This case arose out of a collision between the CMA CGM Florida and the Chou Shan in the East China Sea, which caused bunker oil to leak from the CMA CGM Florida and resulted in pollution damage. This case arose out of the same collision and bunker spill as in Shanghai Xin'an Shipping Co Ltd v Provence Shipowner 2008-1 Ltd (CMI2821), but concerned a separate claim by the Ministry of Transport Shanghai Salvage Bureau for salvage remuneration and pollution prevention and clean-up costs arising from its deployment of the Shen Qian, the Lian He Zheng Li, and the De Yong in the emergency response. The first instance Court held that Shanghai Salvage Bureau's operations did not constitute salvage but were pollution prevention and clean-up operations, and confirmed its maritime claim against Provence Shipowner 2008-1 Ltd and CMA CGM SA for RMB 8,958,539. The appeal Court upheld that judgment. Shanghai Salvage Bureau applied to the Supreme People's Court for retrial.

Shanghai Salvage Bureau argued that its operations, including underwater inspection, cutting away outward-bent steel plates, removing oil from damaged holds, standby services, and escorting, constituted salvage. It argued that, even if some operations were characterised as pollution prevention and clean-up, Provence and CMA CGM were liable for the relevant costs, and Rockwell, as owner of the Chou Shan, was also liable in proportion to the Chou Shan's 50% share of fault. Provence, CMA CGM and Rockwell argued that the Bureau's operations were essentially pollution prevention and clean-up rather than salvage, that SCOPIC rates should not apply, that the owner of the non-leaking vessel was not liable for oil pollution damage, and that the relevant pollution prevention and clean-up costs were subject to limitation of liability.

Held: Retrial application allowed in part; Shanghai Salvage Bureau's operations divided between salvage and pollution prevention and clean-up; Provence and CMA CGM liable for non-limitable salvage remuneration of RMB 13,295,446.45 plus interest, and for pollution prevention and clean-up costs of RMB 6,324,841.70 plus interest within their limitation fund; Rockwell liable for RMB 3,162,420.85 plus interest, representing 50% of those pollution prevention and clean-up costs, recoverable from Rockwell's limitation fund; Shanghai Salvage Bureau's aggregate recovery for pollution prevention and clean-up costs capped at RMB 6,324,841.70 plus interest.

The Court first reconsidered the nature of Shanghai Salvage Bureau's operations. The lower Courts had characterised all of the Bureau's operations as pollution prevention and clean-up. The Supreme People's Court held that this was partly wrong. The Court distinguished the actual functions and work of the three vessels. The Shen Qian mainly carried out underwater inspection, lifting operations, container handling and cutting away outward-bent steel plates, all of which were connected with stabilising and salvaging the CMA CGM Florida. The Lian He Zheng Li mainly extracted and received oily water from the damaged holds, and therefore performed pollution prevention and clean-up work. The De Yong mainly assisted the Shen Qian and the Lian He Zheng Li by transporting personnel, materials and containers. The Court therefore treated the costs of the Shen Qian and 50% of the costs of the De Yong as salvage remuneration, and the costs of the Lian He Zheng Li and the remaining 50% of the costs of the De Yong as pollution prevention and clean-up costs.

As to the Salvage Convention 1989 and SCOPIC, the Court held that the SCOPIC Clause was developed as a simpler and clearer method of calculating special compensation in place of the mechanism in art 14 of the Salvage Convention 1989. SCOPIC remuneration is based on the tariff in Appendix A and covers personnel, tugs and other craft, portable salvage equipment, out-of-pocket expenses and a bonus. Although there was no LOF contract between the parties and no agreement directly applying the SCOPIC Clause, SCOPIC rates are widely used in the international salvage market. In the absence of Chinese government-guided rates or generally adopted industry rates, and where the parties had not proved any more widely accepted or authoritative international salvage rates, the Court held that SCOPIC rates could be used by reference to assess the reasonable costs of the international salvage and related pollution prevention and clean-up operations.

The Court further held that SCOPIC rates could provide a basis for quantification but should not be applied mechanically. For the tug De Yong, the Court referred to the tug rates in Appendix A of the SCOPIC Clause and held that the rate of RMB 1 per horsepower hour adopted by the lower courts was broadly appropriate. For the Shen Qian and the Lian He Zheng Li, which were not tugs, the Court held that their rates should not be calculated simply by reference to horsepower hours. The Court took into account the type, gross tonnage, power, equipment, navigation area, construction cost and actual role of each vessel. It assessed the daily rate of the Lian He Zheng Li at RMB 321,336 and that of the Shen Qian at RMB 1,028,275.20. For personnel and equipment costs covered by SCOPIC rates, the Court allowed a 25% uplift in view of the successful salvage and the significant pollution prevention and clean-up effect.

As to the Bunker Convention 2001, the Court held that China was a party to that Convention and that the case fell within its scope. The pollution prevention and clean-up operations performed by Shanghai Salvage Bureau were preventive measures under the Convention, and the reasonable costs of those operations were costs of preventive measures within pollution damage. Provence, as owner of the CMA CGM Florida, and CMA CGM, as bareboat charterer and operator of that vessel, were shipowners within art 1.3 of the Bunker Convention 2001 and were liable under art 3.1 for the pollution damage caused by the bunker oil spill.

As to the liability of the non-leaking vessel, the Court adopted the same approach as in Shanghai Xin'an Shipping Co Ltd v Provence Shipowner 2008-1 Ltd (CMI2821). Article 3.1 of the Bunker Convention 2001 is a positive rule on the liability of the owner of the leaking vessel, but it does not exclude the liability of other persons at fault. The Convention does not determine whether the owner of a negligent non-leaking vessel is directly liable to the pollution claimant where a collision between two vessels at fault causes one vessel to leak bunker oil. That issue was therefore governed by domestic law. Because the navigational fault of the Chou Shan contributed to the collision with the CMA CGM Florida and caused the latter to leak bunker oil, Rockwell, as owner of the Chou Shan, was liable for pollution prevention and clean-up costs in proportion to the 50% share of fault attributed to that vessel in the earlier collision judgment.

As to limitation of liability, the Court distinguished between salvage remuneration and pollution prevention and clean-up costs. Under the Maritime Code of the PRC, claims for salvage remuneration are not subject to limitation of liability. Shanghai Salvage Bureau's claim against Provence and CMA CGM for salvage remuneration of RMB 13,295,446.45 plus interest was therefore a non-limitable maritime claim. By contrast, the pollution prevention and clean-up costs were costs of preventive measures within pollution damage under the Bunker Convention 2001. Article 6 of the Bunker Convention 2001 preserves the right of shipowners to limit liability under any applicable national or international regime. The limitability of those costs was therefore to be determined under the Maritime Code of the PRC and the relevant limitation rules. The Court held that the pollution prevention and clean-up costs were subject to limitation of liability and should be recovered proportionately from the limitation funds constituted by Provence and CMA CGM, and by Rockwell. Shanghai Salvage Bureau's aggregate recovery for pollution prevention and clean-up costs was capped at RMB 6,324,841.70 plus interest.