Provisions of the Supreme People's Court on Issues Relating to Hearing over Sea Freight Forwarding Dispute Cases

Fa Shi [2012] No. 3

February 27, 2012

The Provisions of the Supreme People's Court on Issues Relating to Hearing over Sea Freight Forwarding Dispute Cases has been adopted at the 1538th meeting of the judicial committee of the supreme people's court on January 9, 2012 and is hereby promulgated, which shall come into effect on May 1, 2012.

These Provisions are formulated in combination with the trial practice and in accordance with the General Principles of Civil Law of the People's Republic of China, Contract Law of the People's Republic of China, the Maritime Law of the People's Republic of China, the Civil Procedure Law of the People's Republic of China and the Special Procedure Law of the People's Republic of China on Admiralty as well as other relevant laws and regulations for the purposes of correctly hearing over sea freight forwarding dispute cases and legally protecting the legitimate rights and interests of the parties.

Article 1 These Provisions shall be applicable to the following disputes arising after the freight forwarding enterprises accept the entrustment of the principal to deal with the freight forwarding matters in relating to the carriage of goods by sea:
1. Disputes arising out of the provision of cargo place booking service, customs clearance service, inspection declaration service, service for application for inspection and insurance service;
2. Disputes arising out of the provision of the service of the packing, inspection of loading and inspection of discharge of goods, and vanning, devanning, allocating and transferring of containers;
3. Disputes arising out of the preparation and payment of relevant documents and settlement of expenses;
4. Disputes arising out of provision of warehousing and land transportation service; and
5. Disputes arising out of handling other sea freight forwarding business.

Article 2 When hearing over the sea freight forwarding dispute cases, where the people's court identifies the freight forwarding enterprise has formed the agency, transportation and warehousing and other legal relationships with the principal due to the handling of the sea freight forwarding affairs, the relevant legal provisions shall be respectively applied.

Article 3 The people's court shall identify the whether the sea freight forwarding contract relationship has been formed or not in accordance with the nature of the rights and obligations as agreed in the contract and in comprehensive consideration of the name and method in which the freight forwarding enterprises obtain their remuneration, type of issued invoice and charging items, the transaction practice between parties and other situation of the actual performance of contract.

Article 4 Where the freight forwarding enterprise issues bill of lading, sea waybill or other transportation documents in its own name in the course of handling the sea freight forwarding affairs, and the principal claims the freight forwarding enterprise to assume the responsibility of the carrier based upon that, the people's court shall support such claim.
Where the freight forwarding enterprise issues the bill of lading, sea waybill or other transportation documents in the name of the agent of the carrier but cannot prove that it has obtained the authorization of the carrier, the principal can claim the freight forwarding enterprise to assume the responsibility of the carrier based upon that, the people's court shall support such claim.

Article 5 Where the principal and the freight forwarding enterprise has agreed to authority of sub-entrustment, and the parties claim that the principal shall agree the sub-entrustment of the sea freight forwarding affairs within the scope of authority, the people's court shall support such claim.
Without any agreed authority of sub-entrustment, the freight forwarding enterprise or the third person claims the principal to agree the entrustment on the ground that the principal knows about the sub-entrustment of the sea freight forwarding affairs to the third person in whole or in part and raises no objection, the people's court shall not support such claim, unless the activities of the principal have obviously indicated his acceptance of the sub-entrustment.

Article 6 Where pursuant to the transaction practice, a party has reasons to believe the doer has the right to represent the party to enter into the sea freight forwarding contract, and such party has claimed the contract to be effective in accordance with the provisions of Article 49 of the Contract Law, the people's court shall support such claim.

Article 7 Where the sea freight forwarding contract stipulates that the delivery of documents obtained from handling the sea freight forwarding affairs by the freight forwarding enterprise shall be conditional upon the payment of relevant expenses by the principal, and the freight forwarding enterprise refuses to deliver the document on the ground of the principal's failure to pay relevant expenses, the people's court shall support the same.
Where the contract does not stipulate nor has no express stipulation, the freight forwarding enterprise refuses to deliver documents on the ground that the principal has not paid relevant expenses; the people's court shall support the same, except for the bill of lading, sea waybill or other transportation documents.

Article 8 Where the freight forwarding enterprise accepts the entrustment of the contractual shipper to go through the affairs of the booking of place for goods and also accepts the entrustment of the actual shipper to deliver goods to the carrier, and the actual shipper demands the freight forwarding enterprise to deliver the bill of lading, sea waybill or other transportation documents it has obtained, the people's court shall support the same.
Contractual shipper refers to the person that enters into the contract of carriage of goods by sea by himself, or by entrusting others to do so in his name or for his benefits.
Actual shipper refers to the person that delivers goods to the carrier in relation to the contract of carriage of goods by sea by himself, or by entrusting others to do so in his name or for his benefits.

Article 9 Where the freight forwarding enterprise completes the sea freight forwarding affairs in accordance with the concluded entrustment authority and demands the principal to pay relevant reasonable expenses, the people's court shall support the same.

Article 10 Where the principal claims the freight forwarding enterprise to assume the relevant indemnification liabilities on the ground that the freight forwarding enterprise has caused losses to the principal in its handling of the sea freight forwarding affairs, the people's court shall support such claim, except when the freight forwarding enterprise can prove that it is not its fault.

Article 11 Where the freight forwarding enterprise fails to perform the duty of prudence to enter into the contract of carriage of goods by sea with non-vessel operating common carrier which has not gone through the registration for bill of lading with the competent transportation department of China and causes losses to the principal, it shall assume the corresponding indemnification liabilities.

Article 12 Where the freight forwarding enterprise accepts the entrustment of the non-vessel operating common carrier without going through the formalities for registration of the bill of lading with the competent transportation department of China to issue bill of lading, and the parties claim that the freight forwarding enterprise and the non-vessel operating common carrier shall assume joint and several liabilities for the losses under the bill of lading, the people's court shall support the same.
After assuming the indemnification liability, the freight forwarding enterprise shall be entitled to recover the same from the non-vessel operating common carrier.

Article 13 Any litigation brought against the disputes as listed in Article 1 hereof shall be governed by the maritime court.

Article 14 Where the people's court finds out that the freight forwarding enterprise without the operation qualifications for non-vessel operating common carrier violates the provisions of the Regulations of the People's Republic of China on International Maritime Transportation to issue bill of lading, sea waybill or other transportation documents in their own names in the course of the hearing over cases, the people's court shall issue judicial suggestions to the relevant competent transportation department to advice the competent transportation department to make corresponding punishment.

Article 15 These Provisions shall not apply to cases over freight forwarding disputes in relation to the coastal and inland water transport of goods.

Article 16 Where the relevant judicial interpretations made by the court before the implementation of these Provisions, these Provisions shall prevail.
After the implementation of these Provisions, where cases are still in the stage of first instance or second instance, these Provisions shall apply; cases that have been finally tried before the implementation of these Provisions, and cases where the parties apply to re-try or that shall be re-tried after the trial supervision procedure shall not be applicable these Provisions.