CHINA Law and Practice Contributed by: John Wang, Xu Jun, Song Jia and Zhao Yuxuan, Wang Jing & Co
Meanwhile “a person liable” in Article 209 refers to the carrier/owner rather than the Master, crew or agent. This means that the carrier/owner is still entitled to benefit from the limitation of liability for maritime claims if it is proved that the loss, damages or delay in delivery of goods resulted from the wilful or reckless acts of the Master or crews rather than the carrier/ owner. After the CMC2025 takes effect, the current limits of the carrier’s liability will be significantly increased. 7. Enforcement of Law and Jurisdiction and Arbitration Clauses 7.1 Enforcement of Law and Jurisdiction Clauses Stated in Bills of Lading PRC courts rarely recognise the validity of law or juris - diction clauses stated in the B/L due to the lack of negotiation between the consignee, the receiver, the holder of the original B/L, the cargo underwriters and the carrier about such clauses. 7.2 Enforcement of Law and Arbitration Clauses Incorporated Into a Bill of Lading PRC courts rarely recognise the validity of law and arbitration clauses incorporated into a B/L. 7.3 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards The PRC joined the 1958 New York Convention in 1986. Civil Procedure Law is the domestic law that governs the recognition and enforcement of foreign arbitral awards. A foreign arbitral award needs to be notarised and legalised before being submitted to the PRC courts for recognition and enforcement. 7.4 Arrest of Vessels Subject to Foreign Arbitration or Jurisdiction The applicant is entitled to apply to the PRC courts for the arrest of a vessel in dispute that is subject to foreign arbitration or jurisdiction. This application shall be made before the applicant commences the arbitra - tion/litigation proceeding. Once the arrest is granted,
the applicant shall commence the arbitration/litigation proceeding within 30 days. 7.5 Domestic Arbitration Institutes The China Maritime Arbitration Commission (CMAC) and the China International Economic and Trade Arbi - tration Commission (CIETAC) specialise in maritime claims. 7.6 Remedies Where Proceedings Are Commenced in Breach of Foreign Jurisdiction or Arbitration Clauses If the claimant commences proceedings before a PRC court in breach of foreign jurisdiction or arbitration clauses, the respondent is entitled to file a jurisdic - tion objection within the defence period to challenge the court’s jurisdiction. If the court sustains the objec - tion, it will dismiss the claimant’s action. In that case, the claimant shall bear the court fee, and there will be no further remedies available to the respondent/ defendant. 8. Ship-Owners’ Income Tax Relief 8.1 Exemptions or Tax Reliefs on the Income of Ship-Owners’ Companies A PRC-incorporated ship-owner is subject to corpo - rate income tax on the worldwide income earned by its vessels and is subject to relief for any tax paid on the same income elsewhere, subject to conventions and treaties in relation to the avoidance of duplicate taxation. 9. Implications of Non-Performance, IMO 2020, Trade Sanctions and International Conflict 9.1 Force Majeure and Frustration Non-performance of a shipping contract due to the effects of the pandemic or the Ukraine war may be considered by PRC courts as force majeure or, in the context of Chinese law, hardship, provided that all statutory requirements have been satisfied. The Supreme Court has recently issued a judicial interpre - tation on contractual matters in the Civil Code, which provided some guidance and clarifications with regard
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