Lloyd's Maritime and Commercial Law Quarterly
RESPONSIBILITY FOR UNSUITABLE CONTAINER IN CHINA
Chinese People’s Insurance v. Guangzhou Ocean
The case of Zhejiang Branch of Chinese People’s Insurance Co. v. Guangzhou Ocean Shipping Corp. & Shanghai Branch of China National Foreign Trade Transportation Corp. was tried by the Shanghai Maritime Court, the decision of which was affirmed by the Shanghai High People’s Court. It is the first case reported in the Supreme Court Law Report
1 about responsibility for an unsuitable container, and should be noticed by carriers, forwarders and other container operators.
The facts are quite simple and not disputed. Three containers containing 750 cases of black tea were carried from Shanghai to Hamburg. Because one of the containers was not clean, 250 cases of black tea were damaged. The container was provided by the carrier and stuffed by the forwarder. The plaintiff was the cargo insurer, the defendants were the carrier and forwarder respectively. At first instance both defendants were found liable. The carrier appealed, but the appeal was dismissed. There are three main points in the case.
1. Nature of the container. Ever since they have been used, there have been different views on the nature of a container. Whether it is cargo, an article of transport or part of the ship has never been settled. The Maritime Code of the People’s Republic of China, Art. 42, provides that “Goods” includes live animals and containers, pallets or similar articles of transport supplied by the shipper for consolidating the goods. So under Chinese law, containers provided by cargo owners are a kind of goods. But the Maritime Code says nothing about containers provided by the carrier. In the instant case, the carrier argued that the container was an article of transport, but the court rejected this argument and concluded that the container supplied by the carrier was “other parts of the ship in which goods are carried”, as provided by the Hague Rules, Art. III, r. 1(c).
2. Responsibility for unsuitable container. Having determined that the container is part of the ship, it was not difficult for the court to hold that the carrier was liable for the suitability of the container and this was part of the carrier’s obligation of seaworthiness. But this was not the end of the matter. The court went on to find that the cargo owner should usually inspect the container before filling it, and the contract evidenced by the bill of lading contained a clause which stated: “If a container has not been filled, packed, stuffed or loaded by the Carrier, the Carrier should not be liable for loss of or damage to the contents and the Merchant shall indemnify the Carrier if such injury, loss, damage,
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