This case arose from the grounding of the Chinese fishing vessel Ou Ya Leng 6 at Taka Atoll in the Marshall Islands. Ningbo Eurasian Ocean Fishery Co Ltd (Ningbo), the vessel's owner and operator, had taken out bunker oil pollution liability insurance with the Beijing branch of an insurer. It also had separate hull and P&I cover. After the grounding, Ningbo engaged PII Co to recover, remove and dispose of fuel oil and lubricating oil from the vessel. The work was later confirmed in writing by the Marshall Islands environmental authority.

Ningbo brought proceedings before the Guangzhou Maritime Court, claiming reimbursement of the pumping costs and interest under the bunker oil pollution liability policy. The insurer's Beijing branch argued that the operation was not only a pollution prevention measure, but also involved salvage and wreck removal. Since Ningbo Eurasian also had hull and P&I cover, the costs should be shared among the three types of insurance rather than borne entirely under the bunker oil pollution policy. The Guangzhou Maritime Court ordered the insurer's Beijing branch to indemnify Ningbo. The Beijing branch appealed to the High People's Court of Guangzhou Province.

Held: Appeal dismissed.

The Court held that the main issue was the legal nature of the pumping operation, which had to be considered in light of the relevant international Conventions applicable to China.

Article 1.a of the International Convention on Salvage 1989 (the Salvage Convention) defines a salvage operation as an 'act or activity undertaken to assist a vessel or other property in danger'. The Court held that the operation on the Ou Ya Leng 6 was carried out to prevent or reduce marine pollution by removing fuel oil and lubricating oil from the vessel. It was not undertaken to assist a vessel or other property in danger. The vessel was also not at imminent risk of capsizing. The operation therefore did not constitute salvage within art 1.a of the Salvage Convention.

The Court also held that the operation did not amount to wreck removal under the Nairobi International Convention on the Removal of Wrecks 2007. Its purpose was to remove oil from the vessel and prevent pollution, rather than to remove the wreck itself.

The Court further treated the operation as a pollution prevention measure under the International Convention on Civil Liability for Bunker Oil Pollution Damage 2001. It therefore rejected the insurer's argument that the costs should be shared among the bunker oil pollution, hull, and P&I policies.

The Court concluded that the pumping costs fell within the cover provided by the bunker oil pollution liability insurance and did not exceed the applicable liability limit under Chinese law. The insurer's Beijing branch was therefore liable to indemnify Ningbo.