Guangzhou Maritime Court


Civil Ruling


(2003)GHFCZ No.293


Applicant: 		Zhanjiang Cang Hai Shipping Co. Ltd.

Address: 		1/F, Fishing Company Office Building, Ren Min Dong Er Road, Xiashan District, Zhanjiang

Agents ad Litem:	Xu Guangyu, Long Yulan, lawyers of Guangdong Zhong Xin Law 

Firm


Dissenter:		Guangzhou Gang Xin Shipping and Industrial Co. Ltd.

Address:		Room 210, 2/F, Feng Le Commercial Building, Feng Le Zhong 

Road, Huangpu District, Guangzhou

Legal Rep.:		Chen Jun, general manager

Agent ad Litem:	Feng Jiancheng, lawyer of Guangdong Green Law Firm

Agent ad Litem:	Lin Wei, lawyer??s assistant of Guangdong Green Law Firm


Dissenter:		Lin Hongchuan, male, born on May 15, 1958, Han Nationality, 

residing in No.64, Hai Xiu Da Dao, Haikou, Hainan Province

Agent ad Litem:	Yang Yunfu, lawyer of Guangdong Heng Yuan Law Firm

Agent ad Litem: 	Huang Hui, staff of Guangzhou Heng Yun Law Firm



The applicant Zhanjiang Cang Hai Shipping Co. Ltd. lodged an application for limitation of liability for maritime claims to this court on June 5, 2003 and applied for establishing a limitation fund for maritime claims. After accepting the case, this court issued a notice to the relevant interested parties, and issued the public notice in Nanfang Daily from June 23 to June 25. The Dissenters, Guangzhou Gang Xin Shipping and Industrial Co. Ltd. and Lin Hongchuan, filed dissension to this court respectively on June 24 and June 26. On August 5, this court summoned the Applicant and the dissenters for a cross-examination of evidences in respect of the facts involved in this case. 


The Applicant Zhanjiang Cang Hai Shipping Co. Ltd. stated that: M/V ?°Yin Hong?± owned by the Applicant carried 37 containers of cargoes from Haikou to Huangpu, Guangzhou. On March 13, 2003, she collided with M/V ?°Sui Gang Xin 202?± at the waters near to Anchorage S9 off Shajiao, Humen, Dongguan. As a result, M/V ?°Yin Hong?± sunk and the containers carried on board fell overboard. According to Chapter XI of the Maritime Code of the PRC, as the owner of M/V ?°Yin Hong?±, the applicant has the right to limit its liability for compensation. M/V ?°Yin Hong?± is a vessel with gross tonnage 480 tons engaged in domestic trade between Chinese ports for transportation of goods. According to Article 210 of the Maritime Code of the PRC and Article 4 of the Decision on the Limitation of Maritime Claims for Ships with Gross Tonnage Less Than 300 and Ships Engaged in Coastal Transportation and Coastal Operation, the limitation of liability for maritime claims for M/V ?°Yin Hong?± is 83,500 SDR, equal to RMB936,536. The Applicant filed an application for limitation of liability for maritime claims in respect of this accident, and applied for establishing the limitation funds for maritime claims in sum of 83,500SDR (equivalent to RMB936,536). The Applicant submitted the following evidences: 1. Business License for the Enterprise as Legal Person (copy) of Zhanjiang Cang Hai Shipping Co. Ltd.; 2. Certificate of Registry of Vessel??s Ownership; 3. Certificate of Vessel??s Nationality; 4. Ship Inspection Certificate Book, Certificate of Seaworthiness of Cargo Ships, Tonnage Certificate, Load Line Certificate; 5. Certificate of Lowest Safety Manning of Coastal Vessels; 6. Certificate of Competence of Crew??s Duty, Certificate of Competency of Training, Crew??s Service Book; 7. Outpatient Handbook of Guangdong Provincial Nongken Central Hospital; 8. Certificate of Medical Diagnosis of Guangdong Provincial Nongken Central Hospital; 9. Certification issued by the ship-master Li Liangtong; 10. Certification issued by Zhanjiang Cang Hai Shipping Co. Ltd.; 11. Certificate for Vessels?? Engagement in Transportation of M/V ?°Yin Hong?±; 12. Civil Judgement (2002)GHFCZ No.252; 13. Civil Judgement (2003)YGFMSZZ No.25; 14. Certificate Book of Survey for Sea-going Vessels; 15. List of the Exchange Rate of SDR.


The Dissenter Guangzhou Gang Xin Shipping and Industrial Co. Ltd. stated that: 1. M/V ?°Yin Hong?± was not seaworthy. As her Certificate of Registry of Vessel??s Tonnage has no statement on the volume (v1) of the closed-in spaces below tonnage deck and the volume (v2) of the closed-in spaces above tonnage deck, her gross tonnage is illegal; 2. In the voyage at issue, M/V ?°Yin Hong?± was not manned with sufficient and qualified crewmembers. The Certificate of Vessel??s Lowest Manning prescribes that the number of the manned crew is 11, while there was only 8 crewmembers on the vessel at the time of the accident; 3. M/V ?°Yin Hong?± was seriously overloaded. The actual quantity of goods loaded on board, 831.156 tons, far exceeded the referential cargo carrying capacity 500 tons stated in Ship Survey Certificate 1998; 4. The applicant seriously violated the navigational rules and regulations. Therefore, pursuant to Article 209 of the Maritime Code of the PRC, the applicant has no right to enjoy the limitation of liability for maritime claims and has no right to apply for establishing limitation funds for maritime claims. The court is requested to dismiss the applicant??s application according to law. The dissenter Guangzhou Gang Xin Shipping and Industrial Co. Ltd. submitted the following evidences: 1. Ship Survey Certificate 1998 of M/V ?°Yin Hong?±; 2. Ship Survey Certificate 2001 of M/V ?°Yin Hong?±; 3. Certificate of Lowest Safety Manning; 4. Written Record of Inquiry by Shajiao Maritime Office to Li Liangtong; 5. Reply of Register of Shipping of the PRC, Zhanjiang to Issues Relevant to M/V ?°Yin Hong?±; 6. Statement of Defence by Zhanjiang Cang Hai Shipping Co. Ltd..


The Dissenter Lin Hongchuan stated that: the precondition for establishing the limitation funds is that the relevant party applies for limitation of liability for maritime claims and has the right to enjoy limitation of liability for maritime claims according to law. The applicant has not applied to the court for the limitation of liability, but only applied for establishing the limitation funds. The court has not yet examined whether the applicant can enjoy the limitation of liability. Therefore, the applicant shall have no right to apply for establishing the limitation funds for maritime claims. For the reasons as follows, the applicant has no right to enjoy the limitation of liability for maritime claims: 1. M/V ?°Yin Hong?± was not seaworthy; 2. Her Certificate of Vessel??s Tonnage states that as the original ship survey certificate has no statement on the data of v1 and v2, the relevant drawings and data shall be submitted within two months for re-verification. However, up to date the applicant has neither provided to the Register of Shipping of the PRC, Zhanjiang with the relevant drawings and data, nor applied for a verification again. The gross tonnage of 480 stated in her certificate is invalid. Therefore, the amount of the limitation funds for maritime claims calculated on this basis is invalid; 3. The certificate of lowest safety manning held by M/V ?°Yin Hong?± has lost the effect; 4. M/V ?°Yin Hong?± did not sail within the prescribed navigational area; 5. In the voyage at issue, M/V ?°Yin Hong?± was not manned with sufficient and qualified crewmembers; 6. In the voyage at issue, M/V ?°Yin Hong?± was seriously overloaded, the cargo was improperly stowed, the stability of the vessel did not meet with requirements. The unseaworthiness of M/V ?°Yin Hong?± has causal relationship with the cause of the accident. The accident was caused due to the imprudent action or inaction of the applicant though it was fully aware of the possibility of the accident. Pursuant to Article 209 of the Maritime Code of the PRC, the applicant shall not be entitled to limit his liability for maritime claims and to establish the limitation funds for the maritime claims. The Dissenter Lin Hongchuan submitted the following evidences: 1. Certificate Book of Ship Survey No.5171C71010 of M/V ?°Yin Hong?±, 1998; 2. Certificate Book of Ship Survey No.1971M5100037 of M/V ?°Yin Hong?±, 2001; 3. Certificate of Lowest Safety Manning of M/V ?°Yin Hong?±; 4. Regulations on Vessel??s Lowest Safety Manning of the PRC; 5. Certificate of Tonnage; 6. Reply of the Register of Shipping of the PRC, Zhanjiang to the Relevant Issues of M/V ?°Yin Hong?±; 7. Written Record of Inquiry by Shajiao Maritime Office to Li Liangtong; 8. Written Record of Inquiry by Shajiao Maritime Office to Wu Keqing; 9. Written Record of Inquiry by Shajiao Maritime Office to Chen Shanjiao; 10. Crew List of M/V ?°Yin Hong?±; 11. Nanfang Daily dated March 14, 2003 and Guangzhou Daily dated March 15, 2003; 12. Report on Maritime Traffic Accident of M/V ?°Yin Hong?±; 13. Waybill of Container Cargoes of Haikou Jinlun Freight Forwarding Co. Ltd..


Upon cross-examination at the court hearing, all relevant parties confirmed the following facts: according to the Certificate of Registry of Ownership submitted by the Applicant in respect of M/V ?°Yin Hong?±, the owner of the vessel was Zhanjiang Cang Hai Shipping Co. Ltd.. In addition, according to the Business License for the Enterprise as Legal Person (copy) of Zhanjiang Cang Hai Shipping Co. Ltd. submitted by the Applicant, the Applicant was an enterprise as legal person incorporated according to law. 


On March 13, 2003, a collision occurred between M/V ?°Sui Gang Xin 202?± and M/V ?°Yin Hong?± at the waters off Shajiao, Humen, Dongguan, resulting in the sinking of the vessel ?°Yin Hong?± and the cargoes carried on board.


Upon examination, the judge holds that: this is a case concerning application for establishing limitation funds for maritime claims. The Applicant is the owner of M/V ?°Yin Hong?±. After the collision, the Applicant applied to this court for limiting her liability and for establishing the limitation funds for maritime claims. As the application is in compliance with paragraph 1 of Article 101 of the Maritime Procedure Law of the PRC, therefore, the Applicant is the qualified subject to the action. The request for compensation of loss of and damage to M/V ?°Yin Hong?± arising from the collision with M/V ?°Sui Gang Xin 202?± during the course of her operation and the claim for the relevant loss resulting therefrom are the limited liability as provided in Item (1) of paragraph 1 of Article 207 of the Maritime Code of the PRC. The amount of the limitation fund that the Applicant applied to constitute is the limit of liability for maritime claims for non-personal injuries arising from this accident. Such amount is calculated according to paragraphs 1 and 2 of Article 210 of the Maritime Code of the PRC and Article 4 of the Decision of the Ministry of Communications on Limitation of Liability for Maritime Claims for Vessels with Gross Tonnage of Less Than 300 Tons and Vessels Engaged in Coastal Transportation and Operation. 


The Certificate of Tonnage of Ocean Vessels for M/V ?°Yin Hong?± submitted by the two defendants states that: ?°as the original ship survey certificate has no statement on the data of v1 and v2, the relevant drawings and data shall be submitted within two months to apply for a verification again.?± However, up to now the applicant has not yet provided the two data. Therefore, what the Applicant is alleged as the gross tonnage on basis of which the amount of the limitation fund for M/V ?°Yin Hong?± is calculated should be invalid. This judge holds that: as the certificate states that the gross tonnage is 480 tons. The above statement only requires the Applicant to provide the relevant drawings and data and to apply for a verification again on the data of v1 and v2. It does not mean to deny the gross tonnage of the vessel. The two dissenters have not provided contrary evidences to deny the gross tonnage stated in the certificate either. Therefore, the gross tonnage on basis of which the Applicant calculated the amount of limitation funds is valid. 


According to Article 83 of the Explanation of the Supreme People??s Court on Certain Issues Concerning the Application of the Maritime Procedure Law of the PRC, when the interested parties have an objection to the Applicant??s constitution of the limitation funds for maritime claims, this court shall carry out examination on the qualification of the subject of the application, the nature of creditor??s right involved in the accident and the amount of limitation funds to be established. Other objections raised by the Dissenters are an issue of substantive right concerning whether the Applicant may enjoy the limitation of liability for the maritime claims. It is not an issue of procedure to be settled by this court for the Applicant??s constitution of the funds, but it shall be handled in another case. Therefore, the Dissenter??s dissension is not tenable.


To sum up, according to Article 106 and Article 108 of the Maritime Procedure Law of the PRC and Article 84 of the Explanation of the Supreme People??s Court on Certain Issues Concerning Application of the Maritime Procedure Law of the PRC, the ruling is given as follows:


I.	The objection raised by the Dissenters Guangzhou Gang Xin Shipping Industrial Co. Ltd. and Lin Hongchuan shall be dismissed;

II.	The application for constituting the limitation fund raised by the Applicant Zhanjiang Cang Hai Shipping Co. Ltd. shall be granted;

III.	The Applicant Zhanjiang Cang Hai Shipping Co. Ltd. shall constitute in this court the limitation fund in the amount of 83,500 Units of Account within three days after this ruling takes effect (the Unit of Account referred herein is the Special Drawing Right as defined by the International Monetary Fund) and the loan interest on rate for current funds of the People??s Bank of China from the day on which the collision occurred (i.e. March 13, 2003) until the day of constitution of the limitation fund. 


The application fee for this case in RMB937 and the public notice fee in RMB23,900 shall be undertaken by the Applicant Zhanjiang Cang Hai Shipping Co. Ltd..


If any party has an objection to this ruling, it may submit a statement of appeal to this court within 15 days after the service of the ruling, together with the number of copies corresponding to the number of the opposite parties. The appellate court is the Higher People??s Court of Guangdong Province.



Judge: Zhan Weiquan

August 6, 2003

Judge??s Assistant: Li Yiyi

Court Clerk: Chen Qiuxia