When goods go missing during overseas delivery, how should liability for the loss be determined? Case Review In July 2019, Ding, based in Hefei, China, was preparing for a major business opportunity. He had carefully selected a batch of high-quality surveillance cameras to be shipped to an overseas warehouse in Australia, in anticipation of the upcoming sales peak. To ensure safe and timely delivery, Ding entrusted the entire process, including transportation, customs clearance, and delivery, to a professional freight forwarding company, Company A. During the negotiation process, Ding received a freight quotation from Company A. The quotation included a clause stating that in the event of loss or customs seizure during transport, Company A would compensate at a rate of RMB 40 per kilogram or RMB 1,000 per cubic meter, whichever applied, with the total compensation not to exceed the declared value of the goods. Freight charges would not be refunded. In October 2019, Ding handed over the goods to Company A, and the shipment was delivered to a port in Australia. For the final leg of delivery, Company A contracted with local Australian logistics provider TOLL. Just as Ding was awaiting confirmation of delivery to the overseas warehouse, troubling news arrived. The shipment had gone missing during delivery. Alarmed, Ding contacted Company A, seeking an explanation and a reasonable compensation plan. To his disappointment, Company A neither provided a credible explanation for the loss nor showed any willingness to assist in locating the goods. How would the court determine the freight forwarder's liability for compensation? Court Decision After trial, Guangzhou Maritime Court found that Company A acknowledged TOLL as its local delivery agent in Australia but failed to provide a reasonable explanation for the loss of the goods during the final delivery stage. Furthermore, Company A did not actively assist Ding in verifying with TOLL whether the goods were indeed lost and at which stage. The Court held that Company A had failed to fulfill its duty of care as a freight forwarder and was clearly at fault, and thus should bear liability for the cargo loss. As for Company A's defense invoking a limitation of liability clause, the Court found that Company A failed to produce evidence proving it had provided Ding with the quotation containing such limitation or exclusion clauses. Even if the quotation had been delivered, it constituted a standard clause drafted by Company A. As Company A admitted it did not provide clear explanations of the quotation, such a clause could not be deemed part of the contract under Paragraph 2 of Article 496 of the Civil Code of the People's Republic of China. The first-instance judgment ordered Company A to compensate Ding RMB 33,600 for the actual value of the goods and to refund the freight charges of RMB 1,250. Company A appealed, and the Guangdong High People's Court upheld the original verdict in the second instance. Key Significance In cross-border e-commerce logistics, it is common for logistics providers to issue pre-drafted quotations to clients, including limitation of liability clauses such as "compensation limited to three times the freight charge" or "maximum compensation of RMB 40 per kilogram." These clauses are standard clauses, which "exempt or alleviate the liability of the party providing the standard clause". When disputed, if the logistics provider cannot prove it fulfilled its duty to call the other party's attention to or give explanations of the clause in a reasonable manner, such a clause will not be considered part of the contract and thus have no legal effect. This case correctly determined the validity of the limitation of liability clause, striking a fair balance between the interests of cross-border e-commerce sellers and logistics service providers. It contributes to the legal regulation of the cross-border logistics industry and promotes its high-quality development.

When goods are shipped internationally but seized and destroyed by foreign customs, who should be held accountable for the infringement? Case Review On January 26, 2022, Company B engaged Company A to ship a batch of solid wood chairs to Japan, assigning it full responsibility for import customs clearance, overseas warehouse delivery, and storage services. The two parties signed an international freight forwarding and customs clearance agreement, which explicitly stated: if the cargo list provided by Company B contains infringing products and the goods are seized by customs, all resulting costs and losses shall be borne solely by Company B. However, unexpected issues arose. On February 3, the shipment was subjected to strict inspection by Japanese customs, which revealed major discrepancies. The physical goods differed significantly from the submitted customs declaration documents. Worse still, the labels on the chairs were found to be nearly identical or even identical to registered local trademarks and were thus deemed infringing. The goods were ultimately destroyed by the local customs authority. After covering the related fees, the local import agent sought reimbursement from Company A, which, under pressure, paid the amount. Company A later faced objections from Company B, which claimed that the issue arose from errors in the customs declaration documents and that the destruction fees were unreasonable, refusing to pay. Consequently, Company A filed a lawsuit against Company B, demanding payment of the customs clearance agency fees, warehouse inspection fees totaling JPY 411,080, destruction costs of JPY 1.32 million, and applicable interest. Who should ultimately bear responsibility for this dispute? And who would receive a fair judgment? Court Decision After trial, Guangzhou Maritime Court found that the goods commissioned by Company B were inconsistent with the customs declaration materials it had provided, and were identified by Japanese customs as infringing items. Company B was therefore in breach of the contractual agreement and was held liable. The Court ruled that Company B shall pay Company A JPY 411,080 in customs clearance and warehouse inspection fees, JPY 1.32 million in destruction costs, and applicable interest. Dissatisfied with the first-instance judgment, Company B appealed. The Guangdong High People's Court, in the second instance, upheld the original ruling, holding that the first-instance judgment had a sufficient factual and legal basis. The court noted the existence of customs documents and chat records confirming that the goods were confiscated and destroyed due to infringement. Company B's argument—that the documents submitted by Company A had not undergone formal authentication and thus the destruction was unproven—was unconvincing. Furthermore, the fees related to customs clearance, warehouse inspection, and destruction were all supported by payment vouchers and substantiated by facts and law. The appeal was dismissed, and the original judgment was upheld. Key Significance This case involved a contractual dispute over ocean freight forwarding. The goods were destroyed by foreign customs during import clearance due to trademark infringement, resulting in significant handling costs. Since the key evidence in the case originated abroad, both trial courts conducted a meticulous review and ultimately found the consignor in breach of contract, ordering it to compensate the freight forwarder for the destruction-related expenses. The case serves as a cautionary tale for enterprises engaged in import-export trade or acting as freight agents: due diligence on intellectual property status of goods is essential to avoid infringement risks at home and abroad. Materials submitted for customs clearance must be carefully verified. Oversight can be costly. To promote the high-quality development of the marine economy and contribute to the building of a "New Maritime Guangdong," cross-border e-commerce companies and maritime logistics enterprises alike must operate with integrity and in full compliance with the law, jointly upholding Guangdong's favorable maritime business environment.

While serving onboard a vessel, Chen was bitten by a dog. During his medical leave and rabies vaccination period, disputes arose over whether his wages during the vaccination period should be deducted, as well as over medical expenses. Subsequent job reassignment and termination triggered further questions. Was Chen entitled to claim compensation? Basic Facts On January 5, 2020, Chen signed a written labor contract with Company B. He was then dispatched to serve as the captain aboard a vessel owned by Company A. Prior to this, a labor dispatch agreement had already been executed between Company A and Company B. On March 27, 2020, an unexpected event disrupted the status quo—Chen was bitten by a dog while onboard. He took a seven-day sick leave to receive rabies vaccinations at a hospital. During this period, Company A appointed a replacement captain and paid that person accordingly. What initially seemed like a minor medical issue became the prelude to a protracted dispute between Chen and Company A. On April 28, Company A issued a notice officially appointing Chen as the captain of the CHANG. Chen subsequently requested annual leave from May 28 to May 31. This seemingly routine leave request and the associated wage issues gave rise to disagreements, including whether wages should be deducted during his vaccination period and who should bear the medical expenses. After completing a handover with the new captain on May 29, Chen disembarked for his leave. While Chen was on leave, Company A decided to return Chen to Company B on June 3, citing non-compliance with internal management policies. The situation became more complex. On June 9, Company B issued a notice requiring Chen to promptly report to its Guangzhou office for reassignment training or a new posting. Chen refused, expressing his intent to return to Company A on June 15 and continue working for it and sought to protect his rights through various channels. The dispute escalated. Chen rejected the reassignment and was issued a disciplinary warning. On June 29, Company B terminated his labor contract on the grounds that his absence constituted abandonment of post due to unauthorized leave. Chen subsequently filed a lawsuit with the Guangzhou Maritime Court (GZMC), demanding that Company A and Company B jointly pay RMB 20,000 as payment in lieu of notice for termination of contract, RMB 76,000 as double wages for failure to sign a labor contract, RMB 40,000 as compensation for unlawful termination, RMB 3,808.08 in wages during his vaccination period, RMB 8,275.80 for unused annual leave, and wages from the end of his leave until formal notice of dismissal, and from the day after termination until a work injury determination was issued, calculated at his original wage rate. Both Company A and Company B argued that the labor contract existed solely between Chen and Company B, and thus Company A bore no responsibility. They also asserted that Chen had fully used his annual leave. Company B claimed that Chen had worked 24 days and taken 7 days of sick leave in April, and that it had fully paid his wages for that month. It had also submitted a work-related injury appraisal application on Chen's behalf for the dog bite, though the outcome was still pending. Furthermore, Company B claimed it had paid Chen's full wages from May through June 2. On June 2, Company A returned Chen citing non-compliance with company policies. Company B then instructed Chen to report for reassignment, which he failed to do without formally requesting leave, thereby violating the labor contract and employee handbook. As such, Company B argued, its termination of Chen's contract on June 29 was lawful, and it was not obligated to pay him wages for the period of unauthorized absence from June 3 to June 29. Court Decision GZMC held that Company A failed to provide evidence that Chen met any legally valid conditions for being returned to the labor dispatching entity. The act of returning Chen thus violated labor laws and regulations. Company B, as the dispatching entity, was obligated to review whether the return was legitimate. It was also entitled to adjust Chen's role based on mutual agreement without altering existing contract terms. However, without properly consulting with Company A on whether Chen should be returned and reaching mutual agreement with Chen for reassignment or mutual termination, Company B unilaterally terminated the labor contract on the grounds of unauthorized absence, which lacked legal basis and constituted unlawful termination. As such, both Company A and Company B were held jointly liable for the damages caused by Company A's unlawful return of Chen. The Court ultimately ruled that Company A must pay Chen RMB 20,000 in compensation for unlawful termination, RMB 3,808.08 in deducted wages for April 2020, RMB 20,000 in wages from June 3 to June 30 prior to contract termination, RMB 3,678.16 for unused annual leave in January 2020. Company B was held jointly liable. The Court dismissed Chen's other claims. Key Significance This case is representative of seafarer labor contract disputes arising from labor dispatch arrangements commonly handled by maritime courts. In practice, while workers may sign contracts with dispatching entities, the dominant position of the entities receiving the dispatched workers often results in insufficient protection of workers' rights by dispatching entities. This case offered a legal analysis of the irregularities and unlawful conduct of both the dispatching entity and the receiving entity, holding both defendants jointly liable for the wrongful termination. It also clarified the obligations of dispatching entities after a worker is returned. The ruling effectively safeguarded the worker's rights while also rejecting unreasonable claims, providing a valuable reference for handling similar cases.

While cross-border trade offers significant opportunities, it also entails complex and unpredictable risks. This case outlines how Company C dealt with the sudden loss of goods at sea, how it sought compensation through marine insurance, and how Company A exercised its subrogation rights through legal proceedings. Basic Facts  In November 2020, Company C secured an overseas order to sell a batch of plastic water pipes to a U.S. customer. To complete the transaction smoothly, Company C booked shipping space with Company B. The two companies entered into an agreement with Company D for the transport of the goods through the vessel ONE APUS from Yantian Port in China to the Port of Long Beach, United States. To protect against potential losses during transit, Company C purchased cargo insurance from Company A, selecting an all-risk marine cargo insurance policy with a coverage amount of USD 126,415.87. On November 19, 2020, the ONE APUS departed from Yantian Port en route to Long Beach. However, on November 30, the vessel encountered severe weather conditions in the North Pacific. A serious collapse of containers occurred onboard, and many, including the one carrying Company C's goods, were lost overboard. The vessel diverted to Kobe Port in Japan for refuge and discharged the remaining containers. Upon inspection, it was confirmed that Company C's container and its contents had been lost at sea. Following the incident, Company B informed Company C of the container loss via a written incident report after receiving notice from Company D. To recover its losses, Company C initiated an insurance claim. On August 17, 2021, Company A paid Company C USD 120,095.08 in compensation. At the same time, Company C signed a subrogation agreement with Company A, transferring its rights of recovery to the insurer. The matter did not end there. To substantiate its claim, Company A engaged Company E to conduct a loss assessment. Company E confirmed that the incident fell within the scope of coverage under the marine cargo policy. The assessed loss totaled USD 126,415.87, and after deducting the policy's deductible, the calculated claim amounted to USD 120,095.08. Subsequently, Company A filed a lawsuit with the Guangzhou Maritime Court (GZMC), seeking RMB 777,795.79 in damages plus interest from Company B. In response, Company B raised several defenses: 1. The portion of the insurance premium based on a 10% surcharge represented an extra obligation under the insurance contract borne solely by the plaintiff, and thus could not be claimed via subrogation. 2. Under the DDP (Delivered Duty Paid) Incoterm, the seller is responsible for freight, insurance, and customs clearance in the destination country. Since the bill of lading indicated freight payable at destination and Company B had not received freight charges for the shipment, the actual value of the goods should be reduced by unpaid freight, insurance premiums, and foreign customs clearance fees. 3. Company C held no cargo rights under the relevant contract of carriage of goods by sea, and therefore, Company A could not obtain subrogation rights through compensation for Company C. 4. The loss occurred due to natural perils at sea, which should be exempted under statutory provisions. Further investigation by the court confirmed that Company B was a registered Non-Vessel Operating Common Carrier (NVOCC) authorized to conduct international freight forwarding services through Chinese ports. According to the Incoterms rules, DDP (Delivered Duty Paid) means that the seller delivers the goods when they are placed at the disposal of the buyer, cleared for import on the arriving means of transport, ready for unloading at the named place of destination. The seller bears all costs and risks involved in bringing the goods to the place of destination and is responsible for clearing the goods for both export and import, paying any duties and taxes for both, and carrying out all customs formalities. During the hearing, both parties agreed that the laws of the People's Republic of China should govern the case. Court Decision  On November 24, 2022, GZMC rendered the following civil judgment: 1. Company B shall compensate Company A for the loss of goods in the amount of USD 111,360.89 plus interest (converted into RMB 721,228.80 at the USD/CNY exchange rate of 1:6.4765 as published by the China Foreign Exchange Trading Center on August 17, 2021 under the PBOC's authorization, with interest calculated from August 18, 2021, at the Loan Prime Rate published by the National Interbank Funding Center until full payment is made). 2. The court rejected all other claims made by Company A. Dissatisfied with the first-instance judgment, Company B appealed to the Guangdong High People's Court. The appellate court upheld the original ruling. Rationale of Judgment  This case is a typical dispute arising from the loss of containerized cargo at sea, where the insurer, after paying compensation, sought recovery via subrogation. The effective judgment accurately interpreted and applied Article 55 of the Maritime Code of the People's Republic of China. It reasonably determined the compensation amount under the DDP Incoterm in the event of cargo loss. The written judgment was clear, logically sound, and well-reasoned, providing valuable reference for similar cases.

In a diesel engine accident onboard a vessel, the key question was: who should bear responsibility for the incident? Should Company B, as the manufacturer, be held fully liable? Should Company C, as the shipbuilder and seller, be accountable for the quality defects? Basic Facts On April 18, 2019, while dredging operations were underway off the coast of Qinzhou Port, the vessel LIANG LONG suffered a sudden mechanical failure accompanied by a loud explosion. Cylinders No. 15 and 16 of the deck pump diesel engine burst simultaneously, resulting in serious damage to the engine. Following the accident, operations were immediately halted. Engineers disassembled the damaged engine and transported it to a repair facility for inspection. The costs for repair, disassembly, and replacement parts placed a heavy financial burden on the shipowner. Fortunately, prior to the incident, Company D—the owner of the LIANG LONG—had taken out an ocean-going vessel all-risks insurance policy from Company A. After the accident, Company A engaged Company E to conduct a damage survey and loss assessment. Based on its investigation findings, Company E concluded that the root cause of the accident was a latent defect in the nozzle of the fuel injector assembly of the diesel engine. The property loss resulting from the incident was assessed at RMB 1,455,428.76. In accordance with the insurance policy, Company A paid Company D RMB 1,277,990.05 in compensation and thereby obtained the right of subrogation. Company A also bore the cost of the appraisal, amounting to RMB 33,564.32. Subsequently, Company A filed a lawsuit with the Guangzhou Maritime Court (GZMC), demanding that Company B and Company C be held jointly and severally liable for payment of the insurance compensation (RMB 1,277,990.05) and corresponding interest, as well as for reimbursement of the appraisal fee (RMB 33,564.32) and corresponding interest. The incident was attributed to a latent defect in the fuel injector nozzle of the marine diesel engine. Pursuant to Article 26 of the Interpretation of the Supreme People's Court on the Application of the Criminal Procedure Law of the People's Republic of China, Company D had purchased the engine from Company C, whose domicile was in Guangzhou. Hence, GZMC had jurisdiction over the case as the court in the place of product sale. In accordance with Article 41 of the Product Quality Law, Company B, as the manufacturer, was found liable for full compensation, since the incident was attributed to a latent defect in the fuel injector nozzle of the marine diesel engine. Company B (China), responsible for the import and distribution of Company B's products in China, knew or ought to have known that the engine posed unreasonable risks to persons or property and failed to take necessary measures. As such, under Article 8 of the Tort Liability Law, Company B (China) was deemed a joint tortfeasor and held jointly liable. Company C, as the builder of the LIANG LONG and seller of the engine, was also held jointly liable under Article 43 of the Product Quality Law. Since Company A had paid Company D the amount of RMB 1,277,990.05 in compensation, it was entitled under the first paragraph of Article 252 of the Maritime Code to exercise the subrogated right of claim against the defendants. The appraisal fee of RMB 33,564.32 was considered a reasonable expense incurred in assessing the loss and pursuing the claim, and thus the defendants were jointly liable for its reimbursement. Case Outcomes  Upon review, GZMC held jurisdiction over two related maritime commercial cases between Company A and the defendants. On May 9, 2022, the court mailed legal instruments, including a notice of response, to Company B's address in China via Company B (China). These documents were confirmed delivered on May 12, 2022. It was further found that Company B (China)'s business scope included: providing consulting services to its parent company; supporting affiliates with market and investment policy information; undertaking outsourced services for its parent and affiliates; providing after-sales services for products manufactured by the parent company; engaging in retail (subject to further approval in case of opening shops) and wholesale of the parent company's and its affiliates' products (excluding specific restricted goods); and acting as a commission agent (excluding auction services). Company B (China) is a wholly owned subsidiary of Company B (Hong Kong), in which Company B holds a 99.99% stake. Accordingly, Company B (China) was deemed an agent of Company B in China. With service of process duly completed, and under the court's mediation efforts, Company B, through its legal counsel, reached a settlement agreement with Company A. The court issued a mediation document stipulating that within 60 days of delivery, Company B would pay Company A a settlement sum of RMB 550,000. The case was thereby satisfactorily resolved. Key Significance The successful resolution of this case addressed a long-standing judicial challenge: effective service of process on multinational corporations via their Chinese subsidiaries. The case bears dual significance. First, it offers a substantive reference for counteracting the doctrine of "long-arm jurisdiction." In judicial practice, as long as the plaintiff's asserted rights are sufficiently connected to the defendant, Chinese courts may exercise personal jurisdiction over foreign entities in accordance with domestic law. Second, Company B, a globally renowned multinational manufacturer of heavy machinery, accepted the principle of mediation promoted by China. This ultimately led to the peaceful resolution of the dispute.

In a marine construction project at Huidong Sea Turtle Bay, China's sole sea turtle nesting site, the contract was deemed invalid due to the absence of an environmental impact assessment, failure to secure sea area usage rights, and damage to public interests. How would the resulting dispute between the two parties be resolved? Basic Facts Beneath the blue skies of Huidong Sea Turtle Bay, a conflict emerged over sea turtle conservation and commercial investment. The XXX Turtle Management Bureau and Company A had previously entered into an investment cooperation contract. The Bureau provided the beach and sea area within its managed nature reserve, while Company A funded and built a marine project, including an offshore laboratory, pier, anti-pollution embankment, artificial reefs, and underwater corridors for the sea turtle center. However, the cooperation did not proceed as smoothly as expected. During the project, Company A entrusted technical development to the XXX Research Institute and assigned the construction task to Company B. In early April 2016, Company B entered the beach within Huidong Sea Turtle Bay and began the construction of a cement platform measuring 30 meters by 30 meters with a height of 5 meters, weighing a total of 2,000 tons. The work halted in December 2016. The XXX Turtle Management Bureau stated that Company A had not completed the project within the agreed timeframe, and the quality of the construction was subpar. It thus filed a lawsuit with the Guangzhou Maritime Court, requesting the termination of the investment cooperation contract and the removal of the structures occupying the sea area, as well as compensation for the loss arising from land occupation. This dispute concerns both the protection of sea turtle habitats and the balance between the conservation of sea turtle resources and commercial interests. Court Decision The Guangzhou Maritime Court ruled that the Huidong Harbor Sea Turtle National Nature Reserve is an ecologically sensitive marine area where endangered marine species nest, including sea turtles nest. Both parties involved in the case proceeded with large-scale marine construction without conducting an environmental impact assessment, evaluating the effects on sea turtle migration and other marine environments, or establishing environmental protection measures. Moreover, the two parties did not obtain sea area usage rights as required by law, which constituted a violation of mandatory legal regulations and harmed the public interest. Hence, the contract was deemed invalid. Although both parties argued that the investment cooperation contract was valid, the court determined that the validity of the contract was a legal issue under the court's authority. The contract was thus invalid from the outset and lacked legal binding force. The XXX Turtle Management Bureau's request for contract termination was not supported due to lack of legal grounds. Company A had invested in preliminary design and construction costs, while the XXX Turtle Management Bureau proceeded with the sea area project in the nature reserve without securing a sea area usage certificate. The Bureau's unauthorized occupation of the sea area and construction of structures constituted the primary fault, making it liable for the consequences. The claim for structure removal and land occupation compensation was dismissed due to insufficient legal grounds. The XXX Turtle Management Bureau appealed the judgment, and the Guangdong High People's Court upheld the original decision. Key Significance This case involves a dispute over ocean development and utilization caused by marine construction, with a focus on the protection of sea turtle resources. Strict ecological protection measures should be taken to prevent damage to the marine ecological environment and natural resources. Sea turtles are classified as endangered species, and their habitats and nesting grounds are threatened by human activities, including interference and destruction. Many sea turtle nesting sites, including the Huidong Harbor Sea Turtle National Nature Reserve, have not seen any signs of sea turtles nesting for many years. In this case, the court played an active role in guiding the rule of law and values in national governance and social governance, not supporting the parties' claims regarding the validity of the investment cooperation contract. The court actively reviewed and ruled that the agreement without environmental impact assessments, lacking sea area usage rights, and harming public interest was invalid. By strengthening the review of the contract's validity, the court dismissed the related claims and, after the judgment took effect, issued a Judicial Proposal to multiple agencies. The proposal called for enhanced law enforcement, prohibition of breaches of red lines of marine ecological protection, and legal penalties for responsible agencies. It also urged prompt restoration of local marine ecology, strict enforcement of source protection systems, and effective regulation of natural resource development and utilization. This case holds significance for strengthening the protection of the marine ecological environment and promoting sustainable development.

Two companies, long-term partners in transporting wind power equipment, faced a sudden breakdown in their relationship. One claimed the other breached an integrity agreement, justifying its decision to withhold freight payment settlements. The other demanded immediate payment for multiple outstanding fees. What was the truth behind this dispute? Basic Facts In the course of their busy daily operations, Company A and Company B had maintained a long-term cooperation, primarily on transporting wind power equipment such as blades for Company B. On June 26, 2021, Company B unexpectedly issued a last-minute order, requesting Company A to transport a wind power blade, using the "HAI 1" vessel, from a dock at the Yangjiang base to a designated position at the Guangdong Electric Shapa Offshore Wind Farm. Company A used its externally chartered "HAI 1" vessel for the transport, and for security purposes, paid a waterway transport insurance fee of RMB 780. A dispute arose over the freight. According to the contract signed between Company A and Company B, the transportation cost for a single set of blades for similar project sections was RMB 290,000. However, in May 2020, Company B entered into a contract with another company, Company C, setting the transportation fee for a single set of blades in a similar project section at RMB 210,000. The difference in transportation fees sparked the dispute. In May 2022, Company B raised concerns, suspecting that Company A' legal representative at the time, Cai, had violated the integrity agreement signed between the two companies in September 2019. It was alleged that Cai had provided improper benefits to Company B's staff, Yi and Xie, prompting Company B to report Cai for suspected bribery and Yi and Xie for suspected embezzlement. After investigation by the public security authorities, an arrest warrant was requested for Cai and the other two individuals, but the local people's procuratorate did not approve the arrest, and all three were released. Subsequently, Company A filed a lawsuit with the Guangzhou Maritime Court, demanding payment of RMB 350,000 for freight payment and RMB 780 for the insurance fee. In response, Company B argued that the freight should be calculated based on the RMB 210,000 agreed upon in the contract with Company C, and that Company A had violated the integrity agreement, giving Company B the right to suspend the freight payment. How would the court rule in this dispute over wind power equipment transportation costs? Court Decision The Guangzhou Maritime Court concluded that Company A did not have the qualifications of a carrier and lacked a waterway transport license, which rendered the contract of carriage of goods in question legally invalid. However, since Company A had already completed the transportation using the vessel, Company B shall provide appropriate compensation according to Article 157 of the Civil Code of the People's Republic of China. Company A failed to provide evidence that the agreed-upon freight was RMB 350,000. Moreover, the contract between Company B and Company C entered into in 2020 was not deemed relevant for reference. In another dispute between Company A and Company B, the agreed freight (including insurance and other costs) was RMB 290,000 for a single set of blades. Therefore, Company A was entitled to request compensation for the reasonable freight of RMB 290,000 (including RMB 780 for insurance). As the evidence in the case could not prove that Company A violated the integrity agreement, Company B was not entitled to suspend the freight payment. Furthermore, Company B's delayed payment constituted a breach of contract, and therefore it shall pay Company A interest on delayed payment. After the judgment in this case, as well as 13 other similar cases involving time charter parties and voyage transport contracts between Company A and Company B, both parties complied with the judgment, and Company B voluntarily fulfilled the rulings in all 14 cases. Key Significance The Third Plenary Session of the 13th CPC Guangdong Provincial Committee outlined the "1310" Strategy, which calls for comprehensive efforts to build Guangdong into a province strong in the marine economy and to achieve breakthroughs in creating a New Maritime Guangdong. Offshore wind power has become one of the key sectors for the high-quality development of Guangdong's marine economy. This case's judgment not only legally recognized that a transport contract with an unqualified carrier is invalid, safeguarding maritime navigation and operational safety. It also fairly determined the compensation fee for the wind power equipment transport company based on Civil Code principles, protecting the interests of such enterprises. This ruling provides significant guidance for resolving related disputes regarding the transportation of offshore wind power equipment.

In international multimodal transport, when goods were seized by customs authorities at a foreign airport due to inaccurate declarations, impeding the completion of transportation and delivery, it may be determined that the goods were lost during the air transport segment. However, if the goods are classified as sensitive cargo and subsequently destroyed by the foreign airport customs authorities, critical legal questions emerge: how should liability be apportioned? And who should bear the resulting losses? Case Review On November 9, 2022, Chen negotiated with Company A for the transportation of a batch of electronic cigarettes from South Korea to the UK. However, an issue arose. On November 18, Chen received unexpected information stating that while the factory records indicated the goods were destined for Malaysia, the actual intended destination was the UK. Chen immediately relayed this information to Company A. Subsequently, on December 9, Chen sent a pro forma invoice to the UK buyer, clearly specifying 10,200 units of Elux Legend 3500-puff electronic cigarettes. On the same day, the seller also provided Chen with a pro forma invoice, but in this version, the product name was recorded as Elux Legend Pro 3500. Chen did not scrutinize this discrepancy. On December 29, Chen transferred USD 36,800 to the seller, covering the purchase price and bank fees. Simultaneously, Chen confirmed with Company A that the 10,200 electronic cigarettes would be transported to the UK under a delivery duty paid arrangement. Company A quoted a freight rate of RMB 58.50 per kilogram. Finding the price reasonable, Chen proceeded with the shipment. The transportation process was progressing as planned. On January 4, 2023, Chen provided Company A with the pickup address, confirming that the total gross weight of the electronic cigarettes was 639.20 kilograms, to be transported by land from Dongguan to Weihai. On the same day, Chen transferred a total freight payment of RMB 92,605.50, which included RMB 37,381.50 for this particular shipment. On January 11, the goods were shipped from Incheon Airport, South Korea, to London Heathrow Airport. At this point, Chen felt somewhat reassured, believing that everything was proceeding according to plan. On January 16, Company A informed Chen that the goods had been subjected to a customs inspection by UK authorities. Feeling uneasy, Chen responded, stating, "Electronic cigarettes are sensitive cargo." On January 19, Chen inquired with Company A as to whether the UK customs had provided any response regarding the inspection. After several weeks of waiting, on February 14, Company A informed Chen that if the goods had been detained by customs, the compensation standard would be RMB 40 per kilogram. Chen expressed disappointment, responding, "This compensation is meaningless; it's far too low…" On February 17, Chen again inquired whether there were any updates from the UK customs regarding the inspection. On April 4, Company A replied to Chen, confirming that the goods had been destroyed by the UK customs. The company also provided Chen with four images that showed that the goods had actually been detained since January 15. To recover the losses, Chen filed a lawsuit with the Guangzhou Maritime Court (GZMC), requesting that Company A should compensate for cargo losses of RMB 303,543, refund RMB 37,381.50 in freight charges, pay compensation for capital occupation losses, and bear the court acceptance fees. In response, Company A argued that no contractual relationship existed between Chen and Company A. It asserted that Company B was the principal, while Company A was merely the agent. The invoice file names, content, and billing details all indicated that the counterparty was Company B. Additionally, Company A contended that the goods were sensitive cargo and were detained due to violations of UK customs regulations, and therefore it should not bear liability. It further argued that whether the goods could clear customs depended on compliance with the import regulations of the destination country, and that a freight forwarder is not responsible for ensuring customs clearance. Company A also stated that it had fulfilled all obligations as an agent. Even if it were to assume liability, the compensation standard should be RMB 40 per kilogram. How would GZMC adjudicate this case? Court Decision On May 31, 2024, GZMC rendered a civil judgment as follows: I. Company A shall compensate Chen for cargo losses in the amount of RMB 134,796.79, plus interest (calculated based on RMB 134,796.79, at the LPR published by the National Interbank Funding Center, accruing from April 4, 2023, until the date of full payment); II. Company A shall refund Chen RMB 37,381.50 in freight charges, plus interest (calculated based on RMB 37,381.50, at the LPR published by the National Interbank Funding Center, accruing from April 4, 2023, until the date of full payment); III. Chen's remaining claims are dismissed. Neither party appealed the first-instance judgment, and it has since taken legal effect. Rationale of Judgment The cargo in this case—electronic cigarettes—was transported by land from Dongguan, China, to Weihai, China, then by sea to Incheon, South Korea, and finally by air to London, UK, constituting international multimodal transport. The electronic cigarettes were seized by the UK customs at London Heathrow Airport due to inaccurate declarations, indicating that customs clearance at the destination had not been completed and that the air transport segment had not yet concluded. At that point, the multimodal transport operator had lost control over the goods, and therefore, the electronic cigarettes were deemed lost during the air transport segment. The parties in this case expressly chose the laws of the People's Republic of China as the governing law, though Article 105 of the Maritime Code of the People's Republic of China provides that if loss of or damage to the goods has occurred in a certain section of the transport, the provisions of the relevant laws and regulations governing that specific section of the multimodal transport shall be applicable to matters concerning the liability of the multimodal transport operator and the limitation thereof. Therefore, Chinese law applies to this case. According to Article 184 of the Civil Aviation Law of the People's Republic of China, the air transport of the electronic cigarettes from Incheon Airport, South Korea, to London Heathrow Airport, UK, falls within the definition of international carriage by air as stipulated in Articles 1 and Article 18(4) of the Montreal Convention. Moreover, both South Korea and the UK are contracting states to the Montreal Convention. Accordingly, the liability of the multimodal transport operator and its limitation of liability are subject to the mandatory application of the Montreal Convention. The customs clearance documents provided by the multimodal transport operator were inaccurate and were insufficient to prove that the operator had acted deliberately or recklessly with knowledge that such actions would result in the confiscation of the electronic cigarettes. Hence, the multimodal transport operator is entitled to invoke the limitation of liability. Article 22(3) of the Montreal Convention prescribes the limitation of liability for cargo loss. Furthermore, in accordance with the review of limitation of liability conducted by the International Civil Aviation Organization (ICAO) pursuant to Article 24 of the Montreal Convention, the limitation of liability in Special Drawing Rights (SDR) applicable to the multimodal transport operator can be determined. Pursuant to Article 23(1) of the Montreal Convention, the limitation of liability in Renminbi (RMB) can be established. Related Legal Provisions Article 1(1) and (2) of the Montreal Convention This Convention applies to all international carriage of persons, baggage, or cargo performed by aircraft for reward. It applies equally to gratuitous carriage by aircraft performed by an air transport undertaking. For the purposes of this Convention, the expression "international carriage" means any carriage in which, according to the agreement between the parties, the place of departure and the place of destination, whether or not there is a break in the carriage or a transshipment, are situated either within the territories of two States Parties, or within the territory of a single State Party if there is an agreed stopping place within the territory of another State, even if that State is not a State Party. Carriage between two points within the territory of a single State Party without an agreed stopping place within the territory of another State is not international carriage for the purposes of this Convention. Article 18(1) of the Montreal Convention The carrier is liable for damage sustained in the event of the destruction or loss of, or damage to, cargo upon condition only that the event which caused the damage so sustained took place during the carriage by air. Article 22(3) and (6) of the Montreal Convention In the carriage of cargo, the liability of the carrier in the case of destruction, loss, damage, or delay is limited to a sum of 17 Special Drawing Rights per kilogram, unless the consignor has made, at the time when the package was handed over to the carrier, a special declaration of interest in delivery at destination and has paid a supplementary sum if the case so requires. In that case, the carrier will be liable to pay a sum not exceeding the declared sum, unless it proves that the sum is greater than the consignor's actual interest in delivery at destination. The limits prescribed in Article 21 and in this Article shall not prevent the court from awarding, in accordance with its own law, in addition, the whole or part of the court costs and of the other expenses of the litigation incurred by the plaintiff, including interest. The foregoing provision shall not apply if the amount of the damages awarded, excluding court costs and other expenses of the litigation, does not exceed the sum which the carrier has offered in writing to the plaintiff within a period of six months from the date of the occurrence causing the damage, or before the commencement of the action, if that is later. Article 23(1) of the Montreal Convention The sums mentioned in terms of Special Drawing Rights in this Convention shall be deemed to refer to the Special Drawing Right as defined by the International Monetary Fund. Conversion of the sums into national currencies shall, in case of judicial proceedings, be made according to the value of such currencies in terms of the Special Drawing Right at the date of the judgment. The value of a national currency, in terms of the Special Drawing Right, of a State Party that is a Member of the International Monetary Fund, shall be calculated in accordance with the method of valuation applied by the International Monetary Fund, in effect at the date of the judgment, for its operations and transactions. The value of a national currency, in terms of the Special Drawing Right, of a State Party that is not a Member of the International Monetary Fund, shall be calculated in a manner determined by that State. Article 105 of the Maritime Code of the People's Republic of China If loss of or damage to the goods has occurred in a certain section of the transport, the provisions of the relevant laws and regulations governing that specific section of the multimodal transport shall be applicable to matters concerning the liability of the multimodal transport operator and the limitation thereof. Paragraph 1 of Article 184 of the Civil Aviation Law of the People's Republic of China Where the provisions of an international treaty concluded or acceded to by the People's Republic of China are different from those of this Law, provisions of that international treaty shall apply, except the provisions for which reservation has been declared by the People's Republic of China.

A ship, after experiencing water ingress into its cargo hold during a typhoon, sank and subsequently caused a fuel oil leak. In response to the incident, the local XXX Maritime Safety Administration organized pollution cleanup and prevention operations, incurring substantial expenses. This raises several legal questions: How should the law be applied in such a circumstance? Does the local Maritime Safety Administration have the right to recover the costs of cleanup and pollution prevention from the liable parties? Who should be held liable for compensation? Basic Facts In the fall of 2014, the ship HAO JUN owned by Company A, was hit by Typhoon Kalmaegi. The storm caused water ingress into the ship's cargo hold, ultimately leading to its capsizing and sinking. The situation escalated when fuel oil from the submerged vessel leaked into the sea, spreading across the surface and contaminating nearby waters to varying degrees. In response to the oil pollution resulting from the shipwreck, the local XXX Maritime Safety Administration took swift action. It enlisted Company B to immediately undertake pollution prevention and cleanup operations, while assigning Company C to dispatch vessels to the shipwreck site to monitor the oil spill. Company B promptly implemented measures to control the oil pollution, and Company C dispatched vessels to conduct close monitoring at the site to curb further spread of the oil leak. However, a key question emerged: who should bear the financial responsibility for these cleanup and prevention efforts? Prior to the incident, Company A had secured a coastal ship fuel pollution liability insurance policy with XXX Branch of PICC. Both Company B and Company C confirmed that the local XXX Maritime Safety Administration would pursue cost recovery on their behalf. Consequently, the local XXX Maritime Safety Administration filed a lawsuit with the Guangzhou Maritime Court (GZMC), requesting that Company A and XXX Branch of PICC jointly pay cleanup and pollution prevention costs amounting to RMB 1,950,799.60 plus interest. Company A maintained that it should not be held liable, arguing that it bore no fault in the incident. It asserted that the XXX Branch of PICC, under the terms of the insurance contract, should be responsible for covering the pollution prevention and cleanup costs. In contrast, the XXX Branch of PICC countered that the local XXX Maritime Safety Administration lacked the legal standing to directly file a claim, insisting that such a claim should instead be pursued by the cleanup companies involved. Additionally, it challenged the reasonableness of the claimed expenses, particularly those associated with the deployment of cleanup vessels. With all parties locked in dispute, the question remains: who should ultimately bear the liability? Court Decision Guangzhou Maritime Court determined that the case constituted a dispute over liability for marine pollution & damage by ship. Under paragraph 1, Article 71 of the Marine Environmental Protection Law of the People's Republic of China, the local maritime safety administration, as the competent maritime administrative authority, is authorized to engage pollution cleanup companies to implement measures aimed at preventing or mitigating pollution and damage when a shipwreck poses a significant risk to the marine environment. In this instance, Companies B and C, which carried out the cleanup operations, were appointed by the local XXX Maritime Safety Administration and agreed to have the Administration pursue compensation on their behalf. Consequently, the local XXX Maritime Safety Administration has the legal standing to seek compensation from the liable parties for the oil pollution. Furthermore, pursuant to Paragraph 1, Article 97 of the Special Maritime Procedure Law of the People's Republic of China, the plaintiff is entitled to directly demand payment of insurance claims from the defendant, XXX Branch of PICC. The plaintiff claimed that the cleanup vessel HUASHENG YOU 3, deployed for the operations, should command a usage fee of RMB 40,000 per day. However, this rate exceeds typical market standards, considering the vessel's gross tonnage of only 408 and a registered bareboat charter rate of RMB 120,000 for two years. GZMC determined the operational rate at RMB 3 per horsepower per hour and the standby rate at half that amount. Given the vessel's 296 horsepower, it operated for 156 hours and remained on standby for 348 hours. Based on these parameters, the court calculated the usage fee as RMB 293,040. Combined with additional expenses totaling RMB 365,324.50, the overall amount reached RMB 658,364.50. The court ruled that this sum constitutes the liability of Company A, as the shipowner, and shall be covered by XXX Branch of PICC, the insurer for oil pollution liability, within the limits of the insurance policy. Key Significance The urgency and severity of consequences of marine oil pollution necessitate the immediate implementation of cleanup measures. When a maritime administrative authority organizes and directs pollution prevention and cleanup entities to mitigate damage during an emergency, it fulfills its duty to safeguard the marine environment. This scenario exemplifies a situation where an administrative body delegates responsibilities to third parties on its behalf. The consent of cleanup companies to allow the relevant maritime administrative authority to pursue claims on their behalf ensures that defendants are not exposed to duplicate claims, thereby affirming the authority's legal standing to assert such claims. In emergency situations, cleanup companies mobilized by the authority often cannot negotiate fees with shipowners in advance or secure written contracts. In practice, the absence of standardized fee rates for cleanup vessels frequently leads to significant disputes over cost calculations. After a thorough review of industry practices and consultation with experts, GZMC established adjusted rates of RMB 3 per horsepower per hour for operational fees and half that rate for standby periods. These rates were informed by emergency rescue contracts and towing fee benchmarks, forming the basis for the court's judgment. The successful resolution of this case effectively balanced the interests of the maritime administrative authority and the liable parties. It also set a precedent for addressing similar incidents, contributing to the protection of the marine environment in the Guangdong-Hong Kong-Macao Greater Bay Area.

Case of XX Salvage Bureau v. Company A, Company B, Company C, and Third Party XX Electric Company Regarding Salvage Contract Dispute —Criteria for Determining Salvage Operations and the Determination of Salvage Reward and Liable Parties XX Salvage Bureau engaged a transportation company to carry a shipment of goods by sea. Just before arrival, the vessel unexpectedly ran aground. In the absence of a written salvage contract, XX Salvage Bureau assisted in refloating the vessel. This raises the legal issue: Did this constitute a maritime salvage operation, or was it merely voluntary assistance provided gratuitously? Case Review On January 8, 2021, XX Salvage Bureau entered into an International Transportation Contract with Company A, engaging it to transport a batch of steel pipe piles and ancillary components by sea in multiple shipments from Zhongshan Guangxin Wharf to a designated customs clearance anchorage near the Tra Vinh Project in Vietnam. Following the conclusion of the contract, both parties awaited the fulfillment of conditions necessary for staggered shipments, ensuring timely transportation of the cargo to its destination. On June 26, 2021, at approximately 4:00 AM, the calm sea was suddenly disrupted by a rumbling sound—the vessel YUAN JING, which was carrying the said cargo, had unexpectedly run aground in coastal waters near a county in Tra Vinh Province, Vietnam. Following the grounding, Company A contacted XX Salvage Bureau via WeChat and email, requesting assistance in refloating YUAN JING. At 4:48 AM, XX Salvage Bureau deployed tugs and anchor-handling vessels in an attempt to tow YUAN JING off the grounding position, but the initial efforts were unsuccessful. As discussions regarding the refloating operation continued, time elapsed, and at 12:40 PM, with the assistance of XX Salvage Bureau's tugboats, YUAN JING was successfully refloated. However, no prior agreement had been made among the parties regarding compensation for the refloating assistance, leaving a potential dispute unresolved. In the six months following the incident, the parties engaged in significant disputes over whether the operation constituted maritime salvage, the amount of salvage reward, and the parties responsible for its payment. XX Salvage Bureau asserted that, in the process of refloating YUAN JING, it had deployed a total of seven vessels, including a crane vessel, anchor-handling vessels, tugs, and workboats, mobilized 96 personnel, utilized emergency materials to prevent oil pollution, and incurred losses due to vessel and machinery downtime. As a result, on March 31, 2022, XX Salvage Bureau issued a letter to Company A, demanding 15% of the total value of the salved property—equivalent to RMB 15 million—as a salvage reward for the refloating of YUAN JING on June 26, 2021. On May 10, 2022, XX Salvage Bureau sent a follow-up letter to Company A, reiterating its demand for payment of the salvage reward. Given that Company C was the owner of YUAN JING, Company B was the bareboat charterer, and Company B had subsequently chartered the vessel to Company A for cargo transportation, XX Salvage Bureau, on July 13, 2022, issued a letter to all three companies, demanding that they provide full security of RMB 17 million as a guarantee for the salvage reward. As negotiations failed to yield a resolution, XX Salvage Bureau filed a lawsuit with the Guangzhou Maritime Court (GZMC), seeking an order requiring the three companies to jointly pay the salvage reward of RMB 17 million plus interest (calculated from June 26, 2021, the completion date of the salvage operation, to the date of actual payment, at the LPR published by the National Interbank Funding Center). Additionally, XX Salvage Bureau sought an order requiring the three companies to jointly bear the litigation costs of the case. The court established the facts as follows: I. Grounding and Refloating of YUAN JING The vessel YUAN JING is a steel general cargo ship with a gross tonnage of 10,177, a net tonnage of 3,053, a length of 142.805 meters, and a beam of 32.20 meters. Its owner is Company C. Between July 1, 2019, and July 1, 2022, Company C bareboat chartered YUAN JING to Company B and completed the bareboat charter registration with the relevant maritime safety administration. In December 2020, XX Electric Company entered into a procurement contract with XX Salvage Bureau, under which XX Electric Company contracted XX Salvage Bureau for services related to the transportation, pile-driving, and installation of wind turbine foundations. On January 8, 2021, XX Salvage Bureau entered into an International Transportation Contract with Company A, engaging it to transport a batch of wind turbine monopile foundations and integrated ancillary components supplied by XX Electric Company. These items were to be shipped in multiple batches from Zhongshan Guangxin Wharf to the customs clearance anchorage near the Tra Vinh Project in Vietnam. The contract stipulated the transportation would occur from January to June 2021, once the cargo met the necessary conditions for staggered shipments. On February 20, 2021, Company B and Company A signed a time charter contract, under which Company B chartered YUAN JING to Company A for a fixed period of no less than four months. The vessel was delivered to Company C at Yangjiang Anchorage in Guangdong Province on February 17, 2021, and was to be used for transporting and loading all lawful cargoes that met the vessel's stability, weight, and safety requirements. YUAN JING subsequently completed part of the transportation stipulated in the International Transportation Contract between XX Salvage Bureau and Company A, with the voyage involved in the case being the fourth voyage under the contract. II. Expert Witness Opinions An expert called BI, commissioned by XX Salvage Bureau, issued an expert opinion titled "Expert Opinion on the Maritime Salvage of the Vessel YUAN JING" (the "Expert Opinion") on March 28, 2023. The Expert Opinion concludes as follows: The grounding of YUAN JING exposed the vessel to substantial risks, and it was unable to refloat independently, thus necessitating external salvage assistance. XX Salvage Bureau, in line with the principles of salvage agreement, worked round-the-clock, carrying out timely exploration and assessment, and formulating a feasible salvage plan. The Bureau urgently mobilized salvage vessels, equipment, and engineering personnel to salvage the ship, using reasonable efforts to ensure its success. Despite the significant dangers faced by the salvage personnel, they applied sound salvage techniques, achieving notable success. The operation proceeded without fatalities, and both YUAN JING and its cargo were maximally preserved and rescued. Furthermore, the operation effectively prevented sinking or environmental pollution, thereby averting potentially severe losses for all relevant parties. Based on these findings, the expert concluded that XX Salvage Bureau was entitled to 10% of the total value of the vessel and cargo as the salvage reward. The XX Maritime Association, engaged by Company B, issued the "Evaluation Opinion on Issues Related to the Grounding of the Vessel YUAN JING" (the "Evaluation Opinion"). The Evaluation Opinion summarizes the following key points: 1. Evidence suggests that, following the grounding of YUAN JING, no imminent danger was present. Even without tugboat assistance, the vessel could have refloated on its own before the high tide at 15:00 on June 26, 2021. 2. The assistance provided by the tugboats in the refloating operation does not constitute maritime salvage. Therefore, XX Salvage Bureau is not entitled to claim a salvage reward for YUAN JING based on the salvage rates that are typically applied in maritime salvage incidents. 3. Should the second refloating attempt by the tugboats be considered, and if the relevant parties agree to provide economic compensation under the commercial towing method, it is recommended that the rate be 50% of the salvage rate for the vessel "LI ZHOU CHANG RONG", calculated at a rate of RMB 1 per horsepower hour for economic compensation. ZHAO, engaged by Company A, issued the "Analysis of the Expert Opinion on the Maritime Salvage of the Vessel YUAN JING" (the "Analysis") on June 15, 2023. The Analysis critiques the conclusions of the Expert Opinion as follows: 1. The conclusion in the Expert Opinion that YUAN JING faced significant risks after running aground and could not refloat on its own, thus requiring external salvage assistance, is unsupported by direct evidence. 2. No salvage agreement existed between the master of YUAN JING, Company A, and XX Salvage Bureau. XX Salvage Bureau did not engage in a round-the-clock salvage operation, as suggested by the Expert Opinion, because the first attempt to refloat the vessel took only 40 minutes, and the second attempt (in the afternoon) took only 10 minutes. 3. The tugboats deployed by XX Salvage Bureau were solely for assisting with cargo discharge, not as part of a salvage operation. Therefore, the "no effect, no reward" model of salvage does not apply in this case. The Expert Opinion's conclusion that XX Salvage Bureau is entitled to 10% of the total value of the vessel and cargo as salvage reward, based on a contractual salvage rate, represents XX Salvage Bureau's unilateral expectation and should not be accepted. Even if the refloating assistance is deemed a maritime salvage operation, two types of salvage should be considered. The Expert Opinion's choice of the "no effect, no reward" salvage model lacks appropriate justification. The Analysis concludes with the following points: 1. No maritime salvage agreement exists between XX Salvage Bureau and YUAN JING. 2. XX Salvage Bureau's assistance in refloating YUAN JING does not meet the basic criteria for maritime salvage. 3. XX Salvage Bureau's claims for compensation regarding the vessels and personnel involved in the operation lack authenticity, necessity, and reasonableness. 4. Regarding the tugboats and anchor-handling vessels that assisted with the refloating, it is suggested that economic compensation be based on 50% of the salvage rate for the vessel "LI ZHOU CHANG RONG", calculated at RMB 1 per horsepower hour. This would result in an economic compensation amount of RMB 24,800 (RMB 1 × 6200HP × 4 hours) for XX Salvage Bureau. III. Value of the Salved Vessel and Cargo, and Freight Charges (i) Vessel Value After YUAN JING was refloated, no parties conducted an assessment of the value of the salved vessel and cargo. In 2022, YUAN JING was sold by Company C for a vessel price of RMB 60.2 million. (ii) Cargo Value The export customs declaration for the goods shows that the declared date was June 16, 2021, and the total cargo price was USD 6,781,946.70, under the CIF (Cost, Insurance, and Freight) terms. (iii) Freight Charges A dispute arose between XX Salvage Bureau and Company A regarding the performance of their International Transportation Contract. Company A filed a lawsuit with the court, and the court accepted the case on March 15, 2022. On November 30, 2022, the court rendered a civil judgment, and both parties appealed the judgment to the Guangdong Higher People's Court, which issued a final civil judgment on June 20, 2023, dismissing the appeal and upholding the original judgment. The effective judgment determines that Company A had completed the transportation of 30 wind turbine units and six voyages under the contract. The original total freight price was RMB 24,880,000, but due to the overdue contract, an additional RMB 5.6 million in freight charges were incurred. After the judgment became effective, XX Salvage Bureau fulfilled the obligation to pay the aforementioned freight charges. Based on the facts recognized in the effective judgment, the freight charges for the voyage in question were calculated to be RMB 5.08 million. Based on the above, the total value of the salved vessel, cargo, and freight at risk stood at RMB 108,586,798.85. Court Decision On May 31, 2024, GZMC rendered the following civil judgment: 1. Company B and Company C (defendants) shall jointly pay a salvage reward of RMB 1,662,000 to XX Salvage Bureau (plaintiff), along with interest (calculated from September 14, 2022 until the date of full payment at the one-year LPR published by the National Interbank Funding Center). 2. Company A (also a defendant) shall pay a salvage reward of RMB 138,000 to XX Salvage Bureau, along with interest (calculated in the foregoing same manner). 3. All other claims of XX Salvage Bureau are dismissed. Following the announcement of the judgment, none of the parties filed an appeal. Rationale of Judgment The legally effective judgment of the court holds that YUAN JING, which was carrying steel monopile foundations and supporting components for wind turbine installations, ran aground while en route from Zhongshan Guangxin Wharf, Guangdong Province, China, to the customs clearance anchorage of the Tra Vinh Project in Vietnam. Since the grounding occurred in Vietnamese waters, the case involves foreign-related elements. According to Article 8 of the Law of the People's Republic of China on the Application of Law to Civil Relations Involving Foreign Interests, "The characterization of foreign-related civil relations shall be governed by the law of the place where the court is located." The plaintiff asserted that the dispatch of its vessels to assist YUAN JING in refloating constituted maritime salvage and, on that basis, sought salvage reward from the defendants. Thus, this case constitutes a dispute over a maritime salvage contract. According to Article 269 of the Maritime Code of the People's Republic of China (the "Maritime Code"), "The parties to a contract may choose the law applicable to such contract, unless the law provides otherwise. Where the parties to a contract have not made a choice, the law of the country having the closest connection with the contract shall apply." In the court proceedings, all parties chose to apply the laws of the People's Republic of China, and therefore, Chinese law shall govern the substantive disputes in this case. China is a contracting state to the International Convention on Salvage, 1989 (the "Convention"), which entered into force for China on July 14, 1996. According to Paragraph 1, Article 268 of the Maritime Code, "If any international treaty concluded or acceded to by the People's Republic of China contains provisions differing from those contained in this Code, the provisions of the relevant international treaty shall apply, unless the provisions are those on which the People's Republic of China has announced reservations." This case falls within the scope of application of the Convention. Chapter IX (Salvage at Sea) of the Maritime Code was formulated primarily based on the Convention. Where the provisions of Chinese law are consistent with the Convention, both may apply concurrently in this case; where they differ, the provisions of the Convention shall prevail. The key disputed issues in this case are as follows: 1. The nature of the plaintiff's assistance in refloating YUAN JING (whether it constitutes maritime salvage); 2. Whether the plaintiff is entitled to claim salvage reward, and the determination of the salvage reward amount; 3. The parties responsible for paying the salvage reward; 4. The interest on the salvage reward. The court's analysis of these disputed issues is set out below: I. The Nature of the Plaintiff's Assistance in Refloating YUAN JING According to Paragraph 1, Article 1 of the Convention, "salvage operation" means any act or activity undertaken to assist a vessel or any other property in danger in navigable waters or in any other waters whatsoever. The court held that the plaintiff's assistance in refloating YUAN JING constituted maritime salvage. The specific rationale is as follows: First, YUAN JING and its cargo qualify as legally recognized objects of salvage. Article 171 of the Maritime Code stipulates that "The provisions of this Chapter shall apply to salvage operations rendered at sea or any other navigable waters adjacent thereto to ships and other property in distress." Article 172 further defines the relevant terms: (1) "Ship" means any ship referred to in Article 3 of this Code and any other non-military, public service ship or craft that has been involved in a salvage operation therewith; (2) "Property" means any property not permanently and intentionally attached to the shoreline and includes freight at risk; ..." The plaintiff conducted salvage operations on YUAN JING, its cargo, and freight at risk. At the time of the incident, YUAN JING was engaged in commercial transport rather than military or governmental service. The cargo consisted of steel monopile foundations and associated components, which fall within the scope of "property" as defined by the applicable legal provisions. Second, YUAN JING and its cargo were in a state of actual and foreseeable danger, rather than merely a hypothetical risk. In the context of maritime salvage, the concept of "danger" does not require an absolute or immediate peril; rather, it is sufficient that, based on the circumstances at the time, the danger was reasonably foreseeable and unavoidable. Although, following the grounding of YUAN JING, the vessel's master arranged for an inspection by the crew, which revealed no damage or deformation to the hull, no displacement or loosening of the stowed cargo, and the fact that the vessel was in an area experiencing a rising tide at the time, these factors do not justify the conclusion that YUAN JING was not in danger or that it could have refloated without external assistance. According to an email sent by Company A to the plaintiff on the day of the incident, the rising tide caused strong currents at the site, creating a risk of pushing the vessel into shallower waters, thereby exacerbating the danger. As a result, waiting for the highest tide was not a viable option, and Company A explicitly requested the plaintiff to assist YUAN JING in refloating at the earliest possible time. This demonstrates that, based on the on-site assessment conducted by YUAN JING and Company A, YUAN JING was indeed in a state of danger. The Evaluation Report and the Analysis only evaluated the degree of danger based on buoyancy loss while failing to consider the risks posed by tidal currents. Furthermore, the plaintiff's assistance in refloating YUAN JING did not arise from any statutory or contractual duty to provide salvage services. Initially, the plaintiff and Company A agreed that the cargo would be delivered at the customs clearance anchorage near the Tra Vinh Project in Vietnam. However, the parties subsequently mutually agreed to change the delivery location to the project's offshore operational site, which was still some distance from the grounding location. The plaintiff had only entered into an International Transportation Contract with Company A, under which Company A bore sole responsibility for any safety-related incidents occurring during transportation, and there was no contractual provision imposing a salvage obligation on the plaintiff. Finally, the plaintiff successfully assisted in refloating YUAN JING through two towing operations. Evidence in the case file indicates that, after YUAN JING ran aground, both Company A and the vessel's master directly communicated with the plaintiff, urgently requesting the plaintiff to develop a refloating plan and dispatch tugboats for assistance. The defendants contended that the refloating of YUAN JING was not directly attributable to the plaintiff's salvage operations. However, neither the Expert Opinion, the Evaluation Report, nor the Analysis asserted that, at 12:40 on June 26, 2021, when YUAN JING was successfully refloated, the water depth was already sufficient for the vessel to refloat on its own. The defendants also asserted that the plaintiff towed YUAN JING toward shallower waters, thereby placing it in greater danger, and thus the operation did not constitute maritime salvage. Furthermore, the defendants claimed that YUAN JING had repeatedly and safely navigated between the plaintiff's construction site and the designated cargo handover location both before and after the grounding and that the vessel only ran aground on June 26, 2021, due to a deviation from its original navigational course. They argued that, since the vessel was in a less hazardous state while navigating within its designated route and near the plaintiff's construction site, and since the plaintiff had already completed the salvage operation by the time YUAN JING deviated from its course and ran aground, subsequent events should not negate the fact that a salvage operation took place. The court held that the post hoc statements made by YUAN JING's master and the defendants regarding the nature of the plaintiff's assistance did not affect the legal determination of whether the refloating operation constituted maritime salvage. II. Plaintiff's Right to Claim Salvage Reward and the Determination of the Salvage Reward Although YUAN JING was carrying both materials required for the plaintiff's construction and cargo entrusted for transportation at the time of the incident, and the plaintiff's salvage efforts objectively reduced construction delays, the fact that the plaintiff benefited from the salvage operation does not alter the legal nature of the act as salvage. Therefore, it does not negate the plaintiff's right to claim a salvage reward. Article 186 of the Maritime Code provides that: "The following salvage operations shall not be entitled to remuneration: (1) The salvage operation is carried out as a duty to normally perform a towage contract or other service contract, with the exception, however, of providing special services beyond the performance of the above-said duty. (2) The salvage operation is carried out in spite of the express and reasonable prohibition on the part of the Master of the ship in distress, the owner of the ship in question and the owner of the other property." In this case, there is no evidence to suggest that YUAN JING or any of the three defendants explicitly refused the plaintiff's salvage assistance. On the contrary, YUAN JING actively cooperated with the plaintiff in order to refloat the vessel. Additionally, Company A explicitly requested the plaintiff's assistance via email, and the master of YUAN JING remained in direct communication with the plaintiff's personnel throughout the operation. YUAN JING did not exercise its right to refuse salvage; rather, through its actions, it clearly sought and accepted the plaintiff's assistance. Therefore, the defendants' claim that the plaintiff is not entitled to a salvage reward is not upheld by the court. Article 179 of the Maritime Code provides that: "Where the salvage operations rendered to the distressed ship and other property have had a useful result, the salvor shall be entitled to a reward. Except as otherwise provided for by Article 182 of this Code or by other laws or the salvage contract, the salvor shall not be entitled to the payment if the salvage operations have had no useful result." In this case, YUAN JING and its cargo were successfully removed from peril through the plaintiff's salvage operation, and neither the vessel nor the cargo sustained any damage. The plaintiff's salvage operation achieved a successful outcome, and none of the circumstances stipulated in Article 182 of the Maritime Code apply. Furthermore, the plaintiff did not waive its right to claim a salvage reward. Additionally, Article 191 of the Maritime Code states: "The provisions of this Chapter shall apply to the salvor's right to the payment for the salvage operations carried out between the ships of the same owner." By analogy, although the cargo on board YUAN JING was intended for the plaintiff's construction project, the plaintiff is still entitled to claim a salvage reward. Beyond the ten factors prescribed under Article 180 of the Maritime Code, the court also considered additional circumstances specific to this case. At the time of YUAN JING's grounding, the vessel was carrying materials essential to the plaintiff's construction project. Had the vessel remained stranded, the delay in cargo delivery could have postponed the plaintiff's construction schedule or even resulted in cargo damage due to potential structural harm to the vessel. By successfully salving YUAN JING, the plaintiff helped minimize delays in cargo delivery and reduced the risk of cargo damage. Thus, the plaintiff derived benefits from its own salvage operation, warranting an appropriate reduction in the salvage reward. Taking into account the value of the salved vessel and other property, the costs incurred by the salvor, as well as the nature and severity of the peril at the time of the salvage operation, the court determined that the plaintiff is entitled to a salvage reward of RMB 3,000,000. The salvage reward shall not exceed the total value of the salved vessel and property, and its calculation must reflect the principle of encouraging salvage operations. III. The Liable Parties for the Payment of the Salvage Reward Paragraph 2, Article 13 of the Convention provides that: "Payment of a reward fixed according to paragraph 1 shall be made by all of the vessel and other property interests in proportion to their respective salved values. However, a State Party may in its national law provide that the payment of a reward has to be made by one of these interests, subject to a right of recourse of this interest against the other interests for their respective shares. Nothing in this article shall prevent any right of defense." Additionally, Article 183 of the Maritime Code stipulates that: "The salvage reward shall be paid by the owners of the salved ship and other property in accordance with the respective proportions which the salved values of the ship and other property bear to the total salved value." The Convention establishes that the responsibility for paying the salvage reward lies with the vessel and other property interests, without restricting liability solely to the owner of the ship. Therefore, under both the Convention and the Maritime Code, the obligation to pay the salvage reward rests with the owners or other interested parties of the salved vessel and property. In this case, during the relevant voyage, Company C was the registered owner of YUAN JING, while Company B was the bareboat charterer. YUAN JING was operated and managed by Company B, and its master and crew were also employed by Company B. Thus, both Company C and Company B qualify as interested parties of YUAN JING, and as such, they are both jointly liable for the payment of the salvage reward. Consequently, Company C and Company B shall pay the plaintiff RMB 1,662,000 in salvage reward, apportioned based on the vessel's salved value relative to the total salved value. Additionally, Company A was the carrier of the cargo in question and, as such, is classified as the party benefiting from the salvage of the freight charges for the voyage. Therefore, Company A shall pay the plaintiff RMB 138,000 in salvage reward, in proportion to the freight charges as part of the total salved value. The plaintiff did not claim a salvage reward from the owner of the cargo, i.e., the third party in this case, which constitutes a disposition of its own civil rights and interests. The court respects this exercise of discretion. The plaintiff's claim that all three defendants should bear joint and several liability for the full salvage reward lacks a legal basis and is therefore not supported by the court. IV. Interest on the Salvage Reward Article 577 of the Civil Code stipulates: "Where a party fails to perform his contractual obligation or his performance does not conform to the agreement, he shall bear default liability such as continuing to perform his obligations, taking remedial measures, or compensating for losses." The plaintiff's claim for interest on the salvage reward calculated based on the LPR published by the National Interbank Funding Center is supported by both factual and legal grounds and is therefore upheld by the court. However, as the parties did not reach a consensus on the amount or the payment date of the salvage reward, the plaintiff's request for interest to accrue from June 26, 2021, the date of the salvage operation's completion, lacks a legal basis and is therefore not upheld by the court. Paragraph 4, Article 511 of the Civil Code provides: "Where the period of performance is not clearly stipulated, the debtor may perform his obligations at any time, and the creditor may request the debtor to perform at any time, provided that he shall give the debtor necessary time for preparation." Considering the circumstances of this case, the court determined that the three defendants should have paid the salvage reward within three months of the case being filed, i.e., by September 13, 2022. Therefore, interest on overdue payments shall accrue from the following day, i.e., September 14, 2022. Key Points of Judgment  1. The requirements for constituting a salvage operation include the following four elements: the subject of salvage must be legally recognized; the salvor must have no pre-existing duty to conduct the salvage operation; the subject of salvage must be in actual and unavoidable danger; and the salvage operation must achieve a successful outcome. 2. The determination of the salvage reward should take into account the ten factors set out in Article 180 of the Maritime Code, while also considering other relevant factors based on the specific circumstances of the case. 3. The parties liable for paying the salvage reward are the vessel or other property interests that have benefited from the salvage operation. Related Legal Provisions Article 179 of Maritime Code of the People's Republic of China Article 180 of Maritime Code of the People's Republic of China Article 183 of Maritime Code of the People's Republic of China Paragraph 1 of Article 268 of Maritime Code of the People's Republic of China Paragraph 2 of Article 13 of International Convention on Salvage, 1989