In February, 1976, the Japanese flag vessel S.M. was in collision with the Somali flag vessel P in a position approximately 60 miles east of Hong Kong and 20 miles off the south coast of the Peoples Republic of China. The P, while flying the Somali flag, was in fact part of the commercial fleet of the Peoples Republic of China. As a result of the collision the S.M. sank and all except two of her crew were lost.

On Mar. 4, 1977, the owners of S.M. received (through China Ocean Shipping Agency—Canton Branch) a notice from the Whampoa Harbour Superintendency Administration (WHSA) which stated that the collision had occurred within Chinese waters, that pollution had been caused by the leakage of fuel oil from the wreck of the S.M. and that therefore the matter was subject to Chinese jurisdiction in general and the jurisdiction of WHSA in particular. The owners of S.M. were invited to submit full documentation in support of their claim for adjudication and it was stated that the Whampoa Harbour Superintendency Administration in dealing with the issues arising would give its judgment “based on our consistent principle of seeking the truth from facts, just and reasonable spirit, and give sufficient opportunities to both parties to counterclaim their reasons and do our best to promote your both sides to settle this case through friendly consultation”.

S.M. ship and cargo interests had no previous experience of the judicial process in China and did not respond to this invitation to submit disputes to the jurisdiction of the WHSA and spent some time investigating the possibility of establishing some other jurisdiction for their claims by the arrest of P or a sister ship. For various reasons it did not prove possible to establish an alternative jurisdiction and with the two-year time limit generally applicable to collision claims about to expire it was decided by S.M. ship and cargo interests to accept WHSA adjudication. It is with the consequences of that decision that this article is concerned.

An initial visit was made to Canton by a solicitor from Hong Kong representing S.M. ship and cargo interests. On instruction from WHSA he took with him evidence in support of the hull claim, particulars of S.M. and statements relating to collision liability. He also took with him a copy of the cargo manifest. At a meeting attended by representatives of P and S.M. interests before the Superintendent of the Harbour Administration documents were formally exchanged. This meeting took place on Mar. 9, 1978, and the Superintendent directed the owners of S.M. to produce certain additional documents, in particular a report prepared by divers who searched for the wreck of S.M. after the sinking. This report was thought to be important in helping to establish precisely where the collision had occurred.

During the course of this initial meeting the Superintendent explained that there were three ways in which maritime matters could be dealt with in China. Firstly, by arbitration through a local Harbour Superintendency Administration (such as the Whampoa Harbour Superintendency Administration) whose decision was subject to appeal to “Head Office”. Secondly, by arbitration through the Commission for the Promotion of Foreign Trade or, thirdly, through the courts. It was explained that by