A decade of change

THERE are four main factors that have influenced change. They are:

1. In July 1993 a new maritime code was adopted by which most of the international conventions relating to maritime affairs were incorporated into Chinese domestic law.
2. By 1993, the maritime court system had already been operating for almost ten years. Set up in 1984 under the administration of the ministry of communications (and more recently as a part of the court system under the ultimate control of the Supreme Court in Beijing) there are ten maritime courts up and down the coast (including Wuhan on the Yangtze River), with branch courts springing up every month. There are probably more specialist full-time maritime judges in China than in most other parts of the world. For example, Shanghai Maritime Court currently has twenty judges.
3. China has two specialist maritime universities in Dalian and Shanghai and, in terms of student numbers, they are the two largest maritime universities in the world. There is a steady flow of new graduates who come into the profession, very often with an excellent command of English.
4. Dramatic economic development has produced the cases to be handled and resolved. Nowhere is this more evident than in Shanghai, which has been selected by the government to be the commercial and shipping centre of China. The prime minister, Zhu Rong Ji, has compared Shanghai to New York. In the Shanghai Maritime Court, for instance, more than 800 cases were filed in 1999, of which about 25 per cent involved a foreign party. Wuhan Maritime Court had about 900 cases filed. In all of China in 1999, about 5,000 cases were filed in the maritime courts.

So have the maritime lawyers in Shanghai - and in China in general - met the challenge and taken advantage of the opportunities offered over the past ten years? As a generalisation, there are two types of maritime lawyer in China. It should be remembered that China is a civil law country, and so lawyers provide the full service, including advocacy.

The basic distinction between the two types of lawyer is essentially based on age. As China opened up there was an urgent need for specialist lawyers, and most of the older lawyers (those over forty) who are in practice started their careers as maritime law teachers. During the first few years they were known as part-time lawyers because they still maintained their teaching positions. At the same time, experienced claims handlers in the shipping and insurance companies also began to handle maritime cases for private clients. Many of the part-time lawyers became full-time, giving up their teaching positions. That group were the first to put the maritime code, and the maritime judges, to the test.

The second group of lawyers are the younger ones in their twenties and early thirties. They are usually law graduates from Dalian or Shanghai or from one of the many other universities teaching maritime and international trade law. Many, but by no means all, study overseas. In the current LLM course at Southampton University in the UK, the largest nationality is Chinese.

Both the older and younger generations of lawyers in China now provide a level of service comparable to that provided by their peers in other established jurisdictions.

Shanghai has seen a great transformation of law firms from the state?run firms of the early 90s to the private law firms of today. Everything has changed. I spent my first year working in Shanghai from a hotel room with the beds moved out and desks moved in. There was no other space available. Now we are spoilt for choice.

In Shanghai today, there are perhaps four firms that are regarded both locally and internationally as specialist maritime law firms. Names such as Haixiang Law Firm, Rolmax Law Office, SG & Co and Sloma are familiar to overseas clients. In addition, there are dedicated shipping departments in some of the larger firms in Shanghai-Duan & Duan, Hua Lian Law Firm, Pudong Law Office and Zhen Dan Law Office. There are also specialist foreign law firms that have been permitted to set up representative offices in Shanghai.

Foreign lawyers certainly have a role to play, the obvious one being to advise and assist clients with respect to the law of their home jurisdiction. At the same time, foreign lawyers can work together on cases; a cargo claim in the Chinese courts could be linked to a charter party dispute in a London arbitration. In some cases the foreign lawyer will brief a Chinese lawyer in pretty much the same way as a solicitor will brief a barrister in London.

The Bureau of Justice in Shanghai actively encourages the firms to expand and offer a service which meets international standards, including financial incentives for taking on new graduates and arranging professional indemnity insurance.

Competition is now fierce among the maritime law firms in Shanghai, and potential clients know this, often shopping around for the best deal on fees. Lawyers in Shanghai handle a large number of domestic cases involving disputes between Chinese parties. With the ten maritime courts up and down the coast, the maritime lawyers from Shanghai are always on the move. A Chinese lawyer has a right of appearance in any court in China and, although there are experienced maritime lawyers in every port where there is a maritime court, clients will sometimes prefer to appoint a lawyer from their own city.

Connections are important. But to expect to win a case just because your lawyer has good connections doesn't work any more, if indeed it ever did.

Most cases are settled by negotiation, and usually the judge will play an active role. The formal part of a court hearing may only last a couple of hours and then the mediation by the judge begins. The parties can have their say. Foreign lawyers are allowed to speak. There is an informality to court proceedings. Very often this avoids the parties getting too far apart so, during the course of a hearing, settlement is still possible.

It is not uncommon for parties to a dispute to have dinner together after a hearing. Misunderstandings and hostilities are often broken down at this stage. Although there is competition between lawyers, generally they get on well together and this again helps the settlement process. If the parties do not agree, judgment is usually given in a fairly short time. There are very few cases in the maritime courts that were started more than a year ago.

With the entry of China into the World Trade Organisation, trade and commerce will increase, with more cases to be handled by maritime lawyers in Shanghai. Developments continue to take place, with a new maritime procedural law being adopted on July 1 this year. This is a major development which should have an immediate impact on the way cases are handled.

Because of the changes that are taking place on a daily basis, the overseas perception of maritime disputes in China is often out of date. Many still see China as a problem jurisdiction. No one would say it is perfect, and indeed Chinese lawyers and judges are frank about the further changes that are required. But the cup is more half-full than half-empty.

Maritime lawyers in Shanghai, and in the rest of China, have met major challenges and made the most of significant opportunities over the past ten years. The challenge of the next twenty years is for the maritime courts and the lawyers to build up a body of maritime law jurisprudence in China which not only serves the maritime industry, but also provides a reference point for maritime courts and lawyers in other jurisdictions.

The system is in place, the judges and lawyers are ready, and with China continuing to grow as a world economic force, the opportunity is there to be seized.