By Keith Wallis

When more than 2,000 passengers aboard China's biggest cruise liner found their ship detained in a South Korean port and their holiday in ruins, they unwittingly became pawns in a five-year legal row between two Chinese shipping firms.

The impounding of the luxury liner Henna earlier this month in a foreign country is the type of incident that may occur more frequently in the future as Chinese firms turn overseas to try to resolve legal disputes and recover debts.

In an embarrassment for China's fledgling cruise industry, most passengers had to be flown home after they were stranded for three days in Jeju island in South Korea. The cruise liner was released only after a bond was posted.

Chinese shipbuilders and ship owners are taking a growing number of commercial disputes abroad to bypass a domestic legal system they fear may not guarantee a fair hearing.

Weak enforcement of laws, pressure from well-connected corporate bosses and political interference are some of the hurdles they face, lawyers say.

"In order to avoid local interference at different levels within China, there are Chinese companies which have chosen to give up having arbitration within China and instead choose to arbitrate outside China," said William Leung, head of Hong Kong law and arbitration firm William K.W. Leung & Co.

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