Revised PRC Maritime Code (Article 295(2)): Impact on China-Related International Shipping Contracts
On 18 October 2025, the 18th session of the Standing Committee of China's 14th National People's Congress adopted the newly revised Maritime Code of the People's Republic of China (the "Revised Maritime Code"), which will come into effect on 1 May 2026. This marks the first comprehensive revision of the Maritime Code in over thirty years since its original enactment in 1993.
Among the numerous amendments, Article 295(2) is particularly noteworthy. This newly introduced provision stipulates that contracts for the international carriage of goods by sea, where the port of loading or the port of discharge is located within the territory of the People's Republic of China, shall be governed by Chapter IV of the Revised Maritime Code. This means that choice-of-law clauses in international maritime cargo transport contracts or bills of lading that designate a foreign law (such as English law) as the governing law cannot override the mandatory application of Chapter IV. The provision is triggered as long as either the port of loading or the port of discharge is situated within China. Given China's position as one of the world's largest trading nations, the scope of this provision is exceptionally broad. This institutional design represents a key measure in the current revision to enhance the framework for the application of law in cross-border contexts, providing more unified and definitive legal safeguards for shipping activities connected to Chinese ports.
In shipping practice, a significant number of international maritime cargo transport contracts are governed by English law. Upon the implementation of the Revised Maritime Code, Chinese courts or arbitral institutions will mandatorily apply Chinese law to any transport contract involving loading or discharge at a Chinese port, regardless of any contractual provision to the contrary. This poses a significant challenge to the legitimate expectations of shipowners and other stakeholders who have traditionally relied on English law. For banks and financial institutions engaged in ship financing and trade finance, representations and warranties in loan documentation, documentary requirements under letters of credit, and the scope of P&I insurance coverage may all require corresponding adjustments.
The Revised Maritime Code will take effect on 1 May 2026. Market participants with China-related operations are advised to take the following steps as early as practicable:
First, conduct a comprehensive review of existing shipping contract templates — in particular, the governing law and jurisdiction clauses on the reverse side of bills of lading — and assess their validity under the new legal framework.
Second, engage with Protection and Indemnity Clubs in a timely manner to understand the impact of the Revised Maritime Code on carrier liability and ensure that protection and indemnity insurance coverage remains consistent with the requirements of the new law.
Third, incorporate provisions relating to compliance with the mandatory rules of the Revised Maritime Code into ship financing and trade finance documentation, and include new law compliance as part of the due diligence review process.
Our team has extensive experience in maritime law and cross-border shipping finance. For further information on how the new law may affect your business, please do not hesitate to contact us.
This article was authored by Katherine Huang (Counsel) and Yihan Wang (Legal Manager).
