I.T.T. Textile Manufacturing Co Ltd v. Yong Long Steamship Co Ltd

HCCL000010/1979

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Coram: Zimmern, J.

Date of Judgment: 3rd March, 1980.

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DECISION

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1. The Plaintiff, a foreign corporation, indorsed in its writ as of A6, Kaohsiung Exporting Processing Zone, Taiwan, against the Defendant another foreign corporation indorsed in the writ as of 15 Lin Hai 2nd Road, Kaohsiung Taiwan and owner of the vessel "Hai Yun". The writ was served on the Defendant's agents within the jurisdiction and by it the Plaintiff claims as against the Defendant damages for breach of contract and/or duty in and about the loading, handling, custody care and discharge of the Plaintiff's cargo aboard the vessel "Hai Yun".

2. The Defendant by leave of the Court entered a conditional appearance and applied for an order that all further proceedings be stayed on the ground that the bill of lading concerned has a foreign jurisdiction clause.

3. The facts are simple. The Defendant was the holder in Taiwan of a clean bill of lading signed on behalf of the Defendant by its Hong Kong agents dated 10th November 1978 evidencing shipment of 151 cartons of piece goods aboard the vessel "Hai Yun" from Hong Kong to Kaohsiung, Taiwan.

4. The vessel arrived in Kaohsiung on the 15th November when the piece goods were discharged into a barge. This barge berthed for landing on 21st November 1978 when 14 cartons were found torn by Lloyds' agents who then conveyed the goods in the customs' warehouse. The result was a short delivery. The Plaintiff, the holder of the bill of lading, then lodged its claim in Taiwan against the Defendant as owner of the vessel. The latter on the 27th December 1978 denied liability allegedly on the ground that "these damages were caused by unsuitable packages and according to the rule No. 113 item 2) of the Maritime of Law" (sic). The Plaintiff, no doubt having done all it was required to do under the Marine Insurance Policy claimed on the Insurers who now by subrogation and in the name of the Plaintiff seeks to recoup their loss against the Defendant.

5. The Defendant owns a fleet of container ships plying a shuttle service between Hong Kong and Taiwan. Upon threat of an action in rem against one of its vessels the Defendant gave the Plaintiff a security in the sum of $45,000 to ward off that action. So in Hong Kong the Plaintiff has a security.

6. The clauses in the bill of lading relied on by the Defendant for foreign jurisdiction read:

7. Mr. Tong for the Plaintiff firstly contends that Clause 37 is not sufficiently clear to show it is a foreign jurisdiction clause because of the words "other action". This is quite groundless. The meaning is clear and it means no court shall have jurisdiction with regard to any other action under the contract of carriage unless the carrier appeals to another jurisdiction or voluntarily submits himself thereto.

8. In the circumstances the Court has the inherent power to stay the proceedings. The onus on the Plaintiff is high. "The discretion should be exercised by granting a stay unless strong cause for not doing so is shown and the burden of proving such strong cause is on the Plaintiff. In exercising its discretion the Court should take into account all the circumstances of the particular case". (per Brandon J. The Eleftheria [1970] P @ 99). Brandon J. then sets out certain particular matters for consideration which I do not have to repeat. Counsel for the Plaintiff made submissions on all of them. The facts and issues in this dispute are simple.

9. The Plaintiff accepted delivery of the goods on 23rd November 1978 and Lloyds' Report is dated 13th December 1978. The Defendant's letter denying liability is dated 27th December 1978. There are two Taiwan companies in a dispute concerning goods landed in Taiwan. A claim is lodged there and liability is denied there. In the ordinary course of business in such a situation it would not be unreasonable to suggest, if left to themselves, the dispute would be settled by the courts in Taiwan. Here the parties are not left to themselves for the Plaintiff having been paid for the loss and damage by its insurers must lend its name to the insurers to commence action against the Defendant. They chose Hong Kong. The writ was issued out of the High Court on the 22nd November 1979 - the end of the first anniversary of the delivery of the goods in Taiwan. The Plaintiff claims they would be time barred in Taiwan for under the bill of lading action must be commenced a year from the date of delivery. The Plaintiff or its insurers had many months to consider their position and if they failed to commence proceedings there in time it is a matter of their own making as counsel for the Defendant rightly submitted. It certainly was not from the want of time.

10. There was much argument as to whether Hong Kong or Taiwan law applied to the contract of carriage. I need not give any opinion as to this. I do not think in this case there is any material difference. It is a term of the contract that the bill of lading shall have effect subject to the provision of Articles I to VIII inclusive of the Hague Rules unless otherwise provided for in the bill of lading. The same rules have been incorporated in our Carriage of Goods by Sea Ordinance. Let me repeat the reason given by the Defendant for the rejection of the claim in Taiwan: "these damages were caused by unsuitable packages and according to the rule No. 113 Item 2) of The Maritime of Law" (sic). Article IV 2(n) of our Ordinance provides "Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from insufficiency of packing". It seems to me there is no real difference between the two and what there is might well have been caused by bad translation from the Chinese version into English.

11. This brings me to the matter of evidence. The pith of the dispute is the sufficiency of the packing. Whilst the cartons were shipped from Hong Kong and I am prepared for the sake of argument to assume that they were manufactured here but the fact remains that their torn state was discovered in Taiwan and the actual survey took place there. There could be witnesses called from both places in this aspect of the case. As to the value of the nder the limitation of the carrier's liability to ?00 per package, I can see no good reason why it cannot be argued in Taiwan in the same manner as it can be argued in Hong Kong.

12. In all the circumstances of this case the dispute is far more closely connected with Taiwan than with Hong Kong and the parties have agreed to invoke only the jurisdiction of the Courts in Taipei. The fact that the Plaintiff has a security in Hong Kong for what is in fact a small claim is of little moment. In my view and so I hold the Plaintiff has not discharged its burden and there will be an order for stay of the proceedings with costs to the Defendant.

Representation:

Ronny Tong (Ince & Co.) for Plaintiff

Patrick Fung (Kwong & Lam) for Defendant