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Abstract Yang Shuying v. Carnival PLC is the first Chinese case wherein the physical damage was sustained on the board of a cruise sailing in international waters. Although the judgement of this case is acclaimed as an outstanding work in the Judicial System, errors can still be found within its reasoning on choice-of-law issues. It is submitted that these errors eventually lead the court to the conclusion that Article 44 of Law of the Application of Law for Foreign-related Civil Relations of PRC (LALFCR), namely the general provision for the applicable law on tortious liabilities, is no longer capable of suggesting the applicable law for cases containing intricate facts. Consequently, the court abandoned LALFCR Article 44 and decided that the doctrine of the most significant relationship (the MSR doctrine) shall be the general rule in such cases. In order to prevent the Judiciary from arbitrarily deciding an “intricate case” and discretionarily applying the MSR doctrine, it is an important step to clear all these obstacles on the way to the application of LALFCR Article 44. That is, supporting rules shall be added and relevant trail techniques concerning the application of Article 44 shall be specified.
First, the infringing act in Yang Shuying v. Carnival PLC does not accord with any special form of tort. Therefore, the general provision for the applicable law on tortious liabilities, namely LALFCR Article 44, shall be applied. This Article provides that the laws at the place of tort shall apply to liabilities for tort, but if the parties have a mutual habitual residence, the laws at the mutual habitual residence shall apply. Meanwhile, if the parties choose the applicable laws by agreement after any tort event takes place, the agreement shall prevail.
Second, in Yang Shuying v. Carnival PLC, the court omitted to refer to the existing rule which stipulates the way of ascertaining the habitual residence of a legal person. This renders the finding on the habitual residence of the defendant company a defective one and makes the subsequent analysis on locus delicti completely groundless. It is submitted that it can be understandable that the court made such an omission, considering that the legislation itself does not actually provide a clear instruction for the determination of the habitual residence of a legal person, especially in situations where the legal persons involved are transnational companies. It is proposed that the definition of “habitual residence” suggested by Hague Conference on Private International Law (HCCH) and relevant legislative practices in the European Union are two important references for the draft of supporting interpretations. It is also proposed that in the cases involving cruise companies, the places where home ports are situated shall be the focus when formulating these supporting rules.
Third, with regard to the concurrence of locus delicti, the court in Yang Shuying v. Carnival PLC failed to determine a single locus delicti among several places of tort appeared in this case. There is a lack of essential techniques concerning the application of the territorial rule when the court was trying to apply LALFCR Article 44. As a result, the court decided that LALFCR Article 44 is beyond any accommodation to the newly arisen cases containing intricate facts. It is worth noting that in China the concurrence of locus delicti are more likely to accord with “chain structure,” and it is proposed that a two-tier filtering rule consisting of both “rule of presumption” and “rule of exclusions” shall hereto applied as the guideline and rationale when dealing with the concurrence of locus delicti of this pattern.
Last, it is the role of the MSR doctrine under Chinese legislation that shall be reiterated. In Yang Shuying v. Carnival PLC, the court abandoned LALFCR Article 44 on the excuse that this provision provides insufficient clues to the applicable law. Instead the court chose to turn to the MSR doctrine, a method providing even less guidance on the choice-of-law problems, and tried to make it the general rule in similar cases. As a common practice, a choice-of-law rule for torts usually includes the MSR doctrine in its exceptional clause together with a high threshold of triggering. In comparison to this, China is even more prudent about the role of the MSR doctrine under its legislation: the MSR doctrine can be invoked only in circumstances where no alternative rules can be found. Courts shall never expand their powers to discretionarily make references to the MSR doctrine in the case where alternative rules are available.
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Published: 01 December 2022
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