Chongqing Transportation Equipment Finance Leasing Co., Ltd. v. Chongqing Kunyuan Shipping Co., Ltd. et al.

Abstract

The Plaintiff, a finance leasing company, sued the First Defendant, the lessee, to recover outstanding charter hire under a finance leasing contract. The Plaintiff also claimed that the Second Defendant, a port administration, was liable to pay part of the outstanding amount under a guarantee contract. The First Defendant counterclaimed against the Plaintiff, arguing that the two ships that were the subject of the finance leasing contract were defective because they were built at the wrong shipyard The court held that the First Defendant was liable to pay the outstanding hire. Although the Second Defendant, as a public institution performing administrative functions was not legally permitted to engage in business activities such as providing a guarantee, it was nevertheless ordered to pay half of the outstanding amount if the First Defendant did not do so.