Trials of Disputes over Liability for Damage Caused by Vessel Collision/Allision
(January 2011 to December 2015)
Ningbo Maritime Court
Preface
Zhejiang is a large oceanic province with developed ocean shipping and fishing industries. For vessels sailing along the North-South Face route and a number of international routes, the East China Sea is the only way to get to their destinations. With numerous vessels to and from the East China Sea, the density of vessels sailing and operating on the East China Sea is increasing. Collision between vessels and allision between vessels and piers or other facilities or obstacles account for a relatively large percentage of maritime accidents, and have direct impact on the safety of vessels, cargos and human life and constitute typical cases of disputes over maritime tort and one of the main types of cases accepted by maritime courts. Through a review of the cases of disputes over liability for damage caused by vessel collision or allision that were concluded by Ningbo Maritime Court in the past five years, this White Paper on Maritime Trials puts forward suggestions based on different accidents and reasons for such disputes, thereby making positive efforts to strengthen the maritime traffic safety management, protect the marine ecological environment and promote the construction of a "Safe Zhejiang".
Basic Information About Disputes over Liability for Damage Caused by Vessel Collision/Allision
In the period from January 1, 2011 to December 31, 2015, the court accepted 156 cases of disputes over liability for damage caused by vessel collision or allision, which accounted for about 1% of the total number of cases accepted by us for that period, with the total amount of the subject matters involved in such cases being 784 million Yuan, accounting for about 2.8% of the total amount of all cases accepted for that period. 138 cases were concluded, accounting for about 0.91% of the total number of cases concluded by us for that period, with the total amount of subject matters involved in such concluded cases being 308 million Yuan, the ratio of cases concluded being 88.46% and the average number of days for trials being 134.8. Among others, such cases show the following characteristics:
(I) Types of cases accepted were mainly disputes over vessel collision that are prone to result in a series of disputes
The past five years witnessed a "gusher-like" growth rate of the total number of accepted cases of maritime disputess, but the number of cases of disputes over liability for damage caused by vessel collisionor allision roughly remained still. In the five years from 2011 to 2015, the number of cases accepted was 32, 27, 28, 33 and 36, respectively, and 14, 29, 29, 27 and 39 respectively for the concluded. In terms of the types of cases accepted, the number of cases resulting from vessel collision was 116, which was more than that of cases of other types and 2.9 times that of cases resulting from vessel allision (see Figure 1). Data show that there is still considerable risk of two vessels colliding with each other and vessels alliding with bulwarks of piers, trestles and other facilities, therefore safety management should not be overlooked. Once vessel collision or allision accidents occur, the vessels often end up sinking, claiming people’s lives or making people injured. In the case of leakage of oil or accidents that occur in coastal waters or areas with intensive navigation and complex fairways or areas adjacent to ports, in addition to the property damage and personal injury, the accidents may lead to blockage of fairways, pollution of the sea waters, damage to port facilities, death of or reduction in the production of farmed aquatic plants and animals and other consequences. Therefore, an accident tends to give rise to a series of disputes. Take the case of dispute over liability for damage caused by vessel collision between the plaintiff, ROCKWELL SHIPPING LIMITED and the defendants, CMA CGM S.A. and Provence Ship-owner 2008-1 Limited as an example, the collision accident involved in the case gave rise to 139 series of cases of disputes over contracts for salvage operations, affirmation of maritime claims, etc.
(II) The amounts of the subject matter in the disputes involved in the cases were large, and there was a high proportion of cases that are concluded through conciliation or by claimants’ withdrawal
The amounts of the subject matters involved in the cases of disputes over liability for damage caused by vessel collision and allision were large. Over the past five years, we accepted 87 cases wherein the amount of subject matter each exceeded 1 million Yuan, accounting for 55.77% of the total number of cases accepted, 9 cases where the amount of the subject matter each exceeded 10 million Yuan, including 2 cases where the amount of subject matter each exceeded 100 million Yuan, accounting for 5.77% of the total number of cases accepted (see Figure 2). As far as annual distribution is concerned, the amounts of the subject matter involved in such cases began to increase in 2012, peaked at 270 million Yuan in 2013 and began to decline thereafter. In terms of methods for settlement of cases, during the aforesaid period, there were 46 cases concluded by handing down a judgment, accounting for 33.33% of the total number of cases concluded for that period, 46 cases concluded in mediation, accounting for 33.33% of the same, and 32 cases concluded by claimants’ withdrawal or credited as withdrawn by claimants, accounting for 23.19% of the same. The average case conciliation and withdrawing rate was 56.52%, which was 3.95% higher than the case withdrawing rate of all cases of first instance tried by us in the past five years (52.57%).
(III) Great hardship was experienced in the trial, and the period of trial was relatively long
Cases resulting from vessel collision and allision are characterized by a high degree of specialization and complexity, difficulty in securing evidence and many others. It is the common sense of all parties involved in maritime litigation that it is very difficult to try such cases. It is hard to maintain the original state of the scenes of vessel collision accidents for the accidents occur on the high seas and the scenes are affected by wind and ocean currents. Moreover, evidence is vulnerable to man-induced or natural factors and often involves professional issues such as navigation, shipbuilding, etc. These increase the difficulty in accident investigations and identifications of liabilities. The property damages resulting from vessel collision and allision accidents are generally heavy. In determining the amounts of losses, it is required in most cases to authorize professional institutions to assess and accredit the losses, and there are many accreditation items which entail a time consuming accreditation process. In addition, in some cases resulting from vessel collision and allision, there exist such complicated issues as difficulty in service of legal instruments, need for notarization of authorization and authentication of extra-territorial evidence for the vessels that leave the scenes of accidents caused by them to evade responsibilities are foreign vessels. Among the cases resulting from vessel collision and allision that were accepted in the past five years, 43 cases involved foreign elements, Hong Kong, Macao and Taiwan, accounting for 27.56% of the total number of such cases. Objectively speaking, the efficiency of trial of cases resulting from vessel collision and allision is bottlenecked and the period of trial prolonged by the foregoing problems. The average number of calendar days for the trial of cases resulting from vessel collision and allision was 110 more than that for trial of general maritime cases.
(IV) Most of the accidents arose from man-induced factors
As a high-risk industry, marine operation is greatly influenced by external factors such as the weather and marine environment. Not surprisingly, most of the vessel collision/allision accidents were caused by severe weather. However, with continuous improvement of the level of navigation, shipbuilding and weather forecasting, the contribution of harsh natural conditions to the occurrence of safety accidents has been reduced. In terms of the causes of this type of cases accepted by us, collision/allision accidents caused by man-induced factors account for a high proportion. Among the 46 collision/allision cases concluded by handing down a judgment in the past five years, 38 cases were completely caused by man-induced factors, accounting for 82.61% of the total. These man-induced factors included violation of navigation rules, negligence in observation, traveling beyond the speed limit, unqualified crew members, adventurous sailing due to over-confidence, etc.
2. Legal Issues and Suggestions Related to Disputes over Liability for Damage Caused by Vessel Collision/Allision
(I) Identification of parties responsible for disputes over liability for damage caused by vessel collision/allision
The risk of registered vessel owners being asked to attend court hearing. In accordance with Article 4 of <Italic>the Provisions of the Supreme People’s Court on Several Issues Concerning Trials of Cases of Disputes over Vessel Collision</Italic>, the damages resulting from vessel collision shall be borne by ship owners. If a ship collided with is in the bareboat charter period and has been registered in accordance with the law, the damages shall be borne by the bareboat charterer. Pursuant to the regulations on administration of vessel registration, the ownership of vessels shall be registered for the vessels as a type of special movable property. However, in shipping practice, some ship-owners go through fake vessel registration formalities for their vessels or make their vessels affiliated with other duly registered vessels in order to avoid operating risks and obtain business qualifications, creating some difficulties in vessel management and dispute resolution. In the event that a de facto ship-owner is not the same person as the registered ship-owner, the registered ship-owner shall not be held liable to the extent that it does not take infringing actions in a vessel collision accident, nor if the accident occurs through its fault and the civil liabilities arising from the accident shall be assumed by the de facto ship-owner. However, the parties whose vessels are collided or allided with will still argue that the registered ship-owners are the defendants and make the registered ship-owners become involved in litigation when they do not know the facts or they want to better ascertain the facts despite knowing the facts. In addition, if a vessel causes personal injuries and property damage during its operation due to its infringing actions and the rightful owner concerned claims maritime lien, the competent court will take the registered ship-owner concerned as the defendant and rule that the plaintiff shall have the maritime lien on the vessel registered in the name of the defendant. We suggest that the relevant parties should avoid being registered as the shipowners if they want to eliminate latent risk of being sued. If a party is registered as s ship-owner, it should enter into a claim agreement with expressed terms and conditions with the de facto ship-owner, such that it may recover the litigation costs and damages assumed by it from its insurer or the de facto shipper after paying the same.
Identification of parties responsible for disputes arising from vessels in sea trials. There are different opinions about who should assume the liability for damage resulting from collisions that occur during sea trials of vessels. One of the opinions is that the relevant shipbuilding contracts should be consulted and the shipowners should assume the liability for damage in accordance with the stipulations of the parties to the contracts about the ownership of the vessels being built. Another opinion is that the principle of “The party who controls the vessel should take the risks” should be adopted. The arguments of this opinions are that according to the risk control cost theory, the shipbuilders within the nearest distance away from risks shall take the risks, and this arrangement is conducive to the maximization of the interests of such ship-owners and prevention of risks as much as they can. Meanwhile, the costs of risks arising therefrom are at the lowest level; otherwise, ethical risks may be given rise to. In addition, it is not fair for such ship-owners to leave the articles in their control unattended and let other persons to take the risks and bear the losses. In case of a dispute over liability for damage caused by vessel collision between the plaintiff, Shao, and the defendants, Zhoushan Dingheng Shipyard Co., Ltd. and Shanghai Dingheng Shipping Co., Ltd. for collision damage dispute case, the Court adopted the second opinion. The Court holds that Zhoushan Dingheng company Shipyard Co., Ltd. is the shipbuilder of the ship "Ding Heng 9" and the ship was actually in its possession and control during the sea trial; Zhoushan Dingheng company Shipyard Co., Ltd. was registered on the tentative certificate of registry of the ship as the operator of the ship; the ship "Ding Heng 9" was in the control of Zhoushan Dingheng company Shipyard Co., Ltd. during the seal trial, and the risks arising during the sea trial shall be taken by Zhoushan Dingheng company Shipyard Co., Ltd. Therefore, Zhoushan Dingheng Company Shipyard Co., Ltd. shall be liable for the damage which the owner of the ship "Zhe Xiang 988" sustained in the vessel collision accident. It is noteworthy that if the injured party claims maritime liens, in view of its statutory right of security, maritime claims due to collision and after the accident, obtain the ownership of the ship owner and from this perspective, the owner as security interests should still bear the legal risk. We suggest that litigants should expressly specify the parties who shall assume the aforementioned liability, methods for assuming such liability and proportion of the liability to be assumed in the relevant shipbuilding contracts to avoid controversies and disputes over assumption of the liability resulting from the accidents that occur during sea trials.
(II) Proper preservation and collection evidence to facilitate identification of responsibilities for accidents
Paragraph 1, Article 169 of the Maritime Law of the People's Republic of China provides that if both the colliding ship and the collided ship are in fault, each ship shall be liable for property damage in proportion to the degree of their respective faults; if the collision causes loss of life or personal injury to a third party, both the ships shall be jointly and severally liable therefor. Article 167 of the Maritime Law provides that neither party shall be liable to the other party if the collision is caused by force majeure or for other reasons not attributable to either party or if the cause thereof cannot be ascertained. We can come to a conclusion based on an analysis of the foregoing provisions that the doctrine of liability fixation adopted in vessel collision cases is fault-based liability. If the plaintiff cannot adduce sufficient evidence demonstrating the causes of the collision, nor can the competent court ascertain such causes through trial, it will be ruled that no party shall be liable to the other party for damage. Hence, whether or not the parties involved in a collision accident have promptly collected and retained the relevant evidence is significant to subsequent analysis of the causes of the accident and determination of responsibilities for the accident. Due to difficulty in keeping the scenes of vessel collisions and vulnerability of the evidence on such scenes to loss, collection and accreditation of the evidence related to vessel collision has become one of the difficulties in trying the cases resulting from vessel collision. During trials, we become aware that some vessels’ navigation and operating records are too brief and some of them are even blank or there is some indication that some of them are altered, which is extremely prejudicial to the judgment of the causes of accidents and determination of the responsibilities for the accidents. In accordance with the relevant provisions of the Laws of the People's Republic of China on Special Procedures Concerning Maritime Litigation, a maritime court will not attach the relevant evidentiary materials to the complaints or pleadings served by it on the litigants, and the plaintiff or the defendant shall truthfully complete a Maritime Accident Investigation Form when filing a lawsuit or defending itself. Litigants shall finish adducing their evidence prior to court hearings, and they may not apply for consulting the relevant factual evidentiary materials related to vessel collision until finishing adducing their evidence. Litigants shall not overthrow the representations they have made in the Maritime Accident Investigation Forms and the evidence they have adduced, except to the extent that they have new evidence and good reasons to support their argument that the new evidence could not be presented during the time limit for adducing evidence. These special systems for evidence are quite different from the procedures of ordinary civil proceedings. Therefore, litigants shall pay adequate attention to them when participating in the proceedings to avoid unnecessary passivity.
Given the above, we suggest that (1) shipping companies should enhance their internal management systems, require their captains and crew members to make full records of and keep the relevant information during the voyages of their vessels, emphasize the importance of making records, and regularly check and reserve the navigational logs and documents on board; (2) shipping companies with good conditions should require their captains and crew members to send navigational logs to their offices for filing on a regular basis during the voyages of their vessels, such that copies of such evidence will still be provided when the original evidence is not available due to involvement of their vessels in accidents; and (3) where the cases are referred to courts for litigation, the relevant shipowners should truthfully and actively adduce evidence and restrain themselves from not adducing evidence that can safeguard their rights until a court session begins or even a judgment is pronounced.
(III) Qualitative analysis of and lessons from collisions with multiple vessels
The criteria for determining whether an accident in which multiple vessels collide with each other constitutes one accident or several collision accidents independent from each other are whether a continuous urgent situation is given rise to and whether there is enough time to avoid the accident(s). Specifically speaking, the first criterion is whether chronological continuity exists and the second criterion is whether there is a causal relationship between the two collisions. If the first collision has not resulted in a subsequent urgent situation, or although it has resulted in a subsequent urgent situation but the second collision can be avoided by virtue of good seamanship and prudent treatment, the colliding vessel collides with another vessel once again or with a pier or other facilities, the first collision and the second one shall be deemed as two collisions independent from each other. As far as the latter case is concerned, given the fact that there was no causal relationship between the two collisions, and the second collision occurred through no fault of the other party, nor was the other party involved in the second collision, the causal relationship between the first collision and the second one did not exist, and therefore the other party is not required to assume the liability for the damage. In case of a dispute over liability for damage caused by vessel collision between the aforementioned plaintiff, Shao, and the defendants, Zhoushan Dingheng Shipyard Co., Ltd. and Shanghai Dingheng Shipping Co., Ltd., after colliding with "Ding Heng 9", the ship "Zhe Xiang 988” collided with the ship "Zhou Hai You 9". Although the first collision was the main reason for the sinking of the ship "Zhe Xiang 988", there was only a 2-minute interval between the first collision and the second one, and there was chronological continuity and a causal relationship between the two collisions. Hence, the two collisions constituted chain collisions.
To sum up, we suggest that (1) shipowners should strengthen their efforts to train their crew members in good seamanship and require their crew members to operate vessels in accordance with the rules for avoiding collision and regulations on navigation, so as to avoid sailing in violation of the relevant regulations; and (2) shipowners should perform survival exercises and collision drills on a regular basis, so as to minimize consequential accidents that may occur due to panic that rises when an accident really occurs and avoid or minimize vessel collision accidents.
(IV) Loss of the right to limitation of liability for maritime claims
The systems for limitation of liability for maritime claims are established with a view to protecting shipping market players. In the event of a vessel collision/allision, responsible persons tend to mitigate their liabilities for damage by claiming for limitation of liability for maritime claims. According to relevant provisions of the Maritime Law of the People’s Republic of China, owners, lessees, operators, salvors, employees, insurers, etc. of ships shall be entitled to the right to limitation of liability for maritime claims in the event of a maritime accident. But principles entail exceptions and the exceptions of limitation on liabilities for maritime claims are set forth in Article 209 of the Maritime Law of the People’s Republic of China, which is also applicable to cases heard by the Court. In the case of dispute over liability for damage caused by vessel collision between the plaintiff, Zhu, and the defendant, Shen, the defendant who is the captain of “Zhe Feng Yu 16027” quickly withdrew the ship and left the scene of accident when the ship “Zhe Feng Yu 16027” was embedded in the cabin of the plaintiff’s ship at right angles and then turn off the signal of AIS, such act constitutes a hit and run. The defendant rashly ordered the ship to drive off the site, with the knowledge that fleeing the scene of an accident could result in casualties and property losses, such act directly brought about a quick sinking of the plaintiff’s ship and death of people who fell into the water as no rescue is provided to them in a timely manner and constituted a rash omission both intentionally and subjectively. The Court holds that the defendant is not entitled to the right to limitation of liability for maritime claims. The case shows that if the offending ship losses the right to limitation of liability for maritime claims due to misconduct, it will assume full liability for the damage based on actual loss. In this regard, we recommend that ship-owners and crew members should drive in strict compliance with navigation regulations to avoid accidents; in case of accidents, they should make every effort to save lives and avoid escapes or other subjectively rash acts, which result in further expansion of losses.
(V) Management of safety of anchored ships
Lack of awareness of the importance of prevention of collision between anchored ships. In the case of dispute over liability for damage caused by vessel collision between the plaintiff, Marte Rickmers Navigation Limited, and the defendant, Fang, the driver of fishing boat failed to comply with navigation regulations and collision avoidance rules, drove the fishing boat at full speed in thick fog, neglected to observe and collided with the ship anchored at the port of Zhoushan. In the case of dispute over liability for damage caused by vessel collision between the plaintiff, Zhang, and the defendant, Bao, the fishing boat owned by the plaintiff, Zhang, was at anchor and rest and the collision avoidance alarm system was not normally opened, when the accident took place, all the crew members were dining, leaving the cab unattended, and the defendant, Bao, failed to keep adequate lookout and a safe speed in intensive areas of fishing boats, both parties have violated the collision avoidance rules, resulting in a collision. We recommend that ship owners and crew members should build up the awareness of security risks, operate in strict compliance with specifications, especially paying attention to the avoidance of collisions between and safety management of their ships and other ships when they are at anchor.
Inadequate Supervision over the Safety of Marine Operation and Navigation by Authorities
In the case of dispute over liability for damage caused by vessel collision between the plaintiff, G.O.D.shipping S.A., and the defendants, Ye and Daishan He Yu Ren Fishery Cooperatives, the anchoring position selected by the ship “Venice Bridge” owned by the plaintiff was an anchorage without informal planning, and in access routes with intensive fishing boats, having impact on the navigational safety of passing ships, however, before the collision took place, the security management department of the navigation port failed to inform the defendant of transferring the ship to a safe anchorage, revealing the weak links in administrative supervision, which are recommended to be improved. In addition, we recommend that: (1) functions should work by division of labor, forming a joint force of marine supervision over safety. Supervision over ship inspection, registration, training and assessment of crew members, ship navigation management, safety inspection and other aspects should be strengthened, so as to eliminate accident hazards as much as possible; and (2) ship affiliation should be governed by operating with the law. Daily management and personnel training of affiliated companies should be supervised to ensure that operators comply with the requirements of operating qualification certificates and security regulations, and work in a safe area.
Conclusion
The construction of “Safety in Zhejiang" is a systematic project, and the protection of navigational safety is inseparable from the protection provided by maritime judicial services. In recent years, in order to give full play to marine trial functions, the Court has attached great importance to trials for the cases of disputes over liability for damage caused by vessel collision and allision. By standardizing the standards for judgment, the Court actively carries out research and passes pre-judgment on new situations and new problems, achieving accurate and sustained force, and has achieved sound legal and social effects by properly hearing a large number of cases of disputes over liability for damage caused by vessel collision and allision. However, all matters involved with maritime security are significant, only by enhancing the awareness of production safety and risk prevention, carrying out scrutiny on safety hazards on a regular basis, and implementing safety responsibilities early and pragmatically, can ports, shipping, shipyards, other related market players and maritime practitioners share long-term benefits and a secure environment brought about by production safety.