YICHENG CONTAINER LINES,YICHENG INTERNATIONAL TRADE COMPANY(Tianjin) v. HEBEI HUAYE IMPORT AND EXPORT CO LTD

Updated：2004-03-16 Views：1875 
HIGHER PEOPLE??S COURT OF TIANJIN 

PEOPLE??S REPUBLIC OF CHINA

CIVIL JUDGMENT

No.GJZ.275(2001)





Appellant (Defendant in first instance 	trial): YICHENG CONTAINER LINES

Domicile				:	126 Tonyklasewalls Street, 2500 New South Wales, Australia 

Legal Representative:	       Zhou Yaqing 

Agent ad litem     :	       Yuan Xiaoguang, lawyer of Jiade Law Firm





Appellant (Defendant in first instance trial):YICHENG INTERNATIONAL TRADE COMPANY(Tianjin)

Domicile				:  Vanke Gental Garden, Qixiangtai Road, Heping District, Tianjin

Legal Representative	:	   Zhou Yaqing, Director 

Agent ad litem      :     Luo Rongli, lawyer of  Fazheng Niujin Law Firm

Agent ad litem      :     Zhang Jie, lawyer of  Fazheng Niujin Law Firm





Respondent (Plaintiff in first instance trial):HEBEI HUAYE IMPORT AND EXPORT CO LTD 

Address				:	152 Xingkai Road, Shijiazhuang, Hebei, China

Legal Representative	:	Guan Chenzhong, President

Agent ad litem     :	    Fang Guoqing, lawyer of  Jiade Law Firm





Being dissatisfied with Civil Judgment No.JHSCZ484(2000) rendered by Tianjin Maritime Court (?°judgment of first instance) for the cases of disputes over the contract of carriage of goods by sea , the Appellants Yicheng Container Lines and Yicheng International Trade Co.(Tianjin) instituted an appeal to this Court. A collegial bench was formed in accordance with law after this Court accepted the case. Now the hearing for the present case has been concluded.



The court of first instance ascertained that, on Nov. 7th 1999, HEBEI HUAYE IMPORT AND EXPORT CO., LTD. signed a contract with the buyer N.A.C.deC.V from Honduras??that HEBEI HUAYE IMPORT AND EXPORT CO., LTD. was to export to the buyer 1700 cases of white pear halves in syrup, with a  unit price of US $20 per case, and 3000 cases of peach halves in syrup??with a unit price of US $12 per case in Cortes ,Honduras, the port of lading was Xingang port, Tianjin, the destination port was Cortes, Honduras port??way of payment   was T/T. 



In early Dec 1999, HEBEI HUAYE IMPORT AND EXPORT CO., LTD. asked YICHENG INTERNATIONAL TRADE COMPANY(Tianjin), the agent of YICHENG CONTAINER LINES in Tianjin to ship two ten 20 TEU containerized cargo, including 850 cases of white pear halves in syrup??valued US $17000,and 15000 cases of peach halves in syrup, valued US $18000, adding up to US $35000, from Xingang port, Tianjin to Cortes of Honduras??HEBEI HUAYE IMPORT AND EXPORT CO., LTD. and YICHENG INTERNATIONAL TRADE COMPANY reached an agreement on the main terms of the shipping contract by fax. 



After HEBEI HUAYE IMPORT AND EXPORT CO., LTD. sent the goods to YICHENG INTERNATIONAL TRADE COMPANY, the goods were loaded on board as scheduled. YICHENG INTERNATIONAL TRADE COMPANY presented the shipped B/L No.yctj90212-073 issued by YICHENG CONTAINER LINES to HEBEI HUAYE IMPORT AND EXPORT CO., LTD. The B/L seated that the shipper was HEBEI HUAYE IMPORT AND EXPORT CO. LTD., the carrying ship was TIANSHUN V179, the port of loding was Xingang port, Tianjin, the port of discharge was Cortes, Honduras, and freight was prepaid. YICHENG CONTAINER LINES, which was the issuer of the B/L, had the same legal representative with YICHENG INTERNATIONAL TRADE COMPANY.



On Jan.13th ,2000, HEBEI HUAYE IMPORT AND EXPORT CO.,LTD. Knew that YICHENG INTERNATIONAL TRADE COMPANY had shipped the cargo to San lorenzo port, instead of the port appointed in the B/L. HEBEI HUAYE IMPORT AND EXPORT CO., LTD. negotiated many times with Wang Xuelan, the director of YICHENG INTERNATIONAL TRADE COMPANY which was the agent of YICHENG CONTAINER LINES in Tianjin, to ship the cargo to the appointed port, but YICHENG INTERNATIONAL TRADE COMPANY and YICHENG CONTAINER LINES could not do so all along. In the end, the buyer told HEBEI HUAYE IMPORT AND EXPORT CO. LTD. that because the goods arrived so late as to have exceeded the date fixed in the contract for the next buyer, so the goods couldn??t be accepted.



It was also ascertained that, YICHENG CONTAINER LINES was a company registered in Australia whose legal representative was Zhou Yaqing??and it did not establish branch offices in Tianjin, China .



on Nov.15th, 2000, YICHENG INTERNATIONAL TRADE COMPANY applied to the court of first instance to order NYK to be an additional defendant in this case. In the application, YICHENG INTERNATIONAL TRADE COMPANY stated that it was the contracting carrier of the shipment. But in the first hearing of the first instance Court, YICHENG INTERNATIONAL TRADE COMPANY and YICHENG CONTAINER LINES denied the statement in the application to the court of first instance, stating that they did not take part in the shipment in question, and the contracting carrier in the application was a mis-statement by YICHENG INTERNATIONAL TRADE COMPANY.



In order to find out the truth, the court of first instance examined the relevant evidence to clear up the self-contradictory statement of Yicheng International Trade Company, and found out that YICHENG INTERNATIONAL TRADE COMPANY did not have the Certificate Of International Freight Agency Company, PRC (hereinafter referred to as Certificate). Part of the payment bills in the bank account of YICHENG INTERNATIONAL TRADE COMPANY as investigated on the basis of the freight invoices provided by HEBEI HUAYE IMPORT AND EXPORT CO., LTD. and the relevant evidence showing that BEIJING YONGZHOU COMPANY lent its bank account to YICHENG INTERNATIONAL TRADE COMPANY, could prove that the account 099243020093535 was opened in the name of BEIJING YONGZHOU COMPANY, but was controlled by  YICHENG INTERNATIONAL TRADE COMPANY. YICHENG INTERNATIONAL TRADE COMPANY had operated beyond its business scope and illegally run the international shipping agency business, while in this case it actually acted as the agent of YICHENG CONTAINER LINES in Tianjin .



The court of first instance considered that the evidence such as shipping order,  bill of picking up containers ,  confirmation letter of bill of lading and the bill of lading proved that there existed a contract of shipment relationship between HEBEI HUAYE IMPORT AND EXPORT CO., LTD. and YICHENG CONTAINER LINES. 



YICHENG CONTAINER LINES was a foreign company that did not legally establish branch offices in china. Although there was an agency contract with BEIJING YONGZHOU COMPANY , but in actual business operations BEIJING YONGZHOU COMPANY could  only collect freight on behalf of YICHENG CONTAINER LINES and provide freight  invoices to shippers , but did not take part in  other  agency business. The evidence under this case showed  that YICHENG INTERNATIONAL TRADE COMPANY actually handled the relevant traffic business in the port of loading ( Xingang , Tianjin); actually it was the cargo agent of YICHENG CONTAINER LINES at the loading port (Xingang ,Tianjin ). 



 YICHENG INTERNATIONAL TRADE COMPANY  undertook international cargo agency business without the ??Certificate?· issued by the Foreign Trade and Economic Cooperation Ministry, which should be regarded as in breach of the relevant  laws and regulations because its business operations were  against  article 12 of the detailed Regulations for implementation of  Stipulations on International Cargo Agency Of the PRC (trial implementation) ( hereinafter called  Operation Details). Therefore the contract of carriage of goods by sea signed between  YICHENG CONTAINER LINES and  HEBEI HUAYE IMPORT AND EXPORT CO., LTD.  should be invalid , and  YICHENG CONTAINER LINES was entirely liable for what happened , and should compensate for the loss of  HEBEI HUAYE IMPORT AND EXPORT CO., LTD.  for it neither  shipped the cargo to the assigned port , nor was it possible for it to return the cargo to HEBEI HUAYE IMPORT AND EXPORT CO., LTD.



According to the provisions of Article 67 of the General Principles of the Civil law of the PRC ,YICHENG INTERNATIONAL TRADE COMPANY ,as the agent of  YICHENG CONTAINER LINES at Xingang Port, Tianjin, should be jointly and severally liable to HEBEI HUAYE IMPORT AND EXPORT CO., LTD. for its intentional law-breaking business operation.  HEBEI HUAYE IMPORT AND EXPORT CO., LTD. had no right to claim for compensation because it only produced  two original Bs/L, but YICHENG CONTAINER LINES said it signed three Bs/L. The court of first instance held that the only effective grounds for pleading by YICHENG CONTAINER LINES and YICHENG INTERNATIONAL TRADE COMPANY was that they gave the cargo stated in the B/L to the receiver and returned the original B/L, otherwise the grounds for pleading  would be  ineffective. About the issue of time limitation, the court held that  because YICHENG CONTAINER LINES and YICHENG INTERNATIONAL TRADE COMPANY had not delivered the goods till this time, therefor HEBEI HUAYE IMPORT AND EXPORT CO., LTD.??s request to add YICHENG CONTAINER LINES as respondent was not time-barred. 



According to paragraph 2 of Article 64,  of the Civil Procedure Law of the PRC; the provisions of Article 67 of the General principles of the Civil law of the PRC; the provisions of Article 2, Article 52 Paragraph 5, and Article 58 of the Contract Law of the PRC; the provisions of Article 41, and Paragraph 1 of Article 42 of the Maritime Code of the PRC, the judgment is rendered as follows:

1. YICHENG CONTAINER LINES compensates USD 35,000 to HEBEI HUAYE IMPORT AND EXPORT CO., LTD. for its loss in value of cargo;

2. YICHENG INTERNATIONAL TRADE COMPANY and YICHENG CONTAINER LINES should be jointly and severally liable for the loss of HEBEI HUAYE IMPORT AND EXPORT CO., LTD. Because YICHENG INTERNATIONAL TRADE COMPANY was in breach of the relevant laws and regulations in its business operations concerning agency work.

3. The above sum should be paid off in 10 days after this judgment comes into force, otherwise the provisions of Article 232 of the Civil Procedure Law of the PRC, shall be enforced.

4. Other litigation requests of HEBEI HUAYE IMPORT AND EXPORT CO., LTD. shall not be supported. 

The litigation fee of RMB6,964 Yuan, security fee of RMB3,720 Yuan, totaling RMB10,684 Yuan, of which HEBEI HUAYE IMPORT AND EXPORT CO., LTD. shall pay RMB97 Yuan, YICHENG CONTAINER LINES and YICHENG INTERNATIONAL TRADE COMPANY shall jointly and severally be responsible to pay RMB10,587 Yuan.



YICHENG INTERNATIONAL TRADE COMPANY and YICHENG CONTAINER LINES were not satisfied with the judgment of first instance and filed an appeal.



The appeal requests of YICHENG INTERNATIONAL TRADE COMPANY were:

1,To dismiss the civil judgment of Tianjin maritime court No.484 (2000), or to change that judgment or hold a retrial of the case.

2, HEBEI HUAYE IMPORT AND EXPORT CO., LTD. should pay all the litigation cost. 

The basic facts and reasons were: HEBEI HUAYE IMPORT AND EXPORT CO., LTD. had already lost its litigious right; YICHENG INTERNATIONAL TRADE COMPANY should not be a party to this case. The contract between YICHENG CONTAINER LINES and HEBEI HUAYE IMPORT AND EXPORT CO., LTD. was true and effective. It was wrong for the court of first instance to decide that the contract of carriage between YICHENG CONTAINER LINES and HEBEI HUAYE IMPORT AND EXPORT CO.,LTD. was null and void; YICHENG INTERNATIONAL TRADE COMPANY should not be liable for compensation for the loss of value of the cargo jointly and severally with YICHENG CONTAINER LINES .



YICHENG CONTAINER LINES appealed to request to rectify the  judgment, to dismiss in the absence of ascertainment of all the facts, and with the wrong application of law .HEBEI HUAYE IMPORT AND EXPORT CO. LTD.??s litigation request ,and order it to pay the litigation fee. The main facts and reasons were:

1, It was in breach of the provisions of the civil procedure law of the PRC that YICHENG CONTAINER LINES was treated as the defendant in the first instance trial. This case was heard for the first time on December 15,2000,and the procedures for cross-examination and argument completed on the same day. However, on April 30 of 2001, four months after the first hearing, HEBEI HUAYE IMPORT AND EXPORT CO., LTD. requested the court of first instance to summon the second appellant to the court to participate in this action as an additional defendant. This request of HEBEI HUAYE IMPORT AND EXPORT CO., LTD. was obviously not in compliance with the law under which the party in a lawsuit can make a new litigation request before the hearing is closed. As a result, this request should be dismissed.



2,The judgment of first instance misunderstood the relevant on legal provisions, thus leading to its wrong judgment. According to the provisions of Article 257 of the Maritime Code of the PRC, the limitation period for claims against the carrier with regard to the carriage of goods by sea is one year, counting from the day on which the goods were delivered or should have been delivered by the carrier. The fact of this case should comply with the expression ?°should have been delivered ?±, but not ?°actually delivered?± as mentioned in the Judgment. And since the receiver refused to take delivery of the cargo in March, 2000(please see HEBEI HUAYE IMPORT AND EXPORT CO., LTD.??s submission of evidence No.7 to first instance court), so HEBEI HUAYE IMPORT AND EXPORT CO., LTD. claimed their rights on April 30,2001. which was already time-barred. as provided by law. Therefore this claim should be dismissed.



3, HEBEI HUAYE IMPORT AND EXPORT CO., LTD. did not have the ownership of the goods and had no right to claim damage from YICHENG CONTAINER LINES. Since YICHENG CONTAINER LINES issued three original Bs/L, but HEBEI HUAYE IMPORT AND EXPORT CO., LTD. produced only two of them to the Court of first instance, while the third copy was endorsed, which meant HEBEI HUAYE IMPORT AND EXPORT CO., LTD. had transferred its ownership to the buyer, and no longer had such right in substance. The judgment in first instance in deciding that HEBEI HUAYE IMPORT AND EXPORT CO., LTD. still had the right to claim was wrong.



4,In this case, the goods being discharged at SAN LORENZO should not be deemed as a discharge at a wrong place. According to the overleaf clauses of the B/L of YICHENG CONTAINER LINES and shipping practice,YICHENG CONTAINER LINES had the right to transfer the goods to another ship or to transport same on land. Discharge of cargo at SAN LORENZO within the valid period was not in violation of any requirements of the contract, nor any agreement between the parties. The point was that the consignee was not willing to perform the contract by finding a pretext to refuse taking delivery of the cargo and imputing to commercial risks. There were many mistakes in the ascertainment of facts and application of laws by the first instance court which should be rectified by this Court.



HEBEI HUAYE IMPORT AND EXPORT CO., LTD. replied by suggesting that the two appellants?? appeal should be rejected and the judgment of first instance court maintained. Besides that, the appellants should also undertake the legal cost. The main reasons were: first, the grounds for YICHENG CONTAINER LINES??s appeal was completely wrong and should be rejected accordingly. The loading port stipulated in the B/L issued by YICHENG CONTAINER LINES was Xingang,Tianjin, and the port of discharge was Cortes of HONDURAS. The principal and primary responsibility of a carrier was to transport the cargo to the designated discharging port. YICHENG CONTAINER LINES, in this case, was in violation of its basic obligation, and should undertake all liabilities for compensation. All other reasons for YICHENG CONTAINER LINES??s appeal were not to be established either.

1, With regard to the time of increasing the defendant, YICHENG CONTAINER LINES??s assertion misinterpreted the relevant provisions of the law of China. The hearing of this case was held on Dec. 15, 2000, then the hearing was discontinued owing to court recession, after that the second hearing was held on Sept, 25,2001.The application for increasing the defendant was made on Apr., 25,2001,which complied with the law of this country.

2, The so-called expiration of limitation period had no legal basis. YICHENG CONTAINER LINES never transported the goods to the designated discharging port, so there was no way for it to deliver the goods at all. Even up to this time, the time limitation for the defendant to bring a suit was not expired yet.

3, It was baseless for YICHENG CONTAINER LINES to say that 3 original Bs/L were issued and one of which endorsed for transfer. The Bs/L issued never showed how many original Bs/L were issued by YICHENG CONTAINER LINES,so the only valid defense of YICHENG CONTAINER LINES was that they collected one original Bs/L and delivered the cargo. Otherwise, YICHENG CONTAINER LINES had to undertake the obligation for compensation. 

4, The discharging port in this case was Cortes .The provisions in the overleaf clauses of the B/L only stated that transshipment could be allowed, but YICHENG CONTAINER LINES was not exempt from its obligation to transport the cargo to the discharging port designated in the B/L. 



Second, YICHENG INTERNATIONAL TRADE COMPANY shall be jointly and severally liable under this case. Although not qualified for freight forwarding, yet it actually controlled the account of BEIJING YONGZHOU COMPANY, disbursing relevant fees for maritime transport. Such facts indicated that it was operating illegal forwarding business. Although YICHENG INTERNATIONAL TRADE COMPANY denied that they had anything to do with this case, but they indicated as contractual carrier for this shipment in writing and their director was involved in forwarding business such as cargo booking, warehousing and handling the remaining problems, so their defense should be overruled. According to Article 67 of the General Principles of the Civil Law of the People??s Republic of China, YICHENG INTERNATIONAL TRADE COMPANY continued its forwarding business notwithstanding their awareness of the illegality of such operation. Therefore it should be jointly and severally liable with YICHENG CONTAINER LINES. 



Third, YICHENG INTERNATIONAL TRADE COMPANY and YICHENG CONTAINER LINES??s fraudulent operations shall be severely punished according to law. The above mentioned two companies were actually staffed with one and the same group of personnel. While cargo booking, warehousing the cargo and other business operations were carried out in the name of YICHENG CONTAINER LINES as a contracting party, actually it was YICHENG INTERNATIONAL TRADE COMPANY that was doing the day to day work, because YICHENG CONTAINER LINES had no branches in this country. Whenever dispute arose from business and the clients wanted to get hold of YICHENG INTERNATIONAL TRADE COMPANY, YICHENG INTERNATIONAL TRADE COMPANY would just shrug off its obligations under the pretext that the documents and papers were issued by YICHENG CONTAINER LINES, not itself. But YICHENG CONTAINER LINES was merely a paper company far away in Australia, with neither property nor ship. Under such situation, the unfortunate clients had no ways and means of demanding any recourse. The two appellants were, in fact, doing something fishy to avoid the laws and regulations .



YICHENG CONTAINER LINES presented the following evidence: 1. The notes of the first instance Court hearing on Dec. 15, 2000 showing the procedures for court hearing were complete except for announcing the judgment; 2. The notice of first instance Court for adding YICHENG CONTAINER LINES to the list of defendant on Apr., 30, 2001; 3. The trade contract indicating there was no agreement on shipping period between the appellant and the buyer and the payment term was T/T; 4. The letter for rejecting the goods by the buyer on Mar., 30,2000; 5.Letters from the agent at port of discharge??proving that the buyer rejected the cargo and the cargo should undergo Customs clearance according to the law of the country in which the port of discharge was located;. 6.The overleaf clauses of the bill of lading of YICHENG CONTAINER LINES??proving that the carrier had the right to transfer the goods to another vessel or to transport on land. YICHENG INTERNATIONAL TRADE COMPANY raised no objection to the above evidence. HEBEI HUAYE IMPORT AND EXPORT CO., LTD. did not challenge the truthfulness of the above evidence, and held that evidence No.4 and evidence No.5 further proved the reason of the consignees, rejection of the cargo was because it was discharged at a wrong port. Evidence No.6 could not prove YICHENG CONTAINER LINES was not in default, as there was difference between transshipment by another vessel and discharge the cargo; the cargo must be carried to the destination port, whatever the ways and means of such carriage. 



YICHENG INTERNATIONAL TRADE COMPANY provided evidence as follows: 1. The declaration of abandoning the title to the goods provided by HEBEI HUAYE IMPORT AND EXPORT CO., LTD. to the court of first instance, thereupon, HEBEI HUAYE IMPORT AND EXPORT CO.,LTD. could no more enjoy the other rights under the B/L; 2. Tentative Specifications on the Administrative Regulations approved by the State Council issued on April 21, 1987, proving that the DETAILED REGULATIONS cited by the court of first instance were regulations issued by governmental department instead of an administration law, so it could not serve as the basis for invalidating a contract. 



In addition, a series of evidential documents were provided by HEBEI HUAYE IMPORT AND EXPORT CO.,LTD. to the court of first instance, to prove that HEBEI HUAYE IMPORT AND EXPORT CO. LTD. had business relationship with HEBEI INTERNATIONAL FREIGHT AGENCY., LTD., and HEBEI INTERNATIONAL FREIGHT AGENCY.,LTD. had direct business relationship with BEIJING YONGZHOU COMPANY represented by Wang Xuelan, while YICHENG INTERNATIONAL TRADE COMPANY wasn??t involved in this case. YICHENG CONTAINER LINES raised no objection to the above evidence. HEBEI HUAYE IMPORT AND EXPORT CO., LTD. did not challenge the fact of the above evidence but believed that they could not prove what YICHENG INTERNATIONAL TRADE COMPANY intended to prove.



HEBEI HUAYE IMPORT AND EXPORT CO., LTD. provided the evidential documents as follows: 1.Shipping order, to prove that they contacted YICHENG INTERNATIONAL TRADE COMPANY to ship the goods to Cortes, Honduras; 2. Bill of Picking up containers,  to prove that YICHENG INTERNATIONAL TRADE COMPANY received the instruction and provided two 20 feet containers; 3. Confirmation letter of Bill of Lading, to prove that YICHENG INTERNATIONAL TRADE COMPANY accepted the contract and agreed to ship the cargo to Cortes, Honduras; 4.Confirmation letter of YICHENG INTERNATIONAL TRADE COMPANY, to prove that YICHENG INTERNATIONAL TRADE COMPANY accepted all the conditions of the shipment contract, and the contract was established; 5. The Bill of Lading, to prove that YICHENG INTERNATIONAL TRADE COMPANY issued the B/L of YICHENG CONTAINER LINES in order to perform the contract; 6-9.Faxes sent by  YICHENG INTERNATIONAL TRADE COMPANY to HEBEI HUAYE IMPORT AND EXPORT CO., LTD.; 10-11. Letters sent by the agent of HEBEI HUAYE IMPORT AND EXPORT CO., LTD. to YICHENG INTERNATIONAL TRADE COMPANY; 12.Letters sent by YICHENG INTERNATIONAL TRADE COMPANY to HEBEI HUAYE IMPORT AND EXPORT CO., LTD. All the above proved that YICHENG INTERNATIONAL TRADE COMPANY was handling the shipping business under this case all the time; 13. Extracts from the files of the Industrial Commercial Bureau, to prove that the Director of the Board of YICHENG INTERNATIONAL TRADE COMPANY was Wang Xuelan, HEBEI HUAYE IMPORT AND EXPORT CO LTD had been contacting with Wang Xuelan for the shipping business, and YICHENG INTERNATIONAL TRADE COMPANY was the contractual carrier under this case; 14.Fax of the consignee, to prove that the consignee refused to accept the goods because the goods were not shipped to the destination port; 15.Evidence of payment by HEBEI HUAYE IMPORT AND EXPORT CO., LTD., to prove that they had paid the freight in US doilars; 16Evidence of payment by HEBEI HUAYE IMPORT AND EXPORT CO .,LTD., to prove that they had paid the port charges in RMB to the agent of HEBEI HUAYE IMPORT AND EXPORT CO., LTD.; 17-18. Evidence of payment by the agent of HEBEI HUAYE IMPORT AND EXPORT CO., LTD.; to prove that they had paid the above said freight to BEIJING YONGZHOU CO., LTD. appointed by YICHENG INTERNATIONAL TRADE COMPANY; 19-20.Contract with the buyer to prove the price of the goods; 21. The invoice of the goods to prove the value of the goods; 22.Declaration of HEIBEI HUAYE IMPORTAND EXPORT CO., LTD. for abandonment of ownership of the goods; 23. A copy of B/L to prove all the Bs/L explicitly stated the number of B/L issued. YICHENG CONTAINER LINES raised objection to item 23.insisting that three original Bs/L had been issued, but no objection to others. YICHENG INTERNATIONAL TRADE COMPANY did not object the evidence per se, but wondered what the evidence was to prove. He considered that the above evidence exactly proved that HEBEI HUAYE IMPORT AND EXPORT CO., LTD. had a direct business relationship with HEBEI INTERNATIONAL FREIGHT AGENCY .,LTD., and HEBEI INTERNATIONA FREIGHT AGENCY., LTD. had a direct business relationship with BEIJING YONGZHOU CO., LTD., represented by Wang xuelan.



This court confirmed the evidential effect of the above evidence.



In conclusion, the facts ascertained by this court were not different from those ascertained by the court of first instance.



This court held that there existed a contractual relationship between HEBEI HUAYE IMPORT AND EXPORT CO., LTD. and YICHENG CONTAINER LINES on the carriage of goods by sea. YICHENG CONTAINER LINES did not legally establish branch offices in Tianjin, China, the agency agreement signed between YICHENG CONTAINER LINES and BEIJING YONGZHOU CO., LTD. which was not involved in this case only covered the arrangement for collection of freight from carriage of goods by sea. In fact , it was YICHENG INTERNATIONAL TRADE COMPANY that negotiated with HEBEI HUAYE IMPORT AND EXPORT CO .,LTD. on behalf of YICHENG CONTAINER LINES on the clauses of the contract of the carriage and to be engaged in such work as related to the shipment of goods at the port of loading involved in this case. That is to say that YICHENG INTERNATIONAL TRADE COMPANY actually was engaged in the business operations provided for in Article 8 of the International Vessel Agency Administration Regulations,viz.the business operations of international shipping agency. In accordance with the provisions of Articles 6 and 7 of International shipping Agency Administration Regulations, a written application should be sent to the local transport administrative authorities before establishing a shipping agency company. Such application shall be sent to the competent authorities in charge of transport at the place of the company seat or the relevant province (municipality directly under the central government or autonomous   region)for examination. Then the applications shall be sent to the Ministry of Communications for approval, and after being approved, the applicant shall bring the document of approval to the Bureau of Administration of Industry and Commerce for registration and business license. It is only after the license has been granted that business operation can start. 



In this case, YICHENG INTERNATIONAL TRADE COMPANY did not undergo the procedures for approval to be entitled to operate the relevant business. Actually the international shipping agency operation they were engaged in should be held as illegal. As the legal representative of YICHENG CONTAINER LINES was the same legal representative of YICHENG INTERNATIONAL TRADE COMPANY, so it should be held that YICHENG CONTAINER LINES knew YICHENG INTERNATIONAL TRADE COMPANY was not qualified for international shipping agency business. Because YICHENG CONTAINER LINES did not transport the cargo to the destination port, and it was impossible to ship it back, therefore , in accordance with the provisions of Article 6 ,the General Principles of the of the  Civil Law of the People??s Republic of China, there was nothing wrong in the judgment of  the court of first instance in deciding that  YICHENG CONTAINER LINES and YICHENG INTERNATIONAL TRADE COMPANY should be jointly and severally liable for the losses of HEBEI HUAYE IMPORT AND EXPORT CO., LTD., and the said judgment should be maintained. 

One of the arguments of YICHENG CONTAINER LINES for its appeal was that the court of first instance was in breach of the provisions of the CIVIL PROCEDURE LAW of China to regard YICHENG CONTAINER LINES as a defendant. This court considered that, although the court of first instance added YICHENG CONTAINER LINES as a defendant in this case after the debate in court, yet when the court resumed its hearing, it did not deprive YICHENG CONTAINER LINES of the right to litigation. Therefore, YICHENG CONTAINER LINES?? claim in alleging that the court of first instance violated the legal procedure should not sustain. 



YICHENG CONTAINER LINES?? second argument for the appeal was that HEBEI HUAYE IMPORT AND EXPORT CO., LTD.??s litigation had exceeded one-year time limitation, so the litigation should not be supported. For this point, this court held that after the cargo involved was transported to SAN LORENZO by YICHENG CONTAINER LINES, HEBEI HUAYE IMPORT AND EXPORT CO., LTD. through Wang Xuelan, had been asking YICHENG CONTAINER LINES all along to perform the contract of carriage to ship the goods to its destination port Cortes, and YICHENG CONTAINER LINES did not refuse clearly. HEBEI HUAYE IMPORT AND EXPORT CO., LTD. continued to ask for the performance of contract of carriage until august, 2000. Before the order Bill of Lading was legally transferred, the indication of anyone other than the person named in the B/L was irrelevant to the shipment under the contract of carriage in this case, still less for it to serve as the starting point for calculating time limitation. During the litigation in the court of first instance, HEBEI HUAYE IMPORT AND EXPORT CO., LTD. declared to abandon their title to the goods and exercise the right to claim. This was the time of the total loss of the goods. Therefore, the allegation of YICHENG CONTAINER LINES that the time the consignee expressed its refusal of taking delivery of the goods to HEBEI HUAYE IMPORT AND EXPORT CO., LTD. after the goods had been shipped to SAN LORENZO was the starting point for calculating the time limitation for HEBEI HUAYE IMPORT AND EXPORT CO., LTD. to claim for the total loss of the goods and to allege that BEIJING HUAYE IMPORT AND EXPORT CO., LTD. ??s litigation was time-barred was not well-founded and shall not sustain.    



The third argument for the appeal by YICHENG CONTAINER LINES was that one of the original bills of lading had been endorsed for transfer and HEBEI HUAYE IMPORT AND EXPORT CO., LTD. had no right to claim by presenting only two original Bills of Lading. This court held that YICHENG CONTAINER LINES had not provided evidence to prove that it had issued three original Bills of Lading and delivered the goods under the Bs/L to the consignee against the original Bs/L, so YICHENG CONTAINER LINES?? grounds for pleading could not sustain.



The fourth argument for YICHENG CONTAINER LINES to appeal was that it was not wrong to discharge the goods at SAN LORENZO. This court held that although YICHENG CONTAINER LINES indicated in the overleaf clauses of the Bill of Lading that they had the right to transfer the goods to another vessel or to transport it on land, but the content of this clause did not relieve them from the obligation to transport the goods to the port of discharge stipulated in the Bill of Lading. The fact that the goods weren??t carried to Cortes was a breach of the contract of carriage. YICHENG CONTAINER LINES should be liable for compensation therefor.



In the first instance trail, YICHENG CONTAINER LINES admitted that it was the contractual carrier of this shipment, Wang Xuelan, the director of the Company admitted that she negotiated the matters concerning this shipment with HEBEI HUAYE IMPORT AND EXPORT CO., LTD. on behalf of YICHENG INTERNATIONAL TRADE COMPANY. The evidence in this case proved that the company that actually attended to matters relating to the agency business of the shipment under this case at the port of loadng, viz. Tianjin was YICHENG INTERNATIONAL TRADE COMPANY. Therefore the allegation that YICHENG INTERNATIONAL TRADE COMPANY was not involved in the shipment business under this case and should not be jointly and severally liable was not well founded and shall not sustain. 



To sum up the above, the appeal of YICHENG CONTAINER LINES and YICHENG INTERNATIONAL TRADE COMPANY was lacking in facts and legal basis, so this court does not support the appeal. The judgment of first instance was clear in ascertaining facts, sufficient in evidence, correct in application of law, and it should be maintained.



In accordance with the provisions of Article 153, Paragraph 1, (1) of the Civil Procedure Law of PRC, the judgment is handed down as follows:



The appeal of YICHENG CONTAINER LINES and YICHENG INTERNATIONAL TRADE COMPANY is dismissed and the judgment of first instance is maintained. 



The court fees for the second instance totaling RMB6,964,of which YICHENG CONTAINER LINES and YICHENG INTERNATIONAL TRADE COMPANY shall each bear RMB 3,482.



This judgment is final.

Presiding Judge:	Xie Lipeng

Acting Judge:	    Li Xuechun

Acting Judge:	    Zhang Rongli





(Stamp of the Higher people??s Court of Tianjin)



Date			:  25 April 2002



(Certified true copy)

Clerk			:	Li tong