Changes to the Maritime Code are under scrutiny as tensions escalate in the Strait of Hormuz. How will its latest revisions assist the flow of global seaborne trade? Olivia Wang reports
From the “Maritime Silk Road” of the Han dynasty, to Zheng He’s voyages in the Ming era, and onward to the European Age of Discovery that reshaped the global political and economic order, humanity has never ceased forging commercial routes across the vast oceans.
Confronted with commercial demand and the the unpredictability of the seas, maritime laws have emerged as a necessary framework.
China’s first Maritime Code was promulgated in 1992. More than 30 years later, the first revision of the Maritime Code was formally adopted on 28 October 2025, and took effect on 1 May 2026.
The overhaul has been described by practitioners as “transformational” in its scope and comprehensiveness. It aligns domestic provisions with international rules and codifies judicial practices that have already taken shape in the courts, while also seeking to strengthen China’s legislative voice in the development of international maritime rules.
But as geopolitical currents unsettle waterways, what impact will the revised Maritime Code have on trade, shipping and the maritime industry?
Civil Code to Maritime Code
When discussing the most significant change brought about by the latest revision, one theme repeatedly emerges: maritime transport between domestic ports has finally been brought within the scope of the Maritime Code. This is widely regarded as one of the most substantive breakthroughs of the current overhaul, bringing an end to the longstanding regulatory divide between coastal and international shipping, and establishing what the industry calls terms a “minimal dual track” regime.
Prior to the amendment, domestic coastal carriage was governed solely by the Civil Code, under which carriers could not rely on nautical fault as a defence. The revision to chapter 4 of the Maritime Code removes the clause excluding carriage of goods by sea between ports of the People’s Republic of China , subjecting both international and domestic sea carriage to the Maritime Code. Domestic carriers may now invoke defences such as nautical fault and fire, and benefit from statutory limitations of liability per package or unit.
In?house counsel, likewise, recognise the importance of this change. Alain Wu, Asia senior counsel at global freight forwarder CH Robinson in Shanghai, observes: “In our view, the changes to chapter 4 are particularly significant, as they directly affect risk allocation under carriage contracts, and have important implications for insurance management and contract template design.”
Regarding the complexity of the changes, Li Chenbiao, a partner at Zhong Lun Law Firm in Shanghai, identifies the most immediate transitional risk as a “fundamental conflict of liability regimes”, noting that the divergence “will directly lead to disruptive changes in the rights and obligations of the contracting parties”.
Li says: “For domestic maritime transport businesses currently in transition between legal regimes: first first, both carriers and cargo interests should immediately conduct a comprehensive review of cross regime contracts and outstanding claims, and establish dedicated records; Second second, they should enter into supplemental agreements to clarify that voyages completed before 1 May remain governed by the Civil Code, or by other laws and regulations previously agreed in the contract; and Third third, with respect to cargo damage claims arising within the past year, formal demand letters should be issued without delay, and for existing claims, steps should be taken promptly to interrupt the limitation period.”
Another maritime lawyer, Mervyn Chen, senior partner and managing director of Wintell & Co in Shanghai, offers tailored recommendations for both sides. For shippers, he suggests: “First, reviewing high?value cargo and declaring cargo value in transport documents for new voyages, thereby lawfully breaking through statutory limitation caps; and second, consulting brokers to increase domestic cargo insurance limits to narrow potential exposure gaps.”
For carriers, Chen encourages what he terms calls the “dividend” of the new law. He recommends notifying domestic cargo clients and issuing supplemental agreements, while updating the paramount clause on standard domestic bills of lading and waybills to state explicitly that voyages commencing on or after 1 May 2026 are governed by the revised Maritime Code.
“Both parties must reach written consensus on how to determine the timing of incidents occurring during the transitional period, in order to construct a lawful firewall for liability allocation,” he says.
Shifting to a systematic level, Yan Bing, a partner at AnJie Broad Law Firm in Shanghai observes: “The ‘minimum dual track’ system seeks, to the greatest extent possible, to harmonise the legal regime governing domestic and international contracts of carriage by sea. Following the revision, many of the provisions in chapter 4 now apply to coastal transport. However, differences remain in the standards of carrier liability, particularly in respect of regarding the duty of seaworthiness, the duty of due dispatch, and the statutory fault based defences.
“The bill of lading regime may now apply in coastal transport scenarios. Parties engaged in domestic trade may structure their arrangements according to their commercial needs, while benefiting from the institutional convenience afforded by negotiable transport documents.”
Yan adds: “The revised chapter 4 shifts the liability basis for coastal carriers from strict liability to fault?based liability. This adjustment may also have implications for the application of other chapters of the Maritime Code. For example, the general average regime may assume a more prominent role in the context of coastal transport.
“The distinctive feature of the law governing contracts for the carriage of goods by sea is that it mandates a minimum standard of carrier liability, while allowing the parties to agree to a higher standard. In other words, it still leaves room for dominant shippers to mitigate the impact of the new law through contractual arrangements.”
Embracing rules, confronting conflicts
From a foreign?related perspective, the revision is equally emphatic. It introduces a dedicated chapter on ship oil pollution damage liability, formally incorporating the International Convention on Civil Liability for Oil Pollution Damage into domestic law, and clarifying liability boundaries and compulsory insurance requirements. The chapter also draws on the 2001 International Convention on Civil Liability for Bunker Oil Pollution Damage and comparative foreign legislation.
Embracing international rules, however, does not mean wholesale transplantation. On the contrary, the revised code also introduces countermeasures against discriminatory foreign actions.
Henry Zhu, a partner at Wei Tu Law Firm in Guangzhou, predicts that international protection and indemnity (P&I) clubs will update their certificates of entry to reflect expanded liability exposure, including bunker pollution, and that international maritime organisations may establish dedicated China desks to provide compliance support.
“While these changes enhance legal certainty, they also incur additional diligence costs, prompting financiers and charterers to reassess the risk return profiles of Chinese maritime transactions,” says Zhu.
Drawing on cross-border transactional experience, Chen describes the oil pollution chapter and countermeasure provisions as having triggered a “strong shock”. He says international P&I clubs and foreign financial institutions “welcome regulatory alignment, yet approach potential compliance conflicts with caution and anxiety”.
With respect to oil pollution, Chen says: “While foreign P&I clubs welcome harmonisation with international standards, the strengthened strict liability regime and the explicit exclusion of pollution clean?up costs from general average mean such costs can no longer be apportioned to cargo interests.”
As for countermeasures, Chen suggests that unilateral sanctions regimes may create the risk of “compliance deadlock” in extreme geopolitical scenarios where foreign sanctions obligations conflict with China’s Maritime Code.
He believes the two new regimes will materially affect cross?border contract negotiations. In ship finance, lenders may require the highest level of financial security for pollution risks as a condition precedent to drawdown, together with stringent environmental covenants. Significant administrative penalties imposed by Chinese maritime authorities could, he predicts, trigger acceleration clauses.
Amid conflicts, how would the counter-sanctions provisions be implemented in practice? Chen describes the dynamic as a “hard-core contest”.
“Article 308 of the revised code provides Chinese shipping enterprises and law firms with a statutory blocking mechanism,” he says. “As a result, sanction and counter?sanction clauses must be carefully structured.
“This will increase the technical complexity of negotiations while materially reinforcing China’s judicial sovereignty and commercial red lines in the evolving global regulatory landscape.”
Practice, legislation and the future
Another set of revisions runs deeper beneath the surface. Rather than creating new rules from scratch, they formally incorporate into the statute the adjudicative principles developed by the courts in the past decade.
“More broadly, many of the other revisions do not represent a fundamental change in practice, but rather codify developments that have already emerged through judicial decisions in recent years,” says Wu, of CH Robinson.
“Chinese courts have, based on industry realities, progressively interpreted and adapted the 1993 Maritime Code in dispute resolution. The revised law largely reflects and formalises these judicial trends by incorporating them directly into statutory provisions.”
Wu says companies that have closely followed major maritime cases have already reflected such judicial trends in contract drafting and dispute management. This includes the provision, in article 93 of the Maritime Code, which places liability on the shipper where cargo remains uncollected at the port of destination.
Yan, of AnJie Broad, says that the provision has been subject to differing interpretations within the industry. “This is not a newly created legal rule, but rather a legislative codification of adjudicative principles developed through maritime judicial practice,” he says.
“Article 61 of the Minutes of the National Courts’ Symposium on Foreign Related Commercial and Maritime Trials, issued at the end of 2021, had already clarified the rule. Even earlier, Guiding Case No. 230, issued by the Supreme People’s Court, provided a comprehensive and concrete interpretation, the core issue being the identification of the proper parties to the contract of carriage.”
Yan says that article 65 of the above?mentioned minutes sets out the standard for determining container demurrage charges, fixing the benchmark at an amount equal to the market price of a comparable new container. “This rule both requires carriers to dispose of uncollected containers in a timely manner, and obliges them to take the initiative in contacting the contractual shipper,” he says.
These rules further entrench and reinforce the adjudicative principle of parity between carriers and shippers, ensuring a corresponding balance of rights, obligations and risk allocation.
Even so, uncertainty remains in individual cases. Wu says in certain recent cases, where a domestic consignor has failed to pay freight, courts have sometimes held that it is not the “contractual shipper”, exempting it from associated costs. Whether this approach will evolve under the revised law remains to be seen.
Beyond cargo, those on board have also received greater attention under the new law. The amendment strengthens protection of seafarers’ rights in several respects and harmonises compensation standards for domestic and international maritime passenger carriage.
Zhu, of Wei Tu, says these changes will reduce contractual uncertainty, although “judicial clarification is needed in several areas” including rest-hour calculations during emergency operations, medical coverage for pre existing conditions, allocation of repatriation costs, and the interface between domestic and international social security regimes.
Ambiguity in the rules may signal a new frontier for lawyers, but for businesses it sketches out a map of risk. While optimistic about the opportunities created by the new law, Li, of Zhong Lun, looks forward to a corresponding rise in professional standards across the maritime legal sector.
“For domestic maritime lawyers, the most promising areas of growth lie in compliance reviews under the new law, maritime dispute resolution amid geopolitical tensions, green shipping compliance, and the optimisation of ship financing structures,” says Li.
“The most formidable challenges, however, will be the rising professional threshold for cross border regulatory alignment, intensifying international confrontation in foreign related disputes, and the increasing difficulty of accurately anticipating judicial approaches under the new law.”
