China’s New Maritime Code

1. China’s new maritime code (“NMC”), effective 01 May 2026, appears to make many changes and with the salient ones as stated below (full details can be viewed at the circular issued by Oasis P&I).
   1. Performing Carriers have the same rights as the contractual carrier.
   2. Requirement of Shipper to be promptly notified if goods remain undelivered and as they (Shipper) remain responsible for these costs.
   3. Application of PRC law as the mandatory law when shipment is to or from a port in China.
2. We have not reviewed the complete provisions of NMC in English (if an English version  is available with any of our readers, we would request for a copy) but based on the various articles published, it does appear that the provisions are more pro–carrier. This is understandable given that China has significant shipping interests and is presently holding the top spot both in terms of value and vessel numbers.
3. One of the articles which we came across on the NMC in the web, did mention specific concerns on the law and jurisdiction clause in Bills of Lading being overridden by the application of Chinese Law due to the provisions of the NMC. Countries often legislate keeping in mind the various interest groups in their country and therefore the mandatory application of local laws for shipments effected to or from a country is not something uncommon. In fact, countries such as Australia (a common law country) have expressly provided this in their COGSAⁱ and Spain (in their legislationⁱⁱ). Even if not provided, courts in various jurisdictions deny the application of the jurisdiction clause on the basis that it was not freely negotiated or it would deny the compulsory provisions available under their local lawsⁱⁱⁱ.
4. We had in our paper, The Revolving Seat, presented at ICMA XXIII, we suggested the use of a revolving seat to ensure that arbitration clauses in Bills of Lading are not derailed. Perhaps, the way forward would be to have a revolving law^iv and jurisdiction (when litigation is the dispute resolution process) / seat (when arbitration is the dispute resolution process). While this may raise concern on the certainty of contractual terms, the fact is that due to the mandatory provisions of the applicable law, parties should be aware what would apply i.e. what will be valid and invalid. If parties/Carriers continue to trade in these jurisdictions, they would have accepted the risks associated and therefore should not cry foul of any provisions detrimental to their interests.
5. In conclusion,
   1. Countries will legislate depending on what is best to their constituents, and which may sometimes be detrimental or beneficial to either cargo or carrier interests.
   2. If the risks due to the new legislation increase substantially, parties have the choice of exiting out and instead consider other markets. Alternatively, parties can actively deal with the new provisions by making necessary amendments to their contract.

^i.See S 11 of the Australian Carriage of Goods by Sea Act 1991.
^ii.See S 468 of the Spanish Shipping Act 14/2014
^iii.For instance, all liner Bills of lading issued by Carrier’s trading into USA generally incorporate a US Law and New Court jurisdiction even though for other shipments, it may provide for another law and jurisdiction – see clause 26 of the Maersk and clause 10.3 of the MSC Bill of Lading Terms and Condition.
^iv. It is our view that for arbitration clauses with a revolving seat, may not require to be coupled with revolving law given that the arbitrators would
i. firstly have a duty to ensure that they publish an enforceable award and which would mean that the arbitrators would have to consider the provisions of the applicable mandatory law, if submitted,
   ii. if the mandatory laws as applicable in the seat is not considered, the affected party may apply to the courts to set aside the award or deny the enforcement that it falls foul of the mandatory law.