Maritime Law and Practice in China
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CHAPTER 11
Collision of ships
Collision of ships
11.1 Collision of ships in the CMC 1992 means an accident arising from the touching of ships at sea or in other navigable waters adjacent thereto.1 The main provisions regarding collision of ships in the CMC 1992 are for the legal liability of the parties to be blamed. The regime of the legal liability is the same to that of Convention for the Unification of Certain Rules of Law with respect to Collisions between Vessels, 1910 (the “Collisions Convention 1910”) to which China has acceded.2 Besides the CMC 1992, the Tort Liability Law 2009 also applies to disputes over the collision of ships.3 The judicial interpretation on the collision of ships is Provisions of the Supreme People’s Court on Several Issues Concerning the Trial of Cases Involving Disputes over Vessel Collisions 2008 (the “Provisions on Vessel Collisions 2008”).4 With regard to tort disputes arising out of contact between ships that are not caused by a collision of ships, the liabilities for compensation of the contacted vessels are determined in accordance with the General Principles of Civil Law 1986, as amended in 2009.5 11.2 For preventing collisions at sea, China has acceded to the Convention on the International Regulations for Preventing Collisions at Sea 1972 (the “COLREGs 1972”).6 In judicial practice, administrative regulations on navigation in local waters may apply in addition to the COLREGs 1972 for the assessment of liabilities of collided ships.7 Meanwhile, the Regulations for Preventing Collisions on Inland Waters 1991,8 as amended in 2003, apply to the collisions in Chinese inland waters and provide rules for the distribution of liability. However, it does not affect the application of the other relevant provisions in CMC 1992 for the liability of collisions in the inland waters.9 China also has the MaritimePage 122
Ships in collision
11.3 “Ships” in the collision of ships in the CMC 1992 include those non-military or public service ships or craft that collide with the ships generally defined in the CMC 1992.11 The ship as a general concept in the CMC 1992 means sea-going ships and other mobile units, but does not include ships or craft to be used for military or public service purposes, nor small ships of less than 20 tons gross tonnage, including ship’s apparel.12 However, the provisions regarding the collision of ships in the CMC 1992 do not apply to disputes over collision between military vessels or official vessels in commercial activities and others ships for the collision of ships in the CMC 1992.13 Furthermore, the collision of ships in the CMC 1992 does not include collision between the inland water ships.14 11.4 The COLREGs 1972 applies to all vessels on the high seas and in all waters connected therewith navigable by seagoing vessels.15 The word “vessel” includes every description of water craft, including non-displacement craft and seaplanes, used or capable of being used as a means of transportation on water.16 The Collisions Convention 1910 applies to the compensation for damages caused to vessels, or to any things or persons on board thereof due to a collision that occurs between sea-going vessels or between sea-going vessels and vessels of inland navigation in whatever waters the collision takes place.17 11.5 Where a ship has caused damage to another ship and persons, goods or other property on board that ship, either by the execution or non-execution of a manoeuvre or by the non-observance of navigation regulations, even if no collision has actually occurred,18 the provisions regarding collision of ships in the CMC 1992 shall apply.19Liabilities in collision
General principles
11.6 The three general rules of legal liability are established by the Collisions Convention 1910. First, if a collision occurs that is accidental or of an uncertain cause, the damagesPage 123
Proportion of liability
11.9 Where the colliding ships are all at fault for the collision at sea or in other navigable waters, the liability and the proportion thereof shall be analysed in the context of the COLREGs 1972. In principle, more fault mean more liability. If the ships in the collision have the same or are at similar fault, the liability of their shipowners shall be divided equally in proportion. Otherwise, the shipowner who is at more fault bears more liability. In Maoming Maonan Xinghua Petroleum & Chemical Co Ltd v Fujian Shishi Xinda Shipping Co Ltd and Others,29 both of the ships in the collision failed to maintain a proper look-out by sight,Page 124
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Causation in tort
11.13 For tortious liability in collision cases, the general principles of tort law apply. Causation is a condition of tortious liability in the judicial practice of ship collision cases even though Chinese statute law does not expressly require this condition. In Rickmers Genoa Schiffahrtsgesellschaft mbH & Cie KG and Rickmers-Linie GmbH & Cie KG v CS Marine Co Ltd,35 one of the issues in the dispute over the ships’ collision was the causation between the collision and the explosion of one of the colliding ships, Rickmers Genoa. Because of the collision, a flood of water poured into the No. 1 cargo hold of Rickmers Genoa. The cargo of magnesium desulfurisation agent within containers reacted with the water and hydrogen was released, which caused the explosion. In the chain of causation, the Shanghai Maritime Court pointed out that the collision was the origin of the explosion, the reaction between the water and the cargo was the condition of the explosion, and both the collision and the reaction caused the explosion. Without the collision, the reaction as the condition of the explosion would not have happened and the explosion would not have thus occurred. Therefore, it was held that there was causation in law between the ships’ collision and the explosion on Rickmers Genoa. For liability in tort, it is necessary to examine both the causation in fact and the causation in law. In this case, there was only causation in fact. In other words, the damage due to the explosion was too remote. 11.14 The test of remoteness is foreseeability.36 If the damage is not foreseeable, it is too remote. In Xing Yulin v Qinzhou Port Yunshunda Shipping Co Ltd,37 the ship Tailianda collided with a first ship and kept reversing until a second collision with a second ship. The Shanghai Maritime Court pointed out that the first collision was an obvious cause of the second collision. However, it was just causation in fact, but not causation in law. InPage 126
Compensation for damages
Compensation in general
11.15 There is no compensation if neither of the parties is liable to the other.41 If the collision is caused by the fault of one of the ships, the one at fault shall be liable for compensation of the loss of the other one.42 If each ship is liable in proportion to the extent of its fault, the ships in fault are liable for the damage to the ship, the goods and other property on board pursuant to the proportions. Where the cargos on board are damaged when both the colliding ships are at fault, the cargo interests may claim against the carrying vessel for breach of contract, or claim against one or both of the colliding vessels for compensation in tort.43 Where damage is caused to the property of a third party, the liability for compensation of any of the colliding ships does not exceed the proportion it shall bear. If the ships in fault have caused loss of life or personal injury to a third party, they shall be jointly and severally liable. If a ship has paid an amount of compensation in excess of its proportion, it has the right of recourse against the other ship at fault.44 11.16 The property loss or losses of a third party means the loss or losses directly caused by the vessel collision to the properties other than goods on the vessels or properties carried by crew, passengers, or other personnel on the ships that are all in fault.45 ThePage 127
Compensation for damage to property
11.17 The compensation for damage to property caused by the ships’ collision is subject to the Provisions on Compensation for Vessel Collisions 1995. Damage to property includes the physical damage to property, consequential expenses and loss, the reasonable expenses and loss for avoiding or minimising the damage and the loss of expected prospective interest.48 In Chinese judicial practice, the prospective interest is the reasonable loss that could be reasonably anticipated by the liable person.49 The loss of penalty paid to a third party is not a reasonable prospective interest because it cannot be anticipated by the liable person in a collision.50 11.18 The compensation for damage to the ship includes the compensation for the whole damage and for partial damage. Whole damage to a ship includes the loss of value of the ship including bunkers on board, ship’s apparel and other properties on board, seamen’s wages, repatriation fees and other reasonable expenses. Partial damage to a ship includes the temporary and permanent repair cost, auxiliary expenses and maintenance cost. The damage to a ship also includes reasonable salvage remuneration, expenses for investigation, rescue and removal of shipwreck, the costs for setting the wreck mark, salvage reward, loss of hire or freight for the current voyage, contribution to general average, loss due to detention of ship and other reasonable costs and expenses.51 11.19 The compensation for damage to the property on board includes the loss or devaluation caused by the loss of or damage to the property, reasonable cost for repair or treatment, reasonable cost for salvage, rescue and removal of the property, contribution to general average and other reasonable costs and expenses.52 The compensation for damage to the onshore installations caused by the collision with ships includes the whole loss of installations or the repair cost for the partial damage and reasonably expected prospective interest before installations can be used as usual after repair.53 If the owner of the damaged installations violates the principle of good faith and deliberately delays the repair, the owner shall be liable for the loss of prospective interest so caused.54Page 128
Compensation for personal injury
11.20 According to the Interpretation on Compensation for Personal Damage 2003,55 compensation for personal injury includes:56- (a) in the event of injury: expenses paid for medical treatment and loss of income due to absence from work, including medical expenses, nursing expenses, travelling expenses, accommodation expenses, board expenses in hospital, and necessary expenses for food;
- (b) in the event of disability due to injury: necessary expenses, cost for additional needs in living and loss of income due to inability to work, including disability compensation, expenses of disability aids, living expenses of dependants, as well as necessary expenses of recovery, nursing, and continuing treatment actually occurred in follow-up treatment;
- (c) in the event of death: the compensation for injury before death, funeral expenses, living expenses of any dependants, death compensation expenses, travelling expenses and accommodation expenses paid and the loss of income due to absence from work incurred by the relatives of the victim in collision for funeral arrangements as well as other reasonable expenses.
- (1) degree of the infringer’s fault, unless the law provides otherwise;
- (2) the means and place of the harm and the manner of the act of harm;
- (3) consequences of the act of tort;
- (4) the benefits obtained by the liable person;
- (5)
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- (6) average living standard in the area where the court accepting the case is located.
Liable persons
11.23 The liabilities for compensation arising out of a ship collision shall be borne by the owner of the ship or by the bareboat charterer if the collision occurs during the period of bareboat charter and the bareboat charter is registered.63 In principle, a shipowner shall mean the person who has been legally registered as the shipowner. Where a ship is not legally registered, the shipowner shall mean the person actually in possession of such ship.64 However, in some special circumstances, the legally registered shipowner may not be the liable person in the collision of ships. In Chinese practice, a ship owned by the beneficial owner may be registered by another person with the person’s name. The reason for this special practice is the registration requirement in law. The real owner may not be qualified to register his ship as the shipowner, and thus the ship is registered by others to satisfy the requirement of ship registration. Therefore, this special practice is not based on an agency agreement or management agreement between the real beneficial owner and the registered owner, but on a special agreement that is for registration purpose only. So the registered owner is not an agent or the manager of the ship. Except the registration, the real beneficial owner controls and is responsible for everything of the ship. In this circumstance, only the real beneficial owner is recognised as the liable person for collision of ships and the registered owner does not bear joint and several liability.65 11.24 In international shipping practice, the ship’s Nationality Certificate is the most important piece of evidence for identifying the shipowner. In Tokio Marine & Nichido Fire Insurance Co Ltd v PT Djakarta Lloyd (PERSERO),66 the defendant was identified as the shipowner through the ship’s registration information from the website of Lloyd’s Register in the court of first instance.67 The defendant argued that it was just the ship’s technical manager, and, although the defendant’s name was on the ship’s seal, it was just for technical management of the ship. The ship’s Safety Certificate and Compliance Certificate showed that the defendant was the ship’s technical manager. The court of appeal pointed out that, as international shipping practice, the ship’s Nationality Certificate was valid evidence of ownership of the ship. According to the ship’s Nationality Certificate, the defendant was not the shipowner or responsible manager. 11.25 In China, the bareboat chartering shall be registered at the ship registration authority. No ship bareboat chartering shall have legal effect against a third party unless registered.68 So, if a bareboat charter is not legally registered,69 the owner of the bareboat chartered shipPage 130
Burden of proof and evidence
11.27 Under the Collisions Convention 1910, it is mandated that all legal presumptions of fault in regard to liability for collision are abolished.75 The SPC has abolished the legal presumptions of fault. The liabilities due to the fault in the ships collision are identified on the basis of evidence. In Panama Trade Expansion Shipping Company and Hong Kong Weilin Sailing Co Ltd v Zhong Xiaoyuan and Zhuhai Anti-Smuggling Office (The Trade Expansion),76 a fishing boat was hit and sank and 21 people fell overboard. The ship causing the accident did not rescue any person overboard but left the accident waters. The owners of the fishing boat and Zhuhai Anti-Smuggling Office that requisitioned the fishing boat claimed against the “liable” shipowner of the “liable” ship Trade Expansion causing the accident.77 Both the court of first instance and the court of appeal held that the “liable” shipowner was liable for the loss of the fishing boat and the death of the people due to the collision.78 11.28 In the retrial of The Trade Expansion, the SPC pointed out that the claimants should bear the burden of proof. In fact, all evidence that allegedly proved that Trade Expansion was the liable ship causing the accident was indirect evidence. It was found that there was no collision trace and damage at the bow of Trade Expansion, the adherent paintPage 131
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- (1) that the probative force of public documentary evidence produced by authorities or social organisations according to its function and power is greater than that of other documentary evidence;
- (2) that the probative force of material evidence, archives, expert conclusions, records of inspection or notarised or registered documentary evidence is greater than that of other documentary evidence, audio-visual materials and testimony of a witness;
- (3) that the probative force of primary evidence is greater than that of the hearsay evidence;
- (4) that the probative force of direct evidence is greater than that of the secondary evidence; and
- (5) that the probative force of testimony offered by a witness in favour of the party having a family relationship or other close relationship therewith is greater than that of other witness testimony.