[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.