I. Parties involved
Applicant: Woodtrans Navigation Corporation (hereinafter referred to as Woodtrans).
Applicant: Sanwai Navigation S.A Panama (hereinafter referred to as Sanwai)
Respondent: Angang Group International Trade Corporation (hereinafter referred to as Angang)
II. Main facts of the case
Angang signed a contract with Billion Golden Ltd. (hereinafter referred to as Billion Golden) on Feb. 20th 1995 to sell Billion Golden hot rolling steel for 5,000 tons with FOB price for USD 295 per ton and payment by L/C. on June 30th of the same year, M.V. UNISON PRAISE owned by Woodtrans was loaded with the cargo under above contract at port of Dalian. When the cargo have been loaded on board, the carrier Merpati Lines S.A. (hereinafter referred to as Merpati) issued the original bill of lading in triplicate to Angang. The bill of lading states that: Shipper: Angang, Consignee: to order of PT Bank Bumi Daya (persero) Jakarta Rasuna Said Branch, Port of Loading: Dalian, Port of Destination: Jakarta, Weight of Cargo: 5155.520 ton. On July 21st, UNISON PRAISE arrived at the port of Jakarta, and then the carrier delivered the cargo to the Notify party listed in bill of lading without presentation of the same after the cargo was discharged from the vessel. Upon receipt of the shipped clean bill of lading issued by the carrier, Angang then submitted to the issuing bank through Anshan Branch of China the whole set of documents including original bill of lading, commercial invoice to settle the payment. The value of cargo as recorded by the invoice amounts to USD 1,520,878.4. Above documents are transferred to the issuing bank on July 8th and rejected by the issuing bank because of inconsistence with L/C. Angang received the returned bill of lading and the invoice on August 20th. Woodtrans is the registry owner of the carrying vessel UNISON PRAISE. M.V UNISON GREAT arrested by Dalian Maritime Court and owned by Woodtrans is the sister vessel of UNISON PRAISE. On April 16th 1996, Woodtrans sold UNISON GREAT to Sanwai who changed the name of vessel to SAN WAI. Through the statement from Panama Public Registry Authority, the owner of UNISON PRAISE did not logout the registry. As a result, the owner of this vessel is still Woodtrans.
III. The original judgment of the case
Dalian Maritime Court tried the case and decided that: Since the carrier Merpati issued the bill of lading and delivered the cargo to UNISON PRAISE to undertake the carriage, Woodtrans is in the legal position of actual carrier as provided by Maritime Code of P.R.C. The Bill of Lading is the evidence of contract of goods by sea, and the certificate for title and documents against which the carrier guarantee to deliver the cargo. When the shipper holds the bill of lading, the relationship of right and liability between the carrier and the holder shall be defined as the provisions of bill of lading. It is the legal responsibility of the carrier to deliver the cargo upon presentation of original bill of lading according to the law. According to Article 61 of Maritime Code, it is also the responsibility of the actual carrier to delivery the cargo against the surrendering of bill of lading. Under the time charter party, even the charterer is entitled to direct the master concerning the operation of vessel as provided by Article 136 of Maritime Code, the instruction made by the carrier in the name of the charterer to the master to deliver the cargo without presentation of bill of lading has not only exceed the legal right of the charterer but also violated the forcible obligation for the carrier and the actual carrier to delivery the cargo against the presentation of bill of lading. Woodtrans knew its forcible obligation to delivery the cargo against the presentation of bill of lading but still violated this obligation, which constitutes an illegal act done with intent and shall not be entitled to benefit from the exemption and the limitation of liability as provided by bill of lading and therefore shall take complete responsibility for the losses suffered by Angang. Meantime, Dalian Maritime Court also determined that the flag of SANWAI is Panama. When exercising the arrest of vessel, the identification of the ownership of SANWAI (original UNISON GREAT) shall apply the law of Panama in accordance with Article 270 of Maritime Code. According to Article 1083 and 1089 of Maritime Code of Panama, under any circumstances, the transference of vessel’s ownership would not act against the third party without registry at public authority. Although the buyer obtained the UNISON GREAT, Woodtrans did not register the transference of ownership at public registry authority at Panama when the vessel was arrested by Dalian Maritime Court. Therefore, the vessel still owned by Woodtrans when the court exercised arrest of the vessel. The objection raised by Sanwai with the court is the legal owner of the vessel shall not be sustained. Hence, the court made a judgment: Woodtrans shall compensate Angang for the loss of cargo in amount of RMB 12,700,000 and the interests thereto in rate of 10.98% per month counting from August 20th 1995 to the date the payment actually being paid; dismiss the claim filed by Sanwai who is in a position of owner in claiming for the incorrect arrest of vessel against Angang. Woodtrans and Sanwai refused to accept the judgment of first trial and filed an appeal with the Liaoning Higher People’s Court. The Liaoning Higher People’s Court heard the case and decided that: Angang is the legal holder of the bill of lading who, under the provision of Maritime Code and internal maritime practice, is entitled to claim for the losses of cargo against Woodtrans who delivered the cargo without presentation of bill of lading. Although Woodtrans entered into a time charter party with Merpati, the act of delivery of cargo without presentation of bill of lading was done by UNISON PRAISE during the performance of time charter party and Woodtrans therefore could not be exempted from the legalized liability. Since UNISON PRAISE carried the cargo under the bill of lading, Woodtrans as the owner of the vessel has acted as the actual carrier under Maritime Code. It is the responsibility not only of the carrier but also the actual carrier to deliver the cargo to the holders who surrender the original bill of lading. Without presentation of original bill of lading, the cargo was delivered to the Notify Party recorded in bill of lading and all the losses suffered by Angang shall be compensated fully by the liability party. UNISON PRAISE owned by Woodtrans shall oblige herself according to the law of China and international maritime practice. Her obeying of the instruction of carrier in delivering of cargo without presentation of bill of lading did not satisfy the condition for exemption, although she enjoyed the right to recourse the losses thereto against the instructor. Therefore the reason for appeal of Woodtrans shall not be supported by the Higher People’s Court. The appeal filed by Sanwai is concerned with objection to the arrest of the vessel before instating an action and is lack of basis for facts and laws because the facts was ascertained at the original procedures for preservation. The appeal has not interested relationship with the concerned disputes of delivery of cargo without presentation of bill of lading and is not provided with the independent claim as required by the law. This appeal is overruled by the court. In the end, Liaoning Higher People’s Court rejected the appeal and affirmed the original judgment.
IV. How is the leading case made:
Woodtrans and Sanwai refused to accept above final judgment and applied for retrial with the Supreme Court of the P.R.C. The main reason for the petition of Woodtrans was: The fact ascertained in the original judgment that Woodtrans was involved in the act of delivery of cargo without presentation of bill of lading is incorrect. Merpati was the charterer and issued one shipped clean bill of lading on July 8th 1995. The bill of lading dated June 30th, ascertained in original judgment was an anti-dated bill of lading issued by Dalian Penavico the agent of Merpati upon the request of the shipper with intention to satisfy the requirement of the letter of credit. Because there existed a time charter party between Woodtrans and Merpati, Merpati issued the bill of lading, and the delivery of cargo without presentation of bill of lading had nothing to do with the owner of the vessel. The actual carrier was not at fault for the losses suffered by the shipper. The bill of lading issued by Merpati said that the contract carrier had been collected by Woodtrans after the discharging of cargo. Whereas the bill of lading held by Angang was an anti-dated bill of lading issued by the agent of Merpati. The actual carrier had fulfilled the liability for delivery of cargo and collected the original bill of lading without any fault. When SAN WAI was arrested at port of Shanghai, she had been granted with temporary certificate of nationality and the document of transference of ownership had been notarized and submitted with public authorization of Panama for registry. Referring to the correct understanding for Maritime Code of Panama, the ownership had been transferred to SAN WAI. Angang contended that: Woodtrans issued illegally the bill of lading to the buyer of sales contract, which deprived of the cargo ownership of the shipper, Angang and violated the contract of bill of lading fundamentally. Thus Woodtrans should undertake the liability for releasing the cargo without surrendering of bill of lading. Woodtrans, as the owner of the ship and the actual carrier, attended the issuance of the original bill of lading to Billion Golden (middleman and buyer) directly; under the time charter party, the owner acting as actual carrier should be liable jointly for the losses of the shipper in issuing the bill of lading to the buyer not the shipper; the application for arrest of SAN WAI was right. The Supreme Court found after retry the case that: Angang and Billion Golden signed sales contract on Feb. 20th 1995. Angang undertook to provide with Billion Golden hot rolling steel for 5000 tons at the price of USD 295 per ton paid by L/C. during the period when SON PRAISE owned by Woodtrans was hired by Merpati under the time charter party, as required by the voyage charter party established between Billion Golden and Merpati, the vessel arrived at port of Dalian and was ready for loading of cargo under above sales contract. On July 9th 1995, the cargo was loaded on board. The date of loading recorded on the manifest of Dalian Penavico was July 9th 1995 with remark that rust in rolling steel and no hoop for loose rolling. At the same day, Dalian Penavico, as the agent of carrier Merpati, issued to Angang an original bill of lading dated June 30th 1995 in triplicate against the Letter of Undertaking provided by Angang. The bill of lading stated that: Shipper: Angang; Consignee: to order of PT Bank Bumi Daya (persero) Jakarta Rasuna Said Branch; Port of Loading: Dalian; Port of Discharge: Jakarta; Weight: 5155.2 tons. During the period when UNISON PRAISE were loading with the cargo at the port of Dalian, Merpati issued to Billion Golden a set of bill of lading upon the presentation of LOU issued by Billion Golden on July 8th 1995. The issuing place recorded on the bill of lading was Dalian. The opening of LOU issued by Billion Golden stated that: To owner of UNISON PRAISE / agent/ charier/ master. LOU provided that: taking the situation into account that you issue to us or to the person to our order the second bill of lading without presentation of the first bill of lading issued at the port of loading… UNISON PRAISE arrived at port of Jakarta on July 21 and the consignee presented LOU to Merpati when the cargo was discharged from the vessel. According to the instruction of Merpati, UNISON PRAISE released the cargo to the consignee against the surrendering of LOU and the copy of bill of lading. Aftertime, Unison collected the bill of lading dated July 8th. This bill of lading had been endorsed by the order and negotiated through bank. Having been acquired the clean bill of lading issued by Dalian Penavico on behalf of Merpati, Angang submitted to the bank through Anshan Branch of China Bank the whole set of documents including original bill of lading, commercial invoice to settle the payment of cargo. The commercial invoice proved that the total value of the cargo amounted to USD 1,520,878.4. Above documents were transferred to the issuing bank on July 19 and rejected by the issuing bank on the basis of inconsistence with L/C. Angang received the refunded bill of lading and the invoice on August 20th. Angang filed a complaint against Merpati and Woodtrans with Dalian Maritime Court, alleging the defendants compensate for the losses arising from release of cargo without presentation of bill of lading and applying for the preservation of property. Dalian Maritime Court arrested SAN WAI (old name: UNISON GREAT) owned by Woodtrans at the port of Shanghai on May 6th 1996. SAN WAI applied for objection to the arrest of vessel by arguing that the vessel was owned by him on May 17th 1995. Dalian Maritime Court informed SAN WAI to attend the litigation as the Third Party. On May 31st, People’s Insurance Company of China (PICC) who was entrusted by Japan P & I Club provided a guarantee in amount of USD 1,800,000 for the owner of the arrested vessel, which made the vessel be released from the court. During the course of first trial, Angang withdrew the complaint against Merpati. Above facts can be proved by following evidences: original bill of lading issued by Merpati to Billion Golden on July 8th 1995; original bill of lading issued by Dalian Penavico to Angang on July 9th 1995; LOU issued by Angang in exchange of the clean bill of lading, LOU issued by Billion Golden as guarantee for bill of lading issued on July 8th, LOU issued by consignee in take delivery of cargo; manifest of Dalian Penavico; order in arrest of vessel; records of hearing. The Supreme Court decided that: The case filed by Angang against Woodtrans is a dispute over delivery of cargo without presentation of bill of lading in carriage of goods by sea. During the first and the second trial, both parties did not object to the application of the laws of China. Therefore, the case shall be applied to the laws of China. Regarding to Article 270 of Maritime Code, the law of the flag State of the ship shall apply to the acquisition, transfer and extinction of the ownership of the ship. As for the ownership of SAN WAI, the law of Panama shall apply to this case. Based upon the examination of the original court, when SAN WAI was arrested by Dalian Maritime Court, Woodtrans did not apply for the transference of ownership with Public Registry Authority of Panama. Therefore, the argument of SAN WAI that the ownership had been transferred from Woodtrans to SAN WAI is lack of reason and shall be rejected. The bill of lading on the basis of which Angang filed a complaint was issued by Dalian Penavico as the agent of Merpati the time charterer and was in the name of Merpati, which explicitly record the carrier as Merpati. Thus, according to provisions of Maritime Code, Woodtrans, the shipowner of UNISON PRAISE shall be deemed as the actual carrier of this voyage who undertakes the carriage of goods by sea actually in accordance with time charter party between Merpati. Angang is still entitled to file a complaint against Woodtrans according to the contract of goods by sea evidenced by bill of lading. During the concerned voyage, Merpati also issued another bill of lading to Billon Golden, the charterer of voyage charter party. When the cargo arrived at the port of destination, consignee presented Merpati with LOU issued by bank. Under the instruction of Merpati, the shipowner released the cargo to the consignee against the presentation of LOU and the copy of bill of lading. The original bill of lading was collected by the shipowner. Based upon current evidences, agents at the port of loading and discharge were both appointed by Merpati. Meanwhile, as time charter party provided, the shipowner shall obey the instruction of charterer concerning the operation of vessel. So, the basis for the claim of Angang that Woodtrans actually participated in the delivery of cargo without presentation of bill of lading is not sufficient. Therefore, the original judgment that determined Woodtrans shall be liable for the delivery of cargo without presentation of bill of lading is lack of the foundation for laws and facts. By arguing that Woodtrans accepted the LOU from Billion Golden to issue the bill of lading and filed a complaint against Billion Golden at Hong Kong, Angang reckoned that Woodtrans participated in the release of cargo without surrendering of bill of lading actually. The Supreme Court decided that the argument was insufficient for the claim and rejected the claim. The merit of the case is dispute of delivery of cargo without presentation of bill of lading, but not dispute of issuance of bill of lading. The argument of Angang that the losses it suffered are linked with the issuance of two sets of bill of lading has exceeded the extent of hearing. Furthermore, LOU issued by Billion Golden is submitted to owner of UNISON PRAISE/ agent/ carrier/ master, from the act of Merpati in issuing of the bill of lading, the person who accepted LOU is not Woodtrans but Merpati. The complaint against Billion Golden filed by Woodtrans who had been claimed by Angang at Dalian Maritime Court could not be used as evidence to prove that Woodtrans actually participated in the delivery of cargo without presentation of bill of lading. The reason of Woodtrans in the application for retrial accord with laws of China, the foundation for the claim of Angang is insufficient and shall be corrected by the Supreme Court. According to Article 60 (1) of Maritime Code of P.R.C, Article 179 (2), (3) and Article 184 (1) of Civil Procedure Law of the P.R.C, the Supreme Court made a judgment that: set aside Civil Judgment (1997) Liao Jing Zhong Zi No. 39 issued by Liaoning Higher People’s Court; set aside Civil Judgment (1996) Da Hai Fa Shang Chu Zi No. 72 issued by Dalian Maritime Court; reject the claim of Angang; reject the claim of Woodtrans and SAN WAI that the ownership of SAN WAI has been transferred from Woodtrans to SAN WAI; The court fee in the first and second trial shall be paid by Angang.
?。?As far as the bill of lading dated July 8th 1995 is concerned, Merpati as the carrier and Woodtrans as the actual carrier have delivered the cargo to the consignee to order of bank and recovered the original bill of lading ultimately. The carrier did not deliver the cargo incorrectly and the claim for delivery of cargo without presentation of bill of lading did not exist.
?。?As actual carrier, under the authorization and instruction of Merpati, Woodtrans exercise due diligence to carry the goods in good order and condition, made the cargo discharged and delivered at the port of destination safely. Woodtrans has performed the carriage of goods by sea completely. Woodtrans did not at fault in issuance of bill of lading and delivery of cargo at the port of destination and shall not take any responsibility.
?。?Woodtrans did not participate in the issuance of bill of lading exercised by carrier and its agent. The issuance of two sets of bill of lading done by carrier and its agent is unknown to Woodtrans. Woodtrans shall not take any liability for the losses without any fault of him.
?。?There is no relationship of causation between the losses of Angang and the act of Woodtrans in delivery of cargo. Angang had given up the right of claim when applying for a withdrawal of the case against Merpati.