—— Shanghai Changhang Minnan Shipyard vs. Haikun Shipping Co., Ltd., and Others Ship Refurbishment Contract Case 

Key Word：Ship refurbishment contract; Dock fees; Shore power fees; Unspecified costs

Case Summary:

In 2015, Haikun Shipping Co., Ltd. (hereinafter referred to as "Haikun Shipping") and others, acting as the contracting party for ship repairs, signed an agreement with Shanghai ChanghangMinnan Shipyard (hereinafter referred to as "Minnan Shipyard"), stipulating that Minnan Shipyard would provide repair and refurbishment services for the vessel "Haike 108." Mr. Yu acted as the performance guarantor for the contracting party. In 2019, Shanghai Haiying Shipping Co., Ltd. (hereinafter referred to as "Haiying Company") and Haikun Shipping signed an agreement, appointing Haiying Company to carry out the subsequent repair and refurbishment work for the ship and to handle payment for the completion of the ship's engineering. After the ship's repair and refurbishment work was completed, Minnan Shipyard did not receive any payments. Following unsuccessful attempts to collect the outstanding fees, Minnan Shipyard filed a lawsuit, seeking a total of over CNY 8.66 million from Haikun Shipping, Mr. Yu, Haiying Company, and others, to jointly bear the expenses for ship repair and refurbishment, dock fees, and vessel shore power supply fees.

Judgment:

The Court held that while dock fees and shore power supply fees were not stipulated between Minnan Shipyard and the contracting party for ship repairs, considering that the time taken for the ship repair and refurbishment significantly exceeded the estimated duration and the vessel's occupation of the dock had caused losses to Minnan Shipyard. Furthermore, the ship's crew needed shore power supply during its stay in port, incurring shore power supply expenses as a natural consequence. Based on the actual circumstances, the court, in its discretion, recognized the specific amounts and supported Minnan Shipyard's claim for dock fees and vessel shore power supply fees.

Significance:

Ship repair and refurbishment refer to maintenance work performed to enhance vessel performance or alter the vessel's intended use. This process typically involves occupying shipyard docks, which can be complex and time-consuming. For shipyards acting as contractors, the contracting party not to make timely payments for repair and refurbishment work poses significant legal risks. Additionally, during the process of recovering owed payments, new and substantial expenses may continue to accrue. In this case, the contracting party's default in paying for the repair work resulted in the ship not being delivered promptly. During its stay at the port, the vessel incurred dock fees and shore power supply expenses, which led to further losses for the shipyard. Although these expenses were not explicitly outlined in the contract, the court, after reviewing the reasonableness of the related costs, exercised its discretion to recognize them. This judication effectively protected the shipyard's legitimate rights and interests, offering robust judicial support for promoting the healthy and sound operation of the ship repair market.