Pearl River Container Transportation Ltd. v. Greenwood Ltd.
Read the full judgment text of CACV 27/1994 on BabelCite. This Court of Appeal judgment was delivered on 25 May 1994 before Power VP, Nazareth JA, Litton JA.
Civil procedure – forum non conveniens – stay of proceedings – charterparty dispute – whether Hong Kong court should decline jurisdiction in favour of PRC courts – Court of Appeal – principles governing appellate review of discretionary decisions on stay – grounds for interference limited to misdirection, taking irrelevant matters into account, or plainly wrong decision (per Lord Brandon in Abidin Daver) – relevant connecting factors (per Lord Goff in Spiliada v Cansulex) – service of writ as of right not itself a connecting factor – burden on defendant to show another available forum clearly or distinctly more appropriate – first defendant incorporated in PRC but registered in Hong Kong under Part XI of Companies Ordinance, enabling service on its Hong Kong branch office as of right – second defendant (Sinotrans) incorporated in China and served in PRC under Order 11 as necessary party – plaintiff (Greenwood) incorporated in British Virgin Islands with no connection to Hong Kong – charterparty allegedly concluded by London brokers for cargo from Bulgaria to Xingang – issue whether Pearl authorised Sinotrans to charter a vessel, turning on discussions in China between Pearl's and Sinotrans' representatives – deputy judge dismissed stay application – whether deputy judge misdirected himself by treating service as of right as a connecting factor – held, no – appellate court not persuaded service as of right was an essential link in his reasoning – whether Pearl established another available forum clearly more appropriate than Hong Kong – held, no – Pearl failed to identify which PRC court was contemplated, despite specific enquiry from plaintiff's solicitors on 7 December 1993 – China Maritime Arbitration Commission not available because Pearl's case was that no contract was concluded and thus no arbitration agreement existed – generic references to 'the PRC' or 'Guangzhou' insufficient given proximity and shared language with Hong Kong – appeal dismissed – respondent to have costs of the appeal to be taxed.
Legal issues: Whether the deputy judge misdirected himself in the forum non conveniens analysis by treating service of the writ as of right as a connecting factor · Whether Pearl established another available forum clearly or distinctly more appropriate than Hong Kong
Outcome: Appeal dismissed; the deputy judge's refusal to stay the proceedings in favour of the PRC courts was upheld.
Cited by 12 cases
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CACV000027/1994 IN THE COURT OF APPEAL 1994, No. 27 ________________
________________ Coram: Hon. Power, V.-P., Nazareth and Litton, JJ.A. Date of hearing: 25 May 1994 Date of judgment: 25 May 1994 _________________ J U D G M E N T _________________ Nazareth, J.A.: 1. This is an appeal against the order of Deputy Judge Yam (as he then was) made on 28th January 1994 dismissing the application of the 1st defendant ("Pearl") for the proceedings to be stayed in favour of the courts of the People's Republic of China on the grounds of forum non conveniens. 2. Shortly stated, the facts are that the plaintiff ("Greenwood") sues as owner of the vessel "Leon" which it avers was chartered to Pearl under a charterparty dated 18th September 1992 to carry cargo from Bourgas in Bulgaria to Xingang in the People's Republic of China. Pearl's claim is for damages for failure to provide a cargo. The charterparty was concluded by brokers in London acting for Greenwood on the one hand and for the 2nd defendant ("Sinotrans") on the other hand. Pearl's case is that it approached Sinotrans with the object of chartering a vessel from Sinotrans. It denies that it gave Sinotrans authority to charter a vessel on its behalf. The relevant negotiations took place in China between a Mr He Pei-kai for Pearl and a Mr Qin Wen for Sinotrans. 3. The essence of the dispute is, therefore, whether or not Pearl authorised Sinotrans to charter a vessel. This will depend on what Mr He said to Mr Qin in the course of discussions between 25th August and 18th September 1992 in China. 4. Greenwood is incorporated in the British Virgin Islands and there is no evidence that it has any connection with Hong Kong. 5. Pearl is incorporated in People's Republic of China but is registered in Hong Kong as an overseas company under Part XI of the Companies Ordinance. This enabled Greenwood to serve its writ of summons on Pearl in Hong Kong as of right, and thus to found the jurisdiction of this Court. 6. The position of Sinotrans is not relied upon in this appeal but it is also incorporated in China. It may be noted that the plaintiff applied for and obtained leave under Order 11 to serve the writ on Sinotrans in the People's Republic of China on the ground that Sinotrans is a necessary party to the action commenced against Pearl. 7. Deputy Judge Yam's decision, under O.12 r8, was made in exercise of his discretion. It is well established that as a court of appeal this Court will therefore not interfere with such exercise of discretion except in very limited circumstances. These may conveniently and appositely be taken from the judgment of Lord Brandon in the Abidin Daver [1984] 1 AC 398 at p.420A-C, a case not dissimilar to this. They are:
For Pearl, Mr Clifford Smith relies upon the circumstances in (i) and (ii). 8. Mr Smith commenced his submission by referring to MacShannon v Rockware Glass [1978] AC 795 in which a number of plaintiffs sued in England for personal injuries sustained by them in the course of employment in Scotland. Although the defendant had its head-office in England, and not merely a branch office as in the case here, and the plaintiffs had properly served the writs in England, the House of Lords nevertheless ordered actions to be stayed to Scotland. Mr Smith stresses that here while the 1st defendant has only a branch office in Hong Kong, its registered and head-office is in China. 9. The relevant principles governing the grant of stay were stated by Lord Goff in Spiliada v Cansulex [1987] 1 AC 460 at 474-478. Those which this appeal is concerned with are:
10. Mr Smith submits that it is upon the service of the writ within the jurisdiction as of right, that the third of the foregoing principles is propounded and that therefore service as of right within the jurisdiction is not one of the connecting factors under the fourth principle by which the question whether there exists some other forum which is clearly more appropriate for the trial of the action is to be determined. I think that submission must be accepted as correct not only upon the basis of the foregoing principles, but also in the way that Lord Goff explained them in particular at p.474 of his judgment. 11. Upon that basis Mr Smith then points to the judgment of the deputy judge in particular the following passage at p.6:
12. Mr Smith submits that from that passage it can be seen that the judge relied upon three reasons for his conclusion. First, that the 1st defendant has been properly served with the writ on its branch office in Hong Kong Second, that it has been actively trading in Hong Kong, and third that it would not cause much inconvenience to the parties if they have to face litigation in Hong Kong by bringing the necessary witnesses and documents here. 13. For myself, I am not persuaded that the judge, who seems to have listed those three matters together in the way they were mentioned by Mr Shieh, actually took into account the service of the writ upon Pearl on its branch office in Hong Kong as a connecting factor in reaching his conclusion that Hong Kong is not a forum non conveniens. Service as of right would in any case have been mentioned as the basis upon which the connecting factors come to be addressed. I think the judge might have expressed himself more felicitously but I remain unpersuaded that service as of right was an essential link in his chain of reasoning. 14. Having reached that conclusion, the first essential step in Mr Smith's submission, i.e. that the judge misdirected himself, fails. However that may be, I propose to address the second limb of his submission. On the assumption that the judge misdirected himself in principle or took into account matters he ought not to have done, this Court would not only be entitled to set side the decision, but itself to exercise the discretion that the judge should have properly exercised. That would require this Court to decide whether or not there is another available forum which is clearly or distinctly more appropriate than the Hong Kong courts. In the context of the sort of connecting factors raised, e.g. distance and communications between Guangzhou and Hong Kong, and the language of the witnesses and the court, the identity of other forum contemplated assumed special significance. Indeed the solicitors acting for Greenwood enquired of Pearl's solicitors by letter dated 7th December 1993: "What exactly are you applying for a stay in favour of? Are you applying for a stay in favour of a trial before the Chinese court? If so, which court and where exactly?" There was no answer to that pertinent enquiry; nor is there any evidence before this Court. It seems to me therefore that this Court cannot in the particular circumstances begin to satisfy itself that there is another available forum which is clearly or distinctly more appropriate than the Hong Kong forum. Upon that ground also, I think, that the appeal would fail. 15. For those reasons, I would dismiss the appeal. Litton, J.A.: 16. I, too, would dismiss this appeal for the following reasons:
17. There is perhaps some looseness of language in the judgment appealed against. For instance, the reference to "the PRC" or "Guangzhou" not being an appropriate forum. But the conclusion the judge reached is, in my view, plainly correct. I would likewise dismiss the appeal. Power, V.-P.: 18. I also would dismiss the appeal. What I wish to add underlines what has been said by both of my Brothers. The summons of this matter was issued on 27th July 1993. It sought a stay. Thereafter, on 7th December 1993, Clyde & Co, the plaintiff's solicitors, asked Ng & Partners, the solicitors of the 1st defendant, to answer the following questions:
This squarely raised an important issue. No reply was ever sent to that letter, and indeed no reply has ever been given other than to suggest that a forum to which transfer is sought is either the courts in China or the courts in Guangzhou. Given the questions that are raised in this application, questions which it must be said are not unique to the circumstances of this case, that lack of particularity left considerations vital to the defendant's application unanswered. Even had the judge erred, for my part, I would have no hesitation in refusing to exercise the discretion of this Court in favour of the applicant. The appeal is therefore dismissed. 19. The respondent is to have the costs of the appeal to be taxed.
Representation: Mr Clifford Smith (M/s Ng & Partners) for Appellant Mr Paul W.T. Shieh (M/s Clyde & Co) for Respondent |
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