This case arose out of a collision between the Panama-flagged bulk carrier Ken Breeze and the Panama-flagged container ship Pacific Grace in the Qiongzhou Strait, China. Delica Shipping SA, the owner of the Ken Breeze, was the plaintiff. Gemadept Shipping Singapore Pte Ltd, the owner of the Pacific Grace, was the defendant. The plaintiff argued that the defendant was 100%, or at least mainly, responsible for the collision, and claimed compensation for the losses suffered by the Ken Breeze. The defendant argued that the Ken Breeze was wholly or mainly responsible because it had crossed the centre line of the middle channel of the Qiongzhou Strait and navigated on the wrong side of the channel.

Held: Liability apportioned between the Pacific Grace and the Ken Breeze at 60% and 40%.

Both vessels were Panama-flagged. Under art 273.3 of the Maritime Code of the PRC, damages between colliding ships of the same nationality are governed by the law of the flag State. The Court therefore applied Panamanian law to collision liability and damages. Under art 275 of the Maritime Code of the PRC, limitation of liability was governed by the law of the forum, namely Chinese law.

The Court considered Panamanian law. Although Panama was not a party to the Collision Convention 1910, Panama had adopted a rule similar to art 4 of Collision Convention 1910. Article 208 of Panama Law No 55 of 2008 provides that, in a case of collision caused by common fault, each colliding vessel is liable in proportion to the degree of fault attributed to it.

The Court assessed the parties' fault by reference to the evidence and the COLREGs. It found both vessels at fault. The Pacific Grace bore the greater responsibility because the vessels were in a head-on situation, but it wrongly altered course to port rather than to starboard. The Pacific Grace also failed to keep a proper lookout, failed to respond to VHF calls, and failed to take early and effective avoiding action. The Ken Breeze was also at fault because it navigated on the wrong side of a narrow channel and failed to take early avoiding action after the risk of collision had arisen.

The Court also considered the Lisbon Rules 1987. The evidence on Panama law showed that the Lisbon Rules could be used to determine the scope of recoverable collision damage only where the parties had expressly agreed to their application. Since the parties had not agreed to apply the Lisbon Rules, the Court did not assess the losses by reference to those Rules.

The Court found that the plaintiff's proved collision losses amounted to USD 3,659,286.79. The defendant was liable for 60% of those losses. The Court confirmed the plaintiff's claim against the limitation fund in the amount of RMB 14,257,838 plus interest. The plaintiff's remaining claims were dismissed.