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Insurance & Reinsurance

Particularly in the context of cargo transportation by air, freight forwarding companies sometimes act as carriers and sometimes merely as agents. As a recent case shows, if an insurer fails to identify the role that such companies performed in a given case, it may jeopardise its ability to exercise its right of subrogation.

The loss or damage of a cargo and a dispute over the insurance coverage gave rise to a case before Wuhan Maritime Court. The issues included the jurisdiction of the court (as opposed to the courts designated on the bills of lading), the right of subrogation and the carrier's liability.

The Shanghai High Court recently ruled on a case in which, among other things, the insurer disputed the insured's indication of no claim or loss under all bills of lading under the insurance proposal form's interpellation clauses. The insured was found to have been involved in numerous cases before the Shanghai Maritime Court, but it maintained that it was merely the agent of the relevant non-vessel-operating common carrier.

Shipping & Transport

A recent case before the Shanghai Maritime Court highlights the importance of pinpointing exactly where cargo damage occurs when determining the responsible party in container damage claims. The case also shows that a consignee's failure to make a full inspection of the goods upon receipt and within the statutory period could bring about the unravelling of its claim.

A recent case before the Guangzhou Maritime Court highlights the extent of relief from carriers' liability for damaged cargo under the Maritime Law. Although the dispute was ultimately settled out of court, provisions of the law allowed the defendant to pay a much lower settlement amount than the plaintiff's original claims.

In a case concerning compensation liability for the release of goods without a bill of lading, the defendant was a qualified non-vessel operating common carrier, but also had a certificate for handling international forwarding. The plaintiff failed to distinguish between the freight forwarder and non-vessel operating common carrier and thus did not make its action against the right defendant, causing the court to rule against it.

Two ships, the M/V SF and the M/V CS, collided in the port of Tianjin, causing much damage to the CS. The CS's owner filed an action for damages against the owner of the SF and its protection and indemnity club insurer. The club argued, among other things, that it was merely a trade brand jointly used by 12 insurers and thus not a legal entity that could be sued. The court ruled in favour of the club, dismissing the claim.

An item of machinery that was to be shipped from Brazil to China was damaged when it struck lifting equipment in the port area. Among other things, the court had to decide whether the defendant was entitled to enjoy the unit limitation of liability that applies when cargo damage occurs during sea transportation, with the plaintiff arguing that the cargo damage had occurred some distance from the ship's rail.

A dispute between a clothing company in China, a logistics company and a shipping company raises significant questions about the scope of liability where goods are released at their destination without an original bill of lading, particularly where the carrier is required to deliver the goods to Customs and the port authority.

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