In the case of a maritime and navigable waterway transportation contract dispute involving a chemical company suing a shipping company and a protection and indemnity (P&I) club, a cargo ship owned by the shipping company transported 34,000 tons of chemical raw materials imported by the chemical company from Longview Port, USA, to Bayuquan Port, China. Upon unloading, the chemical company discovered severe damage to the cargo and filed a high-value claim against the shipping company. To prevent the ship from being arrested, the shipping company provided a letter of undertaking issued by the English Shipowners' Mutual Protection and Indemnity Association. Later, as the parties failed to reach an agreement on the compensation amount, the chemical company filed a lawsuit to claim damages. After unsuccessful attempts to serve the shipping company at its registered address in the Republic of the Marshall Islands via mail, the court, in accordance with the requirements of the Hague Service Convention, served the summons and other legal documents through diplomatic channels. Meanwhile, the court organized an exchange of evidence between the chemical company and the P&I club and presided over multiple mediation sessions to resolve the dispute. Given the significant controversy over the nature of the letter of undertaking in judicial practice, the P&I club refused to pay compensation directly without the shipping company's participation in the litigation. After successful service, the P&I club submitted an application to suspend the proceedings, arguing that both the shipping company and its sole shareholder had been deregistered in the Marshall Islands. Upon review, the court found that the evidence provided by the P&I club did not meet the requirements of the international convention and Chinese law, and decided to proceed with the trial in absentia. After clarifying the facts in court, the court explained the legal liabilities and risks to the P&I club, ultimately facilitating a settlement agreement. The chemical company received over RMB 10 million in compensation after the mediation agreement was reached.
【Typical Significance】 The dispute in this case occurred between a Chinese enterprise and a foreign enterprise that does not have diplomatic relations with China. In the face of the foreign enterprise's evasion of responsibility and refusal to participate in the litigation, the court accurately applied international treaties and Chinese law for foreign-related service of process and trial in absentia. It actively coordinated with the foreign association providing P&I insurance services for the shipping company, clarified legal risks, and successfully mediated the dispute between Chinese and foreign enterprises. This case effectively safeguarded the legitimate interests of Chinese private enterprises and provided strong judicial services and guarantees for the development of the private economy.