The Hong Kong High Court issued a Judgment on 3/6/2015 to deal with a case concerning a sister ship’s arrest. [HCAJ 44/2014]
The claim was in respect of the loss of 2 cargoes of waste paper shipped on board the ship “Bo Shi Ji 393” (“393”) in Hong Kong under bills of lading dated 28/3/2013. On 29/3/2013, 393 sank in Chinese waters, leading to a total loss of the cargoes.
The in rem Writ of summons was issued on 25/3/2014 (hereinafter referred to as “Action”). Pursuant to a warrant of arrest granted on 6/3/2015, the ship “Bo Shi Ji 838” (“Vessel”) was arrested in the evening of 18/3/2015.
Before the court, there were two applications by notices of motion both dated 14/4/2015.
An application by the owners of the cargoes lately laden on board 393 (hereinafter referred to as “cargo owners”) for an order for the appraisement and sale of the Vessel pedente lite together with associated orders.
An application by the owners of the Vessel and 393 (hereinafter referred to as “shipowners”) to (i) set aside service of the Writ of summons on the Vessel on the ground that the requirements of section 12B(4) of the High Court Ordinance, Cap. 4 (“HCO”) were not satisfied, (ii) strike out the cargo owners’ claim against the shipowners pursuant to RHC Order 18 r 19(1)(a), (b) and (d) of RHC on the grounds that the cargo owners’ claim disclosed no reasonable cause of action and/or was scandalous, frivolous or vexatious and/or was an abuse of the process of the Court, (iii) set aside the warrant of arrest and (iv) release the Vessel from arrest.
The Vessel was a wasting asset while under arrest and significant charges (relative to the Vessel’s estimated value) had been and were still being incurred to keep her under arrest. The court was urged to resolve the matter speedily one way or another.
The bills of lading were issued by Golden Trans Shipping Co Ltd (“GTS”) in Hong Kong as agent. The reverse side of the bills of lading contains the following demise clause:
“If the ship is not owned by or chartered by demise to the corporation by whom this Bill of Lading is issued (as may be the case notwithstanding anything that appear to the contrary this Bill of Lading shall take effect only as a contract with the Owner or demise charterer as the case may be as principal made through the agency of the said corporation who act as agents only and shall be under no personal liability whatsoever in respect thereof.”
The cargo owners’ original case was that the person who would be liable in respect of an action in personam was Boluo Water Transport Corporation (“BWTC”) whom they believed to be the sole registered owner of 393 at the time the cause of action arose ie on or about 29/3/2013. Their belief was based on 393’s Certificate of Vessel’s Nationality dated 9/4/2012 which showed BWTC to be the owner and operator of 393. Their cause of action against BWTC lied in contract, bailment and negligence.
The warrant of arrest against the Vessel was granted on the basis of section 12B(4) of HCO which provides:
“In the case of any such claim as is mentioned in section 12A(2)(e) to (q), where – (a) the claim arises in connection with a ship; and (b) the party who would be liable on the claim in an action in personam (“the relevant person”) was, when the cause of action arose, the owner or charterer of, or in possession or in control of, the ship,
an action in rem may … be brought in the Court of First Instance against –
(i) that ship, if at the time when the action is brought the relevant person is either the beneficial owner of that ship as respects all the shares in it or the charterer of it under a charter by demise; or (ii) any other ship of which, at the time when the action is brought, the relevant person is the beneficial owner as respects all the shares in it”.
Actions against “any other ship” are referred to as sister ship actions because the vessel against which in rem proceedings are brought will often be owned by the same entity as the vessel in connection with which the claim arose. That was what the cargo owners alleged in the case in question – they claimed BWTC, being the relevant person, was the beneficial owner as respects all the shares in the Vessel at the time when the Action was brought ie 25/3/2014. They did so by relying on the oral inquiries made through a firm of PRC solicitors. The reason why only oral inquiries were made was because formal searches of the shipping register in Hui Zhou, where BWTC was based, were not allowed, according to the PRC solicitors. On 5/3/2015, the PRC solicitors sent an email to the cargo owner’s solicitors confirming that the Vessel was 100% owned by BWTC on 10/3/2014.
On 25/3/2015, a week after the Vessel had been arrested, the shipowners’ solicitors sent an email to the cargo owners’ solicitors attaching a number of documents she obtained after having visited the shipowners in the PRC personally. As revealed by the Vessel Ownership Registration Certificate of 393, since 10/12/2010, 393 has been co-owned by BWTC (51%) and an individual Liang Ping (49%). It should be immediately apparent that this piece of information is contradictory to what was recorded in 393’s Certificate of Vessel’s Nationality dated 9/4/2012 which still showed BWTC as the sole owner and operator of 393. As revealed by the Vessel Ownership Registration Certificate of the Vessel, BWTC was her sole owner from 30/6/2008 to 2/9/2014 when she became co-owned by BWTC (51%) and an individual Cheng Wanli (49%). In other words, the Certificate seems to confirm that the Vessel was solely owned by BWTC at the time when the Action was brought ie 25/3/2014.
It was accepted by the shipowners that these Certificates were not formal documents from the shipping registry of Hui Zhou. Apparently, the shipping register of Hui Zhou is not open for public inspection. But the shipowners submitted that these Certificates were the best evidence of what was actually contained in the shipping register. The court was prepared to go along with that submission.
The shipowners also filed a large number of affirmations and witness statements in the Action. The gist of these affirmations and witness statement was as follows:
Regarding 393, Mr Liang Ping was her sole beneficial owner in that it was he who purchased the vessel from a shipyard in October 1993. He was at all material times the sole operator of 393 and the employer of all her crew. In 2004, he appointed BWTC as his agent for the purpose of handling all documentation matters. The relationship between the two was governed by a management agreement which showed that Mr Liang was the one who had possession and control of 393. In order to comply with the relevant PRC regulations, BWTC must be registered as 393’s owner as to over 50%. Hence, 393 was registered in the names of BWTC as to 51% and Mr Liang as to 49%, as shown in her Vessel Ownership Registration Certificate.
Regarding the Vessel, the position was similar. Mr Tao Junjie purchased the Vessel in June 2008 and became her sole beneficial owner and operator. He appointed BWTC as his agent for the purpose of handling all documentation matters. Their relationship was also governed by a similar management agreement. In order to comply with the same PRC regulations, he allowed BWTC to be registered as her 100% owner. In September 2014, Mr Tao sold the Vessel to Mr Cheng Wanli. Mr Cheng continued the agency arrangement with BWTC save that the Vessel was registered in the names of BWTC as to 51% and Mr Cheng as to 49%, as shown in her Vessel Ownership Registration Certificate.
BWTC had no involvement in the actual operation of 393 or the Vessel. Nor was it in possession or control of either vessel.
The bills of lading were issued by GTS as agent for and on behalf of Liang Ping only.
In light of inter alia the two Vessel Ownership Registration Certificates supplied by the shipowners, the cargo owners suggested the relevant persons were both BWTC and Mr Liang, as owners of 393 and carriers under the bills of lading.
The striking out application
Despite the lengthy arguments of the shipowners which the court had fully and carefully considered, the court did not think this was a suitable case for striking out.
The shipowners submitted that the cargo owners had no cause of action against BWTC, whether in contract, bailment or tort and hence BWTC was not and could not be the relevant person. All their submissions, however, were premised on the court accepting in full the evidence which they had adduced.
But it is well-established that the power to strike out is exercisable only when the claim is obviously unsustainable and that it must be impossible, not just improbable, for the claim to succeed. Further, there should be no trial upon affidavits and importantly disputed facts must be taken in favor of the party sought to be struck out.
In these circumstances, it was difficult for the court to entertain the striking out application which presupposed all the shipowners’ evidence was accepted by the court and before the cargo owners had any opportunity to test their evidence at trial.
Setting aside application
As the court saw it, the real issue was whether or not the requirements of section 12B(4) HCO were satisfied. If they were, the service of the Writ and the warrant of arrest would stand, and vice versa.
As far as the “relevant person” was concerned, the court accepted the cargo owners’ submissions that it meant the person who would be liable in an action in personam on the assumption that the action succeeded – it was not necessary for the cargo owners to establish, in order to found jurisdiction, that that person was in fact liable on the claim: The St. Elefterio [1957] P 179 at 186; The Rolita [1989] 1 HKLR 394.
The cargo owners claimed that both BWTC and Mr Liang were the “relevant person” as they are shown in the Vessel Registration Ownership Certificate to be co-owners of 393 at the time the cause of action arose. As the Judge said earlier, although the Certificate was not a formal document from the relevant shipping registry, it was regarded by the shipowners as the best evidence of what was contained in the shipping register. In the absence of any contrary suggestion from either party, the court would proceed on the basis that BWTC and Mr Liang were registered owners of 393 in the ratio shown in the Certificate. Since the cargoes were lost while on board 393 and since 393 was not under demise charter at the time, prima facie, the owners would be liable to the shippers and/or cargo owners for loss of the cargoes shipped under the bills of lading: see, for instance, Scrutton on Charterparties and Bills of Lading 125th Anniversary Edition paras. 6‑028; 11‑098.
The shipowners submitted that only Mr Liang was the “relevant person” as only he was in possession and control of 393. This submission was in substance asking the court to accept in full the evidence they had adduced, including in particular the effect of the management agreement, while ignoring the Vessel Registration Ownership Certificate. This submission was untenable and was to be rejected.
The court therefore found the requirement under section 12B(4)(b) of HCO was satisfied.
As for the requirement under section 12B(4)(ii) of HCO, the shipowners submitted that the Vessel was not at the time of the Writ a sister ship of 393 because BWTC was not the beneficial owner as respects all the shares in the Vessel. They submitted that although the Vessel’s registered owner was until 2/9/2014 BWTC, another person was her beneficial owner and held the economic interest in and had possession and control of the Vessel viz Mr Tao Junjie. It was Mr Tao who paid for the Vessel and who enjoyed the right to sell or dispose of the Vessel.
In the Judge’s view, this submission was again in substance asking the court to accept in full the evidence adduced by the shipowners, while ignoring the Vessel Registration Ownership Certificate. However, no expert evidence had been adduced by the shipowners as to whether the requirements of a trust of ships, if any, under PRC laws had been met on the factual evidence adduced and how such trusts of ships interacted with the shipping registration laws in the PRC. The shipowners simply asked this court to assume, on their factual case, the beneficial interest in the Vessel lied with Mr Tao at the time of the Writ.
In The Almojil 61 (HCAJ 164 of 2012) [2014] 4 HKLRD 313, the court stressed the fundamental importance of shipping registers in establishing legal and beneficial ownership of ships at [29] to [42] in the following terms:
“29. The second question for this court is whether, in the absence of fraud or other similarly compelling circumstances, it is open for AMI to go behind registration and contend that MMG was not the beneficial owner of the Vessel as to all her shares (64/64) at the time of the Writ. 30. In my judgment, the answer is no. 31. The word “beneficial” does not appear in the relevant article ie Art 3 of the International Convention for the Unification of Certain Rules Relating to the Arrest of Sea‑Going Ships 1952 (“1952 Convention”). The 1952 Convention was given statutory effect in England by the Administration of Justice Act 1956 (“1956 Act”), subsequently replaced by the Supreme Court Act 1981 (“1981 Act”). The word “beneficial” was inserted before the words “owner as respects all the shares in it” in the English equivalent of our section 12B(4)(i) & (ii) to cater for the possibility of a trust and to tackle the mischief that would otherwise exist if the true beneficial owner was able to operate its ship under the cloak of a trust. 32. In The I Congreso del Partido [1978] QB 500, 542A‑B, Robert Goff J said in respect of the words “beneficially owned as respects all the shares therein” in section 3(4) of the 1956 Act as follows: “As I read section 3(4), the intention of Parliament in adding the word “beneficially” before the word “owned” in section 3(4) was simply to take account of the institution of the trust, thus ensuring that, if a ship was to be operated under the cloak of a trust, those interested in the ship would not thereby be able to avoid the arrest of the ship”. (emphasis added) 33. This meaning of the term beneficial ownership “is the accepted view in nearly all, if not all, maritime jurisdictions”: per Ma CJHC (as he then was) in The Convenience Container supra at [167(4)]. 34. In The Convenience Container, the Court of Appeal had the opportunity to examine the concept of beneficial ownership under section 12B(4) of the Ordinance. At [35], [36] and [38], Reyes J stated as follows:
[35] Thus, as far as “beneficial ownership” is concerned, HCO s.12B(4) must be concerned with title to property. “Beneficial ownership” cannot merely be about the control or administration of a vessel or even the enjoyment of the proceeds from the sale of a vessel. [36] A person can control a ship but have no title in it. By the same token, a person may for a variety of reasons (including mortgage, charge or assignment) have put out of his hands the full enjoyment of the proceeds of sale from an asset. But that would not necessarily mean that the person is unable to pass good title in the asset to third parties…. [38] And that key question is purely one about title. It is whether a particular ship is an asset in which a relevant person holds a proprietary interest against which a claimant can enforce his claim. To put it in another way, the question is whether a relevant person can sell or dispose of a ship and, in so doing, convey good title in the asset to a third party purchaser. (emphasis supplied)
35. In the present case, it was not seriously disputed that MMG was in a position to sell the Vessel and convey a good title to a third party purchaser. In fact, the evidence before this court was that in September 2012, Mr Stewart Macphail, MMG’s CEO, had contacted Mr Osama As’ad, CEO of AMI, and explained that MMG would be unable to pay the final instalment, and, due to lack of funds, MMG’s intention was to sell the Vessel very shortly after its purchase from Swissco. Applying The Convenience Container, it would follow that MMG was the “beneficial owner” of the Vessel within the meaning of section 12B(4). 36. Those statutory words “beneficially owned as respects all the shares therein” were re-enacted in section 21(4) of the 1981 Act and considered by the Court of Appeal in The Evpo Agnic [1988] 1 WLR 1090. At 1096C‑D, Lord Donaldson MR (with whom the other two members of the Court agreed) said he regarded “the concept of a registered owner as being a nominal owner as a contradiction” as this would negate the fundamental importance of maintaining registers of ships which recorded the names of the owners. 37. On the ambit of section 21(4), the Master of the Rolls said at 1097E‑F:
The purpose of section 21(4) is to give rights of arrest in respect of ‘the particular ship’, ships in the ownership of the owners of ‘the particular ship’ and those who have been spirited into different legal ie registered, ownership, the owners of ‘the particular ship’ retaining beneficial ownership of the shares in that ship. That was the situation in The Saudi Prince [1982] 2 Lloyd’s Rep 255 and was alleged to be the situation in The Aventicum [1978] 1 Lloyd’s Rep 184.
38. As Mr Smith SC put it, the words “beneficially owned as respects all the shares therein” are there to serve a similar function as an “anti‑avoidance” provision in a tax legislation. If, for instance, there is a change in ownership of a vessel after the cause of action has accrued but before the issue of the writ, so that the genuineness of this change requires investigation, as in the case of The “Aventicum” [1978] 1 Lloyd’s Rep 184 and The “Saudi Prince” [1982] 2 Lloyd’s Rep 255, then the court may have to investigate whether the alleged change is made solely with a view to avoiding the arrest of the vessel. If it is found that the original owner retains beneficial ownership of the vessel, then, notwithstanding the apparent change, the vessel may still be liable to arrest: Meeson and Kimbell Admiralty Jurisdiction and Practice 4th Ed. para. 3.59; The “Saudi Prince” supra. 39. The fundamental importance of shipping registers in establishing legal and beneficial ownership of ships was reiterated by the Court of Final Appeal in Re Resource 1 (2000) 3 HKCFAR 187. At 207J, Bokhary PJ cited with approval the following passage in The Evpo Agnic:
in real commercial life…registered owners, even when one-ship companies, are not bare legal owners. They are both legal and beneficial owners of all the shares in the ship and any division between legal and equitable interests occurs in relation to the registered owner itself.
40. It has been held that a plaintiff is entitled to rely on the particulars shown in the relevant shipping register not only for the purpose of ascertaining “ownership” ie “legal ownership” of a vessel for the purpose of section 12B(4)(b) of the Ordinance but also for the purpose of ascertaining “beneficial ownership” under section 12B(4)(i) or (ii) of the Ordinance: The Tian Xiang 2 Hao unrep., HCAJ 322 of 2001; Reyes J., 8 October 2003 at [44]. 41. The actual decision and the reasoning of Reyes J were upheld on appeal. In particular, the Court of Appeal, cited with approval the proposition that “the inference must be as a matter of common sense that a registered owner of a ship must be the legal and beneficial owner of the ship”: see The Tian Xiang 2 Hao unrep. CACV 327 of 2003; 16 March 2004, at [8]. 42. From this survey, it is reasonably clear that the authorities speak in one voice and stress the fundamental importance of the shipping register. ”
The court did not accept there was any valid distinction between the case in question and The Almojil 61. On the evidence, the court was not prepared to overlook the Vessel Ownership Registration Certificate and was not satisfied that Mr Tao was the beneficial owner of the Vessel as respects all the shares in it at the time of the Writ.
Disposition and costs order nisi
For the above reasons, both the striking out application and the setting aside application were dismissed. There would be an order nisi that costs of the shipowner’s notice of motion dated 14/4/2015 be to the cargo owners, to be taxed if not agreed, with certificate for counsel. The cargo owners were at liberty to restore their notice of motion dated 14/4/2015 for hearing before the court at the first available date.
Please feel free to contact us if you have any questions or you would like to have a copy of the Judgment.
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The Hong Kong High Court issued a Judgment on 29/4/2013 relating to a discovery order ancillary to and in support of a Mareva injunction. [HCA 2124/2011]
On 5/8/2011, the District Court of Hong Kong dismissed a shipping company’s container claims against a forwarder for want of prosecution and abuse of process. [DCCJ 765/2005]
We refer to our Chans advice/251 last month reporting the Hong Kong High Court’s decision to sentence Mr Ma (Hyundai Hong Kong’s former deputy general manager) to 15 years’ imprisonment. The High Court issued another Judgment on 27 April 2022 holding Mr Ma liable to compensate HK$387,655,303.70 to Hyundai Hong Kong. [HCA 619/2016] [2022 HKCFI 1153]
While the MOL Comfort incident was a disaster widely talked about among forwarders, all who suffered loss without exception will try whatever means to recover their losses down the line wherever the legal regimes permit.
The Hong Kong Court of Final Appeal (“the CFA”) issued a Judgment on 10/9/2014 dismissing a cargo owner’s (“the Assured”) cargo insurance claim of US$1,555,209.00 against an insurance company (“the Insurer”) on the ground that the Assured had breached an insurance warranty relating to the carrying vessel’s deadweight capacity. [FACV No. 18 of 2013]
The Hong Kong High Court issued a Judgment on 3/2/2017 holding Natural Dairy liable to pay HK$4,360,948.38 to Schenker being the outstanding freight charges. In the Judgment, the Judge also explained the principles regarding the meaning of notice of the forwarder’s standard trading conditions. [HCA 1755/2011].
The English High Court issued a Judgment on 2/4/2014 holding the Hague Visby Rules instead of the Hague Rules (as incorporated by a Paramount Clause) to apply to a shipment ex Belgium. [Case No: 2012 Folio 102, 2014 EWHC 971 Comm, 2014 WL 1219313]
In Chans advice/14 dated 28/2/2002, we discussed this topic 15 years ago. In its Judgment dated 16/10/2017, the District Court of New South Wales in Australia had to deal with, inter alia, a malpractice that a forwarder issued its own house B/Ls but signed off with as agent for China Ocean Shipping, Pacific International Lines, Mitsui O.S.K. Lines Limited or Orient Overseas Container Line without authority. [2017 NSWDC 279]
The Hong Kong High Court issued a Decision on 15 March 2021 converting a domestic Mareva injunction into a worldwide Mareva injunction in a shipowner’s freight and demurrage claim against a charterer. [HCMP 1190/2020] [2021 HKCFI 680]
We have received a lot of cargo claims from our forwarder clients in the recent months. In this issue, we would like to discuss in general how the forwarders should handle the cargo claims.
This continues the Q&A in our off-line real seminar on Uncollected and Undelivered Cargo on 28 May 2024. Participants were keen to know more about seaway bills, how war plays in insurance? How modes of transport differ mis-delivery claims handling? What is insurers’ attitude towards transloading claims? And finally, why mis-delivery and uncollected cargo claims deserve special attention. SMIC deals with similar questions daily. Each case varies in its cause, and therefore healing recipe differs. But if you are conversant with fundamentals. They could be simple.
The Montreal Convention is an international treaty agreed by 140 states in respect of governing carriers’ liability for injury or death of passengers, damage to or loss of baggage and cargo and losses caused by delays. Hong Kong has adopted it through the Carriage by Air Ordinance (Cap 500).
Are Standard Trading Conditions (“STC”) equivalent to the House Bill of Lading (“HB/L”) terms or the House Air Waybill (“HAWB”) terms? We have been frequently asked this question by our forwarder clients.
The Hong Kong High Court issued a decision on 31 May 2022 ordering a South Korean shipowner to provide a Hong Kong shipowner with security for costs in the amount of HK$600,000 in relation to a ship collision case that happened in Hong Kong during the super typhoon Hato in August 2017. [HCAJ 80-85/2019] [2022 HKCFI 1631]
The Hong Kong Court of Appeal’s Judgment dated 11/4/2008 explained some legal principles relating to whether indemnity claims are allowed by in rem legal actions against vessels. [CACV 257/2007]
The Hong Kong High Court issued a judgment on 21/4/2016 and disallowed a cargo owner’s application for summary judgment against a forwarder in connection with a cargo (a diamond) missing claim of US$900,000. [HCCL 10/2015]
The High Court of Hong Kong issued a Decision on 31/8/2018 concerning a feeder company’s claim against a shipping company’s lawyer for wasted costs. [HCA1919/2016] [2018HKCFI1879]
The Hong Kong High Court issued a Judgment on 13 August 2021 holding a forwarder liable to pay nominal damages of HKD1,000 to a shipper in a cargo misdelivery claim case of USD1,299,189.87. [HCA 937/2016] [2021 HKCFI 2310]
The Hong Kong High Court issued a Judgment on 21/7/2014 discharging a Mareva injunction in relation to a cargo misdelivery claim of about US$12 million. [HCA 2368/2012]
In our Chans advice/169 last month, we mentioned the English Court’s Judgment dated 14/10/2014 holding CSAV’s bill of lading’s English jurisdiction clause to be an exclusive jurisdiction clause. In this issue, let’s look at that English High Court Judgment [2013 Folio No 1248, 2014 EWHC 3632 Comm, 2014 WL 5113447] issued by Justice Cooke in detail.
The Hong Kong High Court issued a Decision on 4 March 2020 dismissing a shipowner’s application for a stay of proceedings in favour of arbitration in a case of cargo misdelivery without presentation of original bill of lading. [HCAJ 5/2019] [2020 HKCFI 375]
The limit of liability for international carriage of cargoes by air under the Montreal Convention has been revised from 19 SDR/Kg to 22 SDR/Kg of the gross weight of the cargoes effective from 28 December 2019. We have received many enquiries from freight forwarders about changing their house Air Waybills’ terms to cope with the new limit of liability. We would like to take this opportunity to discuss some essential terms in house Air Waybills.
The Hong Kong High Court issued a Judgment on 25/8/2017 to determine whether the Hong Kong Court or the Yangon Court was the natural and appropriate forum in an in rem legal proceedings in relation to a cargo damage claim of USD143,852.02. [HCAJ 101/2015]
The Hong Kong Court of Appeal issued a Judgment on 17/7/2014 holding a Hong Kong forwarder liable to pay US$852,339 plus costs and interest (as damages for conversion) to an Indian bank in an air cargo misdelivery case. [CACV 282/2012]
SMIC has finally jumped on the bandwagon of the cyber media rush by its presence on the Facebook. We would have done this for a long time had it not been for the daily chores and that we were then not too convinced of its value in the commercial world. Thereafter, it becomes obvious that more and more firms are capitalizing on this new media; and unlike the old economies where information flow was imperfect, consumers of the new economies tend to prefer looking up for information by themselves from the web, or augmenting information they are given.
The High Court of Hong Kong issued a Decision on 21/9/2017 dealing with the principles in respect of the real risk of dissipation of assets in a case of Mareva Injunction involving a shipowner and a charterer. [HCMP 1010/2017]
In our Chans advice/244, we reported the Hong Kong High Court case [HCA937/2016] [2021 HKCFI 2310] that the forwarder was held liable to pay nominal damages of HKD1,000 to the shipper in the cargo misdelivery claim of USD1,299,189.87. On 20 October 2021, the Hong Kong High Court issued a Decision on Costs holding the shipper liable to pay the costs of the forwarder. [2021 HKCFI 3021]
The Hong Kong High Court on 18/11/2011 issued a Judgment concerning a quite confusing situation that three different laws (the USA, the PRC, and Hong Kong) might apply to the one shipment. [HCAJ 198/2009]
To continue our recent series of loss prevention articles, we would like to discuss in this issue the major provisions of the PRC Maritime Code as far as the international carriage of goods by sea is concerned.
There are three ways of fulfilling the deposit requirement of the Ministry of Transport (“MOT”) in the People’s Republic of China (“PRC”) for your NVOCC license.
Against the post-Covid tide, we ran an off-line real seminar on Uncollected and Undelivered Cargo on 28 May 2024. Attendance could not be compared with any webinars but the number of enthusiastic questions in the Q&A session reflected the demand for transport liability issue solutions. For the sake of recapitulations and sharing the Q&A among the Chan Advice readership, we like to report the Q&A in two issues. We welcome any other questions you may have on the following.
The Hong Kong High Court issued a Decision on 30 September 2021 holding a shipowner’s Defences as an abuse of process in a case of unpaid crew wages. [HCAJ 76/2020] [2021 HKCFI 2961] [HCAJ 91/2020]
Without even knowing, we have published including this one 200 issues of the Chans Advice. As this is a monthly bulletin, 100 issues took more than 8 years and 200 issues took 17 years to run.
The Hong Kong Court of Appeal issued a Judgment on 4 October 2019 upholding the High Court’s Decision dated 9 April 2018 (reported in our Chans advice/208). [CACV593/2018][2019HKCA1101]
The Hong Kong Court of Appeal issued a Judgment on 20 September 2019 declining to give leave of appeal to Changhong Group in relation to the High Court Decision dated 29 January 2019 (reported in our Chans advice/221). [CAMP197/2019] [2019HKCA1061]
The High Court of Hong Kong issued a Judgment on 1/11/2012 ordering the USA/Canada owners of a cargo (a yacht) to put up HK$250,000 as further security for costs in their legal action against the ship owners. [HCAJ 177/2009]
The High Court of Hong Kong issued a summary Judgment on 28/9/2012 holding a forwarder liable for US$626,389 plus costs and interest for misdelivery of cargoes without production of the original bills of lading. [HCCL 20/2011 & HCCL 21/2011]
Remember our Chans advice/112 that the Hong Kong High Court held the Rotterdam terminal liable to pay the cargo value of €950,071.20 for the misdelivery of one container of Sony Play Stations? On 2/4/2013, Judge To of the Hong Kong High Court issued another Judgment holding that the forwarder was entitled to limit its liability to US$24,392 in accordance with its B/L terms. [HCAJ 106/2008]
Does the law require forklift trucks to have the third party insurance of motor vehicles? The Hong Kong High Court’s Judgment [Magistracy Appeal No 241 of 1996] dated 2/5/1996 explained the legal principles to answer this question.
The Hong Kong High Court issued a Judgment on 2/6/2017 dealing with the liability apportionment among 3 vessels in 2 almost simultaneous collisions that happened near Hong Kong on 14/5/2011. [HCAJ158/2012 and HCAJ49/2013 and HCAJ48/2011]
Remember our Chans advice/163 about the English High Court’s Judgment holding the Hague Visby Rules instead of the Hague Rules to apply to the cargo damage claim case in excess of US$3.6 million? The English Court of Appeal issued a Judgment on 24/2/2016 upholding the High Court’s conclusion but with different reasons. [Case No: A3/2014/1285, 2016 EWCA Civ 101, 2016 WL 00692394]
The Hong Kong High Court on 13/8/2013 held a shipper liable to a shipping company for paying demurrage of US$1,645,286.74 plus interest and costs. [HCAJ 166/2011]
The Hong Kong District Court issued a Decision on 30 April 2021 dealing with a personal injury case in relation to a container terminal. [DCPI 110/2020] [2021 HKDC 463]
Following the Hong Kong Court of Appeal’s Judgment dated 11/3/2015 discharging the Mareva Injunctions and the receivership orders (mentioned in our monthly newsletter of Chans advice/171 two months ago), the Hong Kong High Court issued a Judgment on 12/5/2015 to determine the question of who should pay the remuneration to the receivers. [HCMP 1449/2014]
In the last issue of Chans advice, we reported the case that the Hong Kong Court of Appeal rejected the mortgagee’s appeal against the High Court’s order of granting a stay until 24 April 2019 for the sale of the Vessel Brightoil Glory. On 17 May 2019, the Court of Appeal issued another judgment refusing the shipowners’ appeal in respect of their application for a further stay of the sale of the Vessel until 22 May 2019. [CAMP81/2019] [2019 HKCA 561]
What is the difference between a straight bill of lading and an order bill of lading? This can be illustrated in the Wuhan Maritime Court’s Judgment dated 17 September 2019 concerning a cargo misdelivery claim of US$89,838.
The High Court of Hong Kong issued a Judgment on 3/2/2012 concerning which currency (US$ or Euro) should be the proper one for the cargo owners in a shipment to claim against the forwarder for compensation in a cargo damage case. [HCAJ 152/2010]
The Hong Kong District Court issued a Judgment on 8/4/2014 holding that the one year’s suit time limit under the Hague Visby Rules does not apply to the carrier’s claims against the shipper. [DCCJ 4438/2013]
As reported in our Chans advice/170 dated 27/2/2015, the English High Court on 14/10/2014 held CSAV’s bill of lading’s English jurisdiction clause as an exclusive jurisdiction clause. On 23/4/2015, the English Court of Appeal issued its Judgment reaching the same conclusion. [Neutral Citation No: 2015 EWCA Civ 401, Case No: A3/2014/3584]
The Hong Kong High Court issued a Judgment on 11 January 2019 dealing with a dispute of US$335,858.31 between a bunker supplier and a ship agent. [HCA119/2015] [2019HKCFI57]
The Hong Kong Court of Appeal issued a Judgment on 9/7/2015 in relation to the High Court Judgment dated 21/7/2014 (reported in our Chans advice/167 dated 28/11/2014). [HCMP 2315/2014]
The Hong Kong High Court issued a Decision As To Costs on 5 December 2024 ordering a shipowner (which lost in an anti-suit injunction court case) to pay the winning party’s (a cargo owner) costs on an indemnity basis. HCCT 66/2024 [2024 HKCFI 3511]
We recently have received a lot of uncollected cargo claim cases from our forwarder clients, which have kept our 6 claim handlers very busy. We would like to take this opportunity to talk about this troublesome problem of uncollected cargoes. Actually, the forwarders have been facing this real headache in at least these two decades.
The Shanghai Maritime Court issued a Judgment on 24/12/2009 to deal with the question whether a shipping company could charge the container demurrage based on the tariff published on its website.
The Hong Kong Court of Appeal issued a Judgment on 18/12/2014 in connection with a cargo misdelivery claim of US$27,835,000 involving also anti-suit injunction and worldwide freezing order issued by the English Court. [CACV 243/2014 & HCMP 1449/2014]
The Hong Kong High Court issued a Judgment on 9/4/2018 dealing with a cargo total loss case in which a NVOC in Malta was wrongly sued (because it had the same name as that of the correct NVOC in BVI). [HCAJ 65/2016], [2018 HKCFI 699]
The High Court of Hong Kong issued a Decision on 23 May 2018 allowing a shipowner to be represented by 2 different firms of solicitors (one appointed by its hull underwriters and the other appointed by its P&I Club). [HCAJ84/2017] [2018HKCFI1136]
The Hong Kong High Court issued a Decision on 25 February 2019 dealing with Changhong Group’s delayed application for leave to appeal in relation to the collision case reported in our Chans advice/218 and Chans advice/215. [HCAJ3/2018, 2019HKCFI542]
In Chans advice/215, we reported that the Hong Kong High Court refused Changhong Group’s application to stay the Hong Kong proceedings; and in Chans advice/234, we reported that the Court of Final Appeal dismissed Changhong Group’s application for leave to appeal. On 7 April 2022, the Hong Kong High Court issued a Decision dealing with Changhong Group’s action to re-litigate its stay application. [HCAJ 3/2018] [2022 HKCFI 920]
We reported in our Chans advice/252 that the Hong Kong High Court held Hyundai Hong Kong’s ex-Deputy General Manager (Mr Ma) liable to compensate HK$387,655,303.70 to Hyundai Hong Kong in the case of his theft of his employer’s money. On 23 December 2022, the Hong Kong High Court issued a decision ordering a sum of HK$500,000 (which was deposited by Mr Ma as bail money) to be released to Hyundai Hong Kong in partial satisfaction of Mr Ma’s judgment debt. [HCA 619/2016] [2022 HKCFI 3798]
Remember our Chans advice/171 of 31/3/2015 reporting that the Hong Kong Court of Appeal discharged the Mareva injunctions against Hin-Pro? The Hong Kong Court of Final Appeal issued a Judgment on 14/11/2016 reversing the Court of Appeal’s Judgment of 11/3/2015. [FACA No. 1 of 2016]
The English Court of Appeal issued a Judgment on 13/12/2017 dealing with a cargo damage claim of EUR2,654,238 and a charter hire claim of USD1,012,740 in connection with a NYPE charterparty. [2017 EWCA Civ 2107] [2017 WL 06343564] [Case No. A3/2016/4770]
We mentioned in our Chans advice/225 that the limit of liability under the Montreal Convention for carriage of cargoes was increased from 19 SDR/kg to 22 SDR/kg of the gross weight of the cargoes effective on 28 December 2019. We have recently received some forwarders’ request asking us to talk about the major terms in the Montreal Convention. We in this issue would like to introduce the Montreal Convention’s major provisions as follows:
Remember Chans advice/142 and Chans advice/145 that the High Court of Hong Kong held the forwarder liable for cargo misdelivery without production of original bills of lading? The Court of Appeal of Hong Kong issued a Judgment on 31/1/2013 dismissing the forwarder’s applications for an extension of time to appeal. [HCMP 2366/2012 & HCMP 2367/2012]
Remember our Chans advice/165 (reporting the Hong Kong Court of Appeal holding the Hong Kong forwarder liable to pay US$852,339 plus costs and interest to the Indian bank in the air cargo misdelivery case)? On 19/5/2016, the Court of Final Appeal dismissed the Hong Kong forwarder’s application for seeking leave to appeal. [FAMV Nos 45 & 52 of 2015]
In Chans advice/215, we reported the High Court of Hong Kong refused Changhong Group’s application to stay the Hong Kong action. The Court of Appeal also subsequently dismissed Changhong Group’s appeal. On 13 July 2020, the Court of Final Appeal finally dismissed Changhong Group’s application for leave to appeal. [FAMV No. 34 of 2020] [2020 HKCFA 24]
The Hong Kong High Court issued a Decision on 21 July 2023 in relation to a case that an aircraft (worth at least USD 80 million) and its cargoes were destroyed by a fire caused by the goods of chlorine dioxide disinfection tablets. [HCA 837/2022] [2023 HKCFI 1896]
The District Court of Hong Kong issued a Judgment on 21/4/2011 dismissing a forwarder’s cargo indemnity claim of US$46,201.81 against a trucking company. [DCCJ 2092/2009]
According to the Hague-Visby Rules, the carrier shall be discharged of all liability in respect of the cargoes unless suit is brought within one year of their delivery or the date when they should have been delivered. The English High Court issued a Judgment on 22nd July 2025 explaining the meaning of “suit”. [2025 EWHC 1878 (Comm)]
The Hong Kong High Court issued a Judgment on 24/11/2015 dealing with a mandatory injunction and specific performance in respect of a letter of indemnity in connection with a delivery of cargo without production of the original bills of lading. [HCCL 12/2015]
The Hong Kong Court of Appeal issued a Judgment on 20 February 2019 dismissing Changhong Group’s appeal against the High Court’s Decision of 15 November 2018 (reported in Chans advice/215) because Changhong Group had not obtained leave to appeal from the Hong Kong High Court. [CACV576/2018] [2019HKCA246]
The Ningbo Maritime Court issued a Judgment on 25/5/2016, and dismissed a cargo insurer’s (PICC Ningbo) recovery claim of USD25,238.40 against Mitsui O.S.K. Lines Ltd (“MOSK”) in relation to the vessel MOL Comfort sinking into the Indian Ocean on 17/6/2013.
In this issue, we would like to continue with the case (CSAV v Hin-Pro) mentioned in our monthly newsletter of Chans advice/169 two months ago. The Hong Kong Court of Appeal issued its Judgment on 11/3/2015 discharging the Mareva Injunctions and the receivership orders granted by DHCJ Saunders against Hin-Pro and Soar. [CACV 243/2014]
The Hong Kong High Court issued a judgment on 30/4/2015 dealing with the legal principles in respect of the order of priorities in distributing the sale proceeds of an arrested ship. [HCAJ 129/2013]
The Hong Kong High Court issued a Decision on 2 October 2024 dismissing a shipping company’s application to strike out a forwarder’s third party indemnity claim in a cargo (frozen beef) damage case. [HCAJ 9/2023, HCAJ 22/2023, 2024 HKCFI 2708]
