Civil Judgement of Guangzhou Maritime Court
2005-08-22
Civil Judgement of Guangzhou Maritime Court (1999)GHFSZ No.92
Case of Dispute over Damage to Goods Carried by Sea filed by Shenzhen Nantian Oils Industry Ltd. and the People’s Insurance Company, Liaoning Branch against Standsted Shipping Co. Ltd.
The Guangzhou Maritime Court of the People’s Republic of China
Civil Judgment
(1999)GHFSZ No.92
Plaintiff : Shenzhen Nantian Oils Industry Ltd.
Domicile : Chiwan, Shekou, Shenzhen, Guangdong Province
Legal Rep. : Guo Jianhai, Chairman of Board of Directors
Agents ad litem : Li Hai and Tang Li with Henry & Co. Law Firm
Plaintiff : The People’s Insurance Company, Liaoning Branch
Domicile : 77, Heping Bei Road, Heping District, Shenyang, Liaoning
Person in charge : Xiao Qinghai, General Manager
Agent ad litem : Zhong Cheng with Wang Jing & Co. Law Firm
Defendant : Standsted Shipping Co. Ltd.
Domicile : John Kennedy Street, IRIS Building, Office 740
Limassol, Cyprus
Legal Rep. : Evanthia Mavridou, Director
Agent ad litem : Huang Yaquan and Yang Yunfu with Guangdong Maritime Law Office
The case of dispute over cargo damage under the contract of carriage of cargo by sea between the Plaintiff Shenzhen Nantian Oils Industry Ltd. (“Nantian”) and the Defendant Standsted Shipping Co. Ltd. (“Standsted”) was accepted by this Court on September 2, 1999. A collegial bench was duly formed to try the case. Standsted raised jurisdictional objection during the period for submitting bill of defence. On October 18, 1999, this Court made a ruling to reject Standsted’s objection. Standsted was not satisfied with the ruling of this Court in respect of jurisdiction and filed an appeal before the Higher People’s Court of Guangdong Province. The Higher Court dismissed Standsted’s appeal on March 5, 2000. A meeting was held by this Court on May 29, 2000 for exchange of evidence between the parties and a public hearing was held to try the case. Before the court hearing, The People’s Insurance Company of China, Liaoning Branch (“PICC Liaoning”) filed an application with this Court for joining in the proceedings as co-plaintiff, which was approved. Li Hai, agent ad litem for the Plaintiff Nantian, Zhong Cheng, agent ad litem for the Plaintiff PICC Liaoning and Huang Yaquan and Yang Yunfu, agents ad litem for the Defendant Standsted attended the court hearing. Now the trial of the case has been concluded.
It was alleged by the Plaintiff Nantian that on May 20, 1999, the M.V. Panamax Star carried 47,250.992 MTs of Brazilian soybeans from Brazil to Chiwan port, Shenzhen. The Master issued two sets of bills of lading for the cargo. The two sets of Bs/L were duly assigned to Nantian. Loading operation was completed for the cargo on May 20, 1999 and cargo were carried to the port of destination Chiwan port, Shenzhen on August 6, 1999. After arrival at the port of destination, the Plaintiffs found that the majority of cargo loaded in Hold 5 were damaged and cargo in other holds suffered different degrees of damages due to the factors other than the cargo themselves, some turning grey and some burned black. Through investigation, it was found that the M.V. Panamax Star was owned by the Defendant. Nantian requested the court to order the Defendant to compensate the economic loss of USD5,553,510.20 arising from loss and damage of the cargo and the interests thereon and to order the Defendant to bear the court fee. After PICC Liaoning joined in the proceedings, Nantian changed its claim for damages to USD2,423,579.03 and added the claim for RMB271,609.90 and USD40,525 as the expenses incurred by Nantian for discharging, difficult handling, overtime of the stevedores, hold cleaning, cargo removal, additional storage, cargo inspection, tugboat for boarding the ship to preserve the evidence and inspection fee paid to Andrew Moore & Associates Ltd. (“Andrew Moore”) and requested the court to order the Defendant to undertake court fee.
It was alleged by the Plaintiff PICC Liaoning that it paid to the insurance policy beneficiary Nantian USD1,713,754.04 as the loss resulting from the shortage of 7,001.992 Mts of cargo insured under the Policy SY65/I99013. Nantian issued receipt and letter of subrogation to PICC Liaoning. As Nantian as the plaintiff had brought a suit against Standsted which caused the insurance accident to claim all the losses arising from shortage of and damage to the cargo, PICC Liaoning applied to join in the proceedings as co-plaintiff in accordance with Articles 93, 95 and 96 of the Maritime Procedure Law of the People’s Republic of China and Article 252 of the Maritime Code of the People’s Republic of China, requesting the court to order the Defendant to compensate the loss of USD1,409,921.11 resulting from the loss of 7,001.992MTs of cargo and the bank loan interests on the sum from the date of delivery of the cargo to the date of actual payment.
It was defended by the Defendant Standsted that,
1. The business license and business registration data of Nantian showed Nantian had no permit for import of soybeans which fell out of its business scope. Therefore the import of the cargo was unlawful and the sales contract between Nantian and the seller was invalid and Nantian was not entitled to claim against the Defendant for loss of unlawful cargo. Furthermore, Nantian failed to provide valid evidence to prove its title to the cargo involved in the case. Therefore, Nantian was not a proper party in the case.
2. It was legally baseless for PICC Liaoning to join in the proceedings as co-plaintiff.
3. There were many inconsistencies between the insurance policy presented by PICC Liaoning at the court hearing on July 3, 2000 and that presented by Nantian to the court on September 22, 1999. Obviously these two polices were not the same. However both polices were numbered Y65/I99013. The insurance policy presented by PICC Liaoning to the court was not a true one. PICC Liaoning should not have made the insurance compensation to Nantian on basis of this policy. Supposed that the policy presented by PICC Liaoning to the court was true and valid, the insurance policy taker (insured) Kerry Oils & Grains Trading Co., Ltd. (“Kerry Oils”) had not obtained the title to the cargo at the time of obtaining policy and hence should not have insurable interest in the cargo involved in this case. Therefore, this policy should be invalid and the insurance contract was invalid. PICC Liaoning failed to present evidence to prove that the insured Kerry Oils had paid the insurance premium. In case the insurance policy holder had not paid the insurance premium or had paid the premium after the insurance accident, the insurer should not be responsible for the insurance compensation. If the insurer had made such insurance compensation, such compensation should be a wrongful compensation. Therefore, PICC Liaoning had not actually obtained the right of subrogation and was not a proper party in the case.
4. Before and at the beginning of the voyage, the M.V. Panamax Star and her equipments were in good order and condition and she was provided with necessary documents/papers and equipments and properly and fully manned. The ship was seaworthy and the holds were cargo-worthy. Standsted should be exempted from the liability for the alleged loss of or damage to the cargo.
The loss of or damage to the cargo in Hold 5 of the M.V. Panamax Star was resulting from the collision with the M.V. Auk during shifting in the river channel of Itacoatiara, Brazil on May 21, 1999. The collision accident left a hole about 8 meters long in Hold 5 of the M.V. Panamax Star, causing some cargo to fall into the water and ingress of large amount of water. As a result, most of the cargo stowed in middle and lower layers were wetted. In order to get the ship repaired so as to continue her voyage, the Master of the M.V. Panamax Star jettisoned the wetted and useless cargo into the river with the approval of Brazilian port authority and discharged the undamaged cargo about 1,280 MTs in upper part of Hold 5 into two dummy barges. At that time, the surveyors appointed by the cargo interest and the cargo insurer and the lawyer from Holman, Fenwick & Willan appointed by the cargo interest did not raise any objection. The Defendant should be exempted from any liability for such loss caused to the cargo due to collision.
Supposed that the cargo dropped into the river were of some value of use and that the charterer did not agree to have them dropped into the river, such loss should be dealt with as general average and should be contributed according to the value of the ship and cargo.
Standsted properly and carefully loaded, handled, stowed, carried, kept, cared for and discharged the soybeans carried. The repair of the M.V. Panamax Star lasted 31 days and might have some impact on the heating of the cargo and its consequence. The M.V. Panamax Star arrived at Chiwan anchorage on August 6, 1999 and the cargo were discharged on September 7, 1999. Due to the consignee’s failure to disperse cargo from the port, and the slow discharging rate, heating and deteriorating of the cargo were aggravated and more cargo suffered damage as a result.
5. The Damage Appraisal issued by CCIB Shenzhen showed that the moisture content of the cargo was 13.4%. The moisture content of the cargo at the port of loading as showed in the Report issued by Calwen Marine Consultants and Surveyors Ltd. (“Calwen”) was 13.74%. The moisture content was in any rate on the high side, be 13.4% or 13.74% as it may. The Quality Certificate presented by the Plaintiff showed that about 520MTs of soybeans were heat damaged before loading and it was apparent that the moisture content of part of soybeans was higher than 14%. The excessive moisture content caused instability to the microorganism in the cargo and aggravated the heating and deteriorating of the cargo. The root cause of the heating and deteriorating of the cargo was the physical characteristic or inherent vice of the cargo.
6. Damage to the cargo existed before the loading and such loss should be deducted from the claimed amount of the Plaintiffs. The damaged soybeans accounted for 3.2% of the total cargo. Therefore, the amount of loss USD304,462.76 existing before loading should be deducted from the Plaintiffs’ claimed amount. In addition, before the loading, 1.1% of the soybeans were damaged by heating and loss amounted to USD104,659.06. A corresponding deduction should also be made. A proportion of 0.4% of the total amount of cargo should be deductible as normal loss.
7. Nantian and PICC Liaoning failed to present any valid evidence to prove the existence of loss and the constitution of the amount of loss. The alleged loss was baseless and the claimed amount was obviously unreasonable.
The Defendant asked the court to reject the case filed by Nantian and PICC Liaoning, to order them to bear the court fee and all the costs incurred by Standsted in the proceedings.
After trial, it was found out that, the Sales Contract entered into between Nantian and Kerry Oils on April 29, 1999 stipulated that Nantian purchased from the latter 45,000MTs of Brazilian soybeans (1999 crop) to be carried to Chiwan, China at the price of USD201.36/MT CIF Chiwan. The base oil content was 18.5%, moisture content 14% maximum, base impurity content 1% and maximum 2%. Allowance of 1% would be made in the price for each increase in impurity in excess of 1%, pro rata for fraction. Other terms as per ANEC41.
On May 20, 1999, the M.V. Panamax Star owned by Standsted completed loading of cargo at Itacoatiara port in Amazon. The Master issued Bs/L No.1 and No.2. for the cargo. Both Bs/L stated that the M.V. Panamax Star loaded 23,625.496MTs of Brazilian soybeans (1999 crop) at Itacoatiara port.
It was stated in the quality certificate issued by the independent surveyor Linkmilla Services Ltd. (“Linkmilla”) that the moisture content of 47,250.992 MTs of soybean loaded onboard the M.V. Panamax Star was 12.3%, impurity 0.7%, damaged soybeans 3.2% among which 1.1% were heat damaged and 12.9% were broken kernel.
On May 21, 1999, the Master of the M.V. Panamax Star handed over a sea protest to the port authority, declaring that after the M.V. Panamax Star completed loading operation and departed from the loading berth to the temporary anchorage to wait for the ship’s documents; during shifting, the M.V. Panamax Star contacted the anchor chain of a vessel named “AUK” staying in the middle of the channel under the influence of strong current (about 7 knots) and wind although the M.V. Panamax Star had tried the best to avoid the contact. The M.V. Auk was caused to move further to port and the starboard side of Hold 5 of Panamax Star contacted the bulbous bow of the M.V. Auk, leaving a dent about 15 meters long in the area starboard side in the frames from 110 to 116 in Hold 5 of the M.V. Panamax Star and a crack about 8 meters long between frame 103 and 113. Part of the cargo leaked from the crack into the water.
The Plaintiff obtained the above Bs/L issued by the Master of the M.V. Panamax Star and the Invoice issued by Kerry Oils after payment by letter of credit. According to the invoice, the unit price of the 47,250.992 MTs of soybeans was USD201.36/MT CIF Chiwan and the total value was USD9,514,459.75.
On August 5, 1999, the M.V. Panamax Star arrived at Chiwan, Shenzhen and discharging was completed on September 7, 1999. At the application of Nantian, Shenzhen Import & Export Commodity Inspection Bureau (“CCIB Shenzhen”) weighed the cargo and inspected the quality of the cargo. According to the Inspection Certificate (weighing by scale) SKG990004888, as weighed by the calibrated scale, the actual amount of cargo carried by the M.V. Panamax Star to the port of destination was 40,249 MTs (among which the burned black soybeans were 2,330.850 MTs). On October 12, 1999, CCIB Shenzhen issued a Damage Appraisal SKG99000553 which stated that CCIB Shenzhen monitored the whole discharging operation. With the progress of discharging, the damages to the cargo in each hold were gradually exposed. In order to minimize the loss, CCIB Shenzhen suggested the terminal and the consignee to separate the processable cargo from those that could not be processed. The unprocessable cargo referred to those turning black or mostly blacken or partly brown due to high temperature in the holds, which had entirely lost the value of use. The depreciation rate was suggested to be 100%. The processable cargo referred to those other than the processable cargo, which would be directly used for processing after sending into the warehouse of the consignee during the discharging, including some becoming brown or dark brown and a very small proportion of blackened cargo inevitably mixed during the separation. A certain degree of loss also existed in those cargo. As measured, the average temperature of the blackened cargo in Hold 3 was 85℃, the average temperature in Hold 4 was 85℃ and the temperature of the blackened cargo on the surface in Hold 7 was 88℃. The damage of the cargo was caused by high temperature in the holds before discharging. The processable cargo and unprocessable cargo in each hold were weighed by electronic weighing scale. The amount of processable cargo discharged from the M.V. Panamax Star was 37,918.15 MTs. The amount of unprocessable cargo due to partly burned and blackening in Holds 1, 3, 4 and 7 was 2,330.85 MTs. The amount of cargo stated in the Bs/L was 47,250.992 MTs. A shortage of 7,001.992MTs was resulted, comparing the discharged processable and unprocessable cargo with the B/L amount. The Damage Appraisal also stated that the moisture content of the cargo at the time of loading was 13.4% as shown in the analysis report issued by Thionville do Brazil Ltd. on May 7, 1999 at the port of loading.
The business scope of Nantian includes producing, processing soybean oil, rape oil, groundnut oil and other edible oil, soybean meal, rapeseed extraction, groundnut meal, raw materials for feeding and other high protein food.
On August 5, 1999, Nantian filed an application with this court for preservation of evidences prior to institution of lawsuit, requesting the court to preserve the evidences including the full set of ship’s certificates, all crewmembers’ certificates, inspection reports by the authorities in the countries of port of registry and port of loading in exercise of port state control, self-inspection report, hold inspection certificate or records at the port of loading, draft survey report before the commencement of voyage, cargo stowage plan, voyage deck logbook, engine room logbook, radio logbook, charts and course records for the voyage, radar plotting records, engine room telegraph records, deck telegraph records, windlass repair records, photos of collision damages, sea protest, accident report and pilot report in relation to the collision, survey report at the place of repair, list of repaired items, faxes, letters, telegrams exchanged between the ship and outside objects in the voyage. At the same day, this court handed down a ruling in accordance with law, approving Nantian’s application and ordering Standsted to present to this court the above mentioned evidential documents. The Master of the M.V. Panamax Star presented part of the documents but failed to present the deck logbook and engine logbook under the written explanation that the deck logbook and engine logbook for the time of accident were kept by the shipowner’s Hong Kong lawyer and it was unable to provide them.
On August 11, 1999, Nantian filed an application with this court for preservation of property prior to institution of action, requesting to arrest the M.V. Panamax Star owned by Standsted and ordering Standsted to provide a security in amount of USD2,220,000. On September 3, Nantian filed an additional application for preservation of property, demanding an increase up to USD3,400,000 as security. This court approved Nantian’s application by rulings. Standsted provided security to this court in the above amount demanded by Nantian.
On September 1, 1999, Standsted filed an application with this court for evidence preservation prior to institution of action, requesting Nantian to provide the cargo sales contract, all correspondences with the seller, all correspondences with the shipper and its agent, the letter of credit opened by the bank at application of Nantian for purchase of the subject cargo and the full set of documents required by the letter of credit, voucher of payment made by the opening bank to the foreign party, business registration data and change of registration information, full set of original bills of lading for the cargo carried by the M.V. Panamax Star. This court approved Standsted’s application by ruling. Nantian presented to this court the sales contract, bill of lading, insurance policy, letter of credit and bank payment voucher in relation to the cargo in dispute.
At the application of Nantian, this court made a ruling on September 3, 1999 demanding a compulsory inspection on the M.V. Panamax Star and appointed China Classification Society to conduct the inspection. An Inspection Report GZ99990396 was issued on September 30, 1999 by China Classification Society.
PICC Liaoning presented to this court the Marine Cargo Insurance Policy SY65/I99013 dated May 12, 1999 and the bank payment voucher of insurance indemnity paid to Nantian on June 16, 2000. According to this Insurance Policy, the insured was Kelly Oils and the insured cargo were 47,250.992MTs of Brazilian soybeans in bulk carried by the M.V. Panamas Star for the insured amount of USD12,180,057, the date of sailing being May 4, 1999 and the voyage being from Itacoatiara port, Brazil to Chiwan, China, insurance terms being Institute Cargo Clause (A) with some additional risks covered. Kelly Oils endorsed the Insurance Policy in blank. According to the bank payment voucher, on June 16, 2000, PICC Liaoning entrusted Shenyang Branch of Bank of China to pay USD1,713,754.04 to Nantian as insurance indemnity. Nantian confirmed receipt of the above indemnity and issued the Receipt and Letter of Subrogation under which all the rights and interests in the insured object for which insurance indemnity was obtained (i.e. the 7,001.992MTs of cargo carried and allegedly short-landed by the M.V. Panamax Star) were assigned to PICC Liaoning. During the proceedings for evidence preservation prior to institution of action, Nantian presented to this court an insurance policy with the same number and date of issuance in the above-said insurance policy. But in this insurance policy there was no entry of the name of the insured, amount of cargo or insured amount and the insurance coverage was also different.
Nantian, PICC Liaoning and Standsted did not raise objection to the above facts.
The alleged loss of the cargo in question was divided into two parts, i.e., the loss claimed by Nantian arising from the depreciation of the 2,330.85MTs of blackened soybeans and of the 37,918.15MTs of processable soybeans and the loss claimed by PICC Liaoning arising from the shortage of 7,001.992MTs of soybeans.
In order to prove the depreciation rate of the 37,918.15MTs of processable soybeans, Nantian presented a Survey Report HK/1994/GSC/mc issued by Andrew Moore on October 4, 1999 under which it was concluded that the depreciation rate for a part about 8,000 MTs was 10% and 30% for another part of 29,684MTs. During the court hearing, the agent ad litem for Nantian indicated that the 37,918.15MTs of processable cargo were processed by Nantian itself and no evidence was presented to prove the existence of loss for processing this part of cargo.
Standsted argued that there was no evidence for Andrew Moore to come to the above conclusion and that such conclusion was obviously unreasonable and should not be admitted as the basis for making the court judgment.
The collegial bench was of the opinion that Andrew Moore was a foreign company and Nantian failed to present evidence to prove Andrew Moore’s capacity and qualifications to do business in China and inspect cargo. Therefore, the report of Andrew Moore was not admitted.
In order to prove the weight of the cargo leaked into the water from the crack in the ship hull and jettisoned due to wet damage, Standsted provided the following evidential documents: 1) Telex sent by the Master of the M.V. Panamx Star on May 31, 1999 in which it was stated that the cargo falling into the water from the damaged area of the ship was about 1,000MTs and 2) A note which Standsted called Draft Survey Report and which was handwritten on a letter paper of Seaside Marine Surveys & Services Ltd. The note read “The constant declared by the Master was 342 tons. On basis of the draft survey, the amount of soybeans carried onboard as calculated was 40,956.561MTs.” At the foot of the note, there were two signatures without indicating their identities and the signature of the Master of the M.V. Panamax Star for receipt. The date noted thereon was June 20, 1999. PICC Liaoning argued that the weight of cargo falling into the water as mentioned by the Master in the telex was only an estimated figure rather than the actual weight of cargo and the truthfulness of the “Draft Survey Report” was not accepted.
The collegial bench was of the opinion that the identity and capacity of the signatories to the “Draft Survey Report” was unclear and the basis for working out the weight of the cargo was the information declared by the Master of the M.V. Panamax Star. The truthfulness and legitimacy of the “Draft Survey Report” could not be verified and there was no other evidence to corroborate. Therefore, its evidential effect was not affirmed.
In order to prove the unseaworthiness of the M.V. Panamax Star, PICC Liaoning presented corresponding evidence. Standsted made rebuttal and presented corresponding disproof.
As to the certificates of the M.V. Panamax Star, PICC Liaoning argued that the Safety Management Certificate and Document of Compliance presented by Standsted showed that the certificate holder was Cyprus Shipping Company while all other certificates showed the holder was Standsted. Therefore, from the certificates, the operator of the M.V. Panamax Star could not be identified. Standsted did not provide evidence to prove that the M.V. Panamax Star was operated by Cyprus Shipping Company. If Standsted could not prove this issue, it should be deemed that Standsted was both the owner and operator of the M.V. Panamax Star. This would further show that the M.V. Panamax Star was operated by a company without operating capacity, which was in serious violation of the international safety management rules and could only cause the M.V. Panamax Star to be in serious unseaworthy state.
Standsted argued that in accordance with Artcile 1.1.2 of International Safety Management Code, either the owner or the operator can hold the Document of Compliance in accordance with International Safety Management Code. The Code does not require the shipowner to hold the Document of Compliance. The Manager of the M.V. Panamax Star was Cyprus Shipping Company to which American Bureau of Shipping issued a Document of Compliance on March 25, 1998 and issued a Safety Management Certificate to the M.V. Panamax Star on March 12, 1999. Standsted had presented these two documents to the court. Nantian and PICC Liaoning did not raise objection to the truthfulness of these two documents. According to these two documents, American Bureau of Shipping issued the Document of Compliance PR40168-ISM to Cyprus Shipping Company on March 25, 1998 in Houston in accordance with the authorization of the Republic of Cyprus. The safety management system of the ship was assessed and confirmed to be compliant with the requirement of international ship safety operation and oil pollution prevention rules (international safety management rules) and the certificate would remain valid till March 12, 2003 subject to compulsory annual assessment. On June 20, 1999, American Bureau of Shipping in Athens, Greece made the first annual assessment for this certificate. On March 12, 1999, American Bureau of Shipping in Bahamas free port as per the authorization of the Republic of Cyprus issued Safety Management Certificate to the M.V. Panamax Star. According to the certificate, the name of the ship was “Panamax Star”, the name of the company was Cyprus Shipping Company, the safety management system of the ship complied with the provisions in Paragraphs 3.3.4 and 3.3.5 in the Guide as attached to International Safety Management Code adopted in Resolution numbered A.788(19) of International Maritime Organization. The certificate would remain valid till September 12, 1999.
The collegial bench was of the opinion that the Safety Management Certificate of the M.V. Panamax Star and the Document of Compliance held by Cyprus Shipping Company were issued in accordance with the authorization of the government of the Republic of Cyprus. It could be determined that Cyprus Shipping Company was the operator of the M.V. Panamax Star. These two documents showed that the M.V. Panamx Star and Cyprus Shipping Company complied with the requirement of International Safety Management Code.
As to the manning, PICC Liaoning raised that according to the crew list and certificates of competency, there was only one ordinary radio operator holding certificate and this operator was not jointly acted by a senior officer on deck, and therefore such manning was not consistent with the requirements of Oceangoing Ship Safety Manning Certificate of the M.V. Panamax Star and thus the manning of the M.V. Panamax Star was not appropriate. Standsted argued that the M.V. Panamax Star was manned with a full time first level telegrapher who held both the ordinary radio operator certificate and first level telegrapher certificate. According to SOLAS and International Convention on Standards of Training, Certification and Watch-keeping for Seafarers, 1978, if the ship is manned with a full time telegrapher, there is no need for two deck officers to hold ordinary radio operator certificate.
Standsted presented the ocean-going ship safe manning certificate of the M.V. Panamax Star, on the back side of which it was stated that “two of the senior deck officers shall be competent to release distress and safety signals in accordance with SOLAS and the provisions of Article IV(16) of its protocol and shall hold the ordinary radio operator certificate or above”. Standsted provided the Ordinary Radio Operator Certificate 94-GOC-5983 issued by National Telecommunications Committee under Ministry of Communications of Philippines and First Level Telegrapher Certificate 94-1RTG-4876 held by the crewmember Joseph B. Agnas. According the crew list of the M.V. Panamax Star, Joseph B. Agnas was the telegrapher onboard. Both the Plaintiffs and the Defendant did not raise objection to the above certificates and crew list.
As to the issue about pilot, PICC Liaoning raised that the pilots onboard the M.V. Panamax Star were unable to communicate in English, which was one of the causes leading to the collision accident. The basis for this conclusion was the telex sent by the Master of the M.V. Panamax Star to Cyprus Shipping Company on May 21 after the collision accident, in which the Master’s opinion with regard to cause of collision was (the collision accident could be attributed to) due to the old and forgetful pilots and the careless maneuvering style. The old-aged pilots who reached the age of retirement were unable to communicate in English. Standsted did not raise objection to the truthfulness of the telex. After the end of the court hearing, Standsted presented a declaration issued by Amazon Pilots Association on July 11, 2000 in which it was stated that in accordance with Brazilian law, any ship passing the Brazilian waters including Amazon must appoint local competent pilots and the two pilots worked for the M.V. Panamax Star on May 21, 1999 had 46 years of experience as pilot and they were entirely competent and were obligatory to master the technical terms in English.
The collegial bench was of the opinion that Standsted did not object to the truthfulness of the telex presented to the court by PICC Liaoning and this telex should be admitted as evidence. However, the declaration made by Amazon Pilots Association could not prove that the two pilots had the ability to communicate with the crew in English in respect of pilotage. When mentioning the pilots’ ability to communicate in English, such words “were obligatory to master the technical terms in English” were used, which could not show that the pilots had actual mastery of the technical terms in English
As to charts, navigation notices, deck logbook, engine room logbook etc., PICC Liaoning raised that the Master of the M.V. Panamax Star failed to provide the deck logbook and engine room logbook before, at and after the collision accident when the court officers boarded the ship to preserve evidences and hence challenged the truthfulness of the deck logbook and engine room logbook presented by Standsted. During evidence preservation procedure, Standsted provided the chart numbered 4106A which was the chart for the sea area of collision and was the chart used before and at the commencement of voyage. But this chart was in Portuguese not in English. All the crew onboard the M.V. Panamax Star were Pilipino and the ship’s safety management system documents were all written in English. From the correspondences between the M.V. Panamax Star and the shipping company, it could be seen that there was language obstacle between the crew and the local pilots. That was to say, the crew did not speak Portuguese. It could be seen that the working language onboard the M.V. Panamax Star was English. The contents such as the explanation, notice or warning in the chart were written in Portuguese including the information about rising tide period, low tide period, different currents and tides in different month and the way to obtain the information of the water level at a particular day. Therefore, when sailing in this area, it was difficult for the Master and crew to consult the notices, warnings and other information in the chart to properly maneuver the ship. The ship was provided with an inappropriate chart. In this respect, Standsted argued that after the collision between the M.V. Panamax Star and M.V. Auk, the local port authority took away the original of the deck logbook and engine room logbook when making investigation into the accident. That was why the deck logbook and engine room logbook for the day of collision were not available when the court conducted evidence preservation. Although only the chart in Portuguese for the place of accident was taken during the evidence preservation procedure, this did not mean that the ship was not provided with chart in English before and at the time of commencement of voyage.
When the officers of this court boarded the M.V. Panamax Star to carry out evidence preservation, they requested Standsted to provide the deck logbook, engine room logbook, charts for the voyage, course records and other documents. The Master failed to produce the deck logbook and engine room logbook for the period before, at and after the collision between Panamax Star and Auk with the written explanation that the deck logbook and engine logbook for the time of accident were kept by the shipowner’s Hong Kong lawyer and thus were not available for presentation. The Master presented three charts in Portuguese. During the court hearing, Standsted did not present the evidence to prove that Panamax Star was provided with charts in English for Amazon.
The collegial bench was of the opinion:
During the evidence preservation by this court, the Master of Panamax Star said that the deck logbook and engine room logbook for the time of accident were kept by the shipowner’s Hong Kong lawyer. But Standsted defended in the case that the deck logbook and engine room logbook for the time of accident had been taken away by the port authority of Itacoatiara. Standsted failed to provide these documents during the preservation procedure and without giving justified reason and their explanations for the whereabouts of deck logbook and engine logbook were conflicting and unjustified. The truthfulness of the deck logbook and engine room logbook presented to this court during the litigation could not be affirmed. Therefore, the part in the logbooks favorable to Standsted would not be admitted as evidence without the admission of the Plaintiffs. The Master of Panamax Star only presented to this court the charts in Portuguese for the waters where collision occurred without any explanation for the failure to provide with charts in English. During the litigation, Standsted did not make any substantive explanations. Nor had Standsted provided evidence to prove that Panamax Star was provided with charts in English for the waters where collision accident occurred. It should therefore be determined that Panamax Star was not provided with the charts in English for the waters where collision occurred.
PICC Liaoning alleged that the starboard windlass and communication equipment of Panamax Star had some problems but PICC Liaoning failed to present any evidence in this respect.
Standsted presented the following evidences to prove the seaworthiness of Panamax Star and cargo-worthiness of her holds:
1. Certificates for hull, engine, radio and other equipment;
2. Boarding Certificate issued by US Coastguard on March 22, 1999 in which it was stated that steering in the bridge and steering room in various modes was normal and no defect was found;
3. List of equipments checked by the Master and crew of Panamax Star before arrival at and after departure from Alexander port, Gibraltar port, and the loading port in this case. The checklist included check of the renewal of sailing schedules, charts and navigation publications and the latest navigation information in the relevant navigation areas and check of the steering gear, navigation instrument, communication equipment, signaling set, deck lighting system, ropes and mooring winch and main engine;
4. A document issued by Federal Supervision Bureau of Agriculture under Brazilian Ministry of Agriculture and Grains and stationed in Amazon District in which it was stated that as inspected by technical personnel of Ministry of Agriculture, holds of Panamax Star were in good condition and approved to load cargo and the plant quarantine certificate would be issued later;
5. Cargo Stowage Plan;
6. Copy of the hold inspection certificate issued by Lin Mi La Co. in which it was concluded that all holds were in good condition and suitable for loading cargo;
7. Records of hold temperature measured once every two days for the period between June 21, 1999 and August 9, 1999;
8. Report issued by Calwen containing the process from the loading of cargo by Panamax Star till the discharging of the same and the data relevant to the inspection of the cargo, in which it was stated that at the time the loading operation was completed, the cargo loaded in hold 5 was 8,039.916MTs, the moisture content of the cargo as determined by sampling inspection from June 9 to June 11, 1999 was 12.4%-13.7% (no sampling inspection was made for the cargo in hold 5). It was concluded in the Report that “the extensive heating of Brazilian soybeans in bulk stowed in holds of the ship was basically caused by the instability of microorganism in part of the cargo”, “heating was accumulative and the time factor played important role in the heating of the cargo finally found. Therefore, the prolonged voyage no doubt had an impact on the heating and its consequence. If properly stored, the stowage period for the soybeans with stable microorganism, generally speaking, would be far longer than that for the cargo carried onboard Panamax Star. In order to keep the soybeans in sound commercial condition at the time of arrival at port of destination, the cargo must be in such a condition with stable microorganism at the beginning.”
Nantian did not accept the conclusion in the Report on the ground that it was short of impartiality but did not object to the truthfulness of other evidence presented by Standsted. However, Nantian raised that the evidence presented by Standsted could not prove that due diligence had been exercised before or at the time of commencement of voyage to make the holds cargo-worthy. The Report of Calwen at the port of discharging by sampling inspection showed that there was obvious increase in the moisture content of the cargo in holds other than hold 5 as compared to the content before loading. The increase of moisture content in the cargo caused the cargo to heat up and change color or even become carbonized. The only cause to the increase of moisture content was ingress of water during the voyage. Firstly, rain water came into the holds at the time of loading because the hatches could not be closed. Secondly, improper ventilation during the voyage was conducted during adverse weather. Thirdly, there was no ball check valve at the drain pipe at the rear part of holds 5, 6 and 7. The cleats in holds 3 and 7 and other holds were either missing or rusted. The tossing encountered by the ship in heavy sea might cause the hatch board to shift and reduce water-tightness. During the voyage, there really was shipping of water over hatches. Therefore, Standsted had failed to fulfill the obligations to properly and carefully carry, keep and care for the cargo. Nantian presented the following evidences:
1) Statement of facts for Panamax Star at the port of loading, in which it was recorded that between 0132 hours and 0148 hours on May 20, loading operation in hold 4 stopped due to rainfall and from 0148 hours to 0250 hours, waiting to repair the hatch-closing system so as to close the hatch;
2) Telex sent by the Master of Panamax Star on July 12 and August 2 to Cyprus Shipping Company and the deck logbook of Panamax Star on July 12. In the telex of July 12, it was stated that “After inspection on all holds, cargo in holds 2, 5 and 6 were found to have changed color. Part of the cargo on the surface in holds 1, 3, 4 and 7 became mouldy and this part of cargo had also been affected...ventilation was still going on.” According to the deck logbook, from 0400 hours to 2400 hours, the weather condition was : overcast, high sea, long swell and the ship rocked and tossed. For the entry at 1200 hours and 1600 hours, “sea water sprayed onto the deck”. The telex of August 2 contained the main works onboard Panamax Star during the period between July 12 and July 31. From July 12 to July 20, the main job was to inspect and repair the deck and the facilities on deck and to remove rust and apply paint. On July 21, “derusting/applying paint, collecting/disposing of the cargo partly damaged in hold 1 due to wetting/molding. On July 22, “collecting/disposing of the cargo partly damaged in hold 1 due to wetting/molding. On July 23, 24, 26, 27, 28 and 29, “collecting/disposing of the cargo partly damaged in hold 1”;
3) Inspection Report of China Classification Society in which it was stated that no ball check valves were found on the drain pipes in the rear part of holds 5, 6 and 7.
Standsted did not raise objection to the evidence presented by Nantian.
The collegial bench was of the opinion that the above evidence presented by Nantian and Standsted should be admitted as either party did not challenge the truthfulness of the other party’s evidence. But in the conclusion of the Report of Calwen, the analysis was only made on the cause to the heating of the cargo. This document had no evidential effect.
In order to prove the incurrence of additional costs arising from cargo damage, Nantian presented to this court the following evidences:
1) Cargo handling and storage contract between Nantian and Shenzhen Chiwan Terminal Ltd. (“Chiwan Ltd.”) in which it was stated that the two parties reached agreement as to the handling and storage of the wet-damaged soybeans in bulk in Chiwan: Chiwan Ltd. would charge Nantian RMB40/MT for discharging, handling and loading onto the truck (weighing and harbor construction costs would be charged separately) RMB0.6/MT per day for covering canvas on cargo in warehouse or storage space, additional RMB10/MT for transfer of cargo from one storage space to another space, RMB3/MT per time, RMB3/MT for difficult handling in separating cargo from different holds and separating sound cargo from damaged cargo.
2) List of costs and loading/discharging invoice issued by Chiwan Ltd. on September 9, 1999. In the list of costs, it was stated that: name of inward ship: Panamax Sar; receiver: Nantian; cost for discharging 37,918.16MTs of (sound cargo): RMB1,137,544.80 at RMB30/MT; cost for discharging 2,330.85MTs of (damaged cargo): RMB114,211.65 at RMB49/MT; difficult handling charge: RMB88,139.13 for 29,379.71 MTs; overtime: RMB6,000; cost for cleaning holds: RMB14,000; cost for transfer of good: RMB3,511.50; document/paper charge: RMB2, totaling RMB1,363,409.08 and the invoice value of the loading/discharging invoice was RMB1,363,409.08 in total.
3) Charges settlement sheet numbered 1001172 issued by Chiwan Ltd. and the corresponding invoice, showing that Nantian had paid RMB51,914.12 as storage fee.
4) Inspection fee receipt issued by CCIB Shenzhen, showing that Nantian had paid RMB4,725 as inspection fee under the application numbered SKG99000488 and RMB16,545 under the application numbered SKG99000553.
5) Other special purposes invoices issued by Zhenzhen Tong Jian Industry Ltd., showing that Nantian had paid RMB40,249 as weighing fee under the application numbered SKG99000488.
6) List of costs and invoice issued by Chiwan Shipping Services Company, showing that Nantian had paid RMB2,240 as tugboat fee.
7) Debit note issued by Andrew Moore showing a total fee of USD31,695. Standsted argued that the above costs claimed by Nantian was not reasonable and raised objection to their truthfulness.
The collegial bench was of the opinion that the above costs incurred by Nantian were evidenced by cargo handling and storage contract, list of costs, invoices and receipts and should be affirmed. Standsted raised objection to the truthfulness of such costs but it did not present grounds and evidence and therefore Standsted’s objection should not be admitted.
During the court hearing, the Plaintiffs Nantian and PICC Liaoning and the Defendant Standsted agreed that the law of the People’s Republic of China shall apply to the present case.
The collegial bench was of the unanimous opinion that the present case was one concerning dispute over cargo damage under contract of carriage of cargo by sea whereby the contractual parties can choose the law to apply to the dispute under the contract and since both the Plaintiffs and the Defendant agreed upon the application of the law of the People’s Republic of China, then the law of the People’s Republic of China shall apply to the settlement of the substantive issues of the case.
Nantian held legal entity business license and was a business entity incorporated in accordance with law, having the capacity to be the party in civil litigation. Nantian held the Bs/L involved in the case and went through Customs formalities after the cargo arrived at the port and then took delivery of the cargo from Standsted. When there was no evidence to the contrary, it should be deemed that Nantian had the title to the cargo. Standsted’s allegation that Nantian illegally imported cargo and that Nantian had no title to the cargo and should not be the proper party in the case should not be supported due to the lack of supporting evidence.
The insured should have insurable interest in the subject matter insured. Kerry Oils was the seller of the cargo and it had obtained the Bs/L and assigned the Bs/L to Nantian. Standsted’s contention that Kelly Oils did not obtain the title to the cargo at the time of purchasing insurance policy and thus did not have insurable interest in the subject matter insured was not admitted due to lack of supporting evidence. The payment of premium was not the statutory requirement for an insurance contract to be established. Therefore, whether Kelly Oils had paid insurance premium did not affect the establishment of the insurance contract. During the evidence preservation procedure prior to institution of action, Nantian presented to this court a insurance policy which did not contain information about the quantity of the cargo, insured amount and the name of the insured. Such an insurance policy could only serve as the evidence of the intention of PICC Liaoning to accept coverage of the cargo carried by Panamax Star, having no impact on the establishment and effect of the insurance contract. The marine cargo insurance contract was assignable. It was not in violation of the law for Kerry Oils to have assigned the insurance contract to Nantian. PICC Liaoning presented to this court the original cargo insurance policy and the insurance indemnity payment voucher. Nantian confirmed receipt of the insurance indemnity for the shortlanded cargo. In accordance with the provision in paragraph 1 of Article 252 of the Maritime Law of the People’s Republic of China, Nantian assigned to PICC Liaoning the right to claim against third party for the loss arising from shortage of cargo. The right of recovery obtained by the insurer includes the substantive rights and procedural rights, i.e. civil rights and litigation rights. After the insurer obtained the right of recovery, it had the right to put itself in the position of the insured to exercise all the rights of the insured in connection with the loss. The insurer had the right to bring an action against the third party in the stead of the insured and had the right to join in the action that had already been commenced by the insured against the third party. Therefore, it was consistent with the law for PICC Liaoning to apply to joint in the present case as the co-plaintiff and therefore the application should be admitted.
Panamax Star shortlanded 7,001.992MTs of cargo, which, argued by Standsted, was caused by collision accident. But according to the telex sent by the Master of Panamax Star on May 31, 1999, 1,000MTs of cargo leaked into the water from the crack in the damaged part on the hull, 2,5000MTs of cargo remained sound and the other 4,500MTs of cargo were damaged by wetting. It could be ascertained that the cargo falling into the river from the crack in the hull after collision accident was only a small proportion of the cargo in hold 5, let alone the correctness of the figures mentioned by the Master of Panamax Star. This was the direct loss arising from the collision accident. For the wetted cargo, if properly and timely treated, loss could be avoided or reduced. Standsted did not present any evidence to prove that Itacoatiara port had no equipment or condition to treat the wetted cargo. Neither had Standsted provided evidence to prove that it had taken timely measures to treat the cargo. Nor had Standsted presented evidence to prove that the jettisoned cargo had lost value of use. Therefore, it could not be alleged that this part of loss was caused by the ship collision accident. According to the telexes sent by the Master of Panamax Star on July 12 and August 2, the cargo in holds of Panamax Star was found moldy and deteriorating and part of moldy cargo were collected and disposed of from July 12 to 29. After the collision, a certain quantity of cargo fell into the water. The wetted cargo were jettisoned. During the voyage, some more cargo were disposed of. Among all these causes constituting the loss of the cargo, only the loss of the cargo falling into the river was directly caused by the ship collision accident. But Standsted failed to prove the actual weight of this part of cargo. Since Standsted was unable to prove the shortage of cargo was caused by ship collision accident, its allegation that the shortage was caused by the Master’s negligence in steering the ship could not be tenable.
Standsted contended that the loss of the jettisoned cargo due to wetting should be contributed as general average. But Standsted did not commence proceedings for general averages in accordance with the law of the People’s Republic of China. So this issue would not be dealt with here.
In order to make the voyage safe, Standsted should have exercised due diligence to provide Panamax Star with proper charts that could be read by the Master and crew. In this case, at Itacoatiara port, Panamax Star was only provided with local charts in Portuguese containing various information necessary for navigation in Amazon including rising tide periods, low tide periods, different currents and tides in different month and the way to obtain the information of the water level at a particular day. All the crew onboard Panamax Star were Filipino. From the correspondences between Panamax Star and the shipping company, it could be seen that there was language barrier between the crew and the local pilots. That was to say, the crew did not speak Portuguese. When the Master and the crew could not communicate with the local pilots, they could not understand the navigational information in the charts in Portuguese, thus making the navigation of the ship unsafe. It should be held that the ship was not properly provided with charts before and at the time of commencement of the voyage and was in a state of un-seaworthiness. According to the sea protest of the Master of Panamax Star, the collision had nothing to do with the strong current in the waterway and the wind force. Therefore, it should be held that there was direct causal relationship between the collision accident and the failure to be provided with proper charts. Standsted should be responsible for compensation to the cargo damage caused by the collision.
There was no causal relationship between the collision accident and whether the ship was properly manned with telegrapher. A telex of the Master alone could not prove that the pilots of Itacoatiara onboard Panamax Star were not competent.
In accordance with the Maritime Code of People’s Republic of China, the carrier in contract of carriage of cargo by sea shall, before and at the beginning of the voyage, exercise due diligence to make the ship seaworthy and to make the holds fit and safe for reception, carriage and preservation of cargo. The carrier shall properly and carefully load, handle, stow, carry, keep, care for and discharge the cargo carried. Standsted contended that before and at the beginning of the voyage, Panamax Star and her equipments were in good condition. But from the inspection records of Panamax Star at Alexander port and Gibraltar port, it could be seen that the inspection was done by the crew themselves, not an impartial inspection carried out by competent surveyors. Boarding Certificate issued by US Coastguard contained only the record of inspection on steering system of Panamax Star. Furthermore, the Certificate only certified the findings of inspection of Panamax Star at the time and place of inspection, without the proving effect as to the actual condition of the ship before Panamax Star arrived at Itacoatiara port. According to the list of inspections provided by Standsted for Panamax Star before arrival at Itacoatiara port, the crew had not inspected the various equipments in the holds. According to the statement of facts of Panamax Star at Itacoatiara port from 0132 hours to 0250 hours on May 20 when the loading operation was proceeding, it rained at some time and the hatching closing system in hold 4 was found defective and the hatch was not timely closed. According to the inspection report of China Classification Society, there was no ball check valve at the drain pipe at the rear part of the hatches of holds 5, 6 and 7. The sea water might get ingress into the holds through the drain pipes. All these facts could show that Standsted did not fulfill its obligation to exercise due diligence to make the holds fit and safe for reception, carriage and preservation of cargo. The defects in holds of Panamax Star might cause the cargo to be wetted during loading, discharging or carriage. Standsted’s contention that the hull and equipments of Panamax Star were in good condition before and at the beginning of the voyage was not tenable.
According to the telex sent by the Master of Panamax Star on July 12, ventilation was being provided for the holds. However, according to the deck logbook, from 1200 hours to 1600 hours that day, great amount of sea water were shipped over deck. Under such circumstances, it was inappropriate to conduct ventilation for the holds because great amount of moisture might be brought to the cargo, directly harming the normal preservation of the cargo.
Panamax Star stayed 31 days more than scheduled at Itacoatiara port for repair. This was reasonably foreseeable by Standsted after the collision accident. Standsted was obligated to properly keep and care for the cargo carried. Had Standsted considered that it would be impossible to keep and preserve the cargo due to long period of stay, it should have transshipped the cargo to the port of destination earliest possible to avoid cargo damage. No matter whether Standsted could be exempted from the liability for the loss caused by collision, it could not be exempted from its obligations to properly keep the cargo after the collision accident.
The moisture content as indicted in the hold inspection certificate issued by Lin Mi La Co. was 12.3%. The moisture content of the cargo as showed in the report of Thionille do Brasil Ltd. and as quoted by CCIB Shenzhen in the Damage Appraisal was 13.4%. The moisture content of the cargo as showed in the Report issued by Calwen was 13.74%. There was no evidence to show that the moisture content in the cargo exceeded the normal safe value in marine transportation. According to the quality certificate issued by Lin Mi La Co., the amount of the heat damaged cargo accounted for 1.1% of the total amount of cargo. Judging from the wording used in the certificate, “heat damaged” does not mean that the cargo were heating up but referred to the fact that the cargo were damaged due to heating before inspection. There is no mention of the heating of cargo in the Bs/L issued by Standsted.
To sum up, it could be found that before and at the beginning of the voyage of Panamax Star, the Master and the crew did not exercise due diligence to make the ship seaworthy and to make the holds fit and safe for reception, carriage and preservation of cargo. During the voyage, the Master and the crew also had fault in caring for the cargo. Standsted’s contention that the cargo damage was caused by the inherent vice of the cargo due to the existing heating and high moisture content before loading was baseless. It could not prove that the damage to the cargo carried by Panamax Star was the inevitable result of the inherent vice of the cargo. Therefore, Standsted should be responsible for compensation for the cargo damage. Standsted’s contention that Nantian and its agent did not exercise due diligence to take any measures to prevent the cargo from deteriorating or to reduce the loss under the circumstance that they were fully aware of the seriousness of heating of the cargo was not supported by evidence and therefore was not supported by this court.
As to the amount of loss claimed by Nantian, according to the damage inspection by CCIB Shenzhen, the 2,330.85MTs of blackened soybeans actually constituted total loss and Standsted should compensate for the loss on basis of the price of CIF Chiwan of the cargo. As for the processable 37,918.15MTs of soybeans, CCIB Shenzhen did not carry out the damage inspection and Nantian had directly had this part of cargo processed without giving evidence to prove the actual loss arising from the use of this part of cargo. Therefore, Nantian’s claim for this part of loss was not supported.
Standsted raised that some cargo damage existing before loading onto Panamax Star and corresponding deduction should be made when calculating the amount of loss. The collegial bench was of the opinion that Nantian had obtained full set of negotiation documents including Bs/L and quality certificate through payment to foreign party before Panamax Star arrived at Chiwan. The quality of the cargo as stated in the quality certificate was within the range recognized by the two parties. That was to say, the price of the cargo as stipulated in the sales contract is determined on the quality of the cargo as indicated in the quality certificate. If, according to the argument of Standsted, the loss of the existing damaged cargo should be deducted from the total loss, that would mean that Nantian had purchased cargo of another specification with different commercial value. Therefore, Standsted’s contention in this respect was unreasonable and should not be supported. Standsted’s contention that 0.4% normal loss should be deductible from the total loss was not supported because the loss of and damage to the cargo were not caused by the normal transportation and Standsted’s such contention was baseless and not supported by this court.
According to the List of Costs for loading/discharging issued by Chiwan Ltd., there was cost for discharging 2,330.85MTs of damaged cargo. Because this part of cargo had been totally damaged, the discharging cost should be compensated by Standsted. Difficult handling cost was incurred to separate the sound cargo from the partly damaged cargo. Nantian also paid inspection fee and weighing fee to the commodity inspection organ for inspection so as to determine the extent of damage and quantity. All these extra costs were arising from dealing with the damaged cargo and Standsted should make compensation therefor. Nantian failed to present evidence to prove that Andrew Moore was allowed to engage in business in China and its capacity and qualifications to inspect cargo. Therefore, the costs for appointing Andrew Moore to carry out inspection should be borne by Nantian itself. Other costs claimed by Nantian for handling cargo could not be confirmed to be the extra costs arising from the damage to the cargo and should not be supported.
It was on June 16, 1995 that PICC Liaoning made the insurance indemnity. Before the payment of insurance indemnity, there was no loss of interest. Therefore, its claim for interest from the date of delivery of the cargo was not reasonable and the interest should be accrued from the actual day of payment.
In accordance with Articles 47, 48 and 55 of the Maritime Code of the People’s Republic of China and Articles 111 and 112 of the General Principles of Civil Law of the People’s Republic of China, the judgment was handed down as follows:
1. The Defendant Standsted should compensate the Plaintiff Nantian USD469,339.96 for the cargo damages and the interest (accrued from September 8, 1999 to the date fixed by this judgment for payment in full at the current fund loan rate in the same currency and in the corresponding period as published by the People’s Bank of China.)
2. The Defendant Standsted should compensate the Plaintiff Nantian RMB114,211.65 for discharging cost, RMB88,139.13 for difficult handling cost, RMB21,270 for inspection fee and MRB40,249 for weighing fee and their interests (accrued from September 10, 1999 to the date fixed by this judgment for payment in full at the current fund loan rate in the same currency and in the corresponding period as published by the People’s Bank of China.)
3. The Defendant Standsted should compensate the Plaintiff PICC Liaoning USD1,409,921.11 for shortage of cargo and the interest (accrued from June 6, 2000 to the date fixed by this judgment for payment in full at the current fund loan rate in the same currency and in the corresponding period as published by the People’s Bank of China.)
4. Other claims of Nantian was rejected.
The court fee for the case was USD58,322, of which the Defendant Standsted should bear USD25,603 and the Plaintiff Nantian should bear USD32,719. The fee for property preservation prior to institution of action was RMB5,000, the enforcement fee for arresting the ship was RMB130,916 and the ship inspection fee was RMB14,100, all of which should be borne by the Defendant Standsted. The application fee for property preservation was RMB145,021.8, to be borne by the Plaintiff Nantian. The Plaintiff Nantian had prepaid RMB5,000 as fee for property preservation prior to institution of action, USD37,312 as court fee, RMB145,021.8 as application fee for property preservation, RMB50,000 as ship inspection fee. The Defendant Standsted should pay the court fee USD4,593, property preservation fee prior to institution of action MRB5,000 and ship inspection fee RMB14,100 to Nantian. This court should refund RMB35,900 to Nantian. The Defendant Standsted had prepaid RMB165,600 as enforcement fee for arresting the ship, RMB34,684 of which should be refunded by this court. The Plaintiff PICC Liaoning had prepaid USD21,010 as court fee, which this court would not refund and the Defendant Standsted should directly pay USD21,010 to the Plaintiff PICC Liaoning as court fee.
The above monetary obligations should be fulfilled within 15 days from the date this judgment takes effect.
If not satisfied with this judgment, the Plaintiffs Nantian and PICC Liaoning can within 15 days upon service of this judgment, the Defendant Standsted can within 30 days upon service of this judgment, make appeal to the Higher People’s Court of Guangdong Province by filing with this Court the Statement of Appeal in the number of the counterpart parties.
Presiding Judge : Qin Weiguo
Acting Judge : Gong Jie
Acting Judge : Fu Junyang
May 15, 2001
Judge Assistant : Lai Yukang
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