JIANGSU LIGHT INDUSTRIAL PRODUCTS IMP.&EXP. (GROUP) CORP. v. JIANGSU GLOBE FOREIGN TRADE TRANSPORTION CO.,BRILLIANT INTERNATIONAL CORP. USA

Updated：2004-03-16 Views：1912 
WUHAN MARITIME COURT OF 

PEOPLES?? REPUBLIC OF CHINA

CIVIL JUDGMENT

                                       No.WU-HAI-FA-SHANG 80(1999)

PLAINTIFF: JIANGSU LIGHT INDUSTRIAL PRODUCTS IMP.&EXP. (GROUP) CORP. 

DOMICILE: No.100 JIANYE ROAD, NANJING, JIANGSU PROVINCE, CHINA  

LEGAL REPRESENTATIVE: Yang Yuanfu, Board Chairman

AGENT AD LITEM: ZhangTing, attorney of Nanjing Jinda Law Firm (specially authorized)

AGENT AD LITEM: Zhou Yanting, Employee of JIANGSU LIGHT INDUSTRIAL PRODUCTS IMP.&EXP. (GROUP) CORP., 



DEFENDENT: JIANGSU GLOBE FOREIGN TRADE TRANSPORTION CO.  DOMICILE: RM 7, 12A FL, CHANGJIANG TRADE BLDG, 99 CHANGJIANG      

ROAD, NANJING, JIANGSU PROVINCE, CHINA 

LEGAL REPRESENTATIVE:  Xu Gang, General Manager.

AGENT AD LITEM: Xie Hongyan, Employee of JIANGSU GLOBE FOREIGN TRADE TRANSPORTION CO.

AGENT AD LITEM: Guo Chunfeng, attorney of Shandong Haishi Law Office (specially authorized)

                                  						 		

DEFENDENT: BRILLIANT INTERNATIONAL CORP. USA

DOMICILE: Empire State Building, Suite 4205 350 Fifth Avenue, New York, NY 10118, USA 

LEGAL REPRESENTATIVE: Mr. Lemin Li, Board Chairman

AGENT AD LITEM: Guo Chunfeng, attorney of Shandong Haishi Law Office (specially authorized)

      The plaintiff JIANGSU LIGHT INDUSTRIAL PRODUCTS IMP.&EXP. (GROUP) CORP.(hereinafter " JIANGSU LIGHT INDUSTRIAL "), brought before this court a lawsuit on 30 July, 1999 against the defendants JIANGSU GLOBE FOREIGN TRADE TRANSPORTION CO. (hereinafter "JIANGSU GLOBE") and BRILLIANT INTERNATIONAL CORP. USA (hereinafter " BRILLIANT USA"), for a dispute arising out of a contract of carriage of goods by sea. In this case, the place where the B/L was issued, the place where JIANGSU GLOBE was domiciled and the place of shipment were all in Nanjing, China, this court therefore has jurisdiction over this cases based on the principle of the place where the contract was performed and the place of the defendant??s domicile. After accepting the case, in accordance with the Civil Procedure Law of the PRC ,this court organized a collegial panel on 10 August, of which Xu Zemin was the presiding judge. Wang Jianxin was the assistant judge and Li Xuhai, the judicial assessor (who was later substituted by Zhang Lin, the assistant judge during the second hearing). Then this court served upon the plaintiff the Notification of Acceptance on 10 August and served upon the defendant JIANGSU GLOBE the Response to Action on 17 August. On 3 September, Lemin Li, the legal representative of the defendant BRILLIANT USA, through the contact of the defendant JIANGSU GLOBE, personally came to this court to sign the Response to Action. After the two pubic hearings on 21 December, 1999 and 29 October, 1999 with the participation of Zhang Ting and Zhou Yanting on behalf of the plaintiff JIANGSU LIGHT INDUSTRIAL, Xie Hongyan and Guo Chunfeng on behalf of the defendant JIANGSU GLOBE and Guo Chunfeng on behalf of the defendant BRILLIANT USA, the trial of this case has now been concluded

The plaintiff JIANGSU LIGHT INDUSTRIAL claimed that:

During the time from July through  December of 1998, the plaintiff entrusted the defendant JIANGSU GLOBE to ship a number of bags and suitcases separately under 4 Bs/L for the destination of Miami, USA, the total price being US$15542.75 where JIANGSU GLOBE, on behalf of BRILLIANT USA, signed/ issued to the plaintiff 4 sets of original straight Bs/L respectively on 9 August, 26 August, 6 October and 18 December . According to the Bs/L, the shipper was JIANGSU LIGHT INDUSTRIAL and consignee was M/S. CHINA (USA) INC. (hereinafter reffered to as "M/S INC") However, the two defendants, after the shipment, delivered the goods to the named consignee without collecting the original Bs/L , which resulted in the plaintiff??s failure to collect payments. The plaintiff hereby claimed against the two defendants for joint and several liability on the loss and damage in the sum of  US$ 150,542.75 (equivalent to RMB 1,249,504.83) together with the interest thereon.

In order to support its claim, the plaintiff JIANGSU LIGHT INDUSTRIAL presented to this court the following evidence:

1.The shipment particulars, Customs declarations, packing lists and commercial invoices for goods under Bs/L No. 522109-98, 522168-98, 522123-98 and 522136-98 in order to prove the facts that the shipper was JIANGSU LIGHT INDUSTRIAL and the total value of the goods was US$ 150,542.75.



However, JANGSU GLOBE and BRILLIANT USA defended that the form of settlement of exchange showed in the Customs declarations was D/P, being inconsistent with that on the records filed by the Customs ??D/A, and that the amounts shown in the invoices were inconsistent with that disclosed by the consignee M/S INC. (only the amount under B/L No.522136-98 was true ). BRILLIANT USA stated that his Company would provide relevant evidence for such defense.



The collegial panel held that the said evidence was admissible except the one in relation to the settlement of exchange and the value of goods which shall be further cross-examined after the submission of evidence by BRILLIANT USA.



2. The original Bs/L for the four lots of cargo issued by JIANGSU GLOBE on behalf of BRILLIANT USA (three copies for each lot). They proved the facts that the shipper of the said goods was JIANGSU LIGHT INDUSTRIAL; the consignee and notify party was M/S INC; JIANGSU LIGHT INDUSTRIAL was the legal holder of the original Bs/L.



3. The invoices for agency fees in relation to the said goods issued to JIANGSU LIGHT INDUSTRIAL by JIANGSU GLOBE in order to prove the facts that JIANGSU GLOBE had collected the agency fees and become the actual agent of the shipment of the said four lots of cargo.

 JIANGSU GLOBE and BRILLIANT USA did not challenge the truthfulness of the above original Bs/L and the invoices for agency fees for the said cargo..



The collegial panel held that the above two evidences shall be admissible since neither party challenged them and that BRILLANT USA was the carrier under the Bs/L for the said goods; JIANGSU GLOBE was the shipping agent of JIANGSU LIGHT INDUSTRIAL and the agent issuing the Bs/L on behalf of BRILLANT USA as well; JIANGSU LIGHT INDUSTRIAL was the legal holder of the original Bs/L for the said goods. M/S INC. was the named consignee of the straight Bs/L.



4. 15 faxes between JIANGSU LIGHT INDUSTRIAL and JIANGSU GLOBE and BRILLANT USA, from March 10 through   June 30 of 1999. They showed the facts that JIANGSU LIGHT INDUSTRIAL did request to preserve the goods and that the two defendants, though being aware of the plaintiff??s wish of preservation, fraudulently concealed the fact that the goods had been delivered to the consignee, which finally led the plaintiff to misunderstand that the goods were still under their own control.

JIANGSU GLOBE and BRILLIANT USA, though didn??t challenge the truthfulness of the above said fax messages, yet defended that such evidence could not support the fact that JIANGSU LIGHT INDUSTRIAL requested BRILLIANT USA to preserve the goods before the delivery thereof and that JIANGSU GLOBE and BRILLIANT USA cheated JIANGSU LIGHT INDUSTRIAL.

The collegial panel held that the above faxes could be admissible as the evidence to determine the facts.



The defendant JAINGSU GLOBE argued that:

JIANGSU GLOBE was a legally registered international forwarding company. In the process of shipment, JIANGSU GLOBE had acted as the agent for canvessing cargo and signing Bs/L, which could be proved by Evidence No. 2, and No.3 (i.e. 4 sets of original Bs/L and the invoices for agency fee) submitted by JIANGSU LIGHT INDUSTRIAL. Therefore JIANGSU GLOBE should not be responsible for the plaintiff??s loss and damage and the claim should be dismissed.

The defendant JIANGSU GLOBE made no submission of other evidence.

 

 The defendant BRILLIANT USA defended that:

JIANGSU GLOBE was the agent of BRILLIANT USA for canvassing cargo and signing Bs/L. When the goods arrived at Miami, USA, the named consignee requested to take delivery by means of  L/G because they had not received the original Bs/L. JIANGSU LIGHT INDUSTRIAL had never made a request for the preservation of the goods before delivering to the consignee. After the delivery, the consignee effected part of payment for the goods to JIANGSU LIGHT INDUSTRIAL. In pursuance with the overleaf clauses of the Bs/L and Article 269 of the Maritime Code of the P.R.C, this case shall be subject to COGSA 1936 and the relevant laws of USA. In accordance with the laws of USA (including legal precedents), the straight B/L shall be non-negotiable and the obligation of delivery shall be deemed to  have completed after the carrier had delivered the goods to the named consignee, who needed not present the original B/L. Therefore, it was unsupportable for the plaintiff to claim against BRILLIANT USA for the damage arising from releasing goods without the original Bs/L and the claim should be dismissed.

In order to rebut the claim, the defendant BRILLIANT USA submitted the evidence as follows:

1.A fax from JIANGSU LIGHT INDUSTRIAL to JIANGSU GLOBE on February 23, 1999  stating that JIANGSU GLOBE was requested to checked the arrival of the goods and the costs of carriage to Los Angeles per shipment. The above fax proved the fact that JIANGSU LIGHT INDUSTRIAL had not made the request for the preservation of the goods before March 5 when BRILLIANT USA delivered the goods to M/S INC. 

 

2.A fax from JIANGSU LIGHT INDUSTRIAL to JIANGSU GLOBE dated March 3, 1999 stating that the consignee took delivery of goods without presenting the original Bs/L and JIANGSU GLOBE should be liable for the loss and damage incurred therefrom. The fax proved that JIANGSU LIGHT INDUSTRIAL was aware that the consignee had taken delivery of the goods on March 8, 1999.



JIANGSU LIGHT INDUSTRIAL didn??t challenge the above 2 faxes and stated that they had learned about the delivery from the market.

 The collegial panel held that the above 2 faxes could be used as evidence to determine the facts.



3. The Ls/G issued to BRILLIANT USA by the consignee M/S INC. at the time of delivery. This Ls/G proved that BRILLIANT USA went through the formalities for the delivery with the consignee respectively on  November 16, December 4 of 1998 and January 29 and  March 5 of 1999.

JIANGSU LIGHT INDUSTRIAL defended on 2 points:1) the truthfulness of Ls/G could not be determined: 2) such evidence, if truthful, could only prove the fact that BRILLIANT USA, when delivering the goods without being presented the original Bs/L, did have the knowledge that JIANGSU LIGHT INDUSTRIAL could suffer the loss and damage arising therefrom. 



Based on Evidence 2 as listed above, the collegial panel held that it was unnecessary to determine the truthfulness of 4 Ls/G since BRILLIANT USA had proved to have delivered the goods to the consignee at least by March 8,  1999 and that delivering goods without  presentation of the original Bs/L could not be affected by whether BRILLIANT USA had obtained the Ls/G issued by M/S INC.



4. Information on payments provided to BRILLIANT USA by M/S INC., proving that during the period from  October 6, 1998 to April 13,1999, M/S INC made 9 payments to JIANGSU LIGHT INDUSTRIAL and its affiliate JSL INTERNATIONAL, among which 2 payments were directly to JIANGSU LIGHT INDUSTRIAL .They proved that the consignee did make partial payment to JIANGSU LIGHT INDUSTRIAL.



JIANGSU LIGHT INDUSTRIAL defended that it was impossible to determine which payments were for the said goods though all payments were made after the delivery, because the consignee still had the balance due to pay JIANGSU LIGHT INDUSTRIAL arising from their long-term business relationship , and BRILLIANT USA also failed to make such specification. Among all of the above payments, 4 payments were for JSL INTERNATIONAL, and 2 for goods under Bs/L No. 522156-98 and 522158-98, which were irrelevant to this case. 

JIANGSU LIGHT INDUSTRIAL then provided 2 items of supplementary evidence. Evidence No.1. Information on Payment by M/S INC. issued by JSL INTERNATIONAL. It proved that the 4 payment, which had been made to JSL by M/S INC., were for the balance between JSL and M/S, and had no relevance with the goods of JIANGSU LIGHT INDUSTRIAL; Evidence No.2. The explanation on remittance made by the consignee. It proved that the 2 payments made to JIANGSU LIGHT INDUSTRIAL by M/S INC. were for other goods  previously delivered. 



The collegial panel held that the above evidence submitted by BRILLIANT USA could not be admissible since it was not clear enough to prove that their payments were for said goods , and that the truthfulness of the supplementary evidence submitted by JIANGSU LIGHT INDUSTRIAL could not be determined. Therefore, the court didn??t accept the evidence presented by BRILLIANT USA purporting to prove that the consignee M/S INC had paid for the four lots of cargoes.



5 The commercial invoices for the said goods issued by JIANGSU LIGHT INDUSTRIAL to M/S INC. which recorded the term of the settlement of exchange: D/A 120 days or 30 days. These invoices proved that JIANGSU LIGHT INDUSTRIAL changed the original settlement of exchange D/P into D/A when collecting money after the shipment , and JIANGSU LIGHT INDUSTRIAL did not submit the Bs/L to M/S      INC and breached the contractual obligation which resulted in non-payment. These invoices also proved that the  amount stated in the invoices submitted by JIANGSU LIGHT INDUSTRIAL was different from that held by M/S INC.??the amount on each invoice of the former was US$ 2,000  which was more than that of the latter except the invoice under B/L NO. 522136-98. 

6.A photocopy of Customs declaration obtained from the Customs by BRILLIANT USA to prove that the Customs declaration submitted by JIANGSU LIGHT INDUSTRIAL was inconsistent with that filed by the Customs, in which the method of payment was D/A instead of D/P.

JIANGSU LIGHT INDUSTRIAL did not stand against the above 2 items of evidence, and submitted the photocopies of Customs declarations for the said goods obtained from the Customs and stated that the original Bs/L were directly sent to JSL International, an affiliate in USA, which was entrusted to notify the consignee to make the payment. But the consignee failed to make payments and the original Bs/L could not be delivered. 



The collegial panel certified the truthfulness of the above 2 items of evidence and confirmed that the contractual method of payment agreed by and between JIANGSU LIGHT INDUSTRIAL and M/S INC. was D/A 120 days or 30 days. But later on it was changed into D/P by JIANGSU LIGHT INDUSTRIAL; the total sum of US$ 150,542.75 of the said goods as shown in the commercial invoices submitted by JIANGSU LIGHT INDUSTRIAL were certified to be true. 



After the production of evidence, cross-examination and certification and, in combination with the statements of both parties, this court found out the facts as follows:

1. In July, September and December of 1998, JIANGSU LIGHT INDUSTRIAL, in order to perform the sales contract, entrusted JIANGSU GLOBE to ship four cargoes of bags and suitcases separately. After being entrusted, JIANGSU GLOBE went through the formalities for booking, declaration and delivery. The serial numbers of transportation for the said goods were 522109-98, 522168-98, 522123-98 and 522136-98. The price term was FOB China. The total amount was  US$ 150,542.75. The contractual payment term was D/A 120days or 30 days.

2. JIANGSU GLOBE, on behalf of BRILLIANT USA, signed/ issued to JIANGSU LIGHT INDUSTRIAL 4 sets of original straight Bs/L with order of carrier BRILLIANT USA respectively on  August 9, August 26, October 6 and  December 18, and delivered such Bs/L to JIANGSU LIGHT INDUSTRIAL. The Bs/L showed: the ports of loading were NINGBO, NANJING and NANTONG; the port of discharge was Miami, Florida, USA; freight was payable at destination; the consignee and notify party was M/S INC. USA. The said goods arrived at Miami respectively on September 2, October 29, November 1, 1998 and  February 10 of 1999.

3.The original Bs/L were sent by JIANGSU LIGHT INDUSTRIAL directly to JSL International, an affiliate in USA, which was entrusted to notify the consignee to make the presentation for payment. However, the consignee claimed that he had not received the original Bs/L when he took delivery of the goods. On  November 16 and December 4 of 1998 and  January 29 and March 5 of 1999, the consignee took delivery of the goods after issuing Ls/G to BRILLIANT USA and completing payments of freight.

4. After the shipment, JIANGSU LIGHT INDUSTRIAL, checked with JIANGSU GLOBE about the arrival of the goods and the costs of carriage to Los Angeles on  February 23,1999, but did not make a definite request for stopping delivery. On March 8 1999, JIANGSU LIGHT INDUSTRIAL notified JIANGSU GLOBE by fax that he was aware that the consignee had taken delivery of the goods and JIANGSU GLOBE should be liable for delivering goods without the presentation of Bs/L. On June 16, JIANGSU LIGHT INDUSTRIAL requested JIANGSU GLOBE to notify BRILLIANT USA to ship the goods to Los Angeles and deliver them to EUGENE INTERNATIONAL. However, Brilliant USA refused to do so. 

5. All Bs/L for the said goods stated: the B/L for the goods shipped from or to ports of USA shall be subject to COSGA 1936, otherwise, the B/L shall be subject to Hague Rules or Hague Visby Rules which had been enacted into law by the country of shipment. if there was no such enacted law as mentioned above, the B/L shall be subject to Hague Rules.

During the proceeding, BRILLIANT USA submitted to this court COSGA 1936, Uniform Commercial Code of America and an Affidavit Opinion on the stipulations of the laws of USA on straight Bs/L by John D. Kimball, an attorney of the Law Firm Healy&Baillie and an Adjunct Professor of law at New York University School of Law which had been notarized by the notary office of USA and authenticated by the Consulate General of the PRC in New York. In pursuance with the relevant laws and precedents, it was concluded in the Affidavit OPINION that:

?°Where the Carrier delivered goods to the Consignee under straight bills of lading which contained no contractual terms requiring the Consignee to surrender the original B/L and without notice from the Shipper instructing the Carrier not to deliver the goods, such delivery shall be  deemed to be an act of  the Carrier to fulfill its obligations under the terms of the B/L between the Carrier and the Shipper, and is not in breach of the B/L terms or any of its obligations under United States Law.?±

JIANGSU LIGHT INDUSTRIAL did not question the aunthenticity of COSGA 1936, but argued that Uniform Commercial Code of America should not be applied since it was not a legal document the parties chose to comply with , and the Affidavit Opinion, as personal opinion, could only be used as reference.



The collegial panel confirmed the authenticity of COGSA 1936 and verified  the contents of Uniform Commercial Code of America since it was included in China Laws and Regulations Collection Data Base (2001 State) which had been examined and approved by the Legal Work Committee of the NPC(National People??s Congress)Standing Committee of the PRC. The Affidavit Opinion could be used to explain the viewpoint of the laws of USA with respect to the dispute in question.

The main issues of this case were: 1: Whether JIANGSU LIGHT INDUSTRIAL shall be responsible for the non-payment since it changed the settlement of exchange and failed to deliver the Bs/L to the consignee; 2. Whether the fact that JIANGSU LIGHT INDUSTRIAL made a request for preserving the goods could stand; 3. What law shall be applied to the dispute resulted from delivery of goods without original Bs/L.



For issue No.1, JIANGSU LIGHT INDUSTRIAL claimed:                                       

The sales contract and the carriage contract were two independent contracts. Delivery against the original Bs/L was an international practice. If  the carrier was in breach of such practice, the risk of non-payment would inevitably occur, no matter what method of payment was adopted. It was just because the carrier delivered the goods without having the original Bs/L surrended that  JIANGSU LIGHT INDUSTRIAL lost its control over the goods, even with the original Bs/L in hand, which finally resulted in the non-payment by the consignee M/S INC.



However, BRILLIANT USA and JIANGSU GLOBE defended thus:

D/P means that the importer cannot obtain the B/L from the collecting bank until the payment has been made, while D/A 120 days or 30days means that the importer may obtain the B/L before the payment will be made after 120 days or 30days when the time limit of the draft is due, which involves commercial risks. However, JIANGSU LIGHT INDUSTRIAL changed D/A into D/P without being agreed upon ,thus M/S INC. could not obtain the Bs/L, which finally led to a dispute over the sales contract. The failure of JIANGSU LIGHT INDUSTRIAL in settlement was due to the dispute over the sales contract and not involving the carrier.



The collegial panel held:

Although D/A 120 days or 30days was a kind of settlement involving commercial risks,  JIANGSU LIGHT INDUSTRIAL was entitled to change the method of settlement and undertake the liability incurred therefrom. Even if M/S INC. had refused to undertake the obligation of taking delivery under the contract, JIANGSU LIGHT INDUSTRIAL was still entitled to the right of disposing of the goods. The change of the method of settlement, as a way of lessening risks, was not the cause of non-payment. Therefore, JIANGSU LIGHT INDUSTRIAL should not be liable for the loss of non-payment.



As to issue NO.2, JIANGSU LIGHT INDUSTRIAL claimsed:

15 faxes between JIANGSU LIGHT INDUSTRIAL and JIANGSU GLOBE, BRILLIANT USA were able to prove the fact that JIANGSU LIGHT INDUSTRIAL did request to preserve the goods. The two defendants, though being aware of the plaintiff??s wish of preservation of the goods, yet concealed the fact that the goods had been delivered to the consignee, which finally mislead the plaintiff to misunderstand that the goods were still under their control.



However, BRILLIANT USA and JIANGSU GLOBE defended:

JIANGSU LIGHT INDUSTRIAL did not request to change the consignee until the goods had been delivered. JIANGSU LIGHT INDUSTRIAL had been inquiring JIANGSU GLOBE about the arrival of the goods. However, JIANGSU GLOBE, when making feedback, conveyed an inaccurate information about time due to the failure of BRILLIANT USA to give prompt information, which finally led to the misunderstanding. JIANGSU GLOBE disclosed that the goods were in the custody warehouse of the Customs rather than in the warehouse of the carrier. After going through the formalities for delivery, the consignee did not take a prompt delivery, but left the goods in the custody warehouse of the Customs. When JIANGSU LIGHT INDUSTRIAL requested to change the consignee, BRILLIANT USA, in consideration of the long-term trade relations, did consider to render assistance in returning the goods and claimed for the warehouse charge incurred. However, they decided to give up such an effort on 8 March, 1999, when JIANGSU LIGHT INDUSTRIAL, after being aware of the delivery of the goods, requested them through a letter to be responsible for the liabilities for delivering the goods without original Bs/L.



The collegial panel held: 

JIANGSU LIGHT INDUSTRIAL was not able to prove that it made the request for preservation before BRILLIANT USA had delivered the goods( at least before 8 March, 1999). In the fax sent to JIANGSU GLOBE on February 23, 1999 by JIANGSU LIGHT INDUSTRIAL, the latter did not make a clear request to M/S INC. for stopping delivery.From March 10 to June 30 when the two parties exchanged information through fax, BRILLIANT USA had been dealing with the consignee about the delivery of goods. Although JIANGSU GLOBE failed to give a prompt and accurate notification, yet this could not change the fact that BRILLIANT USA had completed the delivery; nor could it determine that the request for preservation made by JIANGSU LIGHT INDUSTRIAL could be retroacted to the time before the delivery; and it was also impossible to take such request as having been made before the delivery. Therefore, the allegation of JIANGSU LIGHT INDUSTRIAL that the request for preservation of the goods was made before the delivery could not sustain..



For issue No. 3, JIANGSU LIGHT INDUSTRIAL claimed:

Hague Rules, Hague Visby Rules and COGSA 1936 as the applicable laws agreed upon by both parties in the Bs/L were not in conflict with the laws of China in terms of the basic principles and should be applied to this case. It was not stipulated in the above rules and laws that ?° the carrier may deliver goods without presentation of original Bs/L?± or ?°the straight B/L was not a B/L?±. In this case, the Bs/L were signed/ issued by one Chinese legal person to another within China, thus the places where the contract was signed and performed, where damage was caused had the closest connection with China. Therefore, the law of China, as the law of the place with closest connection should be applied, when the law chosen by the parties were inadequate to solve the dispute. In accordance with the Maritime Code of th P.R. C, the carrier, when delivering goods,  shall ensure the consignee was the right one and the B/L was the original. The laws of USA , such as Uniform Commercial Code of America, as was not chosen by the parties, should not be applied.

However, BRILLIANT USA and JIANGSU GLOBE defended:

JIANGSU LIGHT INDUSTRIAL should have had full knowledge of the applicable laws as agreed upon in the Bs/L, since he had for many times accepted the standard Bs/L issued by BRILLIANT USA during the long-term trade relations. In accordance with the overleaf clauses of the Bs/L, the validity of the Bs/L should be subject to COGSA 1936 or Hague Rules 1924, or Hague/ Visby Rules 1968 applied in the country where the goods were loaded. Since China has not joined Hague Rules 1924, nor Hague/ Visby Rules 1968, this case should only be subject to COGSA 1936. Such term was also in compliance with Article 269 of the Maritime Code of the P.R. C:?°the parties to a contract involving foreign interests may choose the law applicable to the contract?±. Since it was not expressly stipulated in COGSA 1936, as to how to deliver goods under the straight B/L, this case should be subject to the common law of USA, such as The Bill of Lading Act 1916, or the Uniform Commercial Code of America. In this case the destination port of the said goods was in USA, the consignee and the carrier were both American companies and the delivery took place in USA. Therefore, the laws of USA which directly affected the contract should be taken as the law of the closest connection. Even if the Bs/L did not contain such agreement as the application of law as above, the law of USA should still be applied in accordance with Article 269 of  the Maritime Code of the P.R.C:?°if the parties to a contract had not made a choice, the law of the country to which the contract was most closely connected shall be applied.?±



The collegial panel held:

The paramount clause of the B/L was one regarding the choice of law applicable to the B/L, which was valid in accordance with Article 269 of the Maritime Code of the P.R. C. In pursuance with this clause, the B/L shall have effect subject to the provisions of the ?°Carriage of Goods by Sea Act 1936?±(?°COGSA?±)of the United States of America in respect of carriage of goods from ports in the United States. Otherwise, this B/L shall have effect subject to the provisons of the Hague Rules or Hague /Visby Rules.Since the destination Port of the said goods was in USA, this case shall be subject to COSGA 1936.



In view of the above, the court held:

A B/L is a document which serves as an evidence of the contract of carriage as agreed by the shipper and the carrier and both parties should undertake the obligations under the B/L. The issue of delivering goods without original Bs/L should be categorized as a contractual dispute.  

It was in compliance with the law of China for the parties to choose  COSGA 1936 as the applicable law in the paramount clause of the B/L. The main issue of this case was whether the carrier had the right to deliver the goods to the named consignee without presentation of original B/L. However, there was no relevant stipulations in COSGA 1936 for solving such problem. Since the law chosen by the parties could only regulate part of the legal relations rather than the full content of the contract, it should be deemed that the parties failed to make the right choice of law to apply to the issue in question. In accordance with Article 269 of the Maritime Code of the P.R. C., when the parties to a contract fail to make such choice, the applicable law shall be determined upon the principle of the closest connection.

The principle of the closest connection lays emphasis on the connection between the legal relationship and the place in question, and determines the applicable law through the factors of connection. All factors of connection relating to a specific issue shall be taken into consideration when determining the applicable law and only the law that has the closest connection with the contract can be chosen. In this case, the factors of connection for the contract of carriage of goods by sea  mainly included the place where the contract was signed, the place where the contract was performed (including the place of shipment and the place of destination), the place of business and the place of the subject mstter, while the main issue in dispute in this case was the legal consequences of the act of delivery of goods by the carrier in the process of the international carriage  of goods by sea, which took place in the port of USA, rather than the place where the B/L was signed/issued or the place of shipment. As the carrier??s act of delivery at the place of destination was directly governed by the law of the place where the act was done ,so its connection with the law of USA where the delivery was carried out was more relevant and more substantial than its connection with the law of China where the contract was signed or the place of shipment was located. Therefore the law of the place where the act was done was the most effective law that governed the issue. On the contrary, the law of China where the contract was signed should not be taken as the law with the closest connection. On the other hand, the parties to the contract had chosen the standard form contract (the B/L) provided by the carrier, so it must be in compliance with the law of the place where the carrier??s business office was located . Since the place of destination, the place of the subject matter and the place where the carrier??s business office was located were all in USA, this case should be subject to the law of USA. Therefore, the allegation of Brilliant USA that this case shall be subject to such relevant laws of USA as Uniform Commercial Code of America shall be supported.

As to The Affidavit Opinion on the stipulations of the laws of USA on the straight Bs/L by John D.Kimball, the lawyer of the Law Firm Healy & Baillie and an Adjunct Professor of  Law at the New York University School of Law , though his personal opinion on the application of law as it was, it did provide the relevant laws of USA. Since it had been notarized by the notary public of USA and authenticated by the Consulate General of China in New York, as being in conformity with the Opinions of the Supreme People??s Court of the PRC Regarding Several Issues on Enforcement of General Principles of the Civil Law , the truthfulness and validity of the relevant laws it provided could be determined. The affidavit opinion based on the relevant laws and precedents, gave explanations on the relevant stipulations on the straight B/L in Uniform Commercial Code of America. Furthermore, the legislative body of the state of Florida, the place of destination had accepted Uniform Commercial Code of America as the law of the state. Jiangsu Light Industry, however, failed to produce the contrary evidence to exclude the application of the Uniform Commercial Code of America. Therefore, the affidavit opinion could be used as the legal opinion for reference in resolving the dispute in question,and this case shall be subject to the Uniform Commercial Code of America.

On the 4 sets of straight Bs/L, it was stated that the consignee was M/S INC. Such Bs/L, in accordance with Article7-104(2) of the Uniform Commercial Code of America, should be non-negotiable. It was stipulated in  Article 7-303(1)-C of the Uniform Commercial Code of America:Unless the bill of lading otherwise provides, the carrier may  deliver the goods to a person or destination other than that stated in the bill or may otherwise dispose of the goods on instructions from the consignee on a non-negotiable bill in the absence of contrary instructions from the consignor ,if the goods have arrived at the billed destination or if the consignee is in possession of the bill. That means the carrier may deliver the goods to the named consignee after the arrival at the destination if the shipper had made no contrary order before such delivery.

Since the plaintiff had neither included in the straight B/L the term of ?°delivery against the original B/L?± ,nor made a prompt request for stopping the delivery before BRILLIANT USA delivered the goods to the named consignee, it shall be deemed due and lawful for BRILLIANT USA to deliver the goods to the named consignee. Therefore, BRILLIANT USA shall not be responsible for the loss and damage claimed by the plaintiff.

    The relationship between the defendant JIANGSU GLOBE and the plaintiff Jiangsu Light Industrial was legally bound by the Agency Agreement. As the agent, JIANGSU GLOBE had duly performed its obligation by completing such formalities in relation to the carriage as booking, declaration, shipping and presentation of Bs/L that were entrusted by JIANGSU LIGHT INDUSTRIAL. Since its act as an agent had no direct causation for the loss and damage of JIANGSU LIGHT INDUSTRIAL, JIANGSU GLOBE shall not be responsible for indemnification. The act of JIANGSU GLOBE in canvassing cargo and issuing Bs/L on behalf of BRILLIANT USA was within the scope of its authority , which had no adverse effect on the loss and damage of JIANGSU LIGHT INDUSTRIAL. Therefore JIANGSU GLOBE shall also not be responsible for the loss and damage. In view of the above, the claim of the plaintiff JIANGSU LIGHT INDUSTRIAL against the defendant JIANGSU GLOBE shall not be supported.



In accordance with Article 269 of the Maritime Code of the PRC. Article 63.1 and 63.2 of the General Principles of Civil Law of the PR C.,  Article 7.1.4.2, 7.3.3.1.C of the Uniform Commercial Code of America and Article5.1, Article 128 of the Civil Procedure Law of the PRC. The judgment is renderedit by this court as follows:

1.the claim of the plaintiff JIANGSU LIGHT INDUSTRIAL PRODUCTS IMP./EXP. (GROUP) CO. against the defendant BRILLIANT INTERNATIONAL CO. USA shall be dismissed;

2.the claim of the plaintiff JIANGSU INDUSTRIAL PRODUCTS IMP/EXP (GROUP) CO. against the defendant JIANGSU GLOBE INTERNATIONAL FOREIGN TRADE TRANSPORTATION CO. shall be dismissed.

The legal cost in the sum of RMB16,300 and other litigation fees in the sum of RMB 4,890, being RMB 21,190 in total ,shall be borne by the plaintiff JIANGSU LIGHT INDUSTRIAL PRODUCTS IMP./EXP. (GROUP) CO..

If refusing to accept this judgement, the plaintiff JIANGSU LIGHT INDUSTRIAL , the defendant JIANGSU GLOBE may within 15 days after the service of this judgment, and the defendant BRILLIANT USA may within 30 days after the service of this judgment, file an appeal with the Higher People??s Court of Hubei Province. The appeal petition shall be submitted to this court and copies of it shall be provided according to the number of persons in the opposing party.





                              Presiding Judge:Xu Zemin

                              Acting  Judge: Wang Jianxin

                              Acting  Judge : Zhang Lin



T December 25, 2001

Certified true copy                               

Clerk: Zhang Yu