Pusan Newport Co., Ltd v. The Owners and/or Demise Charterers of the Ships or Vessels “Milano Bridge” and “Cma Cgm Musca” and “Cma Cgm Hydra”

CACV 496/2021

[2022] HKCA 749

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 496 OF 2021

(ON APPEAL FROM HCAJ NO. 31 OF 2020)

____________________

____________________

Before:  Hon G Lam and Chow JJA in Court

Dates of Written Submissions:  22 April 2022 and 6 & 11 May 2022

Date of Judgment:  26 May 2022

____________________

JUDGMENT

____________________

Hon Chow JA (giving the judgment of the Court):

1.This is the Plaintiff’s application for leave to appeal against this Court’s judgment dated 18 February 2022 (“the Judgment”) dismissing the Plaintiff’s appeal against the order of Anthony Chan J dated 11 May 2021 granting a stay of the Plaintiff’s action against the Defendants in favour of the court of South Korea on the grounds of forum non conveniens and/or lis alibi pendens.

2.The basic facts of this case and the Court’s reasons for dismissing the Plaintiff’s appeal have been set out in the Judgment, and will not be repeated here.

3.In the Plaintiff’s Notice of Motion dated 16 March 2022, a total of 7 questions, said to be questions of great general or public importance, are identified as being appropriate for decision by the Court of Final Appeal, namely:

“1. Whether, in the context of forum non conveniens, the fact that the plaintiff will be deprived of damages on a significantly higher scale can ever justify a conclusion that substantial justice will not be done in the available appropriate forum, if the connections to that alternative forum are overwhelming.

2. Whether the advantages of trial in the alternative forum can ever outweigh the disadvantage the plaintiff will suffer in that forum by the award of a sum which has been significantly eroded by inflation.

3. Whether or not the weight to be given to a juridical advantage ought to be influenced by the strength of the plaintiff’s connection to the Hong Kong forum.

4. Whether the concept of substantial justice varies with the strength of the connections to the alternative forum.

5. Whether it can ever justifiably be concluded that substantial justice will be done in an available alternative forum (in the context of a maritime claim against a shipowner or salvor) by an award of damages capped by reference to the general limits contained in Article 6 of the Convention on Limitation of Liability for Maritime Claims 1976, having regard to the fact that those general limits have, since 1976, been severely eroded by monetary inflation and debasement of the currencies comprising the Special Drawing Rights as defined by the International Monetary Fund.

6. Whether the desirability of international unification of limitation regimes is a factor which can justifiably influence the Court when determining whether or not to deprive a maritime claimant of the juridical advantage of the much higher limit of liability available in Hong Kong.

7. Whether a plaintiff who invokes the Admiralty jurisdiction in rem of the Court of First Instance (which includes jurisdiction to hear and determine any claim for damage done by a ship ‘wherever arising’), which is ‘prima face a natural and appropriate forum in which to bring the action and [is] recognised as such by international convention’, can justifiably be regarded as having no or minimal legitimate claim to the advantage which the Hong Kong Admiralty jurisdiction provides.”

4.In the Judgment, the Court accepted that a higher tonnage limitation available to the Plaintiff in this jurisdiction was a legitimate juridical advantage for the purpose of Stage 2 of Spiliada, and the critical consideration lied in the balancing exercise under Stage 3 (there being no dispute that Hong Kong was not the natural and appropriate forum, and South Korea was clearly or distinctly the more appropriate forum available to the parties).  The Court was aware of the significant difference in the tonnage limitations applicable in the 2 jurisdictions (amounting to some US$58.6 million) and accepted that was an important consideration in the balancing exercise (§41 of the Judgment).  Nevertheless, weighing the advantages of the alternative forum with the disadvantages that the Plaintiff might suffer, the Court concluded that substantial justice to the parties would done be done in the available appropriate forum.  In coming to this conclusion, the Court took into account not just the “connecting factors” relevant to Stage 1 of Spiliada but also other relevant circumstances in the case which had a bearing on the balancing exercise to be undertaken (§§42-44 and 57-61 of the Judgment).  The Judgment is the result of an exercise of discretion on the particular facts and circumstances of the case in question.

5.Question 1 does not arise from the Judgment because it was not the Court’s decision that the deprivation of a significantly higher scale of damages could never justify a conclusion that substantial justice would not be done in the available appropriate forum.

6.In respect of Question 2, it was not the argument of Mr Sussex, SC for the Plaintiff at the hearing of the appeal that a higher, or significantly higher, tonnage limitation, would be conclusive of Stage 3 against a stay.  Any such argument would be wrong as a matter of principle.  We do not consider it reasonably arguable that the advantages of trial in the alternative forum can never outweigh the disadvantage to the plaintiff of a significantly lower level of damages (in real terms) due to inflation applicable in that alternative forum.

7.Questions 3 and 4 can be taken together.  Stage 3 of Spiliada requires the court to weigh or balance (i) the advantages of the alternative forum against (ii) the disadvantage that the plaintiff may suffer in that forum with a view to deciding whether substantial justice will be done in the available appropriate forum.  In the evaluative exercise to be undertaken under Stage 3, the competing considerations naturally would interact with, and have to be weighed or balanced against, each other. Nevertheless, a final conclusion has to be reached whether substantial justice would be done to both parties in alternative forum having regard to all relevant considerations.  We do not consider either question to be a question of great general or public importance fit for determination by the Court of Final Appeal.

8.Question 5 is, in substance, the same as Question 2 which we have dealt with in §7 above.

9.In so far as Question 6 is concerned, it was no part of the argument of Mr Sussex at the hearing of the appeal that the court should refuse to impose a stay of the Hong Kong proceedings in order to seek to achieve an international unification of limitation regimes.  Mr Sussex did refer to the fact that the 1996 Protocol was the most widely accepted convention on tonnage limitation (having been adopted by 63 contracting states, representing some 69.13% of the world’s merchant fleet), but that was in the context of the argument that it would, allegedly, be contrary to international policy, and most unjust, to deprive the Plaintiff of the advantage of Hong Kong’s higher tonnage limit.  The suggested “international policy” was not accepted by the Court (see §§41 and 54-55 of the Judgment).  We do not see that it is the function of the local courts to seek to achieve an international unification of limitation regimes.  Neither do we consider it reasonably arguable that the desirability of such unification is a relevant consideration in the balancing exercise under Stage 3 of Spiliada.

10.Question 7 likewise does not arise from the Judgment, and is not reasonably arguable.  The Court accepted that invoking the jurisdiction of the High Court by an action in rem founded on the arrest of a sister ship is a procedure of special value in admiralty cases recognised by international convention, and the Plaintiff was entitled to do so in the present case (§58 of the Judgment).  The Court further accepted that the higher tonnage limitation in this jurisdiction was a legitimate juridical advantage which the Plaintiff could rely upon for the purpose of resisting a stay of the Hong Kong proceedings.  The Court did not decide that the Plaintiff had no or minimal legitimate claim to such advantage, but decided that, notwithstanding such juridical advantage, having regard to other competing considerations, substantial justice could be done in South Korea and thus the Hong Kong proceedings should be stayed.

11.In all, we do not consider any of the questions raised in the Notice of Motion to be a question which, by reason of its great general or public importance, ought to be submitted to the Court of Final Appeal for decision under s 22(1)(b) of the Hong Kong Court of Final Appeal Ordinance, Cap 484.

12.As regards the Plaintiff’s application based on the “or otherwise” limb in s 22(1)(b) of the Ordinance, it is the settled practice of this Court to defer the matter for consideration by the Appeal Committee of the Court of Final Appeal.  We do not see any good reason to depart from this practice in the present case.

13.For the above reasons, the Notice of Motion is dismissed with costs to the Defendants, which we summarily assess at HK$250,000.

Mr Charles Sussex, SC, and Mr Jason Yu instructed by Lau, Horton & Wise LLP, for the Plaintiff

Mr Clifford Smith, SC, and Mr Edward Alder, instructed by Ince & Co., for the Defendants