On 7 June 2022, China’s Supreme People’s Court (SPC) released ten typical cases heard by maritime courts across the country in 2021.
Of these cases, the most noteworthy is the case between ORIENTAL PRIME SHIPPING CO., LIMITED (the Claimant) and HONG GLORY INTERNATIONAL SHIPPING COMPANY LIMITED (the Respondent), in which the Claimant applied for recognition and enforcement of a foreign arbitral award before a Chinese court.
The case was seized by the Shanghai Maritime Court, which clarified in its judgment that when the place of incorporation/registration of an offshore company is inconsistent with its principal place of business, the latter one should be taken as the company’s domicile.
The dispute, which arose from a charterparty between the parties, was settled by the London Maritime Arbitrators Association (LMAA) through arbitration. As the Respondent failed to comply with the arbitral award, the Claimant applied to the Shanghai Maritime Court for recognition and enforcement.
The Respondent challenged the jurisdiction of the Shanghai Maritime Court, on the basis that it was a company registered in the Marshall Islands with no principal business office or assets within China, and thus the Chinese court had no jurisdiction over the case.
The Shanghai Maritime Court denied the jurisdictional challenge, and confirmed that the Respondent had located its principal place of business in Shanghai, China, and therefore the court had jurisdiction over the application. The Shanghai High People’s Court upheld this ruling in the second instance.
In this case, the Chinese court had adhered to the essence of the New York Convention – pro-enforcement – said the SPC.
Cover Photo by Yu Gui on Unsplash
Contributors: CJO Staff Contributors Team
