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(2013)YongHaiFaShiChuZiNo.18 CIVIL JUDGMENT

THE PEOPLE¡¯S REPUBLIC OF CHINA
NINGBO MARITIME COURT

CIVIL JUDGMENT

 (2013)YongHaiFaShiChuZiNo.18


Plaintiff : Zhoushan Shihua Crude Oil Terminal Co. Ltd.
Domicile : 1 Jinshan Road, Cezi, Dinghai District, Zhoushan City, Zhejiang Province, the People¡¯s Republic of China
Legal Representative : Qian Jianhua, Board Chairman
Agent ad litem : Chen Youmu, Lawyer of Wintell & Co. Shanghai Office
Agent ad litem : Wu Ganjie, Lawyer of Wintell & Co. Shanghai Office

Defendant : E.N.E. ASTIPALAIA LTD
Domicile : 29 J. Drossopoulou Street, GR112 57 Athens, Greece
Legal Representative : Basil Spiliopoulos, Director
Agent ad litem : Wang Hongyu, Lawyer of Wang Jing & Co. Shanghai Office
Agent ad litem : Fei Jun, Lawyer of Wang Jing & Co. Shanghai Office

    The Plaintiff Zhoushan Shihua Crude Oil Terminal Co. Ltd. (¡°Shihua¡±) brought an action before this Court on 4 April 2013 for its dispute over damages arising from ship contact with the Defendant E.N.E. ASTIPALAIA LTD (¡°ASTIPALAIA¡±). This Court accepted the action on 7 April and then legally set up a collegiate bench. This Court organized two exchanges of evidence in court on 26 December 2013 and 16 May 2014, and held a public court hearing on 8 July 2014. Chen Youmu and Wu Ganjie, the agents ad litem of the Plaintiff Shihua, and Wang Hongyu and Fei Jun, the agents ad litem of the Defendant ASTIPALAIA appeared in court. The hearing of this case is now concluded.

    The Plaintiff Shihua claimed that: On 18 August 2011, while MT ¡°ASTIPALAIA¡± owned by the Defendant was berthing alongside the 300,000-ton crude oil terminal owned by the Plaintiff, MT ¡°ASTIPALAIA¡± contacted the terminal facilities following ship drifting after ship lines broke as a result of improper operation; As a result of the accident, loading arms and other facilities on the terminal were damaged to different extents, the crude oil terminal was prevented from normal accommodation of other ships for cargo discharge, and the operation of the terminal was suspended; On 23 August 2011, due to the accident, MT ¡°ASTIPALAIA¡± was arrested by the Ningbo Maritime Court according to law; After the accident, in order to resume operation as quickly as possible, the Plaintiff immediately invited relevant institutions to carry out field inspection and assessment, and got repaired the relevant damaged facilities one after another; Up to now, as a result of the contact accident, the Plaintiff had suffered loading arm repair cost, rubber fender repair cost, gangway repair cost, loss of use, and other costs and losses totaling RMB11,191,874; Therefore, this Court was requested to order that the Defendant should compensate for various losses and expenses totaling RMB11,191,874 that were suffered by the Plaintiff as a result of the accident in question, and the interest accruing thereon (from the date of actual accrual to the date of payment prescribed by the Judgment at the bank loan interest rate published by the People¡¯s Bank of China over the same period), and that the Defendant should bear pre-action property preservation fee of RMB5,000 and other court fee of this case. The Plaintiff provided a loss breakdown, clarifying that its claims for various costs and losses consisted of: 1) loading arm repair cost of RMB1,820,608, including cost for replacing loading arm No.1 of RMB1,370,000 and cost for repairing loading arms No.2, 3 and 4 totaling RMB450,608; 2) rubber fender repair cost of RMB290,000; 3) gangway repair cost of RMB63,726; 4) fire control system repair cost of RMB15,220; 5) loss of use of RMB8,602,320, including loss from suspension of work of RMB4,713,600 and loss of use arising from failure to operate at rated capacity due to replacement and repair of loading arms of RMB3,888,720; and 6) other losses and costs of RMB400,000.

    The Defendant ASTIPALAIA defended that: 1) The accident was caused by the great impact of the currents on the ship at the Plaintiff¡¯s terminal and the terminal¡¯s failure to put safety protection measures in place and failure to set down a proper safety protection and emergency response plan according to MSA¡¯s guidance in a similar case, while the Defendant¡¯s ship had no fault in the accident; 2) As regards the Plaintiff¡¯s various claims, the Defendant only accepted the reasonableness of the fire control system repair cost, and commented that the replacement of loading arms was unnecessary, the damage to the rubber fender was an old one and was not caused by the accident in question, the gangway was found without sign of damage upon field inspection, the loss of use lacked evidence to support and should not be incurred or might be fabricated by the Plaintiff because the terminal was not operated in full capacity, and the Plaintiff¡¯s claim for other losses and costs was not supported by a breakdown; 3) As regards the claim for interest, the Plaintiff failed to make clear the accrual commencing date and basis in court hearing and therefore should not be supported. In view of the above, the Defendant took the view that the Plaintiff¡¯s claims should all be rejected, and the Plaintiff should bear pre-action property preservation fee and other court fee of this case.

    To support its claims, the Plaintiff Shihua provided this Court with the following evidence within the time limit for evidence adduction:

1) marine traffic accident investigation report;

2) letter of undertaking issued by China Reinsurance (Group) Corporation for the Defendant in respect of the accident in question;

Evidence 1 and 2 were to prove the course of the accident in question and the Defendant¡¯s liability for the accident;

3) loading arm¡¯s sales contract;

4) loading arms¡¯ repair contract;

5) rubber fender¡¯s repair contract;

6) gangway¡¯s repair contract;

7) sales contract for fire control system¡¯s repair pieces;

8) terminal¡¯s shift handover & takeover records;

9) survey report issued by Ningbo CCIC Insurance Surveyors & Adjusters Co., Ltd. (¡°CCIC¡±) (¡°CCIC Report¡±);

Evidence 3-9 were to prove various costs and losses suffered by the Plaintiff as a result of the accident in question;

10) correspondences between the Plaintiff and the Defendant;

11) logbook in respect of installation of loading arm No.1;

Evidence 10 and 11 were to prove the fact of repair of loading arm No.1;

12) invoices, payment slips and receipts in respect of the cost for replacing loading arm No.1;

13) invoice in respect of the cost for repairing loading arms No.2, 3 and 4;

14) invoice in respect of rubber fender repair cost;

15) invoice in respect of fire control system repair cost;

Evidence 12-15 were to prove various costs for replacing and repairing loading arms and repairing other facilities on the terminal incurred by the Plaintiff as a result of the accident in question;

16) audit report for the year of 2010;

17) audit report for the year of 2011;

18) audit report for the year of 2012;

Evidence 16-18 were to prove the Plaintiff¡¯s operating income and the Plaintiff¡¯s loss of use of terminal as a result of the accident in question;

19) documents in respect of final acceptance of Cezi terminal;

20) hydrographic survey analysis report issued by Unit 92899 of Chinese People¡¯s Liberation Army;

21) design note issued by the designer;

22) record about tankers berthing alongside the Plaintiff¡¯s terminal during spring tide;

Evidence 19-22 were to prove that the Plaintiff¡¯s terminal satisfied large vessels for their berthing and discharge operation in all respects whether as to port and berth design and construction or as to flow and hydrologic characteristics;

23) CCTV footages by cameras on the terminal at the time of the accident, which were to prove the course of the accident of contact between the Defendant¡¯s ship and the terminal as well as the facilities thereon;

24) the Plaintiff¡¯s internal document, emergency handling plan;

25) the Plaintiff¡¯s internal document, general emergency response plan for sudden accidents;

Evidence 24-25 were to prove that the Plaintiff had put in place handling or emergency response plan for sudden accidents and other emergencies or accidents;

26) payment slip in respect of cost for repairing loading arms No.2, 3 and 4;

27) payment slips in respect of rubber fender repair cost;

28) payment slip in respect of fire control system repair cost;

Evidence 26-28 were to prove various costs for repairing loading arms and other facilities on the terminal incurred by the Plaintiff as a result of the accident in question;

29) loading arm manufacturer¡¯s statement about repair of damaged equipment, which was to prove the fact that the terminal suspended work and the loading arms could not operate at rated capacity as a result of the accident in question;

30) report of the MT ¡°ASTIPALAIA¡± after breaking away from the berth issued by LOC, which was to prove the course of the accident in question, the environmental conditions at the time of the accident, the condition of the equipment, and the cause of the accident;

31) payment applications and slips in respect of CCIC¡¯s survey fee, which were to prove the loss of survey fee and other costs; and

32) cargo discharge plan of the terminal in August 2011, which was to prove that the ship which planned to discharge cargo at the terminal had to discharge cargo at another terminal as a result of the accident, and that the Plaintiff¡¯s loss of use did exist.

To support its defences, the Defendant ASTIPALAIA provided this Court with the following evidence within the time limit for evidence adduction:

1) ship¡¯s particulars of MT ¡°ASTIPALAIA¡±, which were to prove the ship¡¯s particulars and the fact that the ship in question was a very large crude oil carrier;

2) certificate of classification of MT ¡°ASTIPALAIA¡± issued by American Bureau of Shipping on 21 June 2011 and expiring on 31 May 2016, which was to prove that the ship was in good condition in all respects at the time of the accident;

3) master/pilot exchange card, which was to prove the exchange between the Master and the pilot and the ship¡¯s berthing operation;

4) ship¡¯s special survey certificate, which was to prove that the ship had completed periodical dock survey not long before the voyage in question (in June 2011), and at the time of survey by Drydocks World, all winches (including brakes) were renewed, brake tested and found in good condition;

5) records of inspection/replacement of mooring wires on board, which were to prove that among 20 mooring lines on board, 17 mooring lines were replaced in November 2010 and 3 mooring lines were replaced in August 2011, complying with OCIMF¡¯s requirement that tails should be replaced at least every 18 months, and that all 20 mooring lines were inspected on 1 August 2011, complying with OCIMF¡¯s requirement;

6) statement of fact by the classification society, which was to prove that upon inspection to the mooring equipment on board after the accident, the classification society confirmed that there was no need to repair or modification to the ship¡¯s winches, and certificates of inventory of all mooring wires were valid;

7) CCTV footages, which were to prove that: The accident in question occurred while the ship was lying alongside but not while the ship was coming to the berth; The possible cause of accident of misoperation before berthing should be excluded; Having drifted before lines broke, the ship drifted as a result of ebb currents instead of defective quality of lines; The crewmembers had kept lookout with due care, heaved on lines as soon as uneven stresses/slacks on the lines became noticeable, and started main engine as soon as the ship was found drifting; The mooring lines and winches were not defective and were in good operation; Tugboats was not available or on standby at site and did not appear until the accident was unavoidable; And the Plaintiff failed to respond to the ship¡¯s call for assistance, neglected to maintain lookout, and failed to take prompt and effective emergency response action;

8) minutes of the meeting held by Zhoushan MSA on 31 October 2007, which were to prove that: The terminal could not satisfy such a very large vessel as MT ¡°ASTIPALAIA¡±, whether as to its design or as to its construction, and the berth was unsafe; The Plaintiff failed to make proper tugboats available or on standby at the time of the accident according to the requirements of the meeting minutes; And the terminal failed to comply with MSA¡¯s requirements and failed to establish a safety system for ships berthing alongside;

9) Cezi island terminal hydrographic survey report issued by Dr. Roger Maddrell, which was to prove that the Plaintiff failed to consider the berth¡¯s design, layout and its interaction with the tidal currents or the impact of tidal currents on a fully loaded vessel, which is intending to unload cargo at the berth, and the terminal could not satisfy such a very large vessel as MT ¡°ASTIPALAIA¡±;

10) survey report issued by Dennis Kelly on the Plaintiff¡¯s losses; and

11) survey report issued by Teamhead Surveyors Ltd (¡°Teamhead Report¡±);

Evidence 10-11 were to prove that the relevancy and reasonableness of the losses claimed by the Plaintiff remained to be proved.

This Court collected the following evidence from Zhoushan MSA at the Plaintiff¡¯s application:

1) records of interview with the crewmembers of MT ¡°ASTIPALAIA¡± taken by Zhoushan MSA;
2) records of interview with the pilot and the terminal¡¯s operators taken by Zhoushan MSA; and
3) winch brake test report.

    Upon evidence cross-examination at court, the Defendant commented on the evidence provided by the Plaintiff that: As regards Evidence 1, the Defendant accepted the authenticity, but took the views that: The investigation report¡¯s conclusion on accident liability was biased; And the main cause of the accident was not defective quality of lines but was the rapid and complex currents at the Plaintiff¡¯s terminal during spring tide, and was the Plaintiff¡¯s failure to put in place necessary emergency response measures to respond to the accident and failure to comply with MSA¡¯s requirements; As regards Evidence 2, the Defendant accepted the authenticity, but took the view that the Plaintiff¡¯s claim regarding the Defendant¡¯s liability for the accident could not be proved; As regards Evidence 3-9 and 12-15, the Defendant accepted the authenticity but took the view that they could not prove the costs were accident related and that the amounts were exaggerated; As regards Evidence 10, the Defendant accepted the authenticity but took the view that the repair and the cost could not be proved reasonable; As regards Evidence 11, the Defendant confirmed that it attended the work in respect of replacement of the loading arm No.1 on 22 and 23 March 2013, but it did not know the work carried out on 29 March and 7 April 2013, so the authenticity required further evidence from the Plaintiff to prove; As regards Evidence 16-18, the Defendant took the view that: The Plaintiff should not deduce the terminal¡¯s daily income and the terminal¡¯s loss from suspension of work simply from the audit reports; And a berth¡¯s work efficiency did not depend on the work efficiency of loading arms thereon but depended on the work efficiency of discharge pumps on board the ship at the berth, so damage to loading arms would not cause loss of use of terminal; As regards Evidence 19-22, the Defendant took the view that: The terminal¡¯s suitability for accommodation of large vessels taking into account of the tidal conditions around the terminal was not proved; Deduction should not be made simply from competent authorities¡¯ approval that the terminal was safe for operation; And the documents proved that there were rapid currents around the terminal during spring tide and there was an angle between currents and the berth, causing unsafe to berthing of large vessels; As regards Evidence 23, the Defendant accepted the authenticity but took the view that: First, the CCTV footages could prove that MSA investigation report¡¯s conclusion of lines breaking due to tightness was not true, and lines did not broke before the ship drifted; Second, the crewmembers had kept lookout and heaved on lines in due course; Third, the ship drifted at 1723 hours when the main engine had not started, and the main engine did not start until 1729 hours when chimney smoked; As regards Evidence 24 and 25, the Defendant doubted the authenticity, and took the view that the Plaintiff failed to maintain a strict compliance thereof, and the handling plan failed to satisfy MSA¡¯s requirements; As regards Evidence 26-28, the Defendant accepted the authenticity but took the view that the terminal should disconnect the gangway when the ship drifted and whether the costs were accident related was questionable; As regards Evidence 29, the Defendant accepted the authenticity but took the view that: The statement was provided by the Plaintiff specially; The loading arm manufacturer who issued the statement had an interest in this case; The reduced 70% discharge rate was caused by the Plaintiff¡¯s failure to replace wires of the loading arm; And the Plaintiff should further provide ships berthing logbooks during the period while the discharge rate was reduced to 70% to prove that the loss of use of terminal was accident related; As regards Evidence 30, the Defendant took the view that: The findings in the report lacked basis; The documents to which reference was made in the report came from internet but not MSA¡¯s meeting minutes, and the findings in the report contradicted MSA¡¯s findings, in particular, the descriptions about weather, tidal conditions, tugboats¡¯ availability were not true; And the lines were not defective and lines breaking was caused by uneven stresses on lines and lines winding around fire monitor tower on the terminal during mooring; As regards Evidence 31, the Defendant took the view that the survey fee was a contingency cost incurred by the Plaintiff for inspection of the terminal, and was not accident related on the face of the payment slips, and in addition the documents could prove that CCIC was appointed by the Plaintiff unilaterally to carry out inspection and loss assessment, so the survey report provided by the Plaintiff as Evidence 9 was not reasonable and fair; As regards Evidence 32, the Defendant took the view that this document could not prove that the ship would actually berth alongside the terminal, and this document could prove that the Plaintiff¡¯s terminal was not operated at full capacity, so the Plaintiff¡¯s claim for loss of use was questionable.

    The Plaintiff commented on the evidence provided by the Defendant that: The Plaintiff accepted Evidence 1; As regards Evidence 2, the Plaintiff accepted the authenticity but found it irrelevant; As regards Evidence 3, the Plaintiff accepted the authenticity but took the view that according to MSA¡¯s interview records, the pilot had questioned the Master about the conditions of the lines; As regards Evidence 4 and 5, the Plaintiff accepted the evidence but took the view that OCIMF Guidelines 1997 was a outdated; As regards Evidence 6, the Plaintiff accepted the authenticity but took the view that the classification society merely listened to the Master¡¯s introduction about the equipment and checked validity of the certificates, so the statement bore little weight of proof in respect of the conditions of mooring equipment; As regards Evidence 7, the Plaintiff accepted the authenticity, but took the view that: The CCTV footages provided by the Defendant contained more information than that provided by the Plaintiff, so the legality of source was questionable; The Defendant¡¯s interpretation of the CCTV footages went against the facts, while the facts were that the ship drifted due to the crewmembers improper arrangement of lines, and the terminal operators had taken effective measures for drift of the ship; And at that time when berthing operation was not completed, tugboats remained at the ship¡¯s order, so even in case of any problem in tugboat service, it was irrelevant to the terminal but was a fault of the Defendant; As regards Evidence 8, the Plaintiff accepted the authenticity but took the view that ¡°Xin Jin Yang¡± incident was an accident occurrence, and according to the VLCC berthing records provided by the Plaintiff, the terminal was able to receive many vessels and had put in place effective system and measures for VLCC berthing after ¡°Xin Jin Yang¡± incident; As regards Evidence 9, the Plaintiff questioned whether the issuing party was qualified in domestic China to issue report, and whether the report was scientific and impartial; As regards Evidence 10, the Plaintiff took the view that there were material defects in the form and contents of the report and the qualification of the surveyor or institution issuing the report; As regards Evidence 11, the Plaintiff took the view that although the survey report recognized the fact that there were damages to terminal facilities, the report was not impartial when ascertaining the amount of losses and extent of damages.

    As regards the evidence collected by this Court, the Plaintiff and the Defendant both accepted the authenticity but maintained their positions as regards the cause of the accident and the liability issue.

    After hearing, this Court holds that: As regards the evidence provided by the Plaintiff except for Evidence 11, this Court accepts the authenticity considering the Defendant¡¯s acceptance thereof, and will make decisions in respect of their relevancy and the reasonableness of relevant costs involved therein later; As regards Evidence 11, which is a logbook made by the Plaintiff, this Court accepts the authenticity considering that the Defendant only questioned the authenticity of the last two pieces of work due to its failure to attend the work, and this Court will find the facts about installation and repair of the loading arm in combination with other evidence; As regards Evidence 1-8 and 11 provided by the Defendant, this Court accepts the authenticity considering the Plaintiff¡¯s acceptance thereof, and will made a decision in respect of their relevancy later; As regards the Plaintiff¡¯s Evidence 30 and the Defendant¡¯s Evidence 9 and 10, which are opinions of foreign institutions or experts, as the identity and qualification of the issuing parties are unable to check, they can only serve as references by the Plaintiff and the Defendant; As regards the evidence collected by this Court, this Court accepts the authenticity and will make a decision in respect of their relevancy later.

    Regarding various losses claimed by the Plaintiff, based on the above evidence accepted and court investigation, this Court finds as follows:

1) loading arm repair cost

    The Plaintiff claimed that the cost for replacing the terminal¡¯s loading arm No.1 was in amount of RMB1,370,000. The Defendant argued that according to Teamhead Report, many parts of the loading arm No.1, in particular, the most important part, triple swivel assembly, could be dismantled and transferred to another loading arm for further use. In addition, after replacement, the new loading arm had been an upgrade of the old loading arm, while the market price of a brand new loading arm of original model was about RMB1 million. The Defendant then considered that the reasonable amount of this claim should be RMB685,000 after deducting the cost of upgrading and the residual value of useable parts. This Court holds that according to CCIC Report provided by the Plaintiff, the cost for repairing the loading arm No.1 was assessed at RMB1,137,550, the ex-factory price of a brand new loading arm of same model was assessed at RMB700,000 to RMB800,000, and the loss of cost for replacing the loading arm by a new one was assessed at RMB1.2 million. According to CCIC Report, having compared repair cost with replacement cost and having considered the terminal¡¯s actual production, it was recommended that the loading arm be replaced by a new one to reduce overall losses. However, CCIC Report did not discuss the issues of product upgrading and residual value of the old loading arm after replacement. Regarding the issue of product upgrading, Teamhead Report provided different specifications of the new loading arm and the old loading arm, and the Plaintiff did not deny the fact that after replacement, the new loading arm had been an upgrade of the old loading arm, so the Plaintiff¡¯s loss shall be based on the market price of the old loading arm, and having considered the parties¡¯ opinions, this Court exercises discretion to assess the cost at RMB900,000.

    The Plaintiff claimed that the cost for repairing loading arms No. 2, 3 and 4 was in total amount of RMB450,608, and according to CCIC Report, this cost was assessed to include repair cost of RMB360,270 and testing cost of RMB39,800. The Defendant argued that according to Teamhead Report, no significant repair was carried out to the three loading arms, and the Plaintiff failed to provide the manufacturer¡¯s testing record, so the Defendant cast doubt on whether repair was carried out. This Court holds that Teamhead Report has confirmed the facts of replacement of wire ropes and repair of horizontal cylinders. Although the Plaintiff cast doubt on repair of horizontal cylinders and manufacturer test, the Plaintiff provided loading arms¡¯ repair contract, bank slips and manufacturer¡¯s invoices in respect of loading arm repair cost. In addition, the Defendant¡¯s evidence refuting the necessity of repair of loading arms is insufficient and therefore is not accepted by this Court. So this Court supports the Plaintiff¡¯s claim for this repair cost.

2) rubber fender repair cost

   The Plaintiff claimed that the rubber fender repair cost was in amount of RMB290,000, and provided contract, invoice and payment slips to support. The Defendant argued that according to Teamhead Report, the damage to the fender on berthing No. 4 was not caused by the accident because MT ¡°ASTIPALAIA¡± did not make contact with this fender, and the missing of one friction pad on berthing NO. 3 was due to general wear and tear and was not related to the accident in question. This Court holds that in respect of the damage to the fender, CCIC Report found that ¡°The fender [on terminal] was a 2500H twin-drum fender (rubber fender). Its front panel surface was titling, deformed and sinking inwards at upper and middle parts, and the macromolecule polyethylene face pad on the surface of the front panel peeled off. The fender¡¯s outer panel was titling and deformed inwards at upper and middle parts, and the fender bent and deformed at two sides.¡± The Report further assessed the repair cost at RMB263,340, and attached photos of the damaged rubber fender taken in field inspection. In the rubber fender repair contract provided by the Plaintiff, the agreed product (SC2500 fender front panel) corresponded to CCIC Report¡¯s information. According to the CCTV footages provided by the parties, only the chiksan CCTV camera facing stern provided coverage for the outside of the terminal, but based on the footage, the possibility that the ship contacted the rubber fender cannot be excluded. In view of the above, this Court holds that the Plaintiff¡¯s evidence in respect of this claim is sufficient, and the Defendant¡¯s refuting evidence and reasons are insufficient. Therefore this Court supports the Plaintiff¡¯s claim for this loss of RMB290,000.

3) gangway repair cost

    The Plaintiff claimed that the gangway repair cost was in amount of RMB63,726. The Defendant argued that there was no evident sign of damage to the main body of the gangway, and it considered the repair cost agreed in the contract on the high side. This Court holds that according to CCTV footages, it can be confirmed that the gangway dropped off from the deck when the ship was drifting and got damaged. And the Plaintiff provided survey report, relevant contract and payment slip without anything obviously unreasonable, while the Defendant¡¯s rebutting evidence is insufficient. Therefore, this Court supports the Plaintiff¡¯s this claim.

4) fire control system repair cost

    Since the Defendant accepted the Plaintiff¡¯s claim for fire control system repair cost of RMB15,220, this Court supports this claim.

5) loss of use

    First, regarding the period of loss of use, the Plaintiff claimed that the period of loss of use as a result of the accident was 12 days from 18 August to 25 August and from 19 October to 24 October 2011. The Plaintiff further claimed that the period when the loading arms No.2, 3 and 4 were unable to operate at rated capacity as a result of replacement and repair of loading arms was 33 days from 26 August to 18 October 2011, and during this period, the loading arms operated at 70% of rated capacity. Regarding the Plaintiff¡¯s claim for loss of use from 18 August to 25 August, the Defendant cast dispute, raising that according to the terminal¡¯s shift handover & takeover records provided by the Plaintiff, during this period, loading arms No.2, 3 and 4 had been ready for use since 24 August, and the date of accident, 18 August, should not be counted as a day of loss of use, so the number of days of loss of use in August should be reduced by two days. The Defendant further raised that unless the Plaintiff could prove that existing berthing plans were cancelled due to the accident in question, loss of use should not be deemed to arise. Regarding the claim for loss of use as a result of replacement of wire ropes from 19 October to 24 October, the Defendant raised that before replacement, loading arms No.2, 3 and 4 had been in normal operation for 33 days, so the replacement was not urgently required and the Plaintiff could carry out the replacement when the berth was unoccupied. Regarding the claim that the equipment operated at a reduced capacity, the Defendant argued that the claim was technically baseless, and the Plaintiff did not prove the necessity of operating at a reduced capacity. This Court holds that the terminal¡¯s shift handover & takeover records can prove the period of loss of use claimed by the Plaintiff, which was not disputed by Teamhead Report. In addition the Plaintiff had shortened the period of loss of use to 12 days when raising the claim, while the Defendant¡¯s argument is baseless and is not accepted by this Court, so this Court accepts the Plaintiff¡¯s claim for loss of use for 12 days. Regarding the issue of operating at a reduced capacity, CCIC Report provided by the Plaintiff did not make a mention, but the Plaintiff¡¯s Evidence 29, loading arm manufacturer¡¯s statement clarified that ¡°considering that the damaged loading arms¡¯ wire ropes have not been replaced, and there may be hidden and undetected inherent defects or damages as a result of the accident, we recommend that the owner operate the three DN400 loading arms which completed preliminary repair at 70% of the rated capacity for a period in subsequent production so as to ensure no safety accident caused by any defect in equipment¡±. In this regard, Teamhead Report indicated that ¡°operating the berth with the loading arms Nos. 2, 3 and 4 [only] at reduced capacity (70% rated capacity) [compared with operating with 4 loading arms as previously due to breakdown of loading arm No.1] for 33 days¡±. It follows that in respect of 70% rated capacity, the parties have different understandings, and the Defendant questioned the necessity of operation of loading arms at a reduced capacity in court hearing. This Court holds that it is reasonable that the loading arms that completed repair did not operate at full capacity for a period in order to ensure equipment operation safety, so this Court supports the Plaintiff in respect of operation of loading arms at 70% of rated capacity. However, the period of 33 days as claimed by the Plaintiff is obviously too long and baseless, so this Court exercises discretion and only accepts that loading arms operated at a reduced capacity for 10 days.

    Second, regarding the operating income during the period of loss of use and the period when loading arms operated at 70% of rated capacity, the Plaintiff claimed for both losses of use at a daily rate of RMB392,800 which represents the terminal¡¯s average daily income in 2011. The Defendant took the view that in addition to income from cargo handling, the terminal¡¯s income also included income from ISPS charges and income from port management, which were not affected by the accident, so the Defendant argued that the daily loss should be RMB272,585 [(income from cargo handling in 2011 - operating cost) ¡Â 360 days]. This Court holds that in the audit reports provided by the Plaintiff, the operating income included income from cargo handling, income from ISPS charges and income from port management, and the income from cargo handling accounted for about 93% of total operating income. The accident only affected the income from cargo handling, so the other two incomes should not be taken into account. The Plaintiff¡¯s operating cost was a fixed cost, and therefore should not be deducted when calculating profit. The Plaintiff provided its audit reports for 3 years from 2010 to 2012, and the average of three years¡¯ incomes from cargo handling can reflect the Plaintiff¡¯s profit more fairly, so this Court takes this value and assesses the daily loss of use at RMB308,816.50.

    In view of the above, this Court finds that the loss of use is 12 days ¡Á RMB308,816.50/day + 10 days ¡Á RMB308,816.50/day ¡Á (1 - 70%) = RMB4,632,247.50.

6) other losses and costs

    The Plaintiff claimed that it suffered losses of accident handling fee, traffic cost, traveling cost, meeting cost and other costs as a result of the accident in question, which totaled RMB400,000. The Defendant argued that the Plaintiff only provided evidence in respect of survey fee, which however seemed not related to the accident from the evidence. This Court holds that the Plaintiff provided proof of payment to CCIC, and CCIC issued survey report, so the survey fee of RMB30,000 shall be supported, while the Plaintiff¡¯s claim for other costs which have no evidence to support are not supported.

    Based on the above evidence and findings in respect of the losses, and in combination with court investigation, this Court finds the facts as follows: On 18 August 2011, MT ¡°ASTIPALAIA¡± laden with 265,548.93 MT crude oil arrived at Zhoushan Cezi Terminal, planning to berth alongside the 300,000-ton crude oil terminal owned by the Plaintiff; MT ¡°ASTIPALAIA¡± was a double hulled crude carrier with gross tonnage 154,348 and port of registry Piraeus Greece; She was owned by the Defendant and was not under bareboat charter during the voyage; At 1610 hours that day, 20 lines on board were all fastened, and the tug boats all left; At 1719 hours, the stern breast line broke and the vessel then drifted, so the crewmembers took the brake off the winch to release lines, and at the same time the terminal operators tripped the safety switch of mooring hooks to let the lines go; At 1734 hours, the bridge of MT ¡°ASTIPALAIA¡± became parallel with the terminal¡¯s operating platform; As the vessel turned starboard, the port wing of the bridge bore down on the terminal and scratched the wires of loading arms No.4-No.1 in succession; At 1740 hours, two emergency tug boats came in place and then MT ¡°ASTIPALAIA¡± dropped anchor at Yeyashan anchorage at 2017 hours.

    After the accident, Zhoushan MSA made an investigation report on 31 December 2012, concluding in respect of the cause of the accident that: 1) The possibility cannot be ruled out that there might be misoperation of main engine, etc. during the period when the ship was lying at berth (before the lines broke); 2) The possible causes of lines breaking are: the vessel¡¯s failure to make adjustment in the event of uneven stresses on the lines; the defects in the lines; the failure of the deck crewmembers on duty on board MT ¡°ASTIPALAIA¡± to notice ship drifting and uneven stresses on the lines in a timely manner, constituting neglect of watch; the crewmembers¡¯ ineffective emergency action with the problem of the stern breast line; 3) After MT ¡°ASTIPALAIA¡± drifted following lines breaking, the Master ordered astern, making the stern turn toward port, which is the cause of the scratch between the port wing of the bridge of MT ¡°ASTIPALAIA¡± and the loading arms on the terminal; 4) It was a date of perigean spring tide (19 July of the Chinese lunar calendar) on the day of the accident, and the current was rapid at the terminal. Due to the topography of the terminal, there was back current at the terminal. The tide was on the ebb at the time of the accident. The vessel was affected by the current, increasing the stresses on the mooring lines.

    Due to the accident of contact with terminal by MT ¡°ASTIPALAIA¡±, the Plaintiff incurred RMB1,719,554 for replacing loading arm No.1 and repairing loading arms No.2, 3 and 4, rubber fender, gangway and fire control system, and incurred survey fee of RMB30,000 and loss of use of RMB4,632,247.50. The above losses total RMB6,381,801.50.

    It is further found that the Plaintiff filed an application for pre-action preservation of maritime claims before this Court on 23 August 2011, requesting to arrest MT ¡°ASTIPALAIA¡±. This Court made the Civil Ruling of (2011)YongHaiFaZhouBaoNo.28 on the same day, allowing the application. The Plaintiff therefore paid pre-action property preservation fee of RMB5,000.

    This Court holds that the Defendant is a company registered in Greece, so this case relates to a dispute over damages arising from ship contact involving foreign elements. The accident occurred in Zhoushan City Zhejiang Province China, so according to Article 265 of the Civil Procedure Law of the People¡¯s Republic of China, this Court legally has jurisdiction over this case. The Plaintiff and the Defendant both agreed that Chinese law should apply, and the accident occurred in China, so according to Article 3 and Article 44 of the Law of the People¡¯s Republic of China on Application of Law in Foreign-related Civil Disputes, the law of the People¡¯s Republic of China should apply in this case.

    MT ¡°ASTIPALAIA¡± owned by the Defendant contacted with the terminal owned by the Plaintiff while she was berthing alongside the terminal, causing damage to the facilities on the terminal, so the Plaintiff has right to claim against the Defendant for the losses therefrom according to law. The issue in dispute in this case is the liability issue. The Plaintiff took the view that based on MSA¡¯s conclusion in respect of the cause of the accident, the Defendant was the sole party liable for the accident, and should be liable for compensation for all the losses. The Defendant argued that it had no fault, and took the view that: 1) The fundamental cause of the drift of vessel was the rapid ebb currents at the terminal, and the main cause was the tugboats¡¯ failure to provide assistance in due time; 2) The conclusion that the possibility cannot be ruled out that there might be misoperation of main engine, etc., and the findings in respect of the course and cause of lines breaking in MSA¡¯s investigation report were mistaken; There was no misoperation of main engine and the mooring equipment on board was all in good operation; 3) The Plaintiff failed to comply with the requirements in the respect of emergency response set forth in Zhoushan MSA¡¯s meeting minutes dated 31 October 2007, failed to take effective emergency response actions, and failed to make sufficient preparation for emergency, so the Plaintiff should be liable for the accident.

    In combination with MSA¡¯s conclusion on the cause of accident in its investigation report and the CCTV footages at the time of the accident, this Court holds that MT ¡°ASTIPALAIA¡± drifted under effect of currents after completion of berthing operation. Although the Defendant argued that the mooring lines were in good condition and the actions taken were proper, considering that terminal is a fixed facility, lines breaking should be attributed to the fact that the lines condition and the actions taken by the crewmembers failed to ensure safe berthing operation in the hydrologic condition at that time. The Defendant questioned the terminal¡¯s design, but berthing terminal was at the ship interests¡¯ option. Whether the terminal and the berth which the ship berthed alongside were safe or not is not an issue to be decided in this case. The Defendant also argued that the terminal failed to make tugboats available or on standby, or give the Defendant an alert to fulfill its obligation to exercise due care. This Court holds that there is no contract between the Plaintiff and the tugboats, and the tugboats were hired by the ship interests for providing berthing assistance, so it is baseless for the Defendant to hold the Plaintiff liable for failure in tugboat arrangement, and the Defendant¡¯s argument is not accepted by this Court. In view of the above, the Defendant shall be liable for the contact accident in question, and shall compensate the Plaintiff for various losses arising from the accident in total amount of RMB6,381,801.50 according to law. The Plaintiff further claimed for interest on the losses from the date of actual accrual to the date of payment prescribed by the Judgment at loan interest rate published by the People¡¯s Bank of China over the same period. This Court holds that the Plaintiff¡¯s claim for interest is legally grounded and the interest rate is reasonable, so this court supports the claim. The Plaintiff claimed that the interest should be calculated from the date of actual accrual. As repairs were carried out by the Plaintiff after the accident, and the loss of use was incurred in a period of time, so this Court exercises discretion to decide that the interest accrued from the date of completion of repair of loading arms, i.e. 25 October 2011, to the date prescribed by this Judgment. The Plaintiff also claimed that the Defendant should compensate the Plaintiff for the pre-action property preservation fee of RMB5,000. This claim is reasonable and legal and therefore is supported by this Court. In view of the above, according to Article 6 Paragraph 1 of the Tort Liability Law of the People¡¯s Republic of China, Article 1 Paragraph 1 and Article 5 of the Supreme People¡¯s Court¡¯s Rules on Trial of Cases of Dispute over Property Damage Arising from Ship Collision and Contact, and Article 64 Paragraph 1 and Article 259 of the Civil Procedure Law of the People¡¯s Republic of China, the Judgment is handed down as follows:

I. The Defendant E.N.E. ASTIPALAIA LTD shall pay the Plaintiff Zhoushan Shihua Crude Oil Terminal Co. Ltd. RMB6,381,801.50 together with the interest accruing thereon (from 25 October 2011 to the date of payment prescribed by this Judgment at loan interest rate published by the People¡¯s Bank of China over the same period) within ten days from the date when this Judgment takes effect;

II. The Defendant E.N.E. ASTIPALAIA LTD shall pay the Plaintiff Zhoushan Shihua Crude Oil Terminal Co. Ltd. pre-action property preservation fee of RMB5,000 within ten days from the date when this Judgment takes effect;

III. Other claims of the Plaintiff Zhoushan Shihua Crude Oil Terminal Co. Ltd. are rejected.

    If pecuniary payment obligation fails to be fulfilled within the period prescribed by this Judgment, double interest on belated payment shall be paid according to Article 253 of the Civil Procedure Law of the People¡¯s Republic of China.

    The court fee of this case is RMB93,750, among which RMB40,290 shall be borne by the Plaintiff Zhoushan Shihua Crude Oil Terminal Co. Ltd. and RMB53,460 shall be borne by the Defendant E.N.E. ASTIPALAIA LTD.

    If this Judgment is refused to be accepted, a Statement of Appeal, along with the copies in the number of the opposing parties, may be submitted to this Court by the Plaintiff Zhoushan Shihua Crude Oil Terminal Co. Ltd. within 15 days from the date of service of this Judgment or by the Defendant E.N.E. ASTIPALAIA LTD within 30 days from the date of service of this Judgment for appeal to the Zhejiang Province High People¡¯s Court. [The appeal court fee of RMB93,750 (the exact amount shall be determined by Zhejiang Province High People¡¯s Court, and overpayment if any will be returned) shall be prepaid when the Statement of Appeal is submitted. If the appeal court fee is not paid within seven days upon expiry of appeal period, the appeal shall be deemed to be withdrawn automatically. The appeal court fee shall be paid to the non-taxable income settlement account of Zhejiang Provincial Department of Finance, Account No. 19000101040006575401001, Bank: Agricultural Bank of China Hangzhou Xihu Sub-branch].

 

Presiding Judge : Hu Jianxin
Acting Judge : Xu Jiajing
Acting Judge : Zhang Jiansheng
stamp of Ningbo Maritime Court
12 February 2015
Certified True Copy
Acting Clerk : Zheng Jing

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