CHINA Law and Practice Contributed by: John Wang, Xu Jun, Song Jia and Zhao Yuxuan, Wang Jing & Co
Assignment of Title to Sue “Title to sue” is a legal concept in English law, while its equivalent concept in PRC law is usually described as “litigation rights”. Litigation rights are legal procedural rights and are unassignable. In PRC law, creditor’s rights are substantive rights and are assignable, in accordance with contractual agree - ments and subject to certain exceptions. Although liti - gation rights alone cannot be assigned, they can be transferred along with and through the assignment of creditor’s rights. 4.3 Ship-Owners’ Liability and Limitation of Liability for Cargo Damages Ship-Owner’s Liability The ship-owner, whether it is a contractual or actual carrier, shall be liable for the loss of or damage to the goods during the period in which the carrier is in charge of the goods (with the exception stipulated in Article 51 of the Provisions of Delivery of Goods without B/L), and for the loss caused by the delay in delivery within the time expressly agreed upon, if any. In general, the ship-owners (two types of carri - ers) should: • exercise due diligence to make the ship seaworthy before and at the beginning of the voyage; • perform duty of care for cargo properly; and • make no unreasonable deviation. However, the actual carrier may not have the obliga - tion to issue the B/L or deliver the cargo, subject to their charterparty with the charterers. In addition, the contractual carrier shall be responsible for the entire carriage, while the actual carrier is responsible for their segment only. They can both seek recovery from each other under Article 65 of the CMC. Limitation of Liability for Cargo Damages Article 56 of the CMC states: “The liability of the carrier for the loss resulting from loss of or damage to goods shall be limited to an amount equivalent to 666.67 Units of Account per package or other shipping unit, or 2 Units of Account per kilogram of the gross weight of the goods lost or damaged, whichever is the higher, except where the
nature and value of the goods had been declared by the shipper before shipment and inserted in the bill of lading, or where a higher amount than the amount of limitation of liability set out in this Article had been agreed upon between the carrier and the shipper... Where the article of transport is not owned or fur - nished by the carrier, such article of transport shall be deemed to be one package or one shipping unit.” According to Article 61, the above limitation of liability applies to both the contractual and the actual carrier. In addition, according to Articles 204 and 207, except for the unit limitation for the carrier, the ship-owner (including the charterer and the ship operator) and the salvor could be protected by the limitation of liabil - ity for maritime claims stipulated in Article 210 of the same law. However, the carrier or the person liable will not be entitled to the benefit of limitations of liabilities stipu - lated in Articles 56 and 207 if the loss, damage or delay in delivery of the goods resulted from an act or omission of the carrier or the person that was done with the intention to cause that loss, damage or delay, or recklessly and with the knowledge that such a loss, damage or delay would probably result under Articles 59 and 209. “A person liable” in Article 209 refers to the person themself and does not include their servant and agent. Therefore, the ship-owner is still entitled to benefit from the limitation of liability for a maritime claim if it is proved that the loss, damages or delay in delivery of goods resulted from the wilful or reckless acts of the Master, crews or agent, rather than themself. 4.4 Misdeclaration of Cargo The shipper shall indemnify the carrier against any loss resulting from the misdeclaration of general and dangerous cargo. In practice, for general cargo, in order to lodge a suc - cessful claim, the carrier needs to prove that the dam - age was caused by the fault of the shipper or their servant or agent.
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