This case arose from a collision during the berthing of the Tiansheng 18, owned by Ningbo Tiansheng Shipping Co Ltd (Tiansheng), at the chemical terminal in the Lu'anzhou port area of Changzhou Port. The Tiansheng 18 collided with the Shuanglonghai, which was moored at the terminal, and then struck the chemical terminal owned by Changzhou Hongchuan Petrochemical Warehousing Co Ltd (Hongchuan), causing part of the terminal to collapse, pipelines to rupture, and an explosion and fire. The Changzhou Maritime Safety Administration found the Tiansheng 18 wholly responsible for the accident. Tiansheng applied to establish a maritime limitation fund, while Hongchuan claimed terminal repair costs, loss of terminal operations, emergency response expenses, and other losses. The Wuhan Maritime Court allowed Hongchuan’s claims in part at first instance, but rejected its claim for loss of terminal operations. Hongchuan appealed.

Held: The appeal is allowed in part.

The discussion of the international Convention focused on the relationship between the LLMC 1976 and art 210.1.4 of the Maritime Code of the PRC (the Maritime Code). Tiansheng argued that art 210.1.4 of the Maritime Code was derived from art 6.3 of the LLMC 1976, whose English text refers to 'damage to harbour works', rather than 'loss'. Tiansheng then contended that priority should be confined to physical damage to harbour works, and the loss of terminal operations caused by the shutdown of the terminal was merely an indirect loss. At most, business loss could participate in the distribution of the fund as a limitable claim, but should not have the same priority as the terminal repair costs. Tiansheng further argued that, while art 207 of the Maritime Code may cover losses arising from damage to harbour works, art 210 does not expressly include such indirect losses within the scope of priority.

Hongchuan argued that 'claims in respect of damage to harbour works' in art 210.1.4 of the Maritime Code should cover not only physical repair costs, but also loss of terminal operations resulting from such damage. It argued that 'damage' refers to a legally impaired state, while 'loss' refers to the resulting reduction in economic benefit. The Court accepted Hongchuan's position that the loss of terminal operations was recoverable and constituted a limitable claim payable from the maritime limitation fund. However, it rejected Hongchuan's argument that such loss fell within the scope of priority under art 210.1.4 of the Maritime Code, and instead accepted Tiansheng's position that it could not rank equally with terminal repair costs.