The Owners of the Ship "Kapitan Shvetsov" v. The Owners and/or Demise Charterers of the Ship "Nanta Bhum"
Read the full judgment text of on BabelCite. was delivered on 21 February 1997.
1. Late at night on 16 January 1996 two ships collided in the dredged channel of the Chao Phraya River in Thailand. One was the "Kapitan Shvetsov", Russian owned, outward-bound from Bangkok, going down-stream. The other was the "Nanta Bhum", Singaporean owned, going up-stream towards Bangkok.
Cited by 22 cases
Headnote Inherent jurisdiction of the court - Stay of Hong Kong proceedings - Lis alibi pendens - Whether Hong Kong Admiralty action in rem should be stayed in favour of Singapore where Singapore was not the "natural forum" and the limitation of liability in Singapore under the 1957 Brussels Convention was substantially less than the limitation in Hong Kong under the more modern 1976 Convention. Held (Court of Appeal, by a majority):
Observations on the process of adjudicating the defendants' motion for stay: It was no part of the judge's function to try the issue of liability on affidavit: That was a matter for trial. Appeal allowed. Motion to stay the action dismissed.
----------------- Coram: Hon. Litton V-P, Liu JA & Cheung J in court Dates of Hearing: 28 & 29 January. 1997. Date of Handing down Judgment: 21 February 1997 ----------------- JUDGMENT ----------------- Litton V-P: The casualty 1. Late at night on 16 January 1996 two ships collided in the dredged channel of the Chao Phraya River in Thailand. One was the "Kapitan Shvetsov", Russian owned, outward-bound from Bangkok, going down-stream. The other was the "Nanta Bhum", Singaporean owned, going up-stream towards Bangkok. 2. The "Kapitan Shvetsov", a tanker of 4268 gross tons, carrying a cargo of molasses, was very extensively damaged in the collision and had to be beached. She became a constructive total loss. 3. The "Nanta Bhum", a container vessel of 11,079 gross tons, then engaged on a weekly container-feeder service between Bangkok and Singapore, was also damaged in the collision, but not nearly as extensively as the "Kapitan Shvetsov". She was able to proceed to Singapore under her own steam. Temporary repairs were effected in Singapore and she was soon able to resume her weekly feeder service to Bangkok. 4. At the time of the collision both vessels had local Thai pilots on board. The "Kapitan Shvetsov" was holed and a quantity of molasses leaked from her hull: The Singapore port authorities had to incur expense in the clean-up operation. Further, two Thai tugs, each towing three or four barges laden with cargo, were also involved in the incident. Some of the barges and their cargo were damaged. 5. The above, in essence, are the undisputed facts concerning the incident which gave rise to legal proceedings. The follow-up 6. Soon, a whole host of professional people from different parts of the world became involved in the casualty: Lawyers, surveyors, assessors, insurers and their agents, to name a few. 7. Shortly after the collision lawyers from Singapore on both sides arrived at the scene and interviewed the Thai witnesses. Salvors from Singapore were hired; likewise, an agency company from Bangkok was engaged to provide services to the Russian-owners to deal with matters like crew accommodation and repatriation. Eventually, the salvageable molasses on board the "Kapitan Shvetsov" was transferred to a sister-ship owned and operated by the Russian owners. The Russian ship was eventually sold for scrap, with the sale handled from Singapore. Civil liability arising from the incident 8. As can be seen from the brief recital of facts above, a host of civil liabilities might well have been incurred by the owners of the two vessels as a result of the collision: To third parties such as the Singapore port authorities for the clean-up operation, to cargo interests on board the "Kapitan Shvetsov", to third parties such as the Thai barges and the owners of cargo on those barges and, of course, to each other. 9. Clearly, in respect of the resolution of disputes concerning such liabilities, the "natural forum" is the Thai court: that is the forum with which any action brought to determine such liabilities has clearly "the most real and substantial connection" (to use Lord Keith's expression in the Abidin Daver [1984] 1 AC 398 at 415-F). Thailand is the country where the incident took place, where the liability to compensate others for the injury occurred. Many of the witnesses are Thais: The two pilots, the masters of the two tugs and their crews and almost all the crew members of the "Nanta Bhum". Apart from the eye-witnesses who would be testifying in their native language if the proceedings were in Thailand - a factor strongly favouring Thailand as the natural forum - there is this additional fact: There was, apparently, some radio communication between the bridge of the "Kapitan Shvetsov" and the tug going down-stream and the contents of that conversation might be relevant to the collision. The parties' choice of forum 10. Here, neither of the ship-owners (or their insurers) wanted the proceedings brought in Bangkok. The Singapore owners (whose directors and shareholders are not Singaporeans but Thais) wanted the proceedings in Singapore. The Russian owners - and the owners of the cargo carried on board the Russian ship - wanted the proceedings in Hong Kong. 11. Singapore and Hong Kong have similar admiralty jurisdictions in that, for claims for damage done by a ship, jurisdiction can be conferred on the local court by the arrest of a "sister ship": in Hong Kong, this springs from s12B(4)(ii) of the Supreme Court Ordinance, Cap 4. As both owners operated vessels in South East Asian waters and had agents in both Singapore and Hong Kong, it was purely a matter of time before proceedings could be instituted in their chosen forum. As it happened, the Singapore owners were able to act first: but only by a few days: by the arrest in Singapore of the "Kamensk-Uralskiy". On 23 January 1996 an action in rem was instituted by the Singapore owners in Singapore seeking damages and an indemnity against third-party claims from the Russian owners. In Hong Kong, the Russian owners issued their writ on 29 January 1996, pursuant to the arrest of the sister ship "Deja Bhum", seeking identical relief from the Singapore owners. 12. Pausing at this point, and viewing the position objectively, what does one see? Each party was seeking to establish tortious liability against the other and, as Lord Justice Robert Goff said in The "Albaforth" [1984] 2 LI LR 91 at 96:
13. For an illustration of this principle see The "Wellamo" [1980]2 LI LR 229 where two ships navigated by pilots speaking Swedish collided off Stockholm: Sheen J held that Sweden was the natural forum. 14. The natural forum here was Bangkok, but, as mentioned earlier, neither party wanted to go there. Each party preferred its own chosen forum and was exercising an undoubted right of access to that forum: a right which the court will not lightly disturb: see, for example, the observations of Lord Goff in Spiliada Maritime Corporation v. Cansulex Limited [1987] 1 AC 460 at 476G citing authorities to this effect:
15. For an illustration of this approach see The "Po" [1990]1 LI LR 418 at 423, where Sheen J said:
16. But as the plaintiffs have founded jurisdiction as of right -
17. And, as Lord Goff added (Spiliada 477G):
18. Obviously, from the Singapore owners' point of view, Singapore is the more convenient forum as compared with Hong Kong. But the question at issue is not one of "mere practical convenience", it is whether there is another available forum which is clearly or distinctly more appropriate than the one chosen by the respective parties. 19. It must not be forgotten that the jurisdiction to stay proceedings springs from the inherent jurisdiction of the court: The doctrine of forum conveniens, which became an integral part of English law since the decision of the House of Lords in The Atlantic Star [1974] AC 436, is merely an enlargement of the principle that an action will be stayed if it is vexatious or oppressive or an abuse of the process of the court: see Brandon J's observations to this effect in The "Tillie Lykes" [1977]1 LI LR 124 at 126. Plainly, this inherent jurisdiction will not be lightly exercised. In The Atlantic Star itself Lord Wilberforce, adverting to the long history and wide international reputation of the Admiralty court in England, said at p469F:
Steps taken to assert the parties' rights 20. On 25 March 1996 the Russian owners made an application in the Singapore High Court to stay the Singapore action in favour of Hong Kong as the forum conveniens. About a week later, the Singapore owners reciprocated in Hong Kong: They took out a motion on 3 April 1996 to stay the Hong Kong action in favour of Singapore. 21. As it happened, the Singapore court marched to a quicker pace. The Russian owners' application to stay the Singapore action was heard on 12 April 1996, long before the Singapore owners' application in Hong Kong came on for hearing. The Russian owners' application failed. No reasons were given and no formal order has been drawn up, so it is not possible to determine the reasons for the Singapore court's decision. Directions were then made in Singapore for the Singapore owners' claim to proceed. 22. In the meanwhile the Singapore owners' motion here to stay the action was listed for hearing and it came eventually before Waung J who heard it on three consecutive days - 4th, 5th and 6th September 1996. By that time the Singapore action was at a relatively advanced stage. The Russian owners defended, of course, that action, placing the whole blame for the casualty on the "Nanta Bhum". But, consistent with their stance that the respective claims should be tried in Hong Kong, they did not counter-claim. Waung J's judgment 23. By his judgment dated 17 October 1996 the judge allowed the Singapore owners' application. The formal order reads:
24. The judgment itself is extremely long and it would not be fruitful to attempt to summarise it. Following the guidelines given by this court in The Adhiguna Meranti [1987] HKLR 904 the judge asked himself three questions:
The stage (I) test 25. The judge seemed at one point to have accepted that Bangkok was the "most natural forum" for the resolution of the dispute, but he said (p8-S of his judgment):
26. By "the actions of the parties" the judge meant the sending of lawyers, surveyors and salvors from Singapore after the collision, and the institution of proceedings in Singapore. 27. It is difficult to see how if Bangkok was the natural forum it could be "displaced" by such actions, as the judge thought. The insurers of the ships are respectively the Swedish Club for the "Nanta Bhum" and the United Kingdom P&I Club for the "Kapitan Shvetsov", and lawyers could well have been despatched to Thailand from London or Hong Kong. As it happened, they came from Singapore: but they then rendered their professional services in Thailand. The salvage operators were despatched from Singapore because they were based there. 28. The other factor which, as the judge thought, "displaced" Bangkok as "the most natural forum" was the impending trial of the action in Singapore. The proceedings were at a relatively advanced stage. By the time the judge heard the Singapore owners' application here, pleadings had closed in Singapore and the Singapore owners had filed their list of documents. The judge considered it a "positive disaster" and "the nightmares of nightmares" that there should be parallel proceedings in Singapore and Hong Kong (p17J-M of his judgment). 29. With respect to the judge, his concerns are overstated. The courts have never viewed the possibility of parallel proceedings in that light. As earlier mentioned, Lord Wilberforce, in The Atlantic Star at p469F, referred to the instances, starting with The Janera [1928] P.55, where the existence of parallel proceedings was no ground for staying the English action in rem under the court's inherent jurisdiction. As Sheen J said in The "Vishva Abha" [1990]2 LI LR 312 at 315:
30. In The "Tillie Lykes" [1977] 1 Lloyd's R 124, arising out of a collision between two ships in the Pacific west of Central America, there were parallel proceedings in the United States District Court for the Canal Zone and in England. The defendant in the English proceedings issued a summons to stay the action on the grounds that (i) it was inherently undesirable to have parallel proceedings in respect of the same collision; (ii) it was open to the plaintiffs in the English proceedings to counterclaim in the United States action and (iii) the United States court was the more convenient forum. The application was dismissed. Brandon J held that the effect of the decision in The "Atlantic Star" was that the mere existence of a multiplicity of proceedings was not to be taken into account as a disadvantage to the defendant; a clear case of oppression or vexation had to be made out to justify a stay; and although those words had to be given a wide meaning no case of oppression or vexation had been made out. 31. What The "Tillie Lykes" establishes, once again, is that a party's right of access to the court should not be lightly displaced. 32. As regards the practicalities of parallel proceedings in the present case, the situation appears to be this: the Singapore trial, fixed for April this year, will determine liability as between the parties. The Singapore owners may or may not proceed to an assessment of damages: depending, obviously, on the court's determination of the degree of blame. 33. In the meanwhile, the determination of liability by the Singapore court would in effect resolve the same issue in the Hong Kong proceedings as well. The Singapore judgment will clearly give rise to an issue estoppel in the Hong Kong proceedings: see Carl Zeiss Stiftung v. Ravner and Keeler Limited (No. 2) [1967]1 AC 853 at 909. 34. In terms of convenience for the Thai witnesses, it makes little practical difference whether they fly to Singapore or Hong Kong to testify. 35. What it boils down to is this. Assuming there be parallel proceedings, then (i) the judgment of the Singapore court will determine the issue of liability in both jurisdictions; (ii) if there is an apportionment of blame, then each party will proceed to establish the quantum of damages and obtain judgment in the respective jurisdictions for the full amount, without any set-off; (iii) they will then look to the fund put up respectively by the Swedish Club and the P&I club for satisfaction of their judgments. 36. There will, obviously, be a certain amount of duplication of effort: but the overlap may not be great because the respective damages claims are quite distinct. It is likely, for instance, that there will be some dispute concerning the quantum of the Russian ship's salvage claim in the Hong Kong proceedings, but this will obviously play no part in the Singapore proceedings. It is difficult to see why such an outcome should be the "nightmares of nightmares" as envisaged by the judge. 37. The judge was also heavily influenced by the following facts in favour of Singapore as the natural forum: (i) the "Nanta Bhum" flies the Singapore flag; (ii) the owner is a Singapore company; (iii) the "Nanta Bhum" is managed by a Singapore company; (iv) the operation of the ship is controlled by another Singapore company; (v) the ship maintains a regular feeder service between Singapore and Bangkok. 38. But, undoubtedly, similar facts will apply regarding the Russian ship vis-a-vis its port of Nakhodka. This does not make Nakhodka the natural forum. 39. What is stated above is probably sufficient to dispose of the appeal in favour of the Russian owners. The convenience of Singapore as a forum to the Singapore owners is, objectively viewed, simply not enough to displace the Russian owners' right of access to the Hong Kong court. 40. But, when one moves to consider stage (II) in the Adhiguna Meranti test, the scales tip even more heavily in favour of the Russian owners. Stage (II) Test 41. As mentioned earlier, the "Kapitan Shvetsov" was damaged far more extensively than the "Nanta Bhum". On the material before the court, the Russian owners' claim amounts to approximately US$2.6 million. Additionally, there is the claim by the "Kapitan Shvetsov" cargo interests amounting to US$494,000. The claim by the "Nanta Bhum" amounts to US$552,000. Assuming, for instance, that responsibility for the collision were apportioned 50-50, the net effect after set-off would be that the Singapore owners owe the owners of the "Kapitan Shvetsov" and the cargo owners a total of US$1,271,000. And this is where the question of "juridical advantage" in stage (II) of the Adhiguna Meranti test comes in. 42. It is common ground that the Convention Relation to the Limitation of the Liability of Owners of Sea-Going Ships (Brussels 1957) applies in Singapore. This severely limits the liability of the Singapore owners in relation to claims by the Russian owners and cargo owners against the "Nanta Bhum". The limit of liability under the 1957 Convention relates to the tonnage of the "Nanta Bhum" and this works out to the sum of US$933,000. Whatever the amount of damages which the courts might ultimately award to the Russian owners and the cargo owners, they can only look to the fund of $933,000 in Singapore to be shared amongst themselves rateably in satisfaction of their claims if those claims were prosecuted in Singapore. 43. The same limitation of liability prevailed in Hong Kong until 1993. However, pursuant to the Merchant Shipping (Limitation of Ship Owners' Liability) Ordinance of that year, Hong Kong has adopted the 1976 Convention which has a much higher ceiling of liability: higher than the claims of the Russian owners and cargo owners combined. 44. The practical effect of the difference in limitations in the two jurisdictions is this: If the Russian owners were held ultimately to be as much as 60% responsible for the collision, and their claim for damages were accordingly reduced, then after set-off they and the cargo owners would be able to fully satisfy their claims out of the Singapore limitation fund. Anything less, they would suffer financially; and if the "Nanta Bhum" were ultimately held 100% to blame for the collision then the shortfall to the Russian owners would exceed US$1.5m. 45. On any view of the matter, this is a considerable juridical disadvantage to the Russian owners. It flows purely from the fact that, as a result of the collision, the Russian ship was much more severely damaged than the Singapore ship. 46. The judge, however, concluded that the Russian owners failed the stage (II) test in Adhiguna Meranti for two reasons.
47. The judge appears to have accepted counsel's submission that the evidence from the Russian owners concerning the circumstances of the collision was unsatisfactory. It was based upon hearsay. 48. The judge erred in this regard. It was no part of his function to try the issue of liability upon affidavit and it would have been most undesirable had he attempted to do so. That is a matter for trial. All that the parties can properly do at the interlocutory stage is to assert their respective claims: which is what the Russian owners did, through their solicitors. They cannot be criticised in this regard. 49. The juridical disadvantage to the Russian owners lies in this simple fact: because their claim alone is over five times higher than that of the Singapore owners (and, coupled with the cargo owners' claims, is over six times) the Singapore limitation of liability was very likely to bite deeper for them than for the Singapore owners. 50. The judge in conclusion said this:
51. Leaving aside the judge's comment on the quality of the evidence - which was unwarranted - this conclusion should have led him logically to find that the Russian owners would suffer a considerable disadvantage if forced to prosecute their claim in Singapore. 52. As to (2) above, the judge thought it significant that under the 1957 Convention the limitation of liability would only apply if the Singapore owners were able to show that the collision occurred without "actual fault or privity" on the part of their board of directors or shareholders. Under the 1976 Convention the limitation can only be broken by proof of "personal act or omissions committed with intent to cause .... loss, or recklessly and with knowledge at such loss would probably result". 53. Whilst this is a consideration, it does not weigh much in the scales. There is no material before the court to show that the owners were personally involved in anyway. The judge never suggested that this alone was sufficient to tip the scales against the Russian owners. In this regard he was plainly correct. Conclusion 54. The position boils down to this. The Russian owners have properly invoked the jurisdiction of the Hong Kong court for the adjudication of their claim. They have a right to have their claim determined by the Hong Kong court. In principle, this right cannot be lightly disturbed. The Singapore owners have not brought proceedings in a forum which is natural to the action; that is, the forum with which the action has the most real and substantial connection. Additionally, there is a considerable juridical disadvantage to the Russian owners if they were forced to prosecute their claim in Singapore; the interests of both parties and the ends of justice do not demand that they be driven from their chosen forum. 55. Once this point is reached, the conclusion is inevitable that the Singapore owners' motion to stay is ill-founded and should have been dismissed. 56. I would allow this appeal, discharge the judge's order and dismiss the Singapore owners' application to stay the Hong Kong proceedings. 57. I would also make an order nisi that the Singapore owners should pay the costs here and below. Liu JA: 58. The material facts are fully rehearsed by the Vice-President. I content myself with the following resume: On 16 January 1996, a Russian ship and a Singaporean ship collided in a narrow dredged channel in the Chao Phraya River off Bangkok. Negotiation had been conducted on the forum for resolving the claims and cross claims. On behalf of the appellants (the Russian shipowners), London or Hong Kong was offered. Six days after the collision, the respondents (the Singaporean shipowners) indicated their preference for the Singapore court, with an explanation that Singapore exercised like Admiralty jurisdiction and was closest to the scene, vessels and owners. Eight days after the collision, the Singaporean shipowners commenced an Admiralty action in rem against the Russian Shipowners in the Singapore High Court. The Russian shipowners did not counterclaim in the Singapore action for damage to and eventual loss of their ship allegedly caused by the negligent navigation of the Singaporean ship, but almost immediately following i.e. 13 days after collision, they instituted an Admiralty action in rem in Hong Kong for their damages. The Russian shipowners also applied for a stay of the Singaporean action, but their application was not granted and there was no appeal. The Singaporean shipowners applied to and successfully obtained from Waung, J. a stay of the Russian shipowners' Hong Kong action. From that order of stay, the Russian shipowners appealed. The Singaporean action is expected to be tried in April 1997. The Hong Kong action was stayed on 17 October 1996. Consequently, the Singaporean shipowners had not filed their Preliminary Act in Hong Kong. The owners of the cargo in the Russian ship have sued the Singaporean shipowners in Hong Kong. 59. Under the Convention on Limitation of Liability for Maritime Claims, 1976 (the 1976 Convention), the Russian shipowners would have enjoyed in Hong Kong a higher claim limit in excess of US$3 m. Singapore adhered to the International Convention relating to the Limitation of the Liability of Owners of Sea-going Ships, 1957 (the 1957 Convention) which set a lower liability limit of US$933,000. In this appeal, there would seem to be cogent evidence from the Russian shipowners of a "reasonably arguable best case" of equal blame. See The "Moscanthy" [1971] 1 LL.L.R. 37 at p. 44, per Brandon, J. On that basis, the claims of the Russian shipowners and the cargo owners of their ship would reach US$1,271,000. The ceiling of the 1957 Convention was US$933,000. The shortfall would be US$338,000. The 1957 Convention ceiling might to-day be more readily breached if only the Singaporean shipowners could be shown to have been willfully at fault e.g. a defective gear, failure to notify the master of a previously uncharted rock, insufficient crew training in using radar etc. Evidently, a total avoidance of the low 1957 Convention liability limit would be infinitely more beneficial than a mere given opportunity to seek to disapply it. Moreover, at the hearing before Waung, J. no mention was made of any likely breaking of the 1957 Convention limit. The collision occurred in Bangkok. Under the Thai law, liability for the damage was unlimited. 60. Witnesses on board the nearby tugs would have to come from Bangkok. The local pilots of both ships were Thai. The crew of the Singaporean ship were also Thai. Expenses were incurred in cleaning up the polluted Thai river. The Russian ship was beached in Bangkok. It was refloated and salvaged, but ultimately had to be sold as scrap in Bangkok. Bangkok was thus the natural forum which had the most real and substantial connection with the collision, particularly as regards the claims of the Russian shipowners. 61. Broadly speaking, the Russian shipowners' stance was that since neither party would relish the prospect of litigating in Bangkok as the natural forum with which the collision claims had the closest and most real and substantial connection, both shipowners were free to select a forum more convenient or commercially advantageous to themselves and that the Russian shipowners' decision to bring an action in their chosen forum in Hong Kong should not be overridden. In conclusion, leading counsel for the Russian shipowners contended that "if neither party (sought) to litigate in the [most] natural and appropriate forum and each (chose) to sue the other in a forum which (was) the most advantageous or most convenient from its own point of view, the Court should not stay an action properly brought", hence no stay should be granted. Counsel's contention would have the effect of impinging upon the need to compare separate fora because every forum chosen independently of the mutually discarded natural forum, however disconnected or objectively unsuitable, would then have to be regarded as a most appropriate forum. That clearly runs counter to the basic principle observed in a long line of cases, including two of our own. Before considering jurisdical advantages, the court would invariably have to compare the material factors of fora, natural or chosen, for determining the one objectively suitable for the ends of justice. See The Atlantic Star [1974] A.C. 436 at p. 454G, per Lord Reid; MacShannon v. Rockware Glass [1978] A.C.. 795 at pp. 817 and 829, per Lord Salmon and Lord Keith; European Asian Bank A.G. v. Punjab and Sind Bank [1982] 2 L1 L.R. 356 at p. 365, per Stephenson L.J.; The Abidin Daver [1984] A.C. 398 at p. 416 A -B, per Lord Keith; The Spiliada Maritime Corporation v. Cansulex Ltd. [1987] A.C. 460 at pp. 477E & 478 A, per Lord Goff; Charm Maritime Inc. v. Kyriakon [1987] 1 LI L.R. 433 at p. 447, per Slade L.J.; The Po [1991] 2 LI L.R. 206 at p. 213, per Lloyd L.J. and this court's decisions in The "Adhiguna Meranti" [1988] 1 LI L.R. 384 and Louvet v. Louvet [1990] 1 HKLR 670. The list of factors "to be weighted in any particular case" is inexhaustive. See Spiliada, supra. p. 465 E/F, per Lord Templeman. 62. Leading counsel for the Russian shipowners further submitted that the lower limitation of liability under the 1957 Convention would in any event preclude a stay of an action which had been properly brought in Hong Kong. In addition, a jurisdiction rightly founded should not be lightly denied. 63. On the other hand, the Singaporean shipowners maintained that having both rejected Bangkok, as between the fora of Singapore and Hong Kong, Waung, J. would nevertheless have to be called upon to, as he in fact was, determine where it would be most convenient and least expensive to do justice by balancing the material circumstances, and that if the court needed to proceed further, the Russian shipowners had failed to establish any juridical disadvantages in the Singaporean procedural bar for hearsay and in the relatively small limitation difference of US$388,000 between the two Conventions. The Singaporean procedure of excluding hearsay was no longer pressed upon us as a jurisdical disadvantage in this appeal. 64. In Spiliada, supra, at p. 465 E/F, Lord Templeman observed that the "place of incident was not always decisive", but Bangkok did have the most real and substantial connection with the claims arising from the collision and was the natural and appropriate forum. The parties did not treat Bangkok as a forum in play and in the Singaporean shipowners' Hong Kong application for a stay, Waung, J. was obliged to determine whether the other available forum in Singapore was clearly more appropriate for the trial of also the Russian shipowners' claims. In balancing the competing features, the Judge cannot be rightly criticised for describing Bangkok as, in effect, a "theoretical" natural forum. The principle observed in Spiliada and considered in three stages by Hunter J.A. in Adhiguna Meranti was accepted on all hands before Waung, J. For the competing fora, the test has always been either "the natural forum" or "a clearly more appropriate forum". In European Bank v. Punjab Bank, supra, neither India nor Singapore was considered "the natural forum" or "a clearly more appropriate forum", and the selection of the English Court was affirmed. At p. 365, of the three competing fora Stephen L.J. had this to say: The Judge "was right to look for a natural forum, or a clearly more appropriate forum, ..... He was, in my judgment rightly, not addressing his mind exclusively to the question whether one of those countries was the natural forum but whether it was the appropriate, or more appropriate, forum, or 'the more natural forum'". (Emphases supplied). The mere existence of a most natural and appropriate forum is not decisive. Where, as here, the most natural forum was rejected by both parties, the court must necessarily go on to consider whether parallel proceedings in two separately selected fora were justified and, if not, which one was more appropriate. In the latter scenario, the authorities cited have not led to any discernible erosion of the fundamental concept which calls for an objective identification of the appropriate or clearly more appropriate forum so that matters could best be resolved for the interests of justice. What must also not be lost sight of is that the court's discretion in granting a stay should be cautiously exercised upon considering all the relevant circumstances. 65. In Caltex Singapore Pte. Ltd. and Others v. BP Shipping Ltd. [1996] 1 LILR 286 and 19 December 1995 (unreported), Clark, J.'s decision was made on the particular facts in that case where liability was admitted in an action commenced in Singapore by the defendant, BP Shipping Ltd. The plaintiffs brought parallel proceedings in London for the damage done to their Singapore jetty on account of the significantly greater limit of liability under the 1976 Convention. Clark, J. seemed to have, in a broader sense, compared the quality of justice in different jurisdictions by reference to what he regarded as an English public policy of upholding the modern 1976 Convention. We know not what the local, legislative and enforcement conditions in Singapore were, and Clark, J.'s comparison of quality of justice cannot be supported and should not be encouraged. See Abidin Daver, supra p. 410F-H, per Lord Diplock. Waung, J was right in refusing to allow himself to be unduly persuaded by the rationale of Clark, J. As a matter of fact, what weighed heavily in the balancing exercise in Caltex was the difference in the Convention limits, which would have deprived the owners, operators and users of the damaged Singaporean jetty of so much greater a sum in claims that it would be unjust to stay their English action. 66. Waung, J. should not have characterised the Russian shipowners' claims as less than "a strong probability" or proceeded to evaluate the evidence of the Singaporean shipowners as "strong". But he took into account the post-incident activities, the matters affecting convenience and expense, the respective location of the parties' businesses and the progress of the Singaporean action, all in the factors set out in his judgment. He was able to conclude that the Singaporean shipowners' claims and the Russian shipowners' claims should not be adjudicated in different jurisdictions. In prosecuting the Russian shipowners' claims in Hong Kong after liability is established in Singapore, some duplication could not be avoided. The judge also acknowledged the Singaporean action as having developed to the stage where it would have some impact upon the dispute between the parties. See de Dampierre v. de Dampierre [1988] 1 A.C. 92 at p. 108 C-D, per Lord Goff. 67. It was quite unnecessary for Waung, J to go further. But legal fees in this territory have not been known to be moderate. Given the expected burdensome additional legal costs, the possible shortfall of US$338,000 (HK$2.6m. approx.) arising from the difference between the limits of liability could hardly justify a second set of legal proceedings in Hong Kong. In the "Vishva Abha" [1990] 2 LILR 312, at p. 315, the limits were £1.5 m. as against £ 367,000, and the difference of £1.1 or over HK$14 m. was such that "it would be a grave injustice to deprive [the plaintiffs] of their right to litigate" in London. Caltex is another case of a significantly greater limit of liability to the tune of some US$3.57 m. or HK$27.8 m. (US$9,389,115 as against US$5,750,000). 68. Waung, J. followed the guidelines in Adhiguna Meranti, supra. in forming his balanced view. His appreciation of some of the other authorities cited is very much at issue, but nevertheless he correctly decided against parallel proceedings and proceeded to compare one forum with another for determining which one was the more suitable and convenient. Barring inaccuracies and errors, there was ample affidavit evidence for the Judge to form the view that the Singaporean shipowners had an "overwhelming powerful case" for a stay. In his balancing operation, the Judge favoured Singapore as clearly the more appropriate forum. Further, given the relatively insubstantial difference between the limits of liability, another trial in Hong Kong, albeit probably only in quantum, was palpably undesirable. In counsel's skeleton argument to this court, it was submitted for the Russian shipowners that "in terms of practical convenience and expense alone, there (was) little to choose objectively between Hong Kong and Singapore". It would seem, therefore, doubly difficult to demonstrate that the Judge's preference in his balancing exercise was plainly wrong. It was "pre-eminently a matter for the trial judge" and we "should be slow to interfere". Spiliada supra p. 465 F-G, per Lord Templeman. Also, the jurisdical advantage in terms of Convention limit is hardly substantial. Waung, J. disregarded it, though, for the wrong reason, but the balanced view in his analysis of forum cannot be faulted. If I had to exercise like discretion on account of his misdirections, I would be driven to grant a stay. It would therefore be futile to set aside the Judge's decision for reaching the same conclusion in a rehashed balancing operation. I would dismiss this appeal with an order nisi for costs against the appellants. Cheung J: 69. I agree that the appeal should be allowed for the reasons given by My Lord, Litton V-P. Litton V-P: 70. The result is that, by a majority, the appeal is allowed, the judge's order of 17 October 1996 is set aside, the Singapore owners' motion of 3 April 1996 stands dismissed and there will be an order nisi that the costs of the appeal and of the proceedings in the court below will be paid by the respondents (the owners and/or demise charterers of the ship "Nanta Bhum").
Representation: Michael Thomas QC & Godfrey Lam (M/S Holman, Fenwick & Willan) for the Appellants Charles Haddon-Cave (M/S Ince & Co.) for the Respondents |
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