To better leverage the exemplary and guiding role of judicial rulings, the Jiangsu High People's Court released a batch of typical cases concerning foreign-related commercial and maritime trials in November. Notably, a case adjudicated by the Nanjing Maritime Court was included.

Clarifying the Carrier's Duty of Care for Soybeans

Safeguarding the Order of Bulk Grain Cargo Transportation

Case: Dispute over a Contract of Carriage of Goods by Sea between A Chinese Property Insurance Company Shanghai Branch and A Shipping Company of the Marshall Islands

【Facts】

The Shipping Company of the Marshall Islands (hereinafter referred to as “the Shipping Company”), owner of the vessel "STAR ALTAIR," transported a cargo of soybeans from Santos, Brazil to Zhangjiagang, China under a clean bill of lading. The domestic consignee had insured the soybeans with cargo transportation insurance. The quality certificate issued at the port of loading indicated that the soybeans had a moisture content of 12.18%. On August 2, 2021, "STAR ALTAIR" arrived at Zhoushan Port, where the domestic consignee discovered heat damage to the soybeans and notified the vessel's master. On August 13, 2021, "STAR ALTAIR" arrived at Zhangjiagang Port, where all soybeans were subsequently unloaded. On August 4, 2022, an inspection company issued a damage assessment report, stating that the heat damage resulted from insufficient ventilation during the high-temperature season, failing to facilitate timely heat dissipation. The total loss was assessed at RMB 5.545 million. A Chinese Property Insurance Company Shanghai Branch (hereinafter referred to as “the Insurance Company”) compensated the domestic consignee RMB 5.526 million and obtained a subrogation certificate. The Insurance Company then filed a lawsuit, claiming compensation from the Shipping Company for its losses of RMB 5.526 million plus interest.

【Findings】

The Nanjing Maritime Court ruled in favor of the Insurance Company's right to claim compensation. The Court's determination was based on the following findings: Firstly, the quality certificate issued at the loading port indicated that the soybeans' moisture content was 12.18%, which was below the Chinese national standard. Furthermore, the clean bill of lading issued by the Shipping Company confirmed that the soybeans were in good condition at the loading port. Secondly, the ventilation records demonstrated that the Shipping Company failed to ventilate the cargo even when weather conditions were suitable. Additionally, the Shipping Company failed to monitor the temperature of the cargo. There were instances where the cargo temperature was 3℃ higher than the ambient temperature, yet no ventilation was performed. Therefore, the Court concluded that the vessel "STAR ALTAIR" failed to provide proper ventilation, and the Shipping Company had breached its duty of care for the cargo. Thirdly, regarding the damage assessment report issued by the inspection company, the Court noted that the surveyor commissioned by the Shipping Company had participated in the sampling process. As the Shipping Company did not submit evidence to rebut the assessment report, the Court accepted the report as valid. Therefore, the Court ruled that the Shipping Company compensate the Insurance Company for losses of RMB 5.526 million plus interest.

The Shipping Company appealed the decision, but the Jiangsu High People's Court dismissed the appeal.

【Significance of the Case】

As important transit bases for grain logistics in East China, the ports in Jiangsu Province frequently witness foreign-related claims arising from soybean cargo damage. Therefore, the proper adjudication of such cases is of great significance to improving maritime business environment. This case, as a typical dispute over a contract of maritime cargo transportation involving heat damage to soybeans, is characterized by high claim amounts, highly technical evidence, and complex loss calculations. The ruling clarifies that in the maritime transportation of soybeans, carriers should take reasonable ventilation measures based on the characteristics of the soybeans, the duration of the voyage, and seasonal weather conditions. Furthermore, this ruling refines the specific requirements for carriers' cargo management obligations in soybean transportation. It elevates the judicial standards for adjudicating heat damage claims in bulk grain shipping, thereby providing rule-based guidance for the transportation of large quantities of grain.