Plaintiff-Appellant: Vinmar International Ltd．
Address: 300 Room, WestGreen Avenue No. 396, Houston, Texas, U.S.A.
Legal Representative: Vijay Goradia, president
Authorized Attorneys: Lu Min, attorney-at-law of Huisheng Law Firm, 　　　　　　　　　　　　　Shanghai Zhou Qi, attorney-at-law of Huisheng Law 　　　　　　　　　　　Firm, Shanghai
Defendant-Appellant: Foreign Trading Exploitation Co., Zhejiang Province Address: 13th Floor, Fengqi Road No. 422, Hangzhou, Zhejiang, and P.R.C. Legal Representative: Tang Jun, general manager
Authorized Attorney: Yu Hua, attorney-at-law of Yuehanlin Law Firm, 　　　　　　　　　　　　Zhejiang

　　　Vinmar International Ltd. (appellant) and Foreign Trading Exploitation Co. of Zhejiang (appellant), refusing to accept as final the civil case judgement of the Higher People's Court of Zhejiang for a dispute over bill of lading infringement, which is filed as 1998-Zhe-Jing-Chu-Zi-27, have made an appeal to this Court respectively. Pursuant to relevant laws this Court has formed a collegial panel and held a trial. Zhou Qi, the authorized attorney of appellant Vinmar International Ltd., Yu Hua, the authorized attorney of appellant Foreign Trading Exploitation Co., appeared at the trial for argument and the hearing of the case. The case has now come to a close.
　　　 The Trial court found that, on April 5, 1996, plaintiff consigned cargo by the vessel "M/V No. 1 Samly" owned by Xiehe Regular Company. The representative of International Bulk Cargo Freight Company signed on the original order, clean, and on board B/L whose number is SAM-ULISNIN-001. It was written clearly on B/L that the port of shipment was Weishan, Korea, the start time was on April 4, 1996, the amount was 950.712 tons, and the place of delivery was Ningbo, China or nearby. The bill of lading also clearly indicated that the cargo consigned by Vinmar International Ltd. was in apparent good order. On April 10, 1996, "M/V No. 1 Samly" carrying the cargo reached Ningbo. On the same day, the Foreign Trading Exploitation Company of Zhejiang brought an action against Jinlilong Company on the Intermediate People's Court of Huangzhou and asked Jinliong Company to fulfill the obligation of providing 1,000 tons cargo according to the contract. The Intermediate People's Court of Huangzhou filed the case as 1996-Huang-Jing-Chu-Zi-326. On April 12, 1996, the Intermediate People's Court of Huangzhou issued the civil judgement filed as 1996-Hang-Jing-Chu-Zi-326-1, in which content was to "impound and distrain the 1,000 tons cargo belonging to Jinliong Company", and had enforced in accordance with the application and security by the Foreign Trading Exploitation Company. Then, Vinmar International Ltd. made an objection in the name of the B/L holder of the whole set of original copies. On May 28, 1996, the Intermediate People's Court of Huangzhou informed Vinmar International Ltd. to join in the case as a third party. On May 30, 1996, the Intermediate People's Court of Huangzhou sold off the cargo, which had been impounded and distrained. On June 24, 1996, Vinmar International Ltd. brought an action on the Ningbo Maritime Court in the name of the B/L holder of the whole set of original copies. On May 5, 1997, the trial court reviewed this case according to the instruction of the Court.
　　　 The cargo involved in this case was loaded at the Rotterdom of Dutch and shipped by plaintiff. After reaching Korea, the cargo was transshipped by "M/V No. 1 Samly".
　　　 On January 23, 1996, the defendant signed a contract on sales and purchases with Jinlilong Company of Hong Kong, which was filed as No. KVVCX-960123RA. The following proceedings were agreed upon in the contract: Jinlilong (bargainor) provides 1,000 tons cargo to the defendant (purchaser) with the unit price of CNF Ningbo $417 per ton; the port of shipment is in Europe and the port of destination is Ningbo, China; the mode of availability is the irrevocable LC that issued in the name of the plaintiff in 90 days after the B/L date. On the same day, Jinlilong Company (bargainor) signed another contract on sales and purchases with the plaintiff (purchaser). The contract indicated that all contents are same with the preceding contract (No. KVVCX-960123RA), including contract number, name of cargo, unit price, port of shipment and delivery. Furthermore, the latter contract added arbitration clause. On February 2, 1996, the plaintiff and Jinlilong Company reached an agreement that the plaintiff pays brokerage to Jinlilong Company for causing the business. The brokerage was $7 per ton. However, it was also written clearly in the agreement that both parties were still the bargainor and purchaser of the contract. On January 30, the defendant applied for issuing the irrevocable LC benefiting the plaintiff to the International Department, Zhejiang Branch Bank of China Construction Bank. Later, the defendant also applied for modifying LC to the bank according to the requirement of the plaintiff retailed by Jinlilong Company.
　　　 On April 2, 1996, the plaintiff signed a contract on sales and purchases with Imports and Exports Company of Qin County to sell 1,000-ton cargo and issued commercial invoice. The price was $615 per ton. Afterwards, the plaintiff failed to fulfill the contract because the cargo were impounded by the Intermediate People's Court of Huangzhou, and compensated RMB146,924.58 for loss and paid the RMB32,340 arbitration fee, which affirmed in the 1997-Hu-Mao-Zhong-Zi-428 judgement by the Shanghai branch of China International Economy and Trade Arbitration Committee. Moreover, the 1998-Hu-Zhong-Zhi-Zi-460 civil judgement issued by the First Intermediate People's Court of Shanghai affirmed to enforce the plaintiff's RMB179,264.58 and overdue interest which failed to perform automatically.
　　　 The defendant refused to admit the validity of following evidences: the receipt and certification submitted by Hongqian Law Firm of Shanghai, for which cannot prove that Imports and Exports Company of Qin County had received the compensation paid by the plaintiff indeed; the copy of interest rate calculation criterion of American banks submitted by the plaintiff; the documents about the travel costs and attorney fees submitted by the plaintiff, for which cannot be proved reasonably. The evidence provided by the defendant can only prove the plaintiff was the beneficiary of LC issued by the defendant other than the direct contract relationship between the plaintiff and the defendant nor the ownership of the defendant to the cargo impounded and distrained by the Intermediate People's Court.
　　　　On the basis of above facts, the trial court held that, in this case, the SAM-ULSNIN-001 B/L was the property right evidence of the 950.712-ton cargo. Being the legal holder of B/L, the plaintiff took the ownership of cargo recorded on the B/L and the plaintiff's rights shall be protected according to law. The defendant's behavior of applying for impounding and distraining the cargo recorded on the B/L and providing security to the Intermediate People's Court of Huangzhou infringes the plaintiff's lawful rights and interests, and shall bear the liability of compensation. The defendant's plea reason that the law shall protect the behavior of applying for preserving the cargo recorded on the B/L cannot be accepted. The plaintiff's behavior of selling cargo to two different purchases was the key reason of this case. Hence, the value of 950.712-ton cargo in this case shall be calculated according to the $417-per-ton price in the KVVCX-960123RA contract between the plaintiff and Jinlilong Company, namely $396,477. The validity of interest rate calculation criterion submitted by the plaintiff cannot be affirmed. The criterion shall be determined in accordance with the law of China, which is lex loci delicti. The validity of evidences for the compensation to the Imports and Exports Company of Qin County, the travel cost and the attorney fee submitted by the plaintiff cannot be affirmed. Considering the fact of selling cargo to two different purchases, the trial court therefore does not give their support to the claim of the plaintiff. The trial court decided: the the defendant shall pay the damage to the plaintiff in the amount of $396,447 for the loss of cargo and the relevant interest (calculated from April 12, 1996, to the day of payment according to the saving interest rate of US dollar announced by China Bank within the same period), and shall pay off in 30 days after the judgement becoming effective; other claims of the plaintiff are dismissed; the cost of this case if RMB46,724, and shall be borne jointly by the plaintiff with RMB16,724 and the defendant RMB30,000.
　　　 The plaintiff-appellant alleges: it is lacking in factually as well as legal support that the trial court of first instance dismisses the loss of cargo by finding selling cargo to two purchasers. The trial court of first instance does not hear the behavior of selling cargo to the third party. Hence, it is improper to calculate the loss of the plaintiff according to $417 per ton, and unfair not to support other loss of the plaintiff.
　　　 The defendant-appellant alleges: the trial court of first instance finds fact wrongly. There is relationship of contract on sales and purchases between the plaintiff and the defendant; the application of law to the unlawful behavior of selling cargo to two different purchasers is erroneous obviously, which doesn't protect lawful rights and interests of the defendant; there is legal support for the application of property preservation by the defendant. During the hearing, the defendant also put forward that the Vinmar International Ltd. is not the plaintiff of the first instance, because it is the attorney instead of the party who affixed the indictment.
　　　 After the hearing, the authorized attorney of the plaintiff submits the written statement of the procurator for emphasizing again that it is the behavior of selling cargo to two different purchasers that begets this case and is the key reason that the trial court of first instance refused to support some loss of the plaintiff lacking factually as well as legal support. The statement also pleads for the subject qualification of the plaintiff.
　　　 This Court found, after investigation, that on April 5, 1996, the plaintiff consigned cargo by the vessel "M/V No. 1 Samly" owned by Xiehe Regular Company. The representative of International Bulk Cargo Freight Company signed on the original order, clean, and on board B/L whose number is SAM-ULISNIN-001. It was written clearly on the bill of lading that the port of shipment was Weishan, Korea, the start time was on April 4, 1996, the amount was 950.712 tons, and the place of delivery was Ningbo, China or nearby. The bill of lading also clearly indicated that the cargo consigned by Vinmar International Ltd. was in apparent good order. On April 10, 1996, "M/V No. 1 Samly" carrying the cargo reached Ningbo. On the same day, the Foreign Trading Exploitation Company of Zhejiang brought an action against Jinlilong Company on the Intermediate People's Court of Huangzhou and asked Jinliong Company to fulfill the obligation of providing 1,000 tons cargo according to the contract. The Intermediate People's Court of Huangzhou filed the case as 1996-Huang-Jing-Chu-Zi-326. On April 12, 1996, the Intermediate People's Court of Huangzhou issued the civil judgement filed as 1996-Hang-Jing-Chu-Zi-326-1, in which content was to "impound and distrain the 1,000 tons cargo belonging to Jinliong Company", and had enforced in accordance with the application and security by the Foreign Trading Exploitation Company. Then, Vinmar International Ltd. made an objection in the name of the B/L holder of the whole set of original copies. On May 28, 1996, the Intermediate People's Court of Huangzhou informed Vinmar International Ltd. to join in the case as a third party. On May 30, 1996, the Intermediate People's Court of Huangzhou sold off the cargo that had been impounded and distrained. On June 24, 1996, Vinmar International Ltd. brought an action on the Ningbo Maritime Court in the name of the B/L holder of the whole set of original copies. On May 5, 1997, the trial court reviewed this case according to the instruction of the Court.
　　　 The cargo involved in this case was loaded at the Rotterdom of Dutch and shipped by the plaintiff. After reaching South Korea, the cargo was transshipped by "M/V No. 1 Samly".
　　　 This Court also found that, on January 23, 1996, the defendant signed a contract on sales and purchases with Jinlilong Company of Hong Kong, which was filed as No. KVVCX-960123RA. The following proceedings were agreed upon in the contract: Jinlilong (bargainor) provides 1,000 tons cargo to the defendant (purchaser) with the unit price of CNF Ningbo $417 per ton; the port of shipment is in Europe and the port of destination is Ningbo, China; the mode of availability is the irrevocable LC that issued in the name of the plaintiff in 90 days after the B/L date. On the same day, Jinlilong Company (bargainor) signed another contract on sales and purchases with the plaintiff (purchaser). The contract indicated that all contents are same with the preceding contract (No. KVVCX-960123RA), including contract number, name of cargo, unit price, port of shipment and delivery. Furthermore, the latter contract added arbitration clause. On February 2, 1996, the plaintiff and Jinlilong Company reached an agreement that the plaintiff pays brokerage to Jinlilong Company for causing the business. The brokerage was $7 per ton. However, it was also written clearly in the agreement that both parties were still the bargainor and purchaser of the contract. On January 30, the defendant applied for issuing the irrevocable LC benefiting the plaintiff to the International Department, Zhejiang Branch Bank of China Construction Bank. Later, the defendant also applied for modifying LC to the bank according to the requirement of the plaintiff retailed by Jinlilong Company.
　　　 On April 2, 1996, the plaintiff signed a contract on sales and purchases with Imports and Exports Company of Qin County to sell 1,000-ton cargo and issued commercial invoice. The price was $615 per ton. Afterwards, the plaintiff failed to fulfill the contract because the cargo were impounded by the Intermediate People's Court of Huangzhou, and compensated RMB146,924.58 for loss and paid the RMB32,340 arbitration fee, which affirmed in the 1997-Hu-Mao-Zhong-Zi-428 judgement by the Shanghai branch of China International Economy and Trade Arbitration Committee. Moreover, the 1998-Hu-Yi-Zhong-Zhi-Zi-460 civil judgement issued by the First Intermediate People's Court of Shanghai affirmed to enforce the plaintiff's RMB179,264.58 and overdue interest, which failed to perform automatically. The Hongqian Law Firm of Shanghai issued the certification to prove that the lawyer of this law firm, as the attorney of Imports and Exports Company of Qin County, had received the compensation paid by the plaintiff indeed.
　　　 The plaintiff submitted the evidence for proving the loss involved the travel costs and attorney fees, and the copy of interest rate calculation criterion of American banks.
　　　 This Court holds that this case on the dispute over B/L infringement Vinmar International Ltd. v. Foreign Trading Exploitation Company shall apply to the relevant law of China. The SAM-ULSNIN-001 B/L was the property right evidence of the 950.712-ton cargo. Being the legal holder of B/L, the plaintiff-appellant took the ownership of cargo recorded on the B/L and the plaintiff-appellant's rights shall be protected according to law. The defendant-appellant's behavior of applying for impounding and distraining the cargo recorded on the B/L and providing security to the Intermediate People's Court of Huangzhou infringes the plaintiff-appellant's lawful rights and interests, and shall bear the liability of compensation. The defendant-appellant's claim that there is relationship of contract on sales and purchases is lacking factually. The defendant-appellant's plea reason that the law shall protect the behavior of applying for preserving the cargo recorded on the B/L cannot be accepted. Since the cargo involved in this case had been sold off, the defendant-appellant shall compensate the plaintiff-appellant's loss caused by the behavior of property preservation. The plaintiff-appellant's claim that the loss shall be calculated according to the price agreed upon in the contract on sales and purchases with Imports and Exports Company of Qin County accords with the law. It shall be corrected in the judgement of the trial court of first instance that the value of cargo involved in this case shall be calculated according to the price agreed upon in the contract between the plaintiff-appellant and Jinlilong Company because of the plaintiff's behavior of selling cargo to two different purchases. The reason is that the dispute over contract on sales and purchases between the plaintiff-appellant and Jinlilong Company cannot be included in this case. The find of the trial court of first instance is lacking factually as well as legal support. The price agreed upon in the contract between the plaintiff-appellant and Imports and Exports Company of Qin County shall be protected. As far as the judgement of the First Intermediate People's Court of Shanghai submitted by the plaintiff-appellant in order to prove the compensation to Imports and Exports Company of Qin County is effectual, for the judgement has taken effective and has been enforced, together with the receipt issued by the attorney of Imports and Exports Company of Qin County. The plaintiff-appellant's claim that the interest of loss shall be calculated according to the interest rate of American bank is lacking factually as well as legal support, because the evidence is copy and the lex loci delicti is in China. There is not enough evidence for the plaintiff-appellant's claim about the travel cost and the attorney fee. We therefore do not give our support to them.
　　　 With regard to the right of action of Vinmar International Ltd. brought forward by the authorized attorney of the defendant-appellant, the behavior of the authorized attorney of the plaintiff-appellant accords with the delegated authority according to the law. This Court does not give our support to this claim of the defendant-appellant.
　　　 Upon deliberation, this Court hereby decides as follow pursuant to Article 254,128, Clause 3 of Article 153 of Civil Procedure Law of the People's Republic of China, and Clause 2 of Article 106, Article 117, Clause 1 of Article 146 of General Principles of Law of the People's Republic of China:
　　　 1.The civil case judgement of the Higher People's Court of Zhejing filed as 1998-Zhe-Jing-Chu-Zi-27 shall be withdrawn;
　　　2.The defendant-appellant shall compensate $584,687.88 and relevant interest (calculated from April 12, 1996, to the day of payment according to the saving interest rate of US dollar announced by China Bank within the same period), to the plaintiff-appellant for the loss of cargo, and shall pay off in 30 days after the judgement becoming effective;
　　　3. The defendant-appellant shall compensate the RMB179,264.58 that the plaintiff-appellant is asked to compensate to the Imports and Exports Company of Qin County in the 1998-Hu-Yi-Zhong-Zhi-Zi 460 judgement of the First Intermediate People's Court of Shanghai;
　　　4.The other claims of the plaintiff-appellant shall be dismissed;
　　　5.The claims of the defendant-appellant in the appellant petitions shall be dismissed.
　　　 The cost of the trial of first instance of this case is RMB46,724, and shall be borne jointly by the plaintiff with RMB2,385 and the defendant with RMB44,339; the cost of the trial of second instance is RMB46,724, and shall be borne jointly by the plaintiff-appellant with RMB2,385 and the defendant-appellant with RMB44,339.


　　　 This judgement is final.
　　　 Presiding Judge: Lei Xuhui
　　　 Judge: Wang Shumei
　　　 Deputy Judge: Zhao Hong
　　　 Date: Febuary 21, 2001
　　　 Court Clerk: Hu Fang