Editor's note: JPRI International Judicial Conference 2018 was held in Seoul, South Korea, from 4 December to 5 December. Judge Yang Chan of Shanghai Maritime Court attended the conference and delivered an English speech entitled "Judicial Practice of Maritime Dispute Resolution in Chinese Mainland". Now the full text will be published for your reference.

 

Judicial Practice on Maritime Disputes Settlement
in Mainland China

Chan YANG

Presiding Judge, Shanghai Maritime Court

 

It’s my great honor to share our judicial practice on maritime disputes settlement.

The Court System in Mainland China

1.     People's courts are judicial organs of the mainland China, adjudicating civil, criminal and administrative suits and carrying out judicial activities including the execution of civil and administrative decisions and state compensation.

2.     The State sets up Supreme People's Court, local courts at different levels and specialized courts.

3.     Local courts are established in conformity with the administrative divisions, and there are three levels of courts: basic people's courts, intermediate people's courts and high people's courts. A people's court at a higher level supervises the judicial work of the people's courts at the next lower level.

4.     Specialized courts are set up where necessary. For now, Courts of specialized jurisdiction in mainland China include military courts, maritime courts, railway transport courts, intellectual property courts, Internet Courts and the financial Court. The youngest specialized court is Shanghai Financial Court, which was established in August this year.

5.     Adjudicatory mechanism in mainland China is second instance finality with four levels of courts (and three levels in particular for maritime cases).

6.     Organizational structure of the court system in mainland China is as follows:

The Specialized Maritime Adjudication System of Mainland China

7.     Ten maritime Courts, high people's courts which seat at the domicile of the relevant maritime courts and the Supreme People’s Court constitute the maritime adjudicatory mechanism in mainland China.

8.     The Supreme People’s Court and the Ministry of Transport, with approval of the Commission for Politics and Law of Central Committee of the Communist Party of China, jointly issued the Notice on Establishing Maritime Courts on May 24, 1984, thereby setting up maritime courts in Shanghai, Tianjin, Qingdao, Dalian, Guangzhou and Wuhan. The 6 courts were officially established on June 1, 1984.

9.     To meet the increasing judicial demand, the Supreme People’s Court subsequently decided to set up maritime courts in Haikou and Xiamen in 1990, in Ningbo in 1992, and in Beihai in 1999.

10.  Since 1992, the ten maritime courts throughout the country  

have established 39 dispatched tribunals in major port cities within their jurisdictional territories, located in 15 provinces or Municipalities or Autonomous Regions to conduct on-site hearing. This has formed specialized maritime adjudication infrastructure covering every port and the entire territorial waters of China, from Heilongjiang River in the north to the islands of Xisha, Zhongsha, Nansha and Huangyan Isle in the south.

11.  After the maritime courts were established, the high people's courts in the cities where such maritime courts are located were designated as the appellate courts. And specialized collegiate panels for second instance trial of maritime cases were set up within the Economic Divisions, the Fourth or Third Civil Division of the Appellate High Court and a specialized team of maritime judges were built up.

12.  In order to strengthen guidance and supervision of adjudicatory work for maritime cases throughout the country, the Supreme People’s Court set up the Transport Disputes Adjudication Division in March 1987, changing it later to the Fourth Civil Division in the year 2000, for handling first instance cases with national influence, as well as appeals on first instance trials of high people’s courts and re-hearing of maritime cases, exercising guidance and supervision over the adjudicatory work of all the maritime courts and the appellate high people’s courts. Hence, the maritime adjudication system of “second instance finality with three levels of courts” is formed.

Characteristics of Maritime Judicial Practice of Mainland China

13.  Relatively Independent Maritime Law System
The legal system of the People's Republic of China is similar to the civil law system. The main statutory law of the maritime law of the PRC is the maritime law of the People's Republic of China, also known as The Maritime Code of the People's Republic of China, which was enacted in 1992 and came into enforcement in 1993. The detailed 15-chapter, 278-article maritime code is to a large extent modeled on international conventions and international practice and plays an important role in regulating China's maritime transport relations and ship relations, promoting maritime transport and economic and trade development. In 1999, the Special procedure law of the People's Republic of China on maritime litigation was enacted，signifying establishment of our maritime legal system.

14.  The Supreme People's Court has promulgated 18 judicial interpretations for the implementation of Chinese maritime law and the unification of the judicial practice.[1]

15.  Both the substantive and procedural law governing maritime disputes also include certain other civil laws, but the maritime law shall prevail in case of any inconsistency.

16.  However, as time passed by, the maritime code has been lagging behind the development in many ways and calls for a comprehensive modification. In early November 2018, the revised version of draft amendments to the maritime code was officially released for solicitation of comments.

17.  Specialized Jurisdiction over Maritime Cases

In accordance with the Civil Procedural Law of People’s Republic of China, the Maritime Procedural Law of People’s Republic of China, and Provisions of the Supreme People’s Court on the Scope of Cases to Be Accepted by Maritime Courts (March 1, 2016), the maritime courts exercise their jurisdiction across some different administrative regions, hear first-instance cases over 6 categories (108 types), include:

l  Maritime tort

l  Maritime contracts

l  Maritime and navigable waters development and utilization and environmental protection related dispute cases

l  Other maritime disputes

l  Maritime administrative case

l  Maritime special procedure cases (includes maritime enforcement)

18.  Maritime courts previously only heard civil and commercial cases, but the latest provisions affirmed the jurisdiction of maritime courts over maritime administrative cases and stipulate that the cases should be under the jurisdiction of maritime courts if they concern administrative enforcement.

19.  The call for a three-in-one trial never stops. On February 2017, the Supreme People’s Court designated Ningbo Maritime Court as a pilot court to exercise jurisdiction over maritime criminal cases. June 5th, 2017, authorized by Zhejiang High People’s Court through (2017) Zhe Xing Xia No.29 Order for Jurisdiction Designation, Ningbo Maritime Court accepted a criminal case. Allan Mendoza Tablate, the defendant, was charged of committing a traffic offence by Ningbo Prosecution Office. [2]It is the first maritime criminal case accepted by maritime court, also the only one so far.

20.  The annual caseload rose from 100 plus cases per year in the beginning to more than 20,000 in 2013, the highest in the world. Statistics shows that the annual nationwide maritime caseload in recent years is about 15,000, excluding cases on application for execution of court decisions.

21.  Taking Shanghai maritime court for example, we can see that in 2017, Shanghai Maritime Court accepted a total of 4, 274 cases of first instance, and concluded 4, 279 cases. Among the cases filed with our court, a total of 2828 cases were disputes over contracts for freight forwarding by sea or on sea-linked waters, taking up the largest proportion, and a total of 487 cases were disputes over contacts for carriage of goods by sea or on sea-linked waters. These two types of cases totally accounted for 84.70% of the total. Other representative cases include 146 cases of disputes over contracts concerning ship crew, 35 cases of disputes over contracts for ship repair/building/purchase, 43 cases of disputes over vessel leasing, 25 cases of disputes over marine insurance contracts, 45 cases of disputes over maritime personal injury or deaths, and 23 cases of disputes over compensation for damage caused by vessel collision or contact. Since the expansion of the scope of cases that may be accepted by maritime courts on March 1, 2016, there have been new types

of disputes, for example: disputes over purchase and sale contracts for special items for ships, disputes over lease contracts for terminals, disputes over ship engineering contracts, but the number of cases of each type of such disputes was small. In addition, in 2017, we accepted a maritime administrative case.

22.  A Large Proportion of Maritime Cases Involve Foreign Elements

Compared to the cases heard by the local courts, a much more large proportion of maritime cases involve foreign elements, concerning about 70 countries and regions worldwide.

23.  From 2013 to 2017, Shanghai maritime court received first instance 2,393 cases involving foreign interests (mainly involving foreign parties), accounting for about 20% of the total first instance cases of our court, and the total value of the subject matter of such cases exceeded RMB 5.4 billion. In the past 5 years, our court heard nearly 50 cases involving Korean parties, and the total value of the subject matter was about RMB 42 million.

24.  Article 8 of the Special procedural law of the People's Republic of China stipulates that where the parties to a maritime dispute are foreign nationals, stateless persons, foreign enterprises or organizations and the parties, through written agreement, choose a maritime court of the People's Republic of China to be the competent court, even if the place with practical connections to the dispute is not within the territory of the People's Republic of China, the chosen maritime court of the People's Republic of China shall also have jurisdiction over the said dispute. It’s noteworthy that the number of cases voluntarily filed by foreign parties with Shanghai Maritime Court has increased. For example, there was a case of dispute over liability for damages caused by vessel collision, and the parties in this case from North Korea and South Korea both agreed in writing on April 2018 that the case shall be filed with Shanghai Maritime Court.

New Practices of Shanghai Maritime Court

25.    Brief Introduction on Shanghai Maritime Court

Shanghai Maritime Court, established in 1984, has jurisdiction over marine and maritime cases of first instance within its jurisdictional areas, which include the neighboring sea areas of Jiangsu Province, Shanghai Municipality, Yangshan Deep-water Port, and the water area connecting the sea of the Yangtze River starting from the estuary of Liuhe River. Shanghai High People's Court has jurisdiction over appeals on the judgments and orders rendered by Shanghai Maritime Court. Its internal institutions include the Maritime Affairs Tribunal (Hai Shi Ting), the Maritime Commerce Tribunal (Hai Shang Ting), the Case Filing Chamber, the Enforcement Bureau etc.. Besides, it has four dispatched tribunals with two based in Shanghai, namely the Yangshan Deep-water Port Tribunal and Shanghai Free Trade Zone Tribunal, and the other two based in Jiangsu Province, namely  Lianyungang Port Tribunal and Yangkou Port Tribunal.

26.  The most influential case is the one involving the Japanese ship, Baosteel Emotion, owned by Mitsui O.S.K. Lines. The shipping firm was sued in 1988 over delays in leasing payments for two ships and consequential economic losses dating back to the 1930s. The maritime court ruled in 2007 that it should compensate a Chinese firm 2.9 billion Japanese Yen (28.5 million U.S. dollars). Shanghai High People's Court upheld such ruling in 2010, and the maritime court released the ship days after the owners paid the compensation.

27. Improve Professionalized Trial Mechanism to Enhance Quality of Maritime Trials

The Court appointed the first 10 expert jurymen from shipping insurance, shipbuilding and maritime administration, which hopefully may bring their expertise into full play and enhance the professional level of maritime trials. Furthermore, the Court has built up the maritime judicial identification and assessment database and formulated guidelines concerning certain kinds of cases for further promotion of the professionalism, scientificity and impartiality of maritime judicial identification and assessment.

28.    Establish the “Four-Fast” Green Chanel to Resolve Maritime Civil Disputes Properly

The Court attached importance to the trial of maritime civil cases and established the “four-fast” (fast registration, fast preservation, fast trial and fast enforcement) green channel so that the case registration, trial and enforcement departments can cooperate with each other closely for prompt and effective protection of the legitimate rights and interests of the parties. The two cases properly settled by the Court, namely a case of dispute over maritime personal injuries or deaths arising from a major marine accident of “Sanshui 805” in which 15 seamen lost their lives and a case of dispute over compensation for personal and property damages on the sea referred by the Supreme People’s Court to Shanghai Maritime Court and filed by the family members of 28 seamen victims, reflecting the fair and highly efficient maritime trial and realizing the integration of legal effect and social effect.

29.    Improve the Online Ship Auction Mechanism to Overcome Maritime “Enforcement Difficulty”

The Court expanded the online ship auction platform, formulated work rules for online ship auction and standardized detailed online ship auction procedure to improve the efficiency of online ship auction. In 2017, the Court auctioned 10 ships online, totaling a trade value of RMB 144.28 million, with an average premium rate of 42.88%, vigorously enhancing the property liquidation and debt compensation rate of maritime cases of enforcement.

30.    Expand the Application of Network Information Technology to Facilitate Litigation and Improve Efficiency

The Court introduced an “E-Mediation” mobile application to construct highly efficient, convenient, flexible and open online mediation mode, reducing litigation costs and enhancing judicial efficiency. In 2016, the Court successfully settled 105 pre-trial cases through the mediation platform, becoming the first one in China that mediated cases through a mobile application, and was designated a pilot court for online mediation platform by the Supreme People’s Court. In certain court hearings of cases involving foreign elements, some evidences were examined across borders via video-link to investigate the case facts. This innovative practice significantly improved cross-border evidence examination efficiency and saved judicial resources and litigation costs.

Conclusion

31.    At present, China is an important country in the world in maintaining specialized and comprehensive maritime adjudicatory institutions and in accepting maritime cases, with a relatively sound maritime legal system and maritime judicial service system. Many important changes have occurred as the law grows and changes. Facing the future, China’s maritime adjudication will stand at a new starting point in closer connection with the national opening-up strategies and maritime strategies, and will endeavor to build up its maritime judiciary reputation with extensive international influence.

Thank you all!