Plaintiff shipowner and Defendant insurer concluded an insurance contract for all ships owned by the shipowner. During the transportation of goods on the ship, due to improper operation by the crew, the northern end of Luojing Oil Depot Terminal was touched. The accident caused about 74 m of damage to the eastern section of the northern end of Luojing Oil Depot Terminal, which collapsed and sank to the bottom of the river. The comprehensive building built on the depot was also damaged, with one death and one injury to two duty personnel inside. The three oil delivery arms installed on the depot were also damaged when they fell into the water. The shipowner and the insurer recognized that repair cost incurred due to damage to the ship involved in the accident was 792,355 yuan, and a 10% deductible should be deducted for compensation. The shipowner applied to the court to establish a limitation fund for maritime claims liability. The outsider Luojing Oil Depot filed an action before the court (“collision case”), and ultimately, after a retrial by the Supreme People’s Court, the shipowner should have compensation for the damage to the terminal, equipment repair, care and other expenses, as well as corresponding interest. The above damages should be settled within the balance of the maritime liability limitation fund established by the shipowner after deducting the paid compensation amount and the interest during the fund establishment period (calculated based on the benchmark one-year loan interest rate determined by the People’s Bank of China for financial institutions in the same period). The collision case went through first, second and third trials. For the first and second trials, the shipowner paid fixed fee to the lawyer, for the third trial, the shipowner concluded a contingent fee agreement with the lawyer. Through the third trial, the lawyer reduced RMB2.8 m for the shipowner (with the ultimate beneficiary being the insurer), and the shipowner paid 30% of the lawyer fee to them. The shipowner applied to the first instance court for enforcement reversal, requesting Luojing Oil Depot to return the overpaid principal and interest of Renke, and received support. The shipowner and the insurer concluded the Payment Agreement, and the insurer recognized that the shipowner’s claim fell within the scope of insurance liability, with a total loss of 17,427,830.50 yuan. Both parties agreed that the insurer would pay 21,000,000 yuan to Luojing Oil Depot as part of the effective judgment. The insurer required the shipowner to return the additional payment 4,272,169.50 yuan beyond the insurance liability. The shipowner held that after deducting the fee already paid by the insurer, the insurer was also required to pay the remaining ship collision liability insurance compensation, ship repair assessment fee and rescue cost incurred by the shipowner in handling the insurance accident. On February 1, 2013, the shipowner submitted a lawsuit to the court. However, due to the lack of materials such as the insurer’s registration certificate and evidence reflecting the loss, the court issued a notice to the shipowner to supplement the materials, and notified the insurer in writing to go to the court for pre litigation mediation.

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Guangdong Renke Shipping Co., Ltd. v. Bank of China Insurance Co., Ltd. Guangdong Branch

  • Martin Davies,
  • Jiang Lin

摘要

Plaintiff shipowner and Defendant insurer concluded an insurance contract for all ships owned by the shipowner. During the transportation of goods on the ship, due to improper operation by the crew, the northern end of Luojing Oil Depot Terminal was touched. The accident caused about 74 m of damage to the eastern section of the northern end of Luojing Oil Depot Terminal, which collapsed and sank to the bottom of the river. The comprehensive building built on the depot was also damaged, with one death and one injury to two duty personnel inside. The three oil delivery arms installed on the depot were also damaged when they fell into the water. The shipowner and the insurer recognized that repair cost incurred due to damage to the ship involved in the accident was 792,355 yuan, and a 10% deductible should be deducted for compensation. The shipowner applied to the court to establish a limitation fund for maritime claims liability. The outsider Luojing Oil Depot filed an action before the court (“collision case”), and ultimately, after a retrial by the Supreme People’s Court, the shipowner should have compensation for the damage to the terminal, equipment repair, care and other expenses, as well as corresponding interest. The above damages should be settled within the balance of the maritime liability limitation fund established by the shipowner after deducting the paid compensation amount and the interest during the fund establishment period (calculated based on the benchmark one-year loan interest rate determined by the People’s Bank of China for financial institutions in the same period). The collision case went through first, second and third trials. For the first and second trials, the shipowner paid fixed fee to the lawyer, for the third trial, the shipowner concluded a contingent fee agreement with the lawyer. Through the third trial, the lawyer reduced RMB2.8 m for the shipowner (with the ultimate beneficiary being the insurer), and the shipowner paid 30% of the lawyer fee to them. The shipowner applied to the first instance court for enforcement reversal, requesting Luojing Oil Depot to return the overpaid principal and interest of Renke, and received support. The shipowner and the insurer concluded the Payment Agreement, and the insurer recognized that the shipowner’s claim fell within the scope of insurance liability, with a total loss of 17,427,830.50 yuan. Both parties agreed that the insurer would pay 21,000,000 yuan to Luojing Oil Depot as part of the effective judgment. The insurer required the shipowner to return the additional payment 4,272,169.50 yuan beyond the insurance liability. The shipowner held that after deducting the fee already paid by the insurer, the insurer was also required to pay the remaining ship collision liability insurance compensation, ship repair assessment fee and rescue cost incurred by the shipowner in handling the insurance accident. On February 1, 2013, the shipowner submitted a lawsuit to the court. However, due to the lack of materials such as the insurer’s registration certificate and evidence reflecting the loss, the court issued a notice to the shipowner to supplement the materials, and notified the insurer in writing to go to the court for pre litigation mediation.