​INTRODUCTION

        The Special Maritime Procedure Law of the People's Republic of China (hereinafter referred to as the Special Maritime Procedure Law) limits the scope of preservation of maritime claims to be applied in provisions. In order to apply the provisions of the Special Maritime Procedure Law and the Civil Procedure Law of the People's Republic of China (2023 Amendment) (hereinafter referred to as the Civil Procedure Law) respectively, the property that can be claimed for preservation is divided into two categories: "the ship, the cargo carried by the ship, and the ship's fuel and supplies" (hereinafter referred to as "the four categories of property") and "other property". However, since the amendment of the Civil Procedure Law in 2012, the difference between maritime claim preservation and general property preservation has gradually faded, especially for the difference in the scope of property preservation in foreign-related arbitration , which is no longer obvious. With regard to this background, in a maritime claim preservation，the specificity of the object for preservation should not be emphasized again.

 

        On January 24, 2024, the China Judicial Documents Network published the typical cases of national maritime trials in 2022 issued by the Supreme Court. Among these cases, the third case, Fulllinks Marine co ltd v Anhui Technology Import and Export co ltd, has responded to the above changes through judicial practice, and has set a typical example for the application of law in similar cases.

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OVERVIEW

        [Court] Wuhan Maritime Court of the People's Republic of China

        [Date Decided] 30 May,2022

        [Parties] Fulllinks Marine co ltd v Anhui Technology Import and Export

        [Related Legislations] 

        The Civil Code of the People's Republic of China,

        Maritime Code of the People's Republic of China

        [Citation] （2022）鄂72财保45号之一

 

LEGAL ISSUE

        the Legal Application of Property Preservation Jurisdiction in Voyage Charterparty

     

FACTS

        Fullinks and Anhui Technology entered into a charterparty, regarding which a dispute subsequently arose. The dispute was brought to arbitration at the Hong Kong International Arbitration Centre (HKIAC). Fullinks applied to the Maritime Court for interim measures for the preservation of a bank account before an arbitral award was rendered, requesting the sealing, seizure, and freezing of Anhui Technology's bank deposits, or other equivalent property. At the same time, Fullinks provided counter-security for this property preservation.

 

FINDINGS​

        The focus of dispute is that which law should be applied to the preservation of the property in this case.​

       

        For this, the Court held that: Regarding the preservation of maritime claims in arbitration proceedings, Article 21 of Interpretation of the Supreme People's Court on the Application of the Special Maritime Procedure Law of the People's Republic of China (2008 Adjustment Version) (hereinafter referred to as the Judicial Interpretation of the Special Maritime Procedure Law) provides that: "Where a foreign court has already accepted a related maritime case or the relevant dispute has already been submitted for arbitration, but the involved property is within the People's Republic of China, if a party applies for maritime claim preservation with the maritime court of the place where the property is located, the maritime court shall accept the application." At the same time, Article 18 of the Judicial Interpretation of the Special Maritime Procedure Law divides the preserved property into two categories, which is "the four categories of property" and "other property". It can be concluded that we should apply different scopes of property preservation in different kinds of maritime claim. For the maritime claim preservation of "the four categories of property"，we shall apply the relevant provisions of the Special Maritime Procedure Law; For the maritime claims preservation of "other property", the relevant provisions of the Civil Procedure Law shall be applied.

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        In this case, the property requested by the applicant for preservation is not clearly directed to "the four categories of property", so the examination of property preservation involved in the case was supposed to apply the provisions of the Civil Procedure Law. Although the Civil Procedure Law does not provide that parties to an arbitration proceeding conducted in the Hong Kong Special Administrative Region may apply to a mainland court for property preservation before the arbitral award is made, according to Article 3 of Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and of the Hong Kong Special Administrative Region (hereinafter referred to as the Arrangement)[1], the property preservation involved in the case may be examined with reference to the Civil Procedure Law. When applying for preservation of maritime claims involved in the case, the applicant submitted the materials required by Article 4 of the Arrangement[2] and provided guarantees which is sufficient and acceptable, complied with the relevant provisions of the Civil Procedure law. And according to law, its preservation claims should be permitted .​ 

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COMMENTS 

        This is a case in which a party to an arbitration in Hong Kong applied to the maritime court for the preservation of an account before the arbitral award was made. In the process of review, the maritime court analyzed the application of the Civil Procedure Law, the Special Maritime Procedure Law and relevant judicial interpretations comprehensively and considered the Arrangement carefully, setting a typical example for the application of law in similar cases in the future. This case has given full play to the important role of arbitration in the diversified dispute resolution mechanism, reflecting the efforts made by China's maritime judicial field to create an arbitration-friendly judicial environment.

     

        Besides the application in judicial practice we just discussed above, China has also been exploring actively other effective measures aiming at promoting the protection of international commercial arbitration. For instance, on March 31, 2024, the Supreme People's Court launched the "one-stop" diversified international commercial disputes solution platform (https://cicc.court.gov.cn/pc), updated version in the court of international commercial website officially .The "one-stop" platform includes 4 functional modules: mediation service, arbitration service, litigation service and auxiliary service (neutral assessment + case scheduling). It connects the website of the International Commercial Tribunal of the Supreme People's Court, the litigation service network of the Supreme People's Court, the online security system of the People's Court, the mediation platform of the People's Court, the unified identity authentication system of the People's Court on the Internet, the case handling platform of the Supreme People's Court, and 10 international commercial arbitration institutions and 2 international commercial mediation machines that are incorporated into the "one-stop" diversified resolution mechanism of international commercial disputes Structure of the system. After logging in, the parties can choose neutral assessment, mediation, arbitration or litigation and other diversified dispute resolution methods and corresponding institutions according to their actual needs. The Supreme People's Court has all along given full support to and promoted the healthy and orderly development of arbitration. It has successively promulgated the Provisions on Several Issues Concerning the Hearing of Cases for Judicial Review of Arbitration, the Relevant Provisions on the Reporting of Cases for Judicial Review of Arbitration, and the Notice on the Centralized Handling of Relevant Issues in Cases for Judicial Review of Arbitration, with a view to unifying the adjudication standards and protecting the legitimate rights and interests of the parties in accordance with the law.

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        Before the foreign arbitration is initiated, whether the parties to the foreign arbitration can apply for maritime preservation claim of "other property" other than "the four types of property" of the respondent, the practice of maritime courts varies from place to place. The main reason is that there are different opinions held by different judges among maritime courts. How can we cope with this circumstance? In response, Li Jiachun, assistant judge of the Trial Supervision Division (Research Office) of the Shanghai Maritime Court of China, pointed out: "Before the application of foreign arbitration, the applicant, based on its maritime claim, filed an application to the Maritime Court of China for the implementation of property preservation measures against other properties other than the 'four categories of property',  cannot be denied simply because the parties have agreed on a foreign arbitration clause. The maritime court shall accept such applications and decide whether to grant them in the light of the circumstances of the case."[3] In this case, Wuhan Maritime Court ruled to approve Fullinks's application for property preservation, which is consistent with the legislative spirit of pre-litigation preservation in the newly amended Civil Procedure Law, and reflects the accurate grasp and implementation of the maritime claim preservation system under the Special Maritime Procedure Law.

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        Looking at this case from the standpoint of different legal practitioners, we can get different inspirations:

     

        First of all, from the standpoint of judges, judges should form a general principle of how to apply for the relevant legal provisions of maritime preservation while maintaining a flexible grasp of the different circumstances of the case at the same time. Article 28 of the Arbitration Law of the People's Republic of China (2017 Amendment) provides that :"If a party applies for property preservation, the arbitration commission shall submit the party's application to the people's court in accordance with the relevant provisions of the Civil Procedure Law." The right to take compulsory measures to preserve maritime claims belongs to the court in China, so the maritime judicial system should actively support the property preservation before foreign arbitration, which will be crucial to the development of maritime arbitration.

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        Secondly, from the standpoint of lawyers, it should be noted that the requirements of property preservation before arbitration and in arbitration are different in different regions. In China, the current Civil Procedure Law has not clearly stipulated whether a party can apply to a Chinese court for preservation before or during arbitration proceedings abroad. However, in accordance with the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China and the Basic Law of the Macao Special Administrative Region of the People's Republic of China, the Supreme People's Court, in consultation with the Hong Kong Special Administrative Region and the Macao Special Administrative Region respectively, has signed arbitration preservation arrangements for mutual assistance in arbitration proceedings between the courts of the Mainland and the Hong Kong Special Administrative Region, and between the courts of the Mainland and the Macao Special Administrative Region. At present, preservation in arbitral proceedings between the Mainland of China and Hong Kong shall comply with the requirements of the Arrangement. Before the arbitral award is made, the parties have the right to apply to the courts of the Mainland for property preservation in accordance with Article 3 of the Arrangement. The case we analyzed above is a vivid application of the relevant arbitration preservation arrangements,and we can just give a think about it when we encounter the similar question.​

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        [1] Article 3   Before the arbitral award is made, a party to arbitral proceedings in Hong Kong may, by reference to the provisions of the Civil Procedure Law of the People's Republic of China, the Arbitration Law of the People's Republic of China and relevant judicial interpretations, make an application for interim measure to the Intermediate People's Court of the place of residence of the party against whom the application is made (“respondent”) or the place where the property or evidence is situated. If the place of residence of the respondent or the place where the property or evidence is situated fall within the jurisdiction of different people's courts, the applicant shall make an application to any one of those people's courts but shall not make separate applications to two or more people's courts.

        Where an application for interim measure is made after the relevant institution or permanent office has accepted the arbitration case, the party's application shall be passed on by the said institution or permanent office.

        Where a party makes an application for interim measure before the relevant institution or permanent office has accepted the arbitration case, but the people's court of the Mainland has not received a letter from the said institution or permanent office certifying its acceptance of the arbitration case within 30 days after the interim measure is taken, the people's court of the Mainland shall discharge the interim measure.

 

        [2] Article 4    An applicant applying to a people's court of the Mainland for interim measure shall submit the following materials:

        (1) the application for interim measure;

        (2) the arbitration agreement;

        (3) documents of identity: where the applicant is a natural person, a copy of his/her identity card is to

be submitted; where the applicant is a legal person or an organisation which is not a legal person, copies of its certificate of incorporation or registration and the identity card(s) of its legal representative(s) or responsible person(s) are to be submitted;

        (4) where a party makes an application for interim measure after the relevant institution or permanent office has accepted the arbitration case, the request for arbitration setting out the main claim of the arbitration and the facts and justifications on which the claim is based, together with the relevant evidential materials, as well as a letter from the relevant institution or permanent office certifying its acceptance of the relevant arbitration case;

        (5) any other materials required by the people's court of the Mainland.

        Where a document of identity is issued outside the Mainland, such document of identity shall be certified in accordance with the provisions of the relevant laws of the Mainland.

        Where a document submitted to a people's court of the Mainland is not in the Chinese language, the applicant

shall submit an accurate Chinese translation.

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        [3] Li Jiachun. The definition of the scope of maritime claim preservation before foreign arbitration -- On the system of maritime claim preservation in the Maritime Litigation Law [C]// Shanghai Law Research, Volume 17, Volume 65, 2021. Shanghai Maritime Court Trial Supervision Division (Research Office), 2021.8.

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Reference

Primary Sources

Cases

        Fulllinks Marine co ltd v Anhui Technology Import and Export co ltd, (2022)鄂72财保45号之一

Statutes and statutory instruments

        The Special Maritime Procedure Law of the People's Republic of China

        The Civil Procedure Law of the People's Republic of China (2023 Amendment)

        Interpretation of the Supreme People's Court on the Application of the Special Maritime Procedure Law of the People's      Republic of China (2008 Adjustment Version), art 18

        Interpretation of the Supreme People's Court on the Application of the Special Maritime Procedure Law of the People's Republic of China (2008 Adjustment Version), art 21

        Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and of the Hong Kong Special Administrative Region (hereinafter referred to as the Arrangement), art 3-4

        the Arbitration Law of the People's Republic of China (2017 Amendment), art 28

 

Secondary Sources

Journal articles

        Li Jiachun. The definition of the scope of maritime claim preservation before foreign arbitration -- On the system of maritime claim preservation in the Maritime Litigation Law [C]// Shanghai Law Research, Volume 17, Volume 65, 2021. Shanghai Maritime Court Trial Supervision Division (Research Office), 2021.8.

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