Case of dispute over contract of carriage of goods by sea filed by PICC Property and Casualty Company Limited Zhuhai Branch against AMANO KAISOTEN and LTD MITSUI O.S.K.LINES, LTD etc

Updated：2015-08-17 Views：7667 
Guangzhou Maritime Court of the People's Republic of China 



      Civil Judgment 



                                    (2009) GHFCZ No.58



Plaintiff: PICC Property and Casualty Company Limited Zhuhai Branch 

Domicile: Block No.1, Jida Road Central Section, Zhuhai, Guangdong Province

Person in charge: Lin Bincheng, 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: AMANO KAISOTEN, LTD.

Domicile: 2-9-5 Minato Machi, Cingshuei, Shizuoka, Japan

Legal representative: Nobushige Konagaya, president

Agent ad litem: Li Hai, lawyer of Henry & Co. Law Firm 

Agent ad litem: Zhu Yushan, lawyer of Henry & Co. Law Firm



Defendant: MITSUI O.S.K. LINES, LTD.

Domicile: 3-6-32, Nakano Shima, Kitaku, Osaka, Japan

Legal representative: Masakazu Yakushiji, director 

Agent ad litem: Chen Xiangyong, lawyer of Wang Jing & Co. Law Firm

Agent ad litem: Cao Yanghui, 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 

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

Agent ad litem: Zhang Jing, lawyer of Huang & Huang Co. Law Firm



Defendant: SHERRIFSVILLE CORPORATION

Domicile: Rm. 401, Tung Ning Building, 249-253 Des Voeux Road Central, Hong Kong



Legal representative: Situ Yan, director 

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

Agent ad litem: Zhang Jing, lawyer of Huang & Huang Co. Law Firm



After accepting the case arising from dispute over contract of carriage of goods by sea filed by the plaintiff PICC Property and Casualty Company Limited Zhuhai Branch against the defendants AMANO KAISOTEN, LTD (hereinafter referred to as "AMANO") , MITSUI O.S.K.LINES, LTD (hereinafter referred to as "MITSUI"), WANGFOONG SHIPPING LIMITED (hereinafter referred to as "WANGFOONG SHIPPING") as well as SHERRIFSVILLE CORPORATION (hereinafter referred to as "SHERRIFSVILLE"), this court organized the collegial panel in accordance with the law, summoned the parties concerned on 27th May 2009 to exchange evidence before the court hearing and held the court hearing on 27th May and 29th May respectively. Qiu Biaoshan, the agent ad litem of the plaintiff, Zhu Yushan, the agent ad litem of the defendant AMANO, Cao Yanghui, the agent ad litem of the defendant MITSUI, Huang Hui and Zhang Jing, the agents ad litem appointed by the defendants WANGFOONG SHIPPING and the defendant SHERRIFSVILLE jointly were present at the court for evidence exchange before hearing and attended the court hearing. Chen Xiao, the surveyor who was applied by the plaintiff attended the hearing and received the cross-examination. The subject case has now been concluded. 



The plaintiff alleged that in February 2008, Zhuhai Kyoden Co., Ltd (hereinafter referred to as Zhuhai Kyoden) purchased a batch of relay accessories at C&F price from Kyoei Denko Co. Ltd (hereinafter referred to as "Kyoei Ltd.") who was responsible for carriage of the said goods by sea from Japan to Zhuhai. The plaintiff covered insurance for the said goods under Institute Insurance Clause of the British Association (A) at the cover application of Zhuhai Kyoden.



As the shipper, Kyoei Ltd. entrusted AMANO under CY-CY terms to transport the foregoing goods (totaling 1,507 pieces in Container No.MOFU0520996) from Shimizu, Japan to Zhuhai, China, on account of which AMANO signed and issued the sea waybill NO.SS1080056ZHU. AMANO entrusted MITSUI with the actual transport of the goods, and MITSUI in turn signed and issued the sea waybill MOLU217086052 from Shimizu, Japan to Zhuhai via Hongkong under CY-CY terms. During the voyage from Shimizu, Japan to Hongkong, MITSUI arranged MV "MOL OASIA" to carry out the transportation. During the section from Hongkong to Zhuhai, MITSUI entrusted WANGFOONG SHIPPING to transport the goods. After receiving the goods, WANGFOONG SHIPPING signed and issued B/L No. WF5008033107, loaded the goods on board "WANGFOONG 10" owned by SHERRIFSVILLE and transported the goods from Hongkong to Zhuhai. On 18th February 2008, while "WANGFOONG 10" was sailing from Hongkong to Zhuhai, due to weather impact, the goods fell overboard in Hongkong Waters and gave rise to a severe damage. 



AMANO, as the carrier, and MITSUI, WANGFOONG SHIPPING and SHERRIFSVILLE as the actual carrier, shall bear the compensation liabilities jointly and severally for the cargo loss. The plaintiff paid the insurance indemnity for the cargo loss of Zhuhai Kyoden pursuant to the agreement reached in the insurance contract and thus lawfully obtained the insurance subrogation. The plaintiff requests to adjudge the four defendants to jointly compensate the plaintiff for loss of CNY 2,849,822.06 (including: cargo loss totaling CNY 2,785,663.43, survey fee of CNY1,698.63 and appraisal fee of CNY62,460) and the interests thereof. The four defendants shall bear the litigation fee of this case. 



The plaintiff submitted the following evidential materials within the time limit for submission of evidence: 1. Cargo Transport Insurance Policy and Insurance Endorsement, Special Invoice for Insurance Business; 2. Cargo Transport Insurance Clause; 3. Bank pay-in slip of payment of insurance indemnity; 4. Cargo survey fee Debit Note and bank transfer voucher; 5. Surveyor and adjuster's fee Debit Note, voucher of wire transfer and invoice; 6. Receipt of insurance indemnity and Letter of Subrogation; 7. AMANO Sea Waybill; 8. MOL Sea Waybill; 9. B/L of WANGFOONG SHIPPING; 10. Incident Report (Dump Barge "Wangfoong 10" -Incident Report on 18 February 2008) of WANGFOONG SHIPPING; 11. Survey Report of Delta Marine Services Ltd.; 12. Final Adjust Report issued by Hengzhun Surveyors & Adjusters Ltd.; 13. Cargo Manifest and Freight List of MITSUI; 14. Letter sent by MITSUI to Ever Gain & Omori Forwarding Ltd. (hereinafter referred to as "Ever Gain Ltd." ), Letter sent by WANGFOONG SHIPPING to MOL (ASIA) LTD, Letter sent by Ever Gain Ltd. to Hongkong Kyoden Co., Ltd (hereinafter referred to as "Hongkong Kyoden"); 15. Situation description of Zhuhai Kyoden; 16. Business Registration Certificate of WANGFOONG SHIPPING; 17. Reply on "WANGFOONG 10"'s Being owned by SHERRIFSVILLE; 18. Contractual Relationship Between the B/L Holder and the Carrier in Hongkong Law, an article by Dai Xikun; 19. Business License of Hengzhun Surveyors & Adjusters.



The defendant AMANO defended that: 1. The Sea Waybill No. SS1080056ZHU signed and issued by AMANO as the carrier recorded the shipper to be Kyoei Ltd, the consignee Hongkong Kyoden, the notify party Even Gain Ltd., thus Zhuhai Kyoden shall not be the party concerned in the said sea waybill. The Sea Waybill No. MOLU217086052 signed and issued by MITSUI recorded the shipper to be AMANO, the consignee and notify party to be Even Gain Ltd. and the carrier to be MITSUI, therefore Zhuhai Kyoden is not the party concerned in the said sea waybill, either. The B/L No. WF5008033107 signed and issued by WANGFOONG SHIPPING LIMITED recorded the shipper to be MOL (ASIA) LTD, the consignee to be Zhuhai Kyoden, the carrier WANGFOONG SHIPPING LIMITED, consequently AMANO is not the party concerned in the said B/L. Since sea waybill is a non-negotiable transport document, under the circumstance when Zhuhai Kyoden has not been recorded as the party concerned in the sea waybill singed and issued by AMANO and MITSUI, Zhuhai Kyoden could not be the party concerned because of transference of the sea waybill, nor will there exist any contractual relationship of carriage of goods by sea between Zhuhai Kyoden and AMANO. The plaintiff who subrogated the rights of Zhuhai Kyoden runs short of factual and legal basis to claim against AMANO by right of the sea waybill. In 3 sets of the subject transport documents, Zhuhai Kyoden is merely the consignee in the B/L signed and issued by WANGFOONG SHIPPING and has constituted with WANGFOONG SHIPPING contractual relationship of carriage of goods by sea evidenced by B/L. Since AMANO is not the party concerned in the said B/L, when exercising the subrogation right, the plaintiff could only claim his right against WANGFOONG SHIPPING rather than AMANO by right of the B/L. 2. The plaintiff did not provide sufficient evidence to prove himself the insurer for the subject cargo transport who had actually compensated the insured Zhuhai Kyoden for the loss. The plaintiff did not make necessary elaboration on the loss claimed, nor did he provide corresponding evidences. Basing on the above, the litigation requests filed by the plaintiff against AMANO shall be rejected. 



The defendant AMANO did not provide any evidence. 



The defendant MITSUI argued that: Zhuhai Kyoden is not the consignee recorded in the sea waybill singed and issued by MITSUI and does not have any contractual relationship of carriage of goods by sea with MITSUI. The plaintiff who subrogated the right of Zhuhai Kyoden shall not be entitled to claim his right against MITSUI by right of the said sea waybill. MITSUI, merely being the carrier for the section from Japan to Hongkong, is only related to the parties concerned recorded in the sea waybill for such section transport and shall not bear the compensation liability for the cargo loss occurred when WANGFOONG SHIPPING LIMITED was transporting the goods from Hongkong to Zhuhai, nor shall it be jointly and severally liable with WANGFOONG SHIPPING for the compensation liability. According to the above, the litigation requests filed by the plaintiff against MITSUI shall be rejected. 



The defendant MITSUI submitted the following evidential materials within the time limit for submission of evidence: 1. Sea Waybill No.MOLU217086052; 2. Fax from Ever Gain Ltd; 3. B/L No.WF5008033107; 4. Business Registration Certificate of MOL (ASIA) LTD; 5. Confirmation of Zhuhai Kyoden on Consent to Release of Goods; 6. Accident Report of WANGFOONG SHIPPING. 

 

The defendant WANGFOONG SHIPPING and SHERRIFSVILLE jointly contended that: 1. the plaintiff did not provide such evidence as Purchase Contract, Commercial Invoice, Packing List, Declaration Form for Import Commodities to prove Zhuhai Kyoden the buyer for the subject goods under C&F price terms who was entitled the ownership and insurance interest of the goods at the occurrence of the subject accident of cargo damage, thus the premise for the plaintiff to exercise his subrogation right shall not be established; since he is not the qualified plaintiff of the subject case, he shall not be entitled to lodge the subject litigation. 2. In the front side of the B/L WF5008033107, it was clearly stated that "the contract evidenced or contained in this B/L shall be subject to the laws in Hongkong Special Administrative Region". As the consignee in the B/L, Zhuhai Kyoden had no objection to the provisions of application of law stated in the B/L; the plaintiff who lodged litigation by right of the B/L also expressed his accepting the content and clause recorded in the B/L. Therefore, trial on the legal relationship and responsibility between the plaintiff and WANGFOONG SHIPPING & SHERRIFSVILLE shall apply Hongkong law. Pursuant to Hongkong law, only the "carrier" shall bear the compensation liability for the cargo loss or damage occurred during his liable period, and "carrier" merely refers to "shipowner or charterer who concludes contract of carriage with the shipper". Moreover, there is no such concept as "actual carrier" under Hongkong law. Considering that WANGFOONG SHIPPING and SHERRIFSVILLE did not conclude any contract of carriage with Zhuhai Kyoden, nor were they the "carrier" stipulated in Hongkong law, they shall not bear the compensation liability fro the subject cargo damage and the request made by the plaintiff to demand WANGFOONG SHIPPING and SHERRIFSVILLE to bear the liability of the "actual carrier" lacks legal basis. 3. The plaintiff did not have evidence to prove WANGFOONG SHIPPING and SHERRIFSVILLE the shipowner or bareboat charterer of the subject vessel "WANGFOONG 10", thus failed to prove WANGFOONG SHIPPING and SHERRIFSVILLE the actual carrier as stipulated in Article 42 of Maritime Code of the P.R.C (hereinafter referred to as Maritime Code). Provided the plaintiff could evidence that B/L No.WF5008033107 was signed and issued by WANGFOONG SHIPPING, WANGFOONG SHIPPING, as the carrier for transport of the subject goods from Hongkong to Zhuhai Section, shall be liable to MOL (ASIA) LTD, the shipper stated in the B/L in accordance with Maritime Code rather than be jointly and severally liable with the through carrier for the B/L holder or the consignee. 4. The plaintiff did not have evidence to prove the fact of the cargo damage or that the cargo damage occurred during the liable period of WANGFOONG SHIPPING and SHERRIFSVILLE for transport of goods, nor did he possess evidence to testify the authenticity and reasonableness of the loss claimed. Even if the cargo damage occurred during the liable period of WANGFOONG SHIPPING and SHERRIFSVILLE for transport of goods, pursuant to provisions in Article 6 of Convention on Limitation of Liability for Maritime Claims, 1976 acceded to by Hongkong or Article 210 of Maritime Code, WANGFOONG SHIPPING and SHERRIFSVILLE shall be entitled to limitation of liability for maritime claims. The gross tonnage of "WANGFOONG 10" is 2,550.6 tons by calculation, the limitation of liability being 509,283.20 Units of Account, which when converted is CNY5,155,677.55. The plaintiff could only obtain compensation from the limitation of liability as per the proportion of his amount demanded in all of the claim amount arising from the subject marine accident. 



The defendants WANGFOONG SHIPPING and SHERRIFSVILLE furnished the evidential materials within the time limit for evidence submission as follows: 1. Copy of the Civil Judgment under ref. (2004) Xia Hai Fa Shi Chu Zi No.51 (without stamp), copy of the Civil Judgment under ref. (2005) Min Min Zhong Zi No.106 (without stamp), copy of the Civil Judgment under ref. (1998) Jiao Ti Zi No.3 (without stamp); 2. Copy of Hong Kong Carriage of Goods by Sea Ordinance downloaded from Hongkong Bilingual Laws Information System (copy without legalization and certification); 3. Copy of the Civil Judgment under ref. (2006) Guang Hai Fa Chu Zi No.368.



After cross-examination at the court hearing, and taking into account the evidence and Cross-examination Opinion submitted by all parties concerned, the collegial panel ascertained the following facts:



On 5th February 2008, the plaintiff signed and issued one set of Cargo Transport Insurance Policy which stated that: the plaintiff is the insurer, Zhuhai Kyoden is the insured; the Insurance Policy No. is PYII200844040096000043; the cargo insured is relay accessories weighing 17,309 kilometers, measuring 46.314 cubic meters, and totaling 1,507 pieces; the cargo marks is 40?? GP, and the container No./ seal No. is MOFU0520996/MOLU182682; the total amount insured is CNY 3,083,753; the date of shipment is 6th February 2008, the carrying vessel is "MOL OASIA" V.316S/"WANGFOONG 10"V.2008-033; the voyage is from Tokyo, Japan to Zhuhai,  via Hongkong; the kinds of risks are Institute Insurance Clause of the British Association (A), additional insurance covering War Risk Clause, additional insurance covering Strike Risk Insurance (Cargo). In accordance with the Institute Insurance Clause of the British Association (A), the insured section is from warehouse to warehouse, but no compensation shall be made for the cargo loss caused by unattended custody of the goods during the period of roadway transport with a deductible of CNY5,000; the Bs/L numbered SS1080056ZHU/WF5008033107; Open policy numbered PYAE200744040096000005; the insurance indemnity is payable in Zhuhai. 



On 26th February 2008, the plaintiff issued an insurance endorsement for modification of relevant content in the foregoing Insurance Policy, Which stated that: the Agreement No. is PYAE200744040096000005, the Insurance Policy No. is PYII200844040096000043, the Insurance Endorsement No. is EYII200844040096000007; it is hereby endorsed that the insurance amount under this Insurance Policy shall be increased by CNY 8,137, which is CNY 3,091,890 after increase. The insured shall make up for the corresponding insurance premium as contracted in the Agreement; other clauses and conditions remain unchanged. 



The Special Invoice for Insurance Business No.01799526 issued by the plaintiff on 26th February 2008 revealed that Zhuhai Kyoden paid the insurance premium in amount of CNY2,473.51 for transport of the subject goods. 



On 6th February 2008, AMANO signed and issued Sea Waybill No.SS1080056ZHU, which stated that: the shipper is Kyoei Ltd, the consignee is Hongkong Kyoden, the notify party and delivery agent is Ever Gain Ltd.; the place of receipt is Shimizu, Japan CY; the carrying vessel and voyage No. is "MOL OASIA" V.316S; the port of lading is Shimizu, Japan, the port of discharge Hongkong and the place of delivery Zhuhai CY; the container No. / seal No. is MOFU0520996 (40) / MOLU182682; packing condition and description of goods: relay accessories, invoice No.KDC-0202P, KDC-0203P, one container (1,507 pieces); total weight 17,309 kilograms, measurement 46.314 cubic meters; freight prepaid, shipped on board on 6th February 2008; one set of original waybill, issued at Shimizu, Japan, with AMANO as the carrier; such waybill is non-negotiable.



On 6th February 2008, MITSUI signed and issued the MOL Sea Waybill No.MOLU217086052, which stated that: the booking No. is 217086052-A; the shipper is AMANO; the consignee and notify party is Ever Gain Ltd.; the place of receipt is Shimizu, Japan CY; the carrying vessel and voyage No. is "MOL OASIA" V.316S; the port of loading is Shimizu, Japan, the port of discharge is Hongkong, the place of delivery is Zhuhai CY; the container No./seal No. is MOFU0520996/ MOLU182682/S4; packing condition and description of goods: 1?0 dry container,   relay accessories, invoice No.KDC-0202P, KDC-0203P (sea waybill), one container (1,507 pieces); total weight 17,309 kilograms, measurement 46.314 cubic meters; freight prepaid, the goods were loaded on board "MOL OASIA" V.316S at Shimizu, Japan; one set of original waybill, issued at Shimizu, Japan, with MITSUI as the carrier for and on whose behalf SEIWA KAIUN CO., LTD singed the sea waybill.



The subject goods were loaded on board "MOL OASIA" at Shimizu, Japan and delivered to Hongkong on 11th February 2008. On 15th February 2008, Ever Gain Ltd. sent a fax to MITSUI alleging: with regard of the second leg carriage of goods under B/L No.MOLU217086052, kindly please arrange the second carrier of 17th February to Zhuhai; the receiving unit is Zhuhai Kyoden; the cargo name in Chinese is relay accessories; the container No. is MOFU0520996/40??; the No. of pieces is 1,507; the weight is 17,309 (gross weight); the discharging quay is Jiuzhou Port (Zhuhai); the B/L is telex released and the original is kept on board (the goods are directly released to the receiving unit without presentation of original B/L); WANGFOONG TRANSPORTATION LTD. is designated to be the second-leg carrier (hereinafter referred to as WANGFOONG TRANSPORTATION). Such fax bears the stamp of Ever Gain Ltd.



On 17th February 2008, WANGFOONG SHIPPING signed and issued B/L No.WF5008033107, which stated: the shipper is MOL (ASIA) LTD, the consignee and notify party is Zhuhai Kyoden; to be delivered to the carrier by means of N/A, the place of receipt and the port of loading is Hongkong, the carrying vessel is "WANGFOONG 10" V. 2008-033, the port of discharge and the place of delivery is Zhuhai; the container is 40??GP, container No. / seal No. is MOFU0520996 /MOLU182682; pieces, name of goods and kind of package: one 40??GP container, shipper's load, stow, count and seal, 1,507 pieces of relay accessories. The subject goods were shipped from Shimizu, Japan to Zhuhai via Hongkong and transshipped from "MOL OASIA" V.316S; the gross weight is 17,309 kilograms, the measurement is 46.31 cubic meters; freight prepaid; the original B/L is in triplicate and the contract evidenced or contained herein shall apply the law of Hongkong Special Administrative Region and relevant claim or dispute arising therefrom shall be governed by the court of Hongkong Special Administrative Region; the issuing place of the B/L is Hongkong and WANGFOONG TRANSPORTATION LTD. signed and issued the B/L as the agent of WANGFOONG SHIPPING.



On 18th February 2008, WANGFOONG TRANSPORTATION LTD. sent a fax to MOL (ASIA) LTD in the name of WANGFOONG SHIPPING, alleging that: we are regretful to advise you that while "WANGFOONG 10" was sailing to Zhuhai this morning, the containers fell overboard due to the severe weather impact, in response to which we have been taking special measures. Please notify your insurer. Meanwhile, we will keep you duly reported of the development of the case. Please refer to the attachment for detail of the affected containers. We express our great regret for any inconvenience arising from the subject accident. If you have any queries, please contact Mr. TONY KWAN of our company. The attachment stated: "WANGFOONG 10" V.2008-033, estimated time of departure from Hongkong 17/02/2008, CY-MOL-WF5008033107, container No.MOFU0520996/40??, MOL Sea Waybill No.MOLU217086052, Zhuhai Kyoden. 



On 19th February 2008, WANGFOONG TRANSPORTATION LTD. sent relevant client Accident Report of Barge "WANGFOONG 10" Dated 18th February 2008 in the name of WANGFOONG SHIPPING LIMITED, alleging that: at 1045 hrs in the early morning of 18th February 2008, Barge "WANGFOONG 10" was towed by tug "RESPONSE" and headed for Zhuhai. Unfortunately, the tug and the barge were caught in strong winds and waves, the steel rope of "WANGFOONG 10" suddenly broke down, and the ship severely swang, causing part of the containers to fall overboard at Latitude 22.11?°and longitude 113.53. After the occurrence of the accident, we immediately reported it to Hong Kong Marine Department. The officers thereof have arrived at the scene of the accident and commenced the investigation. Meanwhile, we were making every effort to salvage the sunken container. The rescue was still in progress by the time we sent the letter. We have informed our cargo insurer of the accident who has accordingly designated surveyors to investigate the accident. If your party has taken out marine cargo insurance on the goods, you are strongly advised to notify the insurer of accident conditions. For a necessary joint survey or the latest progress of the accident, please contact our colleague Mr. TONY KWAN. We deeply regret for any inconvenience this accident brings to you. The accident report is affixed with the seal (Shipping Agency 10) of WANGFOONG TRANSPORTATION LTD.



On 19th February 2008, ZHUHAI KYODEN issued the Notice of Claim to the plaintiff, informing him of the insurance accident and requesting him to send immediately staff members to investigate the accident and ascertain the loss, and indemnify ZHUHAI KYODEN for the actual thus sustained as per the agreement specified in the insurance contract. 



On 7th March 2008, the plaintiff issued to Hengzhun Surveyors & Adjusters the Letter of Appointment with Respect to the Cargo Insurance Case 2008.2.17of ZHUHAI KYODEN CO., LTD, which states: with respect to the cargo under the policy No. PYAE200744040096000005 of the import cargo insurance underwritten by our company for ZHUHAI KYODEN, the insured container (MOFU0520996) with relay materials packed inside in the insurance amount of RMB3,083,753 on board of "Wangfoong 10" fell into the sea as it was passing through the waters of Hong Kong from Japan en route to Zhuahai due to the sudden break of the pulling cable of the tugboat from the chain wheel. After the accident, we entrusted The Ming An Insurance Company (Hong Kong) Limited (hereinafter referred to "Ming An Insurance") to make a survey thereof, ascertain the loss, and investigate the cause of the accident. Delta Marine Services Ltd. has conducted the survey as entrusted by Ming An Insurance. It is said that the sunken container has been salvaged. Upon an open-package inspection, the container was found to have been pressed out of shape, with sea water seeping into it and soaking the whole cargo, thereby causing severe damage to the goods. Considering that the amount involved is quite large and it is rather time-limited, we hereby entrust your company with the survey of the accident, to ascertain the occurrence of the insured event, the cause thereof and the insured liability, as well as to check and ascertain the loss of the cargo and handle the salvage value as soon as possible. Please report the settlement plan to our company for ascertainment before confirming the loss with the insured. And please maintain timely communication and contact with our staff members in charge for the progress of the claim while dealing with the case. The fee thereof shall be in conformity with the charge standard of insurance assessment companies confirmed by your company and the provincial department of our company. 



On 15th May 2008, ZHUHAI KYODEN sent to Ever Gain Company Limited the Contact Letter which states: with respect to the handling of the damaged goods, we hereby entrust JOHNSON LAM TRADING CO. to take delivery of the goods. Please arrange the time thereof as soon as possible, and do not affect our company's settlement of the insurance claim. On 22nd May 2008, ZHUHAI KYODEN sent to Ever Gain Company Limited the Confirmation of Cargo Release which states: we hereby entrust Ever Gain Company Limited to go through the procedure of taking delivery of the cargo in Hong Kong and take delivery of the whole cargo from your company on behalf of our company. We agree to undertake to assume any liability thus incurred. 



On 22nd May 2008, ZHUHAI KYODEN sent to Hengzhun Surveyors & Adjusters the Notice which states: we have decided to take delivery of the cargo from the container terminal of Wangfoong at 10:00 a.m. on 26th May 2008. Please inform JOHNSON LAM TRADING CO. to go through the procedure of taking delivery of the cargo in Hong Kong and take delivery of the whole cargo on behalf of our company.



On 27th March 2008, Delta Marine Services Ltd. issued the Survey Report which states: with respect to the survey made to the container (MOFU0520996) housed in the container yard of Wangfoong in Hing Wah Street, Lai Chi Kok, Kowloon, Hong Kong, we found that the container seal was in good condition, but the container was pressed out of shape, the goods of different sizes and packages inside the container toppled over and the outer packing was seriously soaked or decomposed, and contaminated by the sludge; according to the commercial invoice issued by Kyoei Co., Ltd., the value of the goods involving the case amounts to JPY42,272,253, equivalent to HKD3,082,043.76; since the container was in the charge of "Wangfoong 10" when the accident occurred, the ship shall be liable therefor.



On 10th October 2008, Hengzhun Surveyors & Adjusters issued to the plaintiff the Final Adjust Report which states: three surveys were conducted to the container (MOFU0520996) housed in the container yard of Wangfoong in Hing Wah Street, Lai Chi Kok, Kowloon, Hong Kong on 20th February, 12th March, and 26th May of 2008 respectively. Upon survey and adjustment, the 1507 boxes of relay parts became a constructive total loss; the goods inside the container sustained damage by getting soaked as a result of the accident in the course of carriage which caused the container on board of "Wangfoong 10" to fall into the sea; the accident took place during the period of responsibility of the carrier "Wangfoong 10", therefore the owner of the ship shall be liable for the loss of the goods and the insurer may file a claim for recovery against the owner of "Wangfoong 10" after indemnifying the insured and obtaining the right of subrogation; as per the invoice provided by the plaintiff, the value of the goods is JPY42,272,253 which adds up to JPY 46,499,478.30 with the addition of 10% thereof, and when calculated as per the JPY/CNY exchange rate of 100:6.6448 of Bank of China on 18th February 2008, the ascertained amount of loss of the accident is RMB3,089,797.33; Upon inquiry for the quotation of the damaged goods, the highest quotation is JOHNSON LAM TRADING CO.'s quotation of HKD333,000. With consent of the insurer, the insured, the carrier, and owner of M/V "MOLOASIA" and the owner of "Wangfoong 10", JOHNSON LAM TRADING CO. transferred HKD333,000 into the account of Hengzhun Surveyors & Adjusters for temporary deposit and the damaged goods were all taken delivery of by JOHNSON LAM TRADING CO on 26th May 2008; the salvage value is calculated as RMB299,133.90 as per the HKD/RMB exchange rate of 100:89.83 of Bank of China on 2nd May 2008; the remaining loss amount after the deduction of the salvage value is RMB2,790,663.43; the deductible amount under this policy is RMB5,000, and the remaining amount of adjustment of loss after such deduction is RMB2,785,663.43; we suggest that the insurance indemnity amount paid by the insurer be RMB2,785,663.43, and the salvage value paid by HENGZHUN SURVEYORS & ADJUSTERS be HKD333,000.



On 12th June 2008, the plaintiff effected the payment of the survey fee in the amount of HKD1,922 to Ming An Insurance via Bank of China, of which, the survey fee of Delta Marine Services Ltd. is HKD1,372, and the handling fee of Ming An Insurance is HKD550; on 9th December 2008, the plaintiff effected the payment of RMB 2,785,663.43 to ZHUHAI KYODEN for the loss of the goods and RMB 62,460 as the survey fee to HENGZHUN SURVEYORS & ADJUSTERS via Zhuhai City Commercial Bank.



The Receipt of Insurance Indemnity and Letter of Subrogation issued by ZHUHAI KYODEN to the plaintiff on 28th November 2008 states: Claim No. CYII200844040098000053, Policy No. PYII200844040096000043; the undersigned hereby confirms the receipt of the amount of RMB2,785,663.43 from the plaintiff as the indemnity amount of the loss of the relay parts carried by M/V "MOL OASIA" 316S/ "Wangfoong 10" 2008-033 shipped from Japan to Zhuhai via Hong Kong under the captioned policy and RMB64,193.53 as the survey fee advanced by the plaintiff; we agree to assign all the rights and interests, and right of recourse of the insured matter to the plaintiff, subject to the limit of insurance indemnity, and invest the plaintiff with full authority and provide any necessary assistance when the plaintiff exercise such rights, but the expense thus incurred shall be borne by the plaintiff.



In addition, it is stated in the attachment to the reply of the Hong Kong Marine Department to Qiu Biaoshan, the agent ad litem of the plaintiff on 23rd April 2008 that: the owner of "Wangfoong 10" is SHERRIFSVILLE; the ship is a non-propelled tugboat, with 49.7m as the full length, 22.24m as the maximum breadth, 2,550.6 tons as the gross tonnage and 1,785.42 tons as the net tonnage and it was built in 2001.



During the court hearing, the plaintiff, AMANO and MITSUI agreed to apply the laws of the People's Republic of China, whereas WANGFOONG SHIPPING. and SHERRIFSVILLE maintained to apply the laws of Hong Kong Special Administrative Region but they raised no objection to the appliance of the laws of the People's Republic of China.



The collegiate members reach the consensus that the plaintiff is the insurer of carriage of the goods in the case, and he has filed a lawsuit on the contract of carriage of goods against the four defendants on the strength of the right of subrogation he obtained after effecting the payment of the insurance indemnity to the insured ZHUHAI KYODEN; however, the goods was shipped from Shimizu, Japan to Zhuhai via Hong Kong and the domicile of both AMANO and MITSUI is Japan while the domicile of both WANGFOONG SHIPPING and SHERRIFSVILLE is Hong Kong. In view of the above, the contractual relationship of the contract of carriage of goods in this case involves foreign element. Thereby this case arises from dispute over contracts of carriage of goods by sea involving foreign element.



The destination of carriage of the goods is Zhuhai which falls within the scope of jurisdiction of this court. This court has jurisdiction over the case, pursuant to the provisions of Paragraph 2 of Article 6 of Special Maritime Procedure Law of the People's Republic of China (hereinafter referred to "Special Maritime Procedure Law") and the provisions of Article 28 of Civil Procedure Law of the People's Republic of China (hereinafter referred to as "Civil Procedure Law") that "An action initiated for a dispute over railway, highway, water, or air transport or through transport contract shall be under the jurisdiction of the people's court in the place where the transport starts or ends or where the defendant has his or her domicile". The plaintiff lodged a lawsuit with this court. The four defendants raised no objection to the jurisdiction of the court and responded to the action by making their defense. It shall be deemed that the four defendants have accepted that this court has jurisdiction over the case, as per the provisions of Article 243 of Civil Procedure Law that "If in a civil action in respect of a case involving foreign element, the defendant raises no objection to the jurisdiction of a peoples court and responds to the action by making his defence, he shall be deemed to have accepted that this peoples court has jurisdiction over the case."



Article 269 of Maritime Code prescribes that "The parties to a contract may choose the law applicable to such contract, unless the law provides otherwise. Where the parties to a contract have not made a choice, the law of the country having the closest connection with the contract shall apply." During the court hearing, the plaintiff, AMANO and MITSUI agreed to apply the laws of the People's Republic of China, whereas WANGFOONG SHIPPING and SHERRIFSVILLE maintained to apply the laws of Hong Kong Special Administrative Region but they raised no objection to the appliance of the laws of the People's Republic of China. The bill of lading issued by WANGFOONG SHIPPING stipulates that the contract demonstrated or contained thereby applies the laws of Hong Kong Special Administrative Region. Yet WANGFOONG SHIPPING and SHERRIFSVILLE simply provided the copies of Hong Kong Carriage of Goods by Sea Ordinance downloaded from Hong Kong Bilingual Laws Information System, and failed to perform relevant procedures of notarization and legalization. Therefore such evidence was insufficient to be admitted as the law of Hong Kong Special Administrative Region to deal with substantive disputes with respect to a contract of carriage of goods. Besides, Hong Kong follows the English law which is case law. WANGFOONG SHIPPING and SHERRIFSVILLE failed to provide to the court any relevant judgment made by High Court of the HKSAR. Moreover, WANGFOONG SHIPPING and SHERRIFSVILLE also quoted relevant provisions of Maritime Code in their defense. In view of that, the opinion of appliance of the laws of Hong Kong Special Administrative Region to this case maintained by WANGFOONG SHIPPING and SHERRIFSVILLE shall not be supported due to its insufficiency of burden of proof. The domicile of the plaintiff is Zhuhai which is also the destination of carriage of the goods and therefore is the one of places of performance under the contract of carriage. China is the country that has the closest connection with the case and thereby the laws of the People's Republic of China should apply to this case to deal with substantive disputes, pursuant to the principle of the closest connection. 



ZHUHAI KYODEN, as the consignee, took out marine cargo insurance for the goods shipped from Japan to Zhuhai and the plaintiff issued Cargo Insurance Policy to ZHUHAI KYODEN accordingly. The plaintiff is the insurer of the goods and ZHUHAI KYODEN is the insured. The damage to the goods took place in the course of carriage from Hong Kong to Zhuhai. As the insurer, the plaintiff effected the payment of indemnity to ZHUHAI KYODEN in accordance with the claim application made by the insured ZHUHAI KYODEN. After receipt of the payment of indemnity, ZHUHAI KYODEN issued to the plaintiff the Receipt of Insurance Indemnity and Letter of Subrogation which agrees to assign all the rights and interests of the insured matter within the limit of insurance indemnity to the plaintiff. Accordingly, the plaintiff is entitled to subrogate the insured ZHUHAI KYODEN to claim recovery from the parties responsible for the marine accident within the limit of insurance indemnity, pursuant to the provisions of Paragraph 1 of Article 60 of Insurance Law of the People's Republic of China (hereinafter referred to as "Insurance Law") that "If an insured risk occurs due to the damage of the objects insured by a third party, the insurer shall, starting from the date of paying the indemnities, subrogate the insured to exercise the right to indemnities from the liable third party" and the provisions of Article 93 of Special Maritime Procedure Law that "Where the occurrence of an insured event is caused by a third party, after having paid insurance indemnity to the insured, the insurer may exercise by subrogation the right of the insured to demand indemnity against the third party up to the limit of insurance indemnity".



AMANO issued the sea waybill (No. SS1080056ZHU) and MITSUI issued the sea waybill (No. MOLU217086052). Both stipulate Shimizu, Japan as the port of shipment and Hong Kong as port of discharge. In view of that, AMANO and MITSUI are both the carriers of the carriage of goods in the section from Shimizu, Japan to Hong Kong. The shipper as stipulated in the sea waybill issued by AMANO is Kyoei Co., Ltd., and the consignee is Hong Kong KYODEN and the notify party is Ever Gain Company Limited. The shipper as stipulated in the sea waybill issued by MITSUI is AMANO, and the consignee and the notify party is Ever Gain Company Limited. ZHUHAI KYODEN is not the shipper, consignee or notify party of the two sea waybills. Article 80 of Maritime Code prescribes that "Where a carrier has issued a document other than a bill of lading as an evidence of the receipt of the goods to be carried, such a document is prima facie evidence of the conclusion of the contract of carriage of goods by sea and the taking over by the carrier of the goods as described therein. Such documents that are issued by the carrier shall not be negotiable." The two sea waybills respectively issued by AMANO and MITSUI are not negotiable. Without being so stipulated ZHUHAI KYODEN shall not, as a result of the assigned sea waybill, become a party thereto, considering which, there is no relationship with respect to the contract of carriage of goods by sea among ZHUHAI KYODEN, AMANO and MITSUI. In addition, the goods were shipped from Shimizu, Japan to Zhuhai via Hong Kong. However, according to the statement of two sea waybills respectively issued by AMANO and MITSUI, the port of loading is Shimizu, Japan and the port of discharge is Hong Kong. The damage to the goods took place in the section from Hong Kong to Zhuhai which does not fall within the responsibility of carriage of AMANO and MITSUI. Therefore, AMANO and MITSUI shall not be liable therefor. The claim that filed by the plaintiff by subrogating ZHUHAI KYODEN in light of the two captioned sea waybills that there is contractual relationship among ZHUHAI KYODEN, AMANO and MITSUI in terms of contract of carriage of goods and that AMANO and MITSUI shall take several and joint liabilities lacks foundation in fact and legal basis, and thereby shall not be supported.



WANGFOONG TRANSPORTATION LTD issued the bill of lading (No.WF5008033107) as agent of WANGFOONG SHIPPING. Thus the bill of lading shall be deemed to be issued by WANGFOONG SHIPPING. It is a straight B/L, with MOL (Asia) Ltd stipulated as the shipper, ZHUHAI KYODEN as the consignee and the notify party, Hong Kong as the place of receipt and the port of loading, Zhuhai as the port of discharge and the place of delivery, and "Wangfoong 10" as the carrying vessel. Pursuant to the provisions of Article 71 of Maritime Code that "A bill of lading is a document which serves as an evidence of the contract of carriage of goods by sea and the taking over or loading of the goods by the carrier, and based on which the carrier undertakes to deliver the goods against surrendering the same", WANGFOONG SHIPPING issued the bill of lading and thereby was the carrier of the goods in the section of carriage from Hong Kong to Zhuhai. ZHUHAI KYODEN was the consignee of the straight bill of lading, and therefore ZHUHAI KYODEN and WANGFOONG SHIPPING contractually related to each other with respect to the contract of carriage of goods by sea certified by the bill of lading. SHERRIFSVILLE, as the owner of the carrying vessel "Wangfoong 10", was the actual carrier of that segment of carriage, as per the provisions of Paragraph 2 of Article 42 of Maritime Code that "'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". 



The carriage of the goods was container transportation. Pursuant to the provisions of Paragraph 1 of Article 46 of Maritime Code that "The responsibilities of the carrier with regard to the goods carried in containers covers the entire period during which the carrier is in charge of the goods, 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", the goods was in the charge of WANGFOONG SHIPPING from the time he had taken over it in Hong Kong until it had been delivered to ZHUHAI KYODEN in Zhuhai, which was the period of responsibility of carriage of WANGFOONG SHIPPING. As the actual carrier, the period of responsibility of carriage of SHERRIFSVILLE commenced from the time the goods had been loaded onboard of "Wangfoong 10" in Hong Kong until the goods had been discharged from the vessel in Zhuhai. WANGFOONG SHIPPING and SHERRIFSVILLE shall, as prescribed in Article 48 of Maritime Code, properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried within the their respective periods of responsibility. The damage to the goods took place as the container fell into the sea due to the break of the steel cable on the way from Hong Kong to Zhuhai. The damage occurred within the period of responsibility of carriage of WANGFOONG SHIPPING and SHERRIFSVILLE who failed to bear the burden of proof to certify that the damage was resulted from any cause for which the carrier is entitled to exemption of liability as provided for in Article 51 of Maritime Code. Therefore, it should be deemed that WANGFOONG SHIPPING and SHERRIFSVILLE failed to perform the liability of properly and carefully loading, handling, stowing, carrying, keeping, caring for and discharging the goods carried as the carrier and the actual carrier respectively in the course of carriage, and thereby shall be liable for the loss resulted therefrom. Pursuant to the provisions of Article 63 of Maritime Code that "Where both the carrier and the actual carrier are liable for compensation, they shall jointly be liable within the scope of such liability", WANGFOONG SHIPPING and SHERRIFSVILLE shall be jointly and severally liable therefor. 



ZHUHAI KYODEN was the consignee of the straight bill of lading issued by WANGFOONG SHIPPING, and was entitled to take delivery of the goods thereunder. The goods fell into the sea in the course of carriage and sustained damage thereby. When the goods was salvaged and shipped back to Hong Kong, it was in effect that JOHNSON LAM TRADING CO. as entrusted by ZHUHAI KYODEN had taken delivery of all the damaged goods. Upon selling the damaged goods at a reduced price, as the consignee of the straight bill of lading, ZHUHAI KYODEN was entitled to indemnity for the loss of the damaged goods after deduction of the salvage value against WANGFOONG SHIPPING and SHERRIFSVILLE who were liable therefor. As the assignee of the right of subrogation, the plaintiff was also entitled to claim recovery for the loss of the damaged goods against WANGFOONG SHIPPING and SHERRIFSVILLE. The defense made by WANGFOONG SHIPPING and SHERRIFSVILLE that the carrier shall only indemnify the shipper for cargo damage/loss taking place during the period of responsibility of carriage and need not to indemnify the consignee, is groundless and shall not be supported. 



Hengzhun Surveyors & Adjusters, as entrusted by the plaintiff, issued the Final Adjust Report. The four defendants raised objection to the objectivity of the conclusion of the Final Adjust Report, but they did not furnish any evidence to refute it. Therefore, the evidential effectiveness of the Final Adjust Report shall be confirmed. In light of the invoice provided by ZHUHAI KYODEN, the Final Adjust Report confirmed the value of the damaged goods C&F Zhuhai as JPY42,272,253 which was calculated as RMB2,808,906.67 as per the JPY/RMB exchange rate of 100: 6.6448 of Bank of China on 18th February 2008 when the marine accident took place; JOHNSON LAM TRADING CO. bought the damaged goods at the ceiling price of HKD333,000, and effected the payment thereof on 2nd May 2008. Calculated as per the HKD/RMB exchange rate of 100:89.83, the salvage value of the goods amounted to RMB299,133.90. ZHUHAI KYODEN had effected the payment of the premium of the marine cargo insurance to the plaintiff in the amount of RMB2,473.51. Pursuant to the provisions of Paragraph 1 and Paragraph 2 of Article 55 of Maritime Code that "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, while that for the damage to the goods shall be calculated on the basis of the difference between the values of the goods before and after the damage, or on the basis of the expenses for the repair. The actual value shall be the value of the goods at the time of shipment plus insurance and freight", the actual value of the damaged goods was RMB2,811,380.18 (RMB2,808,906.67 + RMB2,473.51). After deduction of the salvage value of RMB299,133.90, the remaining amount of the loss of the goods was RMB2,512,246.28. WANGFOONG SHIPPING and SHERRIFSVILLE shall effect the payment of RMB2,512,246.28 as well as the interest thereof, calculating from the next day the plaintiff effected the payment of indemnity to the defendant ZHUHAI KYODEN, i.e. 10th December 2008 till the date of payment as ascertained by this judgment and calculated as per the interest rate of working capital loan for enterprises over the corresponding period promulgated by Bank of China, to the plaintiff as indemnity for the captioned loss. The indemnity amount of RMB2,785,663.43 which the plaintiff had paid to ZHUHAI KYODEN and now claimed by the plaintiff exceeds the actual loss of the goods, and thereby the amount in excess shall not be supported.



As the insurer, the plaintiff entrusted Delta Marine Services Ltd. and Hengzhun Surveyors & Adjusters with the survey and adjustment, and effected the payment of the survey fee in the amount HKD1,922 and the adjustment fee in the amount of RMB 62,460, for the purpose of investigating and ascertaining the nature and cause of the insured event, and the extent of damage. Pursuant to the provisions of Article 64 of Insurance Law that "The insurer shall bear all necessary and reasonable expenses incurred by the insurer and the insured for the purpose of investigating and ascertaining the nature and cause of the occurrence of the insured event, and the extent of loss or damage to the subject matter of the insurance", the survey fee and adjustment fee paid by the plaintiff shall be borne by himself. And such fees did not fall within the loss of the goods of the insured ZHUHAI KYODEN. Thus the plaintiff exercised the right of subrogation to claim for the captioned fees lacks foundation in fact and legal ground and therefore shall not be supported.



WANGFOONG SHIPPING and SHERRIFSVILLE claimed that they were entitled to the limitation of liability for maritime claims which was in the amount of RMB5,155,677.55, and that the indemnity amount claimed by the plaintiff could only be paid from the limit of liability as per the ratio of the loss incurred by the accident. But the amount of the loss of the goods was only RMB2,512,246.28 which was yet to exceed the limit of liability exercised by WANGFOONG SHIPPING and SHERRIFSVILLE.  WANGFOONG SHIPPING and SHERRIFSVILLE failed to bear the burden of proof to certify that except for the loss of the damaged goods, there was other loss incurred by the accident. Therefore, the claim by the plaintiff that the amount of indemnity could only be paid from the limit of liability as per the ratio of the loss incurred by the accident lacks foundation in fact and thereby shall not be supported. 



To sum up, pursuant to the provisions of Article 48, Paragraph 1 and Paragraph 2 of Article 55, and Article 63 of Maritime Code of the Peoples Republic of China, Paragraph1 of Article 60 and Article 64 of Insurance Law of the People's Republic of China as well as Article 93 of Special Maritime Procedure Law of the People's Republic of China, the judgment is as follows:



1. The defendants WANGFOONG SHIPPING and SHERRIFSVILLE CORPORATION shall jointly and severally indemnify the plaintiff PICC Property and Casualty Co. Ltd, Zhuhai Branch for the loss of the goods in the amount of RMB2,512,246.28 plus the interest thereof (calculating from 10th December 2008 till the date of payment ascertained by this judgment, and calculated as per the interest rate of working capital loan for enterprises over the corresponding period promulgated by Bank of China);



2. The litigation request made by the plaintiff PICC Property and Casualty Co. Ltd, Zhuhai branch against the defendants AMANO KAISO TEN. LTD and MITSUI O.S.K. LINES LTD is hereby rejected.



3. Other litigation request made by the plaintiff PICC Property and Casualty Co. Ltd, Zhuhai Branch is hereby rejected.



The entertaining fee of this case is RMB 29,599, of which, RMB3,506.15 shall be borne by the plaintiff and RMB26,092.85 by WANGFOONG SHIPPING and SHERRIFSVILLE CORPORATION. As for the entertaining fee prepaid by the plaintiff, this court shall return RMB26,092.85. WANGFOONG SHIPPING and SHERRIFSVILLE CORPORATION shall pay the entertaining fee of RMB26,092.85 to this court.



The above obligation of payment should be fulfilled within 10 days after this judgment goes into effect. 



In case the obligation of payment failed to be fulfilled within the period specified by this judgment, double interest on the debt for the belated payment shall be paid as per the provisions of Article 229 of Civil Procedure Law of the People's Republic of China.



In case of dissatisfaction, the plaintiff may within 15 days after receipt of this judgment, and the defendant AMANO KAISO TEN. LTD, the defendant MITSUI O.S.K. LINES LTD, the defendant WANGFOONG SHIPPING, and the defendant SHERRIFSVILLE CORPORATION may within 30 days after receipt of this judgment, submit a statement of appeal to this court, and provide copies of the statement in the number of the other parties concerned, and file an appeal to Higher People's Court of Guangdong Province.



 

Presiding Judge: Xiong Shaohui

Acting Judge: Zhang Kexiong

Acting Judge: Wu Wenjun



14th December 2009

(Sealed by Guangzhou Maritime Court)





Clerk: Yang Qian

This copy has been verified as identical with the original.





The translation is provided by Huang