Certain Provisions of the Supreme People’s Court on Trying Cases about Disputes on Compensation for Oil Pollution Damage from Ships
  
 
Certain Provisions of the Supreme People’s Court on Trying Cases about Disputes on Compensation for Oil Pollution Damage from Ships was adopted at the 1509th Session of the Judicial Committee of the Supreme People’s Court on January 10, 2011, it is hereby promulgated and effective as of July 1, 2011.
  

 
 
                                       May 4, 2011
 
 
 
Fa Shi <2011> No. 14
 
 
Certain Provisions of the Supreme People’s Court on Trying Cases about Disputes on Compensation for Oil Pollution Damage from Ships
 (Adopted at the 1509th Session of the Judicial Committee of the Supreme People’s Court on January 10, 2011)
 
 
 
This Provision is enacted in accordance with the laws and regulations of General Principles of the Civil Law of the People's Republic of China, Tort Liability Law of People's Republic of China, Marine Environment Protection Law of the People's Republic of China, Maritime Code of the People’s Republic of China, Civil Procedure Law of the People’s Republic of China, Special Maritime Procedure Law of the People’s Republic of China and relevant international treaties concluded or acceded to by the People’s Republic of China, and in light of the concrete conditions of trial, for the purpose of correctly trying cases about disputes on compensation for oil pollution damage from ships.
 
Article 1
In case that a marine oil pollution accident causes oil pollution damage to or poses a threat of oil pollution damage to the territory of the People’s Republic of China and other waters governed by the People’s Republic of China, and a people’s court tries relevant cases about disputes on compensation for oil pollution damage from ships, this Provision shall apply
 
Article 2
Where a party concerned raises a lawsuit or applies to constitute a limitation fund for oil pollution damage claims liability with respect to the oil pollution damage caused by the persistent oils carried by oil tankers, it shall be under the jurisdiction of the maritime court of the place where the oil pollution accident is occurred.
 
Where the oil pollution accident is caused by the persistent oils carried by oil tankers and occurred outside the territory of the People’s Republic of China and other waters governed by the People’s Republic of China, and it causes oil pollution damage to or poses a threat of oil pollution damage to the territory of the People’s Republic of China and other waters governed by the People’s Republic of China, and a party concerned raises a lawsuit or applies to constitute a limitation fund for oil pollution damage claims liability with respect to the damage caused by the accident, it shall be under the jurisdiction of the maritime court of the place where the damage is occurred or of the place where measures are taken to prevent oil pollution.
 
Article 3
Where the oil pollution damage is caused by oil leakage from two or over two ships and the person suffering for the damage requests the shipowners of the ships from where the oil leaks to bear the compensation liability, the shipowners shall separately undertake the liability if the damage can be reasonably and separately divided according to the factors such as amount of oil leakage and hazard to the environment caused by the oil leakage; otherwise, the shipowners shall bear joint liability, unless the shipowners are exempt from bearing the liability according to law.
 
Where the shipowners shall bear joint liability to the person suffering for the damage, they shall ascertain their corresponding compensation amount according to their respective liabilities; where the liability is hard to be ascertained, the shipowners shall bear the compensation liability equally. A shipowner who remits the compensation amount exceeding that it should remit, shall be entitled to recover from other shipowners.
 
Article 4
Where the oil pollution damage is caused by oil leakage resulted from both to blame collision, the person suffering for the damage may request the shipowners to bear any and all compensation liability.
 
Article 5
Where the oil pollution damage is caused by persistent oils carried by oil tankers, the compensation limit shall be ascertained according to the provisions of Regulations of the People’s Republic of China on the Prevention and Control of Marine Pollution from Ships and International Convention on Civil Liability for Oil Pollution Damage 1992.
 
Where the oil pollution damage is caused by non-persistent fuel oils carried by oil tankers or fuel oils carried by non-tankers, the compensation limit shall be ascertained according to the regulation with respect to limitation of liability for maritime claims in Maritime Code.
 
Article 6
Where it is proved that the oil pollution damage resulted from an act or omission of the shipowners done with the intent to cause such damage and with knowledge that such damage would probably result, a people’s court shall not support the shipowners’ claim for limitation of compensation liability.
 
Article 7
Where the oil pollution damage is caused by the shipowners intentionally, and the person suffering for the damage claims indemnity to the insurer bearing the liability for oil pollution damage or the financial guarantor, a people’s court shall not support.
 
Article 8
Where the person suffering for the damage directly lodges claims against the insurer bearing the liability for oil pollution damage or the financial guarantor, the insurer bearing the liability for oil pollution damage or the financial guarantor may avail itself of any defense against the person suffering the damage as the shipowner.
 
Unless the oil pollution damage is caused by the shipowners intentionally, where the insurer bearing the liability for oil pollution damage or the financial guarantor may, in respect of the person suffering the damage, avail itself of any defense it has against the shipowner, a people’s court shall not support.
 
Article 9
The compensation range of oil pollution damage includes: 1. the expense occurred by taking precautionary measures to prevent or mitigate the oil pollution damage, and the further loss or damage caused by the precautionary measures; 2. the property damage except the ship caused by the oil pollution damage, and the income loss resulted therefrom; 3. the income loss caused by environment damage resulted from the oil pollution; 4. the expense for the restoration measures reasonably taken or about to be taken towards the polluted environment.
 
Article 10
With regard to the expense of precautionary measures and the further loss or damage caused by the precautionary measures, a people’s court shall reasonably ascertain the expense, loss or damage in light of factors such as scope of pollution, degree of pollution, amount of oil leakage, the rationality of precautionary measure, and expense of the workers participating into the clean-up and the equipment put into use etc.
 
Article 11
Where measures are taken to prevent pollution from ships in danger, and the operation mainly aims to prevent or mitigate oil pollution damage at the beginning, the expense occurred shall be ascertained as the expense of precautionary measures.
 
Where the operation aims not only to salvage the ships in danger, but also to prevent or mitigate the oil pollution damage, the expense of precautionary measures and the expense of salvage measures shall be reasonably divided according to the proportion of the sequence of priority of the aims; where there is no reasonable basis to divide the primary and secondary aims, the relevant expense shall be shared equally. However, the expense occurred after the removal of the danger of pollution shall not be listed as expense of precautionary measure.
 
Article 12
Where the oils leaking from ships pollute the property such as other ships, fishing gear, aquaculture facility etc, and the person suffering for the damage requests the responsible person of oil pollution to compensate the reasonable expense for cleansing and repairing the polluted property, a people’s court shall support.
 
Where the polluted property could not be cleansed or repaired, or the cost for cleansing and repairing outweights its value, and where the person suffering for the damage requests the responsible person of oil pollution to compensate the reasonable expense for replacement, a people’s court shall support. However, the expense shall be deducted reasonably according to the proportion of the real service life and expected service life of the polluted property.
 
Article 13
Where the person suffering for the damage could not conduct production and operation normally due to his property suffering from oil pollution, its income loss shall be calculated within the limit of the reasonable period necessary for cleansing, repairing and replacement of the property.
 
Article 14
With regard to the request raised by marine fishery, seashore tourist industry and other sea-using or coastal operation unit or individual in respect of the income loss resulted from environment pollution, if the following conditions are all fulfilled and the income loss is hereby proved to have direct causality with the environment pollution, a people’s court shall support: 1. the claimant’s production and operation activities are located in or close to the polluted area; 2. the claimant’s production and operation activities mainly depend on the polluted resources or coastline; 3. it is hard for the claimant to find other alternative resources or commercial opportunity; 4. the claimant’s production and operation business belongs to the relatively steady industry in that area.
 
Article 15
Where the person suffering for the damage engages in mariculture and marine fishing without the permission of relevant administrative competent authority, a people’s court shall not support its claim for income loss; however, a people’s court shall support the claim for reasonable expense for cleansing, repairing or replacement of the aquaculture and fishing facilities.
 
Article 16
Where the person suffering for the damage claims the income loss resulted from his property being polluted or the environment being polluted, the income loss shall be calculated using the average net income over the same period in the last three years to deduct the actual net income in the damage period, and shall be reasonably ascertained after due consideration of other related factors that may affect income.
 
Where the income loss could not be ascertained according to the provision of the above paragraph, the income loss may be reasonably ascertained according to the relevant statistical data and information of the government department or average income over the same period of the producers and operators of the same kind in the same area.
 
Where the person suffering for the damage takes reasonable measures to avoid income loss, a people’s court shall support the claims for expense of reasonable measures, but the expense shall be limited to the amount of the income loss that has been avoided to occur.
 
Article 17
Where an oil pollution accident causes environment damage, the compensation for the environment damage shall be limited to the expenses of reasonable restoration measures actually taken or about to be taken. The expenses of the restoration measures include the reasonable expense for supervision, evaluation and research.
 
Article 18
Where a ship has obtained the effective civil liability insurance for oil pollution damage or possesses the relevant financial security, a people’s court shall not support the claim of maritime liens raised by the person suffering for the oil pollution damage.
 
Article 19
With regard to the compensation claim of oil pollution damage caused by non-persistent fuel oils carried by oil tankers and fuel oils carried by non-tankers, the provisions about limitation of liability for maritime claims in Maritime Code shall apply.
 
Where the same marine accident results into the oil pollution damage stipulated in the above paragraph and other damages whose compensation liability may be limited as stipulated in article 207 of Maritime Code, and the shipowners claim to limit the compensation liability within the same compensation limit according to the regulation of Chapter 11 of Maritime Code, a people’s court shall support.
 
Article 20
Where in order to avoid the oil pollution damage caused by non-persistent fuel oils carried by oil tankers and fuel oils carried by non-tankers, measures are taken to float, remove or make harmless the sunken, grounded or wrecked ship, and the shipowners claim to limit the compensation liability in respect of the expense resulted therefrom according to the regulation of Chapter 11 of Maritime Code, a people’s court shall not support.
 
Article 21
With regard to the oil pollution damage caused by persistent oils carried by oil tankers, where the shipowners, or the insurer bearing the liability for oil pollution or the financial guarantor claim limitation of liability, a limitation fund for oil pollution damage claims liability shall be constituted.
 
Where the limitation fund is constituted in cash, the fund amount shall be the compensation limit regulated by Regulations of the People’s Republic of China on the Prevention and Control of Marine Pollution from Ships and International Convention on Civil Liability for Oil Pollution Damage 1992. Where the limitation fund is constituted by way of security, the security amount is the fund amount plus its interests within the establishment period of the fund.
 
Article 22
Where the shipowners, the insurer bearing the liability for oil pollution damage or the financial guarantor apply for constitution of the limitation fund, and where the interested party has objection to the shipowners’ claim of limitation of compensation ability, the objection shall be raised in writing within the objection period regulated in paragraph 1 of article 106 in Special Maritime Procedure Law of the People’s Republic of China, but the raising of the objection shall not affect the establishment of the fund.
 
Article 23
With regard to the oil pollution damage caused by persistent oils carried by oil tankers, where the interested party fails to raise abjection to the shipowners’ claim of limitation of compensation liability within the objection period, a maritime court shall, after the constitution of the limitation fund, relieve the preservation measures taken towards the shipowners’ property or return the security provided for relieving the preservation measures.
 
Article 24
With regard to the oil pollution damage caused by persistent oils carried by oil tankers, where the interested party raises abjection to the shipowners’ claim of limitation of compensation liability within the objection period, a people’s court shall, after the ruling which ascertains the shipowners are entitled to limit the compensation liability takes effect, relieve the preservation measures taken towards the shipowners’ property or return the security provided for relieving the preservation measures.
 
Article 25
With regard to the oil pollution damage caused by persistent oils carried by oil tankers, where the person suffering for the damage raises a lawsuit claiming that the shipowner is not entitled to limit its compensation liability, a maritime court may first try and make a judgment towards the controversy whether the shipowner is entitled to limit its compensation liability. 
 
Article 26
With regard to the oil pollution damage caused by persistent oils carried by oil tankers, where the person suffering for the damage fails to apply for claim registration within the regulated claim registration period, it shall be deemed to have abandoned its rights to be satisfied from the limitation fund for oil pollution damage claims liability.
 
Article 27
Where the limitation fund is not enough to satisfy the relevant oil pollution damage, it shall be distributed proportionately according to the confirmed compensation amount in accordance with law.
 
Article 28
With regard to the oil pollution damage caused by persistent oils carried by oil tankers, where the shipowner, the insurer bearing the liability for oil pollution damage or the financial guarantor applies for constitution of the limitation fund, and the person suffering for the damage applies for claim registration or repayment of debt, in the absence of specific stipulations in this Provision, the Special Maritime Procedure Law and the relevant judicial interpretation shall apply.
 
Article 29
Before the distribution of the limitation fund, the shipowner, the insurer bearing the liability for oil pollution damage or the financial guarantor who has already paid for the oil pollution damage in advance may apply for subrogation claim from the fund in writing. The subrogation claim shall be limited to the regulated compensation and shall not be more than the indemnity obtained by the compensation receiver in accordance with law.
 
A maritime court shall, after accepting the application for subrogation claim, give a written notice to all interested parties who make claims about the limitation fund for oil pollution damage claims liability. An interested party who has objection to the applicant’s claiming its right of subrogation claim, shall raise the objection in written form within 15 days from the date of the receipt of the notice.
 
Where an applicant’s right of subrogation claim is tenable through examination, a maritime court shall make an order to confirm; where an applicant’s claim is unfounded in law or in fact, a maritime court shall reject its application. Where a party concerned is not satisfied with the order, it may raise an appeal within 10 days after the date of the receipt of the order.
 
Article 30
Where a shipowner pays reasonable expense or makes reasonable sacrifice in order to prevent or mitigate oil pollution damage, and requests to participate in the distribution of the limitation fund for oil pollution damage claims liability, a people’s court shall support and deal with the case in accordance with paragraph 2 and paragraph 3 of article 29 in this Provision.
 
Article 31
The meanings of the following words in this Provision:
 
1.      “Ship” means sea-going ships and other mobile units that are not used for military or public service purposes. Among which, an oil tanker means ships constructed or rebuilt to carry bulk persistent cargo oils, and other ships actually carrying bulk persistent cargo oils.
 
2.       “Oil” means hydrocarbon mineral oil and its residues. It is limited to persistent cargo oils carried on board as cargo, persistent and non-persistent fuel oils carried on board for the operation of the ship, exclusive of the non-persistent cargo oils carried on board as cargo.
 
3.      “Oil Pollution Accident” means the oil pollution damage caused by oil leakage from ships, or one event or a series of events that pose(s) severe and urgent threat of oil pollution damage even though oils do not leak. A series of events, if occur due to the same cause, shall be deemed as the same accident.
 
4.      “The Insurer Bearing the Liability for Oil Pollution Damage or the Financial Guarantor” means the insurer bearing the oil pollution liability or the financial guarantor of the ship side leaking oils or directly posing a threat of oil pollution damage in a marine accident.
 
5.      “Limitation Fund for Oil Pollution Damage Claims liability” means the limitation fund for compensation liability constituted upon the application of the shipowner, the insurer bearing the liability for oil pollution damage or the financial guarantor in respect of the oil pollution damage caused by the persistent oils carried by oil tankers.
 
Article 32
In case that any judicial interpretation released by this Court before this Provision takes effect contradicts with this Provision, this Provision shall prevail.
 
Where a People’s Court retries the case on which a final judgement has been rendered prior to the implementation of this Provision, this Provision shall not apply.