A Study on the Liability Limitation System of Port Operators in China

Abstract

Maritime transport is the main mode of international trade transport. After COVID-19 pandemic, with the implementation of strong economic stimulus plans in each country, commodity consumption is increasing, and the rapid growth of e-commerce has also stimulated the recovery of maritime trade. United Nations Conference on Trade and Development, Review of Maritime Transport 2021 (New York): United Nations Publications, 2021, p.16. Because ports (i.e., crucial hubs that connect sea and land transportation) are a crucial component of international maritime transport, port operators are a critical research subject. Due to the rapid development of international maritime cargo transportation, port operations have exhibited significant progress and development. Due to the rapid development of the port industry, the legislative process pertaining to China's port laws and regulations is lagging, and the provisions on the legal responsibility of port operators are insufficient; thus, the development of the port industry is hindered. Specifically, the liability limitation system of port operator is related to the amount of compensation liability they bear when facing claims, and the balance of the risks they bear and the rights they enjoy. Moreover, with respect to whether a port operator can enjoy a limitation of liability and the basis for it, the lack of legislation has led to a wide variation in judicial decisions in China; thus, judicial uncertainty is prevalent. In regard to the aforementioned issue, the author observed that although Korea and China, which are friendly neighbouring countries, exhibit similar provisions in their respective laws (i.e., Korean Commercial Law and Chinese Maritime Law), the legal status and liability of port operators in Korean judicial practice is not as confusing as that in the Chinese one. The Korean courts have generally recognised the legal status of the port operator as an ＂Independent Contractor＂, which provides a rational method through which the port operator's limitation of liability system can be structured. The current era represents a crucial moment for the revision of China's Maritime Law. The 2020 Maritime Law Draft for Examination has led to considerable advancements; port operators have been introduced into the Maritime Law scope, and they can enjoy the limitation of liability, which was exclusively enjoyed by carriers. However, many shortcomings, such as the lack of clarity in the definition of the port operator concept and the lack of provisions on the circumstances in which the port operator loses the limitation of liability, exist. This thesis focuses on the legal status and liability of port operators, and it considers the carriage of goods by sea; furthermore, it employs research methods (e.g., documentary research, comparative research, and case analysis) to classify the evolution of domestic and international legislation, and it conducts a detailed analysis of domestic and international legislation and typical cases. Based on the revision of China's Maritime Law, this thesis proposes the relevant rules of adjudication and legislative amendments from the levels of interpretation and legislative theory, respectively, and it is guided by the international law and contract law theories. The thesis comprises five chapters, including an introduction and a conclusion. Chapter Ⅰ Introduction. This chapter introduces the research background, research objectives, research methods, and thesis scope, and it identifies the research values, main directions, and basic thesis framework. Chapter Ⅱ The Liability System of Port Operators and Issues under Chinese Law. This chapter delineates the concept and the basic legal provisions of the port operator (i.e., the subject of study)under Chinese law. By citing maritime law scholars, it first introduces the different definitions of the port operators concept, and it collates the legal provisions in China from 1995 to the present year. The author observes that there is no direct provision for the port operator and its liability limtation in China's contemporary law; thus this legisilation gap should be filled during the revision of the China Maritime Law . Subsequently, various cases of Chinese court decisions on the legal liability and liability limitation of port operators have been collated, which reveal that the determination of the liability of port operators in Chinese judicial practice is largely dependent on the court's identification of the legal status of the port operator in a particular case. After reviewing the relevant Chinese port operator cases, the author introduces and analyses several main opinions and notes their shortcomings and irrationality. The author argues that under the existing Chinese legal system, there is immense uncertainty as to whether the port operator enjoys the limitation of liability. The inconsistent understanding of the legal status of port operators in Chinese academia and judicial practice has led to inconsistent determinations as to whether port operators are entitled to a limitation of liability. Chapter Ⅲ Comparative Law Study on the Port Operators and their Limitation of Liability Systems, the provisions on the port operators in the world's major countries (e.g., the United Kingdom, the United States, and Korea) and those of international conventions (e.g., the O.T.T. Convention) are reviewed. The author has collated and organised the legal provisions of different countries at different periods of time and analysed typical cases at the domestic and international levels. It was observed that most countries do not possess a uniform term for the port operator concept, and that each country exhibits its own port operator characteristics. The scope of this terminology is determined as per different national conditions, legislative purposes, and practical needs. With regard to the legal system for the limitation of liability of port operators, if the development trend of international conventions and extraterritorial laws (e.g., the Hague Rules, Visby Rules, and Rotterdam Rules) are considered, the carrier's period of responsibility has been gradually extended from ＂tackle-to-tackle＂ to ＂door-to-door＂. Thus, the port operator's period of responsibility was extended. The right of carriers to be limited in liability, although sometimes challenged, has not yet been modified; therefore, the port operator tends to be limited in liability. Chapter Ⅳ presents solutions to the problems identified in the preceding studies. This chapter not only proposes a method for determining the legal status of the port operator, namely as ＂Contractual Assistants＂. More importantly, it examines the rationality of a port operator's liability limitation system under Chinese law and the legislative model for a port operator's liability limitation system. Based on the introduction of the international legislative model of the port operator's liability limitation system, the author recognises the rationality of the provisions stipulated in the current Chinese Maritime Law Draft for Examination. Finally, the author re-examines the provisions in the Maritime Law Draft for Examination and proposes specific legislative proposals to address the shortcomings exhibited therein. Chapter Ⅴ presents the conclusion, which summarises the main concepts of the previous chapters and proposes future research directions. The revision of China Maritime Law is currently at its final stages; therefore, an in-depth study of the legal system pertaining to port operators can provide a reference for the enhancement of the liability limitation system of port operators in China, which can facilitate the determination of the rights and obligations of the vessel, cargo, and port parties in maritime transportation and promote the healthy development of the port operation and maritime industries.