CONCRETE REGULATIONS ON THE DISTRAINT OF VESSELS
PRIOR LITIGATION

 (Approved on January 31, 1986 by the Judicial
Committee of the Supreme People's Court)

 

 

 

SUBJECT: ARBITRATION & LITIGATION

ISSUING-DEPT: THE SUPREME PEOPLE'S COURT

ISSUE-DATE: 01/31/1986

IMPLEMENT-DATE: 01/31/1986

LENGTH: 1530 words

TEXT:

Prior to litigation, a claimant of maritime rights may ask a court of law to impound the ship concerned,in order to preserve his right to exercise the right of claim.  These Detailed Regulations on the impoundage of vessels prior to litigation in the State Maritime Law Court are stated hereunder, in order to protect, without delay, the lawful rights and interests of the parties concerned in a maritime dispute, and promote the development of international economic trade and the international shipping industry, in accordance with the basic principles of the Law of the People's Republic of China on Civil Litigation (Trial Implementation) and based upon a summary of judicial experience and reference to common international practice.

I THE SCOPE OF MARITIME RIGHTS OF CLAIM

The term "maritime rights of claim" refers to the right of payment claim which is related to or has resulted from matters concerned with an ocean shipping vessel's construction, transaction, charterage, transport undertakings, operations and rescue, as well as ownership, occupancy right, right of mortgage, priority compensation, etc.  For example:

(1) Right of claim as a result of damages caused by ship collisions or other accidents;

(2) Right of claim as a result of personal casualties caused by ships, ship operations or transport undertakings;

(3) Right of claim as a result of damaging effects to sea waters caused by ship pollution;

(4) Right of claim emerging from measures taken to prevent likely pollution or to reduce and eliminate the damaging effect of pollution;

(5) Right of claim emerging from rescue operations undertaken in maritime disasters or salvage and removal of ship wreckage or other sunken or floating objects;

(6) Right of claim emerging from chartering contracts;

(7) Right of claim emerging from contracts regarding the transportation of goods or passengers, or through the loss and damage of goods or personal luggage during shipping;

(8) Right of claim emerging from general average;

(9) Right of claim emerging from towage and pilotage;

(10) Right of claim emerging from transportation undertaken by supply ships or daily essential requirements of food, commodities, materials, fuel, equipment (including containers) or labour incurred by supply ships;

(11) Right of claim emerging from seeking payment of port, canal, and channel dues;

(12) Right of claim emerging from the construction, reparation, renovation and equipping of a ship;

(13) Right of claim emerging from the right to mortgage ships;

(14) Right of claim emerging from contracts regarding maritime insurance;

(15) Right of claim emerging from seeking payment of the wages of captains and crew members and their social insurance fund expenses;

(16) Right of claim emerging from the payment of ship expenses by the captains, owners, "dry" ship charter owners and other charterers or agents;

(17) Right of claim emerging from the payment of a ship's charterage, service charge and agency fee by the owner, the "dry" ship charter owners or by other representatives on their behalf;

(18) Right of claim emerging from ship ownership or right of occupancy;

(19) Right of claim emerging from issues between common owners of a ship in relation to operations and profit distribution;

(20) Right of claim emerging from contracts regarding transactions involving ships.

II THE SCOPE OF THE IMPOUNDAGE OF VESSELS

Persons who are entitled to any of the rights of claim related to maritime affairs as outlined above may apply to the State Maritime Law Court to impound the ship concerned, but there are two conditions.  First, the owner of the ship involved shall take responsibility for the maritime claim.  Second, besides applying for the impoundage of the ship in order to exercise the right to priority of compensation, the ship concerned must belong to the same owner at the time of application for impoundage and the occurrence of the maritime claim.  The person may also apply to the Court to impound other ships currently owned by the owner of the ship concerned, or the person in charge, or the charterers who are responsible for the maritime claim, but only an application to impound the ship directly concerned may be made if the maritime claim is in relation to ship ownership, right of mortgage, ship management or income distribution.

Ships for military usage and government ships specially used for official business are not permitted to be detained.

III PROCEDURES FOR APPLICATION FOR IMPOUNDAGE

Application for impoundage of ships is not limited to the agreements made by the parties concerned on jurisdiction, arbitration and other aspects applicable to the law relating to maritime claims.

When applying for the impoundage of a ship, the claimant should submit to the Maritime Law Court a written application and evidence of the right of claim.  For example, evidence of real rights or creditor's rights, contracts, tally reports, reports on the merchandise on hand, loading and unloading records, maritime reports, reports on damage to the ship, reports on inspection of goods, reports on marine pollution, notices of loss or damage of goods, photographs, etc.

After examining the application for impoundage, and deciding that all the conditions for impoundage have been met and the evidence is reasonable, the Maritime Law Court, with the approval of the President of the Court, should promptly make a ruling for impoundage, and in a case of emergency, the ruling should be made within 48 hours, while at the same time an order of impoundage should be issued.  While the ruling on the impoundage of the ship is being made, the defendant shall be ordered to provide a guarantee.

Should a reliable and sufficient guarantee be provided by the defendant, which is approved, subject to examination by the Maritime Law Court, the impoundage order shall be withdrawn immediately after the approval of the President of the Court has been obtained.

Provision of a guarantee to facilitate the release of the impounded ship does not mean that its defendant has accepted responsibility, nor abandoned his rights in relation to limitation of liability.

Prior to making a ruling on the impoundage of the ship concerned,the Maritime Law Court may order the claimant to provide a guarantee to cover claims for damages from the defendant, in the event that mistakes have been made on the part of the claimant.

Should the claimant refuse to provide a guarantee, his application will be rejected.  The type, method and amount of money in relation to the guarantee will be decided by the Maritime Law Court.

IV DELIVERY AND IMPLEMENTATION

Legal documents on the impoundage and release of impounded ships are to be delivered to the captain of the impounded ship by the executors of the Maritime Law Court and the captain shall sign a receipt of delivery.  The executor should go on board to deliver the order of impoundage or release and announce it in front of the captain and paste the said order on the lower half of the main mast or another obvious place.  The executors should wear uniform and show their authorisation card when undertaking their delivery task.

At the same time as issuing the order of impoundage or release of the ship concerned, the Maritime Law Court should distribute a notice to port supervisors, border defence guards and other water patrol and monitoring agents, advising them to assist in the implementation of the said order.  If necessary, the Maritime Law Court may send a bailiff or guards on board to carry out the task of impoundage.

V IMPOUNDAGE FEES

Fees for application for impoundage are 1,000 yuan, payable by the claimant.  Other expenses which occur during the implementation of matters concerned with the impoundage will be paid by the defendant, unless the claim fails, in which case, the claimant will be responsible.

VI IMPOUNDAGE AND LITIGATION

The Maritime Law Court involved in the impoundage proceeding has jurisdiction over litigation relating to the maritime claim.

After the defendant has provided a guarantee to facilitate the release of the impounded ship, both parties to the dispute may in accordance with their original agreement on jurisdiction, make an appeal to other law courts which have legal jurisdiction, or apply for arbitration in accordance with their original agreement on arbitration.

The period of impoundage to preserve the right of claim of the party concerned is limited to 30 days.  Within this period the claimant may initiate legal proceedings, that is to say, normal procedure, with the Maritime Law Court which has carried out the impoundage.

During the limited period of impoundage, should the defendant not have provided a guarantee, nor the claimant lodged a suit,the Maritime Law Court which has carried out the impoundage should release the impounded ship.  The claimant will be responsible for any losses incurred by the defendant due to the impoundage.  Should a guarantee be provided by the defendant, but the claimant fail to bring suit within the limited period of impoundage, the defendant may apply for the return of his guarantee.