This case arose from the grounding of the Yuan Jing in waters near Tra Vinh Province, Vietnam. Guangzhou Salvage Bureau (the Bureau) had engaged South China Sinotrans Supply Chain Management Co Ltd (Sinotrans) to transport offshore wind power equipment. Guangzhou COSCO Shipping Engineering Logistics Co Ltd (COSCO) was the owner of the vessel, Nanjing Siluda Shipping Co Ltd (Siluda) was its bareboat charterer and actual operator, and Sinotrans used the vessel under a time charter to carry the cargo. On 26 June 2021, the Yuan Jing ran aground during the voyage. Sinotrans asked the Bureau to assist in refloating the vessel. The Bureau then deployed vessels to assist, and the Yuan Jing was successfully refloated later that day. The parties had not agreed in advance on any reward for the refloating operation.

The Bureau argued that the Yuan Jing and its cargo were in actual danger, and that its refloating operation had succeeded. It therefore claimed that the operation constituted maritime salvage. The Bureau brought proceedings before the Guangzhou Maritime Court, seeking RMB 17 million in salvage reward and interest from Sinotrans, Siluda, and COSCO.

The three defendants denied that the operation constituted maritime salvage. They argued that the Yuan Jing was not in imminent danger after the grounding and might have refloated by itself as the tide rose, even without tug assistance. They also argued that the Bureau had its own commercial interest in the cargo and the project, and that the parties had not entered into a salvage agreement. In their view, even if some compensation was payable, it should not be calculated as a salvage reward.

Held: Claim allowed in part.

The Guangzhou Maritime Court held that the case involved foreign elements because the Yuan Jing had grounded in Vietnamese waters while sailing from Guangdong, China, to the customs clearance anchorage for the Tra Vinh Project. The parties agreed during the proceedings that Chinese law should apply. China is a State Party to the International Convention on Salvage 1989 (the Convention), and the case fell within the scope of that Convention. Chapter 9 of the Maritime Code of the PRC was largely based on the Convention. Where Chinese law and the Convention were consistent, both could apply. Where they differed, the Convention prevailed.

Article 1.a of the Convention defines a salvage operation as 'any act or activity undertaken to assist a vessel or other property in danger'. The Court held that the Yuan Jing, its cargo, and freight at risk were in danger after the grounding. The Bureau had no pre-existing duty to provide salvage and its towing operation successfully refloated the vessel. The operation therefore constituted maritime salvage.

The Court held that the Bureau was entitled to a salvage reward. The fact that the Bureau also benefited from the successful refloating did not change the nature of the operation. The Yuan Jing and the relevant parties had not refused the assistance, and the operation achieved a useful result.

In fixing the reward, the Court considered the value of the salved vessel and other property, the costs incurred by the salvor, and the nature and degree of the danger. It also took into account the benefit obtained by the Bureau itself. The total salvage reward was fixed at RMB 3 million.

As to liability, art 13.2 of the Convention provides that 'payment of a reward fixed according to paragraph 1 shall be made by all of the vessel and other property interests in proportion to their respective salved values'. The Court held that liability was therefore not limited to the shipowner. COSCO, as the registered owner of the Yuan Jing, and Siluda, as its bareboat charterer and actual operator, were both vessel interests and were jointly liable for RMB 1.662 million. Sinotrans, as the carrier, had an interest in the freight at risk and was liable for RMB 138,000. The Bureau's remaining claims were dismissed.