SPECIAL MARITIME PROCEDURE LAW

    Chapter I  General Provisions

    Chapter II  Jurisdiction

    Chapter III  Maritime Claims Preservation

      Section 1  General Principles

      Section 2  Arresting or Auction Sale of Ships

      Section 3  Arrest and Auction of the Goods on Board

    Chapter IV  Maritime Injunction

    Chapter V  Maritime Evidence Preservation

    Chapter VI  Maritime Guarantee

    Chapter VII  Service

    Chapter VIII  Trial Procedures

      Section 1  Provisions on Trying Cases Involving Collision of Ships

      Section 2  Provisions on Trying Cases Involving General Average

      Section 3  Provision on Exercising the Right to Indemnity by Subrogation

                 by a Maritime Insurer

      Section 4  Summary Procedures, Procedures for Hastening Debt Recovery

                 and Procedures for Publicizing Public
Notice for Assertion

                 of Claims

    Chapter IX  Procedures for Constituting a Limitation Fund for Maritime Claims Liability      

    Chapter X  Procedures for Registering Creditors’ Rights and Repayment of Debt

    Chapter XI  Procedures for Publicizing Notice for Assertion of Maritime Liens

    Article 1 This Law is formulated for the purposes of maintaining the litigation rights, ensuring the ascertaining of facts by the people’s
courts, distinguishing right from wrong, applying the law correctly, trying maritime cases promptly.

    Article 2 Whoever engages in maritime litigation within the territory of the People’s Republic of China shall apply the Civil Procedure Law
of the People’s Republic of China and this Law. Where otherwise provided for by this Law, such provisions shall prevail.

    Article 3 If an international treaty concluded or acceded to by the People’s Republic of China contains provisions that differ from provisions
of the Civil Procedure Law of the People’s Republic of China and this Law in respect of foreign-related maritime procedures, the
provisions of the international treaty shall apply, except those on which China has made reservations.

    Article 4 The maritime court shall entertain the lawsuits filed in respect of a maritime tortious dispute, maritime contract dispute and other
maritime disputes brought by the parties as provided for by laws.

    Article 6 Maritime territorial jurisdiction shall be conducted in accordance with the relevant provisions of the Civil Procedure Law of the
People’s Republic of China.

    The maritime territorial jurisdiction below shall be conducted in accordance with the following provisions:

    (1) A lawsuit brought on maritime tortious may be, in addition to the provisions of Articles 19 to 31 of the
Civil Procedure Law of the People’s Republic of China, under jurisdiction of the maritime court of the place of its port of registry;

    (2) A lawsuit brought on maritime transportation contract may be, in addition to the provisions of Articles
82 of the Civil Procedure Law of the People’s Republic of China, under jurisdiction of the maritime court of the place of its port
of re-transportation;

    (3) A lawsuit brought on maritime charter parties may be under jurisdiction of the maritime court of the place
of its port of ship delivery, port of ship return, port of ship registry, port where the defendant has its domicile;

    (4) A lawsuit brought on a maritime protection and indemity contract may be under jurisdiction of the maritime
court of the place where the object of the action is located, the place where the accident occurred or the place where the defendant
has its domicile;

    (5) A lawsuit brought on a maritime contract of employment of crew may be under jurisdiction of the maritime
court of the place where the plaintiff has its domicile, the place where the contract is signed, the place of the port where the
crew is abroad or the port where the crew leaves the ship or the place where the defendant has its domicile;

    (6) A lawsuit brought on a maritime guaranty may be under jurisdiction of the maritime court of the place
where the property mortgaged is located or the place where the defendant has its domicile; a lawsuit brought on a ship mortgage may
also be under jurisdiction of the maritime court in the place of registry port;

    (7) a lawsuit brought on ownership, procession, and use, maritime liens of a ship, may be under jurisdiction
of the maritime court of the place where the ship is located, the place of ship registry or the place where the defendant has its
domicile.

    Article 7 The following maritime litigation shall be under the exclusive jurisdiction of the maritime courts specified in this Article:

    (1) A lawsuit brought on a dispute over harbour operations shall be under the jurisdiction of the maritime
court of the place where the harbour is located;

    (2) A lawsuit brought on a dispute over pollution damage for a ship’s discharge, omission or dumping of oil
or other harmful substances, or maritime production, operations, ship scrapping, repairing operations shall be under the jurisdiction
of the maritime court of the place where oil pollution occurred, where injury result occurred or where preventive measures were taken;

    (3) A lawsuit brought on a dispute over a performance of a maritime exploration and development contract within
the territory of the People’s Republic of China and the sea areas under its jurisdiction shall be under the jurisdiction of the maritime
court of the place where the contract is performed.

    Article 8 Where the parties to a maritime dispute are foreign nationals, stateless persons, foreign enterprises or organizations and the parties,
through written agreement, choose the maritime court of the People’s Republic of China to exercise jurisdiction, even if the place
which has practical connections with the dispute is not within the territory of the People’s Republic of China, the maritime court
of the People’s Republic of China shall also have jurisdiction over the dispute.

    Article 9 An application for determining a maritime property as ownerless shall be filed by the parties with the maritime court of the place
where the property is located; an application for declaring a person as dead due to a maritime accident shall be filed with the maritime
court of the place where the competent organ responsible for handling with the accident or the maritime court that accepts the relevant
maritime cases.

    Article 10  In the event of a jurisdictional dispute between a maritime court and a people’s court, it shall be resolved by the disputing
parties through consultation; if the dispute cannot be so resolved, it shall be reported to their common superior people’s court
for the designation of jurisdiction.

    Section 1 General Principles

    Article 12 Maritime claims mean maritime courts, according to applications of  maritime claimants, take compulsory preservation measures
against property of persons against whom the claims are brought up in order to ensure the realization of such rights.

    Article 13 An application for maritime claims by the parties shall, before bring a lawsuit, be filed with the maritime court of the place where
the property subjected to preservation.  

    Article 14 Maritime claims shall not be bound by procedure jurisdiction agreements or arbitration agreements relating to the said maritime claims
between the parties.

    Article 15 Where maritime claimants apply for maritime claims, written applications shall be filed with maritime courts. Maritime claims, application
reasons, objects subjected to preservation and amounts for guaranty shall be stated in applications.

    Article 16 A maritime court may, in accepting a maritime preservation application, order the claimant to provide a guaranty. Where the claimant
fails to provide guaranty, his application shall be rejected.

    Article 17  After receiving an application, the maritime court must make an order within 48 hours; if the court orders the adoption
of maritime preservation measures, the execution thereof shall begin immediately. Where not conforming to the conditions for a maritime
preservation, the application shall be rejected.

    If the party concerned is not satisfied with the order, he may, within five days from the date of the receipt
of the order, apply for reconsideration which could be granted only once. The maritime court shall make a reconsideration decision
within five days from the date of the receipt of the reconsideration application. Execution of the order shall not be suspended during
the time of reconsideration.

    Where the interested party raises objection to the maritime preservation, the maritime court, upon examination
and deeming it reasonable, shall cancel the property preservation.

    Article 18 If the person against whom the application for maritime preservation is made provides guaranty, or the party has justified reasons
for applying cancellation of maritime reservation, the people’s court shall cancel the property reservation promptly.

    If the maritime claimant fails to bring an action or apply for arbitration according to the arbitration agreement
within the time limit specified by this Law, the people’s court shall cancel the property reservation or return the guaranty promptly.

    Article 19 Where the relevant maritime dispute enters into litigation or arbitration procedure after execution of the maritime preservation,
the party may bring an action relating to the maritime claim to the maritime court which has taken maritime claim preservation or
other maritime courts having jurisdiction over it, with the exception of signing of a litigation jurisdiction agreement or an arbitration
agreement between the parties.

    Article 20 If an application for maritime preservation is wrongfully made by a maritime claimant, the claimant shall compensate the person against
whom the application is made for any loss incurred from maritime preservation.

    Section 2  Arresting or Auction Sale of Ships

    Article 21 The following maritime claims may applied for arresting ships:

    (1) the destruction of or damage to the property occurred in the operation of the ship;

    (2) the loss of life or personal injury directly relating to the operation of the ship;

    (3) salvage payment;

    (4) the damage or threat of damage caused by the ship to the environment, seashore or the relevant interested
parties; the measures taken for prevention, reduction and elimination of such damage; payment for compensation of such damage; the
reasonable cost for the measures taken actually or preparing to take for restoring the environment; loses the third party suffered
or will probably suffer due to such damage; and the damage, fees or loses which are similar in nature specified in this Item;

    (5) fees relating to floating, elimination, recycling and destruction of sunken ships, shipwreck, stranded
objects, abandoned ships or making them harmless, including fees relating to floating, elimination, recycling and destruction of
the objects which still are or were abroad such ships or making them harmless, and fees relating to maintenance of abandoned ships
and suppurating the crew members;

    (6) the agreement or use or charter parties of the ship;

    (7) an agreement for carriage of goods or passengers;

    (8) goods (including luggage) on board or loss or damage related thereto;

    (9) general average;

    (10) towage service;

    (11) pilotage service;

    (12) provision of materials or services for operation, management, maintenance and repair of ships;

    (13) ship building, rebuilding, repair, refitting or fitting;

    (14) prescribed fees or fees for ports, canals, wharves, harbors or other waterways;

    (15) wages of ship’s crew or other payments, including the repatriation fee and social insurance premium payable
for ship’s crew;

    (16) expenses paid for a ship or shipowner;

    (17) ship’s insurance premium (including mutual insurance membership fee) paid by a shipowner or bareboat
charterer, or paid on his behalf;

    (18) the commission, brokerage or agency fee related to a ship paid by the shipowner or bareboat charterer,
or paid on his behalf;

    (19) a dispute over ownership or possession of a ship;

    (20) a dispute over use of or profit from a ship between co-owners of the ship;

    (21) a mortgage of a ship or right of the same nature; or

    (22) a dispute arising from a contract for sale of a ship.

    Article 22  No application for arrest of a ship may be filed except for the maritime claims as stipulated in Article 21 of this Law;
there are exceptions, however, for executing judgments, arbitral awards or other legal documents.

    Article 23  If any of the following circumstances exists, a maritime court may arrest the involved ship:

    (1) where the shipowner is held responsible for a maritime claim and is the owner of the ship when the arrest
is executed;

    (2) where the bareboat charterer of the ship is held responsible for a maritime claim and is the bareboat
charterer or the owner of the ship when the arrest is executed;

    (3) where a maritime claim is enpost_titled to a mortgage of the ship or right of the same nature;

    (4) where a maritime claim relates to ownership or possession of the ship; or

    (5) where a maritime claim is enpost_titled to a maritime lien.

    A maritime court may arrest other ships owned by the shipowner, bareboat charterer, time charterer or voyage
charterer who is held responsible for a maritime claim, when the arrest is executed, with the exception of the claims related to
ownership or possession of the ship.

    No ship engaging in military or government duties may be arrested.

    Article 24  A maritime claimant may not apply to arrest a ship having been arrested for the same maritime claim, except that any of
the following circumstances exists:

    (1) where the party who opposes the claim has not provided a sure guarantee;

    (2) where the guarantor probably cannot perform his obligation of guarantee wholly or partly; or

    (3) where the maritime claimant agrees to release the arrested ship or return the existing guarantee for justifiable
reason; or cannot stop the release of the arrested ship or return of the existing guarantee by justifiable means.

    Article 25  For a maritime claimant applying to arrest the involved ship, if the name of the party who opposes the claim cannot be
ascertained at once, the filing of his application shall not be affected.

    Article 26  A maritime court may issue the relevant departments with a notice for assistance in execution at the same time it issues
or cancels an order for arrest of a ship, and the notice shall clearly set forth the scope and content of the assistance in execution
and the relevant departments have the obligation to assist in execution. A maritime may directly dispatch personnel to board the
ship for supervision if it deems necessary.

    Article 27  After a maritime court orders to impose preservation upon a ship, with consent of the maritime claimant, it may allow
the ship to continue the operation by ways of restraining the disposition or mortgage of the ship.

    Article 28  The period of arresting a ship for maritime claim preservation shall be 30 days.

    If a maritime claimant brings a law suit or applies for arbitration within 30 days, and applies for arrest
of a ship in the course of the litigation or arbitration, the arrest of the ship shall not be restrained by the period stipulated
in the preceding paragraph.

    Article 29  If, on the expiration of the period of arresting a ship, the party who opposes the claim fails to provide guarantee, and
the ship is not suitable for being arrested longer, the maritime claimant may apply to the maritime court arresting the ship for
auction of the ship after bringing a law suit or applying for arbitration.

    Article 30  A maritime court shall conduct examination after receiving the application for auction of a ship, and make an order approving
or disapproving the auction of the ship.

    If a party is not satisfied with the order, he may apply for reconsideration once within five days of the
date of receiving the written order. The maritime court shall make a reconsideration decision within five days of receiving the reconsideration
application. Execution of the order shall be suspended during the time of reconsideration.

    Article 31  Where a maritime claimant, after filing an application for auction of a ship, applies for stopping the auction, whether
or not to give a permission shall be ordered by the maritime court. If the maritime court orders to stop the auction of the ship,
expenses incurred for auctioning the ship shall be paid by the maritime claimant.

    Article 32  A maritime court that orders to auction a ship shall issue a public notice through newspapers or other new media. If a
foreign ship is to be auctioned, a public notice shall be issued through newspapers or other news media distributed abroad.

    A public notice shall contain the following particulars:

    (1) name and nationality of the ship to be auctioned;

    (2) causes and basis for auction of the ship;

    (3) composition of the ship auction committee;

    (4) time and place for auction of the ship;

    (5) time and place for display of the ship to be auctioned;

    (6) procedure to be undergone for participating in the bidding;

    (7) registered items to be handled for claims; and

    (8) other particulars as required to be publicized.

    The period of a public notice for auction of a ship shall not less than 30 days.

    Article 33  A maritime court, 30 days prior to auction of the ship, shall issue notices to the registration authorities of the country
of registry of the ship to be auctioned, and to the known lienor, mortgagee and owner of the ship.

    The contents of the notice contain the name of the ship to be auctioned, time and place for auction of the
ship, causes and basis for auction of the ship, and registration of claims.

    The notice shall be in writing or take other appropriate forms by which receipt can be confirmed.

    Article 34  Auction of a ship shall be executed by a ship auction committee. The ship auction committee shall be composed of three
or five persons, that is, execution officers appointed, as well as auctioneers and surveyors engaged by the maritime court.

    The ship auction committee organizes appraisal and valuation of the ship; organizes and presides over the
auction; signs a letter of confirmation for conclusion of the auction with the bidder; and handles procedures for the transfer of
the ship.

    The ship auction committee shall be responsible to the maritime court and subject to supervision of the maritime
court.

    Article 35  Bidders shall register with the ship auction committee within a prescribed time limit. For registration, they shall submit
for inspection the identity certificates of themselves, enterprises’ legal representatives, or persons-in-charge of other organizations,
as well as powers of attorney of agents, and pay a certain amount of bonds for purchase of the ship.

    Article 36  A ship auction committee shall display the ship to be auctioned before the auction of the ship, and shall provide facilities
for inspecting the ship to be auctioned and relevant data.

    Article 37  The vendee shall pay without delay not less than 20 percent of the ship’s price after he signs a letter of confirmation,
and the remainder of the ship’s price shall be settled within seven days of the date of concluding the auction, however, except otherwise
agreed upon between the ship auction committee and the vendee.

    Article 38  Once the vendee has settled the price in full, the original shipowner shall delivery the ship to the vendee on the basis
of the current condition of the ship, at the place of berth of the ship, within a fixed time limit. The ship auction committee shall
organize and supervise the delivery of the ship, and sign a letter of confirmation of ship’s delivery with the vendee after the delivery
of the ship.

    After the delivery of the ship is finished, the maritime court shall issue an order releasing the arrest of
the ship.

    Article 39  After the delivery of the ship, the maritime court shall issue a public notice through newspapers or other news media,
announcing that the ship has been auctioned openly and delivered to the vendee.

    Article 40  After accepting the ship, the vendee shall undergo formalities for registration of the ship’s ownership at the ship registration
authorities on the basis of the letter of confirmation for conclusion of auction and relevant data. The original shipowner shall
undergo formalities for cancellation of registration of the ship’s ownership at the original ship registration authorities. Failure
to undergo formalities for cancellation of registration of the ship’s ownership by the original shipowner shall not affect the transfer
of the ship’s ownership.

    Article 41  Malicious collusion between bidders makes the auction invalid. Any bidder involved in malicious collusion shall pay expenses
for auctioning the ship and compensate losses incurred. The maritime court may impose upon the bidder involved in malicious collusion
a fine of not more than ten percent and not less than 30 percent of the highest price offered.

    Article 42  In addition to the provisions in this Section, auction shall be governed by the relevant provisions of the Auction Law
of the People’s Republic of China.

    Article 43  Auction of an arrested ship for debt payment during the procedure of execution may be referred to the relevant provisions
of this Section.

    Section 3  Arrest and Auction of the Goods on Board

    Article 44  A maritime claimant may apply to arrest the goods on board for ensuring the fulfillment of his maritime claim.

    The goods on board to be arrested on application shall be under ownership of the party who opposes the claim.

    Article 45  The value of the goods on board to be arrested on application by a maritime claimant shall be equivalent to the amount
of his claim.

    Article 46  The period of arresting the goods on board for maritime claim preservation shall be 30 days.

    If a maritime claimant brings a law suit or applies for arbitration within 15 days, and applies for arrest
of the goods on board in the course of the litigation or arbitration, the arrest of the goods on board shall not be restrained by
the period stipulated in the preceding paragraph.

    Article 47  If, on the expiration of the period of arresting the goods on board, the party who opposes the claim fails to provide
guarantee, and the goods are not suitable for being arrested longer, the maritime claimant may apply to the maritime court arresting
the goods on board for auction of the goods after bringing a law suit or applying for arbitration.

    For articles which cannot be stored, or are difficult to be stored, or the storage expense may exceed their
value, the maritime claimant may apply for auction in advance.

    Article 48  A maritime court shall conduct examination after receiving the application for auction of the goods on board, and make
an order approving or disapproving the auction of the goods on board.

    If a party is not satisfied with the order, he may apply for reconsideration once within five days of the
date of receiving the written order. The maritime court shall make a reconsideration decision within five days of receiving the reconsideration
application. Execution of the order shall be suspended during the time of reconsideration.

    Article 49  Auction of the goods on board shall be executed by an auction organization composed of execution officers appointed, and
auctioneers engaged by the maritime court, or executed by an agency authorized by the maritime court.

    Auction of the goods on board, if not covered by the provisions of this Section, shall be referred to the
relevant provisions of Section 2 of this Chapter on auction of a ship.

    Article 51  A maritime injunction means any of compulsory measures by which a maritime court, on application by a maritime claimant,
orders an act or omission by the party who opposes the claim, in order to protect the lawful rights and interests of the maritime
claimant against