Plaintiff: Shanxi Machinery Import & Export Co.
Address: No.29 Changlezhonglu, Xi??an
Legal representative: Qi Shiliang, general manager
Authorized representative: Sun Weizeng, cadre of Shanxi Machinery Import & Export Co.
Authorized attorney: Zhu Dezhi, attorney-at-law of Ruining Law Firm
Defendant: Oasis (Tianjin) International Trade Ltd. Co.
Address: Room 302, No. 51 Nanxin Building, Huanhuzhonglu, Hexi District, Tianjin
Legal representative: Houbaohua, general manager
Defendant: Toyo Warehouse Co., Ltd
Address: Koku Yilibulei 1-2-3, Nagoya, Aryiqigan County, Japan
Legal representative: Eichi, Chairman of the board
Authorized attorney: Zhu Xiaokong, attorney-at-law of Wanhai Law Firm
Authorized attorney: Zhao Shuyi, attorney-at-law of Xincheng Law Firm, Shanghai
The plaintiff, Shanxi Machinery Import & Export Co. (hereinafter referred to as Shanxi Machinery), sued the defendant, Oasis (Tianjin) International Trade Ltd Co. (hereinafter referred to as Oasis) and TOYO WAREHOUSE CO. LTD. (hereinafter referred to as TWH), for exchanging cargo on marine transportation contract. Tianjin Maritime Court put the cases on record on Dec. 2, 1999. The court constituted collegiate panel and held public hearings. Authorized attorneys of the plaintiff Sun Weizheng and Zhu Dezhi, legal representative of the defendant Oasis Hou Baohua, Zhu Xiaokong and Zhao Shuyi, of defendant, appeared in court and participated in the suit. After the second and before the third hearing, the defendant, TWH, requested the plaintiff??s attorney Zhu Dezhi to withdraw from the case. According to law, the plaintiff??s authorized attorney, Zhu Dezhi, only applied withdrawal by himself, could the court require him to withdraw. Decided by collegiate panel, the court notified the plaintiff??s authorized attorney Zhu Dezhi to withdraw from the case and did not participate in the latter action of the case. But all his procedural activities before the withdrawal still challenge remained valid. Now the case has been finished.
The plaintiff claimed: In Jan. 16, 1999, the plaintiff freighted metal silicon in containers (6X20??) from Tianjin Xingang to Pusan port, South Korea. Vessel ??Victory Star V904E?? took in charge of the cargo. The defendant as the carrier singed and issued the clear bill of lading No. KYCR006. The bill recorded clearly the numbers, seal numbers and the name of metal silicon in of each container.
In Feb. 1999, because issuing bank in Korea refused payment, all bills were returned back. After this, the plaintiff informed the defendant to bring the cargo back to Tianjin. Vessel ??Victory Star V0920W?? took in charge of the cargo. B/L number was: DH99-0518. On June, during unpacking and visual examination, it was found out that containers?? number, parts of the cargos?? outer packing had been changed. With the inspection of commodity inspection and testing bureau in Tianjin and Shanxi, fifty tons of cargo had become clinker and unvalued, which caused great damage to the plaintiff.
The freight had been under the defendant??s responsibility during defendant received the cargo at the loading port till the cargo was handed to consignee at the Pusan port. The plaintiff lost a lot in goods and freight due to the defendant??s failing to fulfill his duty. The plaintiff claimed for compensation of 538,315 Yuan and its interest 28,896.75 Yuan, total 567,211.74 Yuan.
The plaintiff submitted 23 documents to court to prove his claims, facts and arguments, including B/L, commodities inspection report, certificate of the original products, purchase contract, invoices, freight returning notice, bill returning certificate and so on. (See details list)
The defendant, Oasis, argued: According to the B/L of KYCR006, KH99-0518 and records of sea waybill, which plaintiff based to make his point, the contract carrier from Tianjin to Pusan was TWH, and the actual carrier was Namsung Shipping Co., Ltd. In the contract from Pusan to Tianjin, the contract carrier is DAEH LOGISTICS Co. Ltd., and the actual carrier was Hanjin Shipping Co., Ltd. Oasis worked as agent of TWH in China for getting orders and issuing lading bills. In this case, Oasis as an agent issued the lading bill at the port of loading without any misconduct. The contract carrier and the actual carrier did all of the specific work at the unloading port, Pusan. Oasis neither participated nor knew the work. According to related regulations in the Civil Law of the People??s Republic of China, Oasis, as an agent, takes no responsibilities for the loss.
Records of B/L KYCR006 and DH99-0518 as well as marine bill of lading show that the shipping mode of containers is CY-CY. It means the shipper himself loaded the goods at the loading port and the carrier delivered the whole containers at the unloading port. With this shipping mode, the shipper has no reason to claim that the cargos were changed during the navigation. Moreover, the outer packing of cargo did not have any clear indication marks according to the records of B/L. The cargos were changed based on visual inspection at the unloading port claimed by the shipper is against the basic knowledge. According to the messages between plaintiff and the Korea Nonferrous Trade Limited Company (hereinafter referred as KNT), the buyer, KNT, refused to accept the cargo, and the reason is that the quality of delivering cargos does not meet the requirements in the contract. The plaintiff did not tell the truth; instead, he sued the carrier in the name of changing cargo in order to avoid his loss. The action of plaintiff is against the laws.
The defendant, Oasis, submitted to court an agency agreement made between Oasis and TWH, 3 faxes of the concerned cargo between Oasis and the Shanghai representative office of THW.
The defendant, TWH, argued: TWH neither signed any legal documents with Oasis, nor authorized Oasis to issue any lading bills. TWH was neither actual carrier nor contract carrier, so that TWH has no legal relationship with the plaintiff. The cargo was carried from Tianjin Xingang to Pusan, Korea, and was sent into the owner??s bond controlled by Korean customs. The warehousing containers and seals were perfect. According to the customs law of Korea, the Korean customs and the tax institutions both have rights to open the containers for inspection. The owner of the cargo also has rights applying the customs to open the containers for checking. The Korea Inspection Ltd. Co. authorized by Korean government examined the cargo and confirmed the cargo was unqualified. The inspection report and other evidences showed that the cargo arrived Korea and returned Tianjin was the same cargo of the plaintiff. TWH did not change the cargo. The evidences submitted by the plaintiff cannot prove the cargo was qualified before loading. In fact, it is purchase contract instead of contract of carriage. TWH has no misconduct, and should not take the civil responsibility.
The defendant, TWH submitted court 79 evidences to support his claim including warehousing entry and departure, and inspection reports of Korea Inspection Ltd. Co. (see details in evidence list provided by TWH).
After three hearings, the court made key investigation on the controversy between plaintiff and defendant:
1. Whether there is a contract of ocean carriage between plaintiff and defendant;
2. How to determine the liability term of the carrier;
3. Whether the carrier was free of duty;
4. Whether the cargo had been changed;
5. Whether the defendant should take responsibility of compensation.
Plaintiff and defendant gave enough evidences, cross-examinations, debates and closing statements on the key point mentioned above during the hearings. The court also showed related evidences getting by court, which had been cross-examined by the two parts. Based on the evidences mentioned above, the court gave the following analysis and judgment:
Materials collected by court in the industrial and commercial registration Shanghai Representative Office of TWH have been accepted because their truthfulness, legality and effectiveness. These evidences proved that Shanghai Representative Office of TWH as a branch of foreign company to be set in China does not have the status of a legal person. Based on the ?°Company Law of the People??s Republic of China?± article 203 section 2,the defendant TWH should take civil responsibility for the business activities of Shanghai Representative Office.
The court accepted 12 original inspection materials supported by Shanxi Exit & Entry Inspection and Quarantine Bureau (IQB), and accepted investigation written transcripts made by court to Gao Shaoping, and Gao Peicheng from IQB because their truthfulness, legality and effectiveness. These evidences showed that the inspection certificate No. 1403/991012 issued by Shanxi Exit & Entry Inspection and Quarantine Bureau is true.
Evidences of No.1, 4, 5, 6, 9, 29 provided by the defendant, TWH, during the second session did not have any relevancy to the case, and the court refused to accept them.
Evidences No.2, 3, 7, 10, 30, 31 provided by the defendant, TWH, in the second session are Korean law which were enforced after Jun. 1999, while this case happened before that time. The defendant TWH neither had certificate to prove that the law has retroactive force, nor submitted any other laws with the same regulations before the law enforcement. Therefore, the evidences mentioned above cannot be accepted.
The civil judgment of Tianjin higher people's court (2000) Gao-Jing-Zhong-Zi-No.55 provided by plaintiff has no connection with this case. The court did not accept the evidence mentioned above.
Other evidences provided by plaintiff and defendant were cross-examined by the parties, and both parties had no dissent to their truthfulness and legality. The court accepted these evidences after integrative analysis.
Based on aforesaid confirmed evidences, the court finds the following facts:
On Jan. 12, 1999, the plaintiff and KNT signed silicon purchase contract (Contract No.: KTC-ME99011/S1), exporting 120 (+-5%) tons of silicon. The contract has clear engagement on the specification, size, packing etc. The loading port should be Tianjin Xingang and unloading port should be Pusan, Korea; the dead line of shipping date was Jan. 26, 1999. Terms of payment were letter of credit in prompt cash. After made the contract, the plaintiff bought the silicon required in the contract from Yasheng Silicon Factory, Laiyuan County, Hebei Province with unit price of RMB 7,350 Yuan per ton. They were packed into 115 ton-bags. Shanxi Branch of China Committee on the Promotion of Trade issued certificate of original products (certificate No. 981801347) on Jan. 18,1999. On Jan. 22,1999, Shanxi Import and Export Inspection Bureau issued inspection certificate No. 1403/991012, and confirming the quality of the cargo meets the requirements in the contract. Later, the plaintiff carried the 115 ton-bags to Tianjin new port by land. The cargos were put into 6 containers by China Foreign Transport Company, Tianjin Branch, sealed by Tianjin Foreign Carrier Tally Company.
The plaintiff delivered the 6 aforesaid containers to the defendant, Oasis. On Jan. 26, 1999, Oasis signed a clear bill of lading No.KYcr006, titled TWH Warehouse, as the agent of TWH, to the plaintiff .The B/L showed: the shipper was plaintiff; the consignee should be assignee of the instruction from the National Agriculture Bank; shipping port was Tianjin Xingang; port of destination was Pusan, Korea; carrier was vessel ?°Victory Star V904E?±; cargos were 115 bags of metal silicon (gross weight: 115345 kg), in six 20??containers.The numbers of the containers and seals were clearly marked; hand-over form was CY-CY with cash against delivery. The cargos were shipped on time.
The 6 containers of cargos were carried by carrier to the port of destination, Pusan, Korea on Jan. 8,1999 and were put into the New Korea Commercial Transport Warehouse, which is a bonded warehouse and had import and export cargo keeping contract with buyer, KNT. On Feb. 1, 1999, Lijinhao, the representative of Korea Shipping Loading & Unloading Co. and Jiang Yongzhun, authorized representative of New Korea Commercial Transport Warehouse, issued warehousing confirmation to prove the conformity of 6 containers and seals with B/L. New Korea Commercial Transport Warehouse opened the six containers and counted the cargos: 115 bags with 115,345kg. (It was conformable to B/L and proved that the warehousing cargos were the originals which plaintiff handed for transportation.) The warehousing confirmation had no records of unqualified packing or inferior quality etc.
When the six containers were opened, the openers did not apply for inspection .The defendant, TWH, did not submit the evidence of whose decision of opening the containers (the consignee or the supervisors of the bonded Warehouse). But the defendant, TWH, provided a letter to plaintiff from the buyer KNT the ninth day after the opening that is Feb. 9,1999. It said: ?°The quality of cargo is inferior, an inspection should be done if agree.?± On Feb. 10,1999 KNT wrote defendant again, and declared that the quality of the cargo was inferior, which was industry waste in fact, and asked for return. On Mar. 22,1999, the buyer, KNT entrusted Korea Inspection Co. to test the cargos kept on the open land of the New Korea Commercial Transport Warehouse. The inspection report No. BC-CI-9903043 says: Based on all kinds of formal reports, the cargo was unloaded on Feb 1,1999, and then sent to the bonded warehouse. After getting out of the cargos from the containers, with the importers on the spot, we checked one bag of each type, and found some wasted metals and sizes against the contract. So this inspection is followed. The inspection result: ?°net weight is 74,424,kg, far from the specifications on the contract, which disagree to the aim of the contract?±. And made the following conclusion: ?°This unqualified cargo was due to the carelessness of the exporter.?±
On Mar. 26, 1999, the plaintiff replied to KNT agreeing with cargos returned and would like to take the returning charges. The Returning action needed the help of the buyer, KNT. After several rounds of consultations, KNT agreed to assist handling the returning process and the charges would be confirmed by the plaintiff. After many consultations between the plaintiff and Oasis, the agency of the defendant, the plaintiff agreed to pay for the freight charge ($ 20654.80, equivalent to RMB 170,815 Yuan), and two parties made an agreement in terms of returning issue. The returning cargos were put into 6 new containers with new seal numbers, sent out from the New Korea Commercial Transportation Warehouse on May 11, 1999, arrived at Tianjin Xingang on May17. Two defendants didn??t sign new B/L during returning. But from the lading process in the non-negotiable B/L No. DH99-0518 sealed by Shanghai agent of TWH, the cargos had been controlled under TWH all the time. Finally, the 6 containers were delivered to the plaintiff by cable notice.
After the containers retained to Tianjin new port, the plaintiff applied for commercial inspection. On Jun. 16, 1999, the inspection certificate issued by Tianjin Inspection Bureau reports: the seal marks were complete before opening, which was conformable to the record on the non-negotiable B/L No.DH99-0581. (Under the No.DH99-O518, one container with the seal number 615288 instead of 615388 recorded on the shipping bill. The court defined it as a writing error with analysis). Inspection report No. 9920484 of Tianjin Commercial Inspection Bureau states: ?°All the six containers were opened on spot; two bags were casually taken from each container (12 bags in all). The visual inspection showed: cargos were packed in plastic ton-bags, no seals on the bags. Four among the twelve have a good appearance; two are in general; six are poor.?± After inspection, the cargos were new sealed. Tianjin Notary Office and Tianjin Container Transport Co. issued certificates. Later on, the plaintiff applied Branch of Shanxi Inspection Co. for another check. From July 1 to 3, 1999,the Branch of Shanxi Inspection Co. reopened the containers and took another inspection and issued inspection certificate No. 99WT024X which showed the numbers of the containers and the seals at opening were the same with the new ones mentioned before. The No. 99WT024X report says: ?°After checking all 115 bags of cargos, 65 bags have a qualified appearance with no impurity and 90% of which has sizes 10-100mm; clinker and impurity were found in 50 bags, among which 95% has sizes of 0-200mm.?± All the facts proved that the sealing, opening and resealing are in a consecutive process during the cargos?? returning. The inspection made by Shanxi Inspection Branch on July 1-3, 1999 shows that the cargos are the same ones returning from New Korea Commercial Transportation Warehouse.
It was found out that: After getting the original B/L from the defendant, the plaintiff delivered concerned bills to the issuing bank, Industrial and Commercial Bank Xian Dongxinjie Branch, and it is the bank sent the bills to issuing bank in Korea. On Feb. 9, 1999, the issuing bank in Korea informed Dongxinjie Branch the refusal of payment because there were no original invoice and the unconformity on loading bills. After consultation between Dongxinjie Branch and plaintiff , the plaintiff agreed to require issuing bank to return the whole bills on March 16, 1999.
It was also found out that: On Sept. 1, 1998, Oasis signed a contract with Shanghai Agent of TWH, TWH authorized Oasis as its agent in Tianjin Xingang. By the time when the case was put on record, vice representative of Shanghai Agent of TWH, Liu Wei, confirmed the facts mentioned above in a letter to court on Nov. 22,1999.
On Nov. 2, 1999, the plaintiff went to court for compensation of cargo and other charges total RMB 538,315 Yuan. In the first hearing, the plaintiff added RMB 28,896.75 Yuan as interests?? loss. The court ordered the plaintiff to pay the legal cost of the adding claim, but plaintiff failed to pay it till now. The court took the plaintiff to quit the claim of interests?? loss.
Based on the facts confirmed above, and the controversial points focused on the two parties, the court made the following judgments:
The court deemed: in accordance with the agent agreement between Oasis and Shanghai Agent Office of TWH; the letter of vice representative of Shanghai Agent Office of TWH, Liu Wei, on Nov. 22,1999 and faxes of two defendants dealing with the concerned cargos, it confirms that the two defendants, Oasis and TWH have an agent relationship, and Oasis is the bill signing agent of TWH in Tianjin Xingang. The plaintiff delivered cargos in 6 containers to the two defendants and got B/L titled with TWH issued by Oasis, the agent of TWH. According to aforesaid facts and B/L as evidence of ocean going contract, it can be confirmed that plaintiff is shipper; defendant, TWH, is carrier; there is a contract of ocean carriage between plaintiff and TWH.
According to ?°Maritime Law of the People??s Republic of China?± article 46, the carrier??s duty term for the cargo in containers shipping is from getting the cargo at the loading port to deliver it at the unloading port. During that time, the carrier controls the cargos. In this case, the defendant, TWH, as the carrier, took the plaintiff??s cargos from Tianjin Xingang to the unloading port the New Korea Commercial Transportation Warehouse, Pusan. The carrier did not deliver the cargos to the legal consignee or got back the original B/L, therefore, the cargos did not deliver legally, and the carrier??s duty was not released. With the circumstance that the B/L was refused to pay by the issuing bank and returned to the plaintiff, the defendant TWH, as carrier, neither delivered the cargos to its legal holder of B/L at the unloading port, nor took back the original B/L. With the negotiation between plaintiff and defendant, TWH, the two defendants accepted the consignation of plaintiff to carry the cargos back Tianjin and charged for the shipping. The returning cargos had been under the controlled of TWH all the time. Moreover, because of cable notice, TWH did not sign a formal B/L to the plaintiff, so TWH was also a carrier of the returning cargos. As for the fact that TWH transferred the cargos to others for returning is another legal issue. According to the facts mentioned above and the regulations of the ?° Maritime Law of the People??s Republic of China?±, the court holds: the period from Jan. 26, 1999, (the defendant, TWH received the cargos from the plaintiff) to May 17 (returning cargos were handed back to the plaintiff) is the liability term of the defendant, TWH, to protect and keep the cargos. Here the court needs to point out: in this case, the seals had been completed with continuity in the returning process from the cargos?? reloading and departure at New Korea Commercial Transportation Warehouse, Pusan, Korea until they were handed back to the plaintiff. The evidences confirm that the cargos that were received by plaintiff were the right ones from the New Korea Commercial Transportation Warehouse, Pusan, Korea There was no possibility that the cargos were changed during the returning navigation. Therefore, the argument of who is the returning carrier holds no meaning to this case.
?°Maritime Law of the People??s Republic of China?± stipulates: the carrier??s duty to control the cargos in containers not only includes the captain and seamen to control the cargos, but also includes the loading and unloading Co., managers of the warehouse or dock, his agent hired or entrusted to control the cargos. In this case, the six containers with silicon were opened without delivery under the responsibility term of the defendant, TWH. The plaintiff claimed the defendant TWH failed to fulfill his duty during his supervision, and the cargos were changed in his responsibility term. So the plaintiff claimed defendant TWH to compensate for the damage. Against plaintiff??s claim, the defendant, TWH, defended from the following points of view. The carrier was exempted from liability and evidences submitted by the plaintiff do not strong enough to confirm the perfect quality of the cargos, while the materials collected by TWH from Korea can prove the cargos?? quality were inferior, and the defendant submitted concerned evidences to the court.
As to the defense on being exemption from liability, the court holds: the defendant TWH emphasizes the New Korea Commercial Transportation Warehouse is a bonded warehouse, and quoted the Korea ?°Tariff Law?± repeatedly. But all the evidences about Korea ?°Tariff Law?± submitted by the defendant, TWH, in the second hearing were not put into action until Jun. 1999. The defendant TWH neither led evidences to prove that the Law has retroactive force to the disputes over the past, nor other equal regulations before that. So the Law of Korea used by the defendant, TWH, cannot support his arguments. In short, the defendant, TWH, failed to give any legal rules of the carrier can be exempted from his supervision duty for the containers had been opened in the bonded warehouse. Thus, the court refuses to accept the defendant??s (TWH) argument based on exemption from liability point.
As to the argument from the defendant, TWH, that the plaintiff could not prove the cargos in the six containers he delivered for shipping were the right things to be inspected. Evidences collected by TWH from Korea proved that the cargos?? quality was inferior. The court deems: The inspection certificate No.1403/991012 submitted by Shanxi Import & Export Inspection Bureau is the commodity inspection certificate of the producing area, and is not the one on the loading spot. So the certificate only proves the quality when the cargos were inspected. In fact, there is a long way by land from the original producing area to the loading spot, Tianjin Xingang. The plaintiff has neither inspection certificate at the loading time, nor enough evidences to prove the metal silicon being put into containers was the right ones that had been inspected inland. The evidences submitted by the plaintiff are lack of continuity to prove the cargos?? good quality in the containers. The present evidences submitted by the plaintiff are not enough to prove the silicon that being put into the six containers are the right ones being inspected inland. Going through the evidences submitted by the defendant, TWH, it could be seen from the warehousing bill that the containers numbers with the first opening, seal numbers, the amount of the cargos, went along with the record on the B/L. It proves that the cargos being opened were the original cargos delivered by the plaintiff. But there was no defective record when the containers were opened. None of the defendants, TWH, the consigner at the destination port or the employees applied for a quality inspection when the containers were opened. Nine days after the six containers were opened, though claimed the cargos were inferior, the buyer, KNT did not take an inspection in time. 50 days after the containers being opened that is Mar. 22,1999, he took the inspection. The inspection report No. BC-C1-9903043 issued by Korea Inspection Co. only confirmed the cargos?? quality on Mar. 22,1999, and it could not prove the cargos were the ones plaintiff consigned and opened on Feb. 1,1999. Therefore, the evidences submitted by the defendant TWH could not enough to prove the cargos being inspected on Mar. 22,1999 were the ones being checked on Feb. 1,1999.
From the analysis, compared with the evidences submitted by the two parties, the court holds: neither has sound evidences to confirm the cargos?? quality in the containers nor has enough evidences or reasons to reject the counterpart??s evidences. It is impossible for court to make sure whether the cargos were changed under the supervision of the plaintiff or being changed within the liability term of the defendant.
According to the spirits of the ?°Civil Procedure Law of the People??s Republic of China?±, if it is impossible to ascertain the true situation, what the court can do is to comprehensively analyze the case, and decides the responsibility based on the burden of proof contribution.
The plaintiff claims: the defendant, TWH, should take the liability of changing the cargos since he did not fulfill his supervision duty during his responsible term. Considering the whole facts, the court deems: the containers did be opened in the responsible term of the defendant-TWH. The plaintiff claimed that the cargos were exchanged after opening the containers. It is necessary for the plaintiff to prove that the quality of the cargos in six containers is good. With this precondition, it can be confirmed that the cargos were exchanged in the responsible term of the defendant. However, since the plaintiff failed to submit enough evidences to prove the quality of cargos in six containers is good, and it cannot attest that it is the defendant, TWH, who exchanged the cargos in his responsible term. Therefore, the plaintiff should take the legal consequence of failing to submit the evidences.
In conclusion, according to the ?°Civil Procedure Law of the People??s Republic of China?± article 64 section 1; the Supreme People??s Court ?°Provisions Concerning the Civil Economic Mode of Trial Reform?± article 3 section 2; ?°Maritime Law of the People??s Republic of China?± article 42 section 1 item 1 and article 46, the court makes the following judgment:
Reject the plaintiff??s claim.
The legal cost RMB 10393 Yuan is born by the plaintiff.
If refuse to accept this judgment, Plaintiff and defendant Oasis may submit appeal petition and with 5 copies of it to Tianjin Maritime Court within 15 days after the date of service this judgment; Defendant TWH may submit appeal petition and with 5 copies of it to Tianjin Maritime Court within 30 days after the date of service this judgment. The appeal shall be accepted by the Higher People??s Court of Tianjin. Appellant should pay cost of appeal RMB 10,393 Yuan to the Higher People??s Court of Tianjin (Bank account: Agriculture Bank of China new technical park branch, A/C no. 394-9887000390) within 7 days after the appeal petition. If payment delays for the time limit, the appeal will be treated as withdraw automatically.
Chief Judge: Cheng Xianzhang
Judge: Shi Wenxi
Assistant Judge: Xu Fubin
June 25, 2001
Court Clerk: Zhang Aiqin
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