Plaintiff: Shenzhen Xunlong Shipping Ltd.

Address: Shekou 2nd Floor, Shenzhen, Guangdong Province.

Legal Representative: Cui Tieyin, general president

Authorized Deputy: Zhao Jingsong, legal adviser

Authorized Attorney: Deng Xiaomao, attorney-at-law of Qizheng Law Firm, Guangdong Province

Defendant: Fangchenggang Jinwan Trading Ltd.

Address: Xingang Road, Jinsha County, Gangkou District, Fangchenggang City, Guangxi Chuang Regional Autonomy

Legal Representative: Weng Zhaojin, general president

Authorized Deputy: Yin Nianzhang, male, Han nationality, teacher of Zhanjiang Ocean University

Defendant: Guangxi Ocean Shipping Company

Address: 

Legal Representative: He Jianpin, general president 

Authorized Attorney: Yuan Xiaoyong, attorney-in-law of Lijiang Law Firm


    This Court, after filing the cases of the controversy over the damages of collision Shenzhen Xunlong Shipping Ltd. (plaintiff) v. Fangchenggang Jinwan Trading Ltd. (defendant, hereinafter referred to as Jinwan Ltd.) and Guangxi Ocean Shipping Company (defendant, hereinafter referred to as Shipping Company) on January 9, 2001, has duly organized a collegial panel and summoned the parties concerned to exchange the evidence on the court on May 28, and held two public trials on March 29 and November 12 respectively. Zhao Jingson, the authorized deputy of the plaintiff, Deng Xiaomao, the authorized attorney of the plaintiff, Weng Zhaojin, the legal representative of the defendant Jinwan Ltd., Yin Nianzhang, the authorized deputy of the defendant Jinwan Ltd., Yuan Xiaoyong, the authorized deputy of the defendant Shipping Company, appeared at the trials for the hearing of the case. The case has now come to a close.

    The plaintiff alleges: On September 7, 2000, the plaintiff??s ?°M/V Xunlong 2?± set sail from Kong??ao Port at Hongkong at 21:00. After entering the north sea-route, a small-size cargo ship, i.e. ?°M/V Xiongchang 1?± belonging to the defendant, was found to sail toward the starboard of ?°M/V Xulong 2?±. ?°M/V Xunlong 2?± took measures for dodging as soon as possible by whistling one time and decelerating at once, but two ships collided at 21:06. The reasons of the collision are that ?°M/V Xiongchang 1?± neglected to keep a normal lookout, to sail at the safe speed, to cross the sea-route at the right time and to take effectual measures for dodging when existing the risk of collision. The defendant shall bear the liability for the maritime affair because its ship violated relevant regulations on the international rules on dodging collision on the sea. After the collision, ?°M/V Xunlong 2?± reported to Hongkong Maritime Affair Bureau in time and applied CCS to examine on September 8. The total sum for repairing and the damage of sailing date to ?°M/V Xunlong 2?± was HK$3,066,002.10. The plaintiff claims the court to decide the defendants to compensate above damages and bear the cost of this case.

   The defendant Jinwan Ltd. affirms the fact of collision. However, it alleges that the plaintiff shall bear the leading liability for the collision because the plaintiff sailed at high speed in the sea-route and neglected to keep a lookout, whereas the defendant shall bear secondary liability. Those charges for repairing that do not relate to the damages of collision shall be excluded, such as the charges for repairing the leading propeller and for replacing the window curtain and carpet. The plaintiff??s indirect damage shall not be included into the sum of compensation. The defendant shall only burden the damage of collision in the light of the reasonable rate to the liability for collision.

    The defendant Shipping Company alleges: It shall bear no liability for the controversy of collision because it is neither the owner of ?°M/V Xiongchang 1?± nor the operator of above ship and those sailors on ?°M/V Xiongchang 1?± are not assigned by the company.

    The following facts are affirmed: On September 7, 2000, the plaintiff??s ?°M/V Xunlong 2?± with 35 passengers set sail from Kong??ao Port at Hongkong to Shekou at Shenzhen at 21:00. Liang Zewen, the captain, steered, Zhang Si??an, the chief mate, and Zheng Dong, the sailor, were in charge of the instrument for watching in dark and for radar inspection, and Fan Dongben, the engineer, was in charge of inspecting the machine. After entering into the north sea-route of Victoria Port, ?°M/V Xunlong 2?± sailed along the sea-route from southeast to northwest in the direction of 320?? and closed to the 4th buoy at the 30-knot speed. (?°M/V Xunlong 2?± obtained the certificate on speed exemption issued by Hongkong Sea-route Supervision Department by which it was permitted to sail in the sea-route at the 30-knot speed.) The defendant??s ?°M/V Xiongchang 1?± was steered by Su Weicheng, the second mate. Gao Yingguang, the captain, was in charge of control the speed of engine and Weng Zhaojin, the sailor, was in charge of radar inspection. ?°M/V Xiongchang 1?± set sail from Kuiyong Port at Hongkong by carrying cargo at 20:35 to the anchorage ground. The weather of Hongkong water area at that time was benign. The wind direction was northeastward and the wind power was at 4 level. The wave was smooth, and the visibility was 3-5 sea miles. At 21:07, at the point of 22??09??12"N/114??07??30"E, ?°M/V Xunlong 2?± found that ?°M/V Xiongchang 1?± was about 0.4 sea miles in front of its starboard. Although ?°M/V Xunlong 2?± whistled one time and dodged by steering leftward, it was too late to be collided by ?°M/V Xiongchang 1?± at the locations between its 18th and 23rd rib on starboard. It was about 20 seconds between finding ?°M/V Xiongchang 1?± and colliding. According to its own statement, ?°M/V Xiongchang 1?± sailed in the direction of 220?? and at the speed of 4-5 knots, and there were only 10 minutes after finding the yellow signal lamp and red-green board lamp of ?°M/V Xunlong 2?±. In the light of the record inspected by Hongkong Maritme Affair Office, neither ships decelerated or dodged obviously before the collision. After being collided, ?°M/V Xunlong 2?± was permitted specially to sail at low speed in order to send the injured passenger back to Kong??ao Port for treatment, and then was towed to Hongkong Youlian Dockyard Ltd. (hereinafter referred to as Youlian Dockyard) for repairng at that night.

    On September 8, 2000, the plaintiff entrusted CCS, together with China Examination Ltd. (it remandated Hongkong Maritime Affair Notarizaiton Ltd. for examining on the spot) entrusted by Hua??an Property Insurance Agent, the insurer for ?°M/V Xunlong 2?±, to examine the damage of collision, and issued examination report in written form respectively. Being affirmed by both parties in the court, the examination report filed as 2000BS2256 issued by China Examination Ltd. is adopted as the written evidence for the average of ?°M/V Xunlong 2?±. It is said in above report: ?°M/V Xiongchang 1?± collides the locations of 18th to 20th ribs on ?°M/V Xunlong 2?± at the angle of 90?? because the damaged locations are between 18th to 23rd ribs, and all damaged locations are beyond the water level. There are 8 items including more 30 damaged locations on ?°M/V Xunlong 2?± in term of the report and the assumable charge for repairing is HK$1,350,000. Then, the plaintiff entrusted CCS to examine ?°M/V Xiongchang 1?±, but Gao Yingguang, the captain of ?°M/V Xiongchang 1?±, refused the examinators to get on. Moreover, Gao Yingguang and Weng Zhaojin had admitted they had never been trained to inspect radar instrument or only for two days when being acquired by Hongkong Maritime Affair Office and did not know the basic common sense about steering ship. Gao Yingguang also admitted in the inspection report on maritime affair that the oil paint on the left fore of ?±M/V Xiongchang 1?± was rub away slightly.

    From September 8 to October 15, 2000, ?°M/V Xunlong 2?± was repaired at Youlian Dockyard. The plaintiff decided to stop repairing for transportation during the holidays of National Day, and the ship left Youlian Dockyard from September 30 to October 8. The plaintiff had to hire other passenger ships for replacing ?°M/V Xunlong 2?± from other companies two times in order to maintain the transportation between Shekou to Hongkong in the course of repairing from September 8 to September 29 and from October 9 to October 15.

    The plaintiff submits all relevant documents to this court, such as the towage to Youlian Dockyard, charge for repairing, cost for hiring other ships in the course of repairing, charge for using port, cost for fuel and lube, charge for examining to CCS, charge for arranging accommodation for those passengers involved in the collision, charge of transportation and communication for dealing with the collision, charge for investigating maritime affair, charge for legal consultation, counsel fees, etc. The total sum is HK$3,066,002.10, including the towage of HK$45,745, and charge of HK$73,020 for repairing life rafts; charge of HK$1,500,880 for repairing the ship to Youlian Dockyard (including charge for repairing leading propeller, charge for replacing releasers and joining to life rafts, charge for replacing window curtains and carpets for cabins, part charge for repairing engine, charge for temporary transportation during holidays of National Day and relevant charges for mooring, in total HK$151,402.50); charge of HK$600,00 and HK$190,911 for hiring other ships to replace ?°M/V Xunlong 2?± and relevant charges for fuel of HK$391,708, for lube of HK$9,894.80, for using port of HK$119,017 in the course of repairing; charge of HK$32,100 for entrusting CCS to examine; charge of HK$15,638.30 for arranging accommodation for those passengers involved in the collision; charge of HK$15,020 on transportation and communication for dealing with the collision, charge of HK$2,931 for investigating maritime affair, charge of HK$5,000 for legal consultation and charge of HK$64,137 for counsel fees.

    It is also affirmed that ?°M/V Xunlong 2?± is a high-speed passenger ship with double floors, made of aluminum alloy in Norway in August of 1998. The length of ship is 38 meters, the width is 11.20 meters and the depth is 3.90 meters. The total tonnage is 531.tons and the net tonnage is 159 tons. The power is 3,152 kilowatts. The date of obtaining the title deed is August 14, 1998, and the owner recorded on the deed is the plaintiff.

    ?°M/V Xiongchang 1?± is a ship for carrying dry goods and is registered in Fangchanggang City, Guangxi Chuang Regional Autonomy. It is made in Viet Nam with the length of 53.55 meters, the width of 7.63 meters and the depth of 3.20 meters. The total tonnage is 298 tons and the net tonnage is 176 tons. The power is 224 kilowatts. There are two sets of ship certificate. On one set including Registration Certificate on Ship Ownership of the People??s Republic of China (the date of obtaining the ownership June 12, 1996) and Certificate on Ship Nationality of the People??s Republic of China (the term of validity from June 12, 1996, to June 12, 2001), the defendant Jinwan Ltd. is the registered owner and the legal representative of the owner is Weng Zhaojin. On the other set including Certificate on Ship Nationality of the People??s Republic of China (the term of validity from November 21, 1997, to November 20, 2002) and several Ship Certificate for shipping to Hongkong and Macau (the term of validity from May of 1997 to May 30, 2000, from September 18, 1997 to September 17, 1997, from May 30, 2000, to September 30, 2002, etc.), the registered owner and operator is the defendant Shipping Company. Jinwan Ltd. is a private enterprise, which signed an agreement on ship management with Shipping Company on November 20, 1997. It is stipulated that: ?°M/V Xiongchang 1?± belongs to Jinwan Ltd., while Shipping Company transacts relevant procedures on registration and operation for applying transportation in the name of Jinwan Ltd.; the scope for transportation includes along the coastal areas in China (including Hongkong and Macau), and from Chian to Viet Nam; the term of management is from 1997 to 1998; Shipping Company is paid ?¤30,000 for management by the owner and operator of ?°M/V Xiongchang 1?± every year. Then, ?°M/V Xiongchang 1?± registers in the name of Shipping Company and obtains the license for transportation, but has never paid above charge to Shipping Company. After the term of management expired, Shipping Company neither applies to withdraw the license for transportation in its name and other relevant certificates nor declares to cancel its management relation with Jinwan Ltd. in public. Jinwan Ltd. is always engaged in ocean transportation in the name of Shipping Company. In fact, Shipping Company does not bear the responsibility for supervising ?°M/V Xiongchang 1?±.

    Above facts have been affirmed by the parties and the collegial panel. The evidences involved in this case include those submitted by the plaintiff, such as two sets of ship certificates and certificates on ship nationality, logbook of ?°M/V Xunlong 2?±, Report on Accidentally Maritime Affair filled out by both parties after the collision, the idea on confirming the collision issued by Hongkong Maritime Affair Office, the recorded chart inspected by radar, the list and voucher of charges for repairing the ship by Youlian Dockyard, the examination reports issued by CCS and China Examination Company, and those submitted by the defendants, such as the agreement on ship management, material on investigation issued by Hongkong Maritime Affair Office, and the written notes about the hearing.

   This Court holds that this case relates to the controversy over the damage of collision. Since two defendants are companies in Guangxi, China, this court is entitled the jurisdiction in term of relevant laws when the plaintiff brings the litigation to this court. Although the maritime affair happens in the water region of Hongkong, both parties live in mainland and the registered ports lie in mainland. It is prescribed in Clause 3 of Article 273 of Maritime Code of the People??s Republic of China that the case on the controversy over the damage of collision shall apply to the law of flag country only if the nationality of both ships involved in the case are the same no matter the spot on which the collision happens. Therefore, this case shall apply to Convention on the International Regulations for Preventing Collisions at Sea (1972) and relevant laws of China.

    It is not in the nature of things that ?°M/V Xiongchang 1?± is objectively or factually seaworthy even if it is managed in other??s name because its actual owner, i.e. the defendant Jinwan Ltd., is not qualified for being engaged in ocean transportation. All crew, from the captain to the sailor on duty, do not master professional technique and basic knowledge for ocean transportation, are unable to inspect with the radar system, and are unfamiliar any regulations on lookout and on crossing narrow sea-routes prescribed in Conventions on the International Regulations for Preventing Collisions at Sea, even do not know at all. While crossing the sea-route, the crew neglect to observe carefully the situations and, therefore, fail to find ?°M/V Xunlong 2?± in high speed in time. There are only ten seconds from its finding the latter to the collision. Till now, the collision has been unavoidable. In term of Article 5 and Clause 4 of Article 9 of Conventions on the International Regulations for Preventing Collisions at Sea (1972) prescribing that the ships shall not cross the narrow sea-route in case that it would disturb the safety of any other ships sailing in the sea-route, ?°M/V Xiongchang 1?± shall bear most liability for negligence because it neglect to keep a lookout and shall not cross the sea-route while other ships are sailing. It does not indicate that ?°M/V Xunlong 2?± is entitled to sail at high speed in the sea-route no matter what time and what situation though Hongkong Sea-route Supervision Department issues the certificate on speed exemption which permits it sails at 30-knot speed in the sea-route. It shall sail at safe speed according to the change of time and spot while the visibility is lower at night than in daytime and it sails in such busy sea-route such as the one at Victoria Port. In fact, it leaves alone the safety of itself and other ships and is neglect to the maritime affair. When it finds the defendant??s ship, there are only 0.4 sea miles. It indicates that ?°M/V Xunlong 2?± neglects to keep a lookout effectually. The ship sailing at 30-knot speed can do nothing to avoid the collision when the distance between two ships is 0.4 sea miles. Till now, the collision has been unavoidable. Therefore, ?°M/V Xunlong 2?± shall bear certain liability for negligence. The plaintiff alleges that ?°M/V Xunlong 2?± whistles one time to remind the other party, but it is prescribed in Convention of the International Regulations for Preventing Collisions at Sea that the hooter must be whistled shortly and urgently for five times, even supplemented by short and urgent flash for five time, under this condition. It is obviously ineffectual by merely whistling for one time. Although ?°M/V Xunlong 2?± steers to the left at once, the fact that the dependant??s ship collides on it at the angle of 90?? indicates that the measure is ineffectual. Obviously, it is impossible for the ship sailing at high speed to take effectual measures for dodging under the condition like this. The evidences also show that both ships fail to alter their route or decelerate successfully till they collide. In accordance with the principles that the negligence arising to the collision is the leading criterion for deciding the ratio of liability and whether to take proper measures to avoid the collision is the secondary criterion for deciding the ratio of liability, along with the provisions in Article 5, 6, 7, 8, 9 and 34 of Convention of the International Regulations for Preventing Collisions at Sea (1972), both parties shall bear liability for the collision, among which the defendant??s ship shall bear 70 percent whereas the plaintiff??s ship shall bear 30 percent. This court do not support the plea claimed by the defendant Jinwan Ltd. that the plaintiff??s ship shall bear most liability because it does not conform to the fact what the court finds.

    Although it costs the charge of HK$1,500,880 for ?°M/V Xunlong 2?± paying to Youlian Dockyard, those charge for repairing the leading propeller and engine which lie under the water level, replacing the releaser and joining to the life rafts and window curtain and purchasing new carpet shall not been counted for repairing the damage caused by the collision because all damages to the ship caused by the collision lie above the water level. The charge resulted from the temporary transportation during the holidays of National Day shall not been counted because it is not the necessary damage caused by the collision. The charge for mooring shall not been counted because it is the cost expenditure for operation. The charges of HK$151,402.50 mentioned above shall not been counted into the damage of collision and shall be excluded from the charge for repairing to Youlian Dockyard, namely, the charge for repairing ?°M/V Xunlogn 2?± is HK$1,349,477.50 and shall be protected in the light of the ratio of the liability for collision. This Court supports the plaintiff??s claims for the towage of HK$45,745, the charge of HK$73,020 for repairing the life rafts, the charge of HK$32,100 for examination and the charge of HK$15,638.30 for arrange accommodation for the passengers involved the collision because above charges are necessary resulted from the collision. The party who shall bears the liability for collision shall compensate the charge of HK$600,000 for hiring other passenger ships to replace ?°M/V Xunlong 2?± from September 8 to September 29, 2000, because it can be considered as the damage for the sailing date. Since ?°M/V Xunlong 2?± can be used to transport during the holidays of National Day, which indicates that it is able to sail after being repaired, it is unnecessary to be sent to the dockyard again. Thus, the charge of HK$190,911 for hiring other passenger ship cannot be supported. The charge of HK$391,708 for fuel and HK$9,894.80 for lube during the period of hiring ships and the charge of HK$119,017 for using the port are the cost expenditure which does not relate to the damage of collision and shall not be protected. This Court does not support the plaintiff??s claims for the charge of HK$15,020 on transportation and communication for dealing with the collision, charge of HK$2,931 for investigation, charge of HK$5,000 for legal consultation and charge of HK$64,137 for counsel fees because the plaintiff is unable to submit enough evidences. In sum, the damage for repairing and other charges resulted from the collision is HK$2,115,980.80 in total, and ?°M/V Xiongchang 1?± shall compensate 70 percent, i.e. HK$1,481,186.56.

    The defendant Jinwan Ltd. shall bear the leading liability for compensation because it is the owner of ?°M/V Xiongchang 1?±. Although the defendant Shipping Company is not the owner of the ship, it agrees and helps Jinwan Ltd. to register ?°M/V Xiongchang 1?± in itself name, which makes it to be the jural owner of ship who enjoys the capacities of possession, utilization, profit and disposition. Therefore, it shall bear the liability for compensation and reconversion in case the ship is involved into the tort. In addition, Shipping Company is subjectively fault and objectively neglectful because it helps Jinwan Ltd. to obtain the license of transportation and has never supervised the ship actually though it manages the ship for Jinwan Ltd. nominally. After the agreement expires, it neither applies to withdraw above license and relevant certificates in its name nor declare to cancel the relation of management in public, which makes it possible for Jinwan Ltd. to continuously transport in its name. It can be affirmed that two defendants prolong the term of agreement and Shipping Company is still obligate to manage ?°M/V Xiongchang 1?± till the collision. As a result, Shipping Company shall bear the joint and several liability for compensation.

    This Court decides as follow pursuant to Article 169 of Maritime Code of the People??s Republic of China prescribing that both parties shall bear the liability for compensation at the ratio of negligence in case they are both fault to the collision and that both parties shall bear the liability for compensation at the ratio of negligence prescribed in the former clause in case the collision causes the damage of the collided ships and those goods on board, and Article 130 of General Principles of Civil Law of the People??s Republic of China prescribing that they shall bear joint liability if two or more persons jointly infringe upon another person's rights and cause him damages:

    1. The defendant Jinwan Ltd. shall compensate the plaintiff Xunlong Ltd. the total sum of HK$1,481,186.56 for the damage for repairing and relevant damages. The defendant Shipping Company shall bear the joint and several liability. Above compensation shall be paid of in ten days after the judgement becoming effective;

    2. The plaintiff??s other claims shall be dismissed.

    The cost of this case is ?¤29,340, among which the plaintiff shall bear ?¤9,340, the defendant Jinwan Ltd. shall bear ?¤10,000 and the defendant Shipping Company shall bear ?¤10,000. Two defendants shall pay off to the plaintiff in ten days after the judgement becoming effective. This court will not refund the plaintiff the charge paid in advance.

    If any party refuses to accept this judgement, it may submit its appeal petition to this court within 15 days after service of this judgement, together with a sufficient number of duplicated copies for each person the opposing party to have one copy, and the appeal shall be filed with the Higher People??s Court of Guangxi Chuang Regional Autonomy. The appeal fee of ?¤29,340 shall be submitted in advance within 7 days since the term of appeal expires (the name of account is the special account for litigation fee of Guangxi Higher People??s Court, the number of account is 886100010, the bank is Gucheng Road Branch of Agriculture Bank, Naning City), otherwise it would be regarded as withdrawing the appeal automatically.











Presiding Judge:  Zhang Desheng

Judge:          Zhang Qiancheng

Judge:          Ni Xuewei

Date:           December 19, 2001

Court Clerk:     Xiao Xinbo