to deal with specific matters in different cases. In Chinese law, mitigation is derived
from good faith which itself has long been accepted as a moral as well as a legal
standard and an overriding principle. Fairness is a necessary ingredient for creating a
harmonious society. The courts respect the legal culture of balancing the rights and
obligations of parties to ensure harmony. In this vein, good faith and fairness are
helpful in dealing with loopholes in the law and the occasional unworkability of the
mitigation principle.
Whether the English or Chinese law is more consistent with the purpose of the
lien clause and the shipowner exercising his rights under it, is a moot point because
two jurisdictions operate in their own spheres according to their distinctive legal
rationale. But notably, good faith is a common denominator. In terms of English law,
whether contractual discretion or determination discretion is the better test depends
on the objectivity of the standard evidenced by the application of reasonableness. By
contrast, there are no impediments to the application of good faith or reasonableness
in Chinese law. It can be stated in conclusion from a comparative law perspective
that regardless of the differences in the two legal systems, invariably and inevitably,
there is commonality of law and practice given that shipping is a global activity and
charterparties are predominantly in standard form containing the same lien clauses
that govern the rights of shipowners when charterers default in one way or another.
References
Barnes W (2008) The objective theory of contract. Univ Cincinnati Law Rev 76:1119
Brandon DI et al (1984) Self-help: extrajudicial rights, privileges and remedies in contemporary
American society. Vanderbilt Law Rev 37:845, 850
Burton SJ (2001) Principles of contract law, 2nd edn. West Group, St. Paul
Cooke J et al (2014) Voyage charters. Informa Law, Routledge
Cui J (ed) (2003) Contract law, 3rd edn. Law Press, Beijing
Dworkin R (1977) Taking rights seriously. Harvard
Encyclopædia Britannica (2008) Britannica encyclopedia. Rosen Pub Group
Fang S (1999) Damages for breach of contract (1999)
Foxton D (2017) A good faith goodbye? Good faith obligations and contractual termination rights.
Lloyd’s Marit Commer Law Q 3
Foxton D (2018) Controlling contractual discretions. Lecture given at Attorney General’s Champers, Singapore
Han H (2018) Shipowner is not entitled to demurrage for the period when he using the vessel to
exercise lien on cargo. 28 September 2018
Han S (1997) The theory of mitigation principle [1997]. Chin J Law:1
Juenger (1995) Listening to law professors talk about good faith: some afterthoughts. Tulane Law
Rev 69:1253
Leggatt G (2016) Contractual duties of good faith. Lecture to the Commercial Bar Association on
18 October 2016
Liang H (2011) General introduction to civil law, 4th edn. Law Press, China
Lord Neuberger (2016) Express and implied terms in contract. School of Law, Singapore Management University, see https://www.supremecourt.uk/docs/speech-160819-02.pdf
McKendrick E (ed) (2016) Goode on commercial law, 5th edn. Penguin Books, UK
338
S. Jia and H. Yu
from good faith which itself has long been accepted as a moral as well as a legal
standard and an overriding principle. Fairness is a necessary ingredient for creating a
harmonious society. The courts respect the legal culture of balancing the rights and
obligations of parties to ensure harmony. In this vein, good faith and fairness are
helpful in dealing with loopholes in the law and the occasional unworkability of the
mitigation principle.
Whether the English or Chinese law is more consistent with the purpose of the
lien clause and the shipowner exercising his rights under it, is a moot point because
two jurisdictions operate in their own spheres according to their distinctive legal
rationale. But notably, good faith is a common denominator. In terms of English law,
whether contractual discretion or determination discretion is the better test depends
on the objectivity of the standard evidenced by the application of reasonableness. By
contrast, there are no impediments to the application of good faith or reasonableness
in Chinese law. It can be stated in conclusion from a comparative law perspective
that regardless of the differences in the two legal systems, invariably and inevitably,
there is commonality of law and practice given that shipping is a global activity and
charterparties are predominantly in standard form containing the same lien clauses
that govern the rights of shipowners when charterers default in one way or another.
References
Barnes W (2008) The objective theory of contract. Univ Cincinnati Law Rev 76:1119
Brandon DI et al (1984) Self-help: extrajudicial rights, privileges and remedies in contemporary
American society. Vanderbilt Law Rev 37:845, 850
Burton SJ (2001) Principles of contract law, 2nd edn. West Group, St. Paul
Cooke J et al (2014) Voyage charters. Informa Law, Routledge
Cui J (ed) (2003) Contract law, 3rd edn. Law Press, Beijing
Dworkin R (1977) Taking rights seriously. Harvard
Encyclopædia Britannica (2008) Britannica encyclopedia. Rosen Pub Group
Fang S (1999) Damages for breach of contract (1999)
Foxton D (2017) A good faith goodbye? Good faith obligations and contractual termination rights.
Lloyd’s Marit Commer Law Q 3
Foxton D (2018) Controlling contractual discretions. Lecture given at Attorney General’s Champers, Singapore
Han H (2018) Shipowner is not entitled to demurrage for the period when he using the vessel to
exercise lien on cargo. 28 September 2018
Han S (1997) The theory of mitigation principle [1997]. Chin J Law:1
Juenger (1995) Listening to law professors talk about good faith: some afterthoughts. Tulane Law
Rev 69:1253
Leggatt G (2016) Contractual duties of good faith. Lecture to the Commercial Bar Association on
18 October 2016
Liang H (2011) General introduction to civil law, 4th edn. Law Press, China
Lord Neuberger (2016) Express and implied terms in contract. School of Law, Singapore Management University, see https://www.supremecourt.uk/docs/speech-160819-02.pdf
McKendrick E (ed) (2016) Goode on commercial law, 5th edn. Penguin Books, UK
338
S. Jia and H. Yu