Laws of the People's Republic of China

The Standing Committee of the National People's Congress

Order of the President of the People's Republic of China

No.28

The Special Maritime Procedure Law of the People's Republic of China which has been adopted at the 13th Meeting of the Standing Committee of the Ninth National People's Congress on December 25, 1999 is promulgated now, and shall enter into force as of July 1, 2000.

President of the People's Republic of China: Jiang Zemin

December 25, 1999

Special Maritime Procedure Law of the People's Republic of China ContentsChapter I General Provisions

Chapter II Jurisdiction

Chapter III Maritime Claims Preservation

Section 1 General Principles

Section 2 Arresting or Auction Sale of Ships

Section 3 Arrest and Auction of the Goods on Board

Chapter IV Maritime Injunction

Chapter V Maritime Evidence Preservation

Chapter VI Maritime Guarantee

Chapter VII Service

Chapter VIII Trial Procedures

Section 1 Provisions on Trying Cases Involving Collision of Ships

Section 2 Provisions on Trying Cases Involving General Average

Section 3 Provision on Exercising the Right to Indemnity by Subrogation

by a Maritime Insurer

Section 4 Summary Procedures, Procedures for Hastening Debt Recovery

and Procedures for Publicizing Public Notice for Assertion

of Claims

Chapter IX Procedures for Constituting a Limitation Fund for Maritime Claims Liability

Chapter X Procedures for Registering Creditors' Rights and Repayment of Debt

Chapter XI Procedures for Publicizing Notice for Assertion of Maritime Liens

Chapter XII Supplementary Provisions

Chapter I General Provisions

Article 1

This Law is formulated for the purposes of maintaining the litigation rights, ensuring the ascertaining of facts by the people's courts, distinguishing right from wrong, applying the law correctly, trying maritime cases promptly.

Article 2

Whoever engages in maritime litigation within the territory of the People's Republic of China shall apply the Civil Procedure Law of the People's Republic of China and this Law. Where otherwise provided for by this Law, such provisions shall prevail.

Article 3

If an international treaty concluded or acceded to by the People's Republic of China contains provisions that differ from provisions of the Civil Procedure Law of the People's Republic of China and this Law in respect of foreign-related maritime procedures, the provisions of the international treaty shall apply, except those on which China has made reservations.

Article 4

The maritime court shall entertain the lawsuits filed in respect of a maritime tortious dispute, maritime contract dispute and other maritime disputes brought by the parties as provided for by laws.

Article 5

In dealing with maritime litigation, the maritime courts, the high people's courts where such courts are located and the Supreme People's Court shall apply the provisions of this Law.

Chapter II Jurisdiction

Article 6

Maritime territorial jurisdiction shall be conducted in accordance with the relevant provisions of the Civil Procedure Law of the People's Republic of China.

The maritime territorial jurisdiction below shall be conducted in accordance with the following provisions:

(1)

A lawsuit brought on maritime tortious may be, in addition to the provisions of Articles 19 to 31 of the Civil Procedure Law of the People's Republic of China, under jurisdiction of the maritime court of the place of its port of registry;

(2)

A lawsuit brought on maritime transportation contract may be, in addition to the provisions of Articles 82 of the Civil Procedure Law of the People's Republic of China, under jurisdiction of the maritime court of the place of its port of re-transportation;

(3)

A lawsuit brought on maritime charter parties may be under jurisdiction of the maritime court of the place of its port of ship delivery, port of ship return, port of ship registry, port where the defendant has its domicile;

(4)

A lawsuit brought on a maritime protection and indemnity contract may be under jurisdiction of the maritime court of the place where the object of the action is located, the place where the accident occurred or the place where the defendant has its domicile;

(5)

A lawsuit brought on a maritime contract of employment of crew may be under jurisdiction of the maritime court of the place where the plaintiff has its domicile, the place where the contract is signed, the place of the port where the crew is abroad or the port where the crew leaves the ship or the place where the defendant has its domicile;

(6)

A lawsuit brought on a maritime guaranty may be under jurisdiction of the maritime court of the place where the property mortgaged is located or the place where the defendant has its domicile; a lawsuit brought on a ship mortgage may also be under jurisdiction of the maritime court in the place of registry port;

(7)

a lawsuit brought on ownership, procession, and use, maritime liens of a ship, may be under jurisdiction of the maritime court of the place where the ship is located, the place of ship registry or the place where the defendant has its domicile.

Article 7

The following maritime litigation shall be under the exclusive jurisdiction of the maritime courts specified in this Article:

(1)

A lawsuit brought on a dispute over harbour operations shall be under the jurisdiction of the maritime court of the place where the harbour is located;

(2)

A lawsuit brought on a dispute over pollution damage for a ship's discharge, omission or dumping of oil or other harmful substances, or maritime production, operations, ship scrapping, repairing operations shall be under the jurisdiction of the maritime court of the place where oil pollution occurred, where injury result occurred or where preventive measures were taken;

(3)

A lawsuit brought on a dispute over a performance of a maritime exploration and development contract within the territory of the People's Republic of China and the sea areas under its jurisdiction shall be under the jurisdiction of the maritime court of the place where the contract is performed.

Article 8

Where the parties to a maritime dispute are foreign nationals, stateless persons, foreign enterprises or organizations and the parties, through written agreement, choose the maritime court of the People's Republic of China to exercise jurisdiction, even if the place which has practical connections with the dispute is not within the territory of the People's Republic of China, the maritime court of the People's Republic of China shall also have jurisdiction over the dispute.

Article 9

An application for determining a maritime property as ownerless shall be filed by the parties with the maritime court of the place where the property is located; an application for declaring a person as dead due to a maritime accident shall be filed with the maritime court of the place where the competent organ responsible for handling with the accident or the maritime court that accepts the relevant maritime cases.

Article 10

In the event of a jurisdictional dispute between a maritime court and a people's court, it shall be resolved by the disputing parties through consultation; if the dispute cannot be so resolved, it shall be reported to their common superior people's court for the designation of jurisdiction.

Article 11

When the parties apply for enforcement of maritime arbitral award, apply for recognition and enforcement of a judgement or written order of a foreign court and foreign maritime arbitral award, an application shall be filed with the maritime court of the place where the property subjected to execution or of the place where the person subjected to execution has its domicile. In case of no maritime court in the place where the property subjected to execution or in the place where the person subjected to execution has its domicile, an application shall be filed with the intermediate people's court of the place where the property subjected to execution or of the place where the person subjected to execution has its domicile.

Chapter III Maritime Claims Preservation

Section 1 General Principles

Article 12

Maritime claims mean maritime courts, according to applications of maritime claimants, take compulsory preservation measures against property of persons against whom the claims are brought up in order to ensure the realization of such rights.

Article 13

An application for maritime claims by the parties shall, before bring a lawsuit, be filed with the maritime court of the place where the property subjected to preservation.

Article 14

Maritime claims shall not be bound by procedure jurisdiction agreements or arbitration agreements relating to the said maritime claims between the parties.

Article 15

Where maritime claimants apply for maritime claims, written applications shall be filed with maritime courts. Maritime claims, application reasons, objects subjected to preservation and amounts for guaranty shall be stated in applications.

Article 16

A maritime court may, in accepting a maritime preservation application, order the claimant to provide a guaranty. Where the claimant fails to provide guaranty, his application shall be rejected.

Article 17

After receiving an application, the maritime court must make an order within 48 hours; if the court orders the adoption of maritime preservation measures, the execution thereof shall begin immediately. Where not conforming to the conditions for a maritime preservation, the application shall be rejected.

If the party concerned is not satisfied with the order, he may, within five days from the date of the receipt of the order, apply for reconsideration which could be granted only once. The maritime court shall make a reconsideration decision within five days from the date of the receipt of the reconsideration application. Execution of the order shall not be suspended during the time of reconsideration.

Where the interested party raises objection to the maritime preservation, the maritime court, upon examination and deeming it reasonable, shall cancel the property preservation.

Article 18

If the person against whom the application for maritime preservation is made provides guaranty, or the party has justified reasons for applying cancellation of maritime reservation, the people's court shall cancel the property reservation promptly.

If the maritime claimant fails to bring an action or apply for arbitration according to the arbitration agreement within the time limit specified by this Law, the people's court shall cancel the property reservation or return the guaranty promptly.

Article 19

Where the relevant maritime dispute enters into litigation or arbitration procedure after execution of the maritime preservation, the party may bring an action relating to the maritime claim to the maritime court which has taken maritime claim preservation or other maritime courts having jurisdiction over it, with the exception of signing of a litigation jurisdiction agreement or an arbitration agreement between the parties.

Article 20

If an application for maritime preservation is wrongfully made by a maritime claimant, the claimant shall compensate the person against whom the application is made for any loss incurred from maritime preservation.

Section 2 Arresting or Auction Sale of Ships

Article 21

The following maritime claims may applied for arresting ships:

(1)

the destruction of or damage to the property occurred in the operation of the ship;

(2)

the loss of life or personal injury directly relating to the operation of the ship;

(3)

salvage payment;

(4)

the damage or threat of damage caused by the ship to the environment, seashore or the relevant interested parties; the measures taken for prevention, reduction and elimination of such damage; payment for compensation of such damage; the reasonable cost for the measures taken actually or preparing to take for restoring the environment; loses the third party suffered or will probably suffer due to such damage; and the damage, fees or loses which are similar in nature specified in this Item;

(5)

fees relating to floating, elimination, recycling and destruction of sunken ships, shipwreck, stranded objects, abandoned ships or making them harmless, including fees relating to floating, elimination, recycling and destruction of the objects which still are or were abroad such ships or making them harmless, and fees relating to maintenance of abandoned ships and suppurating the crew members;

(6)

the agreement or use or charter parties of the ship;

(7)

an agreement for carriage of goods or passengers;

(8)

goods (including luggage) on board or loss or damage related thereto;

(9)

general average;

(10)

towage service;

(11)

pilotage service;

(12)

provision of materials or services for operation, management, maintenance and repair of ships;

(13)

ship building, rebuilding, repair, refitting or fitting;

(14)

prescribed fees or fees for ports, canals, wharves, harbors or other waterways;

(15)

wages of ship's crew or other payments, including the repatriation fee and social insurance premium payable for ship's crew;

(16)

expenses paid for a ship or shipowner;

(17)

ship's insurance premium (including mutual insurance membership fee) paid by a shipowner or bareboat charterer, or paid on his behalf;

(18)

the commission, brokerage or agency fee related to a ship paid by the shipowner or bareboat charterer, or paid on his behalf;

(19)

a dispute over ownership or possession of a ship;

(20)

a dispute over use of or profit from a ship between co-owners of the ship;

(21)

a mortgage of a ship or right of the same nature; or

(22)

a dispute arising from a contract for sale of a ship.

Article 22

No application for arrest of a ship may be filed except for the maritime claims as stipulated in Article 21 of this Law; there are exceptions, however, for executing judgments, arbitral awards or other legal documents.

Article 23

If any of the following circumstances exists, a maritime court may arrest the involved ship:

(1)

where the shipowner is held responsible for a maritime claim and is the owner of the ship when the arrest is executed;

(2)

where the bareboat charterer of the ship is held responsible for a maritime claim and is the bareboat charterer or the owner of the ship when the arrest is executed;

(3)

where a maritime claim is entitled to a mortgage of the ship or right of the same nature;

(4)

where a maritime claim relates to ownership or possession of the ship; or

(5)

where a maritime claim is entitled to a maritime lien.

A maritime court may arrest other ships owned by the shipowner, bareboat charterer, time charterer or voyage charterer who is held responsible for a maritime claim, when the arrest is executed, with the exception of the claims related to ownership or possession of the ship.

No ship engaging in military or government duties may be arrested.

Article 24

A maritime claimant may not apply to arrest a ship having been arrested for the same maritime claim, except that any of the following circumstances exists:

(1)

where the party who opposes the claim has not provided a sure guarantee;

(2)

where the guarantor probably cannot perform his obligation of guarantee wholly or partly; or

(3)

where the maritime claimant agrees to release the arrested ship or return the existing guarantee for justifiable reason; or cannot stop the release of the arrested ship or return of the existing guarantee by justifiable means.

Article 25

For a maritime claimant applying to arrest the involved ship, if the name of the party who opposes the claim cannot be ascertained at once, the filing of his application shall not be affected.

Article 26

A maritime court may issue the relevant departments with a notice for assistance in execution at the same time it issues or cancels an order for arrest of a ship, and the notice shall clearly set forth the scope and content of the assistance in execution and the relevant departments have the obligation to assist in execution. A maritime may directly dispatch personnel to board the ship for supervision if it deems necessary.

Article 27

After a maritime court orders to impose preservation upon a ship, with consent of the maritime claimant, it may allow the ship to continue the operation by ways of restraining the disposition or mortgage of the ship.

Article 28

The period of arresting a ship for maritime claim preservation shall be 30 days.

If a maritime claimant brings a law suit or applies for arbitration within 30 days, and applies for arrest of a ship in the course of the litigation or arbitration, the arrest of the ship shall not be restrained by the period stipulated in the preceding paragraph.

Article 29

If, on the expiration of the period of arresting a ship, the party who opposes the claim fails to provide guarantee, and the ship is not suitable for being arrested longer, the maritime claimant may apply to the maritime court arresting the ship for auction of the ship after bringing a law suit or applying for arbitration.

Article 30

A maritime court shall conduct examination after receiving the application for auction of a ship, and make an order approving or disapproving the auction of the ship.

If a party is not satisfied with the order, he may apply for reconsideration once within five days of the date of receiving the written order. The maritime court shall make a reconsideration decision within five days of receiving the reconsideration application. Execution of the order shall be suspended during the time of reconsideration.

Article 31

Where a maritime claimant, after filing an application for auction of a ship, applies for stopping the auction, whether or not to give a permission shall be ordered by the maritime court. If the maritime court orders to stop the auction of the ship, expenses incurred for auctioning the ship shall be paid by the maritime claimant.

Article 32

A maritime court that orders to auction a ship shall issue a public notice through newspapers or other new media. If a foreign ship is to be auctioned, a public notice shall be issued through newspapers or other news media distributed abroad.

A public notice shall contain the following particulars:

(1)

name and nationality of the ship to be auctioned;

(2)

causes and basis for auction of the ship;

(3)

composition of the ship auction committee;

(4)

time and place for auction of the ship;

(5)

time and place for display of the ship to be auctioned;

(6)

procedure to be undergone for participating in the bidding;

(7)

registered items to be handled for claims; and

(8)

other particulars as required to be publicized.

The period of a public notice for auction of a ship shall not less than 30 days.

Article 33

A maritime court, 30 days prior to auction of the ship, shall issue notices to the registration authorities of the country of registry of the ship to be auctioned, and to the known lienor, mortgagee and owner of the ship.

The contents of the notice contain the name of the ship to be auctioned, time and place for auction of the ship, causes and basis for auction of the ship, and registration of claims.

The notice shall be in writing or take other appropriate forms by which receipt can be confirmed.

Article 34

Auction of a ship shall be executed by a ship auction committee. The ship auction committee shall be composed of three or five persons, that is, execution officers appointed, as well as auctioneers and surveyors engaged by the maritime court.

The ship auction committee organizes appraisal and valuation of the ship; organizes and presides over the auction; signs a letter of confirmation for conclusion of the auction with the bidder; and handles procedures for the transfer of the ship.

The ship auction committee shall be responsible to the maritime court and subject to supervision of the maritime court.

Article 35

Bidders shall register with the ship auction committee within a prescribed time limit. For registration, they shall submit for inspection the identity certificates of themselves, enterprises' legal representatives, or persons-in-charge of other organizations, as well as powers of attorney of agents, and pay a certain amount of bonds for purchase of the ship.

Article 36

A ship auction committee shall display the ship to be auctioned before the auction of the ship, and shall provide facilities for inspecting the ship to be auctioned and relevant data.

Article 37

The vendee shall pay without delay not less than 20 percent of the ship's price after he signs a letter of confirmation, and the remainder of the ship's price shall be settled within seven days of the date of concluding the auction, however, except otherwise agreed upon between the ship auction committee and the vendee.

Article 38

Once the vendee has settled the price in full, the original shipowner shall delivery the ship to the vendee on the basis of the current condition of the ship, at the place of berth of the ship, within a fixed time limit. The ship auction committee shall organize and supervise the delivery of the ship, and sign a letter of confirmation of ship's delivery with the vendee after the delivery of the ship.

After the delivery of the ship is finished, the maritime court shall issue an order releasing the arrest of the ship.

Article 39

After the delivery of the ship, the maritime court shall issue a public notice through newspapers or other news media, announcing that the ship has been auctioned openly and delivered to the vendee.

Article 40

After accepting the ship, the vendee shall undergo formalities for registration of the ship's ownership at the ship registration authorities on the basis of the letter of confirmation for conclusion of auction and relevant data. The original shipowner shall undergo formalities for cancellation of registration of the ship's ownership at the original ship registration authorities. Failure to undergo formalities for cancellation of registration of the ship's ownership by the original shipowner shall not affect the transfer of the ship's ownership.

Article 41

Malicious collusion between bidders makes the auction invalid. Any bidder involved in malicious collusion shall pay expenses for auctioning the ship and compensate losses incurred. The maritime court may impose upon the bidder involved in malicious collusion a fine of not more than ten percent and not less than 30 percent of the highest price offered.

Article 42

In addition to the provisions in this Section, auction shall be governed by the relevant provisions of the Auction Law of the People's Republic of China.

Article 43

Auction of an arrested ship for debt payment during the procedure of execution may be referred to the relevant provisions of this Section.

Section 3 Arrest and Auction of the Goods on Board

Article 44

A maritime claimant may apply to arrest the goods on board for ensuring the fulfillment of his maritime claim.

The goods on board to be arrested on application shall be under ownership of the party who opposes the claim.

Article 45

The value of the goods on board to be arrested on application by a maritime claimant shall be equivalent to the amount of his claim.

Article 46

The period of arresting the goods on board for maritime claim preservation shall be 30 days.

If a maritime claimant brings a law suit or applies for arbitration within 15 days, and applies for arrest of the goods on board in the course of the litigation or arbitration, the arrest of the goods on board shall not be restrained by the period stipulated in the preceding paragraph.

Article 47

If, on the expiration of the period of arresting the goods on board, the party who opposes the claim fails to provide guarantee, and the goods are not suitable for being arrested longer, the maritime claimant may apply to the maritime court arresting the goods on board for auction of the goods after bringing a law suit or applying for arbitration.

For articles which cannot be stored, or are difficult to be stored, or the storage expense may exceed their value, the maritime claimant may apply for auction in advance.

Article 48

A maritime court shall conduct examination after receiving the application for auction of the goods on board, and make an order approving or disapproving the auction of the goods on board.

If a party is not satisfied with the order, he may apply for reconsideration once within five days of the date of receiving the written order. The maritime court shall make a reconsideration decision within five days of receiving the reconsideration application. Execution of the order shall be suspended during the time of reconsideration.

Article 49

Auction of the goods on board shall be executed by an auction organization composed of execution officers appointed, and auctioneers engaged by the maritime court, or executed by an agency authorized by the maritime court.

Auction of the goods on board, if not covered by the provisions of this Section, shall be referred to the relevant provisions of Section 2 of this Chapter on auction of a ship.

Article 50

Application by a maritime claimant for maritime claim preservation imposed upon fuel and materials used by a ship related to the maritime claim shall be governed by the provisions of this Section.

Chapter IV Maritime Injunction

Article 51

A maritime injunction means any of compulsory measures by which a maritime court, on application by a maritime claimant, orders an act or omission by the party who opposes the claim, in order to protect the lawful rights and interests of the maritime claimant against any infringement.

Article 52

An interested party applying for a maritime injunction before bringing a law suit shall refer to the maritime court at the place where the maritime dispute occurred.

Article 53

A maritime injunction shall not be restrained by a jurisdiction agreement or an arbitration agreement relating to the maritime claim as agreed upon between the parties.

Article 54

A maritime claimant applying for a maritime injunction shall submit a written application to a maritime court. The application shall clearly set forth causes for application with relevant evidence attached thereto.

Article 55

A maritime court accepting an application for a maritime injunction may order the maritime claimant to provide guarantee. If the maritime claimant fails to provide guarantee, the application shall be rejected.

Article 56

To make a maritime injunction, the following conditions shall be fulfilled:

(1)

The claimant has a specific maritime claim;

(2)

There is a need to rectify an act committed by the party who opposes the claim, in violation of the provisions of the law or the stipulations of a contract; and

(3)

In case of emergency, failure to make a maritime injunction immediately will cause damage or expand damage.

Article 57

After accepting the application, a maritime court shall make an order within 48 hours. If an order is made for making a maritime injunction, it shall be executed immediately; if the conditions for a maritime injunction are not fulfilled, an order shall be made to reject the application.

Article 58

If a party is not satisfied with the order, he may apply for reconsideration once within five days of the date of receiving the written order. The maritime court shall make a reconsideration decision within five days of receiving the reconsideration application. Execution of the order shall not be suspended during the time of reconsideration.

If an interested party lodges an objection to a maritime injunction, the maritime court shall order to cancel the maritime injunction if it deems the causes are tenable through investigation.

Article 59

If the party who opposes the claim refuses to obey a maritime injunction, the maritime court may impose a fine or detain him in accordance with the seriousness of the circumstances; if a crime has been constituted, criminal liability shall be investigated according to the law.

A fine on an individual shall not be less than 1,000 yuan and not more than 30,000 yuan . A fine on a unit shall not be less than 30,000 yuan and not more than 100,000 yuan.

The period of detention shall not be longer than 15 days.

Article 60

A maritime claimant wrongfully submitting an application for a maritime injunction shall compensate losses incurred by the party who opposes the claim or an interested party.

Article 61

If no litigation or arbitration procedures start for relevant maritime disputes after the execution of the maritime injunction, the parties may bring a law suit for this maritime claim to the maritime court making the maritime injunction or the other maritime court having jurisdiction, except that a jurisdiction agreement or an arbitration agreement has been concluded between the parties.

Chapter V Maritime Evidence Preservation

Article 62

Maritime evidence preservation means any of compulsory measures by which a maritime court obtains, retains or seals up evidence related to the maritime claim on application by the maritime claimant.

Article 63

An interested party applying for maritime evidence preservation before bringing a law suit shall refer to the maritime court at the place where the evidence to be preserved is located.

Article 64

Maritime evidence preservation shall not be restrained by a jurisdiction agreement or an arbitration agreement relating to the maritime claim as agreed upon between the parties.

Article 65

A maritime claimant applying for maritime evidence preservation shall submit a written application to a maritime court. The application shall clearly set forth the evidence to be preserved on application, the relation between the evidence and the maritime claim and causes for application.

Article 66

A maritime court accepting an application for maritime evidence preservation may order the maritime claimant to provide guarantee. If the maritime claimant fails to provide guarantee, the application shall be rejected.

Article 67

To impose maritime evidence preservation, the following conditions shall be fulfilled:

(1)

The claimant is the party to the maritime claim;

(2)

The evidence to be preserved on application provides proof for the maritime claim;

(3)

The party who opposes the claim is the person related to the evidence to be preserved on application; and

(4)

In case of emergency, failure to impose evidence preservation immediately will result in loss or difficulty in obtaining the evidence for the maritime claim.

Article 68

After accepting the application, a maritime court shall make an order within 48 hours. If an order is made for imposing maritime evidence preservation measures, it shall be executed immediately; if the conditions for maritime evidence preservation are not fulfilled, an order shall be made to reject the application.

Article 69

If a party is not satisfied with the order, he may apply for reconsideration once within five days of the date of receiving the written order. The maritime court shall make a reconsideration decision within five days of receiving the reconsideration application. Execution of the order shall not be suspended during the time of reconsideration. If the causes for applying for reconsideration by the party who opposes the claim are tenable, the evidence preserved shall be returned to the party who opposes the claim.

If an interested party lodges an objection to maritime evidence preservation, the maritime court shall order to cancel maritime evidence preservation if it deems the causes are tenable through investigation; if preservation has been imposed, evidence related to the interested party shall be returned to the interested party.

Article 70

A maritime court imposing maritime evidence preservation may seal up the evidence, may obtain reproductions or duplicates, or take photos, conduct tape-recording, make extracts or records of investigation. If really necessary, the original of the evidence shall be obtained.

Article 71

A maritime claimant wrongfully submitting an application for maritime evidence preservation shall compensate losses incurred by the party who opposes the claim or an interested party.

Article 72

If no litigation or arbitration procedures start for relevant maritime disputes after the imposition of maritime evidence preservation, the parties may bring a law suit for the maritime claim to the maritime court imposing maritime evidence preservation or the other maritime court having jurisdiction, except that a jurisdiction agreement or an arbitration agreement has been concluded between the parties

Chapter VI Maritime Guarantee

Article 73

Maritime guarantee includes guarantee involved in procedures provided in this Law such as maritime claim preservation, maritime injunction, maritime evidence preservation.

The guarantee shall be in form of providing cash or surety, establishing mortgage or pledge.

Article 74

A guaranty provided by a maritime claimant shall be delivered to the maritime court; a guaranty provided by the person against whom the application for maritime preservation is made may be delivered to the maritime court, or delivered to the maritime claimant.

Article 75

The modes and quantity of a guaranty provided by a maritime claimant shall be determined by the maritime court. The modes and quantity of a guaranty provided by the person against whom the application for maritime preservation is made shall be determined through consultation between the maritime claimant and the person against whom the application for maritime preservation is made; if failing such consultation, they shall be determined by a maritime court.

Article 76

Where a maritime claimant requests a person against whom the application for maritime preservation is made to provide guaranty on a maritime claim, the quantity of the guaranty shall equal to the quantity of his creditor's rights, but shall not exceed the value of the preserved property.

The quantity of a guaranty provided by a maritime claimant shall equal to the losses possibly caused to a person against whom the application for maritime preservation is made due to his claim. The specific quantity thereof shall be determined by the maritime court.

Article 77

After a guaranty is provided, the person providing the guaranty may, for any justified reasons, file an application to the maritime court to reduce, modify or cancel the guaranty.

Article 78

Where losses are caused to a person against whom the application for maritime preservation is made due to excessive quantity of the guaranty claimed by a maritime claimant, the maritime claimant shall bear the liability for compensation.

Article 79

The guaranty involved in constituting a limitation fund for maritime claims liability and in advance execution as well as other procedures may be handled by reference to the provisions of this Chapter.

Chapter VII Service

Article 80

In serving a maritime litigation document, the relevant provisions of the Civil Procedure Law of the People's Republic of China are applicable, and the following methods may also be adopted:

(1)

to serve on an agent ad litem commissioned by the person on whom the litigation document is to be served.

(2)

to serve on a representative office or branch office established in the People's Republic of China by the person on whom the service is to be made or on his business agent;

(3)

to serve by employing other appropriate methods by which the receipt can be confirmed.

A legal paper relating to the arrest of a ship may also be served on the captain of the ship involved.

Article 81

If the person who has the obligation of receiving a legal paper refuses to sign and receive the legal paper, the person serving the paper shall record on the receipt the situations. After the person serving the paper and the witness have affixed their signatures or seals to the receipt, the legal paper shall be left at his domicile and the service shall be deemed completed.

Chapter VIII Trial Procedures

Section 1 Provisions on Trying Cases Involving Collision of Ships

Article 82

When a plaintiff brings an action and a defendant files a defence, the Investigation Form of Maritime Accident shall be truthfully completed.

Article 83

When serving a statement of complaint or a defence on any party, the maritime court shall not attach thereto any relevant evidential materials.

Article 84

The parties shall finish the provision of evidence before a court session. After having finished the provision of evidence and issued a note stating the provision of evidence to the maritime court, the parties may apply to consult evidential materials relating to the collision of ships.

Article 85

The parties shall not repudiate their statements in the Investigation Form of Maritime Accident and the evidence they have provided, except that they have new evidence and full reasons which explain that such evidence cannot be provided during the period of providing evidence.

Article 86

The inspection and evaluation of a ship shall be conducted by an institution or individual with authority granted by the State or with professional qualifications. An inspection or evaluation conclusion drawn by an institution or individual without authority granted by the State or without professional qualifications shall not be accepted by the maritime court.

Article 87

A maritime court trying a case involving collision of ships shall conclude the case within one year after placing the case on the docket. Any extension of the period necessitated by special circumstances shall be subject to the approval of the president of the court.

Section 2 Provisions on Trying Cases Involving General Average

Article 88

With respect to a dispute arising from general average, the parties may agree to commission an adjustment institution to have it adjusted, or directly bring an action in the maritime court. When entertaining a dispute arising from general average that has not been adjusted, the maritime court may commission an adjustment institution to have it adjusted.

Article 89

A report of general average adjustment made by an adjustment institution, if the parties do not raise any objections, may be regarded as the basis for contributing liabilities; if the parties raise any objections, the maritime court shall determine to accept them or not.

Article 90

Not being affected by the procedures of an action of general average brought for an identical average accident, the parties may bring an action against the person liable for any non general average losses.

Article 91

An action of non general average brought by the parties for an identical accident in a maritime court entertaining the case involving general average, as well as an action of recourse brought for general average contribution against the person liable, may be tried in combination by the maritime court.

Article 92

The maritime court trying a case involving general average shall conclude the case within one year after placing the case on the docket. Any extension of the period necessitated by special circumstances shall be subject to the approval of the president of the court.

Section 3 Provision on Exercising the Right to Indemnity by Subrogation by a Maritime Insurer

Article 93

Where the occurrence of an insured event is caused by a third party, after having paid insurance indemnity to the insured, the insurer may exercise by subrogation the right of the insured to demand indemnity against the third party up to the limit of insurance indemnity.

Article 94

When an insurer exercises the right to indemnity by subrogation, if the insured does not bring an action against the third party causing the insured event, the insurer shall, in the name of itself, bring an action against the third party.

Article 95

When an insurer exercises the right to indemnity by subrogation, if the insured has brought an action against the third party causing the insured event, the insurer may request the court entertaining the case to change the party so as to exercise by subrogation the right of the insured to demand indemnity against the third party.

Where the insurance indemnity obtained by the insured can not make up all the losses caused by a third party, the insurer and the insured may, as joint plaintiffs, demand indemnity from the third party.

Article 96

When bring an action or applying to participate in the proceedings in accordance with the provision of Articles 94 and 95 of this Law, an insurer shall submit vouchers certifying the payment of insurance indemnity by the insurer, as well as other documents that ought to be submitted when participating in the proceedings, to the maritime court entertaining the case.

Article 97

With respect to a claim for indemnity against oil pollution damage caused by a ship, the person suffering for the damage may make the claim to the shipowner causing the oil pollution damage, or directly make the claim to the insurer bearing the liability for oil pollution damage of the shipowner or to other person providing financial suretyship.

Where the insurer bearing the liability for oil pollution damage of the shipowner or the other person providing financial suretyship against whom an action is filed, he is entitled to require the shipowner causing the oil pollution damage to participate in the proceedings.

Section 4 Summary Procedures, Procedures for Hastening Debt Recovery and Procedures for Publicizing Public Notice for Assertion of Claims

Article 98

When trying a simple maritime case in which the facts are evident, the rights and obligations clear and the disputes trivial in character, the maritime court may apply the provisions on summary procedures in the Civil Procedure Law of the People's Republic of China.

Article 99

When requesting payment of a pecuniary debt or recovery of negotiable instruments from a debtor on the basis of any maritime causes, a creditor may, if the relevant provisions of the Civil Procedure Law of the People's Republic of China are conformed to, apply to the maritime court that has jurisdiction for an order of payment.

Where a debtor is a foreign national, stateless person, foreign enterprise or organization, but he has domicile, representative office or branch office within the territory of the People's Republic of China and an order of payment can be served, the creditor may apply to the maritime court that has jurisdiction for an order of payment.

Article 100

A holder of a voucher for taking delivery of goods such as a bill of loading may, if the voucher for taking delivery of goods is out of his control or destroyed, apply to the maritime court of the place where the goods are for publication of public notice for assertion of claims.

Chapter IX Procedures for Constituting a Limitation Fund for Maritime Claims Liability

Article 101

Where limitation of liability is applied according to law after the occurrence of a maritime accident, the shipowner, charter, operator, salvor and insurer may apply to the maritime court to constitute a limitation fund for maritime claims liability.

Where any oil pollution damage is caused by a ship, the shipowner and the insurer of liability or other persons providing financial suretyship shall, for a purpose of obtaining the right to limitation of liability stipulated by law, constitute a limitation fund for maritime claims liability of oil pollution damage with the maritime court.

An application for constituting a limitation fund for liability may be submitted before bring an action or during the proceedings, but it shall be submitted at least before the making of the judgment of first instance.

Article 102

Where an application for constituting a limitation fund for maritime claims liability is to be submitted before bring an action, the parties shall submit it to the maritime court of the place where the accident is occurred, the place where the contract is performed or the place where the ship is arrested.

Article 103

The constitution of a limitation fund for maritime claims liability shall not be restricted by an agreement between the parties on litigation jurisdiction or arbitration.

Article 104

When applying to constitute a limitation fund for maritime claims liability, the applicant shall submit a written application. The application shall specify the quantity of and the reasons for the limitation fund for maritime claims liability, as well as the names, addresses and corresponding methods of the known interested parties, and shall have relevant evidence attached.

Article 105

After entertaining an application for constituting a limitation fund for maritime claims liability, the maritime court shall, within seven days, issue a notice to the known interested parties, and publish a public announcement in newspapers or through other news media.

The notice and public announcement shall include the following contents:

(1)

name of the applicant;

(2)

facts of and reasons for the application;

(3)

matters for which the limitation fund for maritime claims liability is to be constituted;

(4)

matters concerning the undertaking of registration of the creditors' rights;

(5)

other matter that need to be made known.

Article 106

Where an interested party objects the application of an applicant for constituting a limitation fund for maritime claims liability, the party shall, within seven days from the date of the receipt of the notice or within thirty days from the date of the public announcement for those who have not received the notice, raise the objection in written form to the maritime court.

After receiving a written objection submitted by the interested party, the maritime court shall examine it and make an order within fifteen days. Where the objection is established, it shall order the application of the applicant to be rejected; if the objection is not established, it shall order to approve the applicant to constitute a imitation fund for maritime claims liability.

Where the parties are not satisfied with an order, they may file an appeal within seven days from the date of the receipt of the order. The people's court of second instance shall make an order within fifteen days from the date of the receipt of appeal petition.

Article 107

Where the interested parties do not raise any objections within the prescribed time period, the maritime court shall order to approve the applicant to constitute a limitation fund for maritime claims liability.

Article 108

After an order approving an applicant to constitute a limitation fund for maritime claims liability takes effect, the applicant shall constitute a limitation fund for maritime claims liability with the maritime court.

In constituting a limitation fund for maritime claims liability, the applicant may provide cash, or provide guaranty approved by the maritime court.

The quantity of a limitation fund for maritime claims shall be the sum of such an amount of the limitation of liability for maritime claims, together with the interests therefrom from the date of the occurrence of the accident until the date of the constitution of the fund. Where the fund is constituted in a form of guaranty, the quantity of the guaranty shall be the quantity of the fund together with the interests therefrom during the existence of the fund.

Where the fund is constituted in a form of cash, the date on which the fund reaches the account designated by the maritime court shall be the date of the constitution of the fund. Where the fund is constituted in a form of guaranty, the date on which the guaranty is accepted by the maritime court shall be the date of the constitution of the fund.

Article 109

After the constitution of a limitation fund for maritime claims, for any maritime disputes, the parties shall bring an action in the maritime court constituting a limitation fund for maritime claims, except that the parties reach an agreement on litigation jurisdiction or arbitration.

Article 110

Where the application for constituting a limitation fund for maritime claims is wrong, the applicant shall indemnify the losses therefrom suffered by the interested parties.

Chapter X Procedures for Registering Creditors' Rights and Repayment of Debt

Article 111

After the publishing of a public announcement of the maritime court concerning the order relating to the compulsory auction of a ship, the creditors shall apply to register the creditors' rights relating to the ship that is to be auctioned within the period of the public announcement. Where no registration is conducted by the expiration of the period of the public announcement, the right to the repayment of debt from the proceeds of the auction of the ship shall be deemed as having been waived.

Article 112

After the publishing of a public announcement concerning the entertaining of an application by the maritime court for constituting a limitation fund for maritime claims, the creditors shall, within the period of the public announcement, apply to register the creditors' rights relating to the maritime accident occurred in specific circumstances. Where no registration is conducted by the expiration of the period of the public announcement, the creditors' right shall be deemed as having been waived.

Article 113

When applying to register the creditors' rights with a maritime court, the creditors shall submit written applications, and shall provide evidence of creditors' rights.

Evidence of creditors' rights include written judgment, order in writing, conciliation statement, arbitration award and document evidencing creditors' rights, as well as other evidential materials certifying the existence of maritime claims.

Article 114

The maritime court shall examine the application of a creditor; where evidence of creditors' rights is provided, it shall order to approve the registration; where no evidence of creditors' rights is provided, it shall order to reject the application.

Article 115

With respect to the written judgment, order in writing, conciliation statement, arbitration award and document evidencing creditors' rights provided by the creditors to certify the creditors' rights, the maritime court shall, if ascertaining that the above-mentioned documents are true and lawful upon examination, make an order to have them affirmed.

Article 116

Where any other evidence for maritime claims is provided, the creditors shall, after registering the creditors' rights, bring an action for affirming rights in the maritime court entertaining the registration of creditors' rights. Where the parities conclude an arbitration agreement, that shall promptly apply for arbitration.

The judgment and order made by the maritime court on an action for affirming rights shall be legally effective, the parties shall not file an appeal.

Article 117

After trying and affirming the rights, the maritime court shall issue a notice of the creditors' meeting to the creditors, and organize to convene the creditors' meeting.

Article 118

The creditors' meeting may propose through consultation the proceeds of the ship or a plan for the distribution of the limitation fund for maritime claims, and conclude an agreement on the repayment of debt.

The agreement on the repayment of debt shall be legally effective upon the approval by an order of the maritime court.

Where the creditors' meeting fails to conclude an agreement, the maritime court shall, in accordance with the order of the repayment of debt as stipulated in the Maritime Code of the People's Republic of China and other relevant laws, make a written order to determine the proceeds of the ship or the plan for the distribution of the limitation fund for maritime claims.

Article 119

The proceeds of the auction of a ship and the interests therefrom, or the limitation fund for maritime claims and the interests therefrom, shall be distributed simultaneously.

When distributing the proceeds of a ship, the litigation costs ought to be borne by the persons liable, the expenses for preserving and auctioning the ship and distributing the proceeds of ship, and other expenses incurred for the common interests of the creditors, shall be deducted and paid first from the proceeds of the ship.

The remnant after repaying the debt shall be returned to the original shipowner or the person constituting the limitation fund for maritime claims.

Chapter XI Procedures for Publicizing Notice for Assertion of Maritime Liens

Article 120

When a ship is transferred, the transferee may apply to the maritime court for publicizing notice for assertion of maritime liens, so as to urge the persons enjoying maritime liens to promptly claim their rights and to extinguish the maritime liens attached to the ship.

Article 121

Where applying for publicizing notice for assertion of maritime liens, the transferee shall submit its application to the maritime court of the place where the transferred ship is delivered or the place where the transferee has its domicile.

Article 122

When applying for publicizing notice for assertion of maritime liens, an application, the ship transfer contract, the technical information of the ship and other documents shall be submitted to the maritime court. The application shall specify the name of the ship, the facts of and reasons for applying for publicizing notice for assertion of maritime liens.

Article 123

After receiving the application and relevant documents, the maritime court shall examine them and make an order approving or disapproving the application within seven days.

Where the transferee is not satisfied with the order, it may apply for reconsideration which could be granted only once.

Article 124

After the order approving the application takes effect, the maritime court shall publish a public announcement in newspapers or through other news media, so as to urge the persons enjoying maritime liens to promptly claim their rights within the period of publication of the notice.

The period of publication of a notice for maritime liens shall be sixty days.

Article 125

Where a person enjoying maritime liens claims his rights within the period of publication of a notice for maritime liens, he shall undergo registration procedures with the maritime court; where no rights are claimed, the maritime liens shall be deemed as having been waived.

Article 126

Where no one claims the maritime liens by the expiration of the period of publication of a notice for maritime liens, the maritime court shall, in accordance with the application of the parties, make a judgment to declare that no maritime liens are attached to the transferred ship. The contents of the judgment shall be publicly announced.

Chapter XII Supplementary Provisions

Article 127

This Law shall enter into force as of July 1, 2000.