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2015Report on Maritime Trials of Zhejiang Province

Ningbo Maritime Court

July, 2016


 

 

Introduction

 

    In 2015, the world economy is faced with a complicated situation, witnessing global economic growth rate hitting the lowest record for consecutive 6 years, global trade shrinking, bulk commodity prices dropped deeply, international financial market in aggravated turbulence; and China also witnessed a drop of total export-import volume, failed to achieve the expected growth targets, with domestic deep-rooted contradictions highlighted and downward economic pressure increased. Under the influence of the factors such as the staggering international shipping and shipbuilding market as well as the structural overcapacity of domestic sea- and ship-involved industries, the accepted cases of maritime and admiralty disputes has a year-on-year increase of 57.8%, up to 7614 cases. The courts are faced with heavier pressure of reform, development, law enforcement and case handling. In order to generally summarize the experience of maritime trials throughout the year, improve the international credibility of maritime justice of our court, bring into play the regulation, suggestion and guidance functions of maritime justice onthe shipping, port neighbourhood and foreign trade industry of our province, hereby we compose the 2015 Report on Maritime Trials of Zhejiang Province, and publicly announce it to social public through web portals, Weibo and journals. 

 

    I. Summary of 2015 Maritime Trial

    (1) In respect of case acceptance, maritime disputes witness an all-around increase and hit historical new record, with commonly great increase in all types of cases

    1. Basic situation. In 2015, our court has accepted all types of cases in a number of 7614, increased by 57.8% from last year, the object amount of accepted cases is 1.067 billion Yuan. It includes 4,019 newly accepted maritime and admiralty cases of first instance, with a year-on-year increase of 64%, 1,232 newly accepted maritime special-procedure cases, with a year-on-year increase of  71.8%, 2,363 newly accepted maritime affair execution cases, with a year-on-year increase of 42.7%. 340 foreign-, HK-, Macao- and Taiwan-related (only refer to those with  HK-, Macao- and Taiwan-related litigants) have been accepted, with a year-on-year increase of 54.55% , which include 270 foreign-related cases, increased by one fold compared to the same period of last year. The number of cases accepted throughout the year ranks the first among all the maritime courts nationwide for consecutive 4 years.

Fig. 1. Column chart of number of cases accepted during 2011-2015

     2. Basic features. The disputes accepted in 2015 are featured by:

    (1) Rapid increase of the maritime trade contract disputesin respect of vessel use and value. The accepted cases include 155 disputes concerning ship building, sale, repair and dismantling contracts, 117 disputes concerning vessel mortgage contracts, 103 disputes concerning  charterparty contracts, involving object amount of 1.973 billion Yuan. The above three types of maritime and admiralty disputes have contendingfocus directly relevant with vessel, with a average year-on-year increase of 20%. 1472 disputes concerning crew labour contract have been accepted, focusing on the claim that the crew salary shall fall within the maritime liens and have the priority in compensation from the auction proceeds with a year-on-year increase of 91.2%, accounting for 36.6% of the maritime andadmiralty disputes of first intance11 cases of vessel financing leasing contract have been accepted, slightly rebounded over the momentum of significant decrease in last year, with a year-on-year increase of 57.1%. A total of 156 accepted cases have an object amount over 10,000,000 Yuan, with a year-on-year increase of 21%, dominated by the disputes concerning vessel mortgage contract and vessel operation loan contract, respectively 42 and 25 cases, accounting for 43% of the cases with big object amount; the remaining cases with object amount over 10,000,000 Yuan are dominated by such types as disputes concerning ship building, sale, repair contract (10 cases), disputes concerning maritime creditor¡¯s right confirmation (6 cases), disputes concerning maritime salvage (5 cases), and so on.

    2. The disputes concerning and reflecting maritime ship and cargo safety have a significant year-on-year increase. 139 cases of disputes concerning responsibility for maritime (sea related ways) personal injury have been accepted, with a year-on-year increase of 36.3%, accounting for 70.2% of maritime tort cases; 38 cases of ship collision and touch, with a year-on-year increase of 22.6%, accounting for 19.2% of maritime tort cases. 55 cases of declaration of death in marine accidents have been accepted, with a year-on-year increase of 41%.  8 cases involved application for limitations of maritime compensation responsibility in case of being subject to huge claims arising from navigation accidents such as ship collision, accepted in an object amount of 85,810,000 Yuan. 93 disputes were resulted from the insurance claims arising from ship, cargo or compensation responsibility, with a year-on-year increase of 34.7%. 18 cases of shipwreck salvage have been accepted with an object amount of 145 million Yuan, of which the number and object amount are 450% and 247% respectively those of last year.

    3. Exercise special jurisdiction, producing remarkably increased  radiative power of trial. Three detached tribunals of Wenzhou, Zhoushan and Taizhou playing the advantages of forefront to satisfy the demand from grass-roots judicial organizations, have accepted 4293 maritime cases of all types, accounting for 56.38% of all the cases accepted by the whole court. The cases accepted by three detached tribunals are embodied mainly as the crew labour contract dispute, application for maritime creditor¡¯s right confirmation and dispute concerning registration and compensation of maritime creditor¡¯s right, which involve ship auction. Under the influence of such local industries as shipping, shipbuilding and finance to various degrees, other cases also varied in types (see Fig. 2); it can be exemplified by the continuously low incidence of maritime insurance contract disputes and freight forwarding contract disputes in Zhoushan region, while relatively a large number of disputes concerning ship sale, repair and material supply in two regions of Zhoushan and Taizhou due to their lively shipbuilding and trading markets.

    Since official acceptance of some maritime and fishery administration cases in 2015, our court has accepted a total of 3 administration cases throughout the year, the defendants of which are all the sub- or branch bureaus affiliated to MSA (Maritime Safety Administration) of the province, and have all been concluded. Besides, our court has also accepted some cases of typical maritime trade contract disputes with huge object relevant with shipping economy and ¡°one belt and one road¡± construction, thus effectively maintaining the international cargo trading, shipping and financial economic orders.

Fig. 2 Schematic diagram of comparison of the types of three detached tribunals*

    II. In respect of trial and execution, conduct trial and execution of maritime disputes fairly according to law and with high efficiency, with main performance indices running well

    1. Basic situation. In 2015, 7057 cases were concluded, increased by 51.2% year-on-year, at a case conclusion rate of 92.7% compared to that of 93.8% in the same period of last year. 75.8 cases concluded per capita, increased 21.8 cases year-on-year; 175.1 cases concluded per capita by front-line judges, increased 55.3 cases year-on-year; with a rate of civil conciliation and recall of 53.6%, dropped by 5.3% year-on-year; averagely 58.8 days for per case trial, decreased 5.7 days year-on-year. All the above indices rank among the best in the intermediate courts throughout the province. Execution of 2118 cases have been completed throughout the year, increased by 36.6% year-on-year, 130.8 cases concluded per capita, increased 20 cases year-on-year, 610 million Yuan has been executed in place, at a execution repayment rate of 30.2%, higher than the average value throughout the province and thatof the intermediate courts. The above main indices of trial and execution performance ran well, demonstrating that continuous good operation has been and will be maintained.

    2. Main features. The dispute trial and case execution work are featured by:

    (1) Fully perform the function of maritime trial, calmly deal with all kinds of disputes on sharp increase. For fair law enforcement and case handling according to law and with high efficiency in first priority, full and good use of maritime preservation measures should be persisted. Guiding relevant creditor¡¯s rights into the corresponding litigation channels , properly handled 1044 compensation procedure cases such as creditor¡¯s right registration, creditor¡¯s right confirmation caused by ship auction and application for establishing maritime climitationsfunds. 360 ship were detained throughout the year, 100 ships were sold through auction (selling off), in a total preceeds of 988 million Yuan. Diversified mechanism of dispute settlement has been introduced, to facilitate full settlement of conflicts locally. Juries of maritime specialty have been introduced to participate in the trial of difficult maritime cases. Successfully mediated the case of dispute over the damage responsibility resulted by ship contacting terminal facilities between Ningbo Shihua Crude Oil Terminal Company Limited and  Bernie Japan Co., Ltd. & Bernie International Co., Ltd.[1], attracting wide attention from social medias, with good legal effects and social effects. In the trial of the case of dispute concerning the ship repair contract between Zhoushan Xinya shipyard company and India Pratibha Shipping Company[2], by overcoming the difficulty in service for the case involving foreign interests, ship auction was conducted timely according to law, with ship auction preceeds of 17.4 million Yuan withdrawn, so as to facilitate the subsequent work of the creditor¡¯s right confirmation litigation and the creditor¡¯s right distribution.

    (2) Promote judicial convenience and benefit for people, to open up the ¡°last kilometer¡± in the road of people's demand for justice. Based on the principle of convenience for people, the litigation services dispersed among tribunals was centralized into the front desk of litigation service center, to provide people with integrated disposal of various litigation-involved matters  such as appeal, execution application, complaints, intermediation. Made trial implementation of online reservation for case filing. 509 calls of 12368 litigation service hotline have been received, with the consultation reply contents covering case filing, complaints, jurisdiction and various kinds of procedural affairs and legal problems. Set up maritime legal aid stations, gradually assimilate pro bono lawyers to participate in the mechanism of conflicts and disputes settlement to provide judicial services to demanding parties free of charge. Created ¡°Green Passage¡± for cases involving civilian livelihood, to simplify and facilitate the procedures of case filing, preservation, judging and execution, improving the mechanism of quick case-filing, quick trial and quick execution through combination of mediation and trial; confirmed the  crew wages in a total amount of 65.078 million Yuan for 1281 crew members, with averagely only 38 days spent on each case. Through compulsory execution and the procedure of distribution of preceeds of ship auction , achieved relevant rights and interest such as labour income for 874 crew members, receiving high appraisal from them. Implemented and improved circuit-trial mechanism, Zhoushan tribunal organized judges to hold circuit trials in Shengsi, Qushan for 15 times , hearing and meditating230 cases on spot

    (3) Promote the mechanism of execution work through internal and external linkage, to build up a ¡°general execution¡± pattern. Developed the ship management system, to realize the function of mating  trial with execution data, so as to make accurate and timely inquiry about the information such as ship mortgage, auction (selling off), thus getting a complete command of the disposal of detained ships. Intensified the cooperation and linkage among case-filing, trial and execution, made full use of the mechanism and platform coordination with maritimesafety administration, customs, border defense, ports and local courts, made request to the coordinating units for assistance in detaining 271 ships, practically settled the difficult problems in execution, such as ship detain,auction, and compulsory appropriation of fishery oil price subsidy. Made full and good use of the online p-to-p inspection and control mechanism covering bank savings, house properties, vehicles of all the persons in respect of execution throughout the province, with bank savings checked and controlled in a total amount of 448 million Yuan. Made comprehensive use of the credit investigation website platform, exposed the listed 223 unreliable persons in respect of execution, limited high-value consumption actions of debts bilkers, such as property and house purchase, taking airplane or high-speed railway, withgood effect in execution.

    III. In respect of mechanism, improve the working mechanism which is beneficial for judicial justice

    1. Promote fairness with openness, deepen sunshine justice. By virtue of the integrated, open portal website for one-stop services, deeply promote the openness of case-filing and trialprocedure, judgment document and execution information. Promote the openness of trial practice concerning litigation services, court rules and so on, expand the range of judgment documents available online, uploaded 2392 judgment documents on http://wenshu.court. Fully promote online auction, conducted successful auction of 19 ships through www.shipbid.cn/ , in a total preceeds amount of 281 million Yuan. Organized 42 auctions of object matters through www.taobao.com, 17 items were sold off, in a total preceeds amount of 159 million Yuan. Wherein, 9 ships have been auctioned (sold off), in a total preceeds amount of over 135 million Yuan, with a Average premium rate of 10.35%. According to 2015 Report on China¡¯s Maritime Judicial Transparency issued by the Institute of Law of Chinese Academy of Social Sciences, our court topped among the nationwide maritime courts for maritime judicial transparency, receiving this special honor for consecutive 3 years.

    2. Handle the protection of litigant¡¯s right and the regulation of vexatious litigation, and punish false litigation strictly. While strictly implementing the case-filing registration system and giving sufficient security  for the litigants¡¯ right, our court properly handle the relation between the protection of litigants¡¯ right and the prohibition of vexatious litigation, make more effort to identify the false litigation, malicious litigation and unreasonable repeated-appealing so as to maintain litigation integrity. Attention is fixed on the false litigation possibly existing in two types of cases as concerning crew wages and ship repair. In the preservation stage, carefully check the conditions of the debts, and inform the mortgagees to participate in the litigation to exercise their defense right. In the trial stage, check on the evidence assessment, look into the authenticity of litigation claims. In the execution stage, actively strengthen investigation and verification against questionable points, identified over one hundred cases suspected as false litigation, and transferred the case to the public security departments for criminal investigation.

    3. Strengthen reform and innovation, push forward the construction of judicial capacity. Actively advanced the reform of court hearing records, and video and audio recording is used generally for the cases with clear facts and not very disputable.  Made trial implementation of 841 cases in the reform of court hearing records, actually practice the principle of direct verbal evidence, with good effect of improving the efficiency of court hearing. Made joint effort to advance collaboration between maritime judicial adjudication and maritime administrative law enforcement, make an inquiry of 128 copies of maritime accident investigation material by use of the collaboration platform. The maritime authorities selected and engaged senior judges of our court into its expert database, to assist in the investigation into major maritime accidents, thus accumulating experience of our court in handling cases of maritime accident disputes. The judges of Wenzhou, Zhoushan and other tribunals of our court have also given lessons to local fishery-related mediation organizations, enterprises and general public, thus facilitating to form diversified settlement mechanism for sea-, fishery- or livelihood-related conflicts and disputes.

    II. Major issues discovered in maritime trial and relevant suggestions

    Maritime trial involves a great variety of disputes[3], abundant judicial practice inevitably reflects  some new issues and problems To reflect the situation of maritime case trial of our court typically and emphatically, the following major issues are specifically selected for analysis and comments in this report.

    (1)Issue concerning the continuing construction of ship under construction Due to lack of necessary legal risk assessment, unscientific planning, shortage of follow-up fund, other debts of shipyard or ship owner, the ship construction can¡¯t be completed or can¡¯t be assigned in normal way of trading, thus incurring losses to all interested subjects  to varied degrees. For example, ¡°Hai Ming Xin¡± ship was constructed by Jianghai Company entrusted by a Fujian company, and the latter was sued by Jianghai Company to Ningbo Maritime Court for failure in shipbuilding payment as agreed, due to capital chain rupture, which was supported by the court decision in 2012. Later Huihai Company purchased ¡°Hai Ming Xin¡± ship (currently named ¡°Xin Shun Sheng¡± ship) through judicial auction procedures and entrusted Jianghai Company to continue the construction, both parties signed ¡°Agreement on Continuing Construction of Ship¡± in 2014, and the ¡°Xin Shun Sheng¡± shipwas qualified through test voyage in May, 2015, but Huihai Company, as the new ship owner, failed in the final payment, thus forming a new litigation[4]. Here is another example[5], for the unaffordable continuing construction of oil tankers, Xiang signed a framework agreement with Haibin Company, to transfer the right of continuing construction of his three oil tankers under construction (of which two were constructed as ordered by others, while one was constructed by Xiang for himself) to Haibin Company who signed agreement with each entruster separately. Then Haibin Company had neither signed agreement with Xiang nor continued the construction. Xiang requested to reimburse the invested 1.5 million Yuan, while Haibin Company defended that the continuing construction is stopped by the reason of Xiang and the entrusters, and the dispute was turned into litigation. Thereby it¡¯s suggested that, in case of continuing construction of ship under construction, to conduct necessary legal risk evaluation before the conclusion of contract, so as to ensure the contract counterpart has the right to sign the contract of continuing construction and can complete shipbuilding with reliable capital source. In case that no specific shipbuilding agreement was signed for the reason of construction orderer and thereby failing to continue the construction of ship, the party shall confirm the loss and urge the counterparty to make sure whether to sign the contract or continue the performance, and keep the right of claiming for breach liability.

    (2) Issue concerning the legal risk in case oftheft and pilferage of cargo in the section of foreign land transportation under the mode of multimodal transportation. where neither any bill of lading had been issuednor any evidence had been produced to certify that the cargo value has been claimed to the multimodal transportation carrier and the inland carrier for the section of foreign land transportation, it only allows to claim compensation responsibility according to the transportation law corresponding to the accident section. For example, in a case of dispute concerning the contract of carriage by sea[6], an import company in Yiwu delivered clothing cargo through freight forwarder to the carrier of HYUNDAI MERCHANT MARINE for transportation, to be exported to Mexico, in modes of sea, railway and road transportation, the agreed delivery site was Mexico city; and during the process of transportation from the port to Mexico city, the container lorry driver reported to the police that the cargo was robbed by armed man and missing. The cargo was valued over 200 thousand USD as indicated on the export declaration, but with no formal bill of lading issued; the copy of bill of lading recognized by both parties only bore the cargo name and weight without value, which constituted theprima facie evidence for the courtto hold that the consignor hadn¡¯t declared the cargo value to the carrier. Correspondingly, it¡¯s stipulated in Mexico law that the responsibility of the carrier is limited to the current minimum salary for 15 days for Distrito Federal of Mexico, thus the Yiwu company only got compensation of 1391.67 USD. Thereby it¡¯s suggested that, for multimodel transportation including sea transportation and inland transportation, the consignor shall declare the cargo value actively and request the carrier to issue bill of lading with cargo value borne on it, so as to allow the carrier to claim full compensation in case of unexpected accident such as theft and pilferage happened during the cargo transportation.

    (3) Issue concerning the proprietaryright attribute of the delivery order involved with the cargo deposited in the bonded warehouse. The bonded cargo is subject to an import procedure which is different from that for common maritime cargo, the documents such as the delivery order involved with the bonded cargo have no attribute of proprietary right certificate, which can¡¯t  enable the consignee to claim cargo delivery against the warehouse party. For example, in a case of dispute concerning a  freight forwarding contract[7], Haitian Company claimed that, after Zhang gave delivery order (D/O), as the proprietary right certificate, to Feima Uni-tops Company for customs declaration, Feima Uni-tops Company didn¡¯t transfer the delivery order of  bonded storage goods outbound fromWaigaoqiao Free Trade Zone to Haitian Company, causing the latter to lose the control right of the goods. our court held thatneither the D/O signed and issued by the seller nor the delivery order of bonded storage goods outbound from the Free Trade Zone for verification by the customs  was  a proprietary right certificate. Feima Uni-tops Company, as the customs declaration agent commited by Haitian Company, got in contact with Jiuaifu Company which was the warehouse supplier, through Hengye Company whom was listed in the D/O,  had eligible right to submit the delivery order of  bonded storage goods outbound from Waigaoqiao Free Trade Zone to Hengye Company or Jiuaifu Company. It¡¯s not necessary to submit the document to Haitian Company. Thereby we suggest that, according to the current import precedure for the cargo deposited in the bonded warehouse, the delivery order of bonded storage goods outbound is only used for verification procedures of the customs when handling outbound goods, the goods are actually released  subject to the warehousing contract; and the import enterprise shall resort resolutions  to the framework contract of foreign trade rather than claiming compensation for loss from the angle of thefreight forwarder¡¯s faults.

    (4) The issue concerning whether the ship repairer enjoys the possessory lien after the ship is encroached by others. The ship operator handed the ship over to the shipyard for repair, while the ship owner towed the ship by force without permission, such situation usually doesn¡¯t constitute a criminal offence, meanwhile  not a basis for  extinguishing the possessory lien of the shipyard. For example, Anda Company entrusted Yuanshan Company to repair theship involved in the case, during the reparing period, Hongjun Company organized over 20 armed persons towed the said ship by force, the  frontier police substation considered it not constituting a crime, later Yuanshan Company and Anda Company made settlement about the charges of the repaired items for said ship, confirming the repair charges of nearly 2.37 million Yuan.  Anda Company has not yet paid the above repair charges till now, claiming that the ship involved in the case has been towed and encroached by Hongjun Company by force. [8] Both the first trial and second trial court supported  the shipyard¡¯s litigation claimingfor payment of the repair charges and confirmed the possessory lien. Thereby it¡¯s suggested that, in case of any conflict arising from the ship ownership or management between the ship owner and the operator, the issue of possession and use of the ship shall be settled through active negotiation or legal litigation. The ship owner can retrieve the ship through action of restitution before ship repair commencing if he deems that the operator and the shipyard haveprivy collusion to harm his interest. In case that part of the ship has been repaired, if the repair is blocked by force privately, it will be difficult to clarify the repair items and charges, and impossible to extinguish the possessory lien that the shipyard is entitled to. At this time, the shipyard can claim failure in continuing performance as the result of malicious breach of the ship owner and thus claim for  damages. 

    (5) Issue concerning the legal status of insurance broker. In practice, some insurance broker not only assists policyholders to take out policy, but also assist the insurance companies soliciting business, but hasn¡¯t been entrusted  to act as anagent for any one party. In such case, it is in a legal status as an independent third party, with no right to sign or receive policies or other important documents on behalf of the policyholder. For example, in a case of dispute concerning a ship insurance contract[9], it was argued that whether the insurance contract involved in the case did include the provision of ¡°the policy will be invalidated by failure in paying the premium as agreed in the policy¡± and the provision of deductibles; the insurer PICC Guangdong alleged that the policy didn¡¯t exist separately and the policy content had been changed as agreed through negotiation between T&Z Consultants Ltd. and PICC Guangdong later, so both parties shall perform according to the changed content. It is held that, under Article 118 of the Insurance Law of the People's Republic of China, insurance brokers are intermediary organ providing intermediary services for conclusion of insurance contract between the policyholder and the insurance company based on the interest of policyholder. As indicated by the power of attorney issued to T&Z Consultants Ltd. by Chenzhou Group and Chenglu Company, T&Z Consultants Ltd. is authorized to handle the insurance affairs of the ship as an insurance broker, so hadn¡¯t been directly authorized to sign or receive policy or other important documents on behalf of Chenzhou Group, and the insurance clauses concluded between it and PICC Guangdong shall not be directly binding upon Chenzhou Group and Chenglu Company. Thereby it¡¯s suggested that, the insurance broker must handle the insurance intermediary business strictly according to the authorization given by the policyholder, otherwise its behaviour shall has no legal effect on  either the policymaker or the insurer.

    (6) The issue concerning recovery filed by the liable party after personal injury happened in the dismantling process of ¡°three-no¡± ship was settled. In a case of dispute over responsibility to maritime personal injury[10], Cheng, as the ship owner of a ¡°three-no¡± ship, turned the dismantling works over to Huang A whom had no gas-cutting qualification, at a price of 260,000 Yuan, while Huang A recruited Huang C to carry out construction, Huang C fell to ground in the operation ,wearing no safety helmet and thus died after all rescue measures were taken and proved ineffectual, and there was no safety net arranged at the operation plant. Through mediation by the people's mediation organization, Cheng compensated with some medical fee and 510,000 Yuan compensation to the family, then sought recovery from Huang A and the dismantling plant. Both Huang A and the dismantling plant defended that Huang C fell carelessly from the ship and shall be responsible for 30% loss caused by his own negligence. It was held that, Cheng and Huang A wereparties to the contract of hired work, Huang A hired Huang C to do the job, Huang C shall be responsible for 20% loss caused by his own negligence, Cheng' compensated for that part was a voluntary behaviour and shall not be entitled to recovery from others. The dismantling plant, as the designated dismantling enterprise specified by the local working agency for disposal of fishery-related ¡°three-no¡± ship, who hadn¡¯t fulfilled its safety supervisionduty  with a  relatively low safety guarantee cost, shall take 30% responsibility for compensation, although there was no evidence to show it had charged for dismantling and so on. As the hirer, Huang A who hadn¡¯t taken any safety guard measures during dismantling process, shall take direct responsibility for the result of death. Cheng, who clearly knew Huang A has no qualification and safety production conditions, shall take joint and several liability with Huang A, be respectively responsible for the remaining 50% amount of compensation. Thereby it¡¯s suggested that, ship owner, as one of the parties responsible for the accident, shall seek advices from other responsible parties before advance compensation, and request all parties to participate in the people¡¯s mediation if necessary. To prevent dispute, the people¡¯s mediation can be conducted by virtue of the professional guidance from the maritime court and the detached tribunals, so as to avoid loss burden from extra compensation. As a designated dismantling enterprise, it shall fulfill safety supervision duties practically, and specify the rights and obligations under the contract concluded between the ship owner and the contractor. The ship owner and the contractor shall provide more comprehensive and effective safety guarantee  by methods of  achieving basic safety production stipulations including but not limited to plant.

    (7) The issue concerning whether the compulsory execution is applicable to the ship or ship shares affiliated to the person subject to enforcement. Due to lack of transportation qualification, fishing quota and so on, the natural person or company actually building or using the ship register part or all of the ship affiliated to other person as the affiliating person; and the affiliated person is subjected to compulsory execution by maritime court for his or her own debts, the creditor¡¯s request for enforcement of the shares affiliated thereto usually can hardly gain support from the court. In the lawsuit of Xinbo Company versus Ningbo Branch of Guangfa Bank concerning the litigation of outsiders¡¯ objection to execution[11], Xinbo Company had built the oil tank A in Taizhou and then registered it under the name of Xinhua Company, creating co-ownership by shares as Xinbo Company holding 49%, Xinhua Company holding 51%, and the ship A was actually possessed and managed by Xinbo Company. Xinhua Company mortgaged the ship B owned by itself to Ningbo Branch of Guangfa Bank for loan for its  own business operation, and failed to reimburse the loan, so was sued by Ningbo Branch of Guangfa Bank to the court and subjected to the application for compulsory execution. As the auction proceeds of the ship B is not enough to repay the debt, the bank filed an application to the court for freezing the ship A¡¯s shares held by Xinhua Company and auctioning it, thereby Xinbo Company filed an objection to execution and  brought up a litigation of outsiders¡¯ objection to execution. the court held that, the creditor¡¯s right of the bank over the ship A is an ordinary creditor¡¯s right which can¡¯t override the ownership of Xinbo Company, and the bank failed to prove it is the third partyacting in good faith as specified in the Property Law,  therefore 100% ownership of Xinbo Company over the ship A was affirmed and the execution of the ship shares was stopped. Thereby it¡¯s suggested that, in case of  ship or ship shares registered under the name of the debtor, the creditor shall make mortgage registration under the relevant ship authority to make sure such ship or ship shares is a sufficientguarantee for debt performance. Otherwise, there may be some matters such as  affiliationissues and etc., which prevent fulfilment of creditor¡¯s  right.

    III. Analysis and prediction of situation of maritime trials in 2016

    The number of cases received by our court has been increased continuously  since 2012 when it had topped 4000, and hits a historicly high record in 2015, indicating that  the maritime trials of Zhejiang Province have reached the ¡°new normality¡± with a high operation level of case number and an increasing job pressure of the execution of trials. Behind the case number, it is the economic disputes brought into litigation that can not be dealt with by the market itself, reflecting that Zhejiang¡¯s shipping, shipbuilding, shipping agency and foreign trade industry is experiencing a painful and difficult process of elimination from the market, transformation and upgrading in an overall way. Combined with the maritime trial conditions in recent years, the analysis and predictions of 2016 Zhejiang maritime trials that worth being researched and focused on are as follows:

    (1) The trial of foreign-, HK-, Macao- and Taiwan-related cases will witness new changes.

    From January of 2011 to December of 2015, our Court accepted a total of 1,501 cases of above ¡°four types¡± with a total subject amount of 7.859 billion yuan, involving more than 50 countries and regions. With the further construction of national strategies like ¡°One Belt, One Road¡±, Zhoushan Free Trade Zone, and the economic belt along Yangtze River, maritime disputes that related with relevant crucial strategies, countries and regions will capture increasing social attention, and are bound to be samples of measuring the impartial judicial competence of maritime trials and the courts¡¯ international influence and image of our country. How to improve the judicial capacity of dealing with foreign-related cases, perfect foreign-, Hong Kong-, Macao- and Taiwan-related trial mechanism and the corresponding supporting mechanism, improve the international impacts of Zhejiang maritime trials will become an important work to be concerned about.

    (2) Trials of disputesconcerning crew labour will experience greater development.

    From January of 2011 to December of 2015, our court accepted 4,224 cases related with disputes concerning crew labour with a total subject amount of 0.206 billion Yuan, which is 26.9% of all the cases over the same period. Traditionally, the trial of crew labour disputes is limited to the trial of claims of maritime lien in respect of the employment relationship and the uncontested labour relations such as crew wages and social insurance. The Regulations of the Supreme People¡¯s Court on the Scope for Maritime Courts to Accept Cases carried out by the Supreme Court on March 1, 2016 takes crew labour contract disputes as a new category of cases under provisions. Such problems like whether there are labour relations between crew members and employers, whether such new types of cases like petition of the crew made on the basis of the labor contract and occupational injuries regulations are directly governed by maritime courts, and the conflicts of governance between general courts and maritime courts over the lawsuits brought up by the crew members and the employers if they are not satisfied with labour arbitration awards, may bring certain distress to the crew members¡¯ seeking for judicial relief and the trial of the court and are in great urgency to be investigated and solved.

    (3) Disputes related to the exploitation and utilization of marine resources, environmental protection and maritime administration may increase gradually.

    China has been marching forward from the light green offshore areas to the dark blue marine zones. Putting more efforts on scientific and reasonable exploitation and utilization of marine resources has become a strong beat of the times. The 12 kinds of Disputes related to the exploitation and utilization of marine resources governed by maritime courts which are specifically stipulated in Chapter 3 of Regulations of the Supreme Court on the Scope for Maritime Courts to Accept Cases reflects the supreme court¡¯s requirements to orderly solve such disputes in accordance with law in maritime trials and to serve and safeguard the development of marine industry. In addition, the Regulations have made it clear that maritime administrative cases shall be governed by maritime courts, which has changed the situation of only accepting maritime administrative cases with part of National Maritime Bureaus and Bureaus of Ocean and Fisheries as defendants according to the designation of the province¡¯s high court. Some new types of cases may emerge such as application for disclosure of required government information, or not satisfied with the decision of maritime administrative punishment, etc. From the international environment, there is a partial tension in safeguarding China¡¯s marine rights and people from all fields harbor new expectations on maritime trials. It is a glorious mission and an unshakable responsibility of maritime courts to strengthen specific governance pursuant to law and hear relevant cases impartially.

    (4) Assignments related to the trial and execution of the transaction, construction, repair, detention and auction of ships will have to facemore pressure.

    Under the condition of a relatively long-term surplus of productivity of shipbuilding and market capacity, there is an increasing venture that many shipbuilding enterprises and small and medium-size shipping companies may be subject to lawsuits if fail to fulfill their contractual obligations. The ship value has dropped from the original high point to the recent low point, further increasing the difficulty to resolve the disputes. For example, the ships of an adjunct party under normal operation may be detained by a court  on the grounds of the debts of the party who is affiliated, thereby pushing the adjunct party and many investors in its name to maintain legal rights in groups and jointly file lawsuits. The decrease of ship value also extends the ship disposal cycle, increases custody risks, and the ship-related claims have to face the predicament of ¡°demand exceeding supply¡±, which bring new challenges to maritime trials and executions.


 

Concluding Remarks

 

    In order to further safeguard the orderly development of marine economy in Zhejiang Province pursuant to the law, take the initiative to create and extend the judicial functions and enhance the international influence of China's maritime trials, our Court will continue to firmly grasp the advantages of the ¡°prime time¡± of maritime trials, the less-arduous ¡°historical burdens¡± and a fairly good foundation of institutions and mechanisms to be courageous to explore in such fields as specific jurisdiction, the operation methods of judiciary power, judicial system of accountability, and coordination among maritime courts, continue to put more pressure on ourselves, strengthen the construction of echelon talent and comprehensive talents who are proficient in foreign languages, shipping and law, foster more qualified Party members and qualified judges with the qualities of political loyalty, probity and dedication, being proficient in maritime trails, make innovations in and optimize the supervision of trial administration, researches of government affairs, and logistic support, so as to explore the formation of a new work pattern being in favor of enhancing the cohesiveness of international credibility of maritime trials under the guidance of a higher level of party committee and court.

 

 



* Notes to Fig.2: Material refers to the dispute concerning ship material and spare parts supply contract; co-ownership means the dispute over ship co-ownership; mortgage refers to ship mortgage contract dispute; person refers to dispute over responsibility for personal injury on sea and sea related ways; CSR refers to the dispute concerning shipbuilding contract, dispute concerning ship sale contract and dispute concerning ship repair contract; shipping agency refers to dispute concerning the contract of carriage of goods by sea and sea related ways, dispute over freight forwarding contract and voyage  charterparty; insurance refers to dispute over maritime insurance contract.

[1] Case No. of first trial: Ningbo Maritime Court (2012) Y.H.F.S.C.Zi No.29.

[2] Case No. of first trial: Ningbo Maritime Court (2014) Y.H.F.S.C.Zi No.304, Case No. of second trial: the High People¡¯s Court of Zhejiang Province (2015) Z.H.Z.Zi.205.

[3] Take the example of 2015, our court newly accepted 5251 special-procedure cases of maritime trade and affairs, involving 53 types of cases, including not only a large number of common maritime disputes, such as the disputes arising from shipbuilding, sale, repair, mortgage, charter and maritime voyage, transportation, but also a smaller number of new type of maritime disputes, such as 2 disputes over marine exploitation and utilization, 7 disputes concerning maritime security, 2 disputes concerning ship survey contract. Besides, it also includes 13 maritime affair and trade disputes of complicated legal relation and without corresponding three classes of cause of action. Other traditional maritime affair and trade disputes include 272 disputes over maritime shipping agency contract, 270 disputes concerning ship material and spare parts supply contract, 161 disputes concerning contract of carriage of goods by Sea, 111 disputes concerning ship co-ownership and so on.

[4] Case No. of first trial: Ningbo Maritime Court (2015) Y.H.F.S.C.Zi No.650.

[5] Case No. of first trial: Ningbo Maritime Court (2014) Y.H.F.T.S.C.Zi No.53, Case No. of second trial: the High People¡¯s Court of Zhejiang Province (2014) Z.H.Z.Zi.114

[6]Case No. of first trial: Ningbo Maritime Court (2014) Y.H.F.S.C.Zi No.639.

[7]Case No. of first trial: Ningbo Maritime Court (2015) Y.H.F.S.C.Zi No.531, Case No. of second trial: the High People¡¯s Court of Zhejiang Province (2015) Z.H.Z.Zi.222.

[8]Case No. of first trial: Ningbo Maritime Court (2014) Y.H.F.T.S.C.Zi No.88, Case No. of second trial: the High People¡¯s Court of Zhejiang Province (2015) Z.H.Z.Zi.3.

[9]Case No. of first trial: Ningbo Maritime Court (2014) Y.H.F.S.C.Zi No.318, Case No. of second trial: the High People¡¯s Court of Zhejiang Province (2015) Z.H.Z.Zi.240.

[10] Case No. of first trial: Ningbo Maritime Court (2014) Y.H.F.S.C.Zi No.102, Case No. of second trial: the High People¡¯s Court of Zhejiang Province (2015) Z.H.Z.Zi.142

[11]Case No. of first trial: Ningbo Maritime Court (2015) Y.H.F.Z.Y.C.Zi No.5

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