Maritime Code of The People's Republic of China (2025 Revision)

Promulgated by ： Standing Committee of the National People's Congress

Promulgation Date ： 2025.10.28

Effective Date ： 2026.05.01

Validity Status ： To be effective

Document No. ： Presidential Order No. 58

Maritime Code of the People's Republic of China

Presidential Order No. 58

The Maritime Code of the People's Republic of China was revised and adopted at the 18th Session of the Standing Committee of the 14th National People's Congress of the People's Republic of China on October 28, 2025, and is hereby promulgated. It shall come into force on May 1, 2026.

President of the People's Republic of China Xi Jinping

October 28, 2025

Maritime Code of the People's Republic of China

(Adopted at the 28th Session of the Standing Committee of the Seventh National People's Congress on November 7, 1992; revised at the 18th Session of the Standing Committee of the 14th National People's Congress on October 28, 2025)

Chapter 1 General Provisions

Article 1  This Law is enacted for the purposes of regulating maritime transport relations and vessel relations, protecting the lawful rights and interests of all parties concerned, strengthening the protection of the marine ecological environment, and promoting the high-quality development of maritime transport and economic and trade.

Article 2  Maritime transport as referred to in this Law means the carriage of goods by sea and the carriage of passengers by sea, including direct transport between sea and rivers and between rivers and sea.

Article 3  Vessel as referred to in this Law means sea-going ships and other offshore mobile installations, except for vessels used for military purposes or government public service and small boats of less than 20 gross tons. Vessel includes appurtenances to the vessel.

Article 4  A vessel that has lawfully obtained the nationality of the People's Republic of China through registration shall have the right to fly the national flag of the People's Republic of China in navigation.

A vessel that fails to lawfully fly the national flag of the People's Republic of China or sails in violation by flying the flag of another country, region, or organization shall be ordered by the competent authority to make corrections, and legal liability shall be pursued in accordance with law.

Article 5  Maritime transport and towage between ports of the People's Republic of China shall be operated by vessels that have lawfully obtained the nationality of the People's Republic of China. However, where laws or administrative regulations provide otherwise, such provisions shall prevail.

Without the approval of the competent department of transport under the State Council according to law, foreign vessels shall not engage in maritime transport and towage between ports of the People's Republic of China.

Article 6  The competent department of transport under the State Council, the relevant local people's governments and their competent departments of transport shall, in accordance with law, exercise supervision and administration over maritime transport activities.

Chapter 2 Vessels

Section 1 Ownership of Vessels

Article 7  Ownership of a vessel means the right of the vessel owner to lawfully possess, use, benefit from, and dispose of the vessel.

Article 8  The establishment, modification, transfer, and extinction of ownership of a vessel shall be registered with the vessel registration authority; absent registration, it shall not be asserted against a bona fide third party.

The lessor's ownership in a vessel under a ship finance lease contract shall not be asserted against a bona fide third party unless registered. The lessee shall pay rent in accordance with the ship finance lease contract. Where the lessee, after being urged, still fails to pay rent within a reasonable period, the lessor may request payment of all rent; or may rescind the ship finance lease contract and repossess the finance-leased vessel.

Transfer of ownership of a vessel shall be effected by a written contract.

Article 9  Where a vessel is co-owned by two or more legal persons, unincorporated organizations, or natural persons, such co-ownership shall be registered with the vessel registration authority; absent registration, it shall not be asserted against a bona fide third party.

Right holders in the vessel, interested parties, and relevant state authorities may, in accordance with law, inquire into the registration status of vessel ownership.

Article 10  With respect to ownership of a vessel under construction, where the parties have agreed on its attribution, such agreement shall prevail; where there is no agreement or the agreement is unclear, ownership shall vest in the shipbuilder.

Section 2 Mortgage of Vessels

Article 11  Mortgage of a vessel means the right of the mortgagee, with respect to a vessel provided by the mortgagor as security for obligations, to lawfully enjoy priority of compensation against such vessel when the debtor fails to perform due obligations or when circumstances agreed upon by the parties for realization of the mortgage arise.

Article 12  The vessel owner or a person authorized by the vessel owner may establish a mortgage over the vessel.

Establishment of a vessel mortgage shall be effected by a written contract.

Article 13  The establishment, modification, transfer, and extinction of a vessel mortgage shall be registered with the vessel registration authority; absent registration, it shall not be asserted against a bona fide third party.

Registration of a vessel mortgage shall be jointly handled by the mortgagee and the mortgagor with the vessel registration authority.

Registration of a vessel mortgage shall include the following main particulars:

(1) the names or designations and domiciles of the vessel mortgagee and the mortgagor;

(2) the name and nationality of the mortgaged vessel, the issuing authority and number of the vessel ownership certificate;

(3) the amount of the secured claim and the time period for compensation;

(4) the time of registration of the mortgage.

The registration status of a vessel mortgage shall be available for public inquiry.

Article 14  A vessel under construction may be subjected to a vessel mortgage.

For registration of a mortgage over a vessel under construction, the relevant documents shall be submitted to the vessel registration authority in accordance with relevant provisions.

Article 15  Unless otherwise agreed in the contract, the mortgagor shall effect insurance on the mortgaged vessel; if not insured, the mortgagee shall be entitled to insure the vessel, and the insurance premium shall be borne by the mortgagor.

Article 16  Unless otherwise agreed among the co-owners of the vessel, the establishment of a mortgage over a co-owned vessel shall be handled under the following circumstances:

(1) For a vessel held in tenancy in common by shares, consent shall be obtained from co-owners holding two-thirds or more of the shares;

(2) For a vessel held in joint tenancy, consent shall be obtained from all co-owners.

A mortgage established by a co-owner of a vessel shall not be affected by the partition of co-ownership of the vessel.

Article 17  After a vessel mortgage has been established, the mortgagor may transfer the mortgaged vessel. Where the parties have otherwise agreed, such agreement shall prevail. Transfer of the mortgaged vessel shall not affect the vessel mortgage.

Article 18  Where the claim secured by the vessel mortgage is transferred, the mortgage shall be transferred concurrently, except as otherwise provided by law or agreed by the parties.

Article 19  Where two or more vessel mortgages are established over the same vessel, the order of compensation shall be determined as follows:

(1) Where vessel mortgages have been registered, compensation shall be made in the order of registration times;

(2) A registered vessel mortgage shall have priority of compensation over an unregistered one;

(3) Where vessel mortgages have not been registered, compensation shall be made in proportion to the secured claims.

Article 20  Where the mortgaged vessel is damaged, lost, or expropriated, the mortgagee may enjoy priority of compensation out of the insurance proceeds, indemnities, compensations and the like obtained.

Section 3 Maritime Liens

Article 21  Maritime lien means the right of a maritime claimant, in accordance with this Law, to assert a maritime claim against the vessel owner, bareboat charterer, vessel manager, or vessel operator, with priority of compensation over the vessel that gives rise to such maritime claim.

Article 22  Maritime liens shall arise for the following maritime claims:

(1) claims for wages and other labor remuneration of the master, seafarers, and other on-board working personnel for work on board, repatriation expenses of seafarers, and social insurance contributions;

(2) claims for compensation for personal injury or death occurring in the vessel's operation;

(3) claims for payment of tonnage dues of the vessel, pilotage fees, and other port charges;

(4) claims for payment of salvage remuneration for maritime salvage;

(5) claims for compensation for property damage arising from tortious acts occurring in the vessel's operation, excluding claims for loss of or damage to cargo, containers, and passengers' luggage carried on the vessel.

Pursuant to international treaties concluded or acceded to by the People's Republic of China or mandatory provisions of laws or administrative regulations, where civil liability insurance has been obtained or corresponding financial security is in place, the maritime claims prescribed in items (2) and (5) of the preceding paragraph shall not enjoy maritime lien within the scope of such insurance or financial security.

Article 23  The maritime claims listed in paragraph 1 of Article 22 of this Law shall be compensated in order. However, where the maritime claims under item (4) occur later than those under items (1) through (3), they shall be compensated prior to those under items (1) through (3).

Where two or more maritime claims exist under items (1), (2), (3), and (5) of paragraph 1 of Article 22 of this Law, compensation shall be made concurrently without regard to priority, and, to the extent insufficient, in proportion; where two or more maritime claims exist under item (4), those occurring later shall be compensated first.

Article 24  Litigation costs arising from the exercise of maritime liens, costs incurred in the preservation, auction, or sale of the vessel and the distribution of vessel proceeds, as well as other costs paid for the common benefit of maritime claimants, shall be first allocated out of the proceeds from auction or sale of the vessel.

Article 25  A maritime lien shall not be extinguished due to transfer of vessel ownership. However, where the vessel is transferred, and the maritime lien is not exercised within sixty days from the date on which the court, upon application by the intended transferee, makes a public announcement, the lien shall be extinguished.

Article 26  Where a maritime claim enjoying maritime lien as provided in Article 22 of this Law is assigned or subrogated, the maritime lien attached thereto shall be transferred accordingly.

Article 27  Maritime liens shall be exercised through court arrest of the vessel that gives rise to the lien.

Article 28  Except as provided in Article 25 of this Law, maritime liens shall be extinguished for any of the following reasons:

(1) failure to exercise within one year from the date of arising;

(2) lawful auction or sale of the vessel by the court;

(3) loss of the vessel.

The one-year period prescribed in item (1) of the preceding paragraph shall not be suspended or interrupted.

The one-year period of maritime lien for maritime claims prescribed in item (1) of paragraph 1 of Article 22 of this Law shall commence from the date on which the maritime claimant leaves the vessel from which he served.

Article 29  The provisions of this Section shall not affect the implementation of the provisions on limitation of maritime liability in Chapter 11 of this Law.

Section 4 Possessory Lien on Vessels

Article 30  Possessory lien on a vessel means the right of a shipbuilder or a ship repairer, when the other party to the contract fails to pay the vessel construction or repair fees in accordance with the agreement, to retain the vessel lawfully in its possession and to enjoy priority of compensation out of such vessel.

A possessory lien on a vessel shall be extinguished when the shipbuilder or ship repairer no longer possesses the vessel constructed or repaired.

A possessory lien on a vessel shall be compensated prior to vessel mortgages and after maritime liens.

Article 31  Unless otherwise agreed, where the shipbuilder or ship repairer retains the vessel for sixty days and the debtor still fails to perform the obligation, the shipbuilder or ship repairer may agree with the debtor to offset the lien with the value of the retained vessel, or may enjoy priority of compensation out of the proceeds from auction or sale of the retained vessel.

Article 32  During the lien period, where the vessel is arrested by the court and auctioned or sold, the rights of the holder of the possessory lien on the vessel to enjoy priority of compensation shall not be affected.

Chapter 3 Seafarers

Section 1 General Provisions

Article 33  Seafarers mean all personnel serving on board a vessel, including the master.

Article 34  Chinese seafarers shall obtain the corresponding seafarer competency certificates and health certificates in accordance with relevant laws and administrative regulations on seafarer management.

Foreign seafarers working on Chinese-flagged vessels shall be governed by relevant laws and administrative regulations on seafarer management.

Article 35  Chinese seafarers serving on vessels engaged in international voyages shall hold, in accordance with law, seafarers' passports and relevant certificates issued by the maritime administration of the People's Republic of China.

Article 36  Employers of seafarers shall, in accordance with relevant laws and administrative regulations and relevant international treaties on seafarers' labor and social security concluded or acceded to by the People's Republic of China, conclude labor contracts with seafarers.

Where this Law contains no provisions on the appointment of seafarers and the rights and obligations regarding seafarers' labor and social security, relevant laws and administrative regulations shall apply.

Section 2 Masters

Article 37  The master shall be responsible for the management and command of the vessel.

Orders issued by the master within the scope of his authority shall be complied with by seafarers, passengers, and other persons on board.

The master shall take necessary measures to protect the vessel and persons, documents, mail, cargo, and other property on board, and to prevent and control vessel pollution of the ecological environment.

Article 38  To ensure the safety of persons on board and of the vessel, the master shall have the right to adopt confinement or other necessary measures against persons suspected of engaging in unlawful or criminal activities on board and to prevent them from concealing, destroying, or falsifying evidence.

When adopting the measures in the preceding paragraph, the master shall prepare a report on the case, which shall be signed by the master and two or more persons on board, and shall hand over the suspected person engaging in unlawful or criminal activities to the competent authority for handling.

Article 39  The master shall record births or deaths occurring on board in the logbook, and shall prepare certificates in the presence of two witnesses. A death certificate shall be accompanied by an inventory of the deceased's personal effects. Where the deceased has a will, the master shall attest thereto. The death certificate and the will shall be kept by the master, and delivered to the family or relevant parties.

Article 40  When a maritime accident occurs, endangering the safety of persons and property on board, the master shall organize seafarers and other persons on board to render all possible rescue. Where the sinking or destruction of the vessel is unavoidable, the master shall have the right to make the decision to abandon ship.

In abandoning ship, the master shall take all measures to first organize passengers to safely leave the vessel, then arrange for seafarers to leave the vessel, and the master shall be the last to leave. Before leaving, the master shall direct seafarers to endeavor to rescue the logbook, engine log, oil record book, radio log, charts used during the voyage, and documents, as well as valuables, mail and cash, and shall direct seafarers to close equipment such as oil tank valves to prevent or reduce pollution.

Article 41  The master's responsibilities in managing and commanding the vessel shall not be relieved due to the pilot's conduct of pilotage.

Article 42  Where the master dies during the voyage or is otherwise unable to perform his duties, the officer with the highest rank among the deck officers shall act as master; prior to departure from the next port, the vessel owner, vessel operator or vessel manager shall appoint a new master to take over.

Chapter 4 Sea Carriage of Goods Contracts

Section 1 General Provisions

Article 43  A contract for carriage of goods by sea means a contract whereby the carrier, upon receipt of freight, undertakes to carry the goods shipped by the shipper by sea from one port to another port, including international carriage of goods by sea and domestic carriage of goods by sea between ports of the People's Republic of China.

Article 44  The meanings of the terms used in this Chapter are as follows:

(1) Carrier means a person who, by himself or entrusting another to act in his name, concludes a contract of carriage of goods by sea with the shipper.

(2) Actual carrier means a person who, upon entrustment or sub-entrustment by the carrier, actually performs all or part of the carrier's obligations stipulated in Article 49 of this Law.

(3) Shipper means:

1. a person who, by himself or entrusting another to act in his name or entrusting another for him, concludes a contract of carriage of goods by sea with the carrier;

2. a person who, by himself or entrusting another to act in his name or entrusting another for him, delivers goods to the carrier related to the contract of carriage of goods by sea.

(4) Consignee means the person entitled to take delivery of the goods.

(5) Goods include live animals and containers, pallets, vehicles or similar transport equipment provided by the shipper for the consolidation of goods.

(6) Transport document means bills of lading, sea waybills and other documents evidencing the contract of carriage of goods by sea and that the goods have been received by the carrier or loaded on board.

(7) Bill of lading means a document used to evidence the contract of carriage of goods by sea and that the goods have been received by the carrier or loaded on board, and on the basis of which the carrier undertakes to deliver the goods.

Article 45  Clauses in contracts of carriage of goods by sea and clauses in bills of lading or other transport documents serving as evidence of the contract, that violate the provisions of this Chapter, and clauses transferring the insurance interest of the goods to the carrier or similar clauses, shall be null and void. The nullity of such clauses shall not affect the validity of other clauses in the contract and in the bill of lading or other transport documents.

Article 46  The provisions of Article 45 of this Law do not affect the carrier's increase of his liabilities and obligations beyond those provided in this Chapter on the liability and obligations of the carrier.

Section 2 Liability of the Carrier

Article 47  The period of liability of the carrier for goods shipped in containers shall be from the time of receipt of the goods at the port of loading to the time of delivery of the goods at the port of discharge, covering the entire period during which the goods are under the carrier's custody. The period of liability of the carrier for goods shipped other than in containers shall be from the time of loading of the goods onto the ship to the time of discharge from the ship, covering the entire period during which the goods are under the carrier's custody. During the carrier's period of liability, if the goods are lost or damaged, the carrier shall, unless otherwise provided in this Section, be liable for compensation.

The provisions of the preceding paragraph shall not affect any agreement reached by the carrier regarding liability for goods not shipped in containers prior to loading and after discharge.

Article 48  Before and at the beginning of the voyage, the carrier shall exercise due diligence to make the vessel seaworthy, properly man the vessel, equip the vessel and supply provisions, and make the holds, other places of the vessel where goods are carried, and containers provided by the carrier fit and safe for receiving, carrying and preserving the goods.

Carriers engaged in domestic carriage of goods by sea shall also perform the obligations in the preceding paragraph during the voyage.

Article 49  The carrier shall properly and carefully receive, load, move, stow, carry, keep, care for, discharge, and deliver the goods carried.

Article 50  The carrier shall carry the goods to the port of discharge along the route agreed, customary, or geographically reasonable.

Deviation or other reasonable deviation occurring in the sea or in navigable waters connected to the sea for the purpose of saving or attempting to save life or property shall not constitute a violation of the preceding paragraph.

Article 51  Where the goods fail to be delivered at the port of discharge within the expressly agreed period, delay in delivery is constituted; in domestic carriage of goods by sea, failure to deliver the goods within a reasonable period also constitutes delay in delivery.

Except where the carrier is exempted from liability under this Chapter, if due to the carrier's fault the goods are lost, damaged or suffer other economic loss as a result of delay in delivery, the carrier shall be liable for compensation.

Where the carrier fails to deliver the goods within sixty days from the expiry of the period provided in paragraph 1 of this Article, a person entitled to make a claim for compensation for loss of goods may deem the goods lost.

Article 52  Where loss, damage, or delay in delivery of the goods occurring during the period of liability is caused by any of the following reasons, the carrier shall not be liable for compensation:

(1) fault of the master, seafarers, pilot or other employees employed by the carrier in the navigation or management of the vessel;

(2) fire on board, unless caused by the carrier's own fault;

(3) Act of God, perils or accidents of the sea or navigable waters connected to the sea;

(4) war or armed conflicts, piracy or terrorist activities;

(5) acts of government or competent authorities, quarantine restrictions, or judicial arrest not arising from causes attributable to the carrier, actual carrier or their employees or agents;

(6) strikes, lockouts or labor restrictions;

(7) salvage or attempted salvage of life or property at sea or in navigable waters connected to the sea;

(8) acts of the shipper, cargo owner, consignee or their employees or agents;

(9) the inherent characteristics or inherent defects of the goods;

(10) improper packing of the goods or inadequacy or illegibility of marks;

(11) latent defects of the vessel not discoverable by due diligence;

(12) other causes not due to the fault of the carrier, actual carrier or their employees or agents.

Items (1) and (2) of the preceding paragraph shall not apply to domestic carriage of goods by sea.

Where the carrier is exempted from liability under paragraph 1 of this Article, except for the cause specified in item (2), the carrier shall bear the burden of proof.

Article 53  Where loss, damage, or delay in delivery of live animals is caused by special risks inherent in the carriage of live animals, the carrier shall not be liable for compensation. However, the carrier shall prove that it has complied with the shipper's special requirements for the carriage of live animals, and prove that, according to the circumstances, the loss, damage, or delay in delivery was caused by special risks inherent in the carriage of live animals.

Article 54  The carrier may carry goods on deck upon agreement with the shipper, or in conformity with shipping practice, or in accordance with relevant laws and administrative regulations.

Where the carrier has, in accordance with the preceding paragraph, loaded goods on deck, the carrier shall not be liable for compensation for loss, damage, or delay in delivery caused by the special risks of such carriage.

Where the carrier and the shipper have agreed to carry goods on deck, such agreement shall be recited in the bill of lading; absent such recital, it shall not be asserted against a bona fide third party.

Article 55  Where loss, damage, or delay in delivery of the goods is caused jointly by causes for which the carrier or the carrier's employees or agents cannot be exempted from liability and other causes, the carrier shall be liable for compensation only within the scope for which it cannot be exempted from liability; however, the carrier shall bear the burden of proof for loss, damage, or delay in delivery caused by other causes.

Article 56  The amount of compensation for loss of goods shall be calculated based on the actual value of the goods; the amount of compensation for damage to goods shall be calculated based on the difference between the actual value of the goods before and after damage or the cost of repair of the goods.

The actual value of the goods shall be calculated based on the market price at the time of delivery at the place of delivery; where the market price at the time of delivery at the place of delivery cannot be determined, it shall be calculated based on the value of the goods at the time of loading plus insurance premium and freight.

The actual value of the goods as prescribed in the preceding paragraph shall, at the time of compensation, be reduced by relevant costs that are less or exempted due to the loss or damage of the goods.

Article 57  The carrier's limit of liability for compensation for loss of or damage to the goods shall be calculated either based on the number of packages or other shipping units of the goods, with 666.67 units of account per package or other shipping unit, or based on the gross weight of the goods, with 2 units of account per kilogram, whichever results in a higher limit. However, this shall not apply where, prior to loading, the shipper has declared the nature and value of the goods and such declaration is recited in the bill of lading, or where the carrier and the shipper have otherwise agreed to a limit higher than that prescribed in this Article.

Where goods are consolidated in containers, pallets, vehicles or similar transport equipment, if the bill of lading specifies the number of packages or other shipping units contained in such equipment, such number shall be deemed to be the number of packages or other shipping units as prescribed in the preceding paragraph; if not specified, each piece of equipment shall be deemed to be one package or one other shipping unit.

Where the transport equipment is not owned by the carrier or not provided by the carrier, the transport equipment itself shall be deemed to be one package or one other shipping unit.

Article 58  The carrier's limit of liability for compensation for economic loss caused by delay in delivery of the goods shall be the amount of freight for the goods delivered late. Where loss, damage, and delay in delivery occur concurrently, the carrier's limit of liability for compensation shall be subject to the limit prescribed in paragraph 1 of Article 57 of this Law.

Article 59  Any claim for compensation brought against the carrier by way of litigation, arbitration or other means arising from loss, damage, or delay in delivery of goods under a contract of carriage of goods by sea, whether or not the maritime claimant is a party to the contract, and whether brought based on contract or tort, shall be subject to the defenses and limitations of liability of the carrier provided in this Chapter.

Where the claim for compensation in the preceding paragraph is brought against the carrier's employees or agents, if the carrier's employees or agents prove that their conduct was within the scope of employment or entrusted authority, the preceding paragraph shall apply.

Article 60  Where it is proven that loss, damage, or delay in delivery of the goods is caused by the carrier's intentional act or reckless act or omission with knowledge that such loss would probably result, the carrier shall not invoke the limitation of liability provisions in Article 57 or Article 58 of this Law.

Where it is proven that loss, damage, or delay in delivery of the goods is caused by the intentional act or reckless act or omission of the carrier's employees or agents with knowledge that such loss would probably result, the carrier's employees or agents shall not invoke the limitation of liability provisions in Article 57 or Article 58 of this Law.

Article 61  Where the carrier entrusts the carriage of the goods or a part thereof to an actual carrier, the carrier shall still be responsible for the entire carriage in accordance with this Chapter. For carriage undertaken by the actual carrier, the carrier shall be responsible for the acts of the actual carrier or of the actual carrier's employees or agents within the scope of employment or entrusted authority.

Notwithstanding the preceding paragraph, where it is expressly agreed in the contract of carriage of goods by sea that a specified part of the carriage under the contract shall be performed by a designated actual carrier other than the carrier, the contract may also stipulate that the carrier shall not be liable for compensation for loss, damage, or delay in delivery occurring while the goods are in the custody of the designated actual carrier. However, such stipulation shall be recited in the bill of lading; absent such recital, it shall not be asserted against a bona fide third party.

Article 62  The provisions of this Chapter regarding the liability of the carrier shall apply to the actual carrier. Where claims for compensation are brought against the actual carrier's employees or agents, paragraph 2 of Article 59 and paragraph 2 of Article 60 of this Law shall apply.

Article 63  Any special agreement under which the carrier undertakes obligations not provided in this Chapter or waives rights conferred by this Chapter shall, upon the actual carrier's express written consent, be effective against the actual carrier; whether the actual carrier consents shall not affect the effectiveness of such special agreement against the carrier.

Article 64  Where both the carrier and the actual carrier are liable for compensation, they shall bear joint and several liability within the scope of such liability.

Article 65  Where separate claims for compensation are made against the carrier, the actual carrier, and their employees or agents for loss, damage, or delay in delivery of the goods, the total compensation shall not exceed the limit prescribed in Article 57 or Article 58 of this Law.

Article 66  The provisions of Articles 61 to 65 of this Law shall not affect reciprocal recourse between the carrier and the actual carrier.

Section 3 Liability of the Shipper

Article 67  The shipper shall deliver the goods to the carrier for carriage in accordance with the contract of carriage of goods by sea, and shall ensure that the goods delivered for carriage are fit for the agreed carriage.

Article 68  The shipper shall properly pack the goods to be shipped, and shall warrant to the carrier the accuracy of the name, marks, number of packages or pieces, weight or volume of the goods provided at the time of loading; where improper packing or inaccuracies in the aforesaid particulars cause loss to the carrier, the shipper shall be liable for compensation.

The right of the carrier to be compensated under the preceding paragraph shall not affect the carrier's liability under the contract of carriage of goods by sea towards persons other than the shipper.

Article 69  The shipper shall promptly go through procedures required by ports, customs and other competent authorities for the carriage of goods, and deliver to the carrier documents evidencing completion of such procedures; where delay, incompleteness or inaccuracies in handling such procedures cause loss to the carrier's interests, the shipper shall be liable for compensation.

Article 70  Where the shipper ships dangerous goods, the shipper shall properly pack the goods in accordance with the provisions on carriage of dangerous goods by sea, affix danger marks and labels, and notify the carrier in writing of the proper shipping name and nature of the goods and the measures to prevent hazards and emergency disposal measures; where the shipper fails to notify or makes erroneous notification, the carrier may, at any time and any place as required by the circumstances, discharge, destroy or render the goods harmless, without being liable for compensation. The shipper shall be liable for compensation for loss suffered by the carrier as a result of carriage of such goods.

Where the carrier is aware of the nature of the dangerous goods and has consented to their shipment, the carrier may still discharge, destroy or render the goods harmless when such goods pose an actual danger to the vessel, persons, or other cargo, and shall not be liable for compensation. However, the provisions of this paragraph shall not affect the contribution to general average.

Article 71  The shipper shall pay freight to the carrier in accordance with the agreement.

The shipper and the carrier may agree that freight be paid by the consignee; however, such agreement shall be recited in the transport document.

Article 72  The shipper shall not be liable for compensation for loss suffered by the carrier or actual carrier or damage to the vessel; except where such loss or damage is caused by the fault of the shipper or the shipper's employees or agents.

Employees or agents of the shipper shall not be liable for compensation for loss suffered by the carrier or actual carrier or damage to the vessel; except where such loss or damage is caused by the fault of the shipper's employees or agents.

Section 4 Transport Documents

Article 73  After the goods are received by the carrier or loaded on board, upon the shipper's request, the carrier shall issue a bill of lading. A bill of lading may be issued by a person authorized by the carrier; where issued by the master of the carrying vessel, it shall be deemed issued on behalf of the carrier.

Article 74  A bill of lading shall contain the following particulars:

(1) the name, marks, number of packages or pieces, weight or volume of the goods, and description of dangerous nature for carriage of dangerous goods;

(2) the name and principal place of business of the carrier;

(3) the name of the vessel;

(4) the name of the shipper;

(5) the name of the consignee or instructions concerning the consignee;

(6) the port of loading;

(7) the port of discharge;

(8) for multimodal transport bills of lading, additional particulars of place of receipt and place of delivery of the goods;

(9) the date, place, and number of originals of the bill of lading;

(10) payment of freight;

(11) signature of the carrier or his representative.

Absence of one or more of the particulars prescribed in the preceding paragraph shall not affect the nature of the bill of lading; however, the bill of lading shall comply with item (7) of Article 44 of this Law.

Article 75  Before loading of the goods, where the carrier has already issued, upon the shipper's request, a received-for-shipment bill of lading or other document, upon completion of loading, the shipper may return the received-for-shipment bill of lading or other document to the carrier and exchange for a shipped bill of lading; the carrier may also note on the received-for-shipment bill of lading the name of the carrying vessel and the date of loading, and such noted received-for-shipment bill of lading shall be deemed a shipped bill of lading.

Article 76  Where the carrier or the person issuing the bill of lading on his behalf knows or has reasonable grounds to suspect that the description of the name, marks, number of packages or pieces, weight or volume of the goods recorded in the bill of lading does not conform to the goods actually received, or, in the case of a shipped bill of lading, suspects it does not conform to the goods actually loaded, or has no appropriate means of checking the particulars recorded in the bill of lading, the carrier or such issuer may make reservations on the bill of lading stating the non-conformity, the grounds for suspicion, or that verification was not possible.

Article 77  Where the carrier or the person issuing the bill of lading on his behalf does not make reservations on the apparent condition of the goods in the bill of lading, the goods shall be deemed to be in apparent good order and condition.

Article 78  Except for reservations made in accordance with Article 76 of this Law, a bill of lading issued by the carrier or the person issuing the bill of lading on his behalf shall constitute prima facie evidence that the goods have been received or loaded as described in the bill of lading; evidence adduced by the carrier, including against a consignee who is a bona fide third party, that the condition of the goods is inconsistent with the description in the bill of lading, shall not be admitted.

Article 79  The rights and obligations between the carrier and the consignee or bill of lading holder shall be determined in accordance with the bill of lading. Where no bill of lading is issued, the rights and obligations between the carrier and the consignee shall be governed by the relevant provisions of this Chapter.

The consignee or bill of lading holder shall not bear demurrage, dead freight and other costs related to loading occurring at the port of loading, unless the bill of lading expressly provides that such costs are borne by the consignee or bill of lading holder.

Article 80  An order bill of lading shall not be transferred.

An order bill of lading may be transferred by either special endorsement or blank endorsement.

A bearer bill of lading may be transferred without endorsement.

Article 81  Where documents other than bills of lading are issued by the carrier to evidence receipt of goods for carriage, such documents shall constitute prima facie evidence of the conclusion of a contract of carriage of goods by sea and of the carrier's receipt of the goods specified in the document.

Documents of such kind issued by the carrier shall not be transferable.

Section 5 Electronic Transport Records

Article 82  Electronic transport records mean information issued by the carrier by electronic means in accordance with a contract of carriage of goods by sea, evidencing the contract of carriage of goods by sea and that the goods have been received by the carrier or loaded on board, including negotiable electronic transport records and non-negotiable electronic transport records.

Electronic transport records that meet the conditions prescribed by laws and administrative regulations shall have the same legal effect as transport documents. Electronic transport records shall not be denied legal effect solely on the ground that they are in electronic form.

The provisions of this Law concerning transport documents shall apply to electronic transport records.

Article 83  The carrier and the shipper may, by mutual agreement, issue and use electronic transport records.

Article 84  Electronic transport records shall meet the following requirements:

(1) the recorded information shall include relevant contents under Article 74 of this Law and shall be retrievable and accessible;

(2) the content of the recorded information shall be complete and accurate;

(3) the issuer shall be identifiable;

(4) the holder shall be able to prove his identity.

Article 85  Negotiable electronic transport records shall, in addition to meeting the requirements of Article 84 of this Law, include information on negotiability and procedures for transfer.

Negotiable electronic transport records shall adopt reliable methods or be processed through reliable transaction systems to ensure singularity and integrity of the records and to secure the holder's exclusive control over the records.

Standards for transfer and exclusive control of negotiable electronic transport records, methods for conversion of record forms, and criteria for recognizing reliable methods or transaction systems shall be formulated separately by the National level internet information department in conjunction with the competent department of transport under the State Council.

Article 86  Upon mutual agreement between the carrier and the shipper or the holder of transport documents, electronic transport records and transport documents may be converted into each other.

Conversion between electronic transport records and transport documents shall be accompanied by information indicating conversion, and shall ensure consistency of the recorded content before and after conversion. Conversion of the form of documents shall not alter the parties’ rights and obligations.

Upon completion of conversion between electronic transport records and transport documents, the original transport document or electronic transport record shall become invalid forthwith.

Section 6 Delivery of Goods

Article 87  The carrier shall deliver the goods in accordance with the following provisions:

(1) where a straight bill of lading is issued, delivery shall be made against the bill of lading to the named consignee;

(2) where an order bill of lading is issued, delivery shall be made against the bill of lading to the endorsee to whom the bill is negotiated;

(3) where a bearer bill of lading is issued or an order bill of lading is negotiated by blank endorsement, delivery shall be made against the bill of lading to the holder of the bill;

(4) where a negotiable electronic transport record is issued, delivery shall be made to the holder of the electronic transport record;

(5) in other circumstances, delivery shall be made to the consignee against proof of the consignee’s identity.

Article 88  Upon delivery of the goods by the carrier to the consignee, the consignee shall notify the carrier in writing of any loss or damage to the goods; absent such notice, the delivery shall constitute prima facie evidence that the carrier has delivered in accordance with the transport document and that the goods were in good condition.

Where the loss or damage to the goods is not apparent, the consignee shall submit written notice to the carrier within seven consecutive days from the day following delivery of non-containerized goods or within fifteen consecutive days from the day following delivery of containerized goods; absent such notice, the preceding paragraph shall apply.

Where, at the time of delivery, the consignee has conducted a joint inspection or survey of the goods with the carrier, no written notice need be submitted for loss or damage thus ascertained.

Article 89  Where the carrier does not receive written notice submitted by the consignee for economic loss caused by delay in delivery within sixty consecutive days from the day following delivery of the goods to the consignee, the carrier shall not be liable for compensation.

Article 90  Before the consignee takes delivery of the goods at the port of destination or before the carrier delivers the goods at the port of destination, either party may request an inspection body to inspect the condition of the goods; the party requesting inspection shall pay the inspection fees but shall have the right to claim reimbursement against the party liable for the loss of the goods.

Article 91  The carrier and the consignee shall provide reasonable facilitation to each other with respect to inspections provided in Article 88 and Article 90 of this Law.

Article 92  Where the goods are delivered by the actual carrier, written notices submitted by the consignee to the actual carrier in accordance with Article 88 of this Law shall have the same effect as notices submitted to the carrier; written notices submitted to the carrier shall have the same effect as notices submitted to the actual carrier.

Article 93  Where no person takes delivery of the goods at the port of discharge, the master may discharge the goods into a warehouse or other appropriate place, and the costs and risks arising therefrom shall be borne by the shipper; however, the shipper shall be notified in a timely manner.

Where the consignee has exercised rights under the contract of carriage of goods by sea but delays or refuses to take delivery of the goods, the master may handle the goods in accordance with the preceding paragraph, and costs and risks arising therefrom shall be borne by the consignee.

Article 94  Where freight, general average contribution, demurrage, and necessary expenses advanced by the carrier for the goods, as well as other fees payable to the carrier, have not been paid and no appropriate security has been provided, the carrier may exercise a lien on the corresponding goods.

Where the transport document states freight prepaid or includes a similar declaration, the carrier shall not exercise a lien on the goods on the ground of unpaid freight, except where the consignee is the shipper.

Article 95  Where goods retained by the carrier in accordance with Article 94 of this Law are not taken by any person within sixty days from the day following the vessel's arrival at the port of discharge, the carrier may apply to the court for auction; where the goods are perishable or deteriorable or where the cost of keeping the goods plus the fees payable to the carrier may exceed the value of the goods, the carrier may apply for an earlier auction.

The proceeds from auction shall be applied to pay the costs of keeping and auctioning the goods and the freight and other fees payable to the carrier; any shortfall may be claimed by the carrier against the shipper; any surplus shall be returned to the shipper; where return is not possible and no person claims such surplus within one year from the date of auction, it shall belong to the State.

Section 7 Variation and Rescission of Contract

Article 96  During the carrier's period of liability, the shipper may notify the carrier in writing to suspend carriage, return the goods, change the port of discharge, or deliver the goods to another consignee, but shall compensate the carrier for losses thereby incurred.

The carrier may refuse the shipper's request under any of the following circumstances, but shall immediately notify the shipper:

(1) the carrier is objectively unable to meet the shipper's request, or meeting such request would affect the carrier's normal operation;

(2) the carrier anticipates that meeting the shipper's request would incur extra costs or cause economic loss to the carrier, and requires the shipper to provide corresponding security, which the shipper fails to provide;

(3) the shipper fails to present transport documents already issued as required by the carrier.

Article 97  Prior to departure of the vessel from the port of loading, the shipper may request rescission of the contract. However, unless otherwise agreed in the contract, the shipper shall pay half of the agreed freight to the carrier; where the goods have been loaded, the shipper shall also bear loading and unloading fees and other related costs.

Article 98  Prior to departure of the vessel from the port of loading, where the contract cannot be performed due to force majeure or other causes not attributable to the carrier and the shipper, both parties may rescind the contract without mutual liability for compensation. Unless otherwise agreed in the contract, where freight has been paid, the carrier shall refund the freight to the shipper; where the goods have been loaded, the shipper shall bear loading and unloading costs; where transport documents have been issued, the shipper shall return the transport documents to the carrier.

Article 99  Where the vessel cannot discharge the goods at the contractually agreed port of destination due to force majeure or other causes not attributable to the carrier and the shipper, unless otherwise agreed in the contract, the master shall have the right to discharge the goods at a safe port or place near the port of destination, and performance of the contract shall be deemed completed.

When deciding to discharge the goods, the master shall promptly notify the shipper or the consignee and consider the interests of the shipper or the consignee.

Section 8 Special Provisions on Multimodal Transport Contracts

Article 100  Multimodal transport contract as referred to in this Law means a contract whereby the multimodal transport operator undertakes to carry the goods from the place of receipt to the destination for delivery to the consignee by two or more different modes of transport including sea carriage, and receives freight for the entire journey.

Multimodal transport operator as referred to in the preceding paragraph means a person who, by himself or entrusting another to act in his name, concludes the multimodal transport contract with the shipper.

Article 101  The period of liability of the multimodal transport operator for multimodal transport goods shall be from the time of receipt of the goods to the time of delivery of the goods.

Article 102  The multimodal transport operator shall be responsible for the performance or organization of the performance of the multimodal transport contract, and shall be responsible for the entire journey.

The multimodal transport operator and the carriers participating in the segments of the multimodal transport may, by separate contract, agree upon their respective liabilities for each segment of the multimodal transport contract. However, such contract shall not affect the multimodal transport operator's liability for the entire journey.

Article 103  Where loss, damage, or delay in delivery of the goods occurs in a particular segment of the multimodal transport, the multimodal transport operator's liability for compensation, limits of liability, and limitation periods shall be determined in accordance with the relevant laws governing the mode of transport of that segment.

Article 104  Where the segment in which the loss, damage, or delay in delivery occurs cannot be determined, the multimodal transport operator shall bear liability for compensation in accordance with the provisions of this Chapter regarding the carrier's liability for compensation and limits of liability, and the provisions of this Law regarding limitation of actions.

Chapter 5 Sea Carriage of Passengers Contracts

Article 105  A sea carriage of passengers contract means a contract whereby the carrier carries passengers and their luggage by sea on a passenger ship, cruise ship or other suitable vessels, with the passengers paying the fare.

Article 106  The meanings of the terms used in this Chapter are as follows:

(1) Carrier means a person who, by himself or entrusting another to act in his name, concludes a sea carriage of passengers contract with passengers.

(2) Actual carrier means a person who, upon entrustment or sub-entrustment by the carrier, carries all or part of the passengers and their luggage.

(3) Passenger means a person carried under a sea carriage of passengers contract; a person who escorts cargo on board under a sea carriage of goods contract with the carrier's consent shall be deemed to be a passenger.

(4) Luggage means any articles or vehicles carried by the carrier under a sea carriage of passengers contract, but excluding live animals.

(5) Cabin luggage means luggage carried, kept or placed by the passenger in the cabin by himself.

Article 107  A passenger ticket is evidence of the conclusion of a sea carriage of passengers contract.

Article 108  Clauses in a sea carriage of passengers contract containing any of the following contents shall be null and void:

(1) exemption of the carrier from statutory liability towards passengers;

(2) reduction of the limits of the carrier's liability prescribed in this Chapter;

(3) stipulations contrary to the allocation of burden of proof prescribed in this Chapter;

(4) restrictions on the passengers' right to make claims for compensation.

The nullity of clauses prescribed in the preceding paragraph shall not affect the validity of other clauses in the contract.

Article 109  The period of carriage of passengers by sea shall be from the time the passenger boards the vessel to the time the passenger leaves the vessel. Where the fare includes the cost of connecting transport, the period of carriage shall include the time in which the carrier transports the passenger by water from shore to the vessel and from the vessel to the shore, but shall not include the time the passenger spends within the port station, on the pier, or within other port facilities.

The period of carriage of cabin luggage of passengers shall be governed by the preceding paragraph. Where cabin luggage of passengers is received by the carrier or his employees or agents and has not been returned to the passenger, the period of carriage shall include the time the passenger spends within the port station, on the pier, or within other port facilities.

For luggage other than cabin luggage, the period of carriage shall be from the time the passenger delivers the luggage to the carrier or the carrier's employees or agents to the time the carrier or the carrier's employees or agents returns the luggage to the passenger.

Article 110  Passengers who travel without tickets, travel in a higher class than entitled, travel beyond the journey purchased, or travel on discounted tickets without meeting the conditions for a discount shall pay the balance in accordance with regulations, and the carrier may collect an additional fare in accordance with regulations; if refusing to pay, the master shall have the right to order such passenger to disembark at an appropriate place, and the carrier shall have the right to claim payment.

Article 111  Passengers shall not carry with them or conceal within their luggage prohibited items or dangerous goods that are flammable, explosive, toxic, corrosive, radioactive, or otherwise likely to endanger the safety of persons and property on board.

The carrier shall have the right to discharge, destroy or render harmless prohibited items or dangerous goods carried with or concealed in luggage by passengers, or to hand them over to relevant departments, without liability for compensation.

Where passengers violate paragraph 1 of this Article and cause damage, they shall be liable for compensation.

Article 112  During the period of carriage of passengers and their luggage prescribed in Article 109 of this Law, where accidents are caused by the fault of the carrier or of the carrier's employees or agents within the scope of employment or entrusted authority and cause personal injury or death of passengers or loss or damage to luggage, the carrier shall be liable for compensation.

The claimant shall bear the burden of proof as to the fault of the carrier or of the carrier's employees or agents; except as provided in paragraphs 3 and 4 of this Article.

Where personal injury or death of passengers or loss of or damage to cabin luggage or luggage carried on passengers' vehicles is caused by the sinking, collision, stranding, explosion, fire of the vessel or defects of the vessel, the carrier or the carrier's employees or agents shall be presumed to be at fault unless evidence to the contrary is adduced.

Where loss of or damage to luggage other than cabin luggage or luggage carried on passengers' vehicles occurs, regardless of the accident causing such loss or damage, the carrier or the carrier's employees or agents shall be presumed to be at fault unless evidence to the contrary is adduced.

Article 113  Where the carrier proves that the personal injury or death of passengers or loss of or damage to luggage is caused by the fault of the passenger himself or by the joint fault of the passenger and the carrier, the carrier may be exempted from or appropriately reduce liability for compensation.

Where the carrier proves that the personal injury or death of passengers or loss of or damage to luggage is caused by the passenger's intentional act, or that the passenger's personal injury or death is caused by reasons pertaining to the passenger's own health, the carrier shall not be liable for compensation.

Article 114  The carrier shall not be liable for compensation for loss of or damage to passengers' money, gold or silver, jewelry, negotiable instruments, or other valuables.

Where the passenger agrees with the carrier to deliver the items prescribed in the preceding paragraph to the carrier for safekeeping, the carrier shall bear liability for compensation in accordance with Article 115 of this Law; where the parties have agreed in writing to a sum of compensation higher than the limit of liability prescribed in Article 115 of this Law, the carrier shall bear liability for compensation according to the agreed sum.

Article 115  The carrier's limit of liability for compensation per each carriage of passengers by sea shall be as follows:

(1) for personal injury or death of passengers, not exceeding 175000 units of account per passenger;

(2) for loss of or damage to cabin luggage of passengers, not exceeding 1800 units of account per passenger;

(3) for loss of or damage to passengers' vehicles including luggage carried on such vehicles, not exceeding 10000 units of account per vehicle;

(4) for loss of or damage to other luggage of passengers other than those under items (2) and (3), not exceeding 2700 units of account per passenger.

The carrier and the passenger may agree upon deductibles to be borne by the carrier for loss of passengers' vehicles and luggage other than passengers' vehicles. However, the deductible for loss of each vehicle shall not exceed 300 units of account, and the deductible for loss of other luggage of each passenger other than vehicles shall not exceed 135 units of account. In calculating the amount of compensation for loss of each vehicle or other luggage of each passenger other than vehicles, the agreed deductible of the carrier shall be deducted.

The carrier and the passenger may agree in writing on limits of liability for compensation higher than those prescribed in paragraph 1 of this Article.

Article 116  Where it is proven that personal injury or death of passengers or loss of or damage to luggage is caused by the carrier's intentional act or reckless act or omission with knowledge that such damage would probably result, the carrier shall not invoke the limitation of liability provisions in Articles 114 and 115 of this Law.

Where it is proven that personal injury or death of passengers or loss of or damage to luggage is caused by the intentional act or reckless act or omission of the carrier's employees or agents with knowledge that such damage would probably result, the carrier's employees or agents shall not invoke the limitation of liability provisions in Articles 114 and 115 of this Law.

Article 117  Where luggage is obviously damaged, the passenger shall submit written notice to the carrier or the carrier's employees or agents in accordance with the following provisions:

(1) for cabin luggage and luggage carried on passengers' vehicles, notice shall be submitted before or at the time the passenger leaves the vessel;

(2) for other luggage, notice shall be submitted before or at the time the luggage is returned.

Where damage to luggage is not obvious and difficult to discover when the passenger leaves the vessel or when the luggage is returned, or where luggage is lost, the passenger shall submit written notice to the carrier or the carrier's employees or agents within fifteen days from the day of leaving the vessel or the day the luggage is returned or ought to be returned.

Where the passenger fails to timely submit written notice in accordance with paragraphs 1 and 2 of this Article, unless evidence to the contrary is adduced, the luggage shall be deemed to have been received intact and undamaged.

Where luggage is jointly inspected or surveyed by the passenger and the carrier at the time of return, no written notice need be submitted.

Article 118  Any claim for compensation brought against the carrier by way of litigation, arbitration or other means arising from personal injury or death of passengers or loss of or damage to luggage, whether or not the claimant is a party to the contract, and whether brought based on contract or tort, shall be subject to the defenses and limitations of liability of the carrier provided in this Chapter.

Where the claim for compensation in the preceding paragraph is brought against the carrier's employees or agents, if the carrier's employees or agents prove that their conduct was within the scope of employment or entrusted authority, the preceding paragraph shall apply.

Article 119  Where the carrier entrusts the entire carriage of passengers and their luggage or a part thereof to an actual carrier, the carrier shall still be responsible for the entire carriage in accordance with this Chapter. Where the actual carrier performs carriage, the carrier shall be responsible for the acts of the actual carrier or of the actual carrier's employees or agents within the scope of employment or entrusted authority.

Article 120  The provisions of this Chapter regarding the liability of the carrier shall apply to the actual carrier. The provisions of this Chapter regarding the liability of the carrier's employees or agents shall apply to the employees or agents of the actual carrier.

Article 121  Any special agreement under which the carrier undertakes obligations not provided in this Chapter or waives rights conferred by this Chapter shall, upon the actual carrier's express written consent, be effective against the actual carrier; whether the actual carrier consents shall not affect the effectiveness of such special agreement against the carrier.

Article 122  Where both the carrier and the actual carrier are liable for compensation, they shall bear joint and several liability within the scope of such liability.

Article 123  Where separate claims for compensation are made against the carrier, the actual carrier, and their employees or agents for personal injury or death of passengers or loss of or damage to luggage, the total compensation shall not exceed the limit prescribed in Article 115 of this Law.

Article 124  The provisions of Articles 119 to 123 of this Law shall not affect reciprocal recourse between the carrier and the actual carrier.

Article 125  The carrier or the actual carrier shall effect liability insurance for compensation for personal injury or death of passengers or obtain corresponding financial security.

Article 126  Claims for compensation for personal injury or death of passengers may be brought directly against the liability insurer or financial guarantor. Where the carrier or the actual carrier loses the right to limit liability as provided in this Chapter, the liability insurer or financial guarantor may still invoke the limitation of liability prescribed in this Chapter.

The liability insurer or financial guarantor shall be entitled to defend on the ground that the damage was caused by the intentional act of the carrier or actual carrier, and shall be entitled to invoke defenses other than bankruptcy or liquidation of the carrier or actual carrier.

Chapter 6 Charterparty Contracts

Section 1 General Provisions

Article 127  Charterparty contracts provided by this Law include voyage charterparties, time charterparties, and bareboat charterparties. Charterparty contracts shall be concluded in written form.

Article 128  The provisions of this Chapter on the rights and obligations between the lessor and the lessee shall apply only where the charterparty contains no stipulations or no different stipulations.

Section 2 Voyage Charterparties

Article 129  A voyage charterparty means a contract whereby the vessel lessor provides the lessee with a vessel or part of the vessel's space, loads the agreed cargo, carries it from one port to another, and the lessee pays the agreed freight.

Where the voyage charterparty contains no stipulations or unclear stipulations on the rights and obligations between the lessor and the lessee, in addition to the provisions of this Section, the relevant provisions in Chapter 4 of this Law regarding the rights and obligations between parties shall apply.

Clauses in a voyage charterparty that violate Articles 48 and 50 of this Law shall be null and void.

Article 130  The contents of a voyage charterparty mainly include the names of the lessor and the lessee, the name of the vessel, the vessel's nationality, deadweight, cubic capacity, cargo name, loading port and destination port, laydays, time for loading and discharging, freight, demurrage, dispatch money, and other relevant matters.

Article 131  As to bills of lading issued for goods carried under a voyage charterparty, where the holder of the bill of lading is not the lessee, the rights and obligations between the carrier and such bill of lading holder shall be governed by the terms of the bill of lading. However, where the bill of lading specifies that the voyage charterparty terms apply, the terms of such voyage charterparty shall apply.

Article 132  The lessor shall provide the vessel as agreed; the vessel may be changed with the lessee's consent. Where the vessel provided or changed by the lessor does not conform to the charterparty, the lessee shall have the right to refuse or rescind the contract.

Where the lessee suffers loss due to the lessor's fault in failing to provide the agreed vessel, the lessor shall be liable for compensation.

Article 133  Where the lessor fails to provide the vessel within the agreed laydays, the lessee shall have the right to rescind the contract. However, where the lessor notifies the lessee of the delay in the vessel and the expected date of the vessel's arrival at the loading port, the lessee shall, within forty-eight hours from receipt of the notice, notify the lessor of the decision whether to rescind the contract.

Where the lessee suffers loss due to the lessor's fault in delaying provision of the vessel, the lessor shall be liable for compensation.

Article 134  The laytime for loading and discharging under the voyage charterparty and the method of calculation thereof, demurrage after exceeding laytime, and dispatch money for completing loading or discharging ahead of laytime, shall be agreed upon by the parties.

Article 135  The lessee may subcharter the chartered vessel; after subcharter, the rights and obligations under the original contract shall not be affected.

Article 136  The lessee shall provide the agreed cargo; cargo may be replaced with the lessor's consent. However, where the replacement is unfavorable to the lessor, the lessor shall have the right to refuse or rescind the contract.

Where the lessor suffers loss due to the lessee's failure to provide the agreed cargo, the lessee shall be liable for compensation.

Article 137  The lessor shall discharge the cargo at the contractually agreed port of discharge. Where the charterparty contains a clause allowing the lessee to choose the port of discharge, if the lessee fails to timely notify the port of discharge as agreed in the contract, the master may select one of the agreed optional ports to discharge. Where the lessee fails to timely notify the port of discharge as agreed in the contract and the lessor suffers loss thereby, the lessee shall be liable for compensation. Where the lessor selects a port of discharge without authorization contrary to the contract and the lessee suffers loss thereby, the lessor shall be liable for compensation.

Section 3 Time Charterparties

Article 138  A time charterparty means a contract whereby the vessel lessor provides the lessee with an agreed vessel manned by the lessor, and the lessee uses such vessel for agreed purposes within the agreed period and pays hire.

Article 139  The contents of a time charterparty mainly include the names of the lessor and the lessee, the name of the vessel, the vessel's nationality, class, tonnage, cubic capacity, speed, fuel consumption, trading area, purposes, charter period, time and place for delivery and redelivery and the conditions, hire and payment thereof, and other relevant matters.

Article 140  The lessor shall deliver the vessel at the time agreed in the contract.

Where the lessor violates the preceding paragraph, the lessee shall have the right to rescind the contract. Where the lessor notifies the lessee of delay in the vessel and the expected date of arrival at the delivery port, the lessee shall, within forty-eight hours from receipt of the notice, notify the lessor of the decision whether to rescind the contract or continue to charter the vessel.

Where the lessee suffers loss due to the lessor's fault in delaying provision of the vessel, the lessor shall be liable for compensation.

Article 141  Upon delivery of the vessel, the lessor shall exercise due diligence to make the vessel seaworthy. The delivered vessel shall be fit for the agreed purposes.

Where the lessor violates the preceding paragraph, the lessee shall have the right to rescind the contract and claim compensation for losses thereby incurred.

Article 142  Where the vessel does not conform to the agreed seaworthiness or other agreed condition during the charter period, the lessor shall take reasonable measures available to restore the vessel's condition as soon as possible.

Where the vessel does not conform to the agreed seaworthiness or other agreed condition and is unable to operate continuously for twenty-four hours, the lessee shall not pay hire for the time lost due to such condition; except where such condition is caused by the lessee.

Article 143  The lessee shall ensure that the vessel is engaged in the agreed sea carriage between safe ports or places within the agreed trading area.

Where the lessee violates the preceding paragraph, the lessor shall have the right to rescind the contract and claim compensation for losses thereby incurred.

Article 144  The lessee shall ensure that the vessel is used to carry the agreed lawful cargo.

Where the lessee uses the vessel to carry live animals or dangerous goods, the lessee shall obtain the lessor's prior consent.

Where the lessor suffers loss due to violation of this Article, the lessee shall be liable for compensation.

Article 145  The lessee shall have the right to issue instructions to the master concerning operation of the vessel, but shall not contravene the stipulations of the time charterparty.

Article 146  The lessee may subcharter the chartered vessel, but shall promptly notify the lessor of the subcharter. After subcharter, the rights and obligations under the original charterparty shall not be affected.

Article 147  Where the vessel owner transfers ownership of a vessel already under charter, the rights and obligations of the parties under the time charterparty shall not be affected, but the lessee shall be promptly notified. After transfer of vessel ownership, the original charterparty shall continue to be performed by the transferee and the lessee.

Article 148  During the contract period, where the vessel carries out maritime salvage, the lessee shall be entitled to fifty percent of the salvage remuneration after deduction of salvage expenses, compensation for losses, portion payable to seafarers, and other expenses.

Article 149  The lessee shall pay hire in accordance with the contract; where the lessee fails to pay hire in accordance with the contract, the lessor shall have the right to rescind the contract and claim compensation for losses thereby incurred.

Article 150  Where the lessee fails to pay hire or other sums stipulated in the contract to the lessor, the lessor shall enjoy a possessory lien over goods and property on board belonging to the lessee and over income from subcharter of the vessel.

Article 151  Upon redelivery of the vessel by the lessee to the lessor, the vessel shall be in the same good condition as at delivery, except for natural wear and tear of the vessel itself.

Where the vessel is not maintained in the same good condition as at delivery, the lessee shall be responsible for restoration or compensation.

Article 152  Where, upon reasonable calculation, the date for completion of the final voyage is around the contractually agreed redelivery date, but may exceed such date, the lessee shall be entitled to use the vessel beyond the agreed period to complete such voyage. During the period of overrun, the lessee shall pay hire at the rate agreed in the contract; where the market rate of hire exceeds the contractual rate, the lessee shall pay hire at the market rate.

Section 4 Bareboat Charterparties

Article 153  A bareboat charterparty means a contract whereby the vessel lessor provides the lessee with a vessel without crew, and the lessee occupies, uses, and operates the vessel within the agreed period and pays hire to the lessor.

Article 154  The contents of a bareboat charterparty mainly include the names of the lessor and the lessee, the name of the vessel, the vessel's nationality, class, tonnage, cubic capacity, trading area, purposes, charter period, time and place for delivery and redelivery and the conditions, survey of the vessel, maintenance and repair of the vessel, hire and payment thereof, vessel insurance, time and conditions for rescission of the contract, and other relevant matters.

Article 155  The lessor shall deliver the vessel and vessel certificates to the lessee at the port or place and at the time agreed in the contract. Upon delivery, the lessor shall exercise due diligence to make the vessel seaworthy. The delivered vessel shall be fit for the purposes agreed in the contract.

Where the lessor violates the preceding paragraph, the lessee shall have the right to rescind the contract and claim compensation for losses thereby incurred.

Article 156  During the bareboat charter period, the lessee shall be responsible for maintenance and repair of the vessel.

Article 157  During the bareboat charter period, the lessee shall insure the vessel in the manner approved by the lessor in accordance with the vessel value agreed in the contract, and shall bear the premiums.

Article 158  During the bareboat charter period, where the lessor's interests are affected or suffer loss due to the lessee's occupation, use, and operation of the vessel, the lessee shall be responsible for eliminating the impact or compensating for the loss.

Where the vessel is arrested due to disputes over vessel ownership or debts owed by the lessor, the lessor shall ensure that the lessee's interests are not affected; where the lessee suffers loss thereby, the lessor shall be liable for compensation.

Article 159  During the bareboat charter period, the lessee shall not transfer the rights and obligations under the contract or subcharter the vessel on a bareboat basis without the lessor's prior written consent.

Article 160  Without the lessee's prior written consent, the lessor shall not establish a mortgage over the vessel during the bareboat charter period.

Where the lessor violates the preceding paragraph and the lessee suffers loss thereby, the lessor shall be liable for compensation.

Article 161  The lessee shall pay hire in accordance with the contract. Where the lessee fails to pay hire at the time stipulated in the contract for a continuous period exceeding seven days, the lessor shall have the right to rescind the contract and claim compensation for losses thereby incurred.

Where the vessel is lost or missing, hire shall cease from the date of the vessel's loss or the date of receipt of the last information thereof, and prepaid hire shall be refunded pro rata.

Article 162  Articles 143, paragraph 1 of Article 144, Article 151, and Article 152 of this Law shall apply to bareboat charterparties.

Article 163  Where a bareboat charterparty contains a hire-purchase clause, upon full payment of the hire-purchase price by the lessee to the lessor in accordance with the contract, ownership of the vessel shall vest in the lessee.

Chapter 7 Maritime Towage Contracts

Article 164  A maritime towage contract means a contract whereby the towing party tows the towed object by tug through the sea from one place to another, and the towed party pays the towage fee.

The provisions of this Chapter shall not apply to tug services provided to vessels within port areas.

Article 165  A maritime towage contract shall be concluded in written form. The contents of a maritime towage contract mainly include the names and domiciles of the towing party and the towed party, the names and principal dimensions of the tug and the towed object, tug horsepower, place of commencement of tow and destination, date of commencement of tow, towage fee and method of payment, and other relevant matters.

Article 166  Before and at the time of commencement of tow, the towing party shall exercise due diligence to make the tug seaworthy and fit for towage, properly man the tug, provide towing gear and supplies and other devices and equipment necessary for the voyage.

Before and at the time of commencement of tow, the towed party shall make preparations for towage of the towed object, exercise due diligence to make the towed object fit for towage, and truthfully inform the towing party of the condition of the towed object, and shall, in accordance with regulations, provide certificates and relevant documents issued by relevant inspection institutions attesting to the fitness of the towed object for towage.

Article 167  Before commencement of tow, where the contract cannot be performed due to force majeure or other causes not attributable to either party, both parties may rescind the contract without mutual liability for compensation. Unless otherwise agreed in the contract, where the towage fee has been paid, the towing party shall refund it to the towed party.

Article 168  After commencement of tow, where the contract cannot continue to be performed due to force majeure or other causes not attributable to either party, both parties may rescind the contract without mutual liability for compensation. Unless otherwise agreed in the contract, the towage fee shall be determined based on the portion of towage actually completed.

Article 169  Where the towed object cannot be towed to the destination due to force majeure or other causes not attributable to either party, unless otherwise agreed in the contract, the towing party may, at a place near the destination or at a safe port or anchorage selected by the tug master, deliver the towed object to the towed party or its agent, and performance of the contract shall be deemed completed.

Article 170  Where the towed party fails to pay the towage fee and other reasonable fees as agreed, the towing party shall enjoy a possessory lien over the towed object.

Article 171  During maritime towage, where loss is suffered by the towing party or the towed party, liability for compensation shall be borne by the party at fault; where loss is caused by the fault of both parties, compensation shall be borne by each party in proportion to their degree of fault.

Notwithstanding the preceding paragraph, where the towing party proves that loss of the towed party is caused by any of the following reasons, the towing party shall not be liable for compensation:

(1) fault of the tug master, seafarers, pilot, or other employees or agents of the towing party in navigation or management of the tug;

(2) fault occurring when the tug salvages or attempts to salvage life or property at sea.

The provisions of this Article shall apply only where the maritime towage contract contains no stipulations or no different stipulations.

Article 172  During maritime towage, where personal injury or death of a third person or damage to the property of a third person is caused by the fault of the towing party or the towed party, the towing party and the towed party shall bear joint and several liability for compensation towards the third person. Unless otherwise agreed in the contract, where one party pays compensation in excess of the proportion it ought to bear, it shall have a right of recourse against the other party.

Article 173  Where the owner of the tug carries cargo on barges owned or operated by him, and carries the cargo by sea from one port to another, it shall be deemed carriage of goods by sea.

Chapter 8 Collision of Vessels

Article 174  Collision of vessels means an accident in which vessels come into contact at sea or in navigable waters connected to the sea causing damage.

Where collision occurs between a vessel and any other boat not used for military or government public service, the provisions of this Chapter shall apply.

Article 175  Where vessels collide, the masters of the vessels involved shall, if such rescue does not seriously endanger the safety of their own vessels and persons on board, render all possible assistance to the colliding vessels and persons on board.

The master of the colliding vessel shall notify the other party, as far as possible, of the name of his vessel, the port of registry, port of departure and port of destination.

Article 176  Where vessel collision is caused by force majeure or other causes not attributable to either party, or where the cause cannot be ascertained, the parties to the collision shall not be liable for compensation to each other.

Article 177  Where vessel collision is caused by the fault of one vessel, the vessel at fault shall bear liability for compensation.

Article 178  Where vessel collision is caused by the mutual fault of the colliding vessels, each vessel shall bear liability for compensation in proportion to its degree of fault; where the degrees of fault are equivalent or the proportions cannot be determined, liability for compensation shall be borne equally.

Vessels at mutual fault shall bear liability for compensation for loss of vessels and cargo and other property on board caused by the collision in accordance with the proportions prescribed in the preceding paragraph. Where the collision causes loss to the property of a third person, the liability for compensation of each vessel shall not exceed the proportion it ought to bear.

Vessels at mutual fault shall bear joint and several liability for compensation for personal injury or death of a third person caused. Where one vessel pays compensation in excess of the proportion prescribed in paragraph 1 of this Article, it shall have a right of recourse against the other vessels at fault.

Article 179  Where due to improper maneuvering or failure to comply with navigation rules a vessel causes loss to other vessels and persons, cargo, or other property on board, even though no actual collision occurs, the provisions of this Chapter shall apply.

Chapter 9 Maritime Salvage

Article 180  The provisions of this Chapter shall apply to salvage of vessels or other property in distress at sea or in navigable waters connected to the sea.

Where salvage occurs between a vessel and any other boat not used for military or government public service, the provisions of this Chapter shall apply.

Except for Article 185 of this Law concerning rescission or variation of salvage contracts and Articles 186 and 187 concerning prevention or mitigation of ecological environmental damage, other provisions of this Chapter shall apply only where the salvage contract contains no stipulations or no different stipulations.

Article 181  The meanings of the terms used in this Chapter are as follows:

(1) Property means any property not permanently and not intentionally attached to the shoreline, including freight at risk.

(2) Salvage remuneration means any salvage reward, reward or compensation payable by the salved party to the salvor in accordance with the provisions of this Chapter.

Article 182  The provisions of this Chapter shall not apply to fixed or floating platforms and mobile offshore drilling units placed at sea engaged in exploration, development or production of seabed mineral resources.

Article 183  The master shall, if such rescue does not seriously endanger the safety of his own vessel and persons on board, have the obligation to render all possible assistance to persons in danger at sea.

Article 184  Where the salvor and the salved party reach agreement on maritime salvage, a salvage contract is formed.

The master of a vessel in distress shall have the right to conclude a salvage contract on behalf of the vessel owner. The master of a vessel in distress or the vessel owner shall have the right to conclude a salvage contract on behalf of the owners of property on board.

Article 185  Where any of the following circumstances exists, upon action by either party or arbitration by agreement of both parties, the court or arbitral institution handling the dispute may rescind or vary the salvage contract:

(1) the contract was concluded under duress or under the influence of dangerous circumstances and the terms are manifestly unfair;

(2) the salvage remuneration payable under the contract is obviously excessive or insufficient in relation to the actual salvage services rendered.

Article 186  In the course of salvage operations, the salvor shall owe the following obligations to the salved party:

(1) to carry out salvage with due care;

(2) to take due care to prevent or minimize damage to the ecological environment;

(3) to seek assistance of other salvors when reasonably necessary;

(4) to accept reasonable requests by the salved party to engage other salvors in the salvage operations; however, where such requests are unreasonable, the amount of the original salvor's salvage remuneration shall not be affected.

Article 187  In the course of salvage operations, the salved party shall owe the following obligations to the salvor:

(1) to cooperate effectively with the salvor;

(2) to take due care to prevent or minimize damage to the ecological environment;

(3) to promptly accept reasonable requests for delivery raised by the salvor when the salved vessel or other property is delivered to a place of safety.

Article 188  Where salvage of a vessel or other property in danger yields success, the salvor shall be entitled to salvage remuneration; where it does not yield success, the salvor shall not be entitled to salvage remuneration except as provided in Article 191 of this Law or otherwise by law.

Article 189  Determination of salvage remuneration shall reflect encouragement of salvage operations and shall comprehensively consider the following factors:

(1) the value of the salved vessel and other property;

(2) the salvor's skill and efforts in preventing or minimizing damage to the ecological environment;

(3) the salvor's salvage performance;

(4) the nature and degree of danger;

(5) the salvor's skill and efforts in saving the vessel, other property, and life;

(6) time used by the salvor, expenses incurred, and losses suffered;

(7) liability risk and other risks potentially faced by the salvor or salvage equipment;

(8) the timeliness of the salvor in providing salvage services;

(9) the availability and utilization of vessels and other equipment used in salvage operations;

(10) the standby condition, efficiency, and value of salvage equipment.

Salvage remuneration shall not exceed the salved value of the vessel and other property.

Article 190  The salved value of the vessel and other property shall mean the estimated value after being salved or the proceeds actually obtained from sale, deducting relevant taxes and fees of customs, quarantine, and inspection, and expenses incurred in unloading, storage, reloading, or moving of cargo, fuel, materials and other property on board.

The salved value prescribed in the preceding paragraph shall not include the value of personal belongings of salved seafarers and cabin luggage of passengers salved.

Article 191  Where salvage is carried out for a vessel or cargo on board that constitutes a danger of damage to the ecological environment, and the salvage remuneration obtained by the salvor under Article 189 of this Law is less than the special compensation payable under this Article, the salvor shall be entitled to special compensation equivalent to salvage expenses from the vessel owner.

Where the salvor conducts salvage operations as prescribed in the preceding paragraph and succeeds in preventing or reducing damage to the ecological environment, the special compensation payable by the vessel owner to the salvor under the preceding paragraph may be increased, and the increased amount may reach thirty percent of the salvage expenses. Where deemed appropriate by the court or arbitral institution handling the dispute, taking into account paragraph 1 of Article 189 of this Law, a further increase of the special compensation may be adjudicated or awarded; however, in no event shall the increase exceed one hundred percent of the salvage expenses.

Salvage expenses referred to in this Article mean reasonable expenses directly paid by the salvor in salvage operations and reasonable expenses for actual use of salvage equipment and engagement of salvage personnel. Determination of salvage expenses shall take into account items (8) to (10) of paragraph 1 of Article 189 of this Law.

In any event, the total special compensation under this Article shall be payable only to the extent it exceeds the salvage remuneration obtainable by the salvor under Article 189 of this Law, and the amount payable shall be the difference by which the special compensation exceeds the salvage remuneration.

Where the salvor fails to prevent or reduce damage to the ecological environment due to the salvor's negligence, the salvor may be deprived wholly or partly of the right to special compensation.

The provisions of this Article shall not affect the vessel owner's right of recourse against other salved parties.

Article 192  The amount of salvage remuneration shall be borne by the owners of the salved vessel and other property in proportion to the salved value of each vessel and each item of property to the total salved value.

Article 193  The salvage remuneration for salvors participating in the same salvage operation shall be determined by negotiation among the parties in accordance with the standards prescribed in Article 189 of this Law; where negotiation fails, action may be brought in court or arbitration may be applied for by agreement among the parties.

Article 194  Salvors who save life in salvage operations shall not claim a reward from the persons saved, but shall be entitled to a reasonable share out of the salvage remuneration obtained for salvage of vessels or other property or for preventing or minimizing damage to the ecological environment.

Article 195  The following salvage operations shall not be entitled to salvage remuneration:

(1) salvage that constitutes normal performance of obligations under a towage contract or other service contract; except where special services not constituting performance of such obligations are provided;

(2) salvage carried out despite explicit and reasonable refusal by the master of the vessel in distress, the vessel owner or other property owner.

Article 196  Where salvage operations are necessitated or rendered more difficult due to the salvor's negligence, or where the salvor commits fraud or other dishonest acts, salvage remuneration payable to the salvor shall be cancelled or reduced.

Article 197  Upon completion of salvage operations, the salved party shall, upon the salvor's request, provide satisfactory security for salvage remuneration.

Without prejudice to the preceding paragraph, the vessel owner of a salved vessel shall endeavor to secure satisfactory security from cargo owners before delivery of salved cargo for their respective salvage remuneration liabilities.

Until satisfactory security is provided for the salved vessel or other property upon the salvor's request, the salved vessel and other property shall not be removed from the port or place first reached after completion of the salvage operations without the salvor's consent.

Article 198  The court or arbitral institution handling claims for salvage remuneration may, according to the circumstances, order or award the salved party to make appropriate advance payment to the salvor under reasonable conditions.

Where advance payment is made by the salved party under the preceding paragraph, the amount of security provided by the salved party under Article 197 of this Law shall be correspondingly reduced.

Article 199  Where, with respect to salved vessels and other property for which ninety days have elapsed, the salved party has neither paid salvage remuneration nor provided satisfactory security, the salvor may apply to the court for compulsory auction; where the salved vessels and other property cannot be kept, are difficult to keep, or where keeping costs may exceed their value, application may be made for earlier auction.

The proceeds from auction shall, after deduction of all expenses in keeping and auctioning, be paid in accordance with the provisions of this Law for salvage remuneration; any surplus shall be returned to the salved party; where return is not possible and no person claims such surplus within one year from the date of auction, it shall belong to the State; any shortfall may be claimed by the salvor against the salved party.

Article 200  Where salvage is carried out between vessels owned by the same vessel owner, the salvor's right to salvage remuneration shall be governed by the provisions of this Chapter.

Article 201  Where salvage operations are carried out by or under the control of relevant state authorities, the salvor shall be entitled to the rights and compensation for salvage operations provided in this Chapter.

Chapter 10 General Average

Article 202  General average means special sacrifices or special expenditures directly resulting from measures intentionally and reasonably taken for the common safety where vessels, cargo and other property are exposed to common danger during the same sea voyage.

Losses caused by delay of the vessel or cargo occurring during the voyage or after completion of the voyage, including loss of time and market and other indirect losses, shall not be included in general average.

Losses or costs paid due to leakage of pollutants from the vessel, cargo or other property during the same sea voyage shall not be included in general average.

Article 203  Where the vessel is damaged due to accident, sacrifice or other special circumstances, in order to safely complete the voyage, port dues paid during the extra stay at the port of refuge or place of refuge or return to the port of loading or place of loading for necessary repairs, wages and provisions of crew, fuel and materials consumed by the vessel, losses and costs for unloading, storage, reloading or moving cargo, fuel, materials and other property on board for repairs, shall be included in general average.

Article 204  Where extra costs are paid in substitution of special costs that may be included in general average, such substituted costs may be included in general average; however, the amount of substituted costs included in general average shall not exceed the special costs in general average being substituted.

Article 205  The party requesting contribution to general average shall bear the burden of proof and prove that its loss should be included in general average.

Article 206  Where the accident giving rise to special sacrifices or special expenditures of general average may have been caused by the fault of one party during the voyage, such possibility shall not affect such party's right to request contribution to general average; however, the non-fault party or the faulty party may bring claims for compensation or raise defenses on account of such fault.

Article 207  The amounts of general average sacrifices of vessels, cargo, and freight shall be determined in accordance with the following provisions:

(1) The amount of general average sacrifices of the vessel shall be calculated based on the actual reasonable repair costs paid, deducting reasonable deductions for new-for-old. Where the vessel has not been repaired, it shall be calculated based on the reasonable depreciation caused by the sacrifice, but shall not exceed the estimated repair cost.

Where the vessel suffers actual total loss or where repair costs exceed the value of the vessel after repair, the amount of general average sacrifice shall be calculated based on the estimated value of the vessel in sound condition, deducting the estimated repair costs not constituting general average damage and the residual value of the vessel after damage.

(2) The amount of general average sacrifices of cargo: where cargo is lost, it shall be calculated based on the value of the cargo at the time of loading plus insurance premium and freight, deducting freight not payable due to the sacrifice. Where cargo is damaged and sold before agreement is reached on the degree of damage, it shall be calculated based on the difference between the value of the cargo at the time of loading plus insurance premium and freight, and the net proceeds from sale of cargo.

(3) The amount of general average sacrifices of freight shall be calculated based on loss of freight caused by the sacrifice of cargo, deducting operating expenses that would have been payable to earn such freight but are not payable due to the sacrifice.

Article 208  General average shall be contributed by the benefiting parties in proportion to their respective contributory values.

The contributory values of vessels, cargo, and freight to general average shall be respectively determined in accordance with the following provisions:

(1) The contributory value of the vessel to general average shall be calculated based on the sound value of the vessel at the termination of the voyage, deducting the amount of losses not constituting general average, or based on the actual value of the vessel at the termination of the voyage plus the amount of general average sacrifices.

(2) The contributory value of cargo to general average shall be calculated based on the value of the cargo at the time of loading plus insurance premium and freight, deducting losses not constituting general average and freight at carrier's risk. Where cargo is sold before arrival at the port of destination, it shall be calculated based on the net proceeds from sale plus the amount of general average sacrifices.

Luggage and personal belongings of passengers shall not contribute to general average.

(3) The contributory value of freight shall be calculated based on the freight at the carrier's risk and receivable at the termination of the voyage, deducting operating expenses paid after the occurrence of the general average accident to complete the voyage to earn such freight, plus the amount of general average sacrifices.

Article 209  Unreported cargo or misdeclared cargo shall contribute to general average; special sacrifices suffered thereby shall not be included in general average.

Where declared value is improperly lower than the actual value of cargo, contribution to general average shall be based on the actual value; where general average sacrifice occurs, the amount of sacrifice shall be calculated based on the declared value.

Article 210  Interest shall be calculated on special sacrifices in general average and special costs advanced for general average.

Article 211  Upon request by interested parties, all contributors shall provide security for general average.

Where cash deposits are provided as security for general average, such deposits shall be deposited in a bank in the name of the custodian by the average adjusting institution.

Provision, use or refund of the cash deposits shall not affect the final contribution liability of each party.

Article 212  Adjustment of general average shall be governed by the adjustment rules agreed in the contract; where the contract contains no agreement, the provisions of this Chapter shall apply.

Chapter 11 Limitation of Maritime Liability

Article 213  Vessel owners and salvors may, in accordance with the provisions of this Chapter, limit liability with respect to maritime claims as provided in Article 216 of this Law.

Charterers, vessel operators, and vessel managers shall be subject to the provisions applicable to vessel owners under this Chapter.

Article 214  Where maritime claims prescribed in Article 216 of this Law are made against persons other than the vessel owner or salvor, and the vessel owner or salvor is liable for the acts or fault of such persons, such persons may limit liability in accordance with the provisions of this Chapter.

Article 215  Where the insured may limit liability under this Chapter in respect of maritime claims, the insurer liable for such maritime claims shall be entitled to enjoy the same limitation of liability in accordance with this Chapter.

Article 216  With respect to the following maritime claims, except as otherwise provided in Articles 217 and 218 of this Law, regardless of the basis of liability, the person liable may limit liability in accordance with this Chapter:

(1) claims for personal injury or death or loss of or damage to property occurring on board or directly connected with the operation of the vessel or salvage operations, including damage to port works, basins, fairways and aids to navigation, and corresponding losses arising therefrom;

(2) claims for loss caused by delay in delivery of cargo under sea carriage of goods or delay in arrival under carriage of passengers and their luggage by sea;

(3) claims for other losses caused by infringement of non-contractual rights directly connected with the operation of the vessel or salvage operations;

(4) claims by persons other than the person liable for measures taken to avoid or reduce losses in respect of which the person liable may limit liability in accordance with this Chapter, and claims for further losses caused by such measures.

Regardless of the mode of presentation, the claims listed in the preceding paragraph may be subject to limitation of liability. However, the fourth item shall not be subject to limitation of liability under this Article where the person liable pays remuneration by agreement under contract.

Article 217  The provisions of this Chapter shall not apply to the following:

(1) claims for salvage remuneration or contribution to general average;

(2) claims for liability for oil pollution damage from vessels as provided in Section 2 of Chapter 12 of this Law;

(3) claims for costs of removal, destruction or rendering harmless of a sunk, wrecked, stranded or abandoned vessel and of objects and cargo on board;

(4) claims for nuclear damage prescribed in an international convention on limitation of liability for nuclear damage concluded or acceded to by the People's Republic of China;

(5) claims for nuclear damage caused by nuclear-powered vessels;

(6) claims brought by employees of the vessel owner or salvor in respect of which the vessel owner or salvor has no right to limit liability under relevant laws, or where such laws prescribe limits of liability higher than those provided in this Chapter.

Article 218  Where it is proven that the loss giving rise to claims is caused by the person liable's intentional act or reckless act or omission with knowledge that such loss would probably result, such person shall have no right to limit liability in accordance with this Chapter.

Article 219  Except as otherwise provided in Article 220 of this Law, limitation of maritime liability shall be calculated according to the following limits of liability:

(1) With respect to claims for personal injury or death:

1. For vessels of 300 to 500 gross tons, the limit of liability shall be 500000 units of account;

2. For vessels exceeding 500 gross tons, the portion up to 500 gross tons shall be subject to sub-item 1 above, and the portion above 500 gross tons shall be increased by the following amounts:

For the portion of 501 to 2000 gross tons, 1000 units of account per gross ton;

For the portion of 2001 to 30000 gross tons, 800 units of account per gross ton;

For the portion of 30001 to 70000 gross tons, 600 units of account per gross ton;

For the portion exceeding 70000 gross tons, 400 units of account per gross ton.

(2) With respect to claims other than personal injury or death:

1. For vessels of 300 to 500 gross tons, the limit of liability shall be 250000 units of account;

2. For vessels exceeding 500 gross tons, the portion up to 500 gross tons shall be subject to sub-item 1 above, and the portion above 500 gross tons shall be increased by the following amounts:

For the portion of 501 to 2000 gross tons, 500 units of account per gross ton;

For the portion of 2001 to 30000 gross tons, 400 units of account per gross ton;

For the portion of 30001 to 70000 gross tons, 300 units of account per gross ton;

For the portion exceeding 70000 gross tons, 200 units of account per gross ton.

(3) Where the limit calculated under item (1) is insufficient to pay all claims for personal injury or death, the shortfall shall rank pari passu with claims other than personal injury or death and be compensated from the amounts under item (2) proportionally.

(4) Without prejudice to item (3) concerning claims for personal injury or death, claims for damage to port works, basins, fairways and aids to navigation shall have priority of compensation over other claims within item (2).

(5) For a salvor who does not carry out salvage operations by means of a vessel or on board the vessel being salved, the limit of liability shall be calculated as for a vessel of 1500 gross tons.

For vessels of less than 300 gross tons, and vessels engaged in coastal operations, limits of liability shall be formulated by the competent department of transport under the State Council and implemented upon approval by the State Council.

Other boats not used for military or government public service colliding with vessels shall be subject to the same limits of liability.

Article 220  Limitation of liability for claims for personal injury or death of passengers under sea carriage of passengers shall be calculated by multiplying 175000 units of account by the passenger capacity prescribed in the vessel certificate.

Article 221  The limits of liability prescribed in Articles 219 and 220 of this Law shall apply to the total amount of claims arising from the same specific incident made against the vessel owner, the salvor himself and against persons whose acts or faults the vessel owner or salvor is liable for.

Article 222  A person liable who requests limitation of liability in accordance with this Law may constitute a limitation fund with the court having jurisdiction. The amount of the fund shall be the limits prescribed in Articles 219 and 220 of this Law, plus the corresponding interest accrued from the date of occurrence of the incident to the date of constitution of the fund.

A fund constituted by any one of the persons liable under this Chapter shall be deemed constituted by all persons liable.

Article 223  Upon constitution of a limitation fund by the person liable, any person entitled to make claims under Article 216 of this Law shall not exercise any rights against any property of the person liable; where the vessel or other property of the person liable who has constituted a limitation fund has been subjected to preservation measures, or where security has been provided by the fund's constitutor, the court shall promptly lift preservation measures or return the security.

Article 224  Where a person entitled to limitation under this Chapter makes a counterclaim against the claimant arising from the same incident, the amounts of the claims shall be set off against each other, and the limits of liability prescribed in this Chapter shall apply only to the difference between the two claims.

Chapter 12 Liability for Oil Pollution Damage from Vessels

Section 1 General Provisions

Article 225  Compensation for oil pollution damage from vessels in the sea areas under the jurisdiction of the People's Republic of China and in navigable waters connected to the sea shall be governed by the provisions of this Chapter.

The scope of compensation for oil pollution damage from vessels includes:

(1) property damage other than to the vessel itself and loss of income caused by oil pollution from the vessel;

(2) costs incurred in taking preventive measures to prevent or mitigate oil pollution damage from the vessel, and losses caused by preventive measures;

(3) loss of income caused by damage to the ecological environment due to oil pollution;

(4) costs of reasonable restoration measures already taken or to be taken for the polluted ecological environment.

Article 226  The vessel owner of the leaking vessel shall bear liability for compensation for oil pollution damage from the vessel.

Where the vessel owner proves that the oil pollution damage is entirely caused by any of the following circumstances and that damage to the ecological environment could not be avoided after timely taking reasonable measures, the vessel owner shall not be liable for compensation:

(1) war, armed conflicts, terrorist activities or irresistible natural disasters;

(2) intentional act of a third person;

(3) negligence or other wrongful acts by the department responsible for management of lighthouses or other aids to navigation in the performance of its duties.

Where the vessel owner proves that oil pollution damage is wholly or partly caused by the fault of the victim, the vessel owner may be wholly or partly exempted from liability for compensation to such victim.

Article 227  The vessel owner may limit liability for compensation in accordance with this Chapter. However, where oil pollution damage from the vessel is caused by the vessel owner's intentional act or reckless act or omission with knowledge that such damage would probably result, the vessel owner shall not limit liability for compensation in accordance with this Chapter.

Article 228  Where oil pollution damage is caused by two or more vessels, each vessel owner shall bear joint and several liability for damage that cannot be reasonably separated.

The provisions of the preceding paragraph shall not affect the right of the vessel owner against whom claim is made to limit liability for compensation in accordance with this Chapter.

Article 229  The State shall establish a system of liability insurance for oil pollution damage from vessels. The vessel owner shall, in accordance with relevant state provisions, obtain civil liability insurance for oil pollution damage from vessels or corresponding financial security.

Claims for compensation for oil pollution damage from vessels may be made directly against the vessel owner's liability insurer or financial guarantor; however, the liability of the insurer or financial guarantor shall not exceed the limits of liability prescribed in Articles 233 and 239 of this Law. Where the vessel owner loses the right to limit liability for compensation under this Chapter, the liability insurer or financial guarantor may still invoke the limitation of liability prescribed in this Chapter.

With respect to claims for compensation for oil pollution damage from vessels under the preceding paragraph, the liability insurer or financial guarantor shall be entitled to defend on the ground that the damage was caused by the vessel owner's intentional act, and shall be entitled to invoke defenses other than bankruptcy or liquidation of the vessel owner.

The State shall improve and implement the system of compensation fund for oil pollution damage from vessels according to law.

Article 230  The provisions of this Chapter shall not affect the vessel owner's right of recourse against third persons.

Section 2 Liability for Pollution Damage from Carriage of Oil in Bulk by Vessels

Article 231  The provisions of this Section shall apply to liability for oil pollution damage caused by vessels carrying oil in bulk.

Vessels constructed or converted for carriage of oil cargoes in bulk, and vessels capable of carrying oil in bulk and other cargoes, during voyages in which they actually carry oil cargoes in bulk and in any subsequent voyage, shall be subject to the provisions of this Section, unless it can be proven that no residues of oil cargoes in bulk remain on board.

Oil as referred to in this Section means any persistent hydrocarbon mineral oil carried as cargo or used as fuel by a vessel, including lubricating oil.

Article 232  The following persons shall not be liable for compensation for oil pollution damage from carriage of oil in bulk by vessels under this Section, except where the damage is caused by their own intentional act or reckless act or omission with knowledge that such damage would probably result:

(1) employees or agents of the vessel owner;

(2) pilots or any other persons, other than seafarers, providing services to the vessel;

(3) charterers, vessel operators or vessel managers;

(4) any persons conducting salvage operations with the consent of the vessel owner or pursuant to orders of government authorities;

(5) any persons other than the vessel owner taking preventive measures;

(6) employees or agents of the persons prescribed in items (3) to (5) of this Article.

Article 233  Where oil pollution damage is caused by a vessel carrying oil, the vessel owner's limit of liability for compensation per incident shall be calculated as follows:

(1) For vessels of up to 5000 gross tons, the limit of liability shall be 4510000 units of account;

(2) For vessels exceeding 5000 gross tons, the portion up to 5000 gross tons shall be subject to the preceding item, and the portion above 5000 gross tons shall be increased by 631 units of account per gross ton; however, the limit of liability shall not exceed 89770000 units of account in any event.

Article 234  Where the vessel owner or his liability insurer or financial guarantor invokes the limitation of liability prescribed in this Section, a limitation fund shall be constituted in the court having jurisdiction.

A fund constituted by any one of the persons liable under the preceding paragraph shall be deemed constituted by all persons liable.

Article 235  Where a limitation fund has been constituted and the vessel owner is entitled to limit liability, claimants for oil pollution damage shall not apply to the court for preservation measures against the vessel owner's property; preservation measures already taken shall be lifted, and cash deposits or other security provided by the vessel owner to avoid or lift preservation measures shall be returned.

Article 236  Claimants for oil pollution damage shall share the limitation fund in proportion to their respective amounts of compensation.

Prior to distribution of the limitation fund, where the vessel owner or his liability insurer or financial guarantor has paid compensation to claimants for oil pollution damage, or where compensation is paid by a third person, the vessel owner or such insurer or financial guarantor shall be subrogated to the rights of the claimant to the extent of the amount paid.

Costs of preventive measures taken by the vessel owner and losses caused by preventive measures shall rank pari passu with other claimants for oil pollution damage in distribution of the limitation fund.

Section 3 Liability for Pollution Damage from Vessel Bunker Oil

Article 237  The provisions of Section 2 of this Chapter shall apply to liability for pollution damage caused by non-persistent bunker oil carried by vessels and bunker oil carried by vessels other than those prescribed in Section 2.

Bunker oil as referred to in this Section means hydrocarbon mineral oil used as fuel by a vessel, including lubricating oil.

The provisions in this Section concerning the vessel owner shall apply to bareboat charterers, vessel operators, and vessel managers.

Article 238  The following persons shall not be liable for compensation for pollution damage from bunker oil as provided in this Section, except where the damage is caused by their own intentional act or reckless act or omission with knowledge that such damage would probably result:

(1) employees or agents of the vessel owner;

(2) pilots or any other persons, other than seafarers, providing services to the vessel;

(3) voyage charterers or time charterers;

(4) any persons conducting salvage operations with the consent of the vessel owner or pursuant to orders of government authorities;

(5) any persons other than the vessel owner taking preventive measures;

(6) employees or agents of the persons prescribed in items (3) to (5) of this Article.

Article 239  The limits of liability for compensation for pollution damage from bunker oil under this Section shall be governed by the provisions of Chapter 11 of this Law.

Where the same incident causes pollution damage from bunker oil and other damage for which liability may be limited under Article 216 of this Law, the person liable shall be entitled to limit liability within the same limit of liability in accordance with Article 219 of this Law.

Chapter 13 Marine Insurance Contracts

Section 1 General Provisions

Article 240  A marine insurance contract means a contract whereby the insurer undertakes, upon agreement, to compensate the insured for loss of the subject matter insured and liabilities arising therefrom caused by marine insurance accidents, and the insured pays the premium.

Marine insurance accident means any accident at sea agreed upon by the insurer and the insured, including accidents occurring on inland waters or on land relating to sea navigation.

Article 241  The contents of a marine insurance contract mainly include the following:

(1) the name of the insurer;

(2) the name of the insured;

(3) the subject matter insured;

(4) the insurable value;

(5) the sum insured;

(6) the insurance coverage and exclusions;

(7) the insurance period;

(8) the premium.

Article 242  The following may be the subject matter insured:

(1) vessels;

(2) cargo;

(3) vessel operating income, including freight, hire, and passenger fares;

(4) anticipated profit of cargo;

(5) wages and other remuneration of seafarers;

(6) liability towards third persons;

(7) other property and liabilities and expenses that may be suffered due to the occurrence of marine insurance accidents.

An insurer may reinsure insurance over the subject matter insured in the preceding paragraph. Unless otherwise agreed in the contract, the original insured shall not enjoy the benefits of reinsurance.

Article 243  The insurable value of the subject matter insured shall be agreed in writing by the insurer and the insured; upon occurrence of loss of the subject matter insured, the agreed insurable value shall be the basis for calculation of compensation.

Where the insurer and the insured have not agreed upon the insurable value, the insurable value shall be calculated as follows:

(1) the insurable value of the vessel shall be the value of the vessel at the commencement of the risk, including the value of the hull, machinery, and equipment, and the value of fuel, materials, rigging, provisions, and fresh water on board, and the total of the premium;

(2) the insurable value of cargo shall be the invoice price of cargo at the place of departure at the commencement of the risk or the actual value of non-trade goods at the place of departure, together with freight and premium;

(3) the insurable value of freight shall be the total freight receivable by the carrier at the commencement of the risk together with the premium;

(4) the insurable value of other subject matters insured shall be the actual value at the commencement of the risk together with the premium.

Article 244  The sum insured shall be agreed upon by the insurer and the insured. The sum insured shall not exceed the insurable value; any excess shall be void.

Article 245  Marine insurance contracts for vessels under construction shall be governed by the relevant provisions of this Chapter.

A marine insurance contract for a vessel under construction means a contract whereby the insurer undertakes, upon agreement, to compensate the insured for loss and liabilities arising from marine insurance accidents suffered by the vessel during construction at the shipyard, sea trials and delivery, and the insured pays the premium.

Vessels under construction include materials, machinery and equipment and the like used for constructing vessels in conformity with the shipbuilding contract.

Section 2 Formation, Rescission and Assignment of Contract

Article 246  A contract is formed when the insured submits an insurance application, the insurer agrees to underwrite, and the parties reach agreement on the terms of the marine insurance contract. The insurer shall promptly issue an insurance policy or other insurance certificate to the insured and recite therein the contract contents agreed upon by both parties.

Article 247  Prior to conclusion of the contract, the insured shall truthfully disclose to the insurer material circumstances known to him or that he ought to know in the ordinary course of business that affect the insurer's determination of premium rate or determination of whether to underwrite.

Material circumstances known to the insurer or that the insurer ought to know in the ordinary course of business need not be disclosed by the insured where the insurer has not inquired.

Article 248  Where, due to the insured's intentional act, the insured fails to truthfully disclose material circumstances prescribed in paragraph 1 of Article 247 of this Law, the insurer shall have the right to rescind the contract and shall not refund premiums. Where marine insurance accidents occur before rescission of the contract causing loss, the insurer shall not be liable for compensation.

Where, not due to intentional act of the insured, the insured fails to truthfully disclose material circumstances prescribed in paragraph 1 of Article 247 of this Law, the insurer shall have the right to rescind the contract or request corresponding increase of premium. Where the insurer rescinds the contract prior to commencement of the risk, all premiums shall be refunded but handling charges may be collected. Where the insurer rescinds the contract after commencement of the risk, the insurer shall refund to the insured the premium from the date of rescission to the date of expiry of the insurance period, but the insurer may refuse to refund premium where a voyage insurance contract is rescinded. With respect to loss caused by marine insurance accidents occurring prior to rescission of the contract, the insurer shall be liable for compensation, except where the undisclosed or erroneously disclosed material circumstances affect the occurrence of marine insurance accidents.

The right to rescind prescribed in this Article shall be extinguished where not exercised within thirty days from the date the insurer knows or ought to know the grounds for rescission.

Article 249  Where a marine insurance contract adopts standard terms provided by the insurer, for clauses in the insurance contract that exempt or reduce the insurer's liability and other clauses of material interest to the insured, the insurer shall, when concluding the contract, make prompts sufficient to draw the insured's attention. Where the insured requests explanations, the insurer shall provide clear explanations of such clauses.

Where the insurer fails to fulfill the obligations of prompting or explaining as prescribed in the preceding paragraph, resulting in the insured not noticing or understanding clauses of material interest to him, the insured may assert that such clauses do not constitute the contents of the contract; except where the insured knows or ought to know the contents of such clauses.

Article 250  Where, at the time of conclusion of the contract, the insured already knows or ought to know that the subject matter insured has suffered loss due to marine insurance accidents, the insurer shall not be liable for compensation but shall be entitled to collect the premium; where the insurer already knows or ought to know that the subject matter insured cannot suffer loss due to marine insurance accidents, the insured shall be entitled to recover premiums already paid.

Article 251  Where, for the same subject matter insured and the same insurable interest, the insured repeatedly concludes contracts with two or more insurers for the same marine insurance accident, resulting in the total sum insured exceeding the insurable value of the subject matter insured, unless otherwise agreed in the contract, the insured may make claim for compensation against any insurer, but the total amount of compensation obtained by the insured shall not exceed the amount of loss of the subject matter insured.

Each insurer shall bear liability for compensation in proportion to the sum insured under its underwriting to the total sum insured; where any insurer pays compensation exceeding its proportionate liability, it shall have the right of recourse against insurers who have not paid compensation in accordance with their respective proportionate liability.

The insurable value referred to in paragraph 1 of this Article shall be the highest insurable value among the insurance contracts; the amount of loss shall be the amount calculated based on the highest insurable value among the insurance contracts.

Article 252  Prior to commencement of the risk, the insured may request rescission of the contract, but shall pay handling charges to the insurer, and the insurer shall refund premiums.

Article 253  Unless otherwise provided by law or agreed in the contract, neither the insured nor the insurer may rescind the contract after commencement of the risk.

Where rescission of the contract after commencement of the risk is permitted under the contract, where the insured requests rescission, the insurer shall be entitled to collect premium from the date of commencement of the risk to the date of rescission of the contract and refund the remaining part; where the insurer requests rescission, the insurer shall refund to the insured the premium from the date of rescission of the contract to the date of expiry of the insurance period.

Article 254  For voyage insurance of sea carriage of cargo and vessels, the insured shall not request rescission of the contract after commencement of the risk.

Article 255  A marine cargo insurance contract may be assigned by endorsement or other means by the insured, and rights and obligations under the contract shall be transferred accordingly. Where premium has not been paid at the time of assignment, the insured and the assignee shall bear joint and several liability for payment.

Article 256  Assignment of a vessel insurance contract due to assignment of the vessel shall be subject to the insurer's consent. Absent the insurer's consent, the vessel insurance contract shall be rescinded from the time of assignment of the vessel; where assignment of the vessel occurs during a voyage, the vessel insurance contract shall be rescinded upon termination of the voyage.

Upon rescission of the contract, the insurer shall refund to the insured the premium from the date of rescission to the date of expiry of the insurance period.

Article 257  A floating policy means a contract whereby the insurer undertakes, upon agreement, to bear insurance liability for cargo to be transported in batches by the insured within a certain future period, and the insured pays the premium.

A floating policy shall be concluded in written form.

Article 258  Upon the insured's request, the insurer shall separately issue insurance certificates for cargo transported in batches under a floating policy.

Where the contents of separately issued insurance certificates are inconsistent with the contents of the floating policy, the separately issued insurance certificates shall prevail.

Article 259  The insured shall, prior to each shipment, truthfully declare to the insurer the names and quantities of the cargo transported in batches under a floating policy, the names of vessels carrying the cargo, the routes, the insurable values and sums insured, and other specific matters.

Where, due to the insured's intentional act, the insured fails to declare or makes erroneous declaration of the cargo transported, the insurer shall not be liable for compensation for losses caused by marine insurance accidents occurring during carriage of such cargo, but shall be entitled to collect premiums.

Where, not due to intentional act of the insured, the insured fails to declare or makes erroneous declaration of the cargo transported, the insured may make supplementary declaration or correction, and such supplementary declaration or correction shall not affect the insured's right to claim insurance compensation from the insurer; however, the insurer shall be entitled to take the insurable value prescribed in paragraph 2 of Article 243 of this Law as the basis for calculation of compensation.

The provisions of this Article shall apply only where the floating policy contains no stipulations or no different stipulations.

Section 3 Obligations of the Insured

Article 260  Unless otherwise agreed in the contract, the insured shall pay premiums immediately upon conclusion of the contract; prior to payment of premiums by the insured, the insurer may refuse to issue insurance certificates.

Article 261  Where the insured violates warranty clauses agreed in the contract, the insurer shall have the right to rescind the contract or request modification of underwriting conditions or increase of premiums. Where the insurer rescinds the contract, the insurer shall notify the insured in writing, and the contract shall be rescinded upon receipt of the notice by the insured.

The insurer shall be liable for compensation for losses caused by marine insurance accidents occurring prior to the insured's violation of warranty clauses.

For losses caused by marine insurance accidents occurring from the time of the insured's violation of warranty clauses to the time the rescission notice reaches the insured, the insurer shall not bear insurance liability; except where the insured can prove any of the following circumstances:

(1) violation of warranty clauses by the insured had no impact on the occurrence of marine insurance accidents;

(2) marine insurance accidents occurred after the insured had corrected the violation of warranty clauses.

Article 262  Upon occurrence of marine insurance accidents, the insured shall immediately notify the insurer, and take necessary and reasonable measures to prevent or reduce loss. Where the insured receives special notice from the insurer concerning taking reasonable measures to prevent or reduce loss, the insured shall act in accordance with the insurer's notice.

The insurer shall not be liable for compensation for increased loss caused by the insured's violation of the preceding paragraph.

Section 4 Liability of the Insurer

Article 263  Upon occurrence of loss caused by marine insurance accidents, the insurer shall promptly pay insurance compensation to the insured.

Article 264  The insurer's compensation for losses caused by marine insurance accidents shall be limited to the sum insured. Where the sum insured is less than the insurable value, upon occurrence of partial loss of the subject matter insured, the insurer shall bear liability for compensation in proportion to the sum insured to the insurable value.

Article 265  Where losses caused by marine insurance accidents to the subject matter insured occur several times during the insurance period, the insurer shall compensate even if the total amount of loss exceeds the sum insured. However, where partial loss occurs and, without repair, total loss occurs thereafter, the insurer shall compensate for total loss.

Article 266  Necessary and reasonable expenses incurred by the insured to prevent or reduce losses that may be compensated under the contract, reasonable expenses for inspection and appraisal incurred to determine the nature and extent of marine insurance accidents, and expenses incurred in carrying out the insurer's special notice, shall be paid separately by the insurer in addition to compensation for loss of the subject matter insured.

Payment by the insurer of the expenses prescribed in the preceding paragraph shall be limited to an amount equivalent to the sum insured.

Where the sum insured is less than the insurable value, unless otherwise agreed in the contract, the insurer shall pay the expenses prescribed in this Article in proportion to the sum insured to the insurable value.

Article 267  Where the sum insured is less than the contributory value to general average, the insurer shall compensate general average contribution in proportion to the sum insured to the contributory value.

Article 268  The insurer shall not be liable for compensation for losses caused by the insured's intentional acts.

Article 269  Unless otherwise agreed in the contract, the insurer shall not be liable for compensation for loss of cargo caused by any of the following reasons:

(1) delay in navigation, delay in delivery, or market changes;

(2) natural attrition of cargo, inherent defects and natural characteristics of cargo;

(3) improper packing.

Article 270  Unless otherwise agreed in the contract, the insurer shall not be liable for compensation for loss of insured vessels caused by any of the following reasons:

(1) unseaworthiness of the vessel at the time of commencement of navigation; except where the insured does not know and ought not to know in time insurance of vessels;

(2) natural wear and tear or corrosion of the vessel.

The provisions of the preceding paragraph shall apply to insurance of freight.

Section 5 Losses of the Subject Matter Insured and Abandonment

Article 271  Actual total loss refers to loss of the subject matter insured after marine insurance accidents, or severe damage whereby the subject matter insured completely loses its original form or utility, or cannot continue to be owned by the insured.

Article 272  Constructive total loss of the vessel refers to a situation where actual total loss is unavoidable after marine insurance accidents, or where the expenses required to avoid actual total loss exceed the insurable value.

Constructive total loss of cargo refers to a situation where actual total loss is unavoidable after marine insurance accidents, or where the sum of the expenses required to avoid actual total loss and the expenses to continue to carry the cargo to the destination exceeds the insurable value.

Article 273  Loss not constituting actual total loss or constructive total loss refers to partial loss.

Article 274  Where the vessel does not arrive at the destination within a reasonable time from the place of last report received, unless otherwise agreed in the contract, if no report is received within sixty days, the vessel shall be deemed missing. A missing vessel shall be deemed actual total loss.

Article 275  Where constructive total loss occurs to the subject matter insured and the insured requests compensation by the insurer for total loss, the insured shall abandon the subject matter insured to the insurer within a reasonable time. The insurer may accept the abandonment or refuse the abandonment, but shall notify the insured of the decision to accept or refuse the abandonment within a reasonable time. Where the insurer fails to notify the insured within a reasonable time whether it accepts abandonment, it shall be deemed to refuse abandonment.

Abandonment shall not be conditional. Once abandonment is accepted by the insurer, it shall not be revoked.

Article 276  Where the insurer accepts abandonment, all rights and obligations of the insured with respect to the property abandoned shall be transferred to the insurer.

Section 6 Payment of Insurance Compensation

Article 277  Prior to payment of insurance compensation by the insurer to the insured after occurrence of marine insurance accidents, the insurer may request the insured to provide proof and materials related to confirmation of the nature of marine insurance accidents and the extent of loss.

Article 278  Where loss within the scope of insurance liability of the subject matter insured is caused by a third person after occurrence of marine insurance accidents, the insured's right to claim compensation against the third person shall be transferred to the insurer to the corresponding extent from the date the insurer pays compensation.

The insured shall provide necessary documents and information required by the insurer and shall endeavor to assist the insurer in seeking recourse against the third person.

Article 279  Where the insured waives the right to claim compensation against the third person without the insurer's consent, or due to fault causes the insurer to be unable to exercise the right of recourse, the insurer may correspondingly deduct insurance compensation.

Article 280  When paying insurance compensation, the insurer may correspondingly deduct from the compensation payable the amount of compensation already obtained by the insured from the third person.

Where the insurer obtains compensation from the third person exceeding the insurance compensation paid by the insurer, the excess shall be returned to the insured.

Article 281  After occurrence of marine insurance accidents, the insurer shall be entitled to waive rights to the subject matter insured and pay the insurance compensation stipulated in the contract in full to discharge obligations towards the subject matter insured.

Where the insurer exercises the right prescribed in the preceding paragraph, it shall notify the insured within seven days from the date of receipt of the insured's notice concerning compensation for loss; reasonable and necessary expenses paid by the insured to avoid or reduce loss prior to receipt of the notice shall be reimbursed by the insurer.

Article 282  Except as provided in Article 281 of this Law, where total loss of the subject matter insured occurs and the insurer pays the full sum insured, the insurer shall acquire all rights to the subject matter insured; however, in the case of underinsurance, the insurer shall acquire rights to the subject matter insured in proportion to the sum insured to the insurable value.

Chapter 14 Limitation Periods

Article 283  Where a maritime dispute arises, parties may bring an action or apply for arbitration in accordance with law.

Article 284  The limitation period for claims for compensation under sea carriage of goods shall be one year. Among these, for claims against the carrier or actual carrier for compensation, the limitation shall be calculated from the date of delivery of the goods or the date on which delivery ought to have been made; for claims against the shipper, consignee, or holder of transport documents for compensation, the limitation shall be calculated from the date the right holder knows or ought to know that his right has been infringed.

Where the limitation period prescribed in the preceding paragraph has expired or has less than ninety days remaining to expiry, the limitation period for a right of recourse enjoyed by a person determined to be liable against a third person shall be ninety days, calculated from the date the recourse claimant resolves the original claim for compensation.

Article 285  The limitation period for claims for compensation under sea carriage of passengers shall be two years and shall be calculated as follows:

(1) for claims concerning death of passengers occurring during the period of carriage, calculated from the date the passenger ought to have left the vessel; for claims where death occurs after the passenger leaves the vessel due to injuries during the period of carriage, calculated from the date of death of the passenger; however, in no event shall this period exceed three years from the date the passenger left the vessel;

(2) for claims concerning personal injury of passengers or loss of or damage to luggage, calculated from the date the passenger leaves the vessel or the date the passenger ought to have left the vessel.

Article 286  The limitation period for claims concerning charterparty contracts shall be two years, calculated from the date the party knows or ought to know that his right has been infringed.

Article 287  The limitation period for claims concerning maritime towage contracts shall be one year, calculated from the date the party knows or ought to know that his right has been infringed.

Article 288  The limitation period for claims concerning collision of vessels shall be two years, calculated from the date of the collision accident.

The limitation period for rights of recourse prescribed in paragraph 3 of Article 178 of this Law shall be one year, calculated from the date the party pays damages jointly and severally.

Limitation periods for claims or rights of recourse arising under Article 179 of this Law shall be governed by this Article.

Article 289  The limitation period for claims concerning maritime salvage shall be two years, calculated from the date of termination of salvage operations.

Article 290  The limitation period for claims concerning contribution to general average shall be one year, calculated from the date of completion of adjustment of general average; however, in no event shall it exceed six years from the date of termination of the common voyage.

Article 291  The limitation period for claims against the insurer for insurance compensation under marine insurance contracts shall be two years, calculated from the date the party knows or ought to know that marine insurance accidents have occurred.

Article 292  The limitation period for claims concerning oil pollution damage from vessels shall be three years, calculated from the date of occurrence of the damage; however, in no event shall it exceed six years from the date of the accident causing the damage.

Article 293  Where, within the last six months of the limitation period, force majeure or other obstacles prevent exercise of the right of claim, the limitation period shall be suspended. The limitation shall expire upon six months from the date of elimination of the cause of suspension.

Article 294  The limitation period shall be interrupted where the claimant makes a demand for performance, brings an action, applies for arbitration, or where the person requested agrees to perform the obligation.

Where the claimant applies for arrest of a ship, the limitation period shall be interrupted from the date of application for arrest.

From the date of interruption and upon conclusion of relevant procedures, the limitation period shall be recalculated.

Chapter 15 Application of Law to Foreign-related Relations

Article 295  Parties to a contract may choose the law applicable to the contract, unless otherwise provided by law. Where parties to a contract do not choose, the law of the country having the closest connection with the contract shall apply.

International contracts of carriage of goods by sea with the port of loading or the port of discharge located within the territory of the People's Republic of China shall be governed by the provisions of Chapter 4 of this Law.

Article 296  Ownership of a vessel shall be governed by the law of the flag state.

Where the flag changes, ownership of the vessel after change shall be governed by the law of the new flag state; except where the flag change arises from bareboat chartering.

Ownership of a vessel under construction: where the vessel has been registered, the law of the state of registration shall apply; where not registered, the law of the place of construction of the vessel shall apply.

Article 297  Mortgage of a vessel shall be governed by the law of the flag state.

Where a vessel mortgage is established before bareboat chartering or during bareboat chartering, the law of the original state of registration of the vessel shall apply.

Mortgage of a vessel under construction: where the vessel has been registered, the law of the state of registration shall apply; where not registered, the law of the place of construction of the vessel shall apply.

Article 298  Maritime liens shall be governed by the lex fori.

Article 299  Possessory lien on a vessel shall be governed by the law of the place where the vessel is retained.

Article 300  The order of priority among maritime liens, possessory liens on vessels and vessel mortgages shall be governed by the lex fori.

Article 301  Liability for collision of vessels shall be governed by the law of the place of tort. Where collision occurs on the high seas, the lex fori shall apply. Where collision occurs between vessels of the same nationality, liability between the colliding vessels shall be governed by the law of the flag state.

Where, after collision, the parties agree to choose the applicable law, such agreement shall be followed.

Article 302  Adjustment of general average shall be governed by the law of the place of adjustment.

Parties may agree on the law applicable to claims for contribution to general average; where parties do not choose, the law of the place of termination of the voyage shall apply.

Article 303  Limitation of maritime liability shall be governed by the lex fori.

Article 304  Liability for oil pollution damage from vessels shall be governed by the law of the place where the result of oil pollution damage occurs.

Article 305  Application of foreign law in accordance with this Chapter shall not prejudice the public interest of the People's Republic of China.

Chapter 16 Supplementary Provisions

Article 306  Unit of account as referred to in this Law means the Special Drawing Right prescribed by the International Monetary Fund; the amount in Renminbi shall be the amount in Renminbi calculated according to the exchange rate between the Special Drawing Right and the Renminbi as published by the International Monetary Fund on the date of the court judgment, the date of the arbitral award, or the date of agreement by the parties.

Article 307  Where international treaties concluded or acceded to by the People's Republic of China contain provisions different from those of this Law, the provisions of the international treaties shall apply; except for provisions for which the People's Republic of China has made reservations.

Where neither the laws of the People's Republic of China nor international treaties concluded or acceded to by the People's Republic of China contain provisions, international practices may be applied. Application of international practices shall not prejudice the public interest of the People's Republic of China.

Article 308  The State shall support cooperation in international maritime affairs and promote healthy development of the maritime transport industry.

Where any country or region adopts discriminatory prohibitions, restrictions or other similar measures against the People's Republic of China in areas related to maritime transport and shipbuilding, the People's Republic of China may, according to actual circumstances, adopt corresponding measures against the relevant country or region.

Article 309  Vessel owners, vessel operators, vessel managers or vessel charterers and the like may voluntarily form mutual insurance organizations as members, collect contributions in accordance with the articles of association, and bear liability for compensation for losses, liabilities or expenses incurred by members in vessel operation.

Article 310  This Law shall come into force on May 1, 2026.