航运法2024（中国篇） IN-DEPTH Shipping Law CHINA

IN-DEPTH

ShippingLaw

CHINA

ShippingLaw

EDITION11

ContributingEditors

BruceGPaulsen

and

BrianPMaloney

Seward&KisselLLP

In-Depth:ShippingLaw(formerlyTheShippingLawReview)aimstoprovidethoseinvolvedinhandlingcross-bordershippingdisputeswithanoverviewofthekeylegalissuesarisingacrossmultiplejurisdictions,includingleadingmaritimenationsandmajorshipbuilding

centres.Amongotherthings,itanalysesthemostnoteworthyaspectsofavailabledisputeresolutionprocedures;shipbuildingcontracts,contractsofcarriageandcargoclaims;

limitationofliability;shiparrestprocedures;andmuchmore.

Generated:June19,2024

Theinformationcontainedinthisreportisindicativeonly.LawBusinessResearchisnotresponsibleforanyactions(orlackthereof)takenasaresultofrelyingonorinanywayusinginformationcontainedinthisreportandinnoeventshallbeliableforanydamagesresultingfromrelianceonoruseofthisinformation.Copyright2006-2024LawBusinessResearch

ExploreonLexology

China

TingLei

,

ZhuYang

and

ZiyuWu

GlobalLawOfce

Summary

INTRODUCTION

YEARINREVIEW

FORUMANDJURISDICTION

SHIPPINGCONTRACTS

REMEDIES

REGULATION

OUTLOOKANDCONCLUSIONS

ENDNOTES

ShippingLaw|ChinaExploreonLexology

RETURNTOSUMMARY

Introduction

iCommercialoverviewoftheshippingindustry

In2023,theChineseshippingindustrypresentedastableandpromisingtrendoverall.Thecoastalshippingmarket,dominatedbythemarketsofdomesticdrybulktransportation,containertransportationandhazardousliquefiedcargotransportation,climbedsteadilywithfluctuations.However,internationalshippingrouteswerechallengedbyfactorssuchastheRussia–Ukraineconflictandescalatinginflationarypressures,resultinginageneralweaknessindemandandpronouncedmarketvolatility.[

2

]

AccordingtothelatestdatareleasedbytheMinistryofTransportofthePeople'sRepublicofChina,ChineseshipsregisteredinChinatotalled185,000,inwhich121,900arepossessedbyChineseshipowners,withthecombinednettonnageof298milliontons,accommodating861,800passengersandofferingacontainercapacityof2,987,200standardcontainers.Amongtheseships,forinter-provincialcoastaltransport,thereare:(1)2,538drybulkcargoships(weighingover10,000tonseach,excludingheavyandlengthycargocarrierandcombinationcarrier),withatotalcarryingcapacityof83.356milliontons;(2)410containerships(withacapacityofover700TEUeach,excludingmultipurposeships),providingacombinedcontainercapacityof973,000TEU;(3)1,152oiltankers(includingcrudeoiltankersandrefinedoiltankers,excludingdual-purposetankersforoilandchemicalproducts),amountingtoatotalcarryingcapacityof116.88milliontons;(4)292chemicaltankers(includingdual-purposetankersforoilandchemicalproducts),withatotalcarryingcapacityof1.492milliontons;and(5)85liquefiedgascarriers,withacombinedcarryingcapacityof316,000tons.[

3

]

Throughouttheyear,thecommercialfreightvolumereached8.554billiontons,withatotalcargoturnoverof12,100billionton-kilometres.Specifically,freightvolumeofinlandamountedto4.402billiontons,withaninlandcargoturnoverof19,026billionton-kilometres.Meanwhile,oceanfreightvolumeaccountedfor4.151billiontons,withtheoceancargoturnoverof101,977billionton-kilometres.[

4

]

AccordingtothelatestdatafromtheNationalBureauofStatistics,in2023,importsofcoal,crudeoil,andnaturalgasinChinahavesurged,reachinghistoricallyunprecedentedlevels.Inparticular,coalimportsreached470milliontons,markinganotableincreaseof61.8percentcomparedtothepreviousyear;crudeoilimportsamountedto560milliontons,increasedby11percent;andnaturalgasimportstotalled120milliontons,increasedby9.9percent.Beyonddomesticinter-provincialcoastalandinlandtraderoutes,China'sinternationalmaritimeroutesencompassbothnear-oceanroutesprimarilytotheHongKongandMacaudistricts,andtocountriessuchasSingapore,Malaysia,JapanandSouthKorea,aswellasfar-oceanroutesmainlytoMediterraneancountries,WesternEuropeandtheUnitedStates.Nationally,thereare21,323operationalberthsatportsdesignatedforindustrialproduction,including2,751berthscapableofaccommodatingshipsof10,000tonsormore.Intotal,theannualcargohandlingcapacityreached15.685billiontons,positioningChinaattheforefrontinternationally.[

5

]

In2023,Chinamaintaineditspositionastheworldleaderinshipbuildingmarketshareforthe14thconsecutiveyear,solidifyingitsstatusasaprominentshipbuildingnation.China'sshipbuildingoutput,newordersandbacklog,measuredindeadweighttons,collectivelyrepresented50.2percent,66.6percentand55percentoftheglobaltotal,marking

ShippingLaw|ChinaExploreonLexology

RETURNTOSUMMARY

respectiveincreasesof2.9percent,11.4percent,and6percentcomparedto2022.Eachofthesemarketsharessurpassedthe50percentthresholdforthefirsttime.Bythecloseof2023,thenation'sshipbuildingoutputreached42.32milliondeadweighttons,withneworderstotalling71.2milliondeadweighttonsandabacklogof139.39milliondeadweighttons.Onanationalscale,completedexportshipsamountedto34.53milliondeadweighttons,withundertakenexportshiporderstotalling66.51milliondeadweighttons,andabacklogof130.15milliondeadweighttons.Exportedshipsrespectivelyconstituted81.6percent,93.4percentand93.4percentofthenation'sshipbuildingoutput,newordersandbacklog.Overall,thethreeprincipalindicatorsofshipbuildingexperiencedsynchronisedgrowth,maintainingadominantpositionintheglobalmarket.

[6

]

iiGeneraloverviewofthelegislativeframework

TheMaritimeLawofthePeople'sRepublicofChina,promulgatedandimplementedin1993,standsastheparamountandfoundationallegislationgoverningmaritimetransportandshippingpartyrelationsinChina.Itencompassespivotallegalprovisionsconcerningshiprealrights,crewmembers,contractsofcarriageofgoodsbysea,contractsofcarriageofpassengersbysea,charterparties,contractsofseatowage,collisionofships,salvageatsea,generalaverage,limitationofliabilityformaritimeclaims,contractsofmarineinsurance,limitationoftimeformaritimeclaimsandtheapplicationoflawtoforeign-relatedmatters.

InadditiontotheMaritimeLaw,maritimelegislationinChinaisreflectedin:(1)theCivilCodeofthePeople'sRepublicofChina;(2)administrativeregulationstailoredbyvariousgovernmentdepartments(suchastheRegulationofthePeople'sRepublicofChinaontheAdministrationofNavigableWaterwaysconcerningnavigationsafety,RegulationsofthePeople'sRepublicofChinaGoverningtheRegistrationofShipsregardingshipsupervision,RegulationofthePeople'sRepublicofChinaonSeamenconcerningcrewmanagement,RegulationsontheSafetyManagementofHazardousChemicalspertainingtohazardpreventionandpollutioncontrol,RegulationsofthePeople'sRepublicofChinaontheInvestigationandHandlingofMaritimeTrafficAccidentsaddressinginvestigationprocedureandRegulationontheAdministrationofDomesticWaterTransportfocusingonoperationalmanagement);(3)administrativeregulatorydocumentsissuedbytheStateCouncil(suchastheOfficialReplyoftheStateCouncilonApprovingTemporaryAdjustmentstotheImplementationoftheProvisionsofRelevantAdministrativeRegulationsintheLin-GangSpecialAreaofChina(Shanghai)PilotFreeTradeZone);and(4)locallawsandregulations,governmentalnormativedocumentstailoredbyprovincesandmunicipalitiesaccordingtospecificneeds,suchasShanghai'sGuidelinesforWaterwayTransportMarketCreditManagement,andCreditManagementGuidelinesfortheTransportationIndustryinJiangsuProvince.

InthejudicialpracticeofmaritimeaffairsandcommerceinChina,courtsdemonstrateacommitmenttorespectingtheprincipleofpartyautonomyandadheringtotheapplicationofinternationalmaritimecustomsandconventions.

Yearinreview

ShippingLaw|ChinaExploreonLexology

RETURNTOSUMMARY

On21August2023,theStateCouncilissuedthemostrecentamendmentstotheRegulationsofthePeople'sRepublicofChinaonInternationalOceanShipping.TheserevisionsarecentredonreducingbarrierstoentrywithintheshippingmarketandinvolveadjustmentstoregulationsgoverningforeigninternationalshippingoperationsamongmainlandChina,theHongKongSpecialAdministrativeRegion,theMacauSpecialAdministrativeRegionandtheTaiwanregion.Notably,forcontainerandgeneralcargoshippingservicesbetweenthemainlandandthetwospecialadministrativeregions,thelicensingsystemhasbeeneliminated,withatransitiontoaregistrationrequirementoverseenbyprovincial-leveltransportationauthorities.Moreover,therevisionsincludeprovisionspertainingtointernationalpassengershipsandinternationalshipscarryingdangerouschemicalsinbulk.

FollowingthereleaseoftheMinistryofTransport'sLegislativePlanfor2023,revisionstotheMaritimeLawhavetakenprecedence.Additionally,theplanhighlightstheimportanceofamendingthePortLawofthePeople'sRepublicofChina,withaparticularfocusonimprovingportmanagementsystems,portengineeringconstructionmanagement,portproductionsafetymanagement,porttransportationguaranteeobligations,porteco-development,shorelinemanagementandportresourceintegration.

Forumandjurisdiction

iCourts

Chinahasestablished11maritimecourtsspecificallydedicatedtohandlingmaritimeandcommercialcases.Thesecourtsarespreadacrossthecountry,spanningfromDalianinthenorthtoHaikouinthesouth,andincludecitiessuchasTianjin,Qingdao,Nanjing,Wuhan,Shanghai,Ningbo,Xiamen,GuangzhouandBeihai.Eachmaritimecourtcomprisesmaritimetrialchambersandcommercialtrialchambers,responsibleforadjudicatingfirst-instancemaritimeandcommercialcases,respectively.Dependingonthenature,subjectmatterandsocietalimpactofthecases,thehighpeople'scourtswherethemaritimecourtsarelocated,aswellastheSupremePeople'sCourtmayalsohavejurisdictionoverfirst-instancemaritimeandcommercialcases.Thejudicialreviewprocessformaritimecasesfollowsa'three-tiercourts,finaljudgmentaftertwo-instanceappeal'system,involvingthemaritimecourts,thehighpeople'scourtsandtheSupremePeople'sCourt.

TheMaritimeLawsetsforthprecisestatutesoflimitationsforvariousmaritimeclaims.Forinstance,contractforthecarriageofgoodsclaimsregardingcarrierliabilitymustbefiledwithinoneyear,whileclaimsforindemnificationfromthirdpartiesmustbefiledwithin90days.Thelimitationperiodforcharterpartyclaims,includingvoyagecharterpartyclaims,istwoyears.Similarly,forclaimsarisingfromshipcollisions,thelimitationperiodisalsotwoyears(exceptforclaimsinvolvingjointliabilityindemnification,whichhaveaone-yearlimitation).Claimspertainingtoacontractofmarineinsurancehaveatwo-yearlimitationperiod.Claimsforcompensationforoilpollutiondamagefromshipshaveathree-yearlimitationperiod,withamaximumlimitofsixyearsfromthedateofoccurrenceofthepollutiondamage.

ShippingLaw|ChinaExploreonLexology

RETURNTOSUMMARY

Moreover,theMaritimeLawalsoincludesprovisionsconcerningthesuspensionofstatutesoflimitationsformaritimeclaims.If,withinthefinalsixmonthsofthelimitationperiod,circumstancessuchasforcemajeureorotherhindrancespreventthefilingofclaims,thelimitationperiodwillbesuspended.Thecountingofthisperiodresumesoncethecauseofsuspensionceasestoexist.Additionally,regulationsregardingtheinterruptionofstatutesoflimitationshavebeenspecified.Thelimitationperiodceaseswhenlegalactionisinitiatedorthecaseissubmittedforarbitrationbytheclaimant,orwhenthedefendantacknowledgestheirobligation.However,thelimitationperioddoesnotceaseiftheclaimantwithdrawstheiractionorarbitrationsubmission,oriftheiractionisdismissedbyacourtdecision.Incaseswhereaclaimantseekstoarrestaship,thelimitationperiodhaltsfromthedaytheclaimismade,andrestartsfromthemomentofdiscontinuance.

iiArbitrationandADR

InChina,maritimearbitrationcasestypicallyinvolvetheChinaMaritimeArbitrationCommission(CMAC)andadheretoitsarbitrationrules.ThemostrecenteditionofitsArbitrationRulesisthe2021version.AlongsidetheCMACheadquartersinBeijing,thereareadditionalbranchessuchastheCMACShanghai(thiswasrenamedastheCMACShanghaiHeadquartersin2020),theCMACTianjinMaritimeArbitrationCenter,theCMACSouthwestSub-CommissionandtheCMACHongKongArbitrationCenter.ThesebranchesalloperateundertheArbitrationRulesandrosterofarbitrators,withjurisdictiondeterminedbythearbitrationclausesagreeduponbythepartiesinvolved.Moreover,someinternationalarbitrationinstitutionsinmajorcoastalcitiesacceptmaritimearbitrationcases,extendingbeyonddisputestiedsolelytolocalports.Thedurationofarbitrationproceedingsvariesbuttypicallyconcludeswithinninemonthsforstandardcases,withmorecomplexcasespotentiallyextendingbeyondoneyear.

Inmaritimedisputes,bothCMACandotherarbitrationbodiesoffercomprehensivemediationproceduresoutlinedintheirarbitrationrulesandhavetheauthoritytoissueenforceablearbitrationmediationagreements.ItisimportanttohighlightthatChinadoesnotrecognisetheconceptof'expertdetermination'.Instead,settlementsbetweendisputingpartiesarefacilitatedthroughtheleadershipandinvolvementofvariouschambersofcommerce.However,itisessentialtoacknowledgethatsettlementagreementslacklegalenforceability,andanydisputesarisingfromorrelatedtotheseagreementsmuststillberesolvedthrougharbitrationorlitigation.

Regardingadhocarbitration,thecurrentArbitrationLawdoesnotprovideforadhocarbitrationprocedures.However,asaMemberStateoftheConventionontheRecognitionandEnforcementofForeignArbitralAwards1958(theNewYorkConvention),ChinaisobligatedtorecogniseandenforcearbitrationawardsrenderedinotherNewYorkConventionMemberStates,includingadhocarbitrationawards.In2023,theRegulationoftheShanghaiMunicipalityonPromotingtheInitiativeforanInternationalCommercialArbitrationCentretooktheleadinacceptingandstipulatingtheadhocarbitrationsystem:'Thismunicipalitywill,inaccordancewithnationalarrangements,explorethepossibilityofallowingagreementsonadhocarbitrationbyspecificpersonsinShanghaiunderspecificarbitrationrulesinforeign-relatedcommercialandmaritimefields.'

Additionally,contractualpartiesmayalsochoosetoarbitratemaritimedisputesinChinaunderthearbitrationrulesofforeignarbitrationinstitutions.

ShippingLaw|ChinaExploreonLexology

RETURNTOSUMMARY

iiiEnforcementofforeignjudgmentsandarbitralawards

InChina,therecognitionandenforcementofaforeigncourtjudgmenttypicallyoccursthroughtwoprimarymechanisms.First,partiesmaydirectlyapproachChinesecourts,substantiatingtheirclaimwithevidencedemonstratingthattherehavebeenprecedentsofmutualrecognitionandenforcementofcourtjudgmentsbetweentherelevantcountryandChina.Second,foreigncourtsorconcernedpartiesmayinitiateproceedingsinChinesecourtsinaccordancewiththeHagueConventionontheRecognitionandEnforcementofForeignJudgmentsinCivilandCommercialMatters.

TherecognitionandenforcementofaforeignarbitralawardinChinaiscarriedoutthroughanapplicationfiledbythepartiesinaccordancewiththeNewYorkConvention.ThejudicialreviewofaforeignarbitralawardbyaChinesecourttypicallyoccurswithinaperiodofthreemonthsfromthedateofacceptanceoftheapplicationbythecourt.Theenforcementtimeline,ontheotherhand,generallydependsontheavailabilityofpropertiesorspecificactionscanbeenforced.Toenforcearbitralawards,ChinesecourtshavetheauthoritytoseizeanddetainthepropertiesandfreezethebankaccountsofthepersonwhoissubjecttoenforcementwithinChina,ortocompelspecificactionsoutofthepersoninaccordancewiththearbitralaward.Incasesinvolvingtheexecutionofproperty,suchaswhenthepropertyneedstobedeliveredoutsideChinaorwhentheproceedsaretoberemittedoutofChina,compliancewithrelevantcustomsclearanceforexportorforeignexchangemanagementrequirementsisnecessary.Regardingtheauctionofshipsandotherassets,whichmayinvolvemultiplecreditorsunderthesameproperty,distributionisconductedaccordingtotheprioritisationregulationsstipulatedbyChineselaw.

Shippingcontracts

iShipbuilding

Incurrentshipbuildingpractice,theadoptionofstandard-formcontractsremainsaprevalentapproachintheformationofshipbuildingcontracts.Shipbuildersandprincipalsoftencustomiseandnegotiatespecifictermsandconditionsbasedonindividualcircumstances.Generally,standard-formcontractsforshipbuildingareusedincludingtheCSTCformatdevelopedbytheformerChinaShipbuildingTradingCoLtd,theCMACformatbytheChinaMaritimeArbitrationCommission,theNorwegianformatbytheNorwegianShipowners'Association,NEWBUILDCONbyBIMCO,theSAJformatbytheShipbuilders'AssociationofJapanandtheAWESformatbytheAssociationofWesternEuropeanShipbuilders,amongothers.

Intheresolutionofdisputesarisingfromshipbuildingcontracts,theinvolvedpartieshavetheoptiontostipulatethechoiceofapplicablelawandmethodfordisputeresolution.Itisfrequentlyobserved,particularlyincontractsdraftedinstandardformats,todesignatelawsofEnglandandWalesasgoverninglaw,whilepreferringarbitrationineitherLondonorSingaporefordisputesconcerningcontractperformance.Additionally,someagreementsstipulatetheapplicationofChineselawandselectjurisdictioninChinesecourtsorarbitrationbodies,involvingprimarilytheMaritimeLaw,CivilCodeandrelevantjudicialinterpretationsissuedbytheSupremePeople'sCourt.

ShippingLaw|ChinaExploreonLexology

RETURNTOSUMMARY

Unlessotherwiseprovidedinthecontract,ownershipofashiptransfersuponitsdelivery.Iftheshipyardrefusestodelivertheship,thebuyermayseekreliefthroughmaritimeinjunction(i.e.,acourtordercompellingtheshipyardtofulfilitscontractualobligationthrough).Inpractice,thebuyermayrequiretheshipyardtoprocureabank-issuedletterofguaranteewithacreditlineequivalenttotheprepaymentmadebytheshipowner.Intheeventofdefaultbytheshipyard,theshipownercanthenseekredressfromthebank.

iiContractsofcarriage

China'slegalsystemformaritimecargotransportationoperatesunderadual-tracksystem,wheretherearedifferentlegalprovisionstointernationalanddomesticshipments.TheMaritimeLawgovernsinternationalcargotransportation,whiledomesticcoastalandinlandwaterwaytransportbetweenChineseportsisregulatedbytheCivilCodeandspecialisedregulationsfromtheMinistryofTransport.

Additionally,insituationswherecontractsaresilentandtherearenolegaldirectives,prevailinginternationalshippingpracticesareacknowledgedandupheldbyChinesejudicialandarbitrationauthorities,couldserveasabasisforrulings.

TheHagueRules,theHague-VisbyRulesandtheHamburgRules,aswellastheUnitedNationsConventiononInternationalMaritimeTransportofGoods,althoughnottreatiesChinaispartyto,canstillbeappliedtocontractsthroughspecificclausesagreeduponbytheparties.

IntheMaritimeLaw,provisionsconcerningmultimodaltransportcontractsonlyapplytothoseinvolvinginternationalmaritimetransport.Theseprovisionsdefinemultimodaltransport,outlineliabilityperiods,specifyobligationsofmultimodaltransportoperators,addresscompensationforsegmentdamageandestablishliabilitypresumptions.Ifthesegmentwheregoodsarelostordamagedcannotbeidentified,multimodaltransportoperatorsareliableforcompensationaccordingtocarrierliabilityregulationsandlimits.

iiiCargoclaims

Inavoyagecharterparty,thechartererisentitledtoclaimcompensationforcargodamageorshortageorotherdisputeoverdeliveryofcargo.Ifthejurisdictioncourtisnotspecifiedinthecharterparty,themaritimecourtofthedefendant'sdomicile,theportofloading,theportofdischargeorthelocationofthecargohasjurisdiction.

Forbillofladingholders,cargoissuesclaimsarisingfromthebillofladingcanbebroughtagainstboththeactualcarrierandthecontractualcarrierofthetransportationcontract.Theactualcarrierissometimesconsideredastheagentofthecontractualcarrier.Claimsforcargodamageorshortage,deliverywithoutbilloflading,refusaltodeliverorcargoretentionarecategorisedastortclaims.

Inanotherscenario,whentheholderofbilloflading,althoughhasnotdirectlysignedavoyagecharterpartywiththecarrier,arestillconsideredasapartytoitbecausethetermsareeffectivelyincludedinthebilloflading.AccordingtojudicialpracticeinChina,thisincorporationhappenswhenthebillofladingistransferredtohim,clearlyindicatingthetermsoftheexecutedvoyagecharterparty.Accordingly,unlessstatedotherwise,the

ShippingLaw|ChinaExploreonLexology

RETURNTOSUMMARY

disputeresolutionclausesofthevoyagecharterpartyalsoapplytothisholderofbilloflading.

InChina,thereisnotheconceptoftheactioninrem,whileduetoconstraintslimitationsimposedbyrealrightstheories,asforabareboatcharteredship,cargoownersmayapplyforarrestofabareboatcharteredship,butsincethebareboatcharteredshipisnotthepropertyofbareboatcharterer,cargoownersarepreventedfromseekingcompensationthroughthejudicialauctionoftheship.Shipownersarealsonotheldliableinthisscenario.

ivLimitationofliability

Theentitiessubjecttomaritimeliabilitylimitationencompassshipowners,bareboatcharterers,shipoperators,salvorsandtheemployeesoragentsofshipownersandsalvors,alongwithliabilityinsurers.Toinvokemaritimeliabilitylimitation,certainconditionsmustbemet:thelossespromptingthemaritimecompensationclaimmustnotresultfromtherecklessactionsorinactionsoftheaforementionedpartieswhowereawareofthepotentialharm.Otherwise,therighttolimitmaritimeliabilitycannotbeexercised.TheMaritimeLawclearlyoutlineseligibletypesofmaritimecompensationclaimsforlimitationandnon-limitingclaims.Liabilitylimitsaredeterminedbyshiptonnage,withliablepartiesalsoallowedtoestablishmaritimelimitationfundsinjurisdictionalcourts.Thesefundsensuretheavailabilityofdedicated,irrevocableresourcesforfulfillinglimitedcompensationobligations.

Remedies

iShiparrest

China'sregulationsconcerningshiparrestareprimarilyoutlinedintheSpecialMaritimeProcedureLawofthePeople'sRepublicofChina.ShiparrestinChinafallintotwocategories:thoseoccurringbeforeorduringlitigationorarbitrationproceedings,andthoseexecutedfortheenforcementofjudgmentsorarbitrationawards.Thedistinctionliesintherequirementforprovidingcounter-guaranteeincasesofpre-litigationorpre-arbitrationshiparrests;counter-securitymustbeprovidedtoensureafullcompensationforpotentialwrongfularrest.Itisnotablethatinpre-litigationorpre-arbitrationshiparrest,legalactionmustbeinitiatedwithin30daysofarrestoftheship;failuretodosowillresultinthereleaseoftheshipbythecourt.

ForthearrestofcoastalshipsregisteredinChina,courtstypicallyissueorderstotheship'sregistryauthority,prohibitingsaleormortgage,withoutinterferingintheship'soperation.However,forocean-goingships,Chinesecourtsusuallyrequiretheshiptobedetainedataberth.Forthearrestforeignocean-goingships,Chinesecourtsmayrequiretheapplicanttoprovidecounter-guaranteeincashordemandtheapplicanttoarrangefortheship'sspecialisedcustodyattheirownexpense.Ininstancesofforcedauctions,providingcounter-guaranteeequivalenttotheship'sassessedvaluemayalsobenecessary.

Inadditiontoseekingthearrestoftheship,maritimeclaimantscanalsorequestthearrestofsisterships,referringtoothershipsownedbythesameliableparty.However,such

ShippingLaw|ChinaExploreonLexology

RETURNTOSUMMARY

requestscannotrelatetothedisputesovershipownershiporpossession.Jointventureshipswithownershipstructuresdistinctfromsistershipsareexemptfromarrest.Releasingashiprequiresprovidingsecurityequivalenttotheclaimamount,typicallyintheformofcash,insurancepoliciesorbankguarantees.Yet,courtsusuallydemandcashsecurityforforeign-flaggedships.Thecounter-guaranteeofferedbytheapplicantaddressesclaimsresultingfromwrongfularrest.InChinesejudicialpractice,awrongfularrestoccursonlywhentheapplicant'sclaimslacksanymerit.Ifthecourtpartlysupportstheclaims,thedetentionshallnotbedeemedwrongful.

Injudicialpractice,theprocedures,security,counter-securityandliabilitiesregardingbunkerdetentionresemblethoseofshiparrest.However,itshallbenotedthatifabunkerdetentionisrequestedbeforelitigationorarbitration,theclaimantmustfile