A judgment recently handed down by the Supreme People’s Court of the People’s Republic of China (SPC) has confirmed that the correct liquid bulk cargo weight to be used as primary evidence by courts is the weight provided by the carrier in its ullage report and dry certificate: People’s Insurance Company (Group) of China Limited Guangxi Branch v. Western Global Corp (2019), Min Zai No. 367. This judgment is welcome as it clarifies any previous uncertainty arising from varying weight measurements of discharged liquid bulk cargo. The weight obtained from the carrier’s ullage report or dry certificate should serve as proof and cannot be overridden by any other record of weight, including the China Inspection and Quarantine certificate of weight (CIQ) produced by the receiver, unless the ullage report or dry certificate is defective or otherwise problematic.
The SPC has also confirmed the correct approach in establishing the carrier’s period of responsibility and held that unless a cargo shortage is proved to be within that period, the carrier will not be liable.
Brief background to relevant issues and previous practice in China
In a previous case from 2005, Min Si Ta Zi No.1-1, the Tianjin Higher People’s Court referred issues relating to CIQs based on shore tank weight inspections to the SPC. In its letter of reply (the Letter of Reply), the SPC stated the following:
- The carrier’s period of responsibility for the transportation of bulk liquid cargo begins the moment the ship’s manifold is connected to the flange of the shore pipeline at the loading port, and ends when the ship’s manifold is connected to the flange of the shore pipeline at the discharging port. The cargo is under the carrier’s control throughout this period.
- The ullage report and dry certificate provided by the carrier should be viewed as offering appropriate evidence of the weight of the cargo. As the CIQ is a certificate based on shore tank weight inspection outside the carrier’s period of responsibility, it does not have the effect of certifying the weight of the cargo delivered unless the carrier has otherwise agreed.
Although letters of reply generally have no binding force, it has been common judicial practice for PRC courts to follow the Letter of Reply in liquid bulk cargo shortage claims.
This case has confirmed that, in relation to cargo shortage claims, the point in time at which the cargo is weighed under each weight measurement system is crucial because the carrier is only liable for cargo shortages that occur during the carrier’s period of responsibility.
This position has been followed in several cases, including Zhe Min Zhong No. 390 (2018). In this case, it was held that the carrier’s period of responsibility for the transportation of bulk liquid cargo started from the moment the ship’s manifold was connected to the flange of the shore pipeline at the port of loading, and ended when the ship’s manifold was connected to the flange of the shore pipeline at the port of discharge. Thus, as a general rule, the weight should be measured during the carrier’s period of responsibility, and so before discharge.
The recent judgment issued by the SPC, as discussed below, has reaffirmed the decisions in the above cases.