This dispute arose from the shipment of four containers from Xiamen, China, to Dammam, Saudi Arabia. Hong Qiang Industry Ltd (HK Hong Qiang) engaged Xiamen Baisen Supply Chain Co Ltd (Baisen) to arrange the shipment, and Baisen in turn instructed Xiamen Shippingwell Supply Chain Co Ltd (Shippingwell) to make the booking. In its booking with the agent of Yang Ming (Singapore) Pte Ltd (YM Singapore), Shippingwell described the cargo as general cargo under 'Wood Piece Faham'. YM Singapore issued the bills of lading, and the containers were carried on the YM Movement to Jebel Ali for transhipment. They were loaded onto the YM Wellbeing on 31 July 2022. The following day, smoke was detected from one of the containers, prompting firefighting measures, and the vessel's return to Jebel Ali. Subsequent investigation showed that the goods were in fact charcoal products marketed as 'Quick Lighting Charcoal' and 'Torch Coal', rather than the wood pieces or blocks suggested by the declared description. The incident was attributed to spontaneous combustion of the cargo.

YM Singapore sought compensation from Xiamen Hongqiang Huatan Import and Export Co Ltd (XM Hong Qiang), HK Hong Qiang, Baisen and Shippingwell for losses arising from the fire. The Xiamen Maritime Court found XM Hong Qiang to be the true shipper and liable for misdeclaring the cargo, ordering it to pay CNY 867,062.36 plus interest. Baisen was jointly and severally liable with XM Hong Qiang for 20 per cent of the loss, and Shippingwell with Baisen for 10 per cent. XM Hong Qiang and Shippingwell appealed.

Held: Appeals dismissed.

The High People's Court of Fujian Province confirmed that XM Hong Qiang was the actual shipper. Although the bills of lading named HK Hong Qiang as shipper, the Court did not treat the transport documents as conclusive. Having regard to the manner in which the transaction and carriage arrangements were carried out, together with the insurance, production, and shipping records, it concluded that XM Hong Qiang had conducted the transaction under the name HK Hong Qiang, and had in substance performed the shipper's role.

The Court next addressed the cargo description. Charcoal falls within Class 4.2 of the IMDG Code as a substance liable to spontaneous combustion. XM Hong Qiang knew that the goods consisted of 'Quick Lighting Charcoal' and 'Torch Coal', but they were booked as 'Wood Piece Faham'. That expression was not a recognised shipping description and gave no adequate indication of the cargo's self-heating characteristics. The evidence following the incident, including the handling of the misdeclaration charge, further supported the conclusion that the cargo had not been properly described.

The Court further held that, even if the evidence did not conclusively establish the precise regulatory classification of the two charcoal products, their self-heating characteristics were plainly different from those conveyed by the declared description. Because the carrier had not been informed of the true nature of the goods, it had no basis for applying the precautions appropriate to self-heating cargo. Article 67 of the PRC Maritime Code places responsibility on the shipper for completing the necessary shipment formalities and for losses caused to the carrier by inaccurate or inadequate documentation. Liability under that provision does not depend on whether the misdeclaration was intentional or negligent. XM Hong Qiang was therefore responsible for the resulting loss. The Court's application of art 67 addresses the same core allocation of risk as art 4.6 of the Hague and Hague-Visby Rules, which concerns inflammable, explosive, or otherwise dangerous goods shipped without the carrier's informed consent, and places the resulting loss and expenses on the shipper.

The Court rejected any contributory fault on the part of YM Singapore, holding that it was entitled to treat the cargo as general cargo on the basis of the information provided, and that there was no evidence of improper handling during carriage. Baisen, having been involved in stuffing and aware that the packaging identified the goods as charcoal, was jointly and severally liable for 20 per cent of the loss. Shippingwell, although not directly instructed by the shipper, was also at fault for failing to exercise reasonable professional care in verifying the cargo information and remained jointly and severally liable for 10 per cent.