Background Facts: The ship “Zhong Hai Cai Hua” is a 300,000 DWT ore vessel built by Dalian Shipbuilding Industry Co., Ltd. (hereinafter referred to as DSI Company) under the commission of Caihua Shipping S.A. (hereinafter referred to as Caihua Shipping). On January 30, 2013, DSI Company and Caihua Shipping entered into the Delivery and Acceptance Agreement, delivering “Zhong Hai Cai Hua” to DSI Company in his shipyard. On the same day, both parties signed another agreement which specified the terms as follows: at the same time as the delivery of the ship, Caihua Shipping would purchase insurance for “Zhong Hai Cai Hua”; DSI Company agreed that the ship would be berthed at the pier of his company till June 30, 2013 after the delivery of the ship, all relevant berthing and maintenance expenses incurred during this period would be borne by Caihua Shipping, and DSI Company would carry out necessary maintenance in accordance with the relevant regulations on safety and maintenance of the shipyard and requirements of Caihua Shipping; DSI Company would perform the safety management responsibilities according to the attached Consignment Agreement on the Safety Management of “Zhong Hai Cai Hua”, including specific contents such as “when the ship is berthed at the pier, the shipyard should make arrangements to prevent theft, fire, typhoon and freezing”. On March 9, 2013, affected by strong wind and other factors during berthing, all the cables of “Zhong Hai Cai Hua” broke and the ship drifted with the wind, resulting in contact with the pier of Dalian COSCO Heavy Industry Co., Ltd. (hereinafter referred to as Dalian COSCO). Maritime Safety Administration concluded that “Zhong Hai Cai Hua” should bear full responsibility for the accident. On April 8 and 9, 2013, Caihua Shipping entrusted Shanghai Zhongjiu Engineering Testing Company and China Shipbuilding NDRI Engineering Co., LTD to conduct on-site inspection and issue the Comprehensive Testing, Assessment and Repair Consultancy Report. The report estimated the repair cost to be RMB730 thousand. Dalian COSCO actually spent RMB743,466 in the project of repairing the damaged pier. “Zhong Hai Cai Hua” had no crew members aboard when the accident happened. Dalian COSCO filed a lawsuit, demanding Caihua Shipping for compensating for economic losses of RMB1.3 million and the corresponding interest.
Summary of Judgment: The Court held that Caihua Shipping, as the owner of “Zhong Hai Cai Hua”, had the duty of the safety management of the ship and should take sufficient and effective safety management measures to prevent or avoid the ship’s contact with other people’s property resulting in damages. Article 14 of the Regulations Governing Supervision and Control of Foreign Vessels by the People’s Republic of China stipulates that “While berthing in port, ships shall have on board a sufficient members of men to ensure safe maneuvering, and in case of emergency such as typhoon warning and so on, all hands shall return immediately aboard to take necessary precautions and urgent measures.” When still keeping the ship docked at the pier after delivery, Caihua Shipping should arrange crew members who could sufficiently ensure the safe operation of the ship to keep watch so that, especially under severe weather conditions, when the cables were broken due to strong wind and the ship drifted with the wind, the crew could control the sailing of ship in a timely manner to avoid accidents. As the shipowner, Caihua Shipping should be able to foresee the potential risk of strong wind when the ship was berthed at the pier, but neither arranged competent crew who could ensure the safety of the ship to keep watch nor took effective emergency measures to deal with bad weather and therefore had his own faults. Although Caihua Shipping and DSI Company had signed a safety management agreement, it was not enough to completely exempt Caihua Shipping from safety management responsibilities as the shipowner. The Court ordered Caihua Shipping to compensate Dalian COSCO for the repair fee of RMB743,466 and the corresponding interest. After the judgment of the first instance by the Court was pronounced, Caihua Shipping appealed. Liaoning High People’s Court dismissed the appeal and upheld the original judgment at the second instance.
Typical Significance: A ship contact refers to a maritime tort whereby a ship comes into contact with fixed facilities or obstacles and results in damages. The tort-related liabilities of the ship of contact should be determined in accordance with the Tort Law and the fault liability principle should be adopted. In this case, “Zhong Hai Cai Hua” having its cable broken and drifting with the wind and colliding into the pier is exactly a typical maritime tort. Given the depressed situation of the shipping market, the freight rate is not high and the transport capacity is in surplus, and some new-built ships are not put into use immediately after being built, but are berthed at the pier to be looked after by themselves or looked after by other authorized people, waiting till the market conditions have improved before being put into operation again. Although not in use of the ship, the shipowner still has the responsibility of management. If there is a collision or contact accident during berthing, the shipowner may still bear the tort liability. The shipowner cannot simply think that entrusting others to attend the ship can exempt himself from the liability for the management of the ship. When signing the agreement to entrust others to maintain the ship, it is necessary to make an arrangement on the manning of the ship. Even if the ship is not in service and not necessary to be equipped with all competent crew, some of the crew should be reserved on watch for dealing with emergencies such as bad weather..