International Trade

Guangzhou Maritime Court of the PRC

Civil Judgment
(2001) GHFCZ No.212

Plaintiff: Shenzhen Bao An Gaoke Electronic Co., Ltd.
Address: High-tech Industrial Park, No.8 Tang Hang Rd.,
Shiyan County, Shenzhen
Legal Representative: Zhao Jinhai, General Manager
Agent ad litem: Yan Tieying, lawyer of Guangdong Wanshang Law Firm

Defendant: Beijing Hui Hang International Forwarding Ltd.
Shenzhen Branch
Address: Room AB, 26/F, Shenzhen Development Bank Tower,
No.5047, Shen Nan Dong Rd., Luo Hu District, Shenzhen
Representative: Li Ming, Manager
Agents ad litem: Zhao Shuzhou, Sun Jingliang,
lawyers of Wang Jing & Co. Law Firm

Defendant: Wan Hai Lines Ltd.
Address: 10/F, No. 136, Song Jiang Rd., Taipei, Taiwan, China]
Legal Representative: Chen Chaoheng, Chairman of the Board of Directors
Agents ad litem: Zhao Shuzhou, Sun Jingliang,
lawyers of Wang Jing & Co. Law Firm

As filed by the Plaintiff, Shenzhen Bao An Gaoke Electronics Co., Ltd. (hereinafter referred to as “Bao An Gaoke Co.”) against the Defendants, Beijing Hui Hang International Forwarding Ltd. Shenzhen Branch (hereinafter referred to as “Hui Hang Shenzhen”) and Wan Hai Lines Ltd. (hereinafter referred to as “Wan Hai Lines”) with respect to the dispute over the release of goods without collecting the original bill of lading this court accepted the case on September 26th, 2001. On November 30th, the judge, Huang Qingnan, heard the case by public hearing according to law. Yan Tieying, the agent ad litem of Bao An Gaoke Co., and Zhao Shuzhou and Sun Jingliang, the agents ad litem of Hui Hang Shenzhen and Wan Hai Lines, participated in the proceedings. This case has now been concluded.

The Plaintiff, Bao An Gaoke Co. claimed that: on March 24th, 2001, the Plaintiff, Bao An Gaoke Co., through its agent, Shenzhen Construction Equipment and Materials Import & Export Head Company (hereinafter referred to as “Shenzhen Construction Co.”), entrusted Hui Hang Shenzhen to transport 1,736 cartons of telephone sets valued at USD250,250 from Shenzhen, China to Semarang, Indonesia. Having received the goods consigned by the Plaintiff Bao An Gaoke Co., the Defendant Hui Hang Shenzhen issued on April 2nd the shipped on board clean bill of lading No. SKSM00222 in triplicate. As the actual shipper, the Plaintiff, Bao An Gaoke Co. obtained the bills of lading and held them till now. After the goods arrived at the destination port, the Defendant, Wan Hai Lines, as the actual carrier of the goods in this case, delivered the goods to a third party, in consequence of which the Plaintiff, Bao An Gaoke Co., could not collect the payment for the goods. The court is applied to adjudge that both Defendants shall jointly and severally compensate the losses of the Plaintiff, Bao An Gaoke Co., i.e. the losses of goods in the sum of USD250,250 and the interests accrued thereon pursuant to the loan interest rate stipulated by People’s Bank of China in the corresponding period (from April 24th to the day when both Defendants actually compensate the Plaintiff), plus lawyer’s fees in the amount of RMB80,000, the translation fee at RMB6,488 as well as the inquiry fee of Administration for Industry and Commerce at RMB58, which were all paid by the Plaintiff, Bao An Gaoke Co.; and to order the two defendants to bear the court fees.

The plaintiff Bao An Gaoke Co. provided this court with 28 pieces of evidence.

The Defendant Hui Hang Shenzhen defended that: 1. The Defendant, Hui Hang Shenzhen issued the said B/L as the agent of Wan Hai Lines, and it was not the carrier of the goods in this case; hence, it was not a qualified defendant. In addition, Hui Hang Shenzhen is not an independent legal person of enterprise, but is affiliated to Beijing Hui Hang International Forwarding Ltd., thus it is not qualified to take on the civil responsibility. 2. The said B/L is a straight bill of lading in which the Plaintiff, Bao An Gaoke Co. is not stated as the shipper nor the consignee. Hence, the Plaintiff is not a party to the contract of carriage of goods by sea as evidenced by the said B/L, nor is it entitled to lodge the complaint based on the bills of lading and without the capacity as the plaintiff.

The Defendant, Hui Hang Shenzhen provided this court with 3 groups of evidences.

The Defendant, Wan Hai Lines defended that: 1. The Plaintiff, Bao An Gaoke Co. is not the shipper or the consignee stated in the said B/L, thus is not entitled to file an action based on the B/L. 2. The party who signed the shipping order with the Defendant, Hui Hang Shenzhen, is Shenzhen Foreign Trade Import & Export Combined Transport Co., rather than the Plaintiff, Bao An Gaoke Co.; besides, the Plaintiff cannot be verified to be the actual shipper, for if the party who handed over the goods for shipment is to become the actual shipper, it needs to certify not only that it has handed over the goods to the carrier, but also that the goods are handed over in its own interests. However, the Plaintiff, Bao An Gaoke Co. has not completed their burden of proofs in these two regards. Furthermore, even if the Plaintiff, Bao An Gaoke Co. was the actual shipper, the relationship between the Plaintiff and the Defendant, Wan Hai Lines., was merely the legal relationship as provided in the Maritime Code of the PRC, rather than the legal relationship of contract of carriage of goods by sea evidenced by or contained in the bills of lading. Maritime Code of the PRC does not entitle the actual shipper to ask the carrier to deliver the goods to him, nor does it regulate that the carrier has the obligation to deliver the goods to the actual shipper. Therefore, the Plaintiff, Bao An Gaoke Co. cannot excise the rights of requesting delivery of goods under contract of carriage of goods by sea as contained in or evidenced by the bills of lading. 3. The straight Bs/L, as in this case does not have the function as document of title. The party to whom the goods should be delivered can only be the consignee stated in bill of lading, while any third party beyond the bill of lading relation is not entitled to enjoy the rights connecting to goods. Therefore, even if the Plaintiff, Bao An Gaoke Co. held the B/L, it could not claim its rights in respect of the goods. In summary, it is applied to the court to reject the litigation requests of the Plaintiff, Bao An Gaoke Co..

The Defendant, Wan Hai Lines provided this court with 3 groups of evidences.

It is found out through court trials:

I. Facts relating to transaction of the goods

The Plaintiff, Bao An Gaoke Co. submitted to this court the following evidences: 1. The original Sales Contract No. GK2001-001 signed by the Plaintiff and P. T. KARYA MAKMUR SEJATI (hereinafter referred to as KARYA Co.); 2. The faxes that KARYA Co. sent to the Plaintiff, Bao An Gaoke Co.; 3. The original Agreement concluded between the Plaintiff and PRIMA BRIGHT LIMITED (hereinafter BRIGHT Co.); 4. The original Packing List issued by the Plaintiff, certifying facts of the sales of the goods in this case. The Defendants, Hui Hang Shenzhen and Wan Hai Lines did not accept the authenticity of the four groups of evidences mentioned above, but no contrary evidence was submitted. This judge holds the opinions that: Sales Contract, Agreement and Packing List are all originals; furthermore, the faxes sent by KARYA Co. to the Plaintiff, Bao An Gaoke Co. conform to the three groups of evidences mentioned above. Therefore, the four groups of evidences above can be admitted as grounds to ascertain the facts of this case, and the following facts certified by them shall be confirmed.

On February 15th, 2001, the Plaintiff, Bao An Gaoke Co., and KARYA Co. concluded Sales Contract No. GK2001-001. It is agreed that: the Plaintiff sells to KARYA Co. 28,000 telephone sets worthy of USD250,250 (CNF Semarang, Indonesia); KARYA Co. should pay USD 60,000 as the deposit and the balance should be paid when it received the facsimile copy of the original B/L provided by the Plaintiff; the time of delivery by the Plaintiff is within 30 days upon the receipt of the deposit.

On March 20th, after putting the telephone sets purchased by KARYA Co. into cartons, the Plaintiff issued the Packing list. It records that: there are altogether 1,736 cartons with 28,085 telephone sets, of which 85 sets are spare ones.

On March 21st, KARYA Co. faxed to the Plaintiff, Bao An Gaoke Co., requesting that the “shipper” on the B/L should not be in the authentic name, nor should the name of company in Mainland China appear hereon; and the B/L shall state the “consignee” as PT TRIDHARMA DJAYA SELARAS (hereinafter referred to as DJAYA Co.).

On the same day, the plaintiff, Bao An Gaoke Co. and BRIGHT Co. concluded an Agreement. It is agreed that: because clients of the Plaintiff requested that the shipper stated in the B/L should not be in the name of a company in Mainland, BRIGHT Co. agreed that: the Plaintiff could name BRIGHT Co. as shipper in the box of shipper in the B/L when the Plaintiff handled the shipping procedures for the 1,736 cartons of telephone sets whose consignee is DJAYA Co.; the Plaintiff handles by itself other issues relating to the shipment of the goods, and BRIGHT Co. is not responsible for the same; the Plaintiff obtains the B/L by itself and enjoys the property rights under the B/L.

The Defendants, Hui Hang Shenzhen and Wan Hai Lines claim that the Plaintiff, Bao An Gaoke Co. has received USD60,000 as deposit paid by KARYA Co.. However, no corresponding evidence is submitted. Hence, this judge does not accept such claim.

II. Facts relating to the consignment of the goods

The Plaintiff, Bao An Gaoke Co. submitted to this court the following evidences: 1. The original Agreement on Agency for Export signed by the Plaintiff, Bao An Gaoke Co. and Shenzhen Construction Co.; 2. The original Letter of Entrustment for Custom Declaration issued by Shenzhen Construction Co. to Donglian Customs Declaration Co. Ltd. (hereinafter referred to as Donglian Co. ); 3. Original Declaration Form of Exported Cargo by which Donglian Co. declared to Shenzhen Custom for exportation; 4. The original Agreement entered into by Shenzhen Construction Co. and Connect Channel International Transportation Co., Ltd. (hereinafter referred to as Connect Channel Co.); 5. The original Shipping Order issued by Shenzhen Construction Co. to Connect Channel Co.; 6. Copies of Shipping Order issued by Connect Channel Co. to Shenzhen Foreign Trade Import and Export Combined Transport Co. (hereinafter referred to as Shenzhen Combined Transport Co.); 7. The original Statement with respect to Shipment of the Goods under B/L No. SKSMC00222 issued by Shenzhen Combined Transport Co. to the Defendant, Hui Hang Shenzhen; 8. the original shipping confirmation issued by Shenzhen Combimed Transport Co. to the Defendant Beijing Huihang; 9. The original Certificate for Carriage of Container issued by Shenzhen Xihu Huayu Trailer Transport Co. Ltd. (hereinafter referred to as Shenzhen Xihu Trailer Co.); 10. Copies of Export FCL Collection Order issued by the agent of Wan Hai Lines Ltd.-Wan Hai Lines (HK) Ltd. (hereinafter referred to as Wan Hai HK); 11. The original of Container In/Out Order issued by Shekou Container Terminals Ltd. (hereinafter referred to as Shekou Container Terminal.), certifying that the Plaintiff, Bao An Gaoke Co., through the agent, Shenzhen Construction Co., entrusted the Defendant, Hui Hang Shenzhen to carry 1,736 cartons of telephone sets; Shenzhen Xihu Trailer Co. transported the telephone sets consigned by the Plaintiff to Shekou Container Terminal, and finally the telephone sets were carried by the Defendant, Wan Hai Lines.

With regard to the foregoing 11 groups of evidences, the Defendants, Hui Hang Shenzhen and Wan Hai Lines only agreed with the Shipping Order issued by Shenzhen Combined Transport Co. and submitted to Hui Hang Shenzhen; as for the other evidences, the Defendants did not admit their authenticity, but no contrary evidence was submitted.

This judge holds that: among the 11 groups of evidences provided by the Plaintiff, Bao An Gaoke Co., except for the Shipping Order issued by Connect Channel Co. to Shenzhen Combined Transport Co. and Export FCL Collection Order issued by WH, HK being in photo copies, all other evidences are all original ones, thus they can be admitted as grounds to ascertain the facts of this case; in addition, the Shipping Order issued by Connect Channel Co. to Shenzhen Combined Transport Co. and Statement with regard to Shipment of Goods under B/L No. SKSMC00222 issued by Shenzhen Combined Transport Co. can certify each other; Export FCL Collection Order issued by Wan Hai HK and the Certificate for Carriage of Container issued by Shenzhen Xihu Trailer Co. and Container In/Out Order issued by Shekou Container Co. can verify each other, therefore, the Shipping Order issued by Connect Channel Co. to Shenzhen Combined Transport Co. and Export FCL Collection Order issued by Wan Hai HK can also be taken as the grounds for ascertainment of the facts in this case. In summary, the following facts certified by the foregoing 11 groups of evidences shall be confirmed.

On March 18th, 2001, the Plaintiff, Bao An Gaoke Co. signed the Agreement on Agency for Export with Shenzhen Construction Co.. It was agreed that: Shenzhen Construction Co. acts as the agent of the plaintiff to handle the procedures for exporting telecommunication products such as telephone sets; after Shenzhen Construction Co. received confirmation of the agency for export by the Plaintiff, it is responsible for arranging the procedures in respect of inspection, transportation, custom declaration and so on; the Plaintiff is responsible by itself for stipulations under the contracts it signed with buyer abroad, such as the time of delivery, quality of the goods and so on.

On March 20th, Shenzhen Construction Co. and Connect Channel Co. entered into an Agreement. It agrees that: Connect Channel Co. accepts the entrustment of Shenzhen Construction Co. and is responsible for going through all related procedures for shipment of 1,736 cartons with 28,000 sets of telephone sets (85 sets for spare) therein from Shekou, Shenzhen to Semarang. Indonesia; The actual expenses incurred during the procedures shall be settled by Connect Channel Co. with the carrier, and Shenzhen Construction Co. shall correspondingly make the payment to Connect Channel Co.; Shenzhen Construction Co. shall pay Connect Channel Co. the agency fees within 3 days when getting bill of lading. On the next day, Shenzhen Construction Co. issued a Consignment Bill to Connect Channel Co..

After accepting the entrustment, Connect Channel Co. issued Shipping Order to Shenzhen Combined Transport Co., sub-contracting Shenzhen Combined Transport Co. to handle the procedures for shipment of goods which Shenzhen Construction Co. was authorized to handle as the agent of the Plaintiff, Bao An Gaoke Co..

On March 23rd, having accepted the entrustment, Shenzhen Combined Transport Co. issued Shipping Order to Hui Hang Shenzhen, entrusting M/V “Wan Hai 202” to carry the goods of this case from Shekou, Shenzhen to Semarang, Indonesia. The Shipping Order records: the Defendant, Hui Hang Shenzhen is the agent appointed by the Defendant, Wan Hai Lines.

On March 24th, in accordance with the Export FCL Collection Order issued by the agent of Wan Hai Lines- Wan Hai HK, the Plaintiff, Bao An Gaoke Co., entrusted Shenzhen Xihu Trailer Co. to send container trucks, Yue B-31707 and Yue B-31708 to pick up two empty 40’ containers, numbering CLHU8304038 and CAXU9708118 respectively from the bonded area of Yantian, Shenzhen. After the two container trucks took delivery of the empty containers, the trucks went to the Plaintiff, Bao An Gaoke Co. for loading the subject goods. There were 953 cartons of telephone sets loaded into container CLHU8304038, and 783 cartons into container CAXU9708118, totaling 1,736 cartons. Later, the container truck Yue B-31707 and Yue B-31708 carried the said goods to Shekou Container Terminal. Shekou Container Terminal issued the Container Collection/Acceptance Order.

On March 26th, with the approval of the Plaintiff Bao An Gaoke Co., Shenzhen Construction Co. entrusted Donglian Co. to handle the customs declaration procedures for export. On the next day, Donglian declared the exported goods to Shenzhen Shekou Custom. After examining the goods, the Custom affixed the Cargo Release Chop on the Declaration Form For Exported Goods. The Form records that: Export Agent is Shenzhen Construction Co., Manufacturer is the Plaintiff, Bao An Gaoke Co., the Sales Contract Number is GK2001-001, Container Numbers are CLHU8304038, CAXU9708118, the goods are 28,085 telephone sets, the value of the goods is USD 250,250, CNF Indonesia.

III. Facts relating to the issuance and receipt of the B/L

The Plaintiff submitted to this court the following evidences: 1. The original B/L No. SKSMC00222 in triplicate issued by Defendant, Hui Hang Shenzhen; 2. The original Receipt for B/L issued by Shenzhen Combined Transport Co.; 3. The original Certificate of Connect Channel Co. for getting the B/L, to evidence that after receiving the goods consigned by the Plaintiff Bao An Gaoke Co., the Defendant Hui Hang Shenzhen issued the ocean B/L No. SKSMC00222; having obtained the B/L from the Defendant Hui Hang Shenzhen, Shenzhen Combined Transport Co. handed the B/L to Connect Channel Co., and Connect Channel Co. to Shenzhen Construction Co., then Shenzhen Construction Co. to the Plaintiff, Bao An Gaoke Co.. The Defendants Hui Hang Shenzhen and Wan Hai Lines had no objection to the authenticity of the B/L No. SKSMC00222, but they did not recognize the authenticity of the other 2 groups of evidences. Neither Defendants submitted evidences to the contrary. This judge holds that: all parties concerned agreed with the authenticity of B/L No. SKSMC00222, thus the B/L may serve as the grounds to ascertain the facts of this case. In addition, other 2 groups of evidences submitted by the Plaintiff Bao An Gaoke Co. are originals, although the Defendants Hui Hang Shenzhen and Wan Hai Lines dissented from them, but no contrary evidence was submitted. Furthermore, the foregoing 2 groups of evidences and other evidences submitted by the Plaintiff can cross-verify each other. Therefore, the two groups of evidences can be adopted as grounds to ascertain the facts of this case. The following facts certified by the foregoing evidences should be confirmed.

After receiving the said goods in Shekou, Shenzhen, the Defendant Hui Hang Shenzhen issued the ocean straight clean bill of lading No.SKSMC00222 in triplicates on behalf of the Defendant Wan Hai Lines on April 2nd, 2001. It was recorded on the bill of lading that: Consigner, BRIGHT Co.; Consignee, DJAYA Co.; Carrier, the Defendant Wan Hai Lines; Carrying Vessel, M/V “Wan Hai 202”; Port of Loading, Hong Kong; Port of Discharge, Semarang, Indonesia; Containers No., CLHU8304038 & CAXU9708118; Quantity of Goods, 1,736 cartons. Afterwards, the Defendant Hui Hang Shenzhen handed the whole set of bills of lading to Shenzhen Combined Transport Co.. On April 6th, Shenzhen Combined Transport Co. handed over the same bills of lading to Lai Fulong, an employee of Connect Channel Co.. On receipt of the above bills of lading, Lai Fulong handed them over to Shenzhen Construction Co.. The Plaintiff Bao An Gaoke Co. obtained the bills of lading from Shenzhen Construction Co. and has kept them till now.

IV. Facts Concerning the Release of the Goods

The Plaintiff Bao An Gaoke Co. submitted to this Court the forged bill of lading against presentation of which a third party took delivery of the goods at the port of destination. The said fake bill of lading was shown to the Plaintiff Bao An Gaoke Co. by the Defendant Hui Hang Shenzhen when the former inquired about the whereabouts of the goods. The Defendant Hui Hang Shenzhen affixed a company seal on the fake bill of lading. From the above, the Plaintiff Bao An Gaoke Co. claimed that the cargo had been taken away by the third party on the strength of the fake bill of lading. The Defendants Hui Hang Shenzhen and Wan Hai Lines did not confirm the authenticity of the mentioned evidence. This Judge holds that since Hui Hang Shenzhen had affixed an official chop on the fake bill of lading, this fake bill of lading should be taken as the same one that the Defendant Hui Hang Shenzhen showed to the Plaintiff Bao An Gaoke Co. when the latter inquired the whereabouts of the cargo of the former; and that the cargo in question had been taken away by the third party on the strength of the fake bill of lading.

The Defendants Hui Hang Shenzhen and Wan Hai Lines contended that the party that actually took away the said goods was the consignee DJAYA Co. under the straight bill of lading No.SKSMC00222. To prove that, the Defendants Hui Hang Shenzhen and Wan Hai Lines submitted to this Court a copy of the bill of lading shown to them by DJAYA Co. when it went to take delivery of the goods; a copy of the Commercial Invoice issued by BRIGHT Co., the consigner under the bill of lading, and a copy of the Packing List. The Plaintiff Bao An Gaoke Co. did not confirm the authenticity of the said evidences. This Judge holds that all the above documents were copies only, and they could not be taken as the effective evidence for determining the facts of this case in the absence of other proofs. Therefore, it could not be inferred from the said available evidences that the party that actually took delivery of the goods was DJAYA Co..

The Defendant Wan Hai Lines argued that it released the cargo at the request of BRIGHT Co., the consigner under the bill of lading. However, the Defendant failed to provide the corresponding evidences for its argument, and the Plaintiff Bao An Gaoke Co. raised a dissention from it. So this Judge would not accept the Defendant’s claim.

It was confirmed by the Defendants Hui Hang Shenzhen and Wan Hai Lines during the court hearing that they did not contact Shenzhen Combined Transport Co. when the cargo in question was released. The Plaintiff did not have dissention from this. So this Judge accepts this point.

V. Other Facts

The Plaintiff Bao An Gaoke Co. claimed that it had paid the attorney fee for this case in amount of RMB80,000, the translation fee in amount of RMB6,488 and the inquiry fee to the industrial and commercial bureau in amount of RMB58, and, to prove the above claims, submitted to this Court the original Invoice of Attorney Fee issued by Guangdong Wanshang Law Firm, the original Invoice of Translation Fee issued by Shenzhen Shanghua Translation & Consultant Co. Ltd., and the original Invoice of Industrial and Commercial Inquiry Fee issued by Shenzhen Industrial and Commercial Commodity Price Information Center. The Defendants Hui Hang Shenzhen and Wan Hai Lines held that the above evidences had nothing to do with the dispute in this case, and could not be adopted as the evidences for determining the facts of this case. However, the Defendants Hui Hang Shenzhen and Wan Hai Lines did not provide any contrary evidence in this respect. This Judge believes that, in the absence of contrary evidence from the Defendants Hui Hang Shenzhen and Wan Hai Lines, the original documents provided by the Plaintiff Bao An Gaoke Co. could be used as evidences for determining the facts of this case. So it was ascertained that the Plaintiff Bao An Gaoke Co. paid attorney fees in amounts of RMB48,000 and RMB32,000 to Guangdong Wanshang Law Firm on July 20 and September 5, 2001 respectively; paid translation fees in amounts of RMB5,538 and RMB950 to Shenzhen Shanghua Translation & Consultant Co. on September 6 and September 26 respectively; and paid inquiry fee in amount of RMB58 to Shenzhen Industrial and Commercial Commodity Price Information Center on August 20.

The Defendant Hui Hang Shenzhen does not enjoy the capacity of a legal person of an enterprises as it is affiliated to Beijing Hui Hang International Forwarding Ltd.

The Plaintiff Bao An Gaoke Co. chose breach of contract as cause of action to file a lawsuit against the Defendants Hui Hang Shenzhen and Wan Hai Lines. All parties concerned agreed to apply Chinese law to govern settlement of the substantive dispute of the subject case.

This Judge holds that this case is about a dispute over the release of goods without original bill of lading with respect to carriage of goods by sea, and that the law of the People’s Republic of China shall be applied to govern the settlement of substantive dispute of the subject case.

According to the Maritime Code of the People’s Republic of China, “shipper” means a) 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; b) The person by whom or in whose name or on whose behalf the goods have been delivered to the carrier. “On whose behalf a contract of carriage of goods by sea has been concluded with a carrier” means that the trustee, in accordance with the entrustment of the principal and in order to realize the principal’s interests, is entitled to conclude a contract of carriage of goods by sea with a carrier in its own name. Therefore, when judging a shipper, one should have a comprehensive analysis, taking into consideration not only the party stated in the contract of carriage of goods by sea, but also the relative entrustment relationship.

In this case, the Plaintiff Bao An Gaoke Co. entrusted Shenzhen Construction Co. to go through the export formalities for the said cargo on its behalf, with a view to fulfilling its obligation under the Purchase and Sales Contract it entered into with KARYA Co.. As the agent of Bao An Gaoke Co., Shenzhen Construction Co. re-entrusted DL to apply to the Customs, and Connect Channel Co. to go through the shipping formalities, both with the consent of the Plaintiff Bao An Gaoke Co.. So it can be seen that the Plaintiff Bao An Gaoke Co. was the principal, while Shenzhen Construction Co., Donglian Co., Connect Channel Co. and Shenzhen Combined Transport Co. were all agents of the Plaintiff Bao An Gaoke Co. in this case. For the interest of the Plaintiff Bao An Gaoke Co., Shenzhen Combined Transport Co. concluded a contract of carriage of goods by sea with a foreign party, and handed over the bill of lading it obtained to the Plaintiff Bao An Gaoke Co. via Connect Channel Co. and Shenzhen Construction Co.. The above-mentioned facts were enough to prove that the shipper of the cargo in the subject case was the Plaintiff Bao An Gaoke Co., while Shenzhen Combined Transport Co., who issued a shipping order to the Defendant Hui Hang Shenzhen, was only the agent of the shipper.

The Defendants Hui Hang Shenzhen and Wan Hai Lines defended that the Plaintiff Bao An Gaoke Co. failed to prove that it had actually delivered the goods to the carrier, nor could it prove that the delivery of goods was done in its own interest, so the Plaintiff Bao An Gaoke Co. was not the shipper of the said goods in the subject case. In view of the facts that the Purchase and Sales Contract with KARYA Co., the Certificate for Taking Delivery of the Container issued by Shenzhen Xihu Trailer Transport Co. Ltd., and the Collection/Acceptance Order issued by Shekou Containers Terminal all submitted by the Plaintiff Bao An Gaoke Co. were sufficient to prove that the Plaintiff entrusted the cargo in question for carriage by sea to the carrier for its own interest. Therefore, the defence of the Defendants Hui Hang Shenzhen and Wan Hai Lines should be rejected.

According to the records on the shipping order and the bill of lading No.SKSMC00222 of the subject case, the Defendant Hui Hang Shenzhen was the agent of the Defendant Wan Hai Lines, and Hui Hang Shenzhen issued the ocean bill of lading on behalf of Wan Hai Lines. Therefore, Wan Hai Lines should be ascertained as the actual carrier of the cargo in question; a contractual relationship of carriage of goods by sea did exist between the carrier and the Plaintiff. As such contractual relationship was not in violation of law and lawful and effective, and should be protected. As to the Defendant Hui Hang Shenzhen, it was only the agent of the carrier. It was not a party in the contractual relationship of carriage of goods by sea, and was free from the obligation of delivering the goods against the original bill of lading. Therefore, the request of the Plaintiff that the Defendant Hui Hang Shenzhen should be liable for the release of the goods without the original bill of lading lacked legal grounds and should be turned down.

As the carrier of said cargo in the subject case, the Defendant Wan Hai Lines failed to deliver the goods consigned by the Plaintiff to a third party against production of the original bill of lading, as a result, the Plaintiff, though still holding the original bill of lading, lost control over the cargo under the said bill of lading, and finally had no way to collect the cargo value. The Defendant Wan Hai Lines’ act of releasing the goods without collecting the original bill of lading breached the contract. The Plaintiff Bao An Gaoke Co., as the shipper and the holder of the original bill of lading, was entitled to claim against Wan Hai Lines for its loss thereof. According to relative regulations of the Maritime Code of PRC, the scope of loss of the goods in question should be calculated in accordance with the actual value of the goods. In accordance with the stipulation of the mentioned Purchase and Sales Contract and the record of the Declaration Form of Goods for Export, the actual value of the goods in question was USD250,250. The Plaintiff Bao An Gaoke Co.’s request that Wan Hai Lines should compensate to it the loss of cargo price in amount of USD250,250 and the loss of interest thereof (calculating from April 24, 2001 at the loan interest of the People’s Bank of China at that time) was in conformity with the provision of law and therefore should be supported. The other request of the Plaintiff that Wan Hai Lines should indemnify it for the attorney fee, translation fee and industrial and commercial inquiry fee related to the litigation was legally groundless and should be dismissed.

The Defendant Wan Hai Lines’ defence that the Plaintiff was not the shipper or the consignee as stated on the bill of lading, therefore it was not a party related to the bill of lading, and it was not entitled to initiate a lawsuit in reliance on the bill of lading was not tenable, the reasons for which were as follows: according to the regulations of the Maritime Code of the PRC, a bill of lading was only evidence of a contract of carriage, but it was not the contract of carriage itself. After receiving the goods, the carrier shall issue a bill of lading to the shipper at the shipper’s request. The bill of lading in this case stated as requested by the buyer KARYA Co. that the shipper was “BRIGHT Co.”, and the consignee was “DJAYA Co.”, and the Defendant Hui Hang Shenzhen then issued the said bill of lading at the request of the Plaintiff’s agent Shenzhen Combined Transport Co.. As long as the Plaintiff Bao An Gaoke Co. did not transfer the bill of lading to a third party, it was at the same time the shipper and the holder of the said bill of lading, and was entitled to initiate a lawsuit against the carrier on basis of the contract of carriage and the original bill of lading to claim its right in the cargo.

The Defendant Wan Hai Lines also defended that since the bill of lading in question was a straight bill of lading, it was justified to let the consignee DJAYA Co. named under the bill of lading take delivery of the goods, and should not be liable for releasing the goods without the original bill of lading. As the Defendant Wan Hai Lines failed to prove that DJAYA Co. was the party that had actually taken delivery of the goods, its above argument shall not be supported. Besides, even if DJAYA Co. was the party that had actually taken delivery of the goods, it was not right for Wan Hai Lines to have the goods taken delivery of, the reasons for which are as below: according to the stipulations of the Maritime Code of the PRC, a bill of lading is a document which serves as an evidence of the contract of carriage of goods by sea, and based on which the carrier undertakes to deliver the goods against surrendering the same. Although the bill of lading in question issued by the carrier was a straight bill of lading, the carrier, when delivering the goods, should verify both the identity of the consignee and whether it holds the original bill of lading. The purpose of such stipulation is to make sure that if the named consignee refuses to make payment for the goods, the shipper may choose not to transfer the bill of lading to prevent the named consignee from taking delivery of the goods and to keep control over the goods under this bill of lading. If there was no need for the named consignee to show the original bill of lading to the carrier when taking delivery of the goods, then the party that had actually taken delivery of the goods in this case should have had no need to make a fake bill of lading in order to take delivery of the cargo from the carrier. He might just have to prove his identity as the consignee and taken away the goods. However, the fact was that the party that had actually taken delivery of the goods showed a fake bill of lading to the carrier, who failed to discern the forgery during the examination and wrongfully released the goods.

The Defendant Wan Hai Lines further argued that Shenzhen Combined Transport Co. entered into the shipping order with the carrier in its own name, so the Plaintiff was not the shipper. Even if this argument of Wan Hai Lines was tenable, the Plaintiff was still entitled to a request for compensation against the Defendant Wan Hai Lines for the latter’s releasing the cargo without the original bill of lading. The reasons are: according to Article 403 of the Contract Law of the PRC, under a contract concluded by the agent in the agent’s name with a third party who is not aware of the proxy relationship between the agent and its principal, when the agent fails to perform obligations toward its principal because of the third party, the agent shall disclose the third party to the principal, and the principal may then exercise the rights of the agent against the third party. In this case, Shenzhen Combined Transport Co. was the agent of the Plaintiff. So under the circumstance that the Defendant Wan Hai Lines committed mistakes when delivering the goods, the Plaintiff Bao An Gaoke Co. may directly ask Wan Hai Lines to indemnify it for losses incurred thereof.

To sum up the above, and in accordance with the stipulations of Article 42 (1) 1-3, Article 55, Article 71 and Article 72 of the Maritime Code of the PRC, the Judgment is hereby given as follows:

Ⅰ The Defendant Wan Hai Lines shall compensate to the Plaintiff Bao An Gaoke Co. the loss of cargo in amount of USD250,250 and the loss of interest thereof based on the loan interest of the People’s Bank of China applied in the corresponding period (calculating from April 24, 2001 to the date of payment as specified by this Judgment);

Ⅱ Other litigation requests of the Plaintiff Bao An Gaoke Co. shall be dismissed.

Of the acceptance fee of this case in amount of RMB55,514, the Plaintiff Bao An Gaoke Co. shall pay RMB2,220, and the remaining RMB53,294 shall be borne by the Defendant Wan Hai Lines. This Court shall not refund to the Plaintiff the acceptance fee paid in advance by the Plaintiff. The Defendant Wan Hai Lines shall pay its apportionment to the Plaintiff directly.

The payment of the above sums shall be completed within 10 days upon coming into effect of this Judgment.

Should there be any objection to this Judgment, a statement of appeal with copy/copies in the number of the opponent party/parties may be submitted to this Court within 15 days upon the service of this Judgment, for appealing before the appeal court Guangdong Higher People’s Court.


                     Judge: Huang Qingnan
Secretary: Lai Yukang

(Chop of Guangzhou Maritime Court)

December 26, 2001



This copy is verified as true to the original.

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