Cargo ship disappears, leaving 10 crew members missing

The Philippine Coast Guard reported on October 31st that after several days of searching for a missing coastal cargo ship, there has been an increasing number of reports regarding wreckage and possible sightings of bodies, and they are investigating these reports.

The shipping company involved stated that the cargo ship, which departed last week, had 10 crew members on board. At the time, the ship reported encountering bad weather and was seeking shelter due to limited conditions. The search began on October 27th, when the shipping company expressed that they were unable to contact the crew.

On October 29th, a resident of?the region?reported?finding a life jacket with the cargo ship's name on it and two unmarked lifebuoys about 10 nautical miles off Paluan. Local fishermen also informed the Coast Guard that they had seen at least two bodies floating in the water about 14 nautical miles from Paluan, and other fishermen reported seeing debris and possibly more bodies.

Definition in Maritime Law of the People’s Republic of China

Article 248 of Maritime Law?of the People’s Republic of China states that if a ship does not arrive at its destination from the last known location within a reasonable time, and after two months have passed without any news, unless otherwise agreed in the contract,?it is considered missing. A missing ship is regarded as an actual total loss.

In international maritime law, there are some differences in the definition of a missing ship, mainly reflected in the different combinations of objective standards (such as the physical state of the ship) and subjective standards (such as the intention to abandon the ship).

Definition in Commercial Law?of Japan

In Japanese maritime law, the definition of a missing ship refers to Article 833 of the fourth compilation of "Maritime Commerce" in the?Commercial Law,?which regards a missing ship as a constructive total loss.?Constructive total loss refers to a situation where the total loss of the insured subject is inevitable due to the perils insured against during navigation, or the cost of preservation, repair, or salvage of the insured subject will exceed the value of the preserved subject, thus presuming the total loss of the insured subject. In the Japanese legal system, a missing ship does not refer to the physical loss or utility of the ship, but rather the extinction of the ship's ownership in law. When a ship is missing for more than the statutory period and the owner has not applied for deregistration, this act is considered an abandonment of the ship's ownership. Therefore, the definition of a missing ship in Japanese maritime law focuses on legal effects and the loss of ownership, not just physical disappearance.

Definition in Other Countries

Italian law does not provide a legal definition of a missing ship, but according to the explanatory memorandum of maritime law, a missing ship means that the physical composition of the ship has undergone a substantial change, that is, the ship has lost its basic characteristics as a ship and can no longer be used for the maritime transportation of personnel or goods.?French law defines a missing ship as a state of?non-buoyancy, no crew on board, and the absence of custody and control measures.?The 2007 Nairobi International Convention on the Removal of Wrecks?provides a very broad definition of maritime shipwrecks, including sunken or stranded ships, any part of a sunken or stranded ship, any object lost at sea from a ship and stranded, sunken, or adrift at sea, and ships that are about to or may reasonably be expected to sink or strand.

It should be noted that although Maritime Law of the People’s Republic of China?does not mention the cause of a missing ship, according to the basic spirit of maritime insurance law,?a missing ship cannot include intentional illegal acts of the insured.?If the insured deliberately creates an illusion for fraud insurance or other reasons, or deliberately sinks the ship and then falsely reports it as missing, it is not within the category of a missing ship and may be considered fraudulent behavior. If the circumstances are serious, criminal liability for insurance fraud may be pursued. In addition, a missing ship also includes an important meaning: the cause of the disappearance is unknown. The cause of a missing ship should be untraceable; otherwise, it would be possible to determine whether the cause of the missing ship was due to an insurance accident.

The reason for making this qualitative distinction between the two behaviors is that in the field of maritime insurance law, a missing ship can cause direct and significant legal effects, that is, it will be considered an actual total loss. Article 248 of Maritime Law?of the People’s Republic of China clearly states: A missing ship is considered an actual total loss.?Accordingly, after a ship is missing, if the insured makes a claim and the insurer fully reviews the corresponding legal regulations and documents and finds that it indeed fits the situation of missing ship, then the insurer will compensate according to the actual total loss. If the actual value of the missing ship is higher than the insured amount, then according to Article 219 of Maritime Law, the actual compensation amount should be calculated based on the proportion of the insured amount to the actual value. On the contrary, if the actual value is lower, then the actual value is compensated.

The People’s Insurance Company of China Hull Insurance Clauses?also put forward the same provision?that a ship missing for 2 months is considered an actual total loss, which?greatly protects the interests of ship owners. However, a missing ship does not mean that the ship has actually been lost. If the missing ship reappears after the insurer has compensated, the insured should return the compensation received and the interest generated by the insurance compensation to the insurer, or transfer the ownership of the ship to the insurer without compensation. Regarding how to handle the specific reappearance of a missing ship, the insured and the insurer should fully consult and reach a supplementary agreement.

This incident once again reminds us of the dangers of maritime transportation and the risks faced by crew members. It also highlights the importance of strengthening maritime safety supervision, improving the ship's disaster resistance capabilities, and optimizing emergency response mechanisms. We should continue to promote maritime safety improvement measures to ensure that similar incidents do not happen again, protect the lives of crew members, and maintain the stability and reliability of maritime transportation. The handling of missing ships will follow legal regulations and insurance terms to ensure fairness, transparency, and respect for the rights and interests of all parties involved.

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