Case of Dispute over cargo shortage under contract of carriage of goods by sea filed by the plaintiffs China Pacific Property Insurance Co., Ltd. Shenzhen Branch and Sinochem International Oil Company against the defendant MELINDA HOLDING S.A.

Updated：2014-07-25 Views：2850 
Guangzhou Maritime Court of P. R. C.

Civil Judgment

Case No.: (2005) G H F C Z No.417





Plaintiff: China Pacific Property Insurance Co., Ltd. Shenzhen Branch

Domicile: Floor 7 & 20, Building No.1, News Tower, 2# Shen Nan Zhong Road, Futian District, Shenzhen City, Guangdong province

Responsible Person: Zhang Hengguo, General Manager 

Plaintiff: Sinochem International Oil Company

        Domicile: A2# Fu Xing Men Wai Revenue, West City District, Beijing

Legal Representative: Li Hui, General Manager

Agent ad Litem: Chen Longjie, lawyer of Guangdong Evergreen Leaf Law Firm

Agent ad Litem: Liu Yun, lawyer of Guangdong Evergreen Leaf Law Firm

Defendant: MELINDA HOLDING S.A.

          Domicile: 14, Skouze Str-185 36 Piracus-Greece

Legal Representative: THANOS THEOCHARIS, President 

Agent ad Litem: Huang Yaquan, lawyer of Huang & Huang Co. Law Firm 

Agent ad Litem: Huang Hui, lawyer of Huang & Huang Co. Law Firm



With respect to the case of dispute arising from the cargo shortage under contract of carriage of goods by sea filed by the plaintiffs China Pacific Property Insurance Co., Ltd. Shenzhen Branch (hereinafter referred to as ?°China Pacific Shenzhen?±) and Sinochem International Oil Company (hereinafter referred to as ?°Sinochem?±) against the defendant MELINDA HOLDING S.A. (hereinafter referred to as ?°MELINDA?±), this court accepted it for handling on November 2, 2005, thereafter formed a collegiate bench in accordance with law, which consists of Judge Wu Zili, Acting Judge Huang Xiwu and Acting Judge Fang Jianhua, and then organized the parties concerned to exchange evidences on March 29, 2006, and held open hearings on June 7, 2006. Mr. Chen Longjie and Ms. Liu Yun , the agent ad litem jointly appointed by the plaintiffs, as well as Mr. Huang Yaquan and Mr. Huang Hui, the agents ad litem of the defendant, attended the court hearing. Now the case has been finalized.



The two plaintiffs claim that: the defendant was the ship owner of M/V ?°Silva?±. Sinochem was the holder of the bill of lading issued by Captain of M/V ?°Silva?± on 28th August 2005. The cargo recorded in the bill of lading was 280 # fuel oil, weighing 75,293 MT. The vessel arrived at Nansha Port of China on 18th September 2005 and actually discharged the cargo weighing 74,052.503 MT, suffering an economic loss of cargo shortage in amount of CNY 4,330,000. Sinochem applied to this court for arresting the vessel before litigation on 23rd September 2005, and paid the application fee in CNY 5,000, and the execution fee in CNY 30,000. China Pacific Shenzhen indemnified Sinochem CNY 2,566,080 and paid the inspection fee in CNY 44,432. the plaintiffs requested the court to order the defendant to: ?? compensate China Pacific Shenzhen CNY 2,610,512 and Sinochem for the cargo loss in amount of CNY 1,719,488; ?? bear the Court Charges paid by Sinochem in amount of CNY 68,960, which consists of fee of ship arrestment before litigation in CNY 35,000, investigation fee in CNY 2,000 and the entertainment fee in CNY 31,960.



The two plaintiffs jointly submitted to the court the following evidences:

1.	Facsimile of the attachment of Agreement of Open Insurance, Policy No.ASHZ08824105B000297Z and its endorsement, invoice of premium, the original Payment Voucher of Insurance Indemnity, evidencing the fact that China Pacific Shenzhen gained the subrogation rights;  



2.	Bill of lading, Attestation Letter issued by China Ocean Shipping Agency Guangzhou, and the original Certificate Registry of M/V ?°Silva?±, evidencing the lawful contractual relationship of carriage of goods by sea;



3.	Weight Certificate issued by CCIC Guangdong Company and Re-Certification Report issued by SGS, evidencing the cargo shortage. CCIC Guangdong Company dispatched expertise to attend the court hearing for inquiry;



4.	Sales Contract No. 05BS11XA5332F0111, Commercial Invoice, Application for TT from Abroad, Payment Record of Tariff on Imported Goods, and the original Payment Record of VAT on Imported Goods, evidencing the value of cargo in shortage;



5.	Civil Decision of (2005) Guang Hai Fa Bao Zi No.105, the original Notice of Entertainment, the duplicate of Payment Voucher of Litigation Fee, and the original Invoice of Inspection Fee issued by CCIC Guangdong Company, evidencing the litigation fee, inspection fee and other expenditure.



Upon the request of the two plaintiffs, this court called for the Letter of Protest for ?°Silva?± did not provide the original Ullage Table when discharging the cargo from ENTRY-EXIT INSPECTION AND QUARANTINE OF PANYU (hereinafter referred to as CIQ). Sinochem paid the investigation fee in CNY 2,000. Mr. Wang Rusong, the expertise applied for by the plaintiffs, attended the court hearing and answered the inquiries made by both parties concerned as well as the court.



The defendant raised objection to the authenticity of the attachment of Agreement of Open Insurance, the Sales Contract and the Commercial Invoice, for the attachment was not the original one, the Sales Contract and Commercial invoice had not undergone legal proceedings of verification. The defendant also raised objection to the relevancy of the invoice of inspection fee. The collegiate bench were united in there conclusion that the objected authenticity and relevancy should be approved for although the controversial attachment of Agreement of Open Insurance was not original, yet it mutually confirmed with the Policy; the Sales Contract, the Invoice, the Payments and the tax vouchers, etc. could prove each other; the invoice of inspection fee and the inspection report issued by CCIC Guangdong Company could support each other. Thus, the court approved the authenticity, validity and relevancy of the aforementioned evidences.



The defendant MELIDA defended that: the actual shortage of the cargo in question was 385.692MT, the cause of shortage laid in the inherent defect of the cargo itself, the defendant should be exempted from liability in accordance with law. Even if the defendant was liable for compensation, the number of cargo in shortage should exclude the natural allowance and the gauging tolerance, which was in the percentage of 0.5%. Loss should not be calculated basing on the price in the Sales Contract submitted by the plaintiffs, for they were not the first hand buyers of the cargo in question. Thus, the defendant requested the court to reject the claim of the plaintiffs.



Within the time for adducing evidences, the defendant submitted the following evidences:



1	Certificates proving Silva??s seaworthiness during navigation, such as Cargo Ship Safety Construction Certificate, Cargo Ship Safety Equipment Certificate and so on;



2	Certificates proving Silva??s cargoworthiness before navigation, including the ROB Report issued at the loading port of the voyage in question, Inspection Certificate, and Cargo Tank Inspection Certificate;



3	Cargo Tank Pipe Line System Plan, Ship Bunker Pipeline System Plan, and Ballast System Plan, evidencing that any one of the cargo tank pipeline system, the ship bunker pipeline system and the ballast water pipeline system of ?°Silva?± has no affection on the others.



4	Certificates proving that the quantity of the goods concerned at the loading port is 75293 MT, including Certificate of Origin, Vessel Ullage Report, Manifest, and B/L;



5	Vessel Ullage Report of the voyage in question of ?°Silva?±, evidencing the quantity of the goods concerned at the discharging port before discharge is 75,344.565 MT, what is to say, no shortage occurred;



6	Three sets of inspection reports on the fuel oil of ?°Silva?±, proving the quantity of the bunker on board ?°Silva?± did not have abnormal changes during the process of discharge;



7	Two Sets of ROB report issued respectively by Guangdong Marine Engineering Consultants & Surveyors Corporation (hereinafter referred to as ?°Marine Engineering?±) and CIQ of the discharging port, evidencing the quantity of the remaining materials in the holds of ?°Silva?± after discharge;



8	Survey Report No. GM05195 on the weight of the discharged cargo issued by Marine Engineering, evidencing of the quantity of cargo in shortage;



9	Note of (2005) Guang Hai Fa Bao Zi No.106, evidencing Marine Engineering is the inspection unit acknowledged by the plaintiffs and the defendant;



10	Inspection Report No.HAS/2005H/XLQ/158 on the discharged cargo weight issued by Haijiang Surveyors & Adjustors Co., Ltd. (hereinafter referred to as ?°Haijiang Company?±), evidencing the quantity of cargo in shortage after discharge.



The defendant applied to this court before litigation for the preservation of maritime evidences on the relevant certificates of ?°Silva?± of the voyage in question. The above evidences No.1 to 9 have been duplicated and inspected by the clerks of this court during the period of the evidence preservation. During the trial of this case, this court on 1st May 2005, upon the application of the defendant, executed preservation of maritime evidences on the Slops Removal Service Report, Oil Record Book and Ullage Table when ?°Silva?± was at Qingdao Beihai Shipyard; the two plaintiffs cross-examined the aforesaid evidences. They raised objection to the validity of the application for preserving the Ship certificate and Ullage Table, etc., on the ground that the application was not in accordance with the condition of preservation of maritime evidence because the evidences were in the possession of the applicant. The collegiate bench reached the consent that although part of the preserved evidences was under the control of the defendant itself, yet these evidences were on board ?°Silva?±, it would be difficult to acquire once ?°Silva?± leaves China. This court thus granted permission to the application for preservation of maritime evidence for it met the stipulations in law, and this court disapproved the objection to the validity of preservation of evidence by the plaintiffs. 



In respect of Evidence 10 submitted by the defendant, the two plaintiff raised objection for the legal representative of Haijiang Company was also the lawyer of the same law firm with the lawyers ad litem appointed by the defendant in this case. After investigation, Lin Cuizhu, the legal representative of Haijiang Company was also a registered lawyer of Huang & Huang Co. Law Firm, which is the law firm appointed by the defendant. The collegiate unanimously hold that there was interest relationship between the inspection unit and the defendant, thus Haijiang Company, as the inspector in this case, should withdraw from this case according to Article 45 of Civil Procedure Law of the P. R. C, and the Survey Report issued by it should not be considered the basis of facts in this case. 



According to the ascertained evidences after cross-examination at the court hearing, the ascertained facts of this case are as follows:



On 17th August 2005, Sinochem signed the Sale Contract No. 05BS11XA5332F0111 with Sinochem International Oil Company (Bahamas) Co., Ltd (hereinafter referred to as ?°Sinochem Bahamas?±) and ordered 75,000MT (??10%)of 280# fuel oil from the latter, the specific number is subjected to the number at loading port. The price condition as agreed in the Sales Contract was CIF Huangpu Port in P. R. China, carried by ?°Silva?± or ship in substitute accepted by the seller to Huangpu Port in P. R. C. or Guangzhou Gangfa Port in P. R.C. Sinochem paid the seller Sinochem Bahamas USD 25,873,686.52 for the cargo through Bank of Communications, Beijing Branch, at the unit price of USD 343.64 per metric ton. 



China Pacific Shenzhen undertook to provide insurance for the transportation of the cargo in question, and issued a Cargo Transportation Policy No. ASHZ08824105B000297Z on August 28, 2005, which reads that the insured is Sinochem Bahamas, the cargo is 75,293 MT of 280# fuel oil, and the insured amount is CNY 223,611,927.77. On the same day, China Pacific Shenzhen changed the insured into Sinochem Bahamas / Sinochem through the endorsement No. BSHZ01824105B0002, other terms and conditions remaining unchanged. Sinochem paid China Pacific Shenzhen the insurance premium in CNY 134,167,16.  



MELINDA is the ship owner of ?°Silva?±. This ship, upon the appointment of National Iranian Oil Company (NIOC), carried 280# fuel oil from BANDAR MAHSHAHR in Iran to Huangpu Port of China. The port inspection unit DELFI S.A. issued an OBQ/ROB REPORT on August 27, 2005, evidencing that the cargo holds of ?°Silva?± was clean and dry. The cargo hold Inspection Certificate issued by NIOC proved that ?°Silva?± was seaworthy for the cargo in question. Certificate of Origin recorded that the quantity of cargo in question was 494,039 drums/ 74,143.236 long tons/ 75293 metric tons, which was the same as weight of cargo recorded in the Manifest and B/L; the Ullage Table after loading showed the cargo weight was 75,333.046 MT / 74,143.236 long tons. The Captain of ?°Silva?± issued an instructive B/L on August 28, 2005, which recorded that the cargo weight was 75,293 MT. This B/L was endorsed for four times, and was used by Sinochem to take the delivery.



On September 18, 2005, CIQ inspected the cargo on board ?°Silva?± when it was at the anchorage of Shajiao Guangzhou Port. The result showed that at 15?? the standard overall volume was 78,573.955 m3, and the weight was 75,344.565 MT. Guo zhijian, the inspector of CIQ, remarked in the Ullage Table ?°for ull & temp only?±. The fuel oil report before discharge showed that the weight of fuel oil in the air was 1107.97 MT. On September 22, the fuel oil report after discharge showed that the weight of fuel oil in the air was 1014.27 MT.



On September 22, Sinochem paid the imported Custom Tariff in CNY 11,405,829.96, and VAT in CNY 34,255,509.31 to Panyu Custom for 68,293 MT of cargo; and paid the imported tariff in CNY 1,169,092.14, and VAT in CNY 3,511,173.39 to Custom of the old Huangpu Port for 7000 MT of cargo. The Custom Tariff was 6% of the cargo value, the VAT was 17% of the sum of cargo value and Custom Tariff, the exchange rate between USD and CNY was 1:8.1002, and the cargo value was calculated as USD 343.64 per metric ton.



The barges arranged by Sinochem transferred the cargo in question. CCIC Guangdong Company took the actual weights of the cargo distributed into each one of the 75 barges for transference, and issued the Weight Certificate No. GD2005/PY233-6 on September 26, 2005, which alleged that the weight of cargo transferred by the barges from ?°Silva?± was 74,050.44 MT in accordance with the Volume Table provided by the party of the barge and the necessary correction on the temperature and density of the oil after test. SGS Petrol-Chemistry department made verification on the Weight Certificate issued by CCIC Guangdong Company, and thought that the result of weight calculation could be acknowledged for the standard used in the calculation process was reasonable. Meanwhile, the data from the test made by CCIC Guangdong Province led to the calculation that 75 barges received cargo in a total amount of 74,050.444 MT.



On September 23, Sinochem applied to this court for arresting ?°Silva?± and ordering the defendant to provide a security in CNY 5,000,000. On the same day, this court granted permission to the application of Sinochem and issued the Ship Arrest Order, and thereafter arrested ?°Silva?±. After PICC Property and Casualty Company Limited, Guangdong Branch issued an LOU in amount of CNY 4,500,000 for MELINDA; this court released the arrested ship on September 26. The application fee in CNY 5000 and execution fee in CNY 30,000 that paid by Sinochem for the application for arresting the ship are the actual fee that have taken place. 



On September 26, the defendant MELINDA applied to this court for preservation of maritime evidence, requesting to perform preservation on the relevant certificates on board ?°Silva?± as well as inspection on the discharge conditions at the same time. This court granted permission to the application for preservation of evidence by MELINDA, and called for the agents of Sinochem and MELINDA to negotiate about the designated inspection unit. Both parties agreed unanimously that Marine Engineering should perform inspections on ?°Silva?± after discharge. 



On September 28, Zheng Hui Bo, the inspector of Marine Engineering, embarked on ?°Silva?± and inspected the tank, getting the result that the remaining of cargo oil with a density of 0.948 g / cm3 at 31?? had a volume of 255.89 m3 and the weight of 242.583 MT; the weight of the sludge at the bottom of the tank was 206.61 MT, which density was hard to acquired for it could not be drawn out. At 1530 hours of the same day, the inspector got the testing result that there were 969.353 MT of fuel oil and 129.664 MT of diesel oil on board ?°Silva?±.  



On September 29, CIQ inspected ?°Silva?± and thereafter issued a ROB, showing that the total volume of the sludge in each tank was 488.31 m3 . On the same day, CIQ gave ?°Silva?± a Letter of Protest, claiming that the vessel part had not provided with original Ullage Table and related certificates for it. The Captain of ?°Silva?± signed and stamped on this Letter of Protest and indicated that this file was for receipt only.



On September 30, Marine Engineering issued a Survey Report No. GM05195, which includes not only the inspection result on September 28 but also the remarks that the ship was unable to provide the original Ullage Table and that what was used in the measurement was the duplicated Ullage Table acknowledged by BUREAU VERITIES in 1999. On December 12, 2005, Marine Engineering issued the supplementary report No.GM05195-1, which points out that where it is impossible to measure the density of the sludge at the bottom of the tank directly, it could adopt the calculation as follows: to deduct the standard volume (459.583 m3) of the remaining cargo after discharge from the standard volume (78,573.955 m3) at 15?? confirmed in the Ullage Table by the CIQ before discharge, which leads to the standard volume (78114.372 m3) of discharged cargo;  the standard density of the cargo at 15?? was 0.9600 g / cm3 , thus could calculate the weight of discharged cargo in the air was 74,907.308 MT, 385.692 MT less than the cargo weight in the B/L.



On December 19, 2005, China Pacific Shenzhen paid the indemnity of CNY 2,566,080 to Sinochem. China Pacific Shenzhen also paid the inspection fee of CNY 44,432 to CCIC Panyu.



On May 1, 2006, this court, upon the request of the defendant, executed preservation of evidence on the Slops Removal Service Report, Oil Record Book and the Ullage Table of ?°Silva?± when it was anchoring at Qingdao Beihai Shipyard.



It also ascertained the fact that the foreign exchange rate between USD and CNY publicized by People??s Bank of China was 8.0911 on September 21, 2005.



With respect to the disputes between the two parties over the facts of this case, the collegiate bench ascertains the following: 



I.	With respect to the fact that ?°Silva ?± provided Ullage Table to the inspection unit at the port of discharging

    

The two plaintiffs claimed: ?°Silva?± provided only the duplicate of Ullage Table, instead of the original one, to CIQ and the appraiser Marine Engineering, thus, it??s impossible to verify and ascertain its effect. The defendant claimed that the valid and original Ullage Table was on board the vessel all the time. The Inspection Report issued by Marine Engineering and the Letter of Protest issued by CIQ could just lead to the fact that ?°Silva?± didn??t provide the original Ullage Table. The first page of the original Ullage Table preserved by this court on May 1, 2005 was with a stamp ?°BUREAU VERITIES?± and the writings ?°AT RIJEKA, ON THE 13th MAY 1999?±, which coincided with the record by Marine Engineering that ?°The Ullage Table was acknowledged by BUREAU VERITIES in 1999?±. Comparison showed that data in this Ullage Table corresponded with those in the Vessel Ullage Report and ROB Report issued by CIQ and Marine Engineering. The collegiate bench unanimously hold as follows: although ?°Silva?± provided only the duplicate Ullage Table instead of the original one to CIQ and the appraiser of Marine Engineering, yet it could be ascertained that the duplicate agreed with the original. Though the two plaintiffs raised doubt to the validity of the Ullage Table, they did not provide proof to support their view. So, the Ullage Table should be considered valid at the moment of discharge.



II.	With respect to the quantity of cargo shortage



The defendant claimed: For no measurements had been made along side the vessel when discharging, the computation could be that deduct the volume of the remaining at the bottom of the tank from the cargo volume before discharge to get the delivery volume, and use the delivery volume to compute the weight of cargo in shortage and get the answer is 385.692 MT. The two plaintiffs argued that the defendant as the carrier did not provide the original Ullage Table at the port of discharging, the inspection result based on the duplicate of Ullage Table in the hands of CIQ and Marine Engineering could not be the proof of the delivery quantity in this case. According to the computation result of on the weight of cargo transferred to the barges, the cargo weight Sinochem received from 75 barges in a total amount of 74,052.503 MT, 1240.497 MT less than the figure recorded in the B/L.



The collegiate bench reaches the consent that: although the defendant as the carrier provided only the duplicate of the Ullage Table, yet the duplicate one agreed with the original one, so the computation result, basing on the duplicate, by the CIQ and Marine Engineering could be considered the proof of fact in this case. Only for the reason that the Ullage Table provided by the defendant was a duplicate could not deny the computation result of weight by CIQ and Marine Engineering.



Weight Certificate No. GD2005/PY233-6 issued by CCIC Guangdong Company can only prove the weight of cargo on board the 75 barges, but cannot prove that this installment of cargo was the whole cargo transferred from ?°Silva?± of the voyage in question. The responsibility of the carrier with respect to non-containerized goods covers the period during which the carrier is in charge of the goods, starting from the time of loading of the goods onto the ship until the time the goods are discharged therefrom. In this case, the barges in discharge were appointed by the plaintiff Sinochem, after the cargo was discharged onto the barges, it was no longer under the control of the carrier, that is, it was not within the period of the carrier??s responsibility. Thus, the plaintiffs?? argument about calculating the quantity of cargo shortage on basis of the weight measured from the barges was not established.  



Marine Engineering was the inspection unit under the appointment of the court and with the consent of the plaintiffs and the defendant. Marine Engineering adopted the calculation method that the cargo volume before discharge minus the volume of the remaining at the bottom of the tank is the delivery volume. Such calculation method in calculating the weight of cargo in shortage would be more reasonable. Thus, it could ascertain the total shortage weight of cargo in question was 385.692 MT.



The collegiate bench unanimously holds as follows: This case is a dispute over foreign-related contract of carriage of goods by sea, which is within the scope of dispute over maritime contracts, thus shall be under the jurisdiction of the maritime courts. This court has the jurisdiction over this case for the destination of the voyage of ?°Silva?± in question is within the power scope of this court. Both the plaintiffs and the defendant opined that the laws of P. R. China shall be applicable to the dispute in this case; in accordance with Article 296 of Maritime Code of the P. R. C., the law of the P.R.C. shall be applied to govern the settlement of substantive dispute of this case. 



The plaintiff Sinochem was the consignee and the defendant MELINDA was the carrier. According to Article 46 of Maritime Code of the P. R. C., during the period the carrier is in charge of the goods, the carrier shall be liable for the loss of or damage to the goods. Shortage did occur during the period the carrier was in charge of the goods, thus the defendant MELINDA shall compensate to Sinochem for the loss arising from the cargo shortage.



The plaintiff China Pacific Shenzhen was the insurer of the carriage of goods by sea in question. It is stipulated in Article 252 of Maritime Code of the P. R. C.: Where the loss of or damage to the subject matter insured within the insurance coverage is caused by a third person, the right of the insured to demand compensation from the third person shall be subrogated to his insurer from the time the indemnity is paid. China Pacific paid Sinochem the indemnity in CNY 2,566,080, thus the former got the subrogation right and could claim compensation against MELINDA by exercising the right of subrogation, the right Sinochem had on MELINDA, up to the amount of the insurance indemnity. 



During the period the carrier is in charge of the goods, the carrier shall be liable for the loss of or damage to the goods. The total amount of cargo in shortage occurred during the period the carrier is in chare of the cargo is 385.692 MT. The defendant??s argument that the carrier has exoneration from the liability where the cargo shortage is within 0.5% of the total amount is without the lawful proof, thus is not supported. But there was 206.61 m3 of solid matter remained at the bottom of the tank, the inspection report before loading showed that the tank was clean and dry. The Sales Contract allows the existence of water and deposit, which did not exceed 0.5% of the total volume, in the cargo. Thus, it could be ascertained that the solid sediment after discharge was made up from the deposit in the cargo, which was caused by the nature of the cargo, thus should be deducted from the quantity of cargo in shortage. Because the density of this potion of matter is hard to measure, considering that the density of the deposit must be larger than that of the cargo oil, the weight of this potion of matter could be considered 195.867 MT with the calculation on the density of cargo oil of 0.948 g / cm3.



In conclusion, the defendant shall be liable for 189.825 MT of cargo shortage.



The plaintiff Sinochem paid the cargo on the basis of CIF price of USD 343.64 /ton. At that account, the total value of cargo in shortage is USD 65,231.463. The defendant pointed out that because the plaintiff Sinochem was not the first hand buyer of the cargo in question, it could not calculate the loss on the payable price by Sinochem. This point is not established. According to the foreign exchange rate between USD and CNY of 8.0911 on September 21, 2005, when is the completion of discharging the cargo on board ?°Silva?± of the voyage in question, the defendant shall be liable for the part of loss in CNY 527,794.29.



It is stipulated in Article 54 of Maritime Code of the P. R. C.: The amount of indemnity for the loss of the goods shall be calculated on the basis of the actual value of the goods so lost. Thus the two plaintiffs?? demand for compensation of the loss of tariff and VAT and other taxes from the defendant shall not be approved.



Inspection fee was a sum of business expenditure paid by China Pacific Shenzhen for ascertaining the amount of indemnity, instead of payment of insurance indemnity, thus it??s beyond the scope of subrogation. Weight Certificate issued by CCIC Guangdong Company is not the proof to establish to cargo shortage in question, the plaintiff China Pacific Shenzhen??s request for compensation for inspection fee is not supported. 



Because of the cargo shortage occurring in the carriage, the plaintiffs?? application for arresting ?°Silva?± in question was to exercise their legitimate rights, thus the fee thereof shall be borne by the defendant MELINDA. The request of the two plaintiffs that the MELINDA should bear the application fee and the execution fee for arresting the ship shall be supported. The investigation fee in CNY 2000 was advanced by Sinochem is the expenditure of the two plaintiffs?? obligation of bearing the burden of proof, so it shall be borne by Sinochem.



In conclusion, the defendant shall be liable for the cargo shortage in a total amount of CNY 527,794.29. Because such amount does not exceed China Pacific Shenzhen??s payment of insurance indemnity, the defendant shall compensate to China Pacific Shenzhen and the interest thereof, the counting of interest started from December 19, 2005, when China Pacific Shenzhen paid the insurance indemnity, to the date of payment as specified by this Judgment, on a basis of loan interest rate issued by the People??s Bank of China in the instant period. Sinochem??s request for compensation shall not be approved. 



Above all, pursuant to Article 46 and Article 252 of Maritime Code of the P. R. C. as well as the first paragraph of Article 45 of Insurance Law of the P. R. C. the Judgment is hereby given as follows:



1.	The defendant MELINDA shall compensate to the plaintiff China Pacific Shenzhen in amount of CNY 527,794.29 and its interest (calculating from December 19, 2005 to the date of payment as specified by this Judgment, on a basis of loan interest rate issued by the People??s Bank of China in the instant period);

2.	Other litigation requests of the plaintiff China Pacific Shenzhen shall be rejected;

3.	Litigation request of the Sinochem shall be rejected;



The application fee for arresting the ship before litigation in CNY 5000 and the execution fee in CNY30,000 shall be undertaken by the defendant MELINDA. The investigation fee in CNY 2000 shall be jointly undertaken by the plaintiff China Pacific Shenzhen and Sinochem. Among the entertainment fee in CNY 31,660 and other litigation fee in CNY 300, in an aggregated amount of CNY31,960, CNY 28,064 thereof shall be jointly borne by the two plaintiffs China Pacific Shenzhen and Sinochem, CNY 3896 thereof shall be borne by the defendant MELINDA. The above litigation fees have been advanced by the plaintiff Sinochem, the defendant shall pay the part resting on it to the plaintiff Sinochem, this court will not check and return. 



The above monetary obligations should be fulfilled within 10 days from the date this judgment takes effect.



If not satisfied with this judgment, the plaintiff China Pacific Shenzhen and Sinochem can within 15 days upon service of this judgment, the defendant MELINDA can within 30 days upon service of this judgment, lodge appeal to the Higher People??s Court of Guangdong Province by filling with this court the Statement of Appeal with copies according to the numbers of the opposing parties.











Judge: Wu Zili

Acting Judge: Huang Xiwu

Acting Judge: Fang Jianhua

Guangzhou Maritime Court (stamp)

Date: August 14, 2006





This copy is proved to be identical with the original after checking. 

Secretary: Wang Fei





The translation is provided by Huang & Huang CO.