Lanrich Oil (International) Limited v Shi Chuanhao & Yangpu Jinhao Shipping Co., Ltd. in respect of dispute over contract of supply of ship stores and spare parts

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Lanrich Oil (International) Limited v Shi Chuanhao & Yangpu Jinhao Shipping Co., Ltd. in respect of dispute over contract of supply of ship stores and spare parts

 

Case No.: (2016) Q72 MC No.17

Cause of action: Dispute over contract of supply of ship stores and spare parts

Sea area involved: N/A

Date: 23 June 2016

 

Gist

 

  1.  Limitation of action is discontinued if a suit is brought or if one party makes a claim or agrees to perform its obligations. New limitation shall be counted from the time of the discontinuance.
  2.  The party is obligated to produce evidence to prove the facts based on which it makes its litigation requests or rebuts those made by the opponent party. If there is no evidence or the evidence is not sufficient to prove the facts as alleged, the party bearing the burden of proof shall undertake the unfavorable consequences. 

 

Applicable laws

 

  1.  Article 60, Article 107, and Article 109 of the Contract Law of the People’s Republic of China;
  2.  Article 135 and Article 140 of the General Principles of the Civil Law of the People’s Republic of China;
  3.  Paragraph 1 of Article 64 and Article 144 of the Civil Procedure Law of the People’s Republic of China;
  4.  Article 2 of Some Provisions of the Supreme People's Court on Evidence in Civil Procedures.

 

Basic facts 

 

On 15 June 2013 and 30 October 2013, the claimant Lanrich Oil (International) Limited (formerly known as Lanrich Enterprise) supplied bunker to “Yi Hai 268” owned by the defendant Yangpu Jinhao Shipping Co., Ltd., for which the claimant received two bunker supply receipts. The bunker receipt (0002558) dated 15 June 2013 recorded: the ship “Yi Hai 268” took 20 tons of heavy fuel oil at the unit price of RMB4,100/ton totaling RMB82,000 and 4 tons of marine diesel oil at the unit price of RMB5,800/ton totaling  RMB23,200, with the total amount at RMB105,200. The bunker receipt (0002195) dated 30 October 2013 recorded: the ship “Yi Hai 268” took 24 tons of heavy fuel oil at unit price of RMB4,100/ton totaling RMB98,400 and 1.5 tons of marine diesel oil at unit price of RMB5,800/ton totaling RMB8,700, with the total amount at RMB107,100. The two bunkering operations cost RMB212,300. The two bunker receipts bore the company seal of “Yangpu Jinhao Shipping Co., Ltd.”, the ship’s stamp of “Yi Hai 268”, and the signature of “Shi Chuanhao” at the space for signature of receiver and company seal. As the defendant did not pay for the supplied bunker in full, the claimant entrusted lawyer to send lawyer’s letter to the defendant Jinhao Shipping on 13 October 2014 to demand the bunker payment. The employee of Jinhao Shipping accepted the letter on 16 October 2014. The claimant confirmed that the defendant had paid part of the bunker payment, with RMB164,100 unsettled.   

 

The court also found that the defendant Jinhao Shipping was the registered owner and operator of “Yi Hai 268” during 6 December 2011 and 16 July 2015. Lanrich Enterprise changed its name to Lanrich Oil (International) Limited on 12 March 2014. 

 

Lanrich Oil (International) Limited lodged a lawsuit before this court, requesting that: 1. The two defendants shall jointly repay the claimant the amount of RMB164,100 plus interest accrued from October 2014 until the actual payment date at the bank’s loan interest rate over the same period; 2. The two defendants shall bear all the litigation costs of the subject case.

 

Reasoning

 

Opinions of the effective judgment: the subject case was a dispute over contract of supply of ship stores and spare parts. The disputed issues of the subject case concerned whether the claimant and defendant established a contractual relationship for the supply of ship stores and spare parts, whether the defendant Jinhao Shipping and Shi Chuanhao were obligated to pay RMB164,100 plus interest to the claimant for the supply of bunker, and whether the claimant brought the lawsuit beyond the time bar.

 

As regards whether the claimant and defendant established a contractual relationship for the supply of ship stores and spare parts, since the claimant had supplied bunker to “Yi Hai 268” and the defendant Jinhao Shipping, which was the ship owner and operator registered at the maritime administrations, had affixed ship’s stamp as confirmation, the parties had actually established a contractual relationship for the supply of ship stores and spare parts. It was a common practice in the shipping industry that the ship’s stamp could be used as acknowledgment for bunkering and other navigational affairs. Although the defendant challenged the authenticity of the ship’s stamp and bunker receipts, it could not produce evidence to support its dissent, and so the court did not approve the challenge of the defendant. The defendant Jinhao Shipping also alleged that it was not the actual operator of “Yi Hai 268” which was only attached to the company for operation. Again, the defendant could not provide any evidence, and the court hence did not approve such allegation. The claimant had supplied bunker to the ship as agreed, but the defendant Jinhao Shipping did not make payment in full and hence breached the contract. The defendant shall pay the outstanding amount of the bunker payment and interest so accrued. Since the claimant and defendant did not set a time limit for payment, the interest on the overdue amount shall be calculated from 20 October 2014, i.e. the expiry of the time limit set forth in the lawyer’s letter received by Jinhao Shipping from the claimant. The claimant could not produce evidence to confirm that the defendant Shi Chuanhao was the actual operator of “Yi Hai 268” or that he had an interest in the ship, so it could not prove that Shi Chuanhao and the claimant had established a contractual relationship for the supply of ship stores and spare parts. Therefore, the request of the claimant to hold the defendant Shi Chuanhao liable for breach of contract had no factual or legal basis and was dismissed by the court.             

 

As regards whether the claimant brought the lawsuit beyond the time bar, the claimant sent a lawyer’s letter on 13 October 2014, which constituted a disconnection of limitation of action. The limitation of action shall be calculated from the date of call. Therefore, the claimant was lodging the lawsuit within the time bar prescribed by law.

     

Judgment

 

  1.  The defendant Yangpu Jinhao Shipping Co., Ltd shall, with ten days upon the effect of this judgment, repay the claimant Lanrich Oil (International) Limited RMB164,100 plus interest accrued from 20 October 2014 to the actual payment day at one-year loan interest rate published by the People’s Bank of China over the same period;
  2.  Other litigation requests of the claimant Lanrich Oil (International) Limited were dismissed. (The parties did not appeal.)