM and CMLG agreed to resolve this dispute in accordance with Chinese laws.
[Judicial decision]
In the first-instance judgment made by Tianjin Maritime Court, it was ordered that CMLG should indemnify ZIM for the costs and expenses of goods disposal at the port of destination and the container demurrage calculated based on purchase cost, amounting to RMB 66,152.52 in total, and the associated interest, and other claims of ZIM were rejected. CMLG refused to accept such first-instance judgment and filed an appeal. Tianjin Higher People’s Court rejected the appeal in the second-instance judgment and upheld the original judgment.
[Significance]
This case is a maritime cargo transport contract dispute case occurred in a country along the “Belt and Road” due to non-taking of goods at the port of destination. It has the following typical significance: Firstly, it clarified the liable party for the loss incurred to the carrier due to non-taking of goods at the port of destination. In the event of such non-taking of goods, the carrier has the right to claim against the consigner based on the maritime cargo transport contract. Secondly, it clarified that the lien of the carrier over the goods as provided for in Article 87 and Article 88 of the Maritime Law should not be a precondition for the claim against the consigner. Goods taking and holding is only one of the means usable by the carrier to safeguard its right, and the carrier’s failure to hold the goods does not affect its right to claim associated costs and expenses from the consigner. Thirdly, notarization or certification was not used as the only criterion for effectiveness of overseas evidences, but the empirical rule and logical reasoning was used to comprehensively evaluate the effectiveness of the overseas evidences based on several factors such as particular case, type of the evidence, fact to be proved, and cross-proving with other evidences. This fully showed the trial and judgment level of the people’s court in foreign party involved commercial and maritime cases under the background of the “Belt and Road” initiative. This case was selected as one of the typical maritime cases in China in 2017 announced by the Supreme People’s Court.
2. The maritime container lease contract dispute case between Ocean Global Co., Ltd. and Hanjin Shipping Co., Ltd.
[Case brief]
On May 22, 2013, Ocean Global Co., Ltd. (“Ocean Company”) and Hanjin Shipping Co., Ltd. (“Hanjin”) entered into the contract numbered 180721 and entitled “Long-term Container Lease Agreement”. It is agreed in the agreement that: Ocean Company will lease 19,862 containers to Hanjin for use, and the payment for the lease shall be made 30 days after Hanjin receives the invoice; the container shall be delivered on May 22, 2013, with a lease term of 5 years; when the entire 5-year lease term expires, Hanjin will have the right to buy each container at the price of USD 1 per container after paying the last installment of the rent; it is agreed in the clause on jurisdiction and the general clauses of the Long-term Container Lease Agreement that “unless otherwise specified, the Agreement shall be governed by British laws, including but not limited to the effectiveness, interpretation and performance of the Agreement. In order to deal with any litigation or other procedures caused by or related to this lease or any container, the parties to the Agreement and their respective successors accept and specify the non-exclusive jurisdiction of British courts. This article does not preclude the initiation of relevant procedures in other courts with jurisdiction. The General Trade Terms (hereinafter referred to as “GTC”, a copy of which is attached to the Agreement, unless the lessee has signed it before) is a part of the Agreement and applies to all containers. In the event of a conflict between the provisions of the Agreement and GTC, the Agreement shall prevail.” In the clauses on breach of contract and remedy of the Long-term Container Lease Agreement, it is agreed that “each of the following circumstances shall constitute a ‘breach of contract’....... (3) the lessee, as a continuing business, is dissolved, liquidated or suspended for operation, is insolvent, becomes the subject of any procedure under any bankruptcy law or similar laws in any relevant country, assigns rights and interests to the creditor, or admits in writing its inability to repay the due debts, or a receiver, custodian or liquidator is appointed for the lessee or any part of the lessee’s assets.” “....... Once the Agreement is terminated due to the lessee’s breach of contract, the lessee shall return the container in accordance with the instructions of the lessor.” On September 9, 2016, Hanjin sent a letter to Ocean Company, stating that Hanjin had received an order to initiate the reorganization procedure and therefore terminated the performance of the Long-term Container Lease Agreement, and agreed to return the leased containers. Ocean Company filed a lawsuit to request Hanjin to return the containers.
[Judicial decision]
Tianjin Maritime Court made the judgment that the defendant Hanjin Shipping Co., Ltd. should return 2,830 containers to the plaintiff Ocean Global Co., Ltd..
[Significance]
The cases involving the “Belt and Road” initiative often concern parties from different countries, and jurisdiction and law ascertainment are difficult points in the trial of such cases. In this case, both parties are foreign companies, and the defendant Hanjin did not respond to the suit. Under such circumstance, the collegiate panel determined that it should conduct an active investigation on whether this court had jurisdiction over the case. In the agreement signed by and between Ocean Company and Hanjin, the jurisdiction of the courts in other countries outside the United Kingdom is not excluded, and the containers involved in the dispute are stored in Tianjin Port. Ocean Company filed a lawsuit, which conforms to the provision in Article 265 of the Civil Procedure Law of China that if the subject matter of a case is located within the territory of China, China will have jurisdiction over the case. In addition, the collegiate panel determined that the British law ascertained by the foreign law ascertainment center of China University of Political Science and Law entrusted by the court belongs to the foreign law “provided by Chinese and foreign legal experts” as stipulated in Article 193 of the General Principles of Civil Law and should be adopted. This case has a reference significance for handling jurisdiction and foreign law ascertainment issues in cases involving the “Belt and Road” initiative.
3. The port stored cargo damage liability dispute case between Qingdao Zod International Trade Co., Ltd. and Tianjin Welcome Petrochemical Co., Ltd.
[Case brief]
On February 13, 2014, the plaintiff, as the buyer, signed a contract with China National United Oil Corporation, a party outside the case, to purchase 15,181.623 tons of mixed aromatics. The plaintiff paid USD 16,523,920.83 for the goods as agreed in the contract. The goods involved in the case were transported by the vessel EDZARD SCHULTE from Bangkok Port, Thailand to Tianjin Port, China. The carrier issued 5 sets of triplicate original bills of lading numbered GC14020101-GC14020105. According to the bills of lading, the consignee was “To order of VITOL ASIA PET LTD”, and the notify party was the plaintiff. The plaintiff held one original bill of lading in each set of the bills of lading involved in the case. The cargo was released via telex by the shipping agent Chuangjin Shipping Co., Ltd. upon the carrier’s instruction on telex release and the import document change guarantee letter stamped by the plaintiff, and was discharged into the defendant’s storage tank after arriving at the unloading port on March 5.
On February 24, the plaintiff, as the seller, signed a sale and purchase contract with Juli Holding for the goods involved in the case, and Juli Holding sold the goods to Dongsheng Petrochemical later. In order to perform the sale and purchase contract, the plaintiff delivered the relevant documents required for delivery and customs clearance to Juli Holding. The pick-up, customs declaration, port handling and other procedures for the goods were actually completed by Tongbao Freight Forwarding Company and Gangyuan Shipping Company. Gangyuan Shipping went through the pick-up procedures and obtained the D/O bill of lading stamped by the shipping agent Chuangjin Shipping. Tongbao Freight Forwarding Company was responsible for the customs declaration of the goods, and the Xingang Customs of the People’s Republic of China affixed the release seal on the D/O bill of lading. The plaintiff did not pay port fees, customs declaration fee, customs import value-added tax and other fees, nor did it pay the agency fees and the above-mentioned fees to Tongbao Freight Forwarding Company and Gangyuan Shipping Company. On March 19, Dongsheng Petrochemical, holding an original D/O bill of lading with customs clearance stamp, signed a contract on storage of the goods involved in the case with the defendant. In the contract, it was agreed that Dongsheng Petrochemical should issue a stamped bill of lading to the defendant every time it took oil from the storage tank. From March to April 2014, Dongsheng Petrochemical issued to the defendant a notice of delivery recording the consignor and consignee, tank number, cargo name and vehicle plate number, and all the cargos involved in the case were picked up.
[Judicial decision]
Tianjin Maritime Court made the judgment that the all the claims of the plaintiff Qingdao Zod International Trade Co., Ltd. were rejected.
[Significance]
The case is a storage contract dispute involving the “Belt and Road” initiative. In this case, the court made it clear that the bill of lading cannot bind the warehousing service provider under a warehousing contract, and the holder of the bill of lading can claim against the carrier of the maritime cargo transport contract on the basis of the bill of lading, but cannot claim against the warehousing service provider on the basis of the bill of lading. The D/O bill of lading has the function of a pick-up voucher, and plays a role of connector between the transport process and the warehousing process in the port business operation of imported goods. The warehousing service provider delivered the goods to the holder of the D/O bill of lading according to the storage contract signed with the holder of the D/O bill of lading, and in this way the warehousing service provider fulfilled its obligation to release the goods with due diligence, and its behavior did not constitute an infringement on the holder of the bill of lading. This case was selected as one of the typical cases of the courts in Tianjin in supporting the “Belt and Road” initiative.
4. The marine aquaculture damage indemnification dispute case between the eight plaintiffs including Li and Islamic Republic of Iran Shipping Lines
[Case brief]
On August 18, 2011, the ship PANTEA of the defendant Islamic Republic of Iran Shipping Lines (IRISL) came to an anchor at the anchorage of Jingtang Port. It set sail at 02:24 on September 1 of the same year from the anchorage of Jingtang Port, and anchored at 39°11′05.6″N/119°14′15.3″E at 08:42 on the same day. It anchored at39°12′188″N/119°14′255″E on September 5 of the same year and left the sea area at 16:51 on September 10 of the same year. On September 15 of the same year, the Tidal Flat Management Station of Laoting County Fisheries Bureau issued an investigation report, stating that the ship involved in the case broke into the scallop breeding area of Laoting County and broke the scallop culture ropes of Li and others in Laoting County, so that all the scallop breeding cages were damaged, the scallops died, and the breeding devices such as floating balls and ropes were damaged or lost.
[Judicial decision]
Tianjin Maritime Court made the judgment that Islamic Republic of Iran Shipping Lines should provide the eight plaintiffs including Li with a compensation of RMB 1,076,932.4 and other claims of the eight plaintiffs were rejected.
[Significance]
The Tianjin-Hebei coast has busy shipping and densely distributed breeding areas. There are frequent accidents caused by ships, especially foreign ships, entering the breeding areas. In the trial of the case, the Court equally protected the legitimate rights and interests of the Chinese and foreign parties and resolved three interrelated legal issues: for the proportion of liability, the principle of fault offsetting should apply; for compensation items, the principle of loss and profit offsetting should apply according to the specific breeding conditions of fishermen; for compensation criteria, the specific amount should be determined based on legal standards and the faults of the parties. This case has a positive significance for regulating the shipping and breeding order along the Tianjin-Hebei coast.
5. The maritime dispute case among Chinaland Shipping Agency Co., Ltd., Tianjin Tiangang International Trade Co., Ltd. and Conor Shipping Co., Ltd. arising from a letter of guarantee
[Case brief]
On March 6, 2015, Chinaland Shipping Agency Co., Ltd. (“Chinaland Shipping”) signed a voyage charter contract with Conor Shipping Co., Ltd. (“Conor Shipping”), owner of the “ILIANA” ship. On March 14, 2015, Tianjin Tiangang International Trade Co., Ltd. (“Tiangang”), the consigner indicated on the bill of lading, exported some deformed steel bars, which were transported by the “ILIANA” ship from Tianjin New Port to the Damietta Port in Egypt. During the loading of the goods, it was found that there were slight rusts on the goods. Thus, Tiangang issued a letter of guarantee with the title of “To: Chinaland Shipping & owner of the ILIANA ship”, and the deputy captain of the shipping agency issued a clean bill of lading. After the goods arrived at the port of destination, the consignee found rusts of different degrees on the goods, which were not caused by sea water according to the test report. After Conor Shipping and the consignee reached a compromise on the goods damage, Conor Shipping initiated an arbitration in London according to the voyage charter contract between Conor Shipping and Chinaland Shipping. The arbitral tribunal made two arbitral awards successively on the cause of the damage and the amount of the loss. According to the arbitral awards, Chinaland Shipping should bear 100% liabilities for the loss and indemnify Conor Shipping for the loss of the goods, the shipping period loss, the legal cost arising from the arbitration, and other associated losses. Chinaland Shipping paid the indemnity to the ship owner according to the arbitral awards. Then, Chinaland Shipping claimed against Tiangang for indemnification based on the letter of guarantee issued by Tiangang.
[Judicial decision]
Tianjin Maritime Court made the judgment that the defendant Tianjin Tiangang International Trade Co., Ltd. should pay the plaintiff Chinaland Shipping Agency Co., Ltd. USD 314,445.785 and associated interest, HKD 171,660 and associated interest, and RMB 10,000 and associated interest, and other claims of the plaintiff Chinaland Shipping Agency Co., Ltd. were rejected.
[Significance]
In this case, two rules were clarified during the examination and liability determination processes, and have certain value of reference for handling of similar cases: Firstly, when using arbitral award made by foreign arbitral body as evidence in a related case, even if such award is recognized by the court, the court should still examine the facts stated in the arbitral award by itself instead of directly quoting such facts; secondly, even if there is an agreement on bearing of legal costs such as cost of indemnification, it should not be simply judged that such costs shall be solely borne by a party if the other party is also liable for the accident, and the liability ratio between the two parties should be considered when determining how should the costs be shared.
6. The voyage charter contract dispute case between Zhenhua Logistics Group Co., Ltd. and Zhongyou BSS (Qinhuangdao) Petropipe Co., Ltd.
[Case brief]
On January 12, 2016, the controlling shareholder (a company in Baoji) of Zhongyou BSS (Qinhuangdao) Petropipe Co., Ltd. (“Zhongyou BSS”) started bid invitation for sea transport of pipes for a foundation pipe project in Egypt and the associated port operation and pipe binding. On January 22, 2016, Zhongyou BSS issued a letter of acceptance to Zhenhua Logistics Group Co., Ltd. (“Zhenhua Logistics”), but the two parties did not sign a written contract. On February 15, 2016, totally 68 pipes with total weight of 2,868.499 tons were loaded to the “CARIBBEAN ID” ship in Qinhuangdao Port. According to the bill of lading, the port of unloading is Port Said in Egypt. This port is located on the bank of the Mediterranean on the north of the Suez Canal, and consists of the east part and the west part separated by the estuary of the Suez Canal. After the ship left the port of loading, Zhongyou BSS instructed to unload the goods in the east part of Port Said. Zhongyou BSS confirmed that, if it was instructed to unload the goods in the east part of Port Said, Zhongyou BSS should bear all the port expenses incurred in the east part that exceeded the port expenses to be incurred in the west part, should provide by itself appropriate unloading tools, and should ensure unloading of the goods within 24 hours after the ship arrived at the port. Zhongyou BSS further confirmed that Zhongyou BSS should pay indemnity for any losses such as those arising from ship delay and suspension of unloading not attributable to the ship after expiration of the 24-hour free period, except those caused by weather factors.
At 19:30 on March 20, 2016, the “CARIBBEAN ID” ship arrived at Port Said. Due to the tight berth in the east part of Port Said, the ship dropped anchor in the west part of the port. The unloading of the goods was started at 14:30 on April 1 and completed at 21:50 on April 3, and the ship left the port on the very day when the unloading was completed. The costs and expenses incurred during the above unloading process included barge rent of USD 90,000, crane cost of USD 36,000, port charge for barge of USD 23,264.64, and Suez Canal charge of USD 10,278.05. As Zhongyou BSS refused to pay these costs and expenses, Zhenhua Logistics started a lawsuit in Tianjin Maritime Court on July 13, 2016, requesting the court to order Zhongyou BSS to pay the freight, port charges, demurrage charges and other costs and expenses amounting to RMB 5,127,083.
[Judicial decision]
Tianjin Maritime Court made the judgment that the defendant Zhongyou BSS (Qinhuangdao) Petropipe Co., Ltd. should pay the plaintiff Zhenhua Logistics Group Co., Ltd. sea transport freight of USD 344,219.88, binding cost of RMB 119,656.53, port charge of RMB 774,341.92, and ship demurrage charge of USD 129,500, amounting to USD 473,719.88 and RMB 893,998.45 in total, and the associated interest, and other claims of Zhenhua Logistics were rejected.
[Significance]
This case is a maritime dispute occurred during participation of a domestic enterprise in the “Belt and Road” initiative. The two parties had a major dispute concerning the nature of the contract. Considering the main contents of the underlying contract in this case, and after analyzing the difference between freight forwarding contract and marine freight transport contract, the Court finally determined that the underlying contract was a voyage charter contract under marine freight transport contract in nature. The judgment result of this case is conducive to regulating domestic enterprises’ participation in maritime transport activities under the “Belt and Road” initiative, and has a positive guiding effect in promoting the export-oriented development of enterprises.
7. The maritime cargo transport contact dispute case between Navigator Insurance Company and Kawasaki Kisen Kaisha, Ltd.
[Case brief]
In December 2015, the seller, KEPPEL, entrusted SARJAK to transport a set of waste incineration equipment from GDYNIA Port in Poland to Tianjin Xingang. On December 22, VGL SP. Z O.O. issued a bill of lading as the agent of the carrier SARJAK, and the bill of lading stated that the carrier ship was the ship WES AMELIE, the shipper was KEPPEL, and the consignee was “To Order”, the goods were a set of garbage incineration equipment loaded in eight containers, and the carrier’s responsibility interval is CY/CY.
SARJAK did not actually transport the goods, but entrusted the defendant Kawasaki Kisen Kaisha, Ltd. to transport the goods. The defendant Kawasaki Kisen Kaisha, Ltd. issued a sea waybill, which stated that the shipper was VGL SP. Z O.O., the carrier ship was the ship WES AMELIE, the port of departure was GDYNIA port, the port of destination was Tianjin Xingang, and the responsibility interval was CY/CY. The goods were first transported by the ship WES AMELIE to Rotterdam Port in the Netherlands, and then loaded onto the ship COSCO HARMONY, which transported the goods to Tianjin Xingang. The registered owner of the ship COSCO HARMONY was SEAPAN CORPORATION. COSCO CONTAINER LINES COMPANY LIMITED had signed master agreements on ship sharing and space allocation with the defendant in this case and another two shipping companies. The goods were found damaged at the consignee’s factory in Beijing. The plaintiff Navigator Insurance Company obtained the right of subrogation after compensating the insured’s losses.
[Judicial decision]
Tianjin Maritime Court made the judgment that the claims of the plaintiff Navigator Insurance Company were rejected.
[Significance]
This case is a dispute about subrogation in maritime cargo transport insurance due to interchange of shipping spaces in the sea route along the “Belt and Road”. Since the Maritime Law does not clearly stipulate the rights and obligations of the parties under shipping space interchange, in maritime judicial practice, disputes arising from the legal status of the space providers and users are frequently seen. In the opinion of the Court, Article 42 of the Maritime Law does not clearly define the “actual carrier” as a person “actually” engaged in cargo transport. The “actual carrier” should not be simply and mechanically interpreted as a person who uses its own or leased ships for transportation, but should also include the actual organizers and participants of maritime cargo transport. In the event of shipping space interchange, the space user is the party that issues the transport documents and organizes the transport, and the space provider is the party engaged in the actual transport of the goods. The space user should be identified as the actual carrier, and should bear the liability of actual carrier when the claimant claims against the actual carrier for the loss, damage or delayed delivery of the goods. This case has a reference significance for accurately identifying the actual carrier and allocating liabilities under shipping space interchange.
8. The maritime cargo transport contract dispute case between Tianjin Yinlong Prestressing Materials Co., Ltd. and Dalian Peihua International Logistics Co., Ltd.
[Case brief]
In June 2013, the plaintiff booked shipping space from the defendant through its port of loading agent Ouhua Tianjin Company, and entrusted the defendant to transport 50 containers of steel materials from China to Turkey. On June 28, the defendant issued an order bill of lading numbered TMEI13064401ZM to the plaintiff, stating that the shipper was the plaintiff, the carrier was the defendant, the notify party was Turkey TCDD, and the port of unloading was LANDED IZMIR PORT, TURKEY. On the same day, the defendant signed a transport contract with Arab Airlines, a party outside the case, and entrusted it to actually carry the goods involved. Arab Airlines issued to the defendant a registered bill of lading numbered CNXGG062768, stating that the shipper was the defendant, the carrier was Arab Airlines, the consignee was Noah Company, and the port of unloading is ALIAGA IZMIR, Turkey. The goods were unloaded at the port of ALIAGA IZMIR, Turkey from August 21 to 22, 2013. Due to the defendant’s refusal to transshipment, the plaintiff entrusted its agent in Turkey, EDA, on September 17, 2013, to transport the goods to Izmir Port and deliver them to the consignee TCDD, and additional costs were incurred, which were paid by EDA to the relevant companies on behalf of the plaintiff from September to October 2013. On October 10, 2014, EDA confirmed that it had received all the above costs from the plaintiff.
Izmir Port and Aliaga Port are two independent ports, administered by different port authorities and customs authorities. Izmir Port, also known as Alsancak Port, is a Turkish state-owned port operated by the state-owned company TCDD. Ariaga Port, a port about 50 kilometers north of Izmir, Turkey, is operated by the private company EgeGübreSanayi A.S. If the consignee is TCDD, the cargo unloaded to Izmir Port will be exempted from relevant operating expenses.
The plaintiff had three batches of steel materials shipped from China to Turkey for delivery to TCDD. The goods involved in this case were the second batch, and the other two batches were respectively shipped on April 28 and October 26, 2013, with bills of lading issued accordingly. According to the bills of lading, for both batches the shipper was the plaintiff, the notify party was TCDD, the port of loading was Tianjin Xingang of China, and the port of unloading was Izmir Port, Turkey. Both batches were delivered to Izmir Port, Turkey and delivered to the consignee TCDD. Except for prepaid freight, the expenses paid by EDA on behalf of the plaintiff at the port of unloading for the both batches were unloading fee, document fee, unloading supervision fee, equipment inspection and control fee, and port security fee.
[Judicial decision]
Tianjin Maritime Court made the judgment that the defendant Dalian Peihua International Logistics Co., Ltd. should compensate the plaintiff Tianjin Yinlong Prestressing Materials Co., Ltd. for the economic loss of RMB 386,393.05 and the associated interest, and other claims of the plaintiff Tianjin Yinlong Prestressing Materials Co., Ltd. were rejected.
[Significance]
This case is a maritime transport contract dispute involving the “Belt and Road” initiative. In this case, the plaintiff and the defendant had a major dispute over the clauses on the port of unloading in the bill of lading, and it is essential to clarify which port was the “IZMIR PORT” agreed in the contract for judging whether the defendant had breached the contract. In strict accordance with the relevant provisions of the Contract Law, the Court comprehensively used the methods of literal interpretation and purpose interpretation and considered the transaction habits to interpret the terms, and finally determined that the “IZMIR PORT” referred to Izmir Port in Turkey. This case has a reference significance for the trial of contract disputes involving the “Belt and Road” initiative.
9. The maritime insurance contract dispute case between Italy International Import and Export Co., Ltd. as the plaintiff and Shipping Insurance Business Operation Center of China Pacific Property Insurance Co., Ltd. and China Pacific Property Insurance Co., Ltd. as the defendants
[Case brief]
On November 27, 2017 and January 31, 2018, the plaintiff Italy International Import and Export Co., Ltd. (“the International Company”) signed two sales and purchase contracts with Zhongxing Metal Company, a party outside the case, about the purchase of 50 tons of copper wire scraps by the International Company. Zhongxing Metal Company issued proforma invoices numbered ZX171129 and ZX2018013102. The International Company paid the contract price. On March 5, 2018, Shipping Insurance Operation Center of China Pacific Property Insurance Co., Ltd. (“CPIC Operation Center”) and China Pacific Property Insurance Co., Ltd. (“CPIC”) issued a cargo transport insurance policy numbered AHYXH0124218Q029136C, stating that the insured was the International Company, the insurance value of USD 300,000, the insurance covered all risks, the sailing date should be the date stated in the bill of lading, the transportation means was the Ship EASLINE NINGBO on the 1810E voyage, the transport route was from Tianjin, China to Genoa, Italy, the cargos were copper wire, the container number was TCKU1333075/TCLU3412329, the bill of lading number was KKLUTSN398874, and the deductible amount was USD 200 or 10% of the loss, whichever was higher. According to the insurance policy, this insurance policy bears the “warehouse-to-warehouse” liability. In other words, the insurance takes effect from the departure of the insured goods from the warehouse or storage stated in the insurance policy, covers sea, land, inland water and barge transport during normal transportation processes, and lasts until the goods arrive at the final warehouse or storage of the consignee at the destination stated in the insurance policy or other storage place used by the insured for distribution, dispatch or irregular transport of goods.
The goods involved in the case were packed, counted, sealed and transported to the carrier’s yard by the shipper Zhongxing Metal Company itself. On February 27, 2018, SGS inspectors participated in the packing process of the goods under the proforma invoice numbered ZX171129, and issued an inspection report stating that the shipper loaded 14 pallets of copper wire scraps in the handover warehouse in Daye, and no abnormalities were found during the loading process. After loading of the cargo, the shipper applied a lead seal numbered TAP35853, and the container involved was stored in the depot of the handover warehouse in Daye. On March 5, 2018, the shipper transported the two containers involved in the case to the carrier’s yard of Tianjin Port Terminal Company. The gross weight of the cargo was 47 tons, and the net weight was 29.6 tons after deducting the vehicle weight of 13 tons and the weight of the two containers (2.2 tons each). After receiving the goods, the carrier issued the bill of lading numbered KKLUTSN398874, stating that the shipper was Zhongxing Metal Company, the consignee was the International Company, the vessel and voyage was the 1810E voyage of the ship EASLINE NINGBO, the port of shipment was Tianjin, China, the port of unloading was Genoa, Italy, the cargo was copper wire loaded in two 20-feet containers numbered TCKU1333075 and TCLU3412329, and the lead seal numbers were TAP35852 and TAP35853.
On April 13, 2018, the ship EASLINE NINGBO arrived at Genoa Port, Italy for unloading. After customs inspection, it was found that the containers concerned were loaded with bricks instead of the copper wire scraps as agreed in the contract, and the lead seal numbers of the containers were changed to 007223 and 007225. A total of EUR14,146 was incurred during the inspection and inspection process at the port of unloading. As the International Company failed to pick up the goods, it filed an insurance claim with the defendant, and the defendant refused to pay the insurance compensation.
[Judicial decision]
Tianjin Maritime Court made the judgment that the claims of the plaintiff Italy International Import and Export Co., Ltd. were rejected.
[Significance]
This case is a maritime insurance contract dispute due to secret replacement of cargo during maritime cargo transport involving the “Belt and Road” initiative. In this case, as international shipping involves many processes such as shipping by the seller, tallying by freight forwarding agency, short-distance transport, and port collection, it is impossible to find out where the secret replacement of cargo occurred. Thus, the Italian cargo owner sued the insurance company in accordance with the insurance contract. After investigating the changes in the weight of the cargo at various major points during the container transport, the Court determined that the replacement of the cargo occurred before its transport to port in accordance with the principle of high probability of civil litigation, and excluded the insurance liability period and the liability of the insurer.
In this case, the starting and ending points of the “warehouse-to-warehouse” clause of the insurance contract are defined, and the insurance liability period is determined to be the land transport period from the yard of the loading forwarder to the port, but the container loading period in the yard of the loading forwarder does not belong to the insurance period. The trial of the case has a reference significance.
10. The maritime commercial contract dispute case between Maersk Line Co., Ltd. as the plaintiff and Tianjin Branch of Jincheng International Logistics Service Co., Ltd. and the third party Jincheng International Logistics Group Co., Ltd. as the defendants
[Case brief]
On October 31, 2017, Maersk Line Co., Ltd. (“Maersk”) and Tianjin Branch of Jincheng International Logistics Service Co., Ltd. (“Jincheng Tianjin Branch”) signed the Compensation Grace Agreement. According to the agreement, due to the negligence of Jincheng Tianjin Branch, two sets of original bills of lading, which were not subject matter of the case, were printed, so the Booking Agency Agreement between Maersk and Jincheng Tianjin Branch should be terminated immediately. However, since no actual damage was caused, Maersk was willing to provide Jincheng Tianjin Branch with a grace period of 6 months. Jincheng Tianjin Branch would pay the container demurrages under 3 bills of lading to Maersk by March 18, 2018, of which the demurrage under the first bill of lading was USD 85,961.75, and the demurrage under the second bill of lading was USD 365,42.50. As the cargo under the third bill of lading had not been picked up by anyone after it was unloaded to Doha, Qatar on March 22, 2017, the demurrage had not been finalized. For the maritime cargo transport under the first two bills of lading, a third party booked space from Maersk on behalf of the shipper. For the maritime cargo transport under the third bill of lading, another third party, Pan Asia Company, booked space from Maersk. Maersk had not claimed the expenses under the first two bills of lading from the third party. The third party was not a related party of Jincheng Tianjin Branch, and had not been authorized to enter into a debt obligation contract with Jincheng Tianjin Branch for the related expenses incurred under the two bills of lading. Maersk sued and claimed the aforesaid expenses from Jincheng Tianjin Branch, and Jincheng Tianjin Branch requested cancellation of the agreement on the grounds that the agreement was obviously unfair.
[Judicial decision]
Tianjin Maritime Court made the judgment that the claims of the plaintiff Maersk Line Co., Ltd. were rejected.
[Significance]
At present, about 90% of the traded commodities in the world are transported by sea, and a healthy and orderly maritime transport environment is of great significance to the in-depth implementation of the “Belt and Road” initiative. In this case, by comprehensively examining whether the content of the contract is obviously unfair and the effectiveness of the contract, and fully applying the legal principle of fairness, the Court accurately determined whether the rights and obligations of the parties in the commercial relationship are unequal, and effectively safeguarded the principle of fairness that should be followed in foreign-related economic activities. This case has a positive significance for guiding the “Belt and Road” initiative participants to operate honestly and legally, and for maintaining good order of the maritime transport market.
[1] Cases involving the “Belt and Road” initiative include: cases in which one or more parties are from countries along the “Belt and Road”, and cases in which the port of departure or port of destination port and other connecting points are in countries along the “Belt and Road”.