In July 2009 the plaintiff and the defendant in a recent case
entered into a transportation agreement in which the defendant
would be responsible for transporting 10 sets of passenger boarding
bridges and accessories for the plaintiff from the port of Nansha,
China to the port of Mumbai, India by sea, then to the project site
at New Delhi International Airport by truck. On July 21 2009 part
of the goods under the agreement were loaded onto the M/V XX at
Nansha to be transported to Mumbai. The carrier issued a bill of
lading for this shipment.
Unfortunately, three pieces of cargo were damaged due to several
accidents during transport: one by a fire in the cabin of the XX,
another during the unloading process and a third in a traffic
accident during the road transport from Mumbai to New Delhi
The plaintiff filed a lawsuit against the defendant for this
loss and damages of Rmb825,215.
Whether the Guangzhou Maritime Court had
At trial, the defendant raised an objection to the jurisdiction
of the court on the grounds that the dispute was subject to the
contract of carriage of goods by sea. According to the carriage
contract, any dispute arising from the contract would be governed
by Chinese law and arbitration proceedings would then be held in
China; thus, the Guangzhou Maritime Court had no jurisdiction over
Although the court ultimately rejected the jurisdiction
objection on the ground that no clear arbitration forum was
stipulated in the relevant clause, raising the jurisdiction
objection can be regarded as a good defence tactic that gave the
defendant time to collect sufficient evidence and prepare the
Whether the defendant had 'fire immunity'
Article 51 of the Maritime Law provides that a carrier will not
be liable for losses or damages suffered during its period of
responsibility for the cargo, unless such loss or damage was caused
by the carrier – in which case the carrier will bear the
burden of proof.
According to the relevant survey report provided by the
plaintiff, the loss of the first piece of cargo was caused by fire.
The defendant therefore argued that it had 'fire immunity'
under Article 51. Moreover, if the plaintiff intended to restrict
the carrier's right to rely on exemptions, it had to provide
strong evidence that the fire was the fault of the carrier; the
plaintiff failed to provide any such evidence. The survey report
showed that the fire was caused by negligence during welding and
cutting work, which did not constitute fault by the carrier within
the scope of the law. The defendant was thus allowed fire immunity
in accordance with Article 51 and was not held liable for the cargo
Whether the defendant had unit limitation of
The plaintiff's claim for the second piece of damaged cargo
was Rmb143,213.92. After carefully reviewing the sales agreement,
customs declaration and other evidence provided by the plaintiff,
and confirming the weight of the ticket of goods, the defendant
asserted that it was subject to the unit limitation of liability
under Article 56 of the Maritime Law. Therefore, the defendant
calculated the corresponding unit liability of Rmb57,600 according
to the gross weight – 3,000 kilograms – of the relevant
Based on the strong defence, the plaintiff had to make a
concession. Both sides committed to a friendly consultation under
the judge's mediation and reached the following settlement
The plaintiff's claim for the first piece of cargo amounted
to Rmb85,354.53, but the defendant was exempted from this charge
due to fire immunity.
The plaintiff's claim for the second piece of cargo amounted
to Rmb143,231.92, but this was lowered to Rmb57,600 on account of
the defendant's unit limitation of liability.
The plaintiff's claim for the third piece of cargo amounted
to Rmb276,898.96, but this was lowered to Rmb129,400.
The defendant paid a total settlement amount of Rmb250,000
– much lower than the original claim amount of
Originally published in ILO - February 06 2013
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Local and international news about shipping, aviation, rail and road transport.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).