[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.