Guangzhou Maritime Court of the P.R.C


 Civil Judgment 	


                             (2008) Guang Hai Fa Chu Zi No.578


Plaintiff:  PICC Property and Casualty Company Limited, Guangzhou Branch

Domicile: West side of Fl.1, Fl.2, 6, 14 & 22, No.303, 305 Guangzhou Avenue Central., Yuexiu District, Guangzhou, Guangdong 

Person in charge: Duan Anhong, general manager

Agent ad litem: Zhao Jinsong, lawyer of All Bright Law Offices Shenzhen Branch

Agent ad litem: Qiu Biaoshan, lawyer of All Bright Law Offices Shenzhen Branch


Defendant: Elite Master International Limited, Shenzhen Branch 

Domicile: 404 Shuiwan Tower, Taizi Road, Shekou, Nanshan District, Shenzhen, Guangdong 


Defendant: ORIENT OVERSEAS CONTAINER LINE LIMITED

Domicile: Fl. 33, Harbor Center, No.25 Harbor Road, Hong Kong S.A.R.

Legal representative: Wang Decheng, director

Agent ad litem: Cao Yanghui, lawyer of Wang Jing & Co. Law Firm

Agent ad litem: Wu Kai, lawyer of Wang Jing & Co. Law Firm


Defendant: WANGFOONG SHIPPING LIMITED

Domicile: Fl.3, Harbor Commercial Building, No. 122 Connaught Rd. Central, Hong Kong 

Legal representative: Wu Minyi, director


Defendant: SHERRIFSVILLE CORPORATION

Domicile: Rm. 401, Tung Ning Building, No. 249-253 Des Voeux Road Central, Hong Kong 

Legal representative: Situ Yan, director

Agent ad litem of the above two defendants: Huang Hui, lawyer of Huang & Huang Co.

Law Firm

Agent ad litem of the above two defendants: Zhang Jing, lawyer of Huang & Huang Co. 

Law Firm


With respect to the case arising from dispute over contract of carriage of goods by sea filed by the plaintiff PICC Property and Casualty Company Limited, Guangzhou Branch against the defendant Elite Master International Limited, Shenzhen Branch (hereinafter referred to as Elite Shenzhen), ORIENT OVERSEAS CONTAINER LINE LIMITED (hereinafter referred to as ORIENT OVERSEAS), WANGFOONG SHIPPING LIMITED (hereinafter referred to as WANGFOONG SHIPPING) and SHERRIFSVILLE CORPORATION, the plaintiff instituted an action to this court on 27th November 2008. After accepting this case on 1st December, this court organized the collegial panel consisting of the judge Xu Yuanping, Deng Jinbiao and the deputy judge Li Mintao to try the case in accordance with the law. On 2nd June 2009, this court summoned all parties concerned to exchange evidences before hearing and held an open trial. Qiu Biaoshan, the agent ad litem of the plaintiff PICC Guangzhou, Cao Yanghui and Wu Kai, the agents ad litem of the defendant ORIENT OVERSEAS, Huang Hui and Zhang Jing, the agents ad litem jointly appointed by the defendant WANGFOONG SHIPPING and SHERRIFSVILLE CORPORATION attended the hearing. The defendant Elite Shenzhen did not attend the hearing after being summoned by this court by ways of public announcement. This court tried the case by default of Elite Shenzhen. The subject case has now been concluded. 


The plaintiff PICC Guangzhou alleged that in February 2008, Jinpin Electrical Company Ltd. Zhuhai S.E.Z. (hereinafter referred to as ?°Jinpin Electrical?±) purchased 5,000 pieces of plasma module from LG Electronics (Nanjing) Plasma Co., Ltd. (hereinafter referred to as ?°LG Electronics?±), which was transported from Nanjing to Zhuhai via Hongkong by waterway. LG Electronics covered cargo transportation insurance for the subject goods and the plaintiff issued therefor an insurance policy to cover the subject goods in line with the Institute Cargo Clauses (A). As the shipper, LG Electronics entrusted Elite Shenzhen to transport the foregoing goods from Hongkong to Zhuhai by means of CY-CY. Elite Shenzhen accepted the entrustment and issued B/L No.EM08020006 in replenishment on 19th February. Through its Hongkong agent WORLD CHANCE SHIPPING LTD (hereinafter referred to as WORLD CHANCE), Elite Shenzhen entrusted the actual transportation of the subject goods to ORIENT OVERSEAS who signed and issued B/L No.OOLU3030344080 on 17th February. After accepting the entrustment, ORIENT OVERSEAS entrusted the actual transportation of the subject goods to WANGFOONG SHIPPING, who, after receiving the goods and issuing the B/L, loaded the subject goods on board ?°WANGFOONG 10?± owned by SHERRIFSVILLE CORPORATION for shipment from Hongkong to Zhuhai. On 18th February, while ?°WANGFOONG 10?± was sailing in the Hongkong waters, 3 out of the 6 loaded containers fell overboard and the rest 3 containers were damaged due to contact and crush. As the cargo insurer, the plaintiff paid an insurance indemnity of USD 1,115,419.02 to the insured LG Electronics as agreed in the insurance contract and obtained the subrogation right in accordance with the law. Pursuant to relevant provisions in Maritime Code of the P.R.C, Elite Shenzhen, as the carrier, ORIENT OVERSEAS, WANGFOONG SHIPPING and SHERRIFSVILLE CORPORATION, as the actual carrier, shall be jointly and severally liable for the subject cargo damage. The plaintiff requested the court to adjudge the four defendants to be jointly and severally liable, to compensate the plaintiff USD1,115,419.02, HKD3,046, RMB8,000 and the interests incurred thereof for cargo damage and bear the litigation fee for the subject case. 


The plaintiff submitted the following evidential documents within the time limit for burden of proof: 1. Insurance Policy and Cargo Transportation Insurance Clauses; 2. Payment Voucher; 3. Certificate for Rejection of Goods; 4. Bill for Survey Fees, Debit Note, Bank Notice of Expenditure, Invoice for Survey Fees and Bank Remittance Slip; 5. Subrogation Form; 6. Purchase Order and Invoice; 7. Delivery Note and Packing List; 8. B/L No.EM08020006; 9. B/L No.OOLU3030344080; 10. Accident Report issued by WANGFOONG TRANSPORTATION LIMITED (hereinafter referred to as WANGFOONG TRANSPORTATION); 11. Claim letter; 12. Survey Report; 13. Appraisal Certificate on Cargo Damage, Business License of the survey institute and Qualification Certificate of the surveyor; 14. Retrofit Survey Report; 15. Tender Form. After the court hearing, the plaintiff supplemented the certificate concerning ?°WANGFOONG 10?± issued by the MSA of Hongkong S.A.R.


The defendant Elite Shenzhen neither attended the court hearing to make defense, nor submitted any evidences.


The defendant ORIENT OVERSEAS alleged that: 1. the plaintiff shall not be entitled the right to sue. Since the insured LG Electronics did not have the right to claim for compensation against ORIENT OVERSEAS, the plaintiff shall not be entitled the right to claim for compensation against ORIENT OVERSEAS after paying LG Electronics the insurance indemnity. Elite Shenzhen, not being the agent of ORIENT OVERSEAS, did not issue the subject B/L stating LG Electronics as the shipper for and on behalf of ORIENT OVERSEAS. ORIENT OVERSEAS did not accept the entrustment of the insured LG Electronics to transport the subject goods and the shipper and consignee stated in the subject B/L were not LG Electronics. LG Electronics, not being the shipper, consignee or notify party in the B/L, has no transportation contractual relationship with ORIENT OVERSEAS and thus could not exercise the right to claim for compensation as per the contractual relationship. The subject B/L issued by ORIENT OVERSEAS was a straight B/L stating Jinpin Electrical as the consignee, to whom the rights and obligations of the shipper under the transportation contract evidenced by such B/L has been transferred, thus LG Electronics shall not be entitled to claim for compensation by right of the B/L issued by ORIENT OVERSEAS. 2. ORIENT OVERSEAS was not the actual carrier for the subject transportation. ORIENT OVERSEAS was entrusted by WORLD CHANCE rather than the carrier Elite Shenzhen to transport the goods and then ORIENT OVERSEAS entrusted WANGFOONG SHIPPING with the actual transportation of the subject goods. ORIENT OVERSEAS did not confirm with the provisions on actual carrier as stipulated in the Maritime Code of the P.R.C and hence is not the actual carrier in the subject transportation and shall not bear the compensation liabilities for the subject cargo damage. 3. The subject cargo loss was caused by the fault of LG Electronics, for which the defendant ORIENT OVERSEAS shall not be liable. The purchase contract of the subject goods did not reach any agreement on rejection of goods, and the Chinese laws or international conventions did not have any provisions on rejection of goods, either. In the subject case, a majority of the goods remained intact, as a result, LG Electronics shouldn??t have accepted the goods rejected by Jinpin Electrical but should collect the cargo payment through the bank, otherwise, it shall be liable for all the legal consequences incurred therefrom. 4. It was stated clearly in the subject insurance policy that the premium was 10% higher than the actual cargo value, and the compensation amount claimed by the plaintiff exceeded the actual cargo loss, thus as to the part of insurance indemnity that exceeded the cargo value, the plaintiff shall not be entitled to subrogation right. 5. Pursuant to the B/L issued by ORIENT OVERSEAS, ORIENT OVERSEAS shall be entitled to limitation of liabilities for compensating the subject cargo damage within the amount of USD100,080. However, if calculated as per relevant provisions in Maritime Code of the P.R.C, the limitation of liabilities is USD407,928.12. The defendant requested the court to reject the claims filed by the plaintiff PICC Guangzhou. 


The defendant ORIENT OVERSEAS submitted the following evidential documents within the time limit for evidence submission: 1. copy of the B/L No.OOLU3030344080; 2. copy of the B/L No.WF5008033031; 3. accident report issued by WANGFOONG TRANSPORTATION. After the court trial, copy of B/L No.OOLU30105717060, hard copy of the email concerning the shipping order sent by ORIENT OVERSEAS CONTAINER LINE (H.K.) LIMITED (hereinafter referred to as ORIENT OVERSEAS (H.K.) to WANGFOONG SHIPPING, hard copy of the email concerning confirmation on shipping order sent by WANGFOONG TRANSPORTATION to ORIENT OVERSEAS (H.K.), hard copy of the email sent by WANGFOONG TRANSPORTATION to ORIENT OVERSEAS (H.K.) concerning packing list, list of containers not falling into sea and containers retrieved from sea as well as the Notarial Certificate certifying the above emails issued by Guangzhou Notary Public. 


The defendant WANGFOONG SHIPPING rebutted that: 1.Haven??t obtained the legal subrogation right, the plaintiff was not the qualified litigant in the subject case and shall not be entitled the right to sue. Since the subject goods were sold by the insured LG Electronics to Jinpin Electrical, after LG Electronics delivered such goods to Elite Shenzhen for shipment, the ownership of the goods and risks of loss and damage were transferred to Jinpin Electrical, therefore, at the occurrence of the subject insurance accident, LG Electronics could no longer benefit from the insurance interest of the said goods. The plaintiff mistakenly paid the insurance indemnity to the insured and thus failed to obtain the legal subrogation right. 2. The plaintiff failed to submit evidences to either prove WANGFOONG SHIPPING as the shipowner and bareboat charterer of ?°WANGFOONG 10?±, or as the actual carrier of the subject carriage, consequently it shall bear the unfavorable consequence for failure of burden of proof. 3. The survey report on cargo damage submitted by the plaintiff could not prove that the cause contributing to cargo damage and the cargo damage occurred during the carrier??s liable period, thus the plaintiff shall not be entitled to claim for cargo damage against the carrier. 4. The amount claimed by the plaintiff exceeded the actual cargo loss, lacked factual and legal basis, and was irrational. 5. WANGFOONG SHIPPING shall be entitled to limitation of liabilities for compensation. The defendant requested the court to reject the litigation requests filed by the plaintiff PICC Guangzhou.


The defendant WANGFOONG SHIPPING did not submit any evidential documents within the time limit for evidence submission. 


The defendant SHERRIFSVILLE CORPORATION argued that it agreed with the defense opinions of WANGFOONG SHIPPING. In addition, SHERRIFSVILLE CORPORATION alleged that the plaintiff failed to provide Certificate of Ship??s Ownership to prove SHERRIFSVILLE CORPORATION the shipowner and bareboat charterer of ?°WANGFOONG 10?±. SHERRIFSVILLE CORPORATION was not the actual carrier for the subject transportation and shall bear no compensation liabilities for the subject cargo damage. SHERRIFSVILLE CORPORATION shall be entitled to limitation of liabilities for compensation and thus the plaintiff could only be compensated within the limitation of liability as per the ratio of his claimed amount out of the total claimed amount for cargo loss and damage due to the subject accident. The defendant requested the court to reject the litigation requests filed by the plaintiff PICC Guangzhou. 


The defendant SHERRIFSVILLE CORPORATION did not provide any evidential documents within the time limit for evidence submission. 


Examination shows that on 10th January 2008, Weixing Digital Co., Ltd purchased 5,000 pieces of 32-inch LG plasma module from LG Electronics for and on behalf of Jinpin Electrical. The unit price was USD253.40, the total price USD1,267,000 and the terms of payment was CIF Zhuhai. The subject goods were loaded into six containers No. OOLU1665836, OOLU7320976, OOLU7727067, OOLU7729115, OOLU7831298 and OOLU7832416. After the goods were transported by ORIENT OVERSEAS to Hongkong, LG Electronics entrusted Elite Shenzhen to carry the goods from Hongkong to Zhuhai and Elite Shenzhen afterwards entrusted ORIENT OVERSEAS via its delivery agent WORLD CHANCE. On 17th February, the foregoing goods were loaded on board ?°WANGFOONG 10?± in Hongkong and transported to Zhuhai. Elite Shenzhen issued in replenishment B/L No. EM08020006 in the title of Elite Shenzhen and in the name of ORIENT OVERSEAS on 19th February, which stated that the shipper was LG Electronics, the consignee to the order of Bank of East Asia (China) Ltd, the notify party Jinpin Electrical, the delivery agent WORLD CHANCE, the carrying vessel ?°WANGFOONG 10?±, the voyage 449N, the port of loading Hongkong, the port of discharge Zhuhai, the cargo 32-inch LG plasma module, quantity 417 pallets, gross weight 50,040 kilograms. ORIENT OVERSEAS (H.K.) issued B/L No.OOLU3030344080 on 17th February 2008 for and on behalf of ORIENT OVERSEAS, stating that the shipper was WORLD CHANCE, the consignee Jinpin Electrical, the notify party Elite Shenzhen, the carrying vessel ?°WANGFOONG 10?±, the voyage 499N, the port of loading Hongkong, the port of discharge Zhuhai, the transportation terms FCL/FCL and CY/CY, the cargo 32-inch LG plasma module, quantity 417 pallets, gross weight 50,040 kilograms and freight prepaid. 


On 18th February 2008, while ?°WANGFOONG 10?± was sailing in Tai A Chau Waters in the vicinity of North Lantau Mountain, Hongkong during its voyage to Zhuhai, the tug cable suddenly broke off and three loaded containers No.OOCLU7831298, OOCLU7320976 and OOLU7832416 fell overboard. Containers No.OOCLU7831298 and OOCLU7320976 were salvaged while container No.OOLU7832416 could not be retrieved. Under the entrustment of PICC Guangzhou, the Min An Insurance Company (Hong Kong) Limited (hereinafter referred to as Minan Insurance) appointed Eurasia Marine Consultants Co., Ltd to meet with Mr Rodricks of Andrew MOORER & Associates who was appointed by the carrier and Mr Li of J & S Survey Co., Ltd who was appointed by the barge P & I Club and arrive at WANGFOONG TRANSPORTAOTN located at Hing Wah Street (W), Lai Chi Kok, Kowloon, Hongkong S.A.R. before 27th February to conduct a survey on the cargo loss condition of Container No.OOCLU7831298 and OOCLU7320976 as well as Container No.OOLU7832416 which hasn??t been retrieved and issue a survey report on 28th May afterwards. According to the report, the two containers loaded with goods were damaged to varying extent, with the wrapping materials of contents soaked and rotten, goods exposed, and those stowed at the bottom contaminated with mud; the cause of the water damage of goods was attributed to contact with sea water; the three containers that fell into the sea were loaded with 2808 pieces of 32-inch LG Plasma Module, with USD 253.40 for each piece and USD 711,547.20 in total; the salvage value of the rescued goods was HKD 3,000.00/MT and the total salvage value of goods stowed in Container No.OOCLU7831298 & Container No.OOCLU7320976 was not less than USD 6015.42 (converted as per the exchange rate of USD 1 to HKD 7.78); as the three containers were under strict control and management of M/V ?°WANGFOONG 10?± at the time of the subject accident, M/V ?°WANGFOONG 10?± shall be held liable therefor. PICC Guangzhou effected payment of HKD 3,046.00 to Ming An Insurance for survey fee, agent/handling fee, as well as postage and facsimile charges.


Container No.OOLU1665836, Container No.OOLU7727067 & Container No.OOLU7729115 that didn??t fall into the sea were shipped to Zhuhai, the port of destination, and then delivered to Jinpin Electrical. Jinpin Electrical returned the goods on the grounds of damage it sustained thereto. On 14th March 2008, Jinpin Electrical entrusted China Certification & Inspection Group Zhuhai Co., Ltd. with the appraisal of damage on the goods stowed in Container No.OOLU1665836, Container No.OOLU7727067 & Container No.OOLU7729115. The appraisal report thereof indicated that: of all the 2,192 pieces of 32-inch LG Plasma Module stowed in the three containers under survey, 1,992 pieces were observed with no damage in appearance, 20 pieces with slight damage in appearance, and 180 pieces with serious damage in appearance; calculated as per the unit price of USD 225.00 as stipulated in the contract, the loss value amounted to USD 41,850.00; the base day of such value was 9th January 2008, the date of contract. PICC Guangzhou paid RMB 8,000.00 to China Certification & Inspection Group Zhuhai Co., Ltd. for the appraisal. 


After occurrence of the subject cargo damage, LG Electronics sent a letter of claim to Orient Overseas for the aforesaid total loss of goods in an amount of USD 1,393,700.00.


LG Electronics arranged cargo transportation insurance for the subject goods with PICC Guangzhou who issued Insurance Policy No. PYIE200844019360E01195 to LG Electronics to underwrite the insurance. The insurance policy specifies: the insured is LG Electronics, the insured goods 32-inch LG Plasma Module of 5000 pieces, insurance amount USD 1,402,500.58, date of departure 6th February 2008, and the means of conveyance M/V ?°KAI TONG 6?± Voy. 8006E or M/V ?°OOCLKAOHSIUNG?± Voy. 021W or M/V ?°WANGFOONG 10?± Voy. 2008-033, and the transport route from Nanjing via Hong Kong to Zhuhai, as well as risks to be covered as per I.C.C. (A) dated 1/1/1982 and Institute War Clauses dated 1/1/1982 and Institute S.R.C.C. Clauses. After occurrence of the accident, PICC Guangzhou paid USD 600,000.00 and USD 515,419,02.00 which totals USD 1,115,419.02 as insurance indemnity to LG Electronics on 2nd July and 9th December respectively. LG Electronics signed the Receipt and Release on 6th January 2009 to confirm receipt of payment of USD1,115,419.02 from PICC Guangzhou as insurance indemnity for claim for damage to the plasma modules carried by M/V ?°WANGFOONG 10?± from Hong Kong to Zhuhai on 18th February 2008 under Insurance Policy No. PYIE200844019360E01195 and receipt of survey fee in the amount of HKD 3,046.00 and RMB 8,000.00 paid in advance by PICC Guangzhou, and agreed to transfer all the rights and interests of the subject-matter insured and rights of recourse within the limit of the aforesaid payment to PICC Guangzhou.


In addition, it was ascertained that Elite Shenzhen had the qualification of NVOCC.


The plaintiff submitted the certification on M/V ?°WANGFOONG 10?± issued by the Marine Department of the Hong Kong Special Administrative Region to prove that the owner of the subject vessel was SHERRIFSVILLE. The defendant Orient Overseas confirmed such evidence. However, the defendants WANGFOONG SHIPPING and SHERRIFSVILLE maintained that the aforesaid evidence failed to be submitted within the period for producing evidence and that it was formed in Hong Kong but failed to go through the procedures of notarization and certification and therefore did not confirm its evidential effect. The collegiate bench was of the opinion that the aforesaid evidence had been checked with the original by this court; although the defendants WANGFOONG SHIPPING and SHERRIFSVILLE repudiated such evidence, they failed to provide proof to the contrary; therefore the aforesaid evidence shall be admitted. Given the above, it was ascertained that SHERRIFSVILLE was the owner of M/V ?°WANGFOONG 10?±.


The plaintiff submitted the Accident Report made by WANGFOONG TRANSPORTATION to demonstrate the fact and circumstance of the subject damage of goods. The defendant Orient Overseas also submitted the Accident Report made by WANGFOONG TRANSPORTATION to prove that the subject damage of goods took place within the period of carriage by M/V ?°WANGFOONG 10?±. WANGFOONG TRANSPORTATION alleged in the Accident Report submitted by the plaintiff that: on 18th February 2008, M/V ?°WANGFOONG 10?± encountered strong wind and rough sea on the voyage; and the vessel had its steel cable fractured in a sudden and its hull swaying violently which caused parts of the containers onboard to fall into the sea. WANGFOONG TRANSPORTATION alleged in the accident report submitted by Orient Overseas that: en route to Zhuhai, containers onboard of M/V ?°WANGFOONG 10?± fell into the sea as a result of terrible weather condition; the containers of Orient Overseas that sustained damage thereby were Container No.OOCLU7831298, Container No.OOCLU7320976 and Container No.OOLU7832416. Both reports specified that WANGFOONG TRANSPORTATION was the agent of WANGFOONG SHIPPING. The defendants WANGFOONG SHIPPING and SHERRIFSVILLE repudiated the authenticity of the above two accident reports. The collegiate bench was the opinion that the two reports were not only found mutually corroborated in contents, but also consistent with each other when it came to ascertaining the distress occurring to the subject goods in transit carried by ?°WANGFOONG 10?± and shall be therefore confirmed by this court.


The Plaintiff submitted the Return-to-factory Service Internal Report to evidence that loss amount of goods stowed in the three containers that did not fall into the sea was USD 339,612.66. The three defendants argued that such evidence was copies without being checked with the original and was unilaterally provided by the insured with its content specified therein in contradiction with that of the Damage Appraisal Report, and thereby did not recognize its authenticity. The collegiate bench was the opinion that the aforesaid report was unilaterally provided by the insured with its content therein in contradiction with that of the Damage Appraisal Report and therefore was not confirmed by this court.


The Plaintiff provided the Bidding Proposal to evidence the salvage value of the goods stowed in the three containers that fell into sea. It was stipulated in the Bidding Proposal that the highest bid for the damaged goods stowed in Container No.OOLU7320976 and Container No.OOLU7831298 was HKD 56,000.00. The three defendants held that the evidence was copies without being checked with the original and hence did not recognize its authenticity. The collegiate bench was of the opinion that although the aforesaid Bidding Proposal was copies, the salvage value of goods stowed in the two damaged containers specified therein was higher than USD 6015.42 as assessed by the survey report, which was against the plaintiff; under the circumstance of no any other evidence on the handling of salvage value of goods provided by either party, the authenticity of the Bidding Proposal shall be confirmed. It could be therefore ascertained that the salvage value of the damaged goods stowed in Container No.OOLU7320976 and Container No.OOLU7831298 was HKD 56,000,00, equivalent to USD 7,197.94.


The defendant Orient Overseas submitted copies of B/L No.WF5008033031 and added after court copies of B/L No.OOLU30105717060, printouts of e-mail on Booking Order sent by Orient Overseas H.K. to WANGFOONG SHIPPING, printouts of e-mail on Booking Confirmation sent by WANGFOONG TRANSPORTATION to Orient Overseas H.K., and printouts of e-mail on the cargo lists, the list of containers that did not fall into the sea and salvaged containers that had fallen into the sea sent by WANGFOONG TRANSPORTATION to Orient Overseas H.K., as well as the notarial certificates of such e-mails mentioned above, to evidence that Orient Overseas entrusted WANGFOONG SHIPPING with the actual carriage of the subject goods. The plaintiff recognized the effect of such evidence as provided by the defendant. The defendants WANGFOONG SHIPPING and SHERRIFSVILLE maintained that B/L No.WF5008033031 was copies without either being checked with the original, or signed by anyone and thus did not recognize its evidential evidence; the printouts of e-mail on Booking Order sent to WANGFOONG SHIPPING, printouts of e-mail on Booking Confirmation sent by WANGFOONG TRANSPORTATION to Orient Overseas H.K., and the printouts of e-mail on the cargo lists, the list of containers that did not fall into the sea and salvaged containers that fell into the sea mentioned above sent by WANGFOONG TRANSPORTATION to Orient Overseas H.K. failed to be submitted within the period for producing evidence; besides these evidences were formed in Hong Kong but failed to go through relevant procedures of notarization and certification, and they were merely mails between Orient Overseas and WANGFOONG TRANSPORTATION which did not involve WANGFOONG SHIPPING and thus had nothing to do with WANGFOONG SHIPPING. The collegiate bench was of the opinion that there was neither original of the copies of B/L No.WF5008033031 for checking nor other evidence to support them; besides, they bore no signature and thus shall not be admitted; the copies of B/L No. OOLU3010571760 were not signed either, and moreover the bill of lading stipulated that Orient Overseas was in charge with the carriage of the subject goods, which failed to prove that the subject goods were carried by WANGFOONG SHIPPING as alleged by Orient Overseas. Orient Overseas failed to provide other evidence to prove that the addresser and addressee of the aforesaid e-mails submitted was WANGFOONG SHIPPING; and according to the contents of such e-mails, the addresser and addressee thereof was WANGFOONG TRANSPORTATION. Although the aforesaid e-mails that were noted with ?°WANGFOONG TRANSPORTATION as agent of WANGFOONG SHIPPING?±, based on the content thereof however, WANGFOONG TRANSPORTATION failed to indicate that he acted as the agent of WANGFOONG SHIPPING. Therefore, the evidences provided by Orient Overseas were insufficient to prove that WANGFOONG SHIPPING accepted his entrustment and carried the subject goods.


The collegiate bench was the unanimous opinion that this case arose from dispute over contract of carriage of goods by sea. Pursuant to the provision of Article 11 of Stipulations by the Supreme People's Court on the Scope of Cases to be Heard by Maritime Court, this case shall be under the specific jurisdiction of maritime courts. The destination of carriage of the subject goods fell within the jurisdiction of this court; pursuant to the provisions of Article 28 of Civil Procedural Law of the People??s Republic of China, this court had jurisdiction over this case. The parties concerned made no stipulation on the application of laws to the contract of carriage of goods; The plaintiff PICC Guangzhou and the defendants Orient Overseas, WANGFOONG SHIPPING and SHERRIFSVILLE all cited the laws of the People's Republic of China to raise claim and make defense. Pursuant to the stipulations of Paragraph 2 of Article 4 of Provisions by the Supreme People's Court on Several Issues Concerning the Application of the Law in Trials of Foreign-related Civil and Commercial Contract Disputes that ?°where parties concerned have not yet chosen the application of laws to the contract dispute but cited the laws of one country or region and raised no objection thereto, it shall be deemed that the parties concerned have made their choice over the laws that shall apply to the contract dispute?±, the substantive dispute of this case shall be settled with the application of the laws of the People??s Republic of China.   


The goods underwritten by the plaintiff PICC Guangzhou were 5,000 pieces of 32-INCH LG  Plasma Module carried by M/V ?°WANGFOONG 10?± from Hong Kong to Zhuhai. Although the voyage number for the goods underwritten shown on the insurance policy was different from that was different from that on the bill of lading, other information therein was consistent with what had been found out about the carriage of the subject goods. Thereby, the subject goods carried by sea was the subject-matter insured underwritten by PICC Guangzhou. After the occurrence of insurance accident to the subject-matter insured, PICC Guangzhou effected payment of indemnity to the insured. Pursuant to the provisions of Paragraph 1 of Article 252 of Maritime Code of the People's Republic of China, PICC Guangzhou obtained the right of subrogation and was entitled to lodge a claim for loss of goods against the carrier by subrogating the insured on the strength of the contract of carriage of goods by sea.


Pursuant to the provisions of Article 42 of Maritime Code of the People's Republic of China, ?°Carrier?± means the person by whom or in whose name a contract of carriage of goods by sea has been concluded with a shipper; ?°actual carrier?± means the person to whom the performance of carriage of goods, or of part of the carriage, has been entrusted by the carrier, and includes any other person to whom such performance has been entrusted under a sub-contract. In this case, LG Electronics entrusted Elite Shenzhen with the carriage of the subject goods, and Elite Shenzhen, in the name of agent of Orient Overseas, issued the bill of lading to the insured with the shipper as the insured. But there was no evidence demonstrating that Elite Shenzhen was the agent of Orient Overseas, and Orient Overseas denied in court that Elite Shenzhen issued the bill of lading as his agent. Pursuant to the provisions of Article 66 of General Principles of the Civil Law of the People's Republic of China that ?°The principal shall bear civil liability for an act performed by an actor with no power of agency, beyond the scope of his power of agency or after his power of agency has expired, only if he recognizes the act retroactively. If the act is not so recognized, the performer shall bear civil liability for it?±, under the circumstance that Orient Overseas did not recognize Elite Shenzhen as his agent retroactively, Elite Shenzhen shall solely bear civil liability for issuing the bill of lading. Therefore, Elite Shenzhen was the carrier of the carriage of the subject goods. The subject goods turned out to be loaded onboard of ?°WANGFOONG 10?± for actual carriage; without any proof to the contrary, SHERRIFSVILLE shall be the actual carrier. 


Article 46 of Maritime Code of the People's Republic of China prescribes that the carrier shall be liable for loss of or damage to the goods carried in containers which took place during the period starting from the time the carrier has taken over the goods at the port of loading, until the goods have been delivered at the port of discharge when the carrier is in charge of the goods. The subject goods sustained loss en route to the destination in this case. Elite Shenzhen and SHERRIFSVILLE as the carrier and actual carrier respectively, failed to provide evidence to prove that the subject loss of goods was attributable to the causes from which they were entitled to exoneration from liability as prescribed in Article 51 of Maritime Code of the People's Republic of China; and therefore Elite Shenzhen and SHERRIFSVILLE shall be jointly and severally held for liability for the loss of goods during the period of their responsibility in accordance to the provisions of Paragraph 1 of Article 60 and Article 63. PICC Guangzhou had indemnified the insured for the subject loss of goods, thus Elite Shenzhen and SHERRIFSVILLE shall indemnify the plaintiff in accordance with laws. The request of PICC Guangzhou that Orient Overseas and WANGFOONG SHIPPING bear joint and several liabilities lacked legal grounds and therefore was not supported. As for the responsibilities of Orient Overseas and WANGFOONG SHIPPING during the carriage of the subject goods, parties concerned can separately settle such claim as per their legal relationship. 


The subject goods were stowed in 6 containers in total, of which, 2 suffered from wet damage as a result of falling into the sea, 1 fell into sea with its whereabouts unknown and could be determined as total loss, another 3 did not fell into water but still sustained loss resulted from squeeze. Upon survey and with the salvage value deducted, the loss of goods of the three containers that fell into the sea amounted to USD 704,349.66, whereas that of the other three that did not fall into the sea amounted to USD 41,850.00. However, the Survey Report and the Damage Appraisal Certificate made their calculation on a different basis of unit price, with USD 253.40 for the Survey Report and USD 225.00 for the Damage Appraisal Certificate. The Damage Appraisal Certificate was issued by a competent inspection institution of our country and was made on the basis of the Purchase of Sales Contract provided by the insured as well as such information as customs manifest; hence the unit price of USD 225.00 for calculation of the subject loss of goods specified on the Damage Appraisal Certificate was more convincing. In view of the above, the loss amount of the subject loss could was calculated as USD 666,452.06 in total. 


Since there was no evidence to prove that the subject loss of goods was resulted from the reckless act or omission of the carrier Elite Shenzhen and the actual carrier SHERRIFSVILLE done with the intent to cause such loss or with knowledge that such loss would be probably resulted therefrom, Elite Shenzhen and SHERRIFSVILLE were entitled to limit their liability in accordance with Article 56 of Maritime Code of the People's Republic of China. Paragraph 1 of Article 56 of Maritime Code of the People's Republic of China prescribes that the carrier??s liability for the loss of or damage to the goods shall be limited to an amount equivalent to 666.67 Units of Account per package or other shipping unit, or 2 Units of Account per kilogram of the gross weight of the goods lost or damaged, whichever is the higher. The bill of lading issued by Elite Shenzhen as the carrier specified that subject goods of the 6 damaged containers stowed in 417 pallets and weighed 50,040 kg. Therefore, the liability for the loss of or damage to the subject goods shall be limited to an amount equivalent to 278,001.39 Units of Account as per the packages of the subject goods, or 100,080.00 Units of Account as per the gross weight thereof. And 278,001.39 Units of Account shall prevail in accordance with laws. ?°Unit of Account?± mentioned in Maritime Code of the People's Republic of China refers to the Special Drawing Right as defined by the International Monetary Fund. The limit of indemnify for loss of the subject goods was calculated as USD 438,604.22 as per the rate of 1 US dollar: 0.633832 SDRs as promulgated by the International Monetary Fund on 18th February 2008. For amount of loss as claimed by PICC Guangzhou that exceeded the aforesaid limit, it shall not be supported. The loss of interest that occurred after PICC Guangzhou effected payment of insurance indemnity shall be borne by the defendants in accordance with laws. PICC Guangzhou paid USD 600,000.00 and USD 515,419,02.00 as insurance indemnity to the insured on 2nd July and 9th December respectively; thus the interest shall be calculated from 2nd July 2008, on a principal in RMB converted from USD 438,604.22 as per the USD exchange rate against the RMB and based on the interest rate for a Renminbi loan over the corresponding period as promulgated by the People's Bank of China, to the date of payment set by this Judgment.


As for the survey fee and insurance agent fee as claimed by PICC Guangzhou, since it was not insurance indemnity directly paid by PICC Guangzhou to the insured but necessary expenses PICC Guangzhou paid for settlement of claim, such request for claim lodged by PICC Guangzhou shall not be supported by this court.


Since this case arose from dispute over contract of carriage of goods by sea, the counterplea raised by Orient Overseas pertaining to the Purchase and Sales Contract concluded between the insured LG Electronics and the consignee Jinpin Electrical went beyond the cognizance of this court, and thereby was not supported by this court. 


To sum up, Pursuant to the provisions of Article 130 of Civil Procedural Law of the People's Republic of China, Paragraph 1 of Article 46, Paragraph 1 of Article 56, Article 63, and Paragraph 1 of Article 252 of Maritime Code of the People's Republic of China, the Judgment is rendered as follows:


1.	The defendant Elite Master International Limited, Shenzhen Branch and the defendant SHERRIFSVILLE CORPORATION shall jointly and severally indemnify PICC Property and Casualty Company Limited, Guangzhou Branch for loss of goods in an amount of USD 438,604.22 and the interest thereof (calculated from 2nd July 2008, on a principal in RMB converted from the aforesaid amount in USD as per the central parity rate of the USD against the RMB promulgated by People's Bank of China on 2nd July 2008 and based on the interest rate for liquid capital load in RMB over the corresponding period as promulgated by the People's Bank of China, to the date of payment set by this Judgment);


2.	The claims filed by the plaintiff PICC Property and Casualty Company Limited, Guangzhou Branch against Orient Overseas Container Line Ltd. and WANGFOONG SHIPPING LIMITED is hereby rejected;


3.	Other claims filed by the plaintiff PICC Property and Casualty Company Limited, Guangzhou Branch is hereby rejected.


The court acceptance fee of this case is RMB 65,408.00, of which, the defendant Elite Master International Limited, Shenzhen Branch and the defendant SHERRIFSVILLE CORPORATION shall jointly and severally bear RMB 25,654.96, and the plaintiff PICC Guangzhou shall bear RMB 39,753.04. The court acceptance fee has been prepaid by the plaintiff, to whom this court will return the part that shall be borne by the two aforesaid defendants. And the two defendants shall pay RMB 25,654.96 to this court. 


The above obligation of payment shall be fulfilled within 10 days after this Judgment enters into effect. 


For failure to fulfill the obligation of payment within the period designated by this Judgment, interest on the debt for the delayed period shall be doubled, pursuant to the provisions of Article 229 of Civil Procedural Law of the People's Republic of China. 


In case of dissatisfaction with this Judgment, the plaintiff PICC Property and Casualty Company Limited, Guangzhou Branch and the defendant Elite Master International Limited, Shenzhen Branch may within 15 days upon the service of this Judgment, and the defendants Orient Overseas Container Line Ltd., WANGFOONG SHIPPING LIMITED and SHERRIFSVILLE CORPORATION may within 30 days upon the service of this Judgment, submit a statement of appeal to this court, together with copies in accordance with the number of the opposite parties. The appellate court shall be Guangdong Provincial Higher People??s Court.


Presiding judge: Xu Yuanping

Judge: Deng Jinbiao

Deputy judge: Li Mintao


Guangzhou Maritime Court (stamp) 


14th December 2009


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


Clerk: Zeng Huifen


The translation is provided by Huang & Huang CO.