Making molehills out of mountains in China

With all the activity on the Chinese waterfront,and the unmistakable aim of becoming the industry’s high castle, there is a fairly strong need for marine insurers to understand this rapidly developing jurisdiction. At the heart of all terminal and stevedoring law is the question of indemnities between the ship and the shore.

When the landside interests are working for the ship, it is understood in maritime law at least that the stevedore and terminal interests are working as servants to the ship. If any cargo interest attempts to sue them for work not done or done badly, under maritime law the landside interests can seek the shelter of the “Himalaya Clause”which states that the servants of the shipowner, when working for the latter,are entitled to the same rights and defences as the shipowner. Usually this term is incorporated in the user contracts of terminals and stevedores which they sign with shipowners. Word from China is that claimants are disputing the applicability of this rule to local operations. Chinese maritime law in any case comes to an end at the port gate which makes the rules on collection and delivery subject to civil rules. So “Himalaya” does not necessarily apply anymore in China, an inconvenience to all concerned and a potential loophole available to the cargo interests in the event that some local expensive cargo casualty occurs within the port precincts.