After the outbreak of the “Kowshing” incident，the British Government made claims on the Japanese Government for the loss of the British steamer “Kowshing” on the grounds that no war had been declared，and the steamer was still flying the flag when it was fired upon and sunk by the Japanese man-of-war “Naniwa”. In order to get out of the predicament，the Japanese Government fabricated statements of the survivors，especially Captain Galsworthy，endeavoring to defend the British Government，but it did not work. The so-called “consider sinking of the steamer justified and advice Government to make no claims on the Japanese Government in the Shanghai Naval Court”，was completely a one-sided propaganda by Japan，which was immediately protested by British Vice-Admiral E.Fremantle，who was the client of the case. England’s intention to demand compensation from China emerged around the end of 1894 and early 1895，when Japan won the decisive victory in the Sino-Japanese War of 1894，and completed ratification of the Anglo-Japanese Treaty of Navigation and Commerce. To conceal the injustice and avoid damaging its interests in China，the British Government accepted the suggestion of its minister to China，Nicholas R.O’Conor，that only peaceful solution that could be hoped was that British position as claimants would be supported by the authority of foreign Government or foreign jurists，the so-called “submission to arbitration”，to achieve the goal. In the arbitration negotiations，the British Government disregarded the justice，only concentrating on the claim was made or not，which was already a matter of power surpassing international law. The “Kowshing” incident was ultimately resolved in a diplomatic way，regardless of the spirit of international law.