—— Taicang Foreign Shipping Agency Co., Ltd. v. German Z Shipping Co., Ltd. 

Key Word：Ascertainment of foreign law; Deregistered German partnership; Capacity for civil rights; Asset preservation; Realization of judgment

Facts：

German Z Shipping Co., Ltd. (hereinafter “Z Company”) is a partnership enterprise registered in Germany. From June to November 2019, Z Company commissioned Taicang Foreign Shipping Agency Co., Ltd. (hereinafter “Agency Company”) as the port agent of multiple foreign ships, arranging ships to berth at Chinese ports for unloading. That cost agency fees of over RMB 3 million, which Z Company has yet to pay. On January 17, 2020, Z Company advanced a payment of over RMB 4 million to a third-party company in Yangzhou for other business purposes, but the payment was never offset against actual business transactions. On March 4, 2020, Z Company was dissolved and deregistered. For the agency fees, the Agency Company filed a lawsuit at the Court. After accepting the case, the Court, upon the Agency Company’s application, legally preserved the advance payment remaining in the third-party company in Yangzhou. During the proceedings, the Court commissioned the Center for Proof of Foreign Law of East China University of Political Science and Law to investigate whether a deregistered German company could be a defendant in litigation under German law. According to German law, if there are evidences indicate that after a company’s deregistration, the partnership property or the claims of obligatory right still exist, then the liquidation process has not been terminated, and the partnership name has not been dissolved.

Judgment：

The Court, after reviewing the facts of the case, determined that Z Company was a German partnership enterprise that had been deregistered. In accordance with Article 14 (1) of the Law of the People’s Republic of China on the Application of Law to Foreign-related Civil Relations and Article 14 of the Interpretation of the Supreme People’s Court on Certain Issues Concerning the Application of the Law of the People’s Republic of China on the Application of Law to Foreign-related Civil Relations (I), the capacity for civil rights of the Z Company should be determined in accordance with the law of its place of establishment, i.e., German law. During the litigation, the Court lawfully imposed preservation measures on Z Company’s assets in China. According to the relevant provisions of the German Commercial Code, when a partnership company is dissolved, if there are evidences indicate that partnership property or the claim of obligatory right still exist, then the liquidation process has not been terminated, and the partnership name has not been dissolved, the partnership company may participate in passive lawsuits. Therefore, the Court held that Z Company should pay the Agency Company over RMB 3 million agency fees and interest. After the judgment took effect, the Agency Company received full compensation from the prepayment that remained in the third-party company before the deregistration of Company Z, which was preserved by the Court.

Typical Significance：

This case is a typical example that the Court commissioned a specialized institution to ascertain foreign laws. In this case, the application of law involved two issues: first, the determination of the applicable law for the civil capacity of the German company; second, the determination of the applicable law for the ship agency contract. The Court held that the capacity for civil rights of the German company should be governed by German law, while the dispute concerning the ship agency contract should be governed by Chinese law. The Court, in accordance with German law, held that even if a German partnership enterprise has been dissolved, it still retains the status as a defendant, and thus made the judgment in favour of the Agency Company. This case, through accurate investigation and correct application of German law, demonstrates the equal protection of the legitimate rights and interests of both Chinese and foreign parties, and also enhances the credibility of Chinese maritime adjudication.