The World Wood (Owners of Cargo) v. The World Wood (Owners of the Ship)

HCAJ000207/1992

1992, Folio AJ 206/92
1992, Folio AJ 207/92
(Consolidated)

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

ADMIRALTY JURISDICTION

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Admiralty action in rem against : the ship or vessel "WORLD WOOD"

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Coram: Hon. Yam, J. in Chambers

Date of hearing: 1 September 1994

Date of handing down decision: 9 September 1994

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D E C I S I O N

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1. This is an application by the Defendants' summons dated 30th March 1994 to stay the consolidated action herein in favour of the Singapore Court on the ground that Singapore is the appropriate forum for the trial of the action.

The Facts

2. The facts of the case as agreed between the parties may be summarised as follows :-

(1) Consignments of goods were loaded onboard the vessel ("World Wood") at various South American ports in 1990 for carriage to Hong Kong, Bangkok, Keelung, Busan, Manila and Jakarta. The vessel was and is managed and operated from Singapore.

(2) The vessel arrived at Jakarta on about 24th September 1990 and discharged some cargo. On 8th October 1990 the vessel departed from Jakarta and bound for Bangkok. While en route on 10th October 1990 a fire was discovered onboard. The fire was located in a consignment of baled cotton stowed in No.4 hold. The fire spread to baled cotton stowed in No.3 hold. Later the vessel altered course to Singapore and the Defendant's sought salvage assistance.

(3) Assistance was rendered pursuant to a Lloyds Open Form of Salvage Contract on 11th October 1990. Some of the damaged goods were discharged, sold or disposed of at Singapore.

(4) On completion of the salvage services on 20th October 1990, the vessel continued her voyage to Bangkok and on to Hong Kong to discharge her cargo.

(5) Following arbitration proceedings in London, the amount of the Plaintiff's liability for the salvage services was determined by an Appeal Award of Mr Gerald Darling Q.C. In addition the Plaintiff's incurred costs and expenses in investigating and defending the salvors claim ("the General Losses").

(6) Consignments of the Plaintiffs' goods were not delivered or short delivered or delivered damaged as claimed by them ("the Particular Losses").

(7) Consignments onboard the vessel were destined for receivers, inter alia, resident in Hong Kong. No consignments were destined for Singapore. Cargo owners are represented by solicitors in Hong Kong who have been collecting and collating information in Hong Kong.

(8) Security was provided to the Plaintiffs under the terms of the letters of undertaking provided by the Swedish Club.

(9) In Hong Kong the vessel's limitation fund, calculated in accordance with Article 6.1(b) of Schedule 4 Merchant Shipping Act 1979 (Hong Kong) Order 1980, does not affect the Plaintiffs' claims in this action of approximately US$3,475,000. However, the Plaintiffs claims would become subject to limitation if the proper law for the proceedings is Singapore law and that would be about HK$1 million less.

(10) On 24th September 1991 Singapore Admiralty Writs Nos.764-770 inclusive were issued by cargo interests covering 11 of the 100 Bills of Lading involved in these proceedings. Any claims for cargo loss and damage arising under the remaining 89 B's/L will now be time barred in Singapore.

(11) The Singapore Admiralty Writs have not been served and will expire on 23rd September 1994 at which time the claims covered will become time barred. These proceedings (issued on 10th August 1992) had been served on Richards Butler (1992 AJ-206 on 5th August 1993) and the vessel (1992 AJ-207 on 17th November 1993) and full security had been provided by the owners P & I Club in relation to the claims the subject matter of these proceedings, no further steps were taken to serve the Singapore Admiralty Writs. On 17th February 1994 the vessel called at Singapore and it will not be possible to renew the Singapore Writs.

The Law

3. The principles relating to a grant of stay on the grounds of forum non conveniens are authoritatively stated in The "Spiliada" [1987]1 AC 460. The principles are stated by Lord Goff at pages 476-8 which can be summarised as follows :-

(a) "The basic principle is that a stay will only be granted on the ground of forum non-conveniens where the Court is satisfied that there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of the action, i.e. in which the case may be tried more suitably for the interest of all the parties and the ends of justice."

(b) The burden of proof rests on the Defendant to persuade the Court to exercise its discretion to grant a stay but "if the Court is satisfied that there is another available forum which is prima facie the appropriate forum for the trial of the action, the burden will then shift to the Plaintiff to show that there are special circumstances by reason of which justice requires that the trial should nevertheless take place in" Hong Kong.

(c) It is pertinent to ask whether the Plaintiff has founded jurisdiction as of right in the accordance with the law of Hong Kong, but "if the connection of the Defendant with [the Hong Kong] forum is a fragile one (for example, if he is served with proceeding during a short visit to this country), it should be all the easier for him to prove that there is another clearly more appropriate forum for the trial overseas".

(d) The Court will look first to see what factors there are which point in the direction of another forum. The Court is looking for the "natural forum" as being "that with which the action had the most real and substantial connection"; so it is for connecting factors in this sense that the Court must first look.

(e) If no other available forum is clearly more appropriate ordinarily the stay will be refused.

(f) If there is another prima facie clearly more appropriate forum for the trial of the action, the Court will ordinarily grant a stay unless justice requires a stay should not be granted. The burden of showing this shifts to the Plaintiff.

Is Singapore the "Natural Forum"

4. The Defendants submitted that Singapore is the "natural forum" for the trial of the action. They submitted that there are a number of factors in this case connecting with Singapore, namely :-

(1) Singapore was the port of refuge and the vessel remained at Singapore during the entire salvage operation.

(2) The salvage operation was carried out by two tugs based in Singapore.

(3) The damaged cargo was primarily discharged at Singapore and sold or disposed of at Singapore.

(4) General average was adjusted in Singapore. The acts assessed as general average mostly took place in Singapore.

(5) The majority of expenses covered by the adjustment were incurred in Singapore (and were quantified in Singapore dollars).

(6) The vessel was and is managed and operated from Singapore.

(7) The documents required on discovery will come from Singapore, or be collected via Singapore.

(8) The vessel was attended at Singapore by representatives of all concern parties. Most individual who attended were and are based in Singapore. That is, most likely witnesses are based in Singapore.

(9) Additionally several meetings took place in Singapore between representatives of the various interested parties, for obvious logistical reasons of convenience.

(10) Several Plaintiffs commenced proceedings in Singapore and further took steps to secure their claims in Singapore. The letters of undertaking obtained are effective only in respect of proceedings commenced in Singapore.

5. However, the Plaintiffs believed that the circumstances surrounding the salvage of the vessel and her cargo will not be in issue. All matters relating to the salvage operation have now been fully investigated, reported upon, arbitrated and an arbitration decision reached and both the Plaintiffs and the Defendants were parties in the arbitration proceedings. The salvage award and appeal award have now been issued. There are no further investigations to be carried out in Singapore. Accordingly, the Plaintiffs submitted that the location of the vessel at the time of the salvage operation ceases to be relevant insofar as gathering evidence for the purpose of these present proceedings is concerned.

6. I agree with the Plaintiffs' submission. Singapore is not the "natural forum" once the salvage operation is not in issue.

Is Singapore the clearly and distinctly more appropriate Forum?

7. It depends on what are the issues to be tried in this case. The Plaintiffs listed 10 issues which they believed are likely to be in dispute in this case, namely :-

A. Title to sue.

B. The cause of the fire.

C. Whether the spread of the fire (and losses flowing therefrom) was caused or exacerbated by the unseaworthiness of the vessel.

D. Whether the Defendants exercised due diligence to make the vessel seaworthy.

E. Whether the fire occurred with the actual fault or privity of the Defendants.

F. Whether the Plaintiffs have paid the salvors and, if so, when.

G. Whether the costs and expenses incurred by the Plaintiffs in respect of the salvage claim (i) were reasonable and (ii) have been paid (and, if so, when).

H. The Defendants' liability in respect of the Particular Losses.

I. The quantum of the Plaintiffs' claim in respect of the Particular Losses.

8. In respect of issue A (Title to sue) it is unlikely to be in dispute. In any event, some of the receivers are resident in Hong Kong and elsewhere but none of them is in Singapore. The Plaintiffs' solicitors have been collecting and collating information in this respect and the relevant information and knowledge are in Hong Kong.

9. In respect of issue B (Cause of the fire), C (Unseaworthiness and causation), and D & E (Due diligence and actual fault), they would involve evidence as to events during discharge at Jakarta and up the outbreak of the fire before the vessel changed course to Singapore. Evidence from the vessel's crew is also necessary. There is however no evidence that the crew are Singaporean.

10. The Plaintiffs alleged that vessel's holds were not fitted with a fixed fire detection system, a fixed fire-fighting system and a fixed fire smothering system. Once the vessel's plans and class documentation have been produced it will be a matter of expert evidence as to whether such systems ought to have been fitted. These documents are unlikely to be voluminous and can easily be dispatched to Hong Kong. They will most probably be agreed documents.

11. Further the Plaintiffs alleged the hatch covers were defective. This would involve evidence of condition of these covers at the start of the voyage.

12. In respect of issues F and G (Payment of Salvage and costs and expenses incurred by the Plaintiffs) these would involve 2 questions, namely : (1) when the Plaintiffs paid the salvors and (2) the reasonableness of such costs and expenses incurred. The information has been gathered by the Plaintiffs' solicitors and the evidence is in Hong Kong.

13. In respect of issues H and I concerning the Plaintiffs' particular losses, some of them are consequent upon the fire and the same considerations as aforesaid could be said. The others were shortlanded or damaged other than by fire. The Defence will be that (i) they were in fact not loaded onboard the vessel and (ii) they were damaged at Jakarta. This does not have any connection with Singapore. Rather the connection with Hong Kong is more eminent as some of the relevant Plaintiffs are in Hong Kong.

14. After a survey of the likely issues to be tried I agree with the Plaintiffs that most of the issues have closer connection with Hong Kong than Singapore with parties and businesses in Hong Kong, e.g. the receivers of the goods. In some other cases, experts' evidence is required and it does not matter where the trial of the action actually took place. There is no evidence that the experts or most of them are Singaporean. In any event, in the case of The Spiliada, Staughton J. was quoted to have said at p.469 that :-

"But, as I then said, experts can travel, or be replaced by other experts."

15. In this case, the Plaintiffs have founded jurisdiction in Hong Kong as of right. I agree with the submissions of Mr Griffiths Q.C., counsel for the Plaintiffs, that from all the circumstances of the case as aforesaid Singapore is not clearly or distinctly the more appropriate forum than Hong Kong. The factors relevant to the potential issues in dispute point rather in the direction of Hong Kong. These issues have the most real and substantial connection with Hong Kong where many of the Plaintiffs are situated and preparations for the claim have been made. Any convenience on the part of the Defendants in having their proceedings conducted in Singapore is far outweighed by the inconvenience and expense that would be caused to the Plaintiffs, in having to go to Singapore with documents and witnesses and there restart proceedings and legal preparations. Accordingly I would not accede to the request of the Defendants to stay these proceedings.

Treatment of "a legitimate personal or juridical advantage"

16. Having decided that in my view Singapore is not clearly and distinctly the more appropriate forum, that should be the end of the matter, since point (f) of Lord Goff in The Spiliada concerning whether there are circumstances by reason of which justice requires that they should nevertheless not be granted would only arise when the court concludes that there is some other available forum which prima facie is clearly more appropriate for the trial of the action. However, in deference to the submissions made to me in this respect I shall endeavour to say something on this issue.

17. The Plaintiffs pointed out that the Singapore Admiralty Writs No.764-770 cover a total of 11 Bills of Lading. There are 100 Bills of Lading involved in these proceedings. Their Singaporean solicitors, one Drew & Napier are not aware of any other proceedings commenced in Singapore in relation to the Bills of Lading, the subject matter of this action. Drew & Napier advised that any claims for cargo loss and damage arising under the remaining 89 Bills of Lading will be time-barred if now brought in Singapore.

18. Further, the vessel called in Singapore on or about 17th February 1994. No steps were taken to serve the above-mentioned writs on the vessel in Singapore. The Singapore Admiralty Writs will expire on 23rd September 1994 and it will not be possible to renew them because of the vessel's call in Singapore in February during the currency of the writs. The claims covered by the Singapore Admiralty Writs will therefore become time-barred at that stage.

19. Further substantial injustice can be done in Singapore because there is a limitation of liability applicable there (which is about HK$1 million less), which would not affect the claims in Hong Kong. In Hong Kong were the Defendants held liable, they would be answerable for the actual loss caused. Furthermore, only a limited number of the cargo interests have obtained security for their claims in Singapore.

20. In respect of the treatment of "a legitimate personal or juridical advantage" Lord Goff in The Spiliada said at p.483 as follows :-

"Again, take the example of cases concerned with time bars. Let me consider how the principle of forum non conveniens should be applied in a case in which the plaintiff has started proceedings in England where his claim was not time barred, but there is some other jurisdiction which, in the opinion of the court, is clearly more appropriate for the trial of the action, but where the plaintiff has not commenced proceedings and where his claim is now time barred. Now, to take some extreme examples, suppose that the plaintiff allowed the limitation period to elapse in the appropriate jurisdiction, and came here simply because he wanted to take advantage of a more generous time bar applicable in this country; or suppose that it was obvious that the plaintiff should have commenced proceedings in the appropriate jurisdiction, and yet he did not trouble to issue a protective writ there; in cases such as these, I cannot see that the court should hesitate to stay the proceedings in this country, even though the effect would be that the plaintiff's claim would inevitably be defeated by a plea of the time bar in the appropriate jurisdiction. Indeed a strong theoretical argument can be advanced for the proposition that, if there is another clearly more appropriate forum for the trial of the action, a stay should generally be granted even though the plaintiff's action would be time barred there. But, in my opinion, this is a case where practical justice should be done. And practical justice demands that, if the court considers that the plaintiff acted reasonably in commencing proceedings in this country, and that, although it appears that (putting on one side the time bar point) the appropriate forum for the trial of the action is elsewhere than England, the plaintiff did not act unreasonably in failing to commence proceedings (for example, by issuing a protective writ) in that jurisdiction within the limitation period applicable there, it would not, I think, be just to deprive the plaintiff of the benefit of having started proceedings within the limitation period applicable in this country. This approach is consistent with that of Sheen J. in The Blue Wave [1982]1 Lloyd's Rep.151. It is not to be forgotten that, by making its jurisdiction available to the plaintiff - even the discretionary jurisdiction under R.S.C., Ord.11 - the courts of this country have provided the plaintiff with an opportunity to start proceedings here; accordingly, if justice demands, the court should not deprive the plaintiff of the benefit of having compiled with the time bar in this country."

21. In my view, the Plaintiffs did not act unreasonably in pursuing proceedings in Hong Kong and they had successfully served the writs herein and obtained security for the bulk of the claims. It is therefore not unreasonable for them to allow the writ to lapse in Singapore. This is particularly so when the vessel called at Singapore in February 1994 there was no application to stay the proceedings in Hong Kong. The application before me was only made in March after the vessel left Singapore.

22. As a last resort, the Defendants produced a letter dated and sent on the day of the hearing before me on 1st September from one Ang & Partners. The letter said these:-

"We refer to your enquiry on the following question:-

'In a situation where cargo claimants have commenced action against a carrier in Hong Kong within the applicable time bar period of 1 year, would such cargo claimants be faced with a time bar defence if they now are to come to Singapore and commence an action in Singapore against the same carrier, after the said one year period.'

We wish to advise that the Singapore Courts generally in commercial matters and shipping matters have regard to the judgments of the English Courts which judgment are of persuasive authority. Many of our local decisions on commercial and shipping matters have followed and/or applied legal principles decided in English cases.

In respect of the your question, we are of the view that the Singapore Courts are likely to follow the principle decided in the case of the Nordglimt [1988]1 QB 183 which held that where a cargo claimant had preserved his claim against the carrier in a competent jurisdiction, he should not be faced with a time bar defence when he brings another action against the same carrier in another jurisdiction."

23. In other words, the opinion of Ang & Partners is different from Drew & Napier.

24. However, Mr Griffiths for the Plaintiffs pointed out that in the case of Nordglimt, Hobhouse J.'s decision is contrary to the decision of Roskill J. in Compania Colombiana de Seguros v. Pacific Steam Navigation Co. [1965]1 QB101. The decision of Roskill J. was summarised in Scrutton on CharterParties, 19th Ed. (1984), p.441 as follows :-

"The suit must be brought in the jurisdiction in which the dispute is ultimately decided. Thus if proceedings are not instituted in time in that jurisdiction the claim is barred, notwithstanding the suit was brought in another jurisdiction within a year after discharge."

It has been said by Sheen J. in the case of The "Blue Wave" [1982]1 Lloyd's Rep 151 at p.155 that :-

" I turn now to what I regard as the crucial point on this application. It revolves around the question whether, when this Court is considering how to exercise its discretion on an application for a stay of proceedings, it should have in mind the prejudice to the plaintiffs of having to sue in a foreign Court in which their claim will be, or may be, time barred." (emphasis supplied)

25. I respectfully agree with the decision of Sheen J. that the prejudice is not only that the claim will be barred but in addition it may be barred.

26. It is therefore not necessary for me to decide whether the claim would actually be barred in Singapore. In any event, it is not appropriate for me to decide here. Suffice to say that the action may be barred and the quantum will be limited. The Plaintiffs would therefore suffer some juridical disadvantage and prejudice.

27. Accordingly I find that even if Singapore is clearly and distinctly the more appropriate forum, the prejudice as stated by the Plaintiffs would outweigh the exercise of my discretion to stay the present proceedings.

Conclusion

28. In the end, I find that Singapore is neither the "natural forum" nor clearly and distinctly the more appropriate forum. In any event, the prejudice of certain limitation on liability and the time-bar in Singapore would prevent me from exercising my discretion to grant a stay. Accordingly, the Defendants' application for a stay of the present proceedings is dismissed with the usual Order Nisi on costs for the Plaintiffs in any event.

Representation:

Mr John Griffiths, Q.C. & Miss Liza Jane Cruden, inst'd by M/s Clyde & Co., for Plaintiffs

Mr Russell Coleman, inst'd by M/s Richards Butler, for Defendants