This was an application for retrial brought by Russian Inspectors & Marine Surveyors Corp (RIMSCO) against a decision of the lower Court holding RIMSCO fully liable for delay in the delivery of cargo carried by sea.

RIMSCO argued that there was no clear agreement on the time of delivery of the cargo, and no delay or unreasonable deviation. The Court below also erred in its finding that the ship was unseaworthy, resulting in RIMSCO being unable to invoke limitation of liability under art 57 of the Maritime Code of the People's Republic of China. The ship encountered severe weather and sea conditions during the voyage and was forced to go to Busan to carry out repairs. This did not constitute an unreasonable deviation.

Held: application for retrial dismissed.

The cargo (Pacific herring) purchased by the respondent, Globle Visa Co (GV) was carried on the Professor Mikov, which was demise chartered by RIMSCO. The certificate of origin stated the route 'Bering Sea - Vladivostok, Russia - Dalian, China'. The lower Court found that the parties had agreed on the approximate time of arrival of the goods, and on the customary or geographical route. The ship deviated from this route.

Article 49 of the Maritime Code provides that '[t]he carrier shall carry the goods to the port of discharge on the agreed or customary or geographically direct route'. Article 50 of the Maritime Code provides that:

Delay in delivery occurs when the goods have not been delivered at the designated port of discharge within the time expressly agreed upon. The carrier shall be liable for the loss of or damage to the goods caused by delay in delivery due to the fault of the carrier, except those arising or resulting from causes for which the carrier is not liable as provided for in the relevant Articles of this Chapter. The carrier shall be liable for the economic losses caused by delay in delivery of the goods due to the fault of the carrier, even if no loss of or damage to the goods had actually occurred, unless such economic losses had occurred from causes for which the carrier is not liable as provided for in the relevant Articles of this Chapter.

As RIMSCO took four months to deliver the goods, it was correct for the lower Court to find that there was an unreasonable deviation and a delay in the delivery of goods. RIMSCO is liable for compensation.

As to the seaworthiness of the vessel, the lower Court found that the Russian ship registry noted on the vessel's certificate of classification: 'Auxiliary generator No 1 is not working properly' and 'the vessel can sail only until 4 June 2015 without auxiliary generator No 1'. Nonetheless, RIMSCO did not repair the relevant equipment. This is not in compliance with navigation safety requirements. The conclusion of the lower Court that the vessel was unseaworthy at the time of sailing on 28 July 2015 is justified.

The lower Court correctly applied art 59 of the Maritime Code. Article 59 provides:

The carrier shall not be entitled to the benefit of the limitation of liability provided for in Article 56 or 57 of this Code if it is proved that the loss, damage or delay in delivery of the goods resulted from an act or omission of the carrier done with the intent to cause such loss, damage or delay or recklessly and with knowledge that such loss, damage or delay would probably result.

Article 56 provides:

The carrier's liability for the loss of or damage to the goods shall be limited to an amount equivalent to 666.67 Units of Account per package or other shipping unit, or 2 Units of Account per kilogramme of the gross weight of the goods lost or damaged, whichever is the higher, except where the nature and value of the goods had been declared by the shipper before shipment and inserted in the bill of lading, or where a higher amount than the amount of limitation of liability set out in this Article had been agreed upon between the carrier and the shipper.

Where a container, pallet or similar article of transport is used to consolidate goods, the number of packages or other shipping units enumerated in the bill of lading as packed in such article of transport shall be deemed to be the number of packages or shipping units. If not so enumerated, the goods in such article of transport shall be deemed to be one package or one shipping unit.

Where the article of transport is not owned or furnished by the carrier, such article of transport shall be deemed to be one package or one shipping unit.

Article 57 provides:

The liability of the carrier for the economic losses resulting from delay in delivery of the goods shall be limited to an amount equivalent to the freight payable for the goods so delayed. Where the loss of or damage to the goods has occurred concurrently with the delay in delivery thereof, the limitation of liability of the carrier shall be that as provided for in paragraph 1 of Article 56 of this Code.

RIMSCO is thus not entitled to limit its liability under arts 56 or 57 of the Maritime Code.