Application of Limitation of Action between Maritime Law and Civil Law

Author of this article: Lawyers of Shandong Win & Win Co. Law Firm
[Case Facts] From September to October 2014, Jiangmen Haoyin Trading Co., Ltd. (hereinafter referred to as Haoyin company) sold a batch of women’s pants to Adon Fashion Co., Ltd. (hereinafter referred to as Adon company). Under the instructions of Adon company, Haoyin company entrusted Union Logistics, Inc. to transport the goods involved from Yantian port, Shenzhen City, Guangdong Province to Long Beach port, California, USA. After Union Logistics, Inc. arranged transportation, it authorized its agent Guangzhou Shengyang International Freight Forwarding Co., Ltd. (hereinafter referred to as Shengyang company) to issue a full set of original bill of lading to Haoyin company, indicating that the shipper is Haoyin company and the carrier is Union Logistics, Inc.

On December 26, 2014, the goods involved were shipped. On January 16, 2015, the goods involved in the case were delivered to Adon company by Union Logistics, Inc. at long beach, the destination port of the United States. However, Haoyin company still held the full set of original B / L. On October 21, 2015, Haoyin company filed a lawsuit against Shengyang company as the defendant. After hearing the lawsuit, Guangzhou Maritime Court held that Shengyang company was the signing agent of Union Logistics, Inc., not the carrier involved in the case, so it rejected Haoyin company’s claim. On February 24, 2016, Haoyin company filed a lawsuit against Union Logistics, Inc. as the defendant, requesting Union Logistics, Inc. to compensate for the goods loss and interest it suffered. After the delivery of the Convention, Union Logistics, Inc. came to court and confirmed the fact that the goods were delivered without the original bill of lading, but argued that Haoyin company’s lawsuit against it had exceeded the one-year limitation of action stipulated by maritime law, and there was no legal situation that the limitation of action was suspended or interrupted in this case, and requested the court to refute Haoyin company’s lawsuit request according to law.

[Court Verdict] Guangzhou Maritime Court held that the interruption of limitation of action in this case should be governed by Article 267 Of Maritime Law. This article provides that the limitation of action can be interrupted by “bringing a lawsuit”, but it does not specify the specific circumstances covered by “bringing a lawsuit”, which shall be defined by other laws, regulations or judicial interpretation. According to Article 13 Of The Provisions Of The Supreme People’s Court On Several Issues Concerning The Application Of The Limitation Of Action System In The Trial Of Civil Cases and paragraph 2 of Article 173 Of The Opinions Of The Supreme People’s Court On Several Issues Concerning The Implementation Of The General Principles Of The Civil Law Of The People’s Republic Of China (For Trial Implementation), “where the obligee claims rights from the debt guarantor, the obligor’s agent or the property escrow agent, it can be determined that According to the provisions of “interruption of limitation of action”, the action of Haoyin company filed against Shengyang company on October 21, 2015 can be regarded as a matter with the same effect of interruption of limitation. Such action shall be regarded as “bringing an action” as stipulated in the first paragraph of Article 267 Of Maritime Law, that is to say, the limitation period of this case will be interrupted and reopened on October 21, 2015. Haoyin filed a lawsuit on February 24, 2016, which did not exceed the legal limitation period. As a carrier, the delivery of goods without original B / L violated the carrier’s legal obligations and constituted a breach of contract. The breach of contract had caused Haoyin company to lose the right of goods control and unable to recover the payment, and Union Logistics, Inc. should compensate for the loss. After the first trial, neither party appealed.

[Analysis] Because finding the right defendant in maritime case is very complex issue, there are many companies involving in transportation, such as actual carrier, contract carrier, agent, ship owner, charter etc. For the average person, this is difficult job to ascertain the legal relation between them. And the limitation of action in maritime is short, only one year. This is different from limitation of action in civil case which is three years or longer. Further, this maritime court procedure is very long, for one year or longer is very common. If the plaintiff sues the wrong defendant, and when clamant notices this, perhaps out of limitation of action. This is not fair for the plaintiff.

As a special law of civil law, Maritime Law Of China provides a special limitation of action system which is different from the civil law. When it comes to the rights and obligations regulated by maritime law, the relevant provisions of Maritime Law shall prevail. In the absence of clear provisions in maritime law, general principles of civil law should be applied. Although the first paragraph of Article 267 Of Maritime Law stipulates that the limitation of action can be interrupted only when the claimant brings a lawsuit, it does not clearly stipulate the specific situation of “bringing a lawsuit”. At this time, The General Principles Of Civil Law and other laws and relevant judicial interpretations shall be applied to define it. This case has reference value for dealing with the relationship between maritime law and limitation system of civil law.