The Awa Maru delivers Red Cross supplies to Hong Kong. Captain Hamada's ship has been given safe passage by the American navy; it has already delivered Red Cross goods to Formosa, and will now proceed to Saigon, Singapore and Batavia. At Saigon it will take on 480 survivors of Japanese merchant ships sunk by the Americans and in Singapore loads about 1,700 businesmen and officals who are returning to Japan.
On her homeward voyage she's observed by a number of American planes and submarines which note the white crosses she's covered with or have been informed of her protected status and allow her to proceed.
Late on the night of April 1 the Awa Maru was spotted by the American submarine Queenfish, mistaken for a destroyer and sunk. There were a few survivors but only one accepted the offer of rescue. It took him six hours to recover and be able to tell the Americans they'd sunk a ship that had been granted safe passage.
A court martial found the commanding officer, Charles Loughlin, guilty of negligence but not guilty of two more serious charges. He received a letter of admonition.
The American Government formally apologised to the Japanese and offered to replace the ship with one of a similar standard if it was agreed to only use it for humanitarian purposes. Negotiations about this offer were going on at the end of the war.
The Awa Maru was in fact carrying war-related material, in breach of at least the spirit and perhaps the letter of its safe passage agreement. Neverthless, this wasn't known to the submariners and had no influnece on the decsiion to sink it, which arose from a tragic series of errors and misudnerstandings.
Source:
David Miller, Mercy Ships, 2008, 136-142