CHINA Law and Practice Contributed by: John Wang, Xu Jun, Song Jia and Zhao Yuxuan, Wang Jing & Co
• effect the auction confirmation and delivery; and • release the ship and announce the auction result (done by the court). In PRC law, the private sale of an arrested ship is not allowable. While the ship is under arrest, the ship-owner or bareboat charterer is liable for maintaining the ship until it has been sold by the court. After being sold by auction, the payment sequence is: • maritime claims with maritime liens; • maritime claims secured by possessory liens; • maritime claims secured by ship mortgages; and • other maritime claims in relation to the judicial sale and/or sell-off of the ship. 4.11 Insolvency Laws Applied by Maritime Courts The PRC has the Enterprise Bankruptcy Law, which provides that all bankruptcy cases shall be submitted to the Intermediate People’s Court instead of the maritime court. According to the Interpretations to the Civil Procedure Law and the Interpretations to the Special Maritime Pro - cedure Law, the Intermediate People’s Court may request the maritime court to assist in the arrest and/or auction of the vessel owned by owners that are under bankruptcy proceedings. However, the enforcement of such a request or arrest is subject to communication and co-ordi - nation between the courts. 4.12 Damages in the Event of Wrongful Arrest of a Vessel The applicant shall indemnify the respondent for the wrongful arrest of a vessel. It is clear that the
arrest is wrongful if the applicant loses in the substantive proceeding. In other scenarios, it is subject to the court’s discretion. 5. Passenger Claims 5.1 Laws and Conventions Applicable to the Resolution of Passenger Claims The Applicable Laws and Conventions to the Resolution of Passenger Claims in China The applicable laws and conventions are as fol - lows: • Athens Convention Relating to the Carriage of Passengers and Their Luggage by Sea, 1974 and its 1976 Protocol; • the CMC; and • the Provisions on Limitation of Liability for Carriage of Passengers by Sea between Ports of the PRC. Time Bar Article 258 of the CMC states: “The time limit for bringing a claim against the carrier with regard to the carriage of passengers by sea is two years, counting respectively as fol - lows: (1) Claims for personal injury: counting from the day on which the passengers disembarked or should have disembarked; (2) Claims for death of passengers that occurred during the carriage period: counting from the day on which the passenger should have disem - barked; whereas those for the death of passen - gers that occurred after the disembarkation but resulted from an injury during the carriage period by sea, counting from the day of the death of the passenger concerned, provided that this period
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