Paid but Still No Ship? GZMC and SHMC Coordinate to Resolve Cross-Jurisdictional Dispute
Recently, Guangzhou Maritime Court (GZMC), in collaboration with Shanghai Maritime Court (SHMC), successfully resolved a foreign-related dispute over a vessel sale. In this case, after GZMC initiated enforcement proceedings based on an arbitral award, the related case also entered litigation procedures at SHMC. In May 2025, the two courts coordinated efforts, resulting in an effective resolution of the dispute. In 2021, a Malaysian company paid over RMB 7 million to commission a Shenzhen resident, Yan, to purchase an engineering vessel in China. Yan's wife operated a company in Shanghai (the "Shanghai Company") primarily engaged in the sale of vessels and related equipment. In May 2021, the Shanghai Company, managed by Yan's wife, paid RMB 5.2 million to purchase an engineering vessel and related equipment from a company based in Zhuhai (the "Zhuhai Company"). However, the Zhuhai Company failed to deliver the vessel as scheduled. On June 16, 2023, the Shanghai Company filed for arbitration with the Shenzhen Court of International Arbitration (SCIA). On August 29, 2024, the arbitral tribunal ruled that the Zhuhai Company shall return the RMB 5.2 million. As the company did not voluntarily refund the payment, GZMC initiated compulsory enforcement proceedings. Why did the Zhuhai Company neither deliver the vessel nor return the payment? During a field investigation, Deng Min, the enforcement officer in charge at GZMC, learned that due to policy restrictions, the vessel could not be exported. The Zhuhai Company argued that the failure to deliver was not due to its own fault, and therefore it refused to issue a refund. As the Malaysian company never received the vessel after making payment, it filed a lawsuit in March 2025 with SHMC against Yan and the Shanghai Company, demanding the return of the RMB 7 million. Upon accepting the case, SHMC lawfully issued a pre-enforcement freeze on the funds under enforcement by GZMC. "Given that the enforcement funds have now been pre-frozen, if Yan continues to resist, the Malaysian company is likely to insist on recovering the entire RMB 7 million, leaving no room for compromise," said Deng Min. In response, Deng Min coordinated with judges from SHMC to mediate among the parties. They advised the Zhuhai Company and the Shanghai Company to reach a settlement while the Malaysian company was still open to partial recovery, aiming to resolve the matter swiftly. After multiple rounds of negotiation led by the enforcement officer, the parties reached an enforcement agreement: the Zhuhai Company would return part of the payment to the Malaysian company, and in return, the Malaysian company would withdraw its lawsuit against Yan and the Shanghai Company. The dispute was ultimately resolved successfully. "Enforcement cases are often complex. Only by fully understanding the background and identifying the needs of all parties can we tailor the right solution," Deng Min remarked.
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