Yard Repair Ruling Highlights Approach by Chinese Marine Courts

Monday, May 13, 2002
A recent ruling by a Chinese maritime court has been welcomed by The Swedish Club. The case concerned a member's vessel booked for damage repairs at a Chinese shipyard. The repairs took nearly eight times longer than quoted and the Guangzhou Maritime Court backed the owner's claim for loss of hire. Ruizong Wang, Deputy Managing Director at The Swedish Club's Hong Kong office, says: "Our member incurred a significant financial loss as a result of this extraordinary delay at the yard. The loss was nearly five times greater than the quoted cost of the repairs.

"This favorable ruling from the Guangzhou Maritime Court may provide reassurance of future Chinese commitment to principles of fairness and reasonableness in dealings between Chinese and non-Chinese interests. Also in part heralding a growing awareness of the need to apply international legal and commercial norms, following China's membership of the World Trade Organization last December. Enlightened rulings of this type may become the norm, rather than the exception, in the years ahead." The legal dispute concerned the product tanker Gonen. The repair contract was negotiated by fax between the owners and Guangzhou Weichong Shipyard. The repair period was estimated at nine days, to commence upon the vessel's arrival at the yard. The repairs, however, took 70 days; loss of hire was suffered as the Gonen was under time charter but the owner's claim was rejected by the yard and the matter went to court. The Court rejected the yard's reasons for the delay and ordered that it should meet the major proportion of the loss of hire claim. Ruizong Wang says: "The yard had claimed, inter alia, that it had not received the tender conditions attached to the fax and that the contract had no provision requiring them to pay a penalty if the quoted repair period was exceeded. The other reasons cited for the delay included variations in the scope of work and the materials to be used.

"All points put forward by the yard, but one, were rejected by the Court. The exception concerned the ship's drawings. The Court upheld the argument that repairs could not proceed in the absence of the drawings. Accordingly, the seven-day period which elapsed between the Gonen's arrival at the yard and the availability of the plans was deducted from the owner's claim. The Court held that the yard was responsible for 54.5 days of the loss of hire claim. The repair cost was $150,000 and the award for loss of hire was around $700,000." Another indication of growing Chinese recognition of international norms is an increasing willingness to adopt a more flexible attitude towards guarantees. Ruizong Wang comments: "The Chinese are more willing to recognize the role of the Club Letter. Past insistence on the arrangement of guarantees through local providers has eased. As a result, unnecessary costs and delays are avoided. These delays can be very serious. For example, one recent case involved damage to a fish farm. The problems faced in arranging security through Chinese interests cost our member seven days delay to his ship. A Club Letter, in contrast, can be made available in a couple of hours."

Maritime Today

The Maritime Industry's original and most viewed E-News Service

Maritime Reporter November 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds


Thyssenkrupp Bids for Australian Sub Contract

German industrial group Thyssenkrupp has submitted an offer to the Australian government for a contract to build stealth submarines potentially worth tens of billions of euros,

Ferreira Quits Petrobras

Murilo Ferreira quit as chairman of Brazil's Petroleo Brasileiro SA, the state-controlled oil company said on Monday, without disclosing the reason for his decision.

Wärtsilä Sternguard In-Water Serviceable Seal Launched

Wärtsilä, the marine and offshore industry's leading solutions and services provider, introduces an innovative new seal that can be fully serviced underwater, without setting up a habitat.

Cruise Ship Trends

Norwegian Escape with Biggest Scrubbers sets Sail

On a sunny October day in the German harbor-town of Hamburg, M/V Norwegian Escape, a brand new cruise ship, sets sail for the first time. On board are five Yara SOx scrubbers – one for each engine.

First Cruise Ships Dock at Abu Dhabi’s New Stopover

Abu Dhabi Ports─the master developer, operator and manager of ports and industrial zones in the Emirate―has started welcoming cruise liners at Sir Bani Yas Island,

Five P&O Cruise Ships Meet in Sydney

Sydney is the stage for the biggest get-together of a fleet of cruise ships ever seen in the harbor city.    Five P&O cruise ships have created a V-formation

Maritime Careers / Shipboard Positions Maritime Standards Naval Architecture Navigation Offshore Oil Salvage Ship Electronics Ship Repair Ship Simulators Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.0698 sec (14 req/sec)