Case of dispute over damage compensation arising from ship collision as filed by Beihai Honghai Shipping Co.,Ltd., against Orient Overseas Containers Line Limited, Orient Overseas Container Line (U.K.) Limited and Swan National Leasing(Commercials)Limited

Updated：2015-10-10 Views：11943 

Guangzhou Maritime Court of the People??s Republic of China



Civil Judgment

(2009)GHFCZ No.4 & No.292



Plaintiff				:	Beihai Honghai Shipping Co., Ltd.

(Defendant in Counter-Claim Case)	

Address				:	No.C, Fl.15, Quanjing Building, Beihai Road, Beihai City, 

						Guangxi Zhuang Autonomous Region

Legal Representative	:	Chen Feijing, General Manager of the Company

Agent ad litem		:	Chen Yusheng, Attorney from Lin Yi Hua & Co. Law Office

Agent ad litem		:	Wang Silv, Attorney from Lin Yi Hua & Co. Law Office





Defendant 			:	Orient Overseas Containers Line Limited

(Plaintiff in Counter-Claim Case)	 

Address				:	33/F, Harbour Centre, 25 Harbour Road, Wanchai, Hong Kong

Legal Representative	:	Wang Decheng, Director of the Company

Agent ad litem		:	Chen Xiangyong, Attorney from Wang Jing & Co. Law Firm

Agent ad litem		:	Cao Yanghui, Attorney from Wang Jing & Co. Law Firm





Defendant			:	Orient Overseas Container Line (U.K.) Limited 

(Plaintiff in Counter-Claim Case)

Address				:	33/F, Harbour Centre, 25 Harbour Road, Wanchai, Hong Kong

Legal Representative	:	Dai Shengjian, Director of the Company

Agent ad litem		:	Chen Xiangyong, Attorney from Wang Jing & Co. Law Firm

Agent ad litem		:	Cao Yanghui, Attorney from Wang Jing & Co. Law Firm



Defendant			:	Swan National Leasing (Commercials) Limited

(Plaintiff in Counter-Claim Case)

Address				:	8 Canada Square, E14 5HQ, London, United Kingdom

Agent ad litem		:	Chen Xiangyong, Attorney from Wang Jing & Co. Law Firm

Agent ad litem		:	Cao Yanghui, Attorney from Wang Jing & Co. Law Firm



With respect to the case of dispute over damage compensation arising from ship collision as filed by the Plaintiff, Beihai Honghai Shipping Co., Ltd., against the Defendants, Orient Overseas Containers Line Limited (hereinafter referred to as ?°OOCL?±), Orient Overseas Container Line (U.K.) Limited (hereinafter referred to as ?°OOCL U.K.?±), and Swan National Leasing (Commercials) Limited (hereinafter referred to as ?°Swan Company?±), this Court, after accepting the case, formed a collegiate bench in accordance with law to conduct hearings on the case. The three Defendants raised counter claims on 2 June 2009, and the Court combined the two cases into one for hearing. The Court organized the parties hereto to carry out pre-trial exchange of evidence on 15 July, and the Court also conducted public hearing on the case. The following persons had appeared in court to attend the litigation: the agents ad litem entrusted by the Plaintiff, namely Chen Yusheng and Wang Silv; and the agents ad litem as jointly entrusted by the three Defendants, namely Chen Xiangyong and Cao Yanghui. This case has been closed.



The Plaintiff alleged that: on 16 October 2008, M/V ?°Xinghai 688?± owned by the Plaintiff was sailing from Zhang Jiagang to Guangzhou Longxue Shipyard with steel loaded onboard. At about 0540hrs on 21 October, M/V ?°Xinghai 688?± collided with M/V ?°OOCL EUROPE?± owned by the three Defendants in the waters near Dangan Fairway, which caused M/V ?°Xinghai 688?± to sink. The Plaintiff sustained a loss in an amount of about RMB12,700,625 (excluding the cargo loss and the possible pollution damage) due to the aforesaid accident. M/V ?°OOCL EUROPE?± disregarded the safe navigation rules, and caused the occurrence of the accident. Furthermore, after the accident, M/V ?°OOCL EUROPE?± escaped from the accident scene without giving any thought to the safety of life and property at sea. Therefore, M/V ?°OOCL EUROPE?± shall be fully responsible for the accident. The Defendant, OOCL, is the operator of M/V ?°OOCL EUROPE?±, the Defendant, OOCL U.K. is the bareboat charterer, whilst the Defendant, Swan Company, is the registered owner of the vessel, and in accordance with the law the aforesaid three Defendants shall be jointly and severally liable for the accident. The Plaintiff requested the Court to order that: 1. the three Defendants shall be jointly and severally liable to compensate the loss sustained by the Plaintiff arising from the sinking of the vessel due to the collision accident, in a total amount of RMB12,700,625; 2. the three Defendants shall be jointly and severally bear the acceptance fee, application fee for constitution of limitation fund, and public announcement fee in a total amount of RMB97,300, and other litigation fees relating to this case. 



The Plaintiff had submitted the following evidence during the period for adducing evidence: 1. Certificate of Vessel??s Nationality, Survey Certificate, Certificate of Vessel??s Registration, Safety Management Certificate, and Certificate of Compliance of M/V ?°Xinghai 668?±, and Certificate of Competency of the crew on watch; 2. Ship Information Search for M/V ?°OOCL EUROPE?±; 3. Letter of Undertaking; 4. Report on Maritime Accident; 5. Report on Water Traffic Accident; 6. Maritime Accident Investigation Form; 7. Sea Chart; 8. Methods for Management of Pear River and its Estuary; 9. Correspondences; 10. Procedures for Dealing with the Act of Escaping from Water Traffic Accident Scene; 11. Notice for Strengthening the Investigation Work on Water Traffic Accident; 12. Examples of Cases; 13. Application for Investigation on Maritime Accident; 14. Ship Sales Contract; 15. Ship??s Delivery Note; 16. Receipt of Payment; 17. Ship Repair Contract for M/V ?°Xinghai 668?±; 18. Settlement List issued by Minjiang Shipyard; 19. Receipt of Payment issued by Minjiang Shipyard; 20. Charter Party; 21. Accounting Book of Hire and Receipt of Payment; 22. Agreement on Underwater Inspection for Sunken Ship; 23. Invoice for Underwater Inspection Fee; 24. Application Form for Settlement issued by the Bank of Communications; 25. Survey Report issued by Guangzhou Haijiang Surveyors and Adjustors Co., Ltd. (hereinafter referred to as ?°Haijiang Company?±); 26. Bill of Haijiang Company; 27. Receipt of Payment issued by Haijiang Company; 28. List of Collection, Expense Claim Form, two groups of Accounting Vouchers 29. Report of Losses; 30. Application for Settlement; 31. Letter of Entrustment for Salvage of Sunken M/V ?°Xinghai 688?±; 32. Agreement on Salvage of Sunken M/V ?°Xinghai 688?± and the Cargo; 33. Agency Agreement.



The three Defendants jointly alleged that: 1. they basically did not have any objection to the time (hours) of the occurrence of the accident, but have objection to the minutes, and the three Defendants claimed the accident occurred at 0545hrs on 21 October 2008; 2. the accident occurred in the waters of Hong Kong, and after occurrence of the accident, M/V ?°OOCL EUROPE?± reported to Hong Kong Marine Department, whilst Guangzhou MSA did not carry out any substantive supervision on the accident in dispute; 3. the three Defendants did not have any objection to the qualification of the three Defendants to be the Defendant in this case, but the liability resulted from the collision accident shall be borne by the registered bareboat charterer, namely the Defendant, OOCL U.K., and the other two Defendants shall be not held liable; 4. with respect to the liability arising from the accident, at the time of the occurrence of the accident, the two vessels was in a crossing situation, M/V ?°OOCL EUROPE?± was on the starboard side of M/V ?°Xinghai 668?±, whilst M/V ?°Xinghai 668?±, as a give-way vessel, failed to take avoiding action in ample time, giving rise to a close-quarters situation, and therefore shall bear the major liability for the collision accident; 5. M/V ?°OOCL EUROPE?±, after occurrence of the collision accident, immediately reported to Hong Kong Marine Department, and there existed no action of escaping from the accident scene.



The three Defendants had jointly submitted the following evidence during the period for adducing evidence: 1. Certificate of Vessel??s Registration; 2. Ship??s Certificates, Crew List, Certificate of Competency of the Crew on Watch; 3. Pre-departure Checklist; 4. Pilot Card; 5. Deck Logbook, Engine Logbook and Bell Book; 6. GPS Position; 7. Records of Auto Pilot; 8. Sea Chart; 9. Sea Protest; 10. Statement of Facts; 11. Weather forecast; 12. Position and Tracks of the Two Ships as marked by the VTS Radar of Hong Kong Marine Department; 13. VTS Radar Video and Communication Recording of Hong Kong Marine Department; 14. Accident Investigation Form. 



The three Defendants jointly raised the counter claims by alleging that: the collision accident between M/V ?°OOCL EUROPE?± and M/V ?°Xinghai 668?± had caused damage to M/V ?°OOCL EUROPE?±. As per the preliminary adjustment/calculation, the loss sustained by the three Defendants due to the accident is in an amount of USD618,261.92 and SGD551,081.50. Such loss shall be borne by the Plaintiff according to the proportion of liability on her side. The three Defendants held that, M/V ?°Xinghai 668?± shall bear 70% of liability for the accident, and the Plaintiff shall compensate the three Defendants for the loss in an amount of USD432,783.34 and SGD385,757.05. The three Defendants requested the Court to order that: 1. the Plaintiff shall compensate according to the proportion of liability on her side the three Defendants for the loss in an amount of USD432,783.34 and SGD385,757.05, plus the interest calculated from the date of 21 October 2008 to the date of actual payment of compensation as per the loan interest rate published by the People??s Bank of China at the corresponding period; 2. the litigation fee, and all the expenses paid by the three Defendants for handling this case shall be borne by the Plaintiff.



The three Defendants submitted, in addition to the evidence as provided by the three Defendants for this case, the following supplementary evidence in the counter-claim case: 15. Damage Survey Report; 16. Classification Survey Report; 17. Diving Report; 18. Invoice for Repair Costs; 19.Payment Voucher for Repair Costs; 20. Deck Logbook dated 22 October to 3 November; 21 Market Report on Hire Rate; 22. Bunker Sounding Record; 23. Monthly Report on Consumption of Fuel Oil, and Voyage Report; 24. Invoice for Fuel Oil; 25 Invoice for Survey Fees and Payment Voucher; 26. Invoice for Diving Survey Fee and Payment Voucher; 27. Invoice for Classification Survey Fee; 28. Port Charges and the Invoice thereof.  



The Plaintiff defended against the counter claims lodged by the three Defendants by alleging that: 1. it is the statutory obligation for the parties involved in the collision to salvage the wrecked ship, report the accident to the port authority, stay at the accident scene waiting for investigation, and to exchange information with the other vessel. If such parties violate these obligations, then the act of such parties constitutes ?°hit and run?±. The act of M/V ?°OOCL EUROPE?± has constituted ?°hit and run?±, and therefore in accordance with law M/V ?°OOCL EUROPE?± shall be fully responsible for the loss sustained by the Plaintiff; 2. under the circumstance of ?°hit and run?±, the liability resulted from a traffic accident is mainly decided according to the rule of ?°determination of liability under hit and run?±, whilst the movement of and the actions taken by the two vessels before the collision shall be the minor elements to determine the liability, or the aforesaid movement or actions did not matter as to the determination of liability. Even so, the failure of M/V ?°OOCL EUROPE?±, as a vessel crossing the channel, to observe the sailing rules for a ship to cross the channel and to perform the obligation to keep out of the way of the vessel sailing in the general direction of traffic flow for that lane was the main cause of the collision accident, and therefore M/V ?°OOCL EUROPE?± shall bear the major liability for the accident; 3. the losses alleged by the three Defendants is factually and legally groundless. The three Defendants failed to provide evidence to prove the damage sustained by M/V ?°OOCL EUROPE?± was caused by the collision with M/V ?°Xinghai 668?±; the repair costs, loss of hire and port charges as alleged by the three Defendants are factually groundless, and obviously have been exaggerated, and are not reasonable; even if the loss of bunker alleged by the three Defendants did exist, such loss was caused by the negligence of the crew in checking and management. 



By court hearing, the colligate bench ascertains the facts as follows:



I.	Ship??s Particulars 



The ship??s particulars of M/V ?°Xinghai 668?± are as follows: gross tonnage: 996tons; net tonnage: 558tons; overall length: 65.49m; moulded breath: 11.2m; moulded depth: 6.10m; navigation area and trade area: A1+A2; maximum speed: 8.5knots; port of registry: Beihai, China; type of ship: dry cargo ship; material of hull: steel; when built: 26 August 1986; when rebuilt: 26 May 2008; date of ship??s registration: 6 April 2008; name of builder: YAMANAKA Shipbuilding Co., Ltd.; name of rebuilder: Second Shipyard in Shaqiao, Suburb, Beihai; the Plaintiff is the registered owner and the operator of M/V ?°Xinghai 668?±. The Plaintiff holds the following certificates of M/V ?°Xinghai 668?±: International Tonnage Certificate, Certificate of Seaworthiness for Cargo Ship at Sea, International Oil Pollution Prevention Certificate, International Load Line Certificate, and Minimum Safe Manning Certificate. The aforesaid certificates are all valid at the time of occurrence of the accident in dispute.



The ship??s particulars of M/V ?°OOCL EUROPE?± are as follows: gross tonnage: 89,097tons; net tonnage: 55,204tons; overall length: 309.2m; moulded breath: 42.8m; moulded depth: 20.23m; type of ship: container ship; material of hull: steel; port of registry: Hong Kong; distinctive letters: VRBX7; registered number: HK-1716; date of registration: 26 July 2006; IMO number: 9300805; main engine type: diesel engine/12K98MC-C; main engine power: 68,520kw; when built: year of 2006; name of builder: Samsung Heavy Industries Co., Ltd.; full speed under full load: 16.8knots; full speed under empty load: 17.4knots. The Defendant, Swan Company, is the registered owner of M/V ?°OOCL EUROPE?±, the Defendant, OOCL, is the operator, while the Defendant, OOCL U.K., is the bareboat charterer, with the chartering period starting from 26 July 2006 to 14 July 2018. At the time of occurrence of the collision accident in dispute, the following certificates of M/V ?°OOCL EUROPE?± are all valid: Certificate of Classification, Safety Management Certificate, International Load Line Certificate; International Oil Pollution Prevention Certificate; Cargo Ship Safety Construction Certificate; Cargo Ship Safety Equipment Certificate, and Certificate of Compliance etc.; the manning of the crew onboard is in compliance with the requirements as set forth by the Minimum Safe Manning Certificate.



II.	Process of Accident



M/V ?°Xinghai 668?± completed loading steel at the Gang Hai Li quay No.9 of Zhangjiagang at 1945hrs on 16 October 2008, and then departed from the port, bound for the quay of Longxue Shipyard in Guangzhou. At about 0500hrs on 21 October, M/V ?°Xinghai 668?± sailed in Dangan Fairway from east to west, with the intended course of 268??, and M/V ?°Xinghai 668?± observed the look-out by radar and the crew on watch. At about 0418hrs on 21 October, M/V ?°OOCL EUROPE?± started sailing from Tsing Yi in Hong Kong to Singapore. At about 0500hrs, M/V ?°OOCL EUROPE?± entered Dong Bo Liao Fairway by abeam LCS3 with the course of 150??, and kept look-out by radar and sight. Later, M/V ?°OOCL EUROPE?± kept sailing along the outbound channel of Dong Bo Liao Fairway. M/V ?°Xinghai 668?± and M/V ?°OOCL EUROPE?± saw each other at first sight at about 0537hrs, with the distance of about 3nm. At this time, the course of M/V ?°Xinghai 668?± was about 272??, and the speed was about 7.5knots, while the course of M/V ?°OOCL EUROPE?± was about 148??, and the speed was about 16knots. At 0544hrs, M/V ?°OOCL EUROPE?± started to alter her course to port, and lower her speed, with the course of 146?? and the speed of 16knots; at 0545hrs, the course of M/V ?°OOCL EUROPE?± was 100??, and the speed was 12.5knots. At 0543hrs, the course of M/V ?°Xinghai 668?± was 272??, and the speed was 8knots, and M/V ?°Xinghai 668?± started to alter her course to starboard; at 0545hrs, the course of M/V ?°Xinghai 668?± was 329??, and the speed was 7knots. At about 0547hrs, the starboard side of M/V ?°OOCL EUROPE?± collided with the bow of M/V ?°Xinghai 668?± at the juncture of Guangzhou waters and Hong Kong waters, at the position of about 22??08.9N,114??12.67E. The bow of M/V ?°Xinghai 668?± sank into water, and at about 0615hrs, M/V ?°Xinghai 668?± sank near the light buoy No.1. The position where M/V ?°Xinghai 668?± sank was 1.1nm away from the position where the collision occurred, and the position where M/V ?°Xinghai 668?± sank belongs to Hong Kong waters. The crew was rescued by Hong Kong Marine Department.



M/V ?°Xinhai 668?± alleged that at the time of observing M/V ?°OOCL Europe?± she connected with the same via VHF channel 16 requesting for crossing red to red. However there was no response from M/V ?°OOCL Europe?±. M/V ?°OOCL Europe?± stated M/V ?°Xinhai 668?± was displaying two mast head lights at the first sight, and the two vessels did not connect with each other. 



After the collision, M/V ?°OOCL Europe?± reported to Hong Kong Marine Department the close-quarter situation between her and another small vessel without contact and requested for inquiry of the name of such small vessel for fear of any accident. Hong Kong Marine Department replied that it has not received any report from the said small vessel so that it is unable to find any related information. M/V ?°OOCL Europe?± resumed her voyage to Singapore with heading of 90??. The said three Defendants admitted during the trial that after crossing each other, M/V ?°OOCL Europe?± suspected that she has collided with M/V ?°Xinhai 668?±.



On 24 October 2008, master of M/V ?°OOCL Europe?± made a Sea Protest in Singapore Port stating that M/V ?°OOCL Europe?± collided with a Chinese coasting vessel at buoy No. 1 in the south of Bo Liao Channel at about LT 0547 hrs on 21 October 2008, and on 22 October, the starboard cargo hold No. 21 was found with hole which was 2 m long, 30 cm broad and 16-17 high from the hull bottom, and was between frame No.274 and stern; Furthermore, there were four dents. 



At the time of accident, the visibility was good. 



III		Losses claimed by the Plaintiff



Losses claimed by the Plaintiff are as follows: 1. The loss of value of the vessel in an amount of RMB 4,371,975; 2. Loss of hire in an amount of RMB 590,000; 3. Crew repatriation in an amount of RMB 16,500; 4. Compensation for termination of labor contract in an amount of RMB 178,000; 5. Loss of property onboard in an amount of RMB 149,150; 6. Cost of scanning of sunken ship in an amount of RMB 85,000; 7. Cost of salvaging sunken ship and cargo in an amount of RMB 7,300,000; 8. Cost of survey of M/V ?°OOCL Europe?± in an amount of RMB 10,000; 9. Litigation fee in an amount of RMB 97,300. Amount the aforesaid expenses, the cost of salvaging sunken ship and cargo has not actually incurred, and the Plaintiff did not pay for the acceptance of such claim by this Court. Thus, such loss claimed by the Plaintiff shall not be ascertained. In addition, as per the actual situation of this case, the Plaintiff and Defendant agree to calculate all the losses sustained by the Plaintiff excluding the cost of salvaging sunken ship and cargo. In accordance with the Provisions of the Supreme People??s Court about the Trial of Compensation for Property Damages of the Cases of Ship Collision, as per the losses alleged to be sustained by the Plaintiff, the collegiate bench ascertains as follows:



1.  Loss of Vessel Value. The Plaintiff provided the Contract of Sale of Ship, Letter of Delivery of a Ship, receipts, Repair Contract in respect of M/V ?°Xinghai 668?±, final statement and receipt and alleged that M/V ?°Xinghai 668?± was purchased at the price of RMB 3,680,000 and converted at the cost of RMB 691,975. The said three Defendants believe that receipts should not be deemed as evidence, and provided the Value Evaluation Report of M/V ?°Xinghai 668?± issued by Guangdong Maritime Consulting and Surveying Company (hereinafter referred to as ?°GMCS?±) as rebuttal evidence claiming that the reasonable value of M/V ?°Xinghai 668?± is RMB 3,010,000. The collegiate bench holds as follows: M/V ?°Xinghai 668?± sank so that she can not be inspected. According to the Value Evaluation Report of M/V ?°Xinghai 668?± provided by the said three Defendants, the actual value of M/V ?°Xinghai 668?± can not be evaluated precisely by reason that the materials provided by the three Defendants are too simple to support the evaluation. Thus the evaluation result shall not be adopted. The information indicated by evidence provided by the Plaintiff and certificates of M/V ?°Xinghai 668?± corroborate each other, the evidence provided by the Plaintiff shall be ascertained as true and authentic. The Plaintiff did purchase M/V ?°Xinghai 668?± at the price of RMB 3,680,000 and converted the same at the cost of RMB 691,975. However, it is unreasonable to claim the whole loss without deduction of depreciation. In accordance with the provisions of Article 8 of the Provisions of the Supreme People??s Court about the Trial of Compensation for Property Damages of the Cases of Ship Collision, the calculation of losses of vessel??s value shall be determined by the market price of a similar vessel at the time when the vessel collision occurred. Where there is no market price for reference, the losses of the vessel??s value should be calculated by the construction cost or purchase price of the original vessel minus depreciation (the rate of depreciation is 4-10% per year.) The value of M/V ?°Xinghai 668?± should be calculated with yearly depreciation of 8%. The Plaintiff obtained M/V ?°Xinghai 668?± in April 2008, and converted the same in May 2008. Therefore, the value of M/V ?°Xinghai 668?± should be calculated with yearly depreciation of 4% which is RMB 4,197,096.



2.  Losses of Hire.  The Plaintiff has provided Charter Party in respect of M/V ?°Xinghai 

668?± claiming that the losses of hire sustained by M/V ?°Xinghai 668?± for two months are in an amount of RMB 590,000. The Charter Party was entered into by and between Yangpu Jinhao Shipping Co., Ltd. (hereinafter referred to as ?°Yangpu?±) and the Plaintiff, of which the term of hire shall commence from 11 May 2008 to 10 May 2009, and the hire is RMB 295,000 per month. The Plaintiff provided relevant vouchers, receipts indicating that it has received the hire of M/V ?°Xinghai 668?± from July to October from Yangpu, namely, RMB 295,000 per month. The said three Defendants alleged that the hire should be deducted by operating cost. The collegiate bench holds that in accordance with the provisions of Article 11 of the Provisions of the Supreme People??s Court about the Trial of Compensation for Property Damages of the Cases of Ship Collision, where the charterer to the Charter Party suspends the hire or fails to pay the hire due to collision accident, loss of hire shall be calculated with the deduction of the savable expense. The loss of two months?? hire claimed by the Plaintiff is reasonable. However, it should be deducted by savable expenses. The Plaintiff claimed during the trial that crew??s wages fall into expenses savable, and other taxes paid are not refundable which can not be deemed as savable expenses. The Plaintiff claimed for compensation for termination of labor contract, of which wages of two months shall be paid to each crew member which amount to RMB 178,000 in total. Therefore, the losses of hire sustained by the Plaintiff are in an amount of RMB 412,000.



3.  Repatriation Expenses. The Plaintiff provided the list of collection signed by the master, expense claim form, and accounting vouchers as evidence claiming for repatriation expenses of RMB 16,500 of which every crew shall be paid with RMB 1,500. Such expenses are essential and necessary. The collegiate bench ascertains the same. 



4.  Compensation for Termination of Labor Contract. The Plaintiff provided the list of collection signed by the master, expense claim form, and accounting vouchers as evidence claiming for compensation for wages to the crew in an amount of RMB 178,000 of which every crew shall be paid with wages of 2 months. The collegiate bench ascertains such expenses. 



5.  Loss of Property Onboard. The Plaintiff failed to provide any evidence in support of its claim for loss of property onboard in an amount of RMB 149,150, and requested for discretion of the court during the trial. In accordance with provisions of Article 64(1) of the Civil Procedure Law of the People??s Republic of China, it is the obligation of a party to an action to provide evidence in support of his allegations, and in case of any failure to provide relevant evidence, such party shall bear the adverse consequences arising therefrom. The loss of property onboard claimed by the Plaintiff shall not be supported. 



6.  Cost of Underwater Inspection. The Plaintiff provided the Agreement on Underwater Inspection for Sunken Ship, Application Form for Settlement issued by the Bank of Communications, relevant invoices and etc. as evidence. The Agreement on Underwater Inspection for Sunken Ship was made by and between Shenzhen Xinlong Dive Engineering Co., Ltd. (hereinafter referred to as ?°Xinlong?±) stipulating that Xinlong is responsible for underwater inspection for M/V ?°Xinghai 668?± and the cost and expenses thereof are in an amount of RBM 85,000. Xinlong issued an invoice specifying the underwater inspection fee in an amount of RMB 85,000 was received from M/V ?°Xinghai 668?±. The said three Defendants have no objection to such cost. Therefore the collegiate bench ascertains the same. 



7.  Cost of Survey of M/V ?°OOCL Europe?± in an amount of RMB 10,000. The Plaintiff provided the survey report, bills and receipts as evidence. The collegiate bench holds that such cost was actually incurred, but was not the necessary expenses due to the collision accident. Therefore, such cost shall not be ascertained. 



8.  Application Fee and Announcement Fee. On 11 February 2009, the Plaintiff applied to this Court for constitution of limitation fund of liability for maritime claims. This Court approved such application by issuing Civil Ruling GHFCZ (2009) No. 116. The Plaintiff paid relevant application fee in an amount of RMB 10,000, as well as announcement fee in an amount of RMB 40,500. However, the Plaintiff failed to constitute limitation fund with the time limit stipulated by this Court. The collegiate bench held as follows: the Plaintiff did pay the aforesaid fees. However, the Plaintiff exercised its lawful right to apply for constitution of limitation fund of liability for maritime claims for the purpose of avoiding distrainment. The cost and expenses thereof were not directly incurred by the collision accident. Furthermore, after obtaining the approval of constitution of limitation fund of liability for maritime claims from this Court, the Plaintiff did not actually constitute any limitation fund. The Plaintiff??s claim for such costs against the Defendants lack both factual and legal basis. Therefore, such claim shall not be supported. 



In summary, the losses actually sustained by the Plaintiff due to the subject collision accident are in an amount of RMB 4,888,596.



IV	Losses Claimed by Three Defendants



Losses claimed by three Defendants are as follows: 1. Repair cost in an amount of SGD 510,000; 2. Loss of hire in an amount of USD 494,617.5; 3. Loss of bunker in an amount of USD 119,145.35; 4. Survey fee in an amount of USD 7,016, SGD 9,280 and SGD 12,470; 5. Pilotage in an amount of USD 4,499.08; 6. Port charges in an amount of SGD 19,331.5; In total, the losses claimed are in an amount of USD 618,261.92 and SGD 551,081.5. The Defendants alleged that the aforesaid losses should be calculated as per the exchange rate of SGD 1= RMB 4.7, and USD 1 = RMB6.8. The aforesaid losses are examined and ascertained by the collegiate bench as follows:



1.	Ship Repair Cost. The said three Defendants provided the Survey Report issued by Ocean Shipping & Advisory (Far East) Co., Ltd. (hereinafter referred to as ?°Ocean Shipping?±), Classification Survey Report issued by American Bureau of Shipping (ABS), Diving Report, invoice and payment vouchers of repair cost and etc. as evidence. According to the survey report issued by Ocean Shipping, there are damage found on the starboard shell below draft of 15.0 m and between the waterline and No.21 slot, and the damage extended astern; There were large area of oil stain in the end of the damaged area as well as two breakage on the shell plating; Furthermore, it was otherwise reported by the divers that they discovered some scratch/dent 3.0m below No.21 slot. After inspection by the surveyor, the front end of No.2 starboard wing bunker is damaged. The aforesaid inspection company believes that the damage to M/V ?°OOCL Europe?± was caused by the collision with a small merchant ship, and ascertained the area requiring for steel replacement. The repair cost is estimated as about SGD 400,000. ABS suggested in the survey report to carry out permanent repair of the damaged area, and that the result should satisfy the requirements of surveyor before the vessel resuming her voyage. However, the vessel can proceed to Singapore terminal for discharging and then proceed to place of repair in Singapore. As per the invoice issued by Green Ocean Pte Ltd., the repair cost of M/V ?°OOCL Europe?± is SGD 510,000. According to the payment vouchers issued by the bank, OOCL U.K. has paid to Green Ocean Pte Ltd. SGD 510,000 through Hong Kong and Shanghai Banking Corporation (HSBC). The Plaintiff raised a dissention on the ship repair cost claimed by the Defendants, and provided the survey report issued by Haijiang Company as rebuttal evidence. On 27 December 2008, Haijiang Company carried out inspection of M/V ?°OOCL Europe?± at Shekou Terminal in Shenzhen. The surveyors inspected the damaged part outboard from a commuter, and estimated the reasonable cost of repair of M/V ?°OOCL Europe?± as USD 15,059. The collegiate bench held as follows: It is reasonable for M/V ?°OOCL Europe?± to repair the damaged part caused by the collision at the port of destination, Singapore, after accomplishing the voyage involved in this case. The survey report provided by the Plaintiff was issued after M/V ?°OOCL Europe?± was repaired, and the relevant surveyor carried out inspection based on visual observation and their estimation of repair cost was made as per domestic price standard. Therefore, such survey report is unable to prove the cost of repair of M/V ?°OOCL Europe?± in Singapore. As per the evidence provided by the said three Defendants which corroborate each other, and in view of the ascertained facts of the collision accident, repair of M/V ?°OOCL Europe?± in Green Ocean Pte Ltd in Singapore is directly related to the collision accident. The Defendant, OOCL U.K. has already paid SGD 510,000 for the repair of M/V ?°OOCL Europe?±. Such cost shall be ascertained. 



2.	Loss of Hire. The three Defendants claimed the time spent by M/V ?°OOCL EUROPE?± 

for inspection and repair in Singapore was 9.5 days, and by calculating the hire rate to be USD52,065/day, then the loss of hire sustained by M/V ?°OOCL EUROPE?± is USD494,617.5. The three Defendants provided the deck logbook and the emails of the ship broker as evidence. The Plaintiff raised objection by alleging that it was not reasonable for the three Defendants to claim for loss of hire on the basis of the daily hire in an amount USD52,065 as stated by the ship broker through the emails. The collegiate bench holds that, in accordance with the provisions of Article 11 of the Provisions of the Supreme People??s Court about the Trial of Compensation for Property Damages of the Cases of Ship Collision, the calculation of the loss of hire is generally determined by the average net profit of two voyages before and two voyages after, the collision, if the aforesaid voyages do not exist, then the calculation of the loss of hire is determined by the average net profit of other corresponding voyages; where a collision causes the charterer of a time charter party to stop hiring the vessel or not to pay for the hire, the losses should be calculated by the amount of hire during the off-hire period or the non-paid hire deducting the charges which can be saved. At the time of occurrence of the collision accident involved in this case, M/V ?°OOCL EUROPE?± was under carriage of container liner. The three Defendants did not provide the average net profit of the two voyages respectively before and after the collision as the standard for calculation of the loss of hire, but only submitted the daily hire for the vessels of the same type as provided by the ship broker. The evidence provided by the three Defendants could not prove the costs that can be saved, and the reasonable loss of hire. In accordance with provisions of Article 64(1) of the Civil Procedure Law of the People??s Republic of China, it is the obligation of a party to an action to provide evidence in support of his allegations, and in case of any failure to provide relevant evidence, such party shall bear the adverse consequences arising therefrom. Such loss claimed by the three Defendants shall not be ascertained. 



3.  Loss of Bunker. The three Defendants provided the evidence, such as the bunker sounding record, the report issued by the Chief Engineer, and the bunker invoices etc., claiming the collision accident involved in this case had caused M/V ?°OOCL EUROPE?± to lose 320.65 tons of bunker and consume extra 142.5tons of fuel oil during the anchorage and repair at Singapore, resulting in the loss in an amount of USD119,145.34. The Plaintiff refused to ascertain such loss. The collegiate bench holds that, the collision accident involved in this case occurred at 0547hrs at 21 October 2008; M/V ?°OOCL EUROPE?± also realized she might have collided with an unknown small vessel, and then reported to Hong Kong Martine Department, but M/V ?°OOCL EUROPE?± did not give high attention to this event, and the chief engineer of M/V ?°OOCL EUROPE?± stated that the Master did not inform him of any passing with another ship at a close distance; the chief engineer did not find out the reading of the hold No.2 was very low on the computer until on the morning on 22 October, and then the chief engineer measured the hold No.2, confirming that 320.65tons of bunker had leaked out. Therefore, the consequence that all the bunker of the hold No.2 had leaked out was not caused by the collision accident alone, and the great negligence of M/V ?°OOCL EUROPE?± was the main cause of such consequence. M/V ?°OOCL EUROPE?± shall be responsible for the extended loss. It is unable to distinguish the reasonable loss from the extended loss, and under such circumstance, the loss of bunker as claimed by the three Defendants shall not be ascertained. With respect to the consumption of fuel oil during the stay of M/V ?°OOCL EUROPE?± in Singapore for inspection and ship repair, such consumption of fuel oil is an actual loss, and therefore shall be ascertained. After examination and calculation, M/V ?°OOCL EUROPE?± had consumed 133.3tons of oil during the period from 24 October to 3 November 2008, at the unit price of USD257.25/ton, in a total amount of USD34,291.43.



4.  Survey Fees. The Plaintiff provided the survey report, invoices for survey fee, and payment voucher, claiming the following three items of survey fees had incurred to M/V ?°OOCL EUROPE?± in Singapore due to the collision accident: the survey fee in an amount of SGD12,470 to Ocean Shipping; the diving fee in an amount of SGD9,280 to Winton Marine Services Pte Ltd.; classification survey fee in an amount of USD7,016.03. The collegiate bench holds that these three surveys have already been carried out, and the fees also have been paid by the Defendant, OOCL U.K., and furthermore, it is necessary to carry out these surveys. The aforesaid survey fees shall be ascertained.



5.  Pilotage Fee. The three Defendants withdrew the claim for compensation of pilotage fee during the court hearing, and therefore such fee need not to be examined.



6.  Port Charges. The three Defendants claimed the extra port charges in an amount of SGD19,331.5 had incurred during the period of the inspection and ship repair of M/V ?°OOCL EUROPE?± in Singapore, and provided the documents and invoices issued by the Maritime and Port Authority of Singapore, and an email as evidence. The invoices issued by the Maritime and Port Authority of Singapore stated that the port charges in an amount of USD26,905 incurred from 24 October to 4 November 2008 for M/V ?°OOCL EUROPE?± in the port of Singapore; the email sent by Alex Goh (OPS-OSPL/SIN) stated that under the normal circumstance, the estimated fee of M/V ?°OOCL EUROPE?± is SGD7,573.5, and the extra port charges resulted from the collision is SGD19,331.5. The three Defendants alleged this email was sent by the owner??s agent in Singapore. The collegiate bench holds that, the stay of M/V ?°OOCL EUROPE?± in Singapore for inspection and ship repair will unavoidably give rise to extra port charges than the normal call of M/V ?°OOCL EUROPE?±. According to the common practice, the port agents are quite familiar with these fees, and the statement provided by these port agents can be taken as reference. Therefore, this Court ascertains the extra port charges sustained by M/V ?°OOCL EUROPE?± incurred from the collision accident to be SGD19,331.5.



In summary, the losses sustained by M/V ?°OOCL EUROPE?± due to the collision accident include: repair cost in an amount of SGD510,000; loss of bunker in an amount of USD34,291.43; damage survey fee in an amount of SGD12,470; diving fee in an amount of SGD9,280; classification survey fee in an amount of USD7,016.03; and extra port charges in an amount of SGD19,331.5. The total amount of the aforesaid losses is SGD551,081.5 and USD41,307.46. The exchange rate of SGD 1= RMB 4.7 and USD 1 = 6.8 as claimed by the three Defendants is lower than the intermediate price of the exchange rate from the date of occurrence of the accident to the date of the filing of the complaint as published by the People??s Bank of China, and therefore shall be supported. The losses sustained by M/V ?°OOCL EUROPE?± are calculated, based on the aforesaid, to be in an amount of RMB2,870,973.7.



The collegiate bench holds that this case is a case of dispute over damage compensation arising from ship collision. The collision accident involved in this case occurred at the juncture of Guangzhou waters and Hong Kong waters, and in accordance with the provisions of Article 273(1) of the Maritime Code of the People??s Republic of China, the law of the People??s Republic of China shall apply to this case to settle the substantive disputes. During the court hearing, the parties to the case also agreed that this case is under the jurisdiction of this Court, and that the law of the People??s Republic of China shall apply to this case.



M/V ?°OOCL EUROPE?±, with the cargos heavily loaded onboard, was sailing along the outbound channel of Dong Bo Liao Fairway, and was going to enter Dangan Fairway, bound for Singapore by sailing through the outbound channel of Dangan Fairway. M/V ?°Xinghai 668?±, with the cargos heavily loaded onboard, was sailing along the inbound channel of Dangan Fairway. The two vessels crossed each other at the precautionary area connecting the two traffic separation lanes. The two vessels, when sailing near or enter the precautionary area, shall maintain high precaution, strength the look-out, and low the speed to act against any dangerous situation. However, at the time of first sight, the two vessels were both going full astern, and after first sight, the two vessels both failed to promptly lower their speed, and did not communicate with each other through VHF, as a result of which, the two vessels could not promptly take proper actions to avoid each other. It was the fault jointly committed by the two vessels under the collision accident involved in this case.



M/V ?°OOCL EUROPE?± and M/V ?°Xinghai 668?± saw each other at first sight at 0537 on the date of the occurrence of the accident, and after first sight, a crossing situation developed between the two vessels. Under the aforesaid crossing situation, M/V ?°Xinghai 668?± was the give-way vessel, and was obliged to keep out of the way of the opposite vessel. As the give-way vessel, M/V ?°Xinghai 668?± shall lower her speed so far as possible, and alter her course to starboard substantially, in order to avoid the stand-on vessel, but M/V ?°Xinghai 668?± did not alter her course until 0543hrs, and thus the timing had been delayed, which is one of the causes for the danger of collision involved in this case.



M/V ?°OOCL EUROPE?±, as a stand-on vessel, was obliged to keep her course and speed. In addition, M/V ?°OOCL EUROPE?± was sailing outward from Dong Bo Liao Fairway, and was going to cross the traffic separation lane. In accordance with the provisions of Rule 10 of International Regulations for Preventing Collisions at Sea, 1972 (hereinafter referred to as ?°COLREG 1972?±), M/V ?°OOCL EUROPE?± shall proceed outward from the terminations of the traffic separation schemes, and shall do so with particular caution when navigating in areas near the terminations of traffic separation schemes, and furthermore shall cross on a heading as nearly as practicable at right angles to the general direction of traffic flow. Therefore, M/V ?°OOCL EUROPE?± shall proceed along the outbound traffic separation lane of Dong Bo Liao Fairway, sailing towards the outbound traffic separation lane of Dangan Fairway, and then alter her course to port. However, M/V ?°OOCL EUROPE?± did not take every effective measure to keep proper look-out, and failed to make a reasonable judgment: at 0544hrs on the same day, M/V ?°OOCL EUROPE?± immediately altered her course to port substantially soon after her entry into the precautionary area at the termination of the traffic separation schemes of Dong Bo Liao Fairway, which caused the development of a close-quarters situation between the two vessels. The three Defendants made a defense against the aforesaid by alleging that, since M/V ?°Xinghai 668?± did not alter her course to starboard in ample time to avoid collision, M/V ?°OOCL EUROPE?± was forced to take action to avoid collision by her manoeuvre alone in accordance with Rule 17a(2) of COLREG 1972. However, in accordance with Rule 17a(3) of COLREG 1972, even if M/V ?°Xinghai 668?± did not keep well clear in ample time, under the circumstance at that time, the action taken alone by M/V ?°OOCL EUROPE?± to avoid collision shall not be the action to alter course to port for M/V ?°Xinghai 668?± on her port side. Furthermore, M/V ?°OOCL EUROPE?±, after finding that M/V ?°Xinghai 668?± had altered her course to starboard to avoid collision, still kept altering her course to port substantially. The wrong action taken by M/V ?°OOCL EUROPE?± is the main cause for the danger of collision involved in this case.



In summary, M/V ?°OOCL EUROPE?± violated Rule 5, 6, 7a, 8, 10(2), 10b,c,&f, and Rule 17 of COLREG 1972, which is the main cause for the occurrence of the collision accident involved in this case, and therefore shall bear the major liability of 60%; M/V ?°Xinghai 668?± violated Rule 5, 6, 7a, 8, and Rule 16 of COLREG 1972, which is another cause for the occurrence of the collision accident involved in this case, and therefore shall bear the minor liability of 40%. 



M/V ?°OOCL EUROPE?± did not find out the vessel had been damaged and the oil tank was leaking until the next day after the occurrence of the accident, namely 22 October 2008, which indicated that M/V ?°OOCL EUROPE?± was not sure whether a collision had occurred or not; furthermore, after occurrence of the accident, M/V ?°OOCL EUROPE?± then reported to Hong Kong Marine Department through VHF, requesting for the information of the small vessel, and at that time, the Master of M/V ?°OOCL EUROPE?± still considered the two vessels did not contact with each other. The aforesaid situation indicates that M/V ?°OOCL EUROPE?± did not have the intention to escape from the accident scene with the awareness of the occurrence of collision accident, and therefore the allegation as raised by the Plaintiff that M/V ?°OOCL EUROPE?± had ?°hit and run?± shall not be admitted. 



Article 169a of the Maritime Code of the People??s Republic of China provides that if the colliding ships are all in fault, each ship shall be liable in proportion to the extent of its fault; Article 4 of the Provisions of the Supreme People??s Court on Some Issues concerning the Trial of the Cases of Ship Collision provides that the compensation liability resulted from ship collision shall be borne by ship owners, or shall be borne by the bareboat charterer if the ship collision occurs during the bareboat chartering period and the bareboat chartering has been registered in accordance with law. Based on the facts that have been ascertained by this Court, the Defendant, OOCL U.K., is the registered bareboat charterer of M/V ?°OOCL EUROPE?±, and therefore the loss sustained by the Plaintiff as resulted from the collision accident in dispute shall be borne by the Defendant, OOCL U.K. It is legally groundless for the Plaintiff to request the Defendants, Swan Company and OOCL, to bear the joint and several liabilities, and therefore such request raised by the Plaintiff shall not be supported. The loss sustained by the Plaintiff due to the collision accident is in an amount of RMB4,888,596, and the Defendant, OOCL U.K. shall bear 60% of liability, namely RMB2,933,157.6.



Since the Defendant, OOCL U.K., is the bareboat charterer of M/V ?°OOCL EUROPE?±, and had paid off the repair cost, survey fee, port charges, and bunker fee etc., OOCL U.K. shall be entitled to claim compensation for the loss sustained by it under this case. The Defendant, Swan Company, is the owner of M/V ?°OOCL EUROPE?±, but did not suffer from any actual loss under this case, and therefore the claim raised by Swan Company shall not be supported. The Defendant, OOCL, is the manager of M/V ?°OOCL EUROPE?±, and the claim raise by OOCL is legally groundless, and therefore shall not be supported. The loss sustained by the Defendant, OOCL U.K., is in an amount of RMB2,870,973.7, and the Plaintiff shall bear 40% of liability, namely RMB1,148,389.4. By setoff, the Defendant, OOCL U.K., shall still compensate the Plaintiff of the amount of RMB1,784,768.2.



In summary, in accordance with Article 169a & b of the Maritime Code of the People??s Republic of China, Article 64aof the Civil Procedure Law of the People??s Republic of China, and Article 4 of the Regulations on Some Issues Involved in Cases of Ship Collision promulgated by the Supreme Court, the judgment is rendered as follows:



1.	the Defendant, Orient Overseas Container Line (U.K.) Limited, shall compensate the Plaintiff, Beihai Honghai Shipping Co., Ltd., the amount of RMB1,784,768.2;



2.	the litigation claims raised by the Plaintiff, Beihai Honghai Shipping Co., Ltd., against the Defendants, Orient Overseas Containers Line Limited, and Swan National Leasing (Commercials) Limited, is rejected by the Court;



3.	the counter claim raised by the Defendants, Orient Overseas Containers Line Limited, and Swan National Leasing (Commercials) Limited, against the Plaintiff, Beihai Honghai Shipping Co., Ltd., is rejected by the Court; 



4.	other litigation claims raised by the Plaintiff, Beihai Honghai Shipping Co., Ltd., is rejected by the Court;



5.	other counter claims raised by the Defendant, Orient Overseas Container Line (U.K.) Limited, is rejected by the Court.



With respect to the acceptance fee for the case of the original claims in an amount RMB46,800, RMB21,382 shall be borne by the Plaintiff, and RMB25,418 shall be borne by the Defendant, Orient Overseas Container Line (U.K.) Limited; With respect to the acceptance fee for the case of the counter claims in an amount RMB16,766.5, RMB2,833.9 shall be borne by the Plaintiff, and RMB13,932.6 shall be borne by the Defendant, Orient Overseas Container Line (U.K.) Limited.



The aforesaid obligations of payment shall be fulfilled within ten (10) days from the effective date of this Judgment. If any party fails to perform the obligation of payment within the period as set forth in this Judgment, in accordance with Article 229 of the Civil Procedure Law of the People??s Republic of China, such party shall pay the interest of the deferred debts during the deferred period.  



If unsatisfied with this Judgment, the Plaintiff may within fifteen (15) days, and the Defendants, Orient Overseas Containers Line Limited, Orient Overseas Container Line (U.K.) Limited, and Swan National Leasing (Commercials) Limited, may within thirty (30) days, upon service of this Judgment, submit before this Court statements of appeal together with the copies thereof in accordance with the number of the other parties, for appealing before the Higher People??s Court of Guangdong Province. 







Presiding Judge	Xiong Shaohui

Judge	Zhang Kexiong

								  Acting Judge  Gu Enzhen





(Official Chop of Guangzhou Maritime Court)

										14 December 2009

Certified to be true as the original



										 Clerk	Yang Qian





The translation is provided by Wang Jing & CO.