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”

HCAJ 31/2020

[2021] HKCFI 1283

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY ACTION NO 31 OF 2020

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Admiralty action in rem against: the ships or vessels “MILANO BRIDGE” “CMA CGM MUSCA” and “CMA CGM HYDRA”

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DECISION

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1.  This is the Defendants’ application by Summons filed on 5 November 2020 pursuant to O12, r8 for this action be stayed in favour of the courts of South Korea on the grounds of forum non conveniens (“FNC”) and/or lis alibi pendens (“LAP”).

Issues

2.  The issues are: (i) whether the Defendants are unable to demonstrate that South Korea is clearly or distinctly the more appropriate jurisdiction than Hong Kong for the trial of these matters; and (ii) whether depriving the Plaintiff of the higher tonnage limitation provided in Hong Kong would be a decisive factor in refusing a stay. 

Background

3.  The following facts[1] are not in dispute, save indicated otherwise.  The Plaintiff is the Korean operator of a commercial maritime terminal at the port of Busan (“Terminal”) offering berths for loading and unloading container vessels with large movable gantry cranes.  It appears that the Plaintiff does not have any business operation outside South Korea.

4.  The Defendants were (and are) the joint owners of the vessel “Milano Bridge” (“Vessel”), owned as to 90% by Doun Kisen Co Ltd, a company incorporated in Japan, and 10% by Mi-das Lines SA, a company incorporated in Panama.  The Vessel flies the Panamanian flag.  The Defendants are both managed from Japan.  At the material times, the Vessel was sub-chartered to Ocean Network Express Pte Ltd (“ONE”), which was incorporated in Singapore with operations worldwide, including Busan, South Korea.

5.  The Plaintiff operates on, inter alia, (i) its Standard Terms and Conditions 2019 (“STC”) and (ii) specially negotiated agreements, such as the Terminal Services Agreement dated 1 April 2014 (“TSA”) between the Plaintiff and various liner operators comprising a consortium called The Alliance. 

6.  The Defendants are not party to the TSA. However, both the Charterer and ONE are contracting parties to the TSA.  The Plaintiff has made a claim against ONE under the TSA in South Korea. 

7.  The Defendants are not party to any STC either. The Plaintiff says that the STC are relevant only to liner operators (not vessel owners) who had executed the requisite agreement. 

8.  However, the Defendants seek to refer to the STC which provided at clauses 18.2 and 19.3 for a contractual limitation of liability of US$15m for both parties.  The TSA similarly provided at clauses 18.2 and 19.3 a contractual limitation of liability of US$20m for both sides.  It appears from the liability clauses (18.1 and 19.1) of the STC that loss or damage arising from negligence or wilful misconduct would generally be covered.

9.  This action concerns an Allision between the Vessel and Berth 8 at Pier 2 at the Terminal which took place at 14:49 on 6 April 2020, involving contact between the Vessel and some of the Plaintiff’s cranes and another vessel.  At the time of the Allision, the Vessel was under compulsory pilotage of a Korean pilot and was assisted by Korean tugs, one at the bow and one at the stern.  Also, there were maritime works in progress by Korean contractors to remove Todo Islet, a small island at the approach to the berth.

10.  The Defendants say that Todo Islet presented a hazard to ships arriving at the Terminal, which explained the need for its removal.

11.  The Plaintiff says that Cranes 81, 83 and 84 were partially damaged.  Crane 85 had collapsed onto the deck of the Vessel and was very significantly damaged.  The Plaintiff asserts that the Allision was caused by the negligence of the Defendants, their servants or agents in the navigation and management of the Vessel and that it has suffered loss and damage in terms of (i) physical damage to the cranes with resulting monetary loss in terms of repair and replacement cost; and (ii) business interruption.

12.  The alleged “Material Damage” amounts to US$30,116,930.01, and the alleged “Business Interruption” loss has been quantified at US$60,851,879.83.  

13.  The Defendants’ position is that the quantum of the Material Damage claim will largely be determined by repair and replacement invoices (with possibly certain internal cost claims).  Whilst the claim will be subject to close scrutiny, it will unlikely be disputed that the damaged cranes required significant repair (or replacement), and there will unlikely be much (if any) cross-examination on those quantum issues.

14.  However, the Business Interruption claim may have been significantly exaggerated and is likely to be heavily disputed.  It will turn largely on historical throughput and occupancy figures, as well as assessment of the Plaintiff’s internal business and cost.

15.  It is right to say that in this action all relevant events which gave rise to liability occurred in South Korea, all physical damage was incurred on land in South Korea and all economic loss was suffered in the same country.

16.  This action was commenced when a sister ship of the Vessel, “CMA CGM Musca”, called at Hong Kong on 24 June 2020 and was arrested.

17.  It is fair to say that except for the fact that the sister ship called at Hong Kong, this dispute has nothing to do with Hong Kong.

Other proceedings

18.  As stated above, the Plaintiff has initiated a claim against ONE under the TSA.  It appears to be in abeyance.

19.  In addition, the Allison has given rise to various sets of proceedings in the courts of South Korea as follows :

(1)   Action by the Defendants against the Korean Government in respect of pilot liability, Todo Islet works and Vessel Traffic Service Centre liability;

(2)   Action by the Defendants against the Plaintiff which is essentially a ‘mirror image’ action to these proceedings;

(3)   Action by the Defendants against the Pilot for negligence;

(4)   Action by the Defendants against the Tug Owners for negligence;

(5)   Action by the Defendants against Daelim Industrial Co Ltd, the Todo Islet contractors, for negligence;

(6)   The Defendants’ Limitation Action;

(7)   Action by Busan Port Authority against both the Plaintiff and the Defendants for the cost of maritime markings;  

20.  As to Action (2), the Plaintiff’s response is that it can be dealt with within the Defendants’ Limitation Action (Action (6)). 

21.  In respect of the Limitation Action (Action (6)), the Plaintiff has filed a claim against the Limitation Fund on a without prejudice basis.  There is no agreement between the parties whether it is open to file a claim on such a basis under Korean law.

22.  Action (7) was recently withdrawn upon a promise of full payment by the Plaintiff’s insurers.

23.  In addition to these civil actions, there are criminal proceedings pending against the Master of the Vessel in South Korea.

24.  The Korean Maritime Safety Tribunal (“KMST”) is conducting an investigation to determine the cause of the maritime incident, any administrative sanctions against Korean officeholders and appropriate corrective measures to avoid similar situations in the future.  The Plaintiff is participating in the investigation.  The KMST has already issued one report dated 12 January 2021.  That report was aim at identifying the cause of the Incident and preventing similar accident in the future.  It was not intended to be used for determining liability.  This court was informed that another report which may be so used is in the making.  

25.  In addition to these proceedings, the Plaintiff has commenced materially identical proceedings against the Defendants in Japan. Thus, the Defendants say that they are being vexed twice by the Plaintiff in respect of the Incident.

26.  The Plaintiff’s position is that it wishes to have the dispute determined in Hong Kong, ‘failing which’ Japan.  It has indicated in evidence that if this court declines to stay this action and it is to proceed, the Plaintiff will withdraw the Japanese Action.  On the other hand, if this action is stayed, the Plaintiff will seek to pursue the Japanese Action. 

Insurance

27.  The Plaintiff was insured by Samsung Fire & Marine Insurance Co Ltd (“SFMI”), which is located in South Korea.  SFMI has appointed loss adjusters in South Korea, McLarens Korea. 

28.  It appears that SFMI was reinsured as to 85% with Chubb Insurance Australia Ltd.

Shipowners’ limitation of liability

29.  There is a different shipowners’ liability limitation regime in Hong Kong (and Japan) on one hand and South Korea on the other.  The Plaintiff’s evidence[2] suggests that from the outset the Plaintiff and its advisers had targeted Hong Kong as a forum for this dispute, by way of sister ship arrest, because of the limitation regime here.

30.  South Korea is not party to any international convention on shipowners’ limitation of liability.  However, it has enacted a domestic limitation regime within the Korean Private International Law Act based on the Convention on Limitation of Liability for Maritime Claims 1976 (“LLMC 76”). 

31.  Unlike Hong Kong, under the Korean Act, questions of whether a shipowner is entitled to limit, and if so in what amount, are determined under the law of the flag of the vessel concerned.  In this case, it is the law of Panama. 

32.  On 24 April 2020, the Defendants commenced a limitation action in respect of the Incident in the Changwon District Court (Action (6) above).  On 11 May 2020, on the Defendants’ application, the Changwon District Court ordered the Defendants to deposit in court SDR 16,792,098 plus interest at 6% from the date of Incident to date of deposit, an amount calculated in accordance with the Korean Act and Panamanian Law.

33.  On 18 May 2020, the Defendants deposited in court KDW28,293,827,486 (about US$24m), inclusive of interest, to constitute the Limitation Fund.

34.  On 8 October 2020, the Plaintiff lodged a claim against the Limitation Fund on a without prejudice basis. 

35.  There is no other significant claimant against the Fund apart from the Plaintiff.  On the basis of the asserted claims of the Plaintiff, the Limitation Fund is not sufficient to fully cover the Material Damage component.

36.  Under Hong Kong law, by virtue of the Merchant Shipping (Limitation of Shipowners Liability) Ordinance, Cap 434, limitation is governed by LLMC 76 as amended by the 1996 Protocol (effective in Hong Kong on 3 May 2015), including the June 2015 limit increases (effective in Hong Kong on 4 December 2017).

37.  On 26 June 2020, in order to secure the release of the sister ship from arrest in Hong Kong, the Defendants put up security in the form of a letter of undertaking from the Japan P&I Club responding to any judgment of this court in the maximum amount of US$82.6m.  Such amount was calculated broadly in accordance with the Hong Kong limit.  Hence, the difference between the Korean and Hong Kong limits is US$58.6m (US$82.6m - US$24m).

Applicable principles

38.  The applicable test for FNC was set out in SPH v SA (2014) 17 HKCFAR 364, adopting the seminal principles enunciated by the House of Lords in The Spiliada [1987] 1 AC 460 :

(1)   The single question is whether there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial, ie, in which the action may be tried more suitably for the interests of all the parties and the ends of justice;

(2)   To answer this, the defendant must establish, firstly, Hong Kong is not the natural or appropriate forum.  ‘Appropriate’ in this context means the forum that has the most ‘real and substantial’ connection with the action.  Secondly, there is another available forum ‘clearly or distinctly’ more appropriate than Hong Kong.  Failure to establish these two matters at this stage is fatal.  This is commonly known as the Stage 1 consideration;  

(3)   If the defendant establishes both matters, then the plaintiff may show that if the action is tried in a forum other than Hong Kong he will be deprived of a legitimate personal or juridical advantage available to him in Hong Kong (Stage 2);

(4)   If the plaintiff can establish that, the court balances the advantages of trial in the alternative forum with the disadvantage(s) the plaintiff will suffer.  Deprivation of such advantage(s) will not necessarily be fatal to the defendant if he can establish to the court’s satisfaction that ‘substantial justice will be done’ in the available appropriate forum (Stage 3).

Stage 1(a) – natural or appropriate forum

39.  Under the most ‘real and substantial connection’ requirement, the court looks for connecting factors and these will include not only factors affecting convenience or expense (such as availability of witnesses), but also other factors such as the law governing the relevant transaction and the places where the parties respectively reside or carry on business (The Spiliada, 478A-B).

40.  The Plaintiff accepts that the first question of natural or appropriate forum is answered in favour of South Korea.  The concession is plainly right given the almost exclusive connection with that country in respect of nearly all the relevant factors.  The following factors have been rightly identified by the Defendants :

(1)   All elements of the alleged tort occurred in South Korea, either in Korean territorial waters in port environs, or in the case of the physical loss, on Korean soil.  The conduct complained of occurred in Korea, by the Korean pilot, the Korean tugs or the Master of the Vessel;

(2)   The Plaintiff conducts business solely in South Korea, under Korean law. Any economic loss from the physical damage, including any disruption of business, was suffered in Korea;

(3)   The Plaintiff’s business records would largely be in Korean;

(4)   Repair works were carried out in South Korea, save that the gantry cranes were repaired in Mainland China;

(5)   The Plaintiff was insured by a Korean insurer, which appointed Korean loss adjusters and a Korean based surveyor (Mr Searle);

(6)   The Plaintiff and the other parties against which the Defendants seek recourse, namely, the pilot, the tug owners, the Todo Islet contractors and the South Korean Government are all in Korea;

(7)   The Korean authority, KMST, is investigating the Incident;

(8)   The Defendants operate from Japan but are in the shipping business conducting it worldwide, including in South Korea;

(9)   The sub-charterer against which the Plaintiff has made a claim under the TSA, dealt with the Plaintiff by its Korean subsidiary.

41.  Plainly, the Defendants are right that the highest that can be said about Hong Kong as a forum for these matters is that jurisdiction has been founded here by service on a sister ship making a call here, and that the Hong Kong court is available.

Stage 1(b) – more appropriate forum

42.  In determining whether there is another forum that is ‘clearly or distinctly’ more appropriate than Hong Kong for the trial of the action, the court is entitled to examine a broad range of connecting factors, but this process is not a mechanical exercise of simply totting-up the number of factors connecting the claim with a particular jurisdiction and those against.  The court is required to focus on the appropriateness of a forum from the point of view of the trial of the action: Rambas Marketing Co LLC v Chow Kam Fai David [2001] 3 HKC 250, at 255B. 

43.  There is no dispute that the burden of proof on this issue is on the Defendants (The Spiliada, 476D-F).  However, Mr Kat SC, who appeared with Mr Brown for the Plaintiff, submitted that the burden is a high one based on High Hope Zhongding Corp v廈門墩峰,unrep, HCA 2485/2015, 16 January 2017, §§31 and 41. 

44.  For my part, I accept that the formulation ‘clearly or distinctly’ implies a certain burden which should not be lightly discharged.  On the other hand, the task for the court is a holistic evaluation of the relevant circumstances in order to answer the single question identified in para 38(1) above.  It is doubtful whether the performance of the task is assisted by the standard of proof.

Issues in the trial

45.  The exercise should begin with an identification of the issues to be tried.  In VTB Capital plc v Nutritek International Corp [2013] 2 AC 337, Lord Clarke (dissenting overall but not in contradiction with the majority here) held at §§192-193 :

“First, it appears to me that it is important for the court to know what issues are likely to arise at the trial of the action on the merits. Only when the issues are identified will it be possible to compare the two jurisdictions. …

As Eder J put it in Mujur Bakat Sdn Bhd v Uni.Asia General Insurance Bhd [2011] Lloyd's Rep IR 465, para 9:

“in considering whether or not England is the most appropriate forum, it is necessary to have in mind the overall shape of any trial and, in particular what are, or what are at least likely to be, the issues between the parties and which will ultimately be required to be determined at any trial. …””

46.  In this case, the principal liability issues to be tried are whether: (a) the Vessel caused the Allision; (b) the Defendants are liable; and (c) the Plaintiff was itself responsible to any degree.  In addition, there will be issues as to loss and quantum.  The quantum issues have been identified in paras 11 to 14 above.

Witnesses and Evidence

Liability

47.  There is no disagreement to Defendants’ suggestion that the witnesses on liability are likely to be the Master and other crew, the pilot and the tug crews.

48.  The Master and other key members of the crew are Indian.  They would have to travel to either South Korea or Hong Kong to give evidence.  The pilot and the crew of the tugs are Korean.

49.  There are independent contemporaneous records of the Incident, including video footage of the Allision from four angles, all the information automatically recorded in the VDR, and the investigation report by the KMST.

50.  There is no suggestion that the South Korean courts are unable to conduct maritime litigation concerning events in Korean ports competently or fairly.  Given that South Korea is a major maritime, engineering and trading economy, it must be assumed that its courts are equally capable in dealing with the disputes in question.

51.  I am inclined to agree with the Plaintiff that in light of the independent contemporaneous evidence, the dispute on liability may not be extensive.  On the other hand, there appears to be issue(s) of third party liability, eg, that of the pilot.  Hence, it should not be assumed that the trial of these matters would be a straightforward exercise.   

52.  The third party or parties are all based in South Korea.  Their witnesses are likely to be in Korea and documents are likely to in Korean.  These must be factors in favour of having these matters tried in South Korea.  Indeed, it is not easy to see why these parties should be dragged into the court of Hong Kong in a litigation over the Incident.   

53.  Whilst I agree with the Plaintiff that with the availability of modern technology, location of witnesses does not normally present any serious obstacle for having a trial in Hong Kong, especially when the incident had been investigated by the local authorities with the benefit of contemporaneous records (see Bright Shipping Ltd v Changhong Group (HK) Ltd [2018] HKCFI 2474, §§30-33 and 37; [2019] 5 HKLRD 30, CA, §61), the real point here is not whether Hong Kong court is capable of trying these matters despite the located of witnesses overseas but whether, when compared with the South Korean court, the latter is clearly or distinctly the more appropriate forum. 

54.  I should make 2 further points on the reliance on Bright Shipping.  Firstly, in that case there was no natural forum for the trial of the collision which took place in international waters (CFI, §23).  Secondly, in respect of important witness(es) on major factual dispute, experience informs that the presence of the witness in court is much preferred.

55.  Most of the documentary documents are likely to be in Korean.  Whilst they may be translated for use in Hong Kong, the translation cost can be saved with a trial in South Korea.  More importantly, there is much to be said that important documents should be read in their original text, so that they can be accurately understood.  In short, the South Korean court certainly will be more suited to dealing with a trial where most of the documents are in Korean.

Quantum

56.  Turning to the evidence on quantum, it is common ground that the main witness will be Mr Kim, the Plaintiff’s CEO, who is Korean and based in Busan.  Whilst I can accept that that Mr Kim can give evidence in English, it cannot be doubted that it is more convenient, economical and appropriate for him to give evidence in the place where the Incident took place and in his mother tongue. 

57.  I am inclined to agree with the Defendants that in a claim of this magnitude with the attendant complexity it may well transpire closer to trial that other internal Plaintiff witnesses who reported to Mr Kim will also need to give evidence to justify the components of the claim.  It is unlikely for all such witnesses to be able to give evidence in English.

58.  It appears that the Plaintiff’s primary loss adjusters are McLarens Korea, based in South Korea, and the Plaintiff’s primary surveyor is also based there. 

59.  I also agree with the Defendants that common sense dictates that the vast majority of the Plaintiff’s business records would be in Korean.  The Plaintiff’s evidence is that that certain documents concerning liability had been translated into English so that they could be provided to English speaking foreign based experts appointed by the re-insurer. However, for a claim of this magnitude, it is likely that the untranslated body of documents remains substantial. 

Expert witnesses

60.  The re-insurer has appointed the following expert advisors whom the Plaintiff intends to call as witnesses:

(1)   Mr Brian Armour, an English-speaking Singapore based consultant maritime civil engineer, who will give evidence, technical and financial, on the extent of the damage to the cranes and necessary remedial measures. Mr Armour has relied on the service of a Korea based surveyor Mr Searle;

(2)   Mr David Browne, an English-speaking Hong Kong based navigation expert, who will give evidence on liability;

(3)   Mr Norman Kwan, a punti and English-speaking Hong Kong based business loss accounting expert.

61.  The engagement of these non-Korean based experts is the subject matter of criticisms by the Defendants.  Firstly, it has not been explained in the Plaintiff’s evidence why they were engaged in a case which has everything to do with South Korea, and thus it was self-evidently inconvenient to instruct such experts. 

62.  Secondly, South Korean is an advanced nation with a large maritime economy and a large population.  A wide choice of appropriate witnesses of all 3 disciplines was likely available in Korea, including witnesses who could communicate effectively both in English, for the purpose of liaising with the international insurers, and in Korean, when giving evidence.

63.  In the premises, the Plaintiff should not be allowed to pull itself up by its own bootstraps by attempting to generate a factor in favour of proceedings in Hong Kong, say the Defendants. 

64.  I can see some substance in the criticisms.  The court should no doubt be alive and vigilant to such tactics.  On the other hand, in the sphere of maritime disputes, it is not unusual to see Hong Kong and Singapore based maritime experts being instructed.  However, one may not be able to say the same for a Hong Kong based accounting expert. 

Governing law

65.  There is no dispute that the governing law of the Plaintiff’s tortious cause of action is Korean law.

66.  In VTB Capital, supra, it was held that the governing law is in general terms a positive factor in favour of trial in the place where that law is applied, because it is generally preferable, other things being equal, that a case be tried in the country whose law applies. Further, this factor takes on particular force if issues of law are likely to be important and there is evidence of relevant differences in the legal principles or rules applicable to such issues in the countries proposed as the appropriate forum (per Lord Mance JSC at §46).

67.  Before I endeavour to draw the strands together, there are 4 further issues to be addressed, 2 of them related.

In rem cases (service as of right)

68.  The Plaintiff has placed emphasis on the fact that these proceedings were brought as of right.  However, I do not believe that the FNC principles are applied differently to in rem cases, especially a case like the present where the jurisdiction of the admiralty court was invoked based only on the arrest of a sister ship and Hong Kong has no connection to the events giving rise to the Incident.

69.  In The Spiliada, Lord Goff held (477E) that the burden rests on the defendant to show that the alternative forum is ‘clearly or distinctly’ more appropriate than England, and “in this way, proper regard is paid to the fact that jurisdiction has been founded in England as of right”. 

70.  Lord Goff went on to hold at 477F-G: “if … the connection of the defendant with the English forum is a fragile one (for example, if he is served with proceedings 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”. 

71.  Further, in New Link Consultants Ltd v Air China [2005] 2 HKC 260 §§65-66, DHCJ Poon (as he then was) referred to the above dicta of Lord Goff and held that “while proper regard must be paid to the fact that jurisdiction is founded as of right, it is the connecting factors that determine whether the Hong Kong court or the other forum is clearly more appropriate.  Thus, if the connecting factors clearly point to the latter as the more appropriate forum for the trial, the ‘as of right’ point, however weighty that may be, will not tilt the balance back in favour of the Hong Kong court.”   

72.  In The Kappa Sea, [2017] 1 Lloyd’s Rep Plus 102, §35, Ng J held that :

“… the fact that the vessel is Hong Kong-registered is irrelevant. It has no relation to the claim, it is not a material fact and does not have any bearing on the question where this action can most appropriately be tried. Also irrelevant is the fact that the plaintiffs elected to institute and serve proceedings in Hong Kong. To hold otherwise would be an official endorsement of the practice of forum-shopping since a plaintiff can without undue difficulty institute and serve proceedings in a forum of its choice and use that fact to boost the preferred forum’s connection with the action. At the risk of stating the obvious, the whole point of this application is to determine whether the plaintiff’s choice of forum, ie Hong Kong, is inappropriate and whether there exists another forum which is more suitable for the trial of the action in the interest of all parties and the ends of justice …”

Forum shopping

73.  I am troubled by the evidence of the Plaintiff which suggests that the significantly higher tonnage limitation applicable to Hong Kong was the main driver of the decision to institute proceedings here. Although I can understand that commercial entities are naturally driven by such consideration, the court has always disapproved of forum shopping for good reasons.

74.  I should say a few words about Hanwha Total Petrochemical Co Ltd v Changhong Group (HK) Ltd, unrep, [2019] HKCFI 263, §9, which is relied upon by the Plaintiff.  It would be wrong to regard that case as watering down the disapproval of the court on forum shopping.  In that case, the court did not agree with the criticism of forum shopping made by the defendant.  Importantly, it was a case where there was no natural forum (the collision having occurred in international waters) and the defendant was a Hong Kong company.  The proceedings were served on the defendant in Hong Kong.  

LAP and Cambridgeshire factor

75.  It is well established that LAP is not a separate doctrine but one of the relevant factors that the court may take into account in 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 Ltd v Changhong Group (HK) Ltd [2020] HKCFA 24, §10, per Fok PJ).

76.  The existence of parallel proceedings is not by itself a decisive factor in favour of staying an action on the ground of FNC. However, it is part of the Stage 1 consideration for the court to evaluate the adverse impact and hardship which the parallel proceedings may have on the defendant, eg, the expenses and the risk of inconsistent findings (Bright Shipping Ltd v Changhong Group (HK) Ltd (No 2), CA, [2019] 5 HKLRD 30, §§52-57).

77.  Amongst the existing proceedings in South Korea, 3 of them involve the Plaintiff.  I do not believe that the action by the Busan Port Authority (Action (7) as identified in para 19 above) is relevant for the present purpose.  Neither of the other 2 actions (Actions (2) and (6)) has progressed very far.   

78.  In respect of the Korean Limitation Action (Action (6)), the Plaintiff’s evidence is that it had filed a protective conditional claim on 8 October 2020 when the deadline for filing claims under that action was due to expire solely to ensure that it would not be time-barred in the event that the Defendants succeed in this application.  Further, the Plaintiff has made clear that it will only proceed in the Korean Limitation Action if it is shut out in both Hong Kong and Japan.

79.  As to the Defendants’ action against the Plaintiff (Action (2)), the Plaintiff has suggested that it should be stayed in favour of the Limitation Action to avoid multiple proceedings within Korea and to tie those proceedings together.  The Plaintiff will not proceed with the limitation claim should the present proceedings go ahead.

80.  Action (2) has not advanced beyond initial stages and has been adjourned pending the determination of the KMST.

81.  The Defendants’ claims in Action 2 are: (a) the gantry cranes were in the wrong position; and (b) the Plaintiff should have advised the Vessel of the work taking place at Todo Islet.  It is common ground that these are in the nature of counterclaims aimed at reducing liability.  It is fair to say that there is no reason why these cannot be brought as a counterclaim in these proceedings in the event of refusal of the Defendants’ application.   

82.  The Defendants pray in aid the Cambridgeshire factor.  That principle applies where there is ‘very heavy litigation’ in a case involving, eg, difficult scientific questions and the parties involved had already participated in a substantial part of the trial of a similar action.  Thus, the legal teams and experts would have gained much learning and experience in dealing with the same or similar issues.  Such advantage may be taking into account in the ‘objective interest of justice’ (see The Spiliada, 485F-486B and Bright Shipping, CA, §52). 

83.  I agree with the Plaintiff that the Cambridgeshire factor has no application to this case.  It is not a case of huge technical complexity, nor is it the case that any of the Korean proceedings is in an advanced stage.

Conclusion on Stage 1(b)

84.  It is plain from the factors identified above that the court of South Korea is clearly or distinctly the more appropriate forum.  As analysed, all the relevant considerations, eg, the location of evidence (both witnesses and documents) and applicable law[3], point to the place of alleged commission of the tort as the distinctly more appropriate forum. 

85.  The lack of connection to Hong Kong serves to highlight the ersatz nature of the Plaintiff’s suggestion that this case can just as easily be tried in Hong Kong.  As pointed out in para 53 above, one can accept that with the advancement of technology, a trial of these matters can be conducted in any modern city anywhere in the world.  But why should the Korean witnesses and documents be dealt with by this court rather than the court there?  It is not a matter of mere convenience when, with the exception of the experts and the crew of the Vessel, all the witnesses are in Korean and the documents are largely in Korean.

86.  As to the experts, it must be part of their job to travel to where they are needed.

87.  I am unable to accept Mr Kat’s submission that the trial will likely involve little, if any, live evidence.  I have pointed out above the involvement of third party liability.  In addition, the Business Interruption claim by itself runs to US$60.85m, US$46.90m of which is made up of “Increase in Cost of Working”.  I agree with Mr Smith SC, who appeared with Mr Alder for the Defendants, that it is quite unlikely that such a claim will be resolved without proof from witnesses who will be cross-examined in detail.

88.  For completeness, I do not believe that the issue of LAP is a weighty factor in the present consideration.

Juridical advantage and forum shopping (Stage 2)

89.  I turn to the nub of the dispute in this application.  It is common ground that the higher tonnage limit in Hong Kong is a juridical advantage in favour of Plaintiff.

90.  First of all, I am unable to accept that Plaintiff’s submission that the deprivation of such a juridical advantage would be conclusive such that a stay should be refused. 

91.  An advantage of a forum to the plaintiff will often give rise to a corresponding disadvantage to the defendant or deprive him of an equal but opposite advantage in the alternative forum (The Spiliada, 482D; The Kappa Sea, §45).  I certainly agree with the Defendants that the court no more favours claimants (be they foreign or local) than it does defendants (be they foreign or local).  

92.  The issue of lower damages abroad was addressed in The Spiliada, 482E-G (see also de Dampierre v de Dampierre [1988] 1 AC 92, 101E-F and 110B-F) :

“The key to the solution of this problem lies, in my judgment, in the underlying fundamental principle.  We have to consider where the case may be tried “suitably for the interests of all the parties and for the ends of justice.”  Let me consider the application of that principle in relation to advantages which the plaintiff may derive from invoking the English jurisdiction.  Typical examples are: damages awarded on a higher scale; a more complete procedure of discovery; a power to award interest; a more generous limitation period.  Now, as a general rule, I do not think that the court should be deterred from granting a stay of proceedings, or from exercising its discretion against granting leave under R.S.C. Ord. 11, simply because the plaintiff will be deprived of such an advantage, provided that the court is satisfied that substantial justice will be done in the available appropriate forum. …”

93.  Mr Smith put special emphasis on the dicta at 483B-C :

“… Then take the scale on which damages are awarded. Suppose that two parties have been involved in a road accident in a foreign country, where both were resident, and where damages are awarded on a scale substantially lower than those awarded in this country. I do not think that an English court would, in ordinary circumstances, hesitate to stay proceedings brought by one of them against the other in this country merely because he would be deprived of a higher award of damages here.”

94.  I am inclined to agree with the Defendants that the above dicta apply to the situation before this court.

95.  I do not believe that the dicta of this court in Bright Shipping, §56, or that of the CA at §§64-69 have the effect contended by the Plaintiff (see para 90 above).  It is reasonably clear from those dicta that the deprivation of juridical advantage of higher tonnage limitation may be a decisive factor in the Stage 2 evaluation. 

96.  It should be said that the line of Hong Kong authorities of The Adhiguna Meranti [1987] HKLR 904, The Kapitan Shvetsov [1997] HKLRD 374 and Bright Shipping should be understood with their factual context in mind. 

97.  In The Adhiguna Meranti, although the Indonesian court was held to be the more appropriate forum, staying the Hong Kong action would expose the plaintiff to uncertain and possibly derisory limits.  It should not be overlooked that there were also other procedural disadvantages which the plaintiff would be deprived of if the Hong Kong action was stayed (922E-F).

98.  In The Kapitan Shvetsov, neither one of the forums chosen by the parties (Hong Kong and Singapore) was the natural forum, which was Thailand where the collision took place (376G-J).  In declining the stay, the court took into consideration that Singapore was not a natural forum and the loss of juridical advantage to the plaintiff in terms of the higher limit (382F-G).

99.  In Bright Shipping, there was no natural forum and the defendant was a Hong Kong company having been served with the proceedings in Hong Kong.  It was held that the defendant had failed on the Stage 1 test (first instance, §55).  The court went on the hold, obiter, that the significant disparity in tonnage limitation and the expiration of time limit for any claim by the plaintiff against the limitation fund constituted in the alternative forum would have led the court to decline a stay (§§56-58, CA at §§63, 64 and 72).

100.  The present case is rather different.  Neither the Incident nor the parties has anything to do with Hong Kong (save for the calling of a sister ship) and Hong Kong was chosen as a forum primarily on the higher tonnage limit.  Whilst I have no difficulty accepting Mr Kat’s suggestion that this case is about economics with the respective insurers behind the parties, this is no licence for forum shopping. 

101.  I believe that Mr Smith is right that the dicta of Lord Goff at 483B-C was a statement of disapproval of forum shopping.

102.  In The Adhiguna Meranti, 907I-908B, it can be seen that, in dealing with the Stage 3 consideration, the CA took the view that the deprivation of juridical disadvantage would not outweigh a case where proceedings were started in Hong Kong for little more than reason of forum shopping :

“… If the answer to (II) is yes, a court has to balance the advantages of (I) against the disadvantages of (II), Abidin Daver per Lord Brandon at p. 419. Deprivation of one or more personal or juridical advantages will not necessarily be fatal to the applicant provided that the court is satisfied that notwithstanding such loss “substantial justice will be done in the available appropriate forum” (p.991H). The court must try to be objective (p. 991F). Proof of this, which can fairly be called the ultimate burden of persuasion, rests upon the applicant for the stay. By these means he establishes that on balance the other forum is more suitable “for the interests of all the parties and the ends of justice”. This may be another way of saying that the plaintiffs’ choice of forum has been shown to be so inappropriate as to deserve the pejorative description of “forum-shopping” and to be restrained accordingly, cp. Lord Reid in The Atlantic Star [1974] AC 436.”

Stage 3

103.  At the end of the day, there is little to speak for having the dispute resolved in Hong Kong with the exception of the deprivation of a higher tonnage limitation.  There can be no serious suggestion that justice will not be done to the parties in the court of South Korea.  I am in no doubt that it is for the interests of all the parties and the ends of justice that these proceedings should be stayed notwithstanding the deprivation of juridical advantage to the Plaintiff.

104.  For completeness, I agree with the Defendants that given that the Plaintiff is a South Korean entity operating its business there under the applicable legal regime, it lies ill in its mouth to complain that the tonnage limitation there has not kept up with inflation.  Quite possibly, the Plaintiff had benefited from the lower Korean limit when it was called upon to pay compensation, and from the lower insurance premium which should apply in light of the Korean limit.

Disposition

105.  In the premise, I order that these proceedings be stayed.  The parties have agreed that costs should follow the event with a certificate for 2 counsel.  I so order in favour of the Defendants.  The costs are to be taxed if not agreed.

106.  I am grateful to counsel for their assistance.

Conduct of O12, r8 applications

107.  Before completing this decision, I must express my agreement with the dicta of Lord Neuberger (with whom Lord Mance, Lord Clarke and Lord Reed agreed) in VTB Capital, supra, §§82-84 and 89 where disapproval was voiced with the unnecessary complication (and the attendant effects) in FNC applications :

“82 The first point is that hearings concerning the issue of appropriate forum should not involve masses of documents, long witness statements, detailed analysis of the issues, and long argument. It is self-defeating if, in order to determine whether an action should proceed to trial in this jurisdiction, the parties prepare for and conduct a hearing which approaches the putative trial itself, in terms of effort, time and cost. There is also a real danger that, if the hearing is an expensive and time-consuming exercise, it will be used by a richer party to wear down a poorer party, or by a party with a weak case to prevent, or at least to discourage, a party with a strong case from enforcing its rights.

83 Quite apart from this, it is simply disproportionate for parties to incur costs, often running to hundreds of thousands of pounds each, and to spend many days in court, on such a hearing. The essentially relevant factors should, in the main at any rate, be capable of being identified relatively simply and, in many respects, uncontroversially. There is little point in going into much detail: when determining such applications, the court can only form preliminary views on most of the relevant legal issues and cannot be anything like certain about which issues and what evidence will eventuate if the matter proceeds to trial.

84 This concern is not new. In Cherney v Deripaska (No 2) [2010] 2 All ER (Comm) 456, paras 6, 7, Waller LJ said that whilst he “appreciate[d] that litigants do often feel strongly about the place where cases should be tried … disputes as to forum should not become state trials”. He also lamented the “mountain of material” the court faced in that case, and suggested that it “would have been better for both parties and better use of court time if they had expended their money and their energy on fighting the merits of the claim”.

…

89 However, particularly with the benefit of procedural reforms, which have been introduced, or are in the process of being introduced, following reports from Lord Woolf and Jackson LJ, the judiciary is now encouraged to exercise far greater case management powers than 25 years ago.  Accordingly, judges should invoke those powers to ensure that the evidence and argument on service out and stay applications are kept within proportionate bounds and do not get out of hand.”

108.  In addition to being guided by the dicta, this court shall give effect to it such that wastage of costs arising from undue complication in what should, in the main at least, be reasonably straightforward dispute may be met with adverse costs consequences.