[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.