packed in such article of transport shall be deemed to be the number of packages or shipping
units. If not so enumerated, the goods in such article of transport shall be deemed to be one
package or one shipping unit. Where the article of transport is not owned or furnished by the
carrier, such article of transport shall be deemed to be one package or one shipping unit.
Although China is not a party to any of the international conventions on carriage
of goods by sea, the provisions of this article on the limits of the carrier’s liability are
the same as those in the 1979 SDR Protocol to the Hague-Visby Rules. In practice,
local courts can accurately apply Article 56 of the CMC to calculate the carrier’s “per
unit limit of liability” to provide a reasonable explanation of Article 56 in conjunction with relevant international conventions such as Hague Rules and Hamburg
Rules to resolve the parties’ different estimations and understanding of the number
of packages of the goods under Article 56.
In Anlian Property Insurance (China) Co., Ltd. v. Shanghai (Shanghai) International Freight Co., Ltd. & other companies,
22 a contract for the carriage of goods by
sea case, the assured of the plaintiff’s assured Shanghai Electric Alstom Baoshan
Transformer Co., Ltd. (“Shanghai Alstom”) and the defendants had signed a contract, under which defendants were to transport the transformer and related equipment under the PH314-01 rev00 project. On January 25, 2013, the defendant, the
Youxisi Company, issued a full set of clean bills of lading identifying port of
shipment as Shanghai, China, and the port of destination as Long Beach, USA, on
behalf of the defendant El Porter Company (both for multimodal transport operators). The defendant Zhongbo Qiankun Company was the owner of the ship
involved. After the goods arrived at the port of destination, the assured was informed
by the defendant that the surfaces of five wooden boxes loaded with spare parts had
been seriously damaged during transportation.
The plaintiff compensated the assured and acquired subrogation rights according
to law. When dealing with the defendant’s limitation of liability issue, the plaintiff
considered that the quantity of the goods specified in Article 56 of the CMC should
be the number of pieces of goods clearly stated on the bill of lading, and the gross
weight of the goods should mean the total weight of the whole lot, including the
weight of the package. The Court, in consonance with the Hague Rules and
Hamburg Rules, explained that Article 56 should be applied based on gross weight
or number of other cargo units of damaged goods, other than the total or gross weight
of the whole goods, and compared the limits of liability calculated under Article
56 to determine the amount of cargo damage.
Article 59 of the CMC sets out the conditions for the limitation of liability rights
in the following words:
the carrier shall not be entitled to the benefit of the limitation of liability provided for in
Article 56 or 57 of this Code if it is proved that the loss, damage or delay in delivery of the
goods resulted from an act or omission of the carrier done with the intent to cause such loss,
damage or delay or recklessly and with knowledge that such loss, damage or delay would
probably result.
22 No.361 Judgement [2014], First Instance, Shanghai Maritime Court.
Compensation for Cargo Damage in International Maritime Transportation:. . .
221
units. If not so enumerated, the goods in such article of transport shall be deemed to be one
package or one shipping unit. Where the article of transport is not owned or furnished by the
carrier, such article of transport shall be deemed to be one package or one shipping unit.
Although China is not a party to any of the international conventions on carriage
of goods by sea, the provisions of this article on the limits of the carrier’s liability are
the same as those in the 1979 SDR Protocol to the Hague-Visby Rules. In practice,
local courts can accurately apply Article 56 of the CMC to calculate the carrier’s “per
unit limit of liability” to provide a reasonable explanation of Article 56 in conjunction with relevant international conventions such as Hague Rules and Hamburg
Rules to resolve the parties’ different estimations and understanding of the number
of packages of the goods under Article 56.
In Anlian Property Insurance (China) Co., Ltd. v. Shanghai (Shanghai) International Freight Co., Ltd. & other companies,
22 a contract for the carriage of goods by
sea case, the assured of the plaintiff’s assured Shanghai Electric Alstom Baoshan
Transformer Co., Ltd. (“Shanghai Alstom”) and the defendants had signed a contract, under which defendants were to transport the transformer and related equipment under the PH314-01 rev00 project. On January 25, 2013, the defendant, the
Youxisi Company, issued a full set of clean bills of lading identifying port of
shipment as Shanghai, China, and the port of destination as Long Beach, USA, on
behalf of the defendant El Porter Company (both for multimodal transport operators). The defendant Zhongbo Qiankun Company was the owner of the ship
involved. After the goods arrived at the port of destination, the assured was informed
by the defendant that the surfaces of five wooden boxes loaded with spare parts had
been seriously damaged during transportation.
The plaintiff compensated the assured and acquired subrogation rights according
to law. When dealing with the defendant’s limitation of liability issue, the plaintiff
considered that the quantity of the goods specified in Article 56 of the CMC should
be the number of pieces of goods clearly stated on the bill of lading, and the gross
weight of the goods should mean the total weight of the whole lot, including the
weight of the package. The Court, in consonance with the Hague Rules and
Hamburg Rules, explained that Article 56 should be applied based on gross weight
or number of other cargo units of damaged goods, other than the total or gross weight
of the whole goods, and compared the limits of liability calculated under Article
56 to determine the amount of cargo damage.
Article 59 of the CMC sets out the conditions for the limitation of liability rights
in the following words:
the carrier shall not be entitled to the benefit of the limitation of liability provided for in
Article 56 or 57 of this Code if it is proved that the loss, damage or delay in delivery of the
goods resulted from an act or omission of the carrier done with the intent to cause such loss,
damage or delay or recklessly and with knowledge that such loss, damage or delay would
probably result.
22 No.361 Judgement [2014], First Instance, Shanghai Maritime Court.
Compensation for Cargo Damage in International Maritime Transportation:. . .
221