Court orders Japanese ship detained
April 30, 2014 Category Logistics, Ports & sea transport
The Shanghai Maritime Court detained the Japanese bulk iron ore carrier Baosteel Emotion, owned by Japanese shipping firm Mitsui OSK Lines (MOL), following a verdict ordering the ship’s owner to pay delayed rent and losses to a Chinese firm. The ship was allowed to leave after Mitsui paid JPY4 billion in compensation and litigation fees.
The ship was seized at Majishan port in Zhejiang province. A Chinese company had sued the Japanese shipping firm in 1988 in the Shanghai maritime court over alleged delays in rent for two ships, plus economic losses. The two Chinese cargo ships were rented in 1936 by Daido Shipping Co, which was purchased by Mitsui OSK. Daido failed to return the two ships it had rented after the one-year contract expired in 1937. In 1940, Daido said the ships were “legally captured” and owned by the Japanese government. One sank near Japan in 1938 and the other one in the South China Sea in 1944 while China and Japan were at war. The Shanghai Maritime Court ruled in 2007 that MOL should compensate the Chinese firm Zhongwei Shipping Co USD28.4 million, including delayed rent and operating losses. Mitsui OSK appealed, but the Shanghai High People’s Court upheld the ruling in 2010, and China’s Supreme People’s Court rejected Mitsui OSK’s request for a retrial. The Shanghai Maritime Court issued an enforcement notice to Mitsui OSK in December 2011. The two parties tried to negotiate a settlement but failed to reach an agreement. The court said it would dispose of the ship if MOL continued to refuse to fulfill its obligation. Chen Rulang, a lawyer specializing in maritime lawsuits in Shanghai, said Chinese courts had rarely, if ever, taken such a tough stance to recover wartime reparations from Japan. “The verdict has been made so the action is absolutely legal, but it is quite unusual”, he said. The seizure of the ship was unrelated to wartime compensation, said Chinese Ministry of Foreign Affairs Spokesman Qin Gang, while Japan’s Chief Cabinet Secretary Yoshihide Suga said the seizure “undermined” the 1972 joint communique that normalized ties between Japan and China, in which Beijing agreed to renounce “its demand for war reparation from Japan.” Mitsui has argued that it is not liable to pay compensation given that the ships were requisitioned by the Japanese military during the war. Analysts expect more cases against Japan are likely to be filed in Chinese courts.
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