Several Provisions of the Supreme People's Court on Trial of Cases on Disputes over Limitation on Liabilities for Maritime Claims

Fa Shi [2010] No. 11

August 27, 2010

The Several Provisions of the Supreme People's Court on Trial of Cases on Disputes over Limitation on Liabilities for Maritime Claims, which were adopted at the 1484th meeting of the trial commission of the Supreme People's Court on March 22, 2010, are hereby promulgated and shall come into effect as of September 15, 2010.

For the purpose of hearing relevant cases on disputes over limitation on liabilities for maritime claims, these Provisions are formulated in accordance with provisions in the Special Procedure Law of the People's Republic of China on Admiralty (the "Special Maritime Procedure Law") and the Maritime Law of the People's Republic of China (the "Maritime Law") and in line with trial practice.

Article 1 For trial of relevant cases on disputes over limitation on liabilities for maritime claims, the Special Maritime Procedure Law and the Maritime Law shall be applied. If there are on relevant provisions in such two laws, other relevant laws or administrative regulations shall be applied.

Article 2 For the same maritime accident, if different persons liable have applied to different maritime courts for establishment of limitation funds for maritime claims prior to filing a lawsuit in accordance with article 102 of the Special Maritime Procedure Law, the maritime court(s) registering the case latter shall transfer the case to the maritime court, which firstly registers the case, for trial.

Article 3 For applying for establishment of limitation funds for maritime claims, persons liable shall file the application with the maritime court that has accepted the relevant case of maritime disputes.
Where the relevant case has been accepted by different maritime courts, for applying for establishment of limitation funds for maritime claims, persons liable shall file the application with the maritime court firstly registering such case in accordance with the agreement of litigation jurisdiction; while there is any agreement of litigation jurisdiction between parties concerned, such application shall be filed with the maritime court firstly registering such case.

Article 4 After establishment of limitation funds for maritime claims, the maritime court establishing such funds has jurisdiction over the action lodged by claimants against persons liable over relevant disputes over the maritime accident.
Where the claimants lodge a maritime action with other maritime court(s), such other maritime court(s) that have accepted the case shall transfer such case to the maritime court that has established the limitation funds for maritime claims in accordance with provisions in the civil procedure law, unless there is an agreement on litigation jurisdiction between parties concerned.

Article 5 The period, as specified in paragraph (2), article 106 of the Special Maritime Procedure Law, of 15 days in which maritime courts shall make a ruling, shall be counted from the thirtieth day following the next day of the latest announcement of the maritime court's acceptance of the application for establishment of limitation funds for maritime claims.

Article 6 The expiry day, as specified in article 112 of the Special Maritime Procedure Law, for a period within which application for registration of claims may be lodged, shall be the sixtieth day following the next day of the latest announcement of the maritime court's acceptance of the application for establishment of limitation funds for maritime claims.

Article 7 Where the creditors apply for going through registration of claims and comply with relevant provisions, the maritime court shall make a ruling in accordance with provisions in article 14 of the Special Maritime Procedure Law after the limitation funds for maritime claims are established; while if such funds are not established in accordance with law, the maritime court shall award to terminate the registration of claims. Application fees that have been paid by creditors shall be assumed by persons who apply for establishment of limitation funds for maritime claims.

Article 8 After limitation funds for maritime claims are established, claimants may apply for property preservation against persons liable based on that the persons liable are not entitled in accordance with law to employ limitations of liability for maritime claims to defend against maritime claims.

Article 9 After limitation funds for maritime claims are established, if claimants, based on maritime claims over the same maritime accident that fall within limitation on liabilities for maritime claims specified in article 207 of the Maritime Law, cite execution admiralty lien as the reason for their application for detaining of vessel, the maritime court shall not enforce such application.

Article 10 Where any creditor brings an action in accordance with article 209 of the Maritime Law to confirm that persons liable have no right to limit liabilities for maritime claims, a written form is required. Procedures for right confirmation specified in the Special Maritime Procedure Law shall not be applied to trial of the said case and parties concerned may lodge an appeal against judgment or ruling made by the maritime court.
Where two or more creditors claim that persons liable have no right to limit liabilities for maritime claims, the maritime court may consolidate relevant actions for joint hearing.

Article 11 After creditors have brought a right confirmation action in accordance with paragraph (1), article 116 of the Special Maritime Procedure Law, if it is necessary to judge proportion of colliding vessels' degree of fault, procedures for right confirmation specified in the Special Maritime Procedure Law shall not be applied to the trial thereof and parties concerned may lodge an appeal against the judgment or ruling made by the maritime court.

Article 12 For the purpose of article 204 of the Maritime Law, "vessel operators" shall refer to registered vessel operators or persons who accepts vessel owners' instruction to actually use and control a vessel and bears corresponding responsibilities for the vessel, excluding carriers without a vessel.

Article 13 Failure of persons liable to apply for establishment of limitation funds for maritime claims shall not prejudice the persons liable to use limitation on maritime claims as a defense against maritime claims specified in article 207 of the Maritime Law.

Article 14 Where persons liable have not filed a defense of limitation on maritime claims, the maritime court shall not render a judgment by applying provisions of the Maritime Law on limitation on maritime claims on its own initiative.

Article 15 Where persons liable have not filed a defense of limitation on maritime claims prior to first instance' judgment has been rendered but file during the second instance or re-trial process, the people's court shall not support.

Article 16 Where persons liable fail to file a defense of limitation on maritime claims against maritime claims specified in article 207 of the Maritime Law, and the creditors file an application for enforcement against property of the persons liable other than those of the limitation funds for maritime claims on the strength of effective written judgments or arbitration awards, the people's court shall support, except that the creditors use the above instruments as evidence to apply for registration of creditors' rights and the maritime court renders a ruling of approval.

Article 17 Maritime claims specified in article 207 of the Maritime Law that may be limited shall not include claims filed because of sinking, accident, stranding of a vessel or the floating-off, cleanup, demolishment or rendering harmless of an abandoned vessel or claims filed because of cleanup, demolishment or rendering harmless of goods on a vessel.
Where a person liable encounter claims specified in the preceding paragraph because of vessel crash, and the person liable exercises its recourse right towards the other party to the crash for the loss incurred, if the other party claims for limitation on claims in accordance with article 207 of the Maritime Law, the people's court shall support.

Article 18 For the purpose of article 209 of the Maritime Law, "liable person" shall refer to the very person liable for the maritime accident.

Article 19 Where a maritime claimant claims that the persons liable are not entitled to limitation on maritime claims on the ground that the vessel subject to maritime accident is improper for the sailing but fails to prove that the losses out of which claims arise are caused by the rash action or omission of the very liable persons who intentionally cause losses or clearly be aware of possible losses, the people's court shall not support.

Article 20 The limitation funds for maritime claims shall be established in RMB, and the amount thereof shall be calculated by the method of converting the special drawing right on the date the ruling of the people's court on approval of fund establishment was made to RMB.

Article 21 Interest specified in article 213 of the Maritime Law shall be calculated at the standard interest rate for one-year-term loans of financial institutions of the same period as determined by the China People's Bank from the date of maritime accident to the date of fund establishment.
In respect of limitation funds for maritime claims established in the form of guarantee, the interest during the fund establishment period shall be calculated at the standard interest rate for one-year-term loans of financial institutions of the same period as determined by the China People's Bank.

Article 22 These Provisions shall not apply to cases that have gone through the final trial prior to the implementation of these Provisions when they are re-tried by the people's court.

Article 23 In case of discrepancy between the judicial interpretations promulgated by this Court prior to implementation of these Provisions and these Provisions, these Provisions shall prevail.