calculated on the basis of corresponding interest rates on bank overdue loans from
July 28, 2002 to the date of the actual payment of the loss; and (3) loss of profit of
CNY 228,155.4.
The defendant argued that the CMC in this case should take precedence over
general law such as the General Principles of the Civil Law and the Contract Law.
The Xiamen Maritime Court approved the amount of compensation for the actual
loss of the goods calculated under Article 55 of the Chinese Maritime Code and
denied plaintiff’s claims for loss of benefit and other liquidated damages, etc. The
reason was that Article 55 of the CMC operates as a specialized subject of legislation, the aim of which is to take account of the relatively huge risks involved in
maritime transport. By restricting the liability of the carrier, this Article aims to
enhance the protection of the maritime transport industry. Based on the principle that
specific provisions have priority over general provisions, the plaintiff could not
recover for his economic losses by virtue of the General Principles of Civil Law
and the Contract Law.
In Zhejiang Oriental Science and Technology Import and Export Company v.
Star Ship Co., Ltd. & Ningbo Port Authority Beilun Container Company,
9 a case
which also dealt with the issue of cargo damage compensation under a carriage of
goods by sea contract, the plaintiff, United Import and Export Corporation, imported
a cargo of frozen shrimps from Reykjavik, Iceland. To ship the goods from the
Canadian port of Hark to Ningbo, China, the cargo was divided into three freezer
containers by the defendant carrier. The bill of lading specified that at any time the
temperature must be maintained at minus 25 degrees (Celsius Degrees) or below.
The goods arrived at the destination port’s container yard. However, three containers
were not electrically charged during storage, resulting in damage to the frozen
goods. The plaintiff claimed for losses which included value of the goods, customs
duties, value-added tax, and loss of profits.
The defendant, Star Ship Co., Ltd. (Star) contended that firstly, the cargo damage
was caused by the fault of the container company, therefore, Star did not assume
responsibility; in addition, most of the plaintiff’s claims were indirect losses. Thus,
Star was not liable to pay compensation. The defendant container company
contended that it was not a party to the carriage of goods by sea contract; therefore,
it was not a qualified defendant. The Ningbo Maritime Court, while determining the
amount of compensation, considered that in that case, priority should be given to
Article 55 of the CMC in accordance with the applicable principles of special law
and general law. The court considered that if Article 55 of the CMC and the General
Principles of Civil Law were to be applied at the same time, two categories of losses
would be generated: one would be actual losses under maritime law and the other,
economic losses under civil law. Clearly, other relevant economic losses which arise
under civil law, contradict with Article 56 of the CMC, the aim of which is to restrict
carrier’s liability. This would undoubtedly increase the carrier’s responsibility.
9 No.218 Judgement [2000], First Instance, Ningbo Maritime Court.
Compensation for Cargo Damage in International Maritime Transportation:. . .
213
July 28, 2002 to the date of the actual payment of the loss; and (3) loss of profit of
CNY 228,155.4.
The defendant argued that the CMC in this case should take precedence over
general law such as the General Principles of the Civil Law and the Contract Law.
The Xiamen Maritime Court approved the amount of compensation for the actual
loss of the goods calculated under Article 55 of the Chinese Maritime Code and
denied plaintiff’s claims for loss of benefit and other liquidated damages, etc. The
reason was that Article 55 of the CMC operates as a specialized subject of legislation, the aim of which is to take account of the relatively huge risks involved in
maritime transport. By restricting the liability of the carrier, this Article aims to
enhance the protection of the maritime transport industry. Based on the principle that
specific provisions have priority over general provisions, the plaintiff could not
recover for his economic losses by virtue of the General Principles of Civil Law
and the Contract Law.
In Zhejiang Oriental Science and Technology Import and Export Company v.
Star Ship Co., Ltd. & Ningbo Port Authority Beilun Container Company,
9 a case
which also dealt with the issue of cargo damage compensation under a carriage of
goods by sea contract, the plaintiff, United Import and Export Corporation, imported
a cargo of frozen shrimps from Reykjavik, Iceland. To ship the goods from the
Canadian port of Hark to Ningbo, China, the cargo was divided into three freezer
containers by the defendant carrier. The bill of lading specified that at any time the
temperature must be maintained at minus 25 degrees (Celsius Degrees) or below.
The goods arrived at the destination port’s container yard. However, three containers
were not electrically charged during storage, resulting in damage to the frozen
goods. The plaintiff claimed for losses which included value of the goods, customs
duties, value-added tax, and loss of profits.
The defendant, Star Ship Co., Ltd. (Star) contended that firstly, the cargo damage
was caused by the fault of the container company, therefore, Star did not assume
responsibility; in addition, most of the plaintiff’s claims were indirect losses. Thus,
Star was not liable to pay compensation. The defendant container company
contended that it was not a party to the carriage of goods by sea contract; therefore,
it was not a qualified defendant. The Ningbo Maritime Court, while determining the
amount of compensation, considered that in that case, priority should be given to
Article 55 of the CMC in accordance with the applicable principles of special law
and general law. The court considered that if Article 55 of the CMC and the General
Principles of Civil Law were to be applied at the same time, two categories of losses
would be generated: one would be actual losses under maritime law and the other,
economic losses under civil law. Clearly, other relevant economic losses which arise
under civil law, contradict with Article 56 of the CMC, the aim of which is to restrict
carrier’s liability. This would undoubtedly increase the carrier’s responsibility.
9 No.218 Judgement [2000], First Instance, Ningbo Maritime Court.
Compensation for Cargo Damage in International Maritime Transportation:. . .
213