Bright Shipping Ltd v. Changhong Group (HK) Ltd

HCAJ 3/2018

[2022] HKCFI 920

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY ACTION NO 3 OF 2018

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BETWEEN

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Before:  Hon Ng J in Chambers

Date of Hearing:  28 October 2021

Dates of Further Written Submissions:  16 December 2021, 17 and 23 February 2022

Date of Decision:  7 April 2022

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DECISION

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Introduction

1.This is an in personam action commenced on 9 January 2018.  This Action concerns a collision between the Plaintiff’s tanker SANCHI (“Sanchi”)  and the Defendant’s cargo vessel, CF CRYSTAL (“Crystal”). The collision took place on 6 January 2018 in international waters viz the East China Sea. 

2.There is no dispute that the jurisdiction of the Hong Kong Court was invoked by the Plaintiff as of right, having served these proceedings on the Defendant at its registered address in Hong Kong. 

3.There is before this court the Defendant’s Summons filed on 30 October 2020 (“Summons”)  for a permanent stay of this Action under RHC O 12 r 8 and the inherent jurisdiction of the Court in favour of the Shanghai Maritime Court (“SMC”)  on the grounds of forum non conveniens and lis alibi pendens viz SMC is the natural forum for the determination of the Plaintiff’s claim and that there are proceedings pending between the parties in the SMC.  The Defendant’s application is almost 2 years out of time, having filed its Preliminary Act on 24 December 2018[1].  Hence, at paragraph 1, it seeks an extension of time for the filing of the Summons. 

4.This application is the Defendant’s 2^nd attempt to stay this Action.  Previously in May 2018, the Defendant had applied for a stay of this Action on the same grounds of forum non conveniens and lis alibi pendens in that the proceedings should be conducted in the SMC instead of Hong Kong (“1^st Application”).  The 1^st Application was dismissed by A Chan J on 15 November 2018.  Firstly, the learned Judge held that the Defendant has failed to discharge its burden in relation to the Spiliada Stage 1 analysis.  While the Plaintiff accepted that the collision took place on the high seas and there was no natural forum to determine the liability for such a collision, the Defendant had failed to get pass the Stage 1 requirement of establishing the SMC was “clearly and distinctly” more appropriate than the Hong Kong Court. Secondly, the learned Judge held that a significant difference in tonnage limitation applied in Hong Kong and the Mainland[2] was a very important, if not decisive, personal juridical advantage in favour of refusing a stay: Bright Shipping Limited v Changhong Group (HK)  Limited [2018] HKCFI 2474 at [17] - [18], [23] and [55] - [56].

5.A Chan J’s decision in relation to the Spiliada Stage 1 analysis was upheld by the Court of Appeal: Bright Shipping Limited v Changhong Group (HK)  Limited [2019] 5 HKLRD 30 at [63].  A Chan J’s decision in relation to the Spiliada Stage 2 analysis on the significant disparity in tonnage limitation between Hong Kong and the Mainland was also upheld by the Court of Appeal on an obiter basis ie the Plaintiff has shown that it would be deprived of a legitimate juridical advantage if this Action were tried in the SMC: supra at [64] - [72]. 

6.The Defendant went all the way up to the CFA at the leave to appeal stage.  Its application for leave was dismissed by the Appeal Committee on 13 July 2020 with reasons handed down on 16 July 2020. 

7.The basis of the present application is that since the 1^st Application was determined against the Defendant, there have been significant new developments.  The Defendant submits that contrary to the Plaintiff’s previous stance of (i)  avoiding the proceedings in the SMC[3] and (ii)  seeking an early trial of liability in this Action[4], the Plaintiff:

(1)  started to participate in the SMC proceedings shortly before the hearing before the Appeal Committee on 13 July 2020, by firstly instructing lawyers to appear at a pre-trial hearing on 30 June 2020 for disclosure and exchange of evidence and subsequently to argue the merits of the inter-ship liability at the trial before the SMC which concluded on 14 July 2020; and

(2)  after the parties had incurred costs in preparing for the trial of liability in this Action scheduled on 14 October 2020, applied by summons dated 11 September 2020 to adjourn the trial sine die with liberty to apply, in order to wait for the ruling on liability pending before the SMC - at the hearing on 16 September 2020, this court granted the adjournment. 

(“New Developments”)

8.For the record, the Defendant did not oppose the adjournment of the trial as such.  At paragraph 15 of the Defendant’s skeleton for the hearing on 16 September 2020, it submitted that:

“Although the Defendant does not object to the exceptional indulgence that the Plaintiff seeks, the Defendant ought not to be burdened with the costs of the application and thrown away consequent upon the adjournment – costs which will have been increased by the Plaintiff’s unexplained and unforgivable delay.”

9.At the time of the hearing of this application, Judgment was still pending in the SMC.  On 8 November 2021, the SMC handed down its Ruling on liability in which Sanchi was 70% to blame for the collision and Crystal was 30% to blame.  Both parties have appealed against the Ruling.

Background

10.The basic facts of this Action were set out in the Decision of A Chan J (“1^st Decision”).  For ease of reference, they are repeated below. 

11.The Plaintiff was incorporated in Belize.  The Defendant is a Hong Kong incorporated company with a registered office in Hong Kong.

12.Sanchi flied the Panamanian flag.  Her crew were Iranian and Bangladeshi.  At the time of the collision, she was loaded with 115,000 tonnes of natural gas condensate and was on her way from Iran to South Korea.  She was managed by an Iranian company, National Iranian Tanker Co (“NITC”)  which has a representative office in Shanghai.  Crystal flied the Hong Kong flag and her port of registry was Hong Kong.  She was laden with nearly 64 m.t. of sorghum cargo and was on a voyage from Port Kalama in the USA to Port Machong, Guangdong, PRC.  Her crew were all Chinese nationals.  She was managed by Changfeng Shipping Holding Ltd (“Changfeng”), a company incorporated in Hong Kong.

13.Sanchi exploded immediately upon collision and both vessels caught fire.  Crystal managed to reverse her engine and escape the fire.  Her crew abandoned the vessel but returned to successfully extinguish the fire on board.  Afterwards, she safely proceeded to and berthed at Zhousan, Zhejiang, PRC.  Sanchi kept burning and drifting after the collision.  Eventually, she sunk at a location around 151 nautical miles southeast of the point of collision on 14 January 2018.  None of her officers or crew survived the accident.

14.Pollution resulted from the collision was in the form of spilt bunkers and natural gas condensate. 

15.The Mainland authorities had been heavily involved in all aspects of the aftermath of the collision, including investigation and pollution issues.  Following the collision, a multi-national task force, led by the Shanghai Maritime Safety Administration (“MSA”)  with participants from Hong Kong, Iran and Panama, carried out an investigation. On 11 May 2018, a 191-page report of the joint investigation was submitted to the International Maritime Organisation (“IMO”). 

16.The collision was followed by a number of legal actions. 

17.This Action was commenced on 9 January 2018.  Also on 9 January 2018, the Defendant applied to establish in the SMC two limitation funds, one for personal injury claims and one for property loss/damage claims. On 11 January 2018, the Defendant commenced the SMC proceedings against the Plaintiff and NITC.  The Plaintiff has not filed a claim against the Defendant in the SMC.  It is time-barred from doing so now.

18.On 30 January 2018, the Defendant brought an action in the SMC against NITC as cargo shipper and a Korean entity as cargo consignee in respect of the collision.  In addition, the insurers of Crystal’s cargo brought an action in the SMC against, the Defendant, the Plaintiff and NITC in respect of the loss of cargo on Crystal.  There are also cargo claims against the Defendant.  Further, there are emergency response and pollution related claims, two of such actions involve the Plaintiff. 

19.As of 22 October 2018 ie the hearing of the 1^st Application before A Chan J, the Plaintiff has not submitted to the jurisdiction of the Mainland Court in any of those proceedings. 

Deliberation

20.The Defendant’s contention, as summarised in Mr Scott SC’s skeleton, is this:

(1)  This Court has jurisdiction to and should reconsider the Defendant’s stay application on the ground of forum non conveniens and lis alibi pendens or entertain it afresh.

(2)  Given the New Developments, there has been a relevant change of circumstances.  Had the Plaintiff participated in the SMC proceedings from the outset and/or had A Chan J been aware of the Plaintiff’s intended tactics at the time of his decision on 15 November 2018, the Court would have reached a different conclusion and granted a stay.

(3)  The Plaintiff is guilty of abuse of process by way of “gaming the system” so as to achieve the best of both worlds, to the Defendant’s considerable and unfair disadvantage.  The Plaintiff resisted a stay of this Action and obtained an early trial date of this Action on the basis that it had no intention to participate in the SMC proceedings.  Having succeeded in defeating the 1^st Application, the Plaintiff started participating in the SMC proceedings and sought an adjournment of the trial of this Action sine die with a view to reopening this Action in due course and taking what advantage it can of events in the SMC.

(4)  In light of these new circumstances, and given the existence of lis alibi pendens in the SMC, this Court should grant a permanent stay of this Action on the grounds that (i)  the SMC is now the natural forum for the determination of the Plaintiff’s claim and/or (ii)  the Plaintiff is guilty of abuse of process.

21.The first question for this court is whether the Defendant should be allowed to re-litigate its stay application well out of time. 

22.In SJH v RJH [2012] 4 HKLRD 308 at paragraphs 9(4)-(7), the Court of Appeal held that RHC O 12 r 8(2)  applied to applications for a stay of proceedings based on forum non conveniens and that an answer filed in divorce proceedings was akin to a defence filed in High Court proceedings.  Since the defendant had already filed his answer, it was clearly too late to challenge the jurisdiction of the Hong Kong Court.  Further, the Court of Appeal held at paragraph 9(13)  that the filing of an answer must be construed as a submission to jurisdiction.

23.At paragraph 9(6), Cheung JA cited the following observation by Sir Anthony Mason NPJ in Re Resource 1 (2000)  3 HKCFAR 187 at 213:

“ A power to regulate by rules the practice and procedure in actions generally in a superior court must extend to the prescription of time limits within which, and procedures by which, objections on various grounds, including jurisdiction, are to be made. Indeed, in the case of jurisdictional objections, there are powerful reasons for thinking that they should be resolved, as far as possible, at an early stage of an action. It is not right that a court should be venturing upon the merits or substance of an action without determining at the threshold of the action, if it can conveniently do so, that there is jurisdiction to proceed. The prospect of a defendant raising a jurisdictional objection at a very late stage of an action, perhaps after a lengthy hearing and just before the delivery of judgment, is one not readily to be contemplated. Accordingly, in the absence of any compelling contrary consideration, there are strong grounds for holding that the rule making power extends to prescribing a time and method by which a jurisdictional objection is to be taken, at least an objection of the type raised here, in default of which jurisdiction will be exercised.” (emphasis added)

24.It is true that the Court may in its discretion grant an extension of time under RHC O 3 r 5 even after a defendant has submitted to jurisdiction.  However, the purpose of the power to extend time is to ensure that the legal consequences which ordinarily flow from non-compliance with time limits do not apply in cases where an extension is appropriate: Re Resource 1 at 202-3.

25.Mr Scott SC also submits that there remains an inherent jurisdiction to stay proceedings on the grounds of forum non conveniens even if RHC O12 r 8 is not applicable: Balram Chainrai v Kushnir Family (Holdings)  Ltd [2019] HKCFI 2866 at [122].  But as Recorder Manzoni SC noted at [123], by submitting to the jurisdiction the 3^rd defendant in that case has effectively debarred himself from successfully applying under RHC O 12 r 8 and so he is only entitled to apply under the inherent jurisdiction in the event that something has occurred since the date of his submission to the jurisdiction which would itself justify a stay.

26.As far as this court can see, the Defendant is relying on the same New Developments, in particular, the Plaintiff’s application for an adjournment of the trial of this Action sine die which took place after the Appeal Committee had given its ruling, in seeking an extension of time as well as for permission to re-litigate the stay application. If the Defendant cannot get pass the hurdle for obtaining permission to re-litigate the stay application, this court cannot see any point in granting it an extension of time or why an extension is appropriate.

27.At this juncture, this court should refer to Chu J’s (as she then was)  decision in Re Prudential Enterprises Ltd (No 2) [2004] 2 HKC 205 at [12] - [13] in which the learned Judge held that as a matter of general principle, when an interlocutory application was dismissed, whether on procedural ground or merits, it is not permissible to make a fresh application for the same relief and/or on the same ground.  A possible exception to the general rule against re-litigating over interlocutory applications will be where there is a significant change of circumstances.

28.Mr Sussex SC submits that the Plaintiff’s participation in the SMC proceedings themselves is not a significant change of circumstances.  This court agrees.

29.First, lis alibi pendens is only one of the relevant factors that a court will take into account when addressing the Stage 1 question of whether an applicant for a stay has demonstrated that another jurisdiction is clearly or distinctly more appropriate than Hong Kong: Bright Shipping Limited v Changhong Group (HK)  Limited unrep, FAMV 34 of 2020, 16 July 2020 at [10] - [11].

30.As a general rule, the fact that to permit the Hong Kong action to be pursued would result in concurrent actions on the same subject matter proceeding in two different jurisdictions could not be sufficient to justify depriving the plaintiff of the advantage to which he was entitled to choose Hong Kong as a forum in which he preferred to litigate the matter.  It is only in exceptional cases where the existence of parallel proceedings might cause unusual hardship to a defendant that an action might be stayed on that ground: LN v SCCM unrep, CACV 62 of 2013, 4 June 2013 at [23] - [24] (per Cheung JA).  There is no suggestion of unusual hardship in the present case.

31.Second, the existence of parallel proceedings in admiralty matters is by no means unusual and the mere existence of such by itself should not incline a court towards staying an action on the ground of forum non conveniens: The “Peng Yan” [2009] 1 HKLRD 144 at [23] (per Ma CJHC, as he then was). 

32.Third, in the present case, as Ma CJ observed at the CFA leave hearing on 13 July 2020, the fact that the Plaintiff would fully participate in a full trial in the SMC is of limited utility.  This is because whether or not the Plaintiff has submitted to the jurisdiction of the SMC, it has not abandoned its claims in Hong Kong.

33.Fourth, also in the present case, A Chan J, at [49] of the 1^st Decision, correctly, if I may respectfully say so, held that:

“ Whilst I am concerned about the possibility of inconsistent findings if the inter-ship dispute is litigated in 2 jurisdictions, this does not of itself render Shanghai the appropriate forum, nor would it constitute unusual hardship to Changhong in the context of a collision in international waters.”

34.A Chan J’s decision on this point was upheld by the Court of Appeal, holding that in the absence of serious consequences with regard to expenses or other matters of the kind envisaged in The Abidin Daver and undue hardship, the SMC Action did not tip the balance in the Stage 1 analysis, despite the undesirability of the same issue being tried in different courts: see the Judgment of Kwan VP at [53] - [57].

35.In this court’s view, there is no real basis for Mr Scott SC’s submission (i)  at paragraph 28(3)(a)  of his skeleton that “had matters been in 2018 as they are now, a different outcome would have almost certainly ensued.  In short, there has been a material change in circumstances” or (ii)  at paragraph 29 of his skeleton that the Plaintiff’s success in opposing the 1^st Application and in subsequent appeals depended heavily on its tactical non-participation in the SMC proceedings.

36.Mr Sussex SC further submits that the adjournment of the trial of liability in Hong Kong pending the ruling in the SMC is also not a significant change of circumstances.  This court agrees.

37.Mr Sussex SC now accepts that in all likelihood the apportionment of liability as determined by the SMC will, subject to appeal, give rise to an issue estoppel in Hong Kong and will obviate the need for a liability trial in Hong Kong.  The parties could then proceed to assessment of quantum in Hong Kong.  Hence, the adjournment of the Hong Kong liability trial serves to avoid a risk of the Hong Kong Court arriving at a contrary decision and prevents the wastage of the Court’s time in hearing unnecessary evidence and submissions.

38.In this court’s view, that was a sensible position for the Plaintiff to take and this court agreed by granting in effect a case management adjournment.  The fact that the Defendant did not oppose the application for an adjournment only serves to reinforce the merits of the Plaintiff’s application.  This court therefore cannot see any basis for the Defendant’s submission that the Plaintiff is guilty of abuse of process by “gaming the system” if the adjournment application was itself meritorious.  Nor can this court see why the adjournment of the trial of liability in Hong Kong pending the ruling in the SMC is a significant or even relevant change of circumstances in order to justify re-litigating the stay application.  The Plaintiff has not abandoned the Hong Kong proceedings but simply obtaining an adjournment sine die of the liability trial.  It may still have to proceed to assessment of quantum in Hong Kong in the absence of agreement on quantum with the Defendant.  In civil litigation, all parties make what may be regarded as “tactical” decisions all the time.  Even assuming Mr Scott SC’s submission at paragraph 39 of his skeleton is correct in that the Plaintiff’s overall pattern of conduct was aimed at obtaining the best of all possible worlds, in the absence of anything reprehensible or abusive of the system, that is not something which should be considered a significant or even relevant change of circumstances.

39.For completeness, in February this year, both parties have submitted to this court post-hearing notes with regard to a judgment of Sir Nigel Teare dated 30 November 2021 in Apollo Ventures Co Ltd v Surinder Singh Manchanda [2021] EWHC 3210 (Comm).[5]

40.The Teare judgment was concerned with an application by the defendant[6], who was Thailand-based and domiciled[7], and who ultimately succeeded in staying the English proceedings in favour of Thailand on forum non conveniens grounds.  The application was made in May 2021 almost 5 years after the claim was originally issued in 2016 by the claimant, a Thai company, against the defendant and several others (some of them were based in England)  and after he had submitted to the English jurisdiction by serving his Defence. 

41.Mr Scott SC submits Apollo Ventures Co Ltd is a useful illustration of the Court’s jurisdiction and willingness to reconsider forum non conveniens arguments notwithstanding (a)  that time for a conventional jurisdictional challenge by the defendant expired long ago, and (b)  significant participation by the defendant in the English proceedings, in the light of significant changes of circumstances. 

42.But in this court’s view the facts of Apollo Ventures Co Ltd are so different from the present case that its usefulness even as an illustration is very limited.  First, the underlying facts of the case had no connection with England (para 3 of the Teare judgment).  Second, prior to the defendant’s application, the claimant had in 2018 commenced parallel proceedings in Thailand against him (para 6 of the Teare judgment).  Third, in January 2021, the claims against all the other defendants were struck out because the claimant had failed to provide security for costs, leaving the defendant as the sole defendant in the English proceedings (para 7 of the Teare judgment).  Fourth, the learned Judge considered that there was such a significant change of circumstances that he was prepared to consider the defendant’s case that Thailand was the clearly and distinctly more appropriate forum than England (para 14 of the Teare judgment)  and the learned Judge eventually found it was (paras 34 - 36 of the Teare judgment). 

43.Mr Sussex SC submits that Apollo Ventures Co Ltd is of no assistance to this Court in determining the present renewed application.  This court agrees.

44.To conclude, this court does not see any compelling circumstances to justify the grant of an extension of time to the Defendant or to entertain its application under the inherent jurisdiction.  Nor can this court see any significant change of circumstances to justify the Defendant re-litigating the stay application.  For these reasons, this court is not minded to entertain the Defendant’s present application. 

45.In deference to counsel’s efforts, this court will briefly deal with the submission that the present application should also be dismissed on its merits. Given the 1^st Application and the subsequent appeals had been rejected by six eminent judges at three different levels, and given this court’s view that the New Developments are not significant changes of circumstances, it seems to this court that it should respectfully adopt the conclusions of A Chan J, the Court of Appeal and the Appeal Committee. 

46.The principles governing applications for a stay on forum non conveniens grounds are not in dispute and have been restated by the Court of Final Appeal in SPH v SA (2014)  17 HKCFAR 364 at [51] as follows:

“ 51. We adopt the re-statement of the principles … in DGC v SLC (née C) [2005] 3 HKC 293, 297-298, applying Spiliada Maritime Corporation v. Cansulex Limited [1987] 1 AC 460, 477 and Louvet v. Louvet [1990] 1 HKLR 670, 674-675:

‘1. The single question to be decided is whether there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of an action i.e. in which the action may be tried more suitably for the interests of all the parties and the ends of justice?

2. In order to answer this question, the applicant for the stay has to establish that first, Hong Kong is not the natural or appropriate forum (‘appropriate’ in this context means the forum has the most real and substantial connection with the action)  and second, there is another available forum which is clearly or distinctly more appropriate than Hong Kong. Failure by the applicant to establish these two matters at this stage is fatal.

3. If the applicant is able to establish both of these two matters, then the plaintiff in the Hong Kong proceedings has to show that he will be deprived of a legitimate personal or juridical advantage if the action is tried in a forum other than Hong Kong.

4.  If the plaintiff is able to establish this, the court will have to balance the advantages of the alternative forum with the disadvantages that the plaintiff may suffer. Deprivation of one or more personal advantages will not necessarily be fatal to the applicant for the stay if he is able to establish to the court’s satisfaction that substantial justice will be done in the available appropriate forum.’”

47.In The Spiliada Maritime Corporation v Cansulex Limited [1987] AC 460, at 477C-D, Lord Goff observed that:

“ … [T]here are cases where no particular forum can be described as the natural forum for the trial of the action. Such cases are particularly likely to occur in commercial disputes, where there can be pointers to a number of different jurisdictions … or in Admiralty, in the case of collisions on the high seas. I can see no reason why the English court should not refuse to grant a stay in such a case, where jurisdiction has been founded as of right.” (emphasis added)

48.As far as Stage 1 analysis is concerned, this court agrees with A Chan J that there are no particular forum that can be described as the natural forum for the trial of this Action and that the Defendant has failed to discharge its burden of showing that the SMC was clearly or distinctly more appropriate, in light of (i)  the location of the collision in international waters, (ii)  the ready availability of documentary evidence on liability, (iii)  the location of witnesses, (iv)  the lack of commercial operation of the Defendant and the management of Crystal in Hong Kong, and (v)  the fact that Hong Kong court is well-placed and experienced in dealing with cases involving Mainland witnesses, documents in Chinese and Mainland law.  In this regard, it should perhaps be noted that the words “clearly or distinctly” suggest that the onus is not to be lightly discharged.  The burden of proof on the defendant in a stay application has been described as “a very high burden”: China International Fund Ltd v West China Cement Ltd unrep, HCA 1889 of 2019, 4 December 2020, DHCJ Burns SC at [27]-[28]; cited with approval in Patrick James Joseph O’Mara v Chin Shau Tong unrep, HCA 1253 of 2019, 18 March 2022, Ng J at [10].

49.As for the existence of the SMC proceedings, A Chan J is clearly correct in concluding that lis alibi pendens is only a relevant factor at the Stage 1 analysis and that the possibility of inconsistent findings by the SMC does not of itself render Shanghai the appropriate forum, nor would it constitute unusual hardship to the Defendant when it is being sued in its place of incorporation by the Plaintiff as of right.  As noted earlier, A Chan J’s decision on Stage 1 analysis was not faulted by the Court of Appeal.

50.As far as Stage 2 and Stage 3 analyses are concerned, Mr Sussex SC urges this court to accept and adopt the observations made by Kwan VP at [64] - [72] of her Judgment.  Essentially, the Court of Appeal held at [67] - [69] that there are binding decisions of the Court of Appeal that a higher tonnage limitation in Hong Kong is a legitimate juridical advantage at Stage 2 and the Hong Kong limit reflects international public policy and to deprive a plaintiff of that limit would be unjust to it and is capable of being a decisive factor in refusing a stay.  At [72], the Court of Appeal concluded that “it must be doubted if substantial justice can be achieved in the SMC by awarding a sum which has been significantly eroded by inflation”. 

51.This court would respectfully adopt the analyses of Kwan VP on her Stage 2 and Stage 3 observations and have nothing to add.

52.In addition, regarding legitimate juridical advantage of suing in Hong Kong, the Plaintiff had not lodged a claim against the Defendant in the SMC and is now time-barred from doing so.  Under Mainland law, the time bar in ship collision claims is accepted by the Defendant as 2 years and the limitation period for the Plaintiff’s claim against the Defendant had expired on 6 January 2020.

53.Mr Scott SC submits that the Plaintiff’s juridical disadvantage was of its own making.  In this regard, the test is whether the Plaintiff has acted reasonably in allowing time to expire in the SMC: The Pioneer Container [1994] 2 AC 324, 348-9 (Lord Goff); The Kappa Sea [2017] 1 Lloyd’s Law Rep Plus 102 at [56]-[59] (Ng J).

54.Mr Sussex SC submits and this court agrees that, in the circumstances of this case, it was reasonable for the Plaintiff to have allowed the limitation period in the Mainland to lapse.  By then, the Defendant’s challenges to the Hong Kong Court’s jurisdiction had failed twice before A Chan J and the Court of Appeal on the Stage 1, 2 and 3 analyses.  Whereas in The Kappa Sea, the action had no or no relevant connections with Hong Kong while there were numerous connections with the Yangon Court.  In the absence of a clear and plausible explanation as to why the plaintiffs in that case did not issue a protective writ in the Yangon Court, this court was not satisfied that they had acted reasonably in failing to do so.

55.A stay of the Hong Kong Action means that the Plaintiff will recover nothing from the Defendant despite its significant claim, said to be estimated at US$130 million, and notwithstanding the SMC’s ruling that Crystal was 30% to blame for the collision.  Conversely, if this court were to refuse to stay this Action, the Plaintiff now accepts that in all likelihood it will be bound by the liability apportioned by the SMC (or the appellate Court)  and may have to proceed with its quantum claim against the Defendant in Hong Kong.  The Defendant will suffer minimal duplication of effort as the quantum of the Plaintiff’s claim against the Defendant is not in issue in the SMC proceedings.  These consequences mean that the Defendant cannot establish to this court’s satisfaction that substantial justice will be done in the Mainland Court.

56.To conclude, even if this court were to entertain the present application on its merits, it would still dismiss the application.

Disposition and costs order nisi

57.For the above reasons, the Defendant’s application is dismissed with a costs order nisi in favour of the Plaintiff, to be taxed if not agreed and paid by the Defendant forthwith, certificate for 2 counsel.

Mr Charles Sussex, SC and Mr Jason Yu, instructed by Holman Fenwick Willan, for the Plaintiff

Mr John Scott, SC and Mr Edward Alder, instructed by Reed Smith Richards Butler, for the Defendant