Typical Case about “The Belt and Road” of Qingdao Maritime Court (2018) Lu 72 Min Chu, No.124

　　Qingdao Dongtai Peanut Products Co., Ltd. v.Transpac Container System Limited. (Case about disputes over contract on carriage of goods at sea)

　　【Reason for Recommendation】

　　The case deals with disputes arising from delivery of goods by the carrier at the destination port in the absence of an original bill of lading under the contract of carriage of goods by sea. The shipper stated in the bill of lading in this case is a company filled in at the request of the foreign buyer and the plaintiff is only an agent. Such being the case, the identity of the plaintiff shall be determined in accordance with Maritime Law and Provisions of the Supreme People’s Court on Several Issues concerning the Application of Law during the Trial of Cases about Delivery of Goods without an Original Bill of Lading. Therefore, as the shipper and the holder of the original bill of lading, the plaintiff is entitled to request the carrier to bear the liability for the loss caused by its delivery of the goods in the absence of an original bill of lading. The carrier is obliged to deliver the whole container for the goods transported by container. When the shipper has proven that the empty containers have returned to the yard for re-circulation, the plaintiff has completed its preliminary obligation of proving that the carrier has delivered the goods. At this time, the carrier bears the burden to prove that the goods have not been delivered yet. Otherwise, the carrier shall bear the unfavorable legal consequences of failure to produce evidence, and should assume liability for delivery of goods without an original bill of lading.

　　【Basic Facts】

　　In May 2017, the plaintiff, Qingdao Dongtai Peanut Products Co., Ltd. handed over a batch of goods to Qingdao Branch of Dexun (China) Freight Forwarding Co., Ltd. (hereinafter referred to as “Qingdao Dexun”) for transportation. After accepting the goods, Qingdao Dexun issued a full set of original bills of lading for the goods as the agent of the defendant, Transpac Container System Limited.

　　It is stated in the bill of lading that the date of shipment of the goods is May 312017; the port of loading is Qingdao Port; the port of unloading is Jeddah Port; the delivery method is CY/CY, and the goods are peeled peanuts. The head and the lower right corner of the bill of lading both indicate that the carrier is Blue Anchor Line and Qingdao Dexun is the signing agent. The shipper column records “Qingdao Dongtai Peanut products Co., Ltd. On behalf of SULEYMAN GIDA TEKS.VE SA N. URN.TIC.TD.STI”; the consignee is NATIONAL COMMERCIAL BANK A/C OF BASMA ALHOUTI TRADING EST; the notifying party is BASMA AL-HOUTI TRADING EST; and Dexun is the delivery agent.

　　The container circulation records showed that the two containers under the bill of lading arrived at the destination port on June 24 2017, and left the yard on July 18 of the same year. On July 20 of the same year, the containers returned to the yard empty. The packing list, invoice and customs declaration form involved revealed that the plaintiff is the production and sales unit and the shipper of the goods involved, and the value of the goods involved is $67,320. The above price is the CNF Jeddah price. During the trial, the plaintiff confirmed that the freight had paid to the agent of defendant, Qingdao Dexun and the defendant confirmed the receipt of the freight under the bill of lading involved. The plaintiff still holds full sets of original bills of lading up to now. The defendant is a non-vessel operation carrier registered with the Shanghai Municipal Transportation Commission and has the qualification of being a non-vessel operation carrier. The Blue Anchor Line shown in the head and the lower right corner of the bill of lading registered by the defendant is the carrier under the bill of lading.

　　The plaintiff requested the defendant to compensate it the loss of the value of the goods under the above-mentioned bill of lading for the amount of USD 67,320 and the corresponding interest due to the defendant’s delivery without an original bill of lading.

　　【Judgement】

　　Qingdao Maritime Court held that the case is about disputes over the contract on carriage of goods by sea. The defendant is a Hong Kong company and the disputed delivery in the absence of an original bill of lading happens in Saudi Arabia, which means that the case has foreign-related factors. The parties invoked the laws of the People’s Republic of China and neither of them raised any objection on the applicable law. Therefore, laws of the People’s Republic of China are taken as the applicable laws in this case. The defendant is the carrier of the goods under the bill of lading. The plaintiff is the production and export unit of the goods involved. At the same time, the plaintiff booked the cabin from the agent of the defendant, paid the freight to it, actually delivered the goods to the defendant for transportation, which is also confirmed by the defendant. Obviously, the plaintiff is in line with the definition of the second type of shipper in Maritime Law of the People’s Republic of China and an international contractual relationship of the carriage of goods by sea exists between the parties. The plaintiff, as the holder of the original bill of lading, has presented evidence to prove that the containers involved had been returned to the yard emptily for reusing and re-circulation. At the same time, the delivery method of the goods involved was CY/CY, which meant the defendant was obligated to deliver the containers as a whole. But the goods involved had been unpacked and the defendant had violated the obligations stipulated in the contract. On the basis of the above two points, it can be concluded that the plaintiff has completed its preliminary obligation of proving that the defendant released the goods without an original bill of lading as the carrier. As to the prima facie evidence provided by the plaintiff, the defendant should prove that the goods were still under its control. Otherwise, it should bear the unfavorable consequences of failure to produce such evidence and bear the liability for the loss caused by its delivery without an original bill of lading. In this case, the defendant did not submit evidence to prove that the goods were still under its control. Therefore, it should be liable for releasing the goods without an original bill of lading and the amount of compensation should be calculated based on the value of the goods at the time of shipment plus the freight and insurance. The trade term of this case is CNF Jeddah, which includes the cost and freight of goods, excluding insurance premium. It could be confirmed that the value recorded in the customs declaration form is the same as the value of the goods involved, totaling $67,320 plus corresponding interest. Hence, the defendant was ruled to compensate the plaintiff the forgoing amount.

　　【Typical Significance】

　　This case is about disputes caused by delivery of goods without an original bill of lading by the carrier at the port of destination under the contract of carriage of goods by sea with foreign factors, and the destination port stated in the bill of lading is Jeddah Port. It is a dispute arising from the international sale of goods between a Chinese seller and a Saudi buyer, a member state of the Belt and Road. Through this case, the seller and the carrier could get the revelation that no matter what trade terms are used and how to operate the charter booking, only by holding the original bill of lading and delivering on it, can a party be exempt from the legal risks.

　　Qingdao Maritime Court

　　Civil Judgment

　　(2018) Lu 72 Min Chu No. 124

　　Plaintiff: Qingdao Dongtai Peanut Products Co., Ltd. Address: Malianzhuang Town, Laixi City, Qingdao City, Shandong Province, the People’s Republic of China.

　　Legal representative: LiZuodong, executive director.

　　Authorized agents ad litem: YuPeipei, lawyer of Shandong Wincon law firm.

　　Authorized agents ad litem: MaJiefei, trainee lawyer of Shandong Wincon law firm.

　　Defendant: Transpac Container System Limited. Address: 19th Floor, 23rd Floor, Room 2502-2503 of 25th Floor, Manhattan Plaza, Hong Tai Road 23, Kowloon Bay, Hong Kong Special Administrative Region.

　　Legal representative: WONG SIEW LOONG, director.

　　Authorized agents ad litem: ZhouPing, lawyer of Sloma law firm.

　　Authorized agents ad litem: DingYu , lawyer of Sloma law firm.

　　On January 12 2018, the court legally applied the general procedures to publicly hear the case of a dispute over the contract of carriage of goods by sea between the plaintiff: Qingdao Dongtai Peanut Products Co., Ltd. (hereinafter referred to as the “plaintiff”) and the defendant: Transpac Container System Limited. (hereinafter referred to as the “defendant”). The plaintiff’s attorneys, YuPeipei and MaJiefei, and the defendant’s attorney, ZhouPing, attended the proceedings. As far, the case has been concluded.

　　The plaintiff raised the following claims towards the Court:

　　Firstly, order the defendant to compensate the plaintiff for the loss of the value of the goods under the bill of lading No. 4352-0330-705.017, amounting USD 67,320 (calculated at the exchange rate of $1 to RMB 6.5079 as announced by the State Administration of Foreign Exchange on the date specified by the indictment, equivalent to RMB 438,111.83), together with the interest from July 20 2017 to the date of actual payment in accordance with the US dollar deposit interest rate of the people’s Bank of China for the same period. Secondly, order the defendant to bear all litigation fees.

　　Facts and Reasons: On May 31 2017, the defendant, as the carrier recorded in the full set of original bill of lading numbered 4352-0330-705.017, shipped 34 tons of peeled peanuts for the plaintiff and the value of the goods was $67,320. It was recorded in the bill of lading that the plaintiff was the shipper of the involved goods; the loading port was Qingdao Port and the unloading port was Jeddah Port; the number of container was CBHU3904425, CBHU5918330. The container tracking records showed that two containers involved in the case were unpacked and released without approval after they arrived at the port of destination. The plaintiff still held the full set of original bills of lading for the above goods. The defendant was the carrier of the involved goods. As a non-vessel operation carrier registered with the Shanghai Municipal Transportation Commission, the defendant shall have the legal obligation to take care of the goods and deliver the goods against the original bill of lading. The goods were released without an original bill of lading, thus, the defendant, as the carrier, shall compensate plaintiff’s loss.

　　The defendant argued that the plaintiff’s claims shall be overruled. The specific reasons were as follows: Firstly, the plaintiff was not the party involved in the case. The plaintiff failed to prove that the contract of carriage of goods by sea was concluded between the plaintiff and the defendant. The plaintiff was not the shipper and had no interest in the case. Thus, its pleadings shall be dismissed. Secondly, on the premise of retaining the above-mentioned defense, the defendant believed that the plaintiff failed to submit evidence to prove that the goods had been delivered in the absence of an original bill of lading, and failed to prove its loss. The defendant collected, collated and notarized relevant evidential materials at the port of destination, which was the crucial fact to determine whether the plaintiff in this case had any losses and whether the defendant shall be liable for compensation. Thirdly, even if the defendant was liable for compensation, the plaintiff has not fulfilled the burden of proof for the specific amount of the loss; if it failed to prove the amount of the loss before the end of the trial, it shall bear the unfavorable consequences and its action shall be dismissed; Fourthly, the calculation standard for the plaintiff’s interest loss is unknown.

　　To support its claims, the plaintiff submitted the following evidence:

　　Evidence One: the sample of the bill of lading registered by the defendant. It is submitted to prove that the defendant is a non-vessel operation carrier registered with the Shanghai Municipal Transportation Commission, having the qualification of being a non-vessel operation carrier. The head of the registered bill of lading shows Blue Anchor Line.

　　Evidence Two: No. 4352-0330-705.017 original bill of lading (the translation version is attached). It is submitted to prove that: the plaintiff still holds the full set of the original No. 017 bill of lading. The head of the involved bill of lading shows Blue Anchor Line. That is in line with the one registered by the defendant. Therefore, the defendant is the carrier in this case and the plaintiff is the shipper. As a result, a contractual relationship of the carriage of goods by sea exists between the parties and the defendant is obliged to dispose of and deliver the goods against the original bill of lading. It further proves that according to the bill of lading, the goods involved are two containers of Chinese peanut kernels; the port of loading is Qingdao Port and the port of unloading is Jeddah Port.

　　Evidence Three: the inquiry records of the tracking records of the involved bill of lading. The records indicate that all goods under the bill of lading were taken in July 18 2017, and returned empty, thus the defendant did deliver the goods without an original bill of lading. The defendant shall be liable for compensating plaintiff’s losses caused by its failure to properly keep, care for the goods and deliver the goods against an original bill of lading.

　　Evidence Four: 4-1: the invoices of the goods involved (the translation version is attached); 4-2: the packing list (the translation version is attached); 4-3: the customs declaration form. The above documents are submitted to prove that the seller of involved goods is the plaintiff, and the value of the involved goods of two containers is $67,320. The plaintiff suffered a loss of $67,320 because the defendant did not properly perform the carrier’s obligations and delivered the goods without an original bill of lading.

　　The defendant did not submit any evidence.

　　The relevant pieces of evidence were cross-examined by the parties. As to evidence one, two and three submitted by the plaintiff, the defendant had no dissent in their authenticity, legality, and relevance. But as to evidence 4-1 and 4-2, the defendant argued that it was made solely by the plaintiff and could not be confirmed by sales contract. The defendant had no dissent in the authenticity, legality, and relevance of evidence 4-3.

　　Taking the parties’ evidence and cross-examination opinions into consideration, the Court held that the authenticity, legality and relevance of evidence one, two, three and 4-3 were confirmed. Evidence 4-1, 4-2 shall be comprehensively analyzed in combination with other evidence.

　　Based on the parties’ presentation and the evidence confirmed, the Court ascertained the following facts：

　　In May 2017, the plaintiff handed over a batch of goods to the Qingdao Branch of Dexun (China) Freight Forwarding Co., Ltd. (hereinafter referred to as “Qingdao Dexun”) for transportation. After accepting the goods, Qingdao Dexun issued a full set of original bills of lading numbered 4352-0330-705.017 for the goods as the agent of defendant. It states in the bill of lading that the date of shipment of the goods is May 31 2017; the name of the vessel/voyage is YM FOUNTAIN 132W; the port of loading is Qingdao Port; the port of unloading is Jeddah Port; the delivery method is CY/CY, and the goods are peeled peanuts. The bill of lading involved two 20-foot ordinary containers numbered CBHU3904425 and CBHU5918330, of which each contains 850 boxes of goods.The head and the lower right corner of the bill of lading both indicate that the carrier is Blue Anchor Line and Qingdao Dexun is the signing agent. The shipper column records “Qingdao Dongtai Peanut products Co., Ltd. On behalf of SULEYMAN GIDA TEKS.VE SA N. URN.TIC.TD.STI”; the consignee is NATIONAL COMMERCIAL BANK A/C OF BASMA ALHOUTI TRADING EST; the notifying party is BASMA AL-HOUTI TRADING EST; and Dexun is the delivery agent.

　　The container circulation records showed that the two containers under the bill of lading arrived at the destination port on June 24 2017, and left the yard on July 18 of the same year. On July 20 of the same year, the containers returned to the yard empty.

　　The packing list, invoice and customs declaration form involved revealed that the plaintiff is the production and sales unit and the shipper of the goods involved, and the value of the goods involved is $67,320. The above price is the CNF Jeddah price.

　　During the trial, the plaintiff confirmed that the freight had paid to the agent of defendant, Qingdao Dexun and the defendant confirmed the receipt of the freight under the bill of lading involved. The plaintiff still holds full sets of original bills of lading up to now.

　　The defendant is a non-vessel operation carrier registered with the Shanghai Municipal Transportation Commission and has the qualification of being a non-vessel operation carrier. The Blue Anchor Line shown in the head and the lower right corner of the bill of lading registered by the defendant is the carrier under the bill of lading.

　　The Court held that the case is about disputes over the contract on carriage of goods by sea. The defendant is a Hong Kong company and the disputed delivery in the absence of an original bill of lading happens in Saudi Arabia, which means that the case has foreign-related factors. The parties invoked the laws of the People’s Republic of China and neither of them raised any objection on the applicable law. According to article 8, paragraph 2 of Interpretation of the Supreme People’s Court on Several Issues Relating to Application of the Law of the People’s Republic of China on Application of Laws to Foreign-related Civil Relations (I),the Court determined that the parties had made a choice regarding the law applicable in this case.Therefore, laws of the People’s Republic of China are taken as the applicable laws in this case.

　　The key issues in this case are as follows:

　　Legal relationship between plaintiff and defendant.

　　Qingdao Dexun accepted the plaintiff’s goods and arranged the shipment of it. Qingdao Dexun issued the full set of original bill of lading as the agent of defendant. The carrier was Blue Anchor Line stated in the head and the lower right corner of the bill of lading. The lower right corner of the bill of lading also stated Qingdao Dexun was the agent of defendant to issue bills of lading. The format of this bill of lading was the same as the one registered by the defendant with the Shanghai Municipal Transportation Commission. Therefore, the defendant was the user of this standard form bill of lading and the defendant was the carrier of the involved goods.

　　In the present case, the plaintiff is the production and export unit of the goods involved according to the customs declaration form. At the same time, the plaintiff booked the cabin from the agent of the defendant, paid the freight to it, actually delivered the goods to the defendant for transportation, which is also confirmed by the defendant.

　　According to article 42 of Maritime Law of the People’s Republic of China, “Shipper” means the person by whom or in whose name or on whose behalf a contract of carriage of goods by sea has been concluded with a carrier; and the person by whom or in whose name or on whose behalf the goods have been delivered to the carrier involved in the contract of carriage of goods by sea. In this case, the plaintiff handed over the goods to the carrier for transportation as the seller. Obviously, the plaintiff is in line with the definition of the second type of shipper in Maritime Law of the People’s Republic of China. Thus, the plaintiff is the shipper stipulated by the Maritime Law. Defendant’s defense that the plaintiff is not the shipper was not supported by the court. An international contractual relationship of the carriage of goods by sea exists between the parties.

　　Whether the defendant should be liable for compensation?

　　The plaintiff claimed that the defendant had the obligation to deliver the goods against the original bill of lading. The plaintiff held the full set of original bills of lading for the involved goods. However, the goods had been released. Thus, the defendant should compensate for the loss of the goods. The defendant admitted that the goods involved had indeed been unpacked at the port of destination, but alleged that it was necessary to examine evidence to determine whether there was delivery without an original bill of lading. Unfortunately, it failed to submit any evidence during the period of proof given by the Court. In light of this, the Court held that, the plaintiff, as the holder of the original bill of lading, has presented evidence to prove that the containers involved had been returned to the yard emptily for reusing and re-circulation. At the same time, the delivery method of the goods involved was CY/CY, which meant the defendant was obligated to deliver the containers as a whole. But the goods involved had been unpacked and the defendant had violated the obligations stipulated in the contract. On the basis of the above two points, it can be concluded that the plaintiff has completed its preliminary obligation of proving that the defendant released the goods without an original bill of lading as the carrier. As to the prima facie evidence provided by the plaintiff, the defendant should prove that the goods were still under its control. Otherwise, it should bear the unfavorable consequences of failure to produce such evidence and bear the liability for the loss caused by its delivery without an original bill of lading. In this case, the defendant did not submit evidence to prove that the goods were still under its control. Therefore, it should be liable for releasing the goods without an original bill of lading.

　　According to article 71 of the Maritime Law, a provision in the document stating that the goods are to be delivered to the order of a named person, or to order, or to bearer, constitutes an undertaking to deliver the goods. According to article 2 of the Provisions of the Supreme People’s Court on Several Issues concerning the Application of Law during the Trial of Cases about Delivery of Goods without an Original Bill of Lading,where a carrier delivers goods without an original bill of lading in violation of law, damaging the rights of the holder of the original bill of lading under the bill of lading, the holder of the original bill of lading may require the carrier to bear the civil liability for the losses resulting therefrom. Therefore, the plaintiff, as the shipper and the holder of the original bill of lading, is entitled to require the carrier to assume liabilities for compensation for the losses caused by its delivery of goods without an original bill of lading.

　　How to determine the amount of the compensation?

　　Paragraph 1 and paragraph 2 of article 55 of the Maritime Law stipulate that the amount of indemnity for the loss of the goods shall be calculated on the basis of the actual value of the goods so lost; the actual value shall be the value of the goods at the time of shipment plus insurance and freight.

　　Article 6 of the Provisions of the Supreme People’s Court on Several Issues concerning the Application of Law during the Trial of Cases about Delivery of Goods without an Original Bill of Lading provides that the indemnity for the losses suffered by the holder of the original bill of lading from the carrier’s delivery of goods in the absence of original bill of lading shall be calculated on the basis of the value of the goods at the time of shipment plus freight and insurance. The trade term of this case is CNF Jeddah, which includes the cost and freight of goods, excluding insurance premium. The packing list, invoice and customs declaration form involved reveal that the value of the goods involved is $67,320. Hence, the plaintiff’s claim that the defendant should compensate for the loss of goods was upheld by the Court. 

　　With regard to the interest, the interest loss is caused by the defendant’s default and there is causality between them. According to article 113 paragraph 1 of the Contract Law of the People’s Republic of China, “where either party to a contract fails to perform the contractual obligations or its performance of the obligations does not meet the terms of the contract, thereby causing losses to the other party, the amount of compensation for losses shall be equal to the losses caused by breach of contract, including benefits receivable after the performance of the contract, provided that it shall not exceed the probable losses caused by breach of contract which was foreseen or ought to have been foreseen by the breaching party at the time of conclusion of the contract”, thus the interest required by the plaintiff is supposed to be compensated. The plaintiff claimed that interest should be calculated based on the US dollar deposit interest rate for the same period of the People’s Bank of China from July 20 2017, but the defendant argued that the calculation standard was not definite. Giving the fact that the People’s Bank of China did not issue the US dollar deposit interest rate standard for the corresponding period, the Court decided to calculate the interest based on the RMB liquidity loan interest rate for the corresponding period of the People’s Bank of China. Therefore, the defendant shall indemnify the plaintiff for the interest of the loss of goods $67,320, which shall be calculated in accordance with the RMB liquidity loan interest rate of the people’s Bank of China for the same period from July 20 2017 until the date of payment determined in this judgment.

　　In summary, there was a contractual relationship for the carriage of goods by sea between the parties. The plaintiff held the full set of the original bill of lading. The defendant delivered goods without an original bill of lading and shall be liable for the compensation. According to article 8, paragraph 2 of Interpretation of the Supreme People’s Court on Several Issues Relating to Application of the Law of the People’s Republic of China on Application of Laws to Foreign-related Civil Relations (I), article 42, article55 and article 71 of the Maritime Law of the People’s Republic of China, article 107 and article 113 of the Contract Law of the People’s Republic of China, article 64 of the Civil Procedure Law of the People’s Republic of China, article 2 and article 6 of the Provisions of the Supreme People’s Court on Several Issues concerning the Application of Law during the Trial of Cases about Delivery of Goods without an Original Bill of Lading and article 90 and article 108 of the Interpretations of the Supreme People’s Court on Application of the Civil Procedural Law of the People’s Republic of China, the Court ruled that:

　　1. The defendant, Transpac Container System Limited shall compensate the plaintiff, Qingdao Dongtai Peanut Products Co., Ltd. for the loss of goods value $67,320.

　　2. The defendant, Transpac Container System Limited shall compensate the plaintiff, Qingdao Dongtai Peanut Products Co., Ltd. for the interest of the above-mentioned payment.  The interest shall be calculated in accordance with the RMB liquidity loan interest rate of the people’s Bank of China for the same period from July 20 2017 until the date of payment determined in this judgment.

　　3. Dismiss plaintiff’s other claims.

　　The defendant, Transpac Container System Limited, shall pay the above-mentioned money within 10 days from the effective date of this judgment. In the event that the defendant fails to perform the obligations to make the payment during the period specified in the judgment, double interest for the debt for the period of deferred performance shall be imposed on the defendant, in accordance with Article 253 of the Civil Procedure Law of the People’s Republic of China.

　　The case acceptance fee is 7,871yuan, which shall be borne by the defendant, Pantai Transportation Co., Ltd.

　　Against this judgment, parties may submit a written appeal to this Court within 15 days after the service of the judgement for Qingdao Dongtai Peanut Products Co., Ltd. and for Transpac Container System Limited, within 30 days. The appeal party should submit copies of the written appeal in the same number of the counterparty and appeal to the Shandong High People’s Court.

　　Presiding Judge    WangAiling

　　Acting Judge    ZhangFangsheng

　　Acting Judge    WangJun

　　October 17, 2018

　　The copy is the same as the original

　　Judge Assistant  NiuMeng                       

　　Court Clerk LangXiaolin