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Wednesday, 02 April 14
CHINA: ARBITRATION CLAUSES IN BILLS OF LADING UNDER CHINESE LEGAL PRACTICE - SKULD
KNOWLEDGE TO ELEVATE
Successful incorporation of a charterparty arbitration clause into the bills of lading is not a straight forward matter under China jurisprudence and recently a Chinese maritime court dismissed the owners' motion to refer the case to arbitration, because it was held that the C/P arbitration clause incorporated into the B/L was not effective. Details of the matter are as follows. Key points following the legal decision are:
- Although the said B/L recorded on the front page that it was: "to be used with charterparty", there was no express statement in the bill terms for incorporating the arbitration clause from the C/P.
- The standard incorporation clause in the back page of the B/L could not constitute a valid incorporation of the arbitration clause under Chinese law and practice.
- If any C/P terms are to be recognised as incorporated then they would be those of the voyage charter to which the cargo receiver was a party - not the head time C/P. This is because the time C/P is in the nature of being primarily a leasing contract .
Facts of this case
The vessel owners concluded a time C/P as with a charterer. One of the rider clauses provided that English law shall be applicable, and a further clause provided that any dispute arising from the C/P shall be submitted to arbitration at the LMAA.
As part of her charter employment, the vessel carried a cargo of iron ore fines from South America to China. According to the B/L, the shipper South American and the receiver was a Chinese Steel Mill.
While on route the vessel was involved in collision with another vessel. The owners appointed salvors to conduct salvage, and concluded a LOF contract. General average was declared. The salvage was successful, and the Chinese Steel Mill (through its insurers) had to provide general average security to the vessel.
The general average apportionment of salvage costs to cargo was significant, and the Chinese Steel Mill commenced proceedings in China for an indemnity against the ship-owner. The owners raised objection to jurisdiction on the basis that the provisions of the time C/P, including the arbitration clause had been incorporated into the B/L, and thus was binding upon the Steel Mill. The expert opinion of English lawyers was put forward to confirm that the terms of the C/P were successfully incorporated in to the bills of lading, including the arbitration clause.
First instance trial before the Chinese Maritime Court
The Maritime Court dismissed the objection to jurisdiction for the following reasons:
- The case was about compensation of ship collision / general average salvage rewards. Hence, the case fell into the scope of the contract of the carriage of goods by sea.
- Although the said B/L recorded on the front page that: "to be used with charterparty", there was no express statement in the bill terms for incorporating the arbitration clause in the C/P. The standard incorporation clause in the back page of the B/L cannot constitute valid incorporation.
- Meanwhile, the C/P which the owner claimed was to be incorporated into the B/L was a time C/P between the owner and the charterer only. The C/P arbitration clause was only there for resolving the disputes arising from the leasing of the vessel. It was not an arbitration clause for purpose of carriage of goods by sea under the voyage C/P.
- The local Maritime Court, as the nearest court at the port of the destination of the said carriage contract, should have jurisdiction over this case.
Appeal judgment High People's Court
The owners then appealed to the High People's Court and the appeal court dismissed the objection to jurisdiction for reason that:
- Although it is stated on the face of the involved B/L that the said B/L should be used with the C/P, the said C/P to be used with B/L shall be the voyage C/P and not the time C/P to which the owner was a party.
- However, the C/P provided by the owners was a time C/P and there was also no record on the face of the B/L regarding the specific C/P concerned and no express acceptance to have the C/P arbitration clause incorporated.
Observation on this case and comment
Chinese courts hold a stringent view concerning the issue of incorporating the C/P arbitration clause into the B/L. In this case, a key issued appeared to be that the C/P terms sought to be incorporated came from the time C/P, instead of a voyage C/P.
It should also be noted that in 2004 the Qingdao Maritime Court also held that a time C/P is primarily a vessel leasing contract, and although it also has some clauses regarding transportation of cargo it is still primary a leasing contract which is very different from voyage C/P.
The Qingdao Maritime Court continued to say that the B/L relationship is different to the time C/P legal relationship, and because of the rooted difference in this respect, the time C/P arbitration clause cannot be incorporated into the B/L.
Although China is not a case law country, the reasoning of Chinese courts in this regard should be paid attention to for handling of other similar cases.
By Philip Peng
Hai Tong & Partners, Beijing
Source: Skuld / Hellenic Shipping
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Thursday, 06 February 14
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- White Energy Company Limited
- Independent Power Producers Association of India
- Dalmia Cement Bharat India
- Wood Mackenzie - Singapore
- GVK Power & Infra Limited - India
- Aditya Birla Group - India
- Commonwealth Bank - Australia
- Toyota Tsusho Corporation, Japan
- Timah Investasi Mineral - Indoneisa
- Sindya Power Generating Company Private Ltd
- Indo Tambangraya Megah - Indonesia
- Kobexindo Tractors - Indoneisa
- Oldendorff Carriers - Singapore
- Posco Energy - South Korea
- Borneo Indobara - Indonesia
- Binh Thuan Hamico - Vietnam
- TeaM Sual Corporation - Philippines
- Formosa Plastics Group - Taiwan
- India Bulls Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Sarangani Energy Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Coal and Oil Company - UAE
- Port Waratah Coal Services - Australia
- Renaissance Capital - South Africa
- Ambuja Cements Ltd - India
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- Parry Sugars Refinery, India
- Pipit Mutiara Jaya. PT, Indonesia
- Chamber of Mines of South Africa
- Indika Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The State Trading Corporation of India Ltd
- Romanian Commodities Exchange
- Bangladesh Power Developement Board
- Kepco SPC Power Corporation, Philippines
- McConnell Dowell - Australia
- Jaiprakash Power Ventures ltd
- Vedanta Resources Plc - India
- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- Thai Mozambique Logistica
- SMG Consultants - Indonesia
- Essar Steel Hazira Ltd - India
- Central Electricity Authority - India
- Economic Council, Georgia
- Ministry of Finance - Indonesia
- LBH Netherlands Bv - Netherlands
- Global Business Power Corporation, Philippines
- Australian Coal Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Australia Pty. Ltd.
- AsiaOL BioFuels Corp., Philippines
- Baramulti Group, Indonesia
- Krishnapatnam Port Company Ltd. - India
- South Luzon Thermal Energy Corporation
- PTC India Limited - India
- Chettinad Cement Corporation Ltd - India
- Gujarat Sidhee Cement - India
- Samtan Co., Ltd - South Korea
- Maheswari Brothers Coal Limited - India
- Banpu Public Company Limited - Thailand
- Ind-Barath Power Infra Limited - India
- The University of Queensland
- Cigading International Bulk Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Uttam Galva Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Coalindo Energy - Indonesia
- Africa Commodities Group - South Africa
- Indonesian Coal Mining Association
- International Coal Ventures Pvt Ltd - India
- London Commodity Brokers - England
- Gujarat Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- The Treasury - Australian Government
- Petrochimia International Co. Ltd.- Taiwan
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- PNOC Exploration Corporation - Philippines
- Minerals Council of Australia
- Rio Tinto Coal - Australia
- Lanco Infratech Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Grasim Industreis Ltd - India
- Mercator Lines Limited - India
- Meralco Power Generation, Philippines
- Agrawal Coal Company - India
- Cement Manufacturers Association - India
- Electricity Authority, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bharathi Cement Corporation - India
- SMC Global Power, Philippines
- Salva Resources Pvt Ltd - India
- Parliament of New Zealand
- Madhucon Powers Ltd - India
- Mintek Dendrill Indonesia
- Indian Energy Exchange, India
- Directorate Of Revenue Intelligence - India
- GMR Energy Limited - India
- Straits Asia Resources Limited - Singapore
- Meenaskhi Energy Private Limited - India
- Larsen & Toubro Limited - India
- Kapuas Tunggal Persada - Indonesia
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- Barasentosa Lestari - Indonesia
- Thiess Contractors Indonesia
- Petron Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- Coastal Gujarat Power Limited - India
- Price Waterhouse Coopers - Russia
- Maharashtra Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Marubeni Corporation - India
- Bulk Trading Sa - Switzerland
- Kartika Selabumi Mining - Indonesia
- Tata Chemicals Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Mercuria Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Mines - Canada
- Semirara Mining Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Interocean Group of Companies - India
- Alfred C Toepfer International GmbH - Germany
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- Mjunction Services Limited - India
- Eastern Energy - Thailand
- Singapore Mercantile Exchange
- Tamil Nadu electricity Board
- Sojitz Corporation - Japan
- Trasteel International SA, Italy
- Bukit Baiduri Energy - Indonesia
- Latin American Coal - Colombia
- CIMB Investment Bank - Malaysia
- Intertek Mineral Services - Indonesia
- IEA Clean Coal Centre - UK
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sinarmas Energy and Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kumho Petrochemical, South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Makarim & Taira - Indonesia
- ASAPP Information Group - India
- IHS Mccloskey Coal Group - USA
- Bayan Resources Tbk. - Indonesia
- Jindal Steel & Power Ltd - India
- MS Steel International - UAE
- Eastern Coal Council - USA
- Global Coal Blending Company Limited - Australia
- Simpson Spence & Young - Indonesia
- Bhushan Steel Limited - India
- Metalloyd Limited - United Kingdom
- Power Finance Corporation Ltd., India
- Heidelberg Cement - Germany
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement PLC, Thailand
- CNBM International Corporation - China
- Billiton Holdings Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Merrill Lynch Commodities Europe
- New Zealand Coal & Carbon
- GN Power Mariveles Coal Plant, Philippines
- Bhatia International Limited - India
- Medco Energi Mining Internasional
- Standard Chartered Bank - UAE
- Malabar Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ceylon Electricity Board - Sri Lanka
- Karaikal Port Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- SN Aboitiz Power Inc, Philippines
- Sical Logistics Limited - India
- Central Java Power - Indonesia
- Carbofer General Trading SA - India
- San Jose City I Power Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Vizag Seaport Private Limited - India
- Planning Commission, India
- OPG Power Generation Pvt Ltd - India
- Deloitte Consulting - India
- Energy Development Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Indian Oil Corporation Limited
- Manunggal Multi Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Sakthi Sugars Limited - India
- Indogreen Group - Indonesia
- Xindia Steels Limited - India
- Riau Bara Harum - Indonesia
- ICICI Bank Limited - India
- Goldman Sachs - Singapore
- Iligan Light & Power Inc, Philippines
- Wilmar Investment Holdings
- Star Paper Mills Limited - India
- Videocon Industries ltd - India
- Attock Cement Pakistan Limited
- Sree Jayajothi Cements Limited - India
- Edison Trading Spa - Italy
- Orica Mining Services - Indonesia
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