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Wu Kai  

When a maritime accident happens to a ship, the damaged party might take action to detain the shipi.e.,  apply to the Chinese maritime court for arresting the  ship. Such ship detainment belongs to judicial detainment. The Chinese maritime court issues an arrest order and serves it on the ship  causing the accident. The ship cannot leave the current location upon receiving the order. Besides judicial detainment, a ship might also be detained by China Maritime Safety Administration (the “MSA”)when a marine accident happens. Ship detainment by the MSA is different from judicial detainment.

1. Nature of the Action of Ship Detainment by MSA

1.1 Legal basis

The main legal basis for the MSA to detain ships is Article 19 of Maritime Traffic Safety Law Of the People's Republic Of China, which stipulates “the competent authorities shall have the right to forbid a vessel or aninstallation from leaving the harbor or order it to suspend its voyage,change its route or cease its operations under any one of the followingcircumstances:

 (1) ifshe violates any law, administrative statute or other rules orregulations of the People's Republic of China;

 (2) ifshe is in a condition of unseaworthiness or unsuitable for towing;

 (3) ifsheis involved in a traffic accident and has not completed thenecessary formalities;

 (4) ifshe has not paid the fees that are due or furnished appropriatesecurity to the competent authorities or the department concerned; or

 (5) if the competent authorities consider that there are othercircumstances that will might jeopardize maritime trafficsafety.”

According to abovementioned stipulation, when a ship is involved in a traffic accident and has not completed thenecessary formalities, or in an unseaworthycondition after the accident, or has not paid the fees that are due or provided appropriatesecurity to the competent authorities, the MSA is entitled to detain the ship.

1.2 Nature of the action

As the competent administrative department in charge of Chinese maritime affairs, the MSA is responsible for the navigation safety management of ships within the Chinese waters and has the executive power over ships sailing in the Chinese waters. When a maritime accident happens to a ship, the MSA’s detainment of the ship in accordance with law is an act of executing their power within the scope of administrative enforcement of law. Such an act belongs to an act of administrative enforcement of law.

1. Reasons for Detaining Ships

The main reasons for the MSA to detain a ship involved in an accident are as follows:

2.1Fail to complete the necessary formalities

The necessary formalities for the ship involved in an accident include:

2.1.1 To report immediately to the nearest MSA by VHF, radiotelegram or other effective means. The content of thereports shall include: name of the vessel, call sign,

nationality, port of departure and port of arrival, owners or managers of

the vessel, when and where the accident happened and the

attending circumstances on the sea, the extent of damage of the vessel, request for salvage, and etc.

2.1.2 To submit the Written Report on Maritime Traffic Accidents and other necessary documents to the MSA. If maritime traffic accidents happen within the waters of the port areas, it is necessary to submit the reportand other documents within 24 hours after the accidents. If maritime traffic accidents happen to vessels in the coastal waters beyond the waters of port areas, it is necessary tosubmit the report and other documents within 48 hours after the vesselsarrive at the first port in the People's Republic of China.

2.1.3 To accept investigation

If the abovementioned first formality is not fulfilled, the MSA can warn or impose a fine of notmore than 5,000 Yuan on the owners or managers of the vessels. If the abovementioned second or third formality is not fulfilled, in addition to warn or impose a fine, the MSA is entitled to prohibit the ship from departing the port or to suspend her navigation.

If it is necessary, the MSA may order the ship involved to sail to a designated place for investigation. The ship cannot leave the designated place without getting permission from the MSA except that the ship’s safety will be endangered if she keeps staying there. She  can only leave the place after completion of the investigation and gain permission from the MSA.

2.1.3.1 Timing of investigation

The MSA will carry out the investigation upon receiving the accident report from the shipinvolved or upon becoming aware of the accident from other approach in order to acquire first-hand evidence. The MSA will inform the ship involved before boarding the ship for investigation and require her not to leave and wait for the MSA investigators’  embarkation.

2.1.3.2 Content of investigation

The content of the accident investigation mainly include the followings:

1) Inquire relevant personnel, make written record, and ask the person being inquired to sign the record for confirmation;

2) Require personnel being inquired to provide written materials and certifications;

3) Review the deck log book, engine log book, engine telegraph record, radio log, automatic course record, sea chart, data of the ship(s), functions of the navigation equipment and instruments and other necessary original documents and materials; copy or duplicate above materials and ask the person involved to sign for confirmation;

4) Examine certificates of the ship, installations and the relevant equipment and certificates of the personnel and verify seaworthiness of the ship and technical conditions of the installations before the accident;

5) Examine the damage to the ship, installations and goods and ascertain casualties of personnel;

6) Investigate the scene and collect relevant material evidence;

7) Require the parties involved to apply to the inspection institute for inspection or engagean appraiser for technical appraising;

8) Use sound recording, photographing and video equipment and may resort to other means of investigation permitted by law.

It is worth noting that generally non-relevant persons (including lawyers entrusted by the shipowner) are not allowed to be present when the MSA investigators ares inquiring the relevant persons. Moreover, the MSA usually would not offer a copy of their written record to the person being inquired.

During the MSA investigation, the shipowners  should instruct the master and crew to coordinate with the MSA and provide the required documents so that the investigation can go smoothly and finish as soon as possible and the ship can set sail in time. However, to avoid providing documents that may be unfavorable to the shipowners, we suggest the shipowners to retain experienced maritime lawyers to help the master and crew. The documents should be reviewed by the lawyers first before providing to the MSA. If any document requested y he MSA is unfavorable to the ship owners, the master and crew should refrain from disclosing it to the MSA and in the meantime a reasonableexplanation should be made to the MSA for non-disclosure.

2.1.3.3 Conclusion of investigation

The duration of investigation depends on the accident grade (to be decided in accordance with the extent of damage caused), and the impact of the accident. In our experience, the duration is usually 1-3 days for an accident in an ordinary grade. However, it will take more time for a significant maritime accident or an accident that caused great social impact. In that case, supplementary investigations might be needed after the first time investigation on board. It  may take 3-5 days or even longer for the whole investigation.

2.2 Fail to pay the fees that are due or faile to furnish appropriate security

2.2.1 Fail to pay the fees that are due or fail to furnish appropriatesecurity to the MSA

2.2.1.1 Penalty

When a maritime accident occurs, the MSAcan impose fine on the ship under any of the followingcircumstances:

a. Fail to complet the necessary formalities. A fine of not more than RMB 5,000 shall be imposedd.In the event that an ocean environment pollution accident or other contingency occurs,  a fine of not more than RMB 50,000 shall be imposed forfailing to report in accordance with the law(Article 29 of Regulations of the People’s Republic of China on the Investigation and Handling of Maritime Traffic Accidents, Article 74 of Marine Environment Protection Law of The People's Republic of China, Article 75 of Law of the People's Republic of China on Marine Administrative Penalty)

b. Fail to observe the relevant rules and operation regulations concerning maritime traffic safety, endangering the safety of the vessels and installations in navigation, berthing and operation. In the event that it is an illegal act in business activities, a fine of RMB 100 up to RMB 10000 shall be imposedif there are no illegal earnings and a fine of at most three times the amount of unlawful income and no more than RMB 30000 shall be imposedifthere are illegal earnings. (Article 35 of Provisions of the People's Republic of China on Marine Administrative Penalty)

c. Fail to take proper measuresimmediately in the event of an accident or any other contingent event causing pollution to the ocean environment.A  fine of not less than RMB 20,000 but no more than RMB 100,000 shall be imposed (Article 73 of Marine Environment Protection Law of the P.R.C. and Article 74 of Provisions of the People's Republic of China on Marine Administrative Penalty

d. Fail to timely start the emergency plan when a pollution accident happensA fine of no less than RMB 20,000 and no more than RMB 100,000shall be imposed.For failure to report the accident timely or omit the report, a fine of no less than RMB 50,000 but no more than RMB 250,000 shall be imposed. (Article 69 and Article 70 of Regulations on Administration of Prevention and Control of Pollution to the Marine Environment by Vessels)

e. Cause damage to marine ecosystems such as coral reefs, mangroves, marine fishery resources and marine protected areas, a fine of no less than RMB 10,000 but no more than RMB 100,000 shall be imposed; in case of having any illegal income, the illegal income shall be confiscated. (Article 77 of the Marine Environment Protection Law of the P.R.C.)

f. Failto provide true statement of the accident and relevant documents or forge, conceal, destroy evidence or to obstruct the investigationby other meansa fine of no less than RMB 10,000 but no more than RMB 50,000 shall be imposed. (Article 72 of Regulations on Administration of Prevention and Control of Pollution to the Marine Environment by Vessels)

After the accident investigation, the MSA usually decides whether to impose a fine on ships according to the result of their investigation. Normally, the MSA’s decision will not be made before the ship’s scheduled date of departure.. Therefore,the MSA will request a fine guarantee from the ship owners before permitting the ship to depart.

2.2.1.2 Clean-up cost

In the event of oil pollution sourced from ships, the MSA willnormally organize pollution clearance operations. With respect to the clean-up cost, Article 42 of Regulations on Administration of Prevention and Control of Pollution to the Marine Environment by Vessels stipulates that “After the ship pollution accident, the maritime administration can adopt clearing, salvage and wreck removal, towage, pilotage, lightening and other necessary measures to reduce the pollution damage and the cost thereby incurred shall be borne by the ship or the operation unit that cause the pollution. For  the vessel that shall bear the relevant cost as provided by the above paragraph, she shall, before commencing her next voyage, pay the cost or provide the relevant financialsecurity.”

2.2.2 Fail toprovidesecurity to the party concerned

Legally speaking, the MSA shall not detain the ships even ifthe ships involved in the accident do not provide security to the party concerned (the party sustaining damage/loss due to the accident). ,I practice,however the party suffering from damage usually require the MSA to detain the ships in various ways and the MSA sometimesdetain the ships,especially foreign ships, for some excuses before the security is provided to the party concerned

2.3 The ship is unseaworthy

After the maritime accident, if the ship is unseaworthy due to the damage caused, the MSA will require the shipowners to repair or at least temporarily repair the ship. Only after the ship has been repaired and deemed seaworthy upon inspection by the class surveyorwill the MSA permit the ship to depart.

3. Lifting the detainment

When the detainment by the MSA will be lifted depends on when the reasons for the detainment will be eliminated. After the marine accident happens, if the relevant formalities are completed, costs/fine are paid or security is provided, and the ship is made seaworthy, the MSA will lift the detainment.The security requested by the MSA is usually cash or a Letter of Guarantee issued by a Chinese financial institutewith good credit standing such as a bank or an insurance company.

However, time limit for accident investigation is at the  MSA’s discretion. No stipulation regarding the time limit foraccident investigation is made in the Regulations of the P.R.C. on Investigation and Handling of Maritime Traffic AccidentOnly in theProvisions on Investigation and Handling of Inland Traffic Accidents published by  theMinistry of Transport of the PRC in 2006is therethe relevant stipulation.. Article 20 of the Provisions on Investigation and Handling of Inland Traffic Accidents stipulates that “The maritime administrative department shall avoid causing inappropriate delays to the ships. The time limit for the ship to accept investigation at a designated place shall be counted from  the moment the ship arrives at the designated place and it shall be no more than 72 hours. In special circumstances, if the investigation cannot be completed upon expiration of the time limit, with the approval of the maritime administration at a higher level, it may be extended appropriately, but the extension shall not exceed 72 hours”. In on our experience, the time limit for accident investigation by the MSA is usually 1-5 days.

After occurrence of a maritime accident, the MSA’s detainmentof the ship by virtue of law is an act of administrative enforcementof law but they seldom issue a written decision for the detainment. If any interested party has dissention to the MSA’s detainment, they may raise the dissention  to the said MSA, or appeal to the MSA at ahigher level for complaint. However,

The most efficient way for the ship owners to let the MSA release the vessel is to cooperate with the MSA as far as possible.