Plaintiff: Fujian Tingyi Food Co., Ltd 

Domicile: No. 14, Kuaian Extended Area, Hi-tech Zone, Fuzhou, Fujian Province

Legal Representative: Zhao Huijing, Board Chairman

Agent ad Litem: Zheng Decheng, Jiang Guangsheng, lawyers of Fujian Chuang Ye Law Firm 

Defendant: COSCO Container Lines Co., Ltd

Domicile: No. 378, Daming Road, Shanghai

Legal Representative: Wei Jiafu, Board Chairman

Agent ad Litem: Huang Yaquan, Chen Longjie, lawyers of Guangdong Heng Yun Law Firm

Defendant: Guangzhou Container Terminal Co., Ltd 

Domicial: No. 1, Xingang Road, Huangpu District, Hi-tech Zone, Guangzhou, Guangdong Province

Legal Representative: Huang Guosheng, Board Chairman

Agent ad Litem: Song Xiaodong, lawyer of Guangdong Everwin Law Office


The Plaintiff Fujian Tingyi Food Co., Ltd complained to this court, on a dispute over compensation for goods damage of contract for carriage of goods by sea, versusing the Defendant COSCO Container Lines Co., Ltd (hereinafter referred to as COSCO Co.) and the Defendant Guangzhou Container Terminal Co., Ltd (hereinafter referred to as GCT Co.). This court set up a collegiate bench after accepting the cases on March 13, 2003 and called together the parties to exchange evidences in the court and tried the case openly on May 28. Now the case has been finalized. The litigation representative Zheng Decheng and Jiang Guangsheng of the Plaintiff, the litigation representative Huang Yaquan and Chen Longjie of the Defendant COSCO Co. and the litigation representative Song Xiaodong of the Defendant GCT Co. presented in court. Now the case has been finalized.  

The Plaintiff Fujian Tingyi Food Co., Ltd states: on September 11, 2001, BVI Co. signed a Contract of Sale with Italia SIPA Co. (hereinafter referred to as SIPA Co.), agreeing that SIPA Co. sole 11 1-step bottle machines (Model: ECS FX20??80HF) and relevant equipments. On October 16, SIPA Co. signed a Contract of Sale with the Plaintiff, agreeing that BVI Co. sole one 1-setp bottle machine and relevant equipment to the Plaintiff. On March 23, 2002, SIPA Co. transferred one 1-setp bottle machine to ?°M/V EMPRESS HEAVEN?± of COSCO Co. to transport by sea and COSCO Co. issued a B/L (No. COSU92423790) named the Plaintiff as Consignee. During the discharge, the container of No. CBHU920242/6 fell from the portal crane of GCT Co.. By checking through, the goods were seriously destroyed and the fixing fee exceeded the price of this equipment. The Plaintiff holds that the two defendants should pay full compensation for goods damage for the goods destroyed in the period of responsibility of the two Dependants. Thus, the Plaintiff asks this court to order the Defendant COSCO Co. and the Defendant GCT Co. to jointly compensate the Plaintiff the loss of goods USD 1,218,400. 

During the period of adducing evidences, the Plaintiff provided the following evidences: (1). Copy of the Contract of Sale signed by BVI Co. and SIPA Co.; (2). Copy of the Contract of Sale signed by thePlaintiff and BVI Co.; (3). The Contract of Sale (No. FY-2002006A) signed by the Plaintiff and BVI Co.; (4). Commercial invoices; (5). Invoices of BVI Co.; (6). Barer B/L (No. COSU92423790) and exhibits; (7). 12 pieces of container load plan; (8). Customs declaration; (9). Bs/L; (10). Freight Records made by the business section of business development department of GCT Co.; (11). Copy of Damage Report of New Equipment of Fuzhou made by Dick Sun; (12). Copy of Written Opinion sent to the staffs of the Plaintiff by the Sales Manager Robert Cucciol and the Project Manager Massimo Budoia of SIPA Co.; (13). Forty photos shot by SIPA Co. and the Plaintiff together; (14). Declaration Correspondence sent by the Plaintiff to COSCO Co.; (15). Claim Paper of the Plaintiff; (16). Copy of Apply Letter of COSCO Co.; (17). Copy of Apply Letter of Guangdong Heng Yun Law Firm; (18). Official Reply on Approving Equipments-importing by Fujian Tingyi Food Co., Ltd made by Economical Development Bureau of Fuzhou Hi-tech Zone; (19). Copy of Exemption Certificate for Import and Export; (20). Two correspondences of changing the port of destination.   

The Defendant COSCO Co. states: (1). The Plaintiff is not the proper subject in the litigation for it is not the possessor of the goods; (2). The goods damage claimed by the Plaintiff does not exist, on the reason that the goods in this case have not been destroyed when consigned to the consignee at Huangpu Port, Guangzhou; (3). The Plaintiff has no evidence to proof that the quality of the goods was good and had no damage while shipping, for the No. COSU92423790 bearer B/L only records: ?°the carrier loads and checks the number by himself?±; (4). Even thought the goods in this case have been damaged, the Plaintiff did not suffer any loss; (5). COSCO Co. should not bear any liability on the damage of the goods, for it was nor intentional neither had fault on the damage; (6). Suppose COSCO Co. should bear compensational liability on the damaged goods, it should enjoy the limitation of liability of units in accordance with law and the limitation of compensation should not exceed special right for drawing (SDR) 46,000. 

During the period of adducing evidences, the Defendant COSCO Co. provided a Survey Report on Damage issued by China National Import & Export Commodities Inspection (Guangdong) Corporation.  

The Defendant GCT Co. states: (1). Based on the B/L, the Plaintiff can only sue the carrier, since the goods damage happened in the liability period of the carrier; (2). As an employee of COSCO Co. in this case, GCT Co. arranged parking, loading, unloading and other relevant works, thus no contractual relationship exists between the Plaintiff and GCT Co. and the Plaintiff has no right to sue GCT Co. in respect of this case; (3). Based on the Contract of Sale between the Plaintiff and BVI Co., the Plaintiff should pay after installation and checked in according to the checking document and bear no liability on the goods damage not happened during the shipping. Thus, as the buyer, the Plaintiff should not bear liability for the goods damage was not happened during the shipping. Further, the Plaintiff has no right to sue GCR Co., on the reason that the Plaintiff has no property right on the goods in this case without any payment paid; (4). The accident in this case is caused by bad packing, short of label and dim label, which means GCT Co. can be exemption; (5). Suppose GCT has to bear compensation liability, Article 56 on limitation of liability of compensation of Maritime Code of the People??s Republic of China would be invoked.    

During the period of adducing evidences, the Defendant GCT Co. provided evidences as follows: (1). Loading & Unloading Agreement of Foreign Trade M/V; (2). The back clause of the No. COSU92423790 bearer B/L and exhibits; (3). Survey Report of Cranes.

By cross-examination in the court, the facts are found as follows:

1. The Fact of Selling Goods 

On September 11, 2001, BVI Co. signed a Contract of Sale with SIPA Co., agreeing that SIPA Co. sole 11 1-step bottle machines (Model: ECS FX20??80HF) and relevant equipments. On October 16, 2001, SIPA Co. signed a Contract of Sale with the Plaintiff, agreeing that BVI Co. sole one 1-setp bottle machine and relevant equipment to the Plaintiff at the price USD 2,373,906 that includes CIF of China open port and fees for installation and test-drive. The method of payment is telegraphic money order in 100% after installation and checking according with checking document. The liability of the buyer includes: ?°Unload the machines and hardwares at the installation site. Any damage caused during the hoisting is the liability of the buyer, unless the damage can be proved to happen during the shipping.?± On April 1, 2002, the Plaintiff and BVI Co. signed another Contract of Sale (No. FY-2002006A), agreeing that BVI Co. sole one 1-setp bottle machine and relevant equipment to the Plaintiff at price USD 2,373,906, CIF Huangpu Port.

2. The Fact of Contract of Transportation

On March 23, 2002, SIPA Co. transferred one 1-setp bottle machine to COSCO Co. to carry and COSCO Co. issued the No. COSU92423790 B/L, recording that the carrier is SIPA Co., the consignee is the Plaintiff and the notifier is Guangzhou Tingyi Food Co., Ltd.; the goods are No. 11 ECS FX20??80HF 1-setp bottle machines in seven containers of 40 feet and two containers of 20 feet with 127,021kg weight; the carrying ship is ?°M/V EMPRESS HEAVEN?±; the port of loading is Genoa, Italy and the port of destination is Singapore, from container yard to container yard. The law applying clause of the B/L records that this B/L applies to the law of the People??s Republic of China. The list exhibiting after the B/L records the number of the containers and pieces and weight of the goods carried, within which No. CBHU920242/6 container contained one piece of goods weights 23,000kg. In according to the container load plan issued by SIPA Co., the goods in No. CBHU920242/6 container is blow pressing machine. After issuing the B/L, SIPA Co. sent a correspondence to COSCO Co. changing the port of destination to Huangpu, Guangzhou.  

3. The Fact of the falling of No. CBHU920242/6 container

The foregoing goods arrived Huangpu, Guangzhou, on April 16, 2002. Being entrusted by COSCO Co., GCT Co. arranged the parking, loading and unloading and other relevant works. In the same day, during the unloading, one side of No. CBHU920242/6 container broke off abruptly; a pole on the other side of the contained and a mudsill were broken, falling on a 40 feet container which was reclining on No. 2 shelf of land side of the portal crane. The Shipping Record issued by GCT Co. records the process of falling and expresses the opinion that the main reason causing the accident and the goods damage were in surveying.     

After picking up the goods, the Plaintiff transported the damaged container and the whole set bottle machine to Fuzhou. Now the damaged equipment is in the factory of the Plaintiff. 

4. The Fact of Damage Survey

The Damage Report of New Equipment of Fuzhou by Dick Sun, provided by the Plaintiff, records, on April 23, 2002, jointly with representatives from Guangzhou Tingyi Food Co., COSCO Co. and notarization party concerned, Dick Sun opened and checked the damaged container at Huangpu, Guangzhou. The conclusion is: all girders over beams of maintaining platform at the blowing part are broken and lean; most air pipes and oil pipes are seriously distorted; and gas valve has been damaged in different degree. Marks on the B-side of driving device of conveying belt shows that it has been bumped hardly, while A-side has been slightly damaged. No pattern has been fix at the B-side and nearly half stretching rods are not at their normal position which can be seen. The pattern at the A-side is in closing, however damage cannot be seen. The gap on the rear conjoint of the bottom of the direct fixed outside the pattern is big, which can deduce that the whole bottle equipment has been over-turned. Moreover, the opening-closing machine has disturbed landscape orientation. 

The fax sent by Robert Cucciol, Sales Manager of SIPA Co., to the staffs of the Plaintiff, provided by the Plaintiff, records: the budget of the blowing part is USD 1,081,500, with respect to the new blowing part and adjusting the injection equipments that has not been damaged, expenses should be paid separately at USD 92,400. Moreover, packing fees is USD 6,500 and shipping fee of the new equipment to China harbor is USD 38,000. The forgoing fees are totally USD 1,218,400. The fax sent by Massimo Budoia, Project Manager of SIPA Co., to the staff of the plaintiff, provided by the plaintiff, records: the blowing part cannot be used any longer and the costs for taking down the machine and checking the working effect of the undamaged part would exceed the price of this set of equipment.

COSCO Co. and GCT Co. hold: SIPA Co. is nether a legal organization nor an authorized organization of appraisal, further, being the seller in this case, SIPA Co. is an interest party; thereof, the above-mentioned opinions and conclusions made by SIPA Co. cannot be the evidences confirmed the goods damage and the loss in this case.

Based on the application of COSCO Co., China National Import & Export Commodities Inspection (Guangdong) Corporation made further appraisal report on damaged status of the blowing part of the 1-stept bottle machine on August 26, 2002 at the Plaintiff??s factory. In the report, recording that the damaged equipment is the blowing part within the whole product line, the appraisal conclusion of the outside damages is as follows: (1). The girders and straight beams over the crossbeams of the maintaining platform at the blowing part have been snapped, sloping to an angle around 23º~25º; (2). Three crossbeams over the top of the maintaining platform have been miscued; (3). The air pipe and high-pressure oil pipe fixed at the B-side of the blowing part have been knocked flatly, departure from the fixing position, with connectors on part of pipes losing off; moreover, the valve connecting the high-pressure oil pipe is leaning and out of shape, departure from the fixing position; (4). The flywheel in the driving device of conveying belt fixed at the B-side has marks showing serious bump, the flanges on the both top sides of the flywheel have been damaged by bumping, shoveling a notch which is 5mm deep at the most; (5). Portrait straight beams at the B-side out-coming part of the maintaining platform have been ripped, with connected bolts on the green holed splint cutting off, which cause the splint loosing and sloping; (6). The cable trunkings are twist and bumped to concave; (7). No patterns have been seen on two closing seats at both A and B sides. The appraisal conclusion is: the price of the blowing part cannot be determined on the reason that COSCO Co. and the Plaintiff have not provided the sales contract, invoices and relevant customs declaration for importing with respect to buying this set of bottle machine and changing new equipment after the blowing part damaged; however, by synthetically considering the structure and function of the blowing part in the whole set bottle machine, the price of this part accounts 25-35% of the whole set machine. In according to the appearance damage of the blowing part at the scene, the connection and the running quality of each part in the blowing part have been greatly damaged and the connection between the blowing part and the whole product line is out of work, while by considering the possibility of reclaiming the parts on the machine, for example, the direct of the pattern, the opening-closing part and part of valves and pumps on the hydraulic pressure system, the rate of scrap value of the blowing part is estimated as around 20%.

5. Others

In each day of June 17, 2002 and November 12, the Plaintiff sent correspondence to COSCO Co., stating that SIPA Co. had already made an analysis report on the loss degree of the damage machine, in which the damage machine had been cognized that seriously damaged and had no need to repair, and asking COSCO Co. to compensate USD 1,218,400. COSCO Co. or the agent p.p. sent correspondence to the Plaintiff in each August 12, October 25 and November 13 in the same year, asking for the analysis report and the contract of sale of SIPA Co. in order that COSCO Co. can entrust China National Import & Export Commodities Inspection (Guangdong) Corporation to inspect and examine. In addition, during the litigation, the Plaintiff, COSCO Co. and GCT Co. all choose to apply laws of the People??s Republic of China to settle the dispute in this case.

Further, it is found out that on June 18 2003, International Monetary Fund published the conversion rate of SDRs to USD as 1 SDRs changing USD 1.419040.

Members of collegiate bench consistently hold that this case is a dispute over contract for carriage of goods by sea on the reason that the Plaintiff brought up the complain on the B/L for carriage of goods by sea. Based on the Article 269 of Maritime Code of the People??s Republic of China, the parties to a contract may choose the law applicable to such contract. In this case, the Plaintiff and the Defendant COSCO Co. and GCT Co. all choose to apply laws of the People??s Republic of China to settle the dispute, thereby, the case should be applied laws of the People??s Republic of China.  

Based on Article 78, Paragraph 1, of Maritime Code of the People??s Republic of China, the relationship between the carrier and the holder of the bill of lading with respect to their rights and obligations shall be defined by the clauses of the bill of loading. By signing Contract of Sale with BVI Co., the Plaintiff obtained No. COSU92423790 straight bill and was the named holder of the said bill. Thus, the Plaintiff has right to claim compensation to the carrier on the goods loss caused in goods shipping in according with the said bill. The Contract of Sale between the Plaintiff and BVI Co. does not impact the rights and litigations of the Plaintiff being the holder of the bill; thus, the claim of COSCO Co. that the Plaintiff is not the proprietor of the cargos and has no right of claim on the cargo loss in this case, has no legal basis. 

No. CBHU920242/6 container fell during the hoisting unloading at Huangpu Harbor on April 16, 2002. Both the Appraisal Report on Damage by China National Import & Export Commodities Inspection (Guangdong) Corporation, provided by COSCO Co. and the Damage Report of New Equipment of Fuzhou by Dick Sun of SIPA Co., provided by the Plaintiff record that the goods in the No. CBHU920242/6 container had been damaged, which the damage statuses of the goods in both reports are not contradicted. The appraisal time China National Import & Export Commodities Inspection (Guangdong) Corporation took is August 26, 2002 and the appraisal site is at Fuzhou. Although objectively existing the possibility that other reasons may cause the damage during April 16, 2002 and August 26, 2002, under the situation that COSCO Co. did not provide counterevidence, the goods damage of No. CBHU920242/6 container caused by the falling of the container shall be confirmed. 

On the amount of indemnity for the loss of the goods, based on Article 55, Paragraph 1,of Maritime Code of the People??s Republic of China, the amount of indemnity 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, and the actual value shall be the value of the goods at the time of shipment plus insurance and freight. The two written opinions by Robert Cucciol, Sales Manager of SIPA Co. and Massimo Budoia, Project Manager of SIPA Co. on the amount indemnity for the loss of the goods should not be adopted as the basis to decide the fact, on the reason that SIPA Co. is not legal organization for goods damage survey in our country and, being the goods seller and the shipper of the B/L, SIPA Co. has interest relationship with the goods in this case; moreover, the Plaintiff did not provide the original copy of the two written opinions that the opposing party denied, which means, no other evidences can verify the opinion on the amount of the goods loss. The Plaintiff??s claim on USD 1,218,400, the amount of indemnity for the loss of the goods, calculated on the two written opinions, shall not be supported. The real price of the damaged blowing part before the damage happened cannot be determined on the reason that the Plaintiff did not provide evidences to proof the price of buying the part or the same kind of cargo. The Plaintiff did not sell off the damaged blowing part, thus the real price of the damaged blowing part after the damage happened cannot be determined. Moreover, without repairing, the repairing fee cannot be determined. Thereby, the specific amount of loss of the damaged blowing part cannot be determined. Under this situation, the appraisal conclusion made by China National Import & Export Commodities Inspection (Guangdong) Corporation, the legal appraisal organization in our country, which is based on the structure of the blowing part in the whole set bottle machine, the function, the value rate of the damage status in the whole set of machine and the rate of scrap value, can be the basis of determining the loss of the damaged blowing part in this case, due to not enough counterevidence been provided by the Plaintiff to reverse the appraisal conclusion. Based on the appraisal conclusion by China National Import & Export Commodities Inspection (Guangdong) Corporation, the value of the damaged blowing part accounts for 25-35% of the value of the whole machine, the rate of scrap value accounts for 20%. This court calculates the amount of indemnity for the loss of the goods is USD 664,693.68, which is 35% the price of the damaged blowing part in the value of the whole machine.

Article 46, Paragraph 1, of Maritime Code of the People??s Republic of China stipulates: the responsibilities of the carrier with regard to the goods carried in containers covers the entire period during which the carrier is in change 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 damage happened before the delivery by the Defendant COSCO Co., which is during the responsibility period of carrying goods, and the goods were damaged by falling during the hoisting unloading, which does not belong to the grounds for exemption of the carrier stipulated in the Paragraph 1, Article 51 of Maritime Code of the People??s Republic of China. Thereby, COSCO Co. shall bear the compensation liability of the goods damage in this case.

By accepting the entrustment of COSCO Co. to unload the goods in this case, GCT Co. should not bear liabilities of the carriage contract, on the reason that thought it made goods loss during the unloading, it is not the party in this contract for carriage of goods by sea. The tort action that the Plaintiff versusing GCT Co. and the action the Plaintiff versusing COSCO Co. on the same goods loss do not belong to the colitigation stipulated on Article 53, Paragraph 1, of Civil Procedure Law of the People??s Republic of China. Under the situation that the Plaintiff brought up the action, versusing COSCO Co., based on the contract for carriage of goods by sea, the dispute between the Plaintiff and GCT Co. cannot be consolidated trail, which can be solved separately.

The goods loss in this case is not caused by the intention of COSCO Co. or blindly to do or not to do so by know perfectly well on the loss; thus COSCO Co. has right to compensate the amount of indemnity stipulated in Article 56 of Maritime Code of the People??s Republic of China. Based on Article 56, Paragraph 1, of Maritime Code of the People??s Republic of China, the carrier??s liability for the loss of or damage to the goods shall be limited to an amount equivalent to 666.67 Units of Account per package or other shipping unit, or 2 Units of Account per kilogram of the gross weight of the goods lost or damaged, whichever is the higher. The B/L in this case records the piece of the damaged No. CBHU920242/6 container is one, weighing 23,000 kilograms, and no price of the container goods is recorded. Thus, the limit of the indemnity for the damaged goods in the container should be calculated on 46,000 Units of Account per gross weight, which is 666.67 Units of Account per package. The Units of Account stated in Maritime Code of the People??s Republic of China means the special drawing rights stipulated by the International Monetary Fund. Based on the calculation rate of SDR to USD published by the International Monetary Fund on June 18, 2003, the limit of the indemnity for the goods in the container is USD 65,275.84. The claim of the Plaintiff exceeding the limit shall not be supported. 

Based on Article 46, Paragraph 1, and Article 56, Paragraph 1, of Maritime Code of the People??s Republic of China, this court now judges as follows:

1. Order the Defendant COSCO Co. compensate the Plaintiff Fujian Tingyi Food Co. the loss of the goods USD 65,275.84;

2. Dismiss the claim of the Plaintiff Fujian Tingyi Food Co. to the Defendant GCT Co.;

3. Dismiss the other claim of the Plaintiff Fujian Tingyi Food Co..

The accepting fee of this case is RMB 60,574 plus other fees RMB 100, which the Plaintiff pays RMB 57,423 and the Defendant COSCO Co. pays RMB 3,251. All the said fees have been paid by the Plaintiff in advance, thus the Defendant shall directly repaid the Plaintiff and this court would not check and return the fee separately.

The paying responsibility mentioned above shall be fulfilled completely within ten days after this Judgment takes effect. 

Suppose any party takes exception to the judgment, an appeal paper can be submitted to this court within 15 days after the service day of the Judgment, appealing to Guangdong Supreme People??s Court, in addition, any party submits the appeal paper shall provide the copies according to the number of the other party.


Presiding Judge:   Xu Yuanping

Judge:   Zhan Weiquan

Judge:   Deng Yufeng


June 18, 2003


Assistant:   Han Haibing

Clerk:   Zhang Haiying