Defending soyabean claims in China

Julia Ju, Senior Claims Manager, P&I, Team Asia for The Swedish Club has noted in the latest edition of Triton that the frequency of soyabean cargo claims arising at discharge ports, particularly in China, had become infamous amongst shipowners, as had the difficulties in defending such claims in local courts.

Ju noted that the Club had encountered claims almost every year where shipowners had been unable to defend successfully and/or recover for claims for damaged soyabean cargoes, despite the damage not being due to the fault or negligence of the shipowners, but due to the inherent nature of soyabeans or pre-shipment conditions.

Ju said that self-heating soyabeans should be recognized as an “inherent vice” under the Hague Visby rules. The burden of proof is on the carrier to show the cause of the damage to the cargo (i.e. that reasonable care was taken by the carrier and that the effective cause of the loss was solely due to the inherent nature of the cargo). Although the Hague Visby Rules are not enacted in Chinese law, the Chinese Maritime Code (enacted 1993) provides for a similar ‘inherent vice’ defence, specifically Article 51.

However, since the 1990s shipowners had been unable to rely on the inherent vice defence in the Chinese maritime courts.

The courts have given the following reasons:

  • The carrier failed to take proper measures to ventilate the cargo
  • The carrier failed to prevent a prolonged voyage which was a factor in cargo damage
  • The carrier failed to discharge the burden of proof by showing that the cargo damage was caused by the nature or inherent vice of the cargo.

The Chinese courts had firmly maintained these reasons in their judgments against carriers, even where the shipowners were able to adduce expert opinion which confirmed that the heat damage was caused by the inherent vice of the cargo and that cargo ventilation had no connection to the heat damage.

https://www.swedishclub.com/media_upload/files/Publications/Triton/Triton%203 2018 WEB.pdf