Though marine transportation is continuously booming, yet there has not been any law made specifically upon B/L matters in China. Also, the PRC Maritime Law is not focused enough on cargo delivery under B/Ls. This led to the difficulties faced by Chinese maritime courts when hearing cases on such disputes. In August 2000, to solve a problem arose in a case of this type, the PRC Supreme People’s Court (“SPC”) promulgated Letter on Whether the Holder of B/L Can Still Claim Against the Carrier for the Cargo Title After Its Possessing the Cargo Without Changing the Receiver (“Letter 2000”). As its name suggests, this judicial interpretation only referred to cargo title problem, leaving many other issues unsolved.
In consideration of improvement in future hearing of cases of this kind, SPC issued on February 26, 2009 a new judicial interpretation named Regulations on Some Issues Related to Application of Law in Hearing Cases upon Cargo Delivery without Original B/L (“the Regulations”). The fifteen-article Regulations took effect on March 5th , and clarifies some issues as follows:
1. Cause of Action
In compliance with the Regulations, a holder of an original B/L who has suffered from the cargo delivery by the carrier without original B/L is entitled to claim against the carrier for its liabilities under breach of contract or infringement. This is to say the holder can sue on the ground of infringement or breach of contract as cause of action.
2. Application of Law
The Regulations sets forth that PRC Maritime Law is applicable to cases of disputes over cargo delivery without original B/L. Meanwhile, “other laws and regulations shall apply wherever there is no related stipulation in PRC Maritime Law”. Therefore,when the plaintiff sues under breach of contract, the abovementioned “other laws and regulations” refers to PRC Contract Law and its corresponding judicial interpretation. Similarly, if the plaintiff sues under infringement, “other laws and regulations” shall mean General Provision of Civil Law and its related judicial interpretation.
3. Exclusion of Limitation of Liability for Maritime Claims
Concerning Article 4 of the Regulations, carriers are not allowed to apply limitation of liability for maritime claims during trial of cases on cargo delivery without original B/L. To some extent, plaintiffs may be happy since damages they suffered would be much better indemnified with such exclusion.
4. Exceptions and Time Limit of Action
The Regulations also sets forth three types of instances where the court would dismiss the claim of the holder of an original B/L. Meanwhile, the commencement and re-commencement of time limit of action are stipulated.
- Though there are so many specific provisions clearly set out, the Regulations dose not mention the allocation of burden of proof, which has been highly concerned by shipping companies and freight forwarders.
- Whether or not it is reasonable that “the claiming amount shall be calculated as cargo value at loading plus freight and insurance” (Article 6).
- Shall Article 13 be understood as “wherever the carrier fails to pay the total amount of the damages as agreed to the holder of original B/L, such holder is then entitled to sue the carrier, REGARDLESS OF THE OUTSTANDING AMOUNT” or, like stipulation in Letter 2000, that “Only when the carrier DID NOT PAY ANY of the damages as agreed can the holder sue”.
Governance upon cargo delivery without original B/L will be enhanced with the implementation of the Regulations in China. Of course, foreign companies in marine transportation industry would welcome it too.