their commitments.” It can also be found in Article 6 of the Contract Law of the
P.R. China (1999) (CLoC). The good faith principle requires each party to a contract
to exercise its rights as an “honest businessman”, which means they cannot exercise
their rights in a way that sacrifices the other party’s interest or the public interest.
90
It is well-known that judge-made law is the norm in the common law system. Less
well-known is the fact that in China, as in other civil law jurisdictions, there is the
corresponding practice of judicial discretion to address lacunae and inadequacies in
the statute law which only stipulate broad principles often without elaboration or
proper interpretation. How the principle or provision is to be applied in a specific
situation is left to discretion of the court. The overriding nature of the good faith
principle enables a court to address lacunae and inadequacies in the written law.
However, where there is clear and unequivocal legislation in place, there is no room
for the operation of any overriding principle. The presumption is that lawmakers in
drafting and promulgating the written law have taken into account the overarching
reach of the principle of good faith. In such instances, the imposition of good faith by
the courts would be needless intrusion which could lead to a result unintended by the
written law and could detrimentally affect its legal certainty.
91 In this regard it is
expedient to examine the CMC to glean from it whether in the context of security for
a debt and its amount, a shipowner is bound to act in a reasonable manner and in
good faith.
6.3 Reasonable Requirements in the CMC
Article 87 of the CMC provides that, “[W]here freight charges payable to a carrier,
general average to be shared, overdue fees and necessary expenses paid for cargo
with the expectation of repayment, as well as other amounts payable to the carrier are
not settled, and no appropriate guarantee is provided therefore, the carrier may have
a lien upon a reasonable amount of the cargo.”
92 Besides this right of the carrier
provided in Article 87, under Article 88 the carrier is required to exercise the lien in a
reasonable ways,
93 including applying for a court ruling to auction the cargo subject
to the lien where nobody claims it within 60 days following the day after its delivery
90 Liang (2011), p. 270.
91 Ibid. at pp. 270–272.
92
E6%B0%91%E5%85%B1%E5%92%8C%E5%9B%BD%E6%B5%B7%E5%95%86%E6%B3%
95> accessed 19 December 2018; Wolters Kluwer translation of CMC.
93 Article 88 of the CMC provides that, “[G]oods shall be preserved by a carrier in accordance with
the provisions of Article 87 of this Law and where nobody claims the goods within 60 days
following the day after delivery to the port of discharge, the carrier may apply for a court ruling to
auction; in cases where the goods are perishable, or the custodian charges may exceed he value of
the goods, the carrier may apply earlier to undertake an auction. . . .”
332
S. Jia and H. Yu
P.R. China (1999) (CLoC). The good faith principle requires each party to a contract
to exercise its rights as an “honest businessman”, which means they cannot exercise
their rights in a way that sacrifices the other party’s interest or the public interest.
90
It is well-known that judge-made law is the norm in the common law system. Less
well-known is the fact that in China, as in other civil law jurisdictions, there is the
corresponding practice of judicial discretion to address lacunae and inadequacies in
the statute law which only stipulate broad principles often without elaboration or
proper interpretation. How the principle or provision is to be applied in a specific
situation is left to discretion of the court. The overriding nature of the good faith
principle enables a court to address lacunae and inadequacies in the written law.
However, where there is clear and unequivocal legislation in place, there is no room
for the operation of any overriding principle. The presumption is that lawmakers in
drafting and promulgating the written law have taken into account the overarching
reach of the principle of good faith. In such instances, the imposition of good faith by
the courts would be needless intrusion which could lead to a result unintended by the
written law and could detrimentally affect its legal certainty.
91 In this regard it is
expedient to examine the CMC to glean from it whether in the context of security for
a debt and its amount, a shipowner is bound to act in a reasonable manner and in
good faith.
6.3 Reasonable Requirements in the CMC
Article 87 of the CMC provides that, “[W]here freight charges payable to a carrier,
general average to be shared, overdue fees and necessary expenses paid for cargo
with the expectation of repayment, as well as other amounts payable to the carrier are
not settled, and no appropriate guarantee is provided therefore, the carrier may have
a lien upon a reasonable amount of the cargo.”
92 Besides this right of the carrier
provided in Article 87, under Article 88 the carrier is required to exercise the lien in a
reasonable ways,
93 including applying for a court ruling to auction the cargo subject
to the lien where nobody claims it within 60 days following the day after its delivery
90 Liang (2011), p. 270.
91 Ibid. at pp. 270–272.
92
E6%B0%91%E5%85%B1%E5%92%8C%E5%9B%BD%E6%B5%B7%E5%95%86%E6%B3%
95> accessed 19 December 2018; Wolters Kluwer translation of CMC.
93 Article 88 of the CMC provides that, “[G]oods shall be preserved by a carrier in accordance with
the provisions of Article 87 of this Law and where nobody claims the goods within 60 days
following the day after delivery to the port of discharge, the carrier may apply for a court ruling to
auction; in cases where the goods are perishable, or the custodian charges may exceed he value of
the goods, the carrier may apply earlier to undertake an auction. . . .”
332
S. Jia and H. Yu