THE OWNERS AND/OR THOSE ENTITLED TO SUE IN RESPECT OF A CARGO LATELY LADEN ON BOARD THE SHIP OR VESSEL “JIN HUI 588” v. THE OWNERS AND/OR DEMISE CHARTERERS OF THE SHIP OR VESSEL“JIN HUI 588”

HCAJ 139/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY ACTION NO 139 OF 2014

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HCAJ 140/2014

THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY ACTION NO 140 OF 2014

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(Consolidated by the Order of the
Honourable Mr Justice Ng dated 26 March 2015)

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J U D G M E N T

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Introduction

1.  This case involves a simple cargo damage claim of less than HK$500,000. The 1^st Defendant in HCAJ 140/2014 (“Contech”) is a Hong Kong company.  The 3^rd Defendant in HCAJ 140/2014 (“Top Grace”) is also a Hong Kong company with a registered office in Tuen Mun, although it says its principal place of business is in Guangzhou, PRC.  For reasons which will later become apparent, the Defendant in HCAJ 139/2014 and the 2^nd Defendant in HCAJ 140/2014 (“Owner”) is either a PRC company or a PRC resident.  On 26 March 2015, this court ordered the two proceedings to be consolidated and tried together at the same time. 

2.  There are two applications before this court:

a. By Notice of Motion dated 4 May 2015 and Summons dated 22 May 2015, the Owner seeks an Order staying the consolidated proceedings on the grounds (i) that the dispute was subject to the jurisdiction of the PRC Court pursuant to an exclusive jurisdiction clause in a Bill of Lading numbered HKL1308158 and dated 30 August 2013 issued by Top Grace (“Top Grace Bill of Lading”); (ii) of forum non conveniens — the proceedings should be conducted in the PRC Court.

b. By Summons dated 6 May 2015, Top Grace similarly seeks a stay of the consolidated proceedings on the same grounds save that it specifically points to the Guangzhou Maritime Court[1] of the PRC as the natural and appropriate forum. 

3.  The applications are opposed by the Plaintiffs.

 Stay based on “Exclusive” Jurisdiction Clause

4.  By the Top Grace Bill of Lading, it was agreed that a container of 440 pieces of garment fabric and accessories be shipped on board the “Jin Hui 588” (“Vessel”) from Hong Kong to Lian Hua Shan, PRC.  The 3^rd Plaintiff (“Polex”) was named as shipper and the 1^st Plaintiff was named as consignee in the bill.  The bill was marked “Signed for and on behalf of the Master” and signed by Top Grace “As Agent For The Carrier”.

5.  In the Affirmation of Cai Ruchen (“Cai”), director of Top Grace, dated 5 May 2015 (“Cai Affirmation”), Cai stated that Top Grace was the charterer of the Vessel and had agreed with the Owner that it was fully authorised to issue bills of lading on its behalf.  This accords with the evidence of Zheng Junxiang (“Zheng” and “Zheng Affirmation”), said to be the beneficial owner and master of the Vessel.  Zheng said Top Grace had chartered the Vessel from him and was authorized to issue bills of lading on his behalf as Master.  Zheng also said after he had bought the Vessel in 2010 from Jin Hui Shipping and Transportation Limited (“Jin Hui”), he “continued to appoint Jin Hui as the registered owner of the Vessel”.

6.  Clause 2 on the reverse side of the Top Grace Bill of Lading (“Clause 2”) contains a jurisdiction clause which provides:

“JURISDICTION

All disputes arising under and in connection with this Bill of Lading shall be determined by the Court in the Mainland of People’s Republic of China.”

7.  The Owner’s and Top Grace’s case is that, in accordance with the contract of carriage evidenced by the Top Grace Bill of Lading, the Plaintiffs and the Owner agreed that all disputes are to be referred to the PRC Court. Both of them submit that Clause 2 is an “exclusive” jurisdiction clause.

8.  On the Plaintiffs’ evidence, at the material time, Polex, on behalf of all the Plaintiffs, was responsible for arranging shipment of the cargo.  It had only dealt with Contech and had only received the Bill of Lading numbered HKL1308158 and dated 30 August 2013 issued by Contech (“Contech Bill of Lading”) for the shipment in question.  Polex had no knowledge of Top Grace or the Top Grace Bill of Lading until the dispute had broken out.  The Plaintiffs’ solicitors first received the reverse side of the Top Grace Bill of Lading from the Owner’s solicitors, Ms Brenda Chark, on 23 March 2015.  For this reason, presumably, Mr Alder submits that the Plaintiffs are not parties to the Top Grace Bill of Lading and hence not bound by Clause 2.  Nevertheless, in para 1 of the Statement of Claim filed herein on 9 April 2015, the Plaintiffs have relied on the Top Grace Bill of Lading and pleaded that it was issued by Top Grace on behalf of itself and/or the Owner.

9.  In addition to the Top Grace Bill of Lading, the Plaintiffs have also relied on and pleaded that the Contech Bill of Lading was issued by Contech on behalf of itself and/or the Owner.  In the Contech Bill of Lading, Polex was similarly named as shipper and the 1^st Plaintiff as consignee. The Contech Bill of Lading provides for the shipment of the same cargo on the same Vessel from Hong Kong to Lian Hua Shan, PRC.  It contains the following words in the signature box in Chinese: “Signed on behalf of the Master”, although the copy in the hearing bundles appears to be unsigned.

10.  Nevertheless, in its Defence dated 29 May 2015, Contech has pleaded that the Contech Bill of Lading was issued by it as agent/sub‑agent for the Owner and/or Top Grace and that Top Grace was the carrier and demise charterer of the Vessel. 

11.  Significantly, Clause 3 on the reverse side of the Contech Bill of Lading (“Clause 3”) provides:

“3. Governing Law

In so far as anything has not been dealt with by the terms and conditions of this Bill of Lading, Hong Kong SAR law shall apply. Hong Kong SAR law shall in any event apply in interpreting the terms and conditions hereof.

Jurisdiction

The contract evidenced hereby or contained herein shall be governed by English law. Any claim or other dispute thereunder shall be solely determined by the Courts in Hong Kong Special Administrative Region and no other court unless the Carrier otherwise agrees in writing.” (emphasis added)

12.  Mr Luxton, for the Owner, submits that, in circumstances where a plaintiff is contractually bound by a foreign exclusive jurisdiction clause, the court will ordinarily grant a stay of proceedings commenced in Hong Kong unless the plaintiff can demonstrate strong cause for not doing so: The KH Enterprise v The Pioneer Container [1994] 2 HKLR 134, 150; Noble Power Investments Ltd v Nissei Stomach Tokyo Co Ltd [2008] 5 HKLRD 631 at [37].  See also Donohue v Armco Inc[2] [2001] UKHL 64 at [24] – [25].  In this regard, Mr Luxton concedes that a relevant consideration in the exercise of the court’s discretion is whether by granting a stay, it will result in multiplicity of proceedings in different forums.  In the view of this court, the concession is made advisedly and in accordance with the guidance from the House of Lords in Donohue v Armco Inc supra at [27].

13.  Another relevant consideration for the court is whether, by granting a stay, the Plaintiffs would be prejudiced by having to sue in the foreign court because he would be faced with a time bar not applicable in the Hong Kong proceedings: The KH Enterprise supra at 150.

14.  However, Mr Luxton submits, in the present case, there will be multiplicity of proceedings in different forums only if the Plaintiffs can demonstrate they have a valid claim under the Contech Bill of Lading.  He submits the Plaintiffs have failed to do so. He points to both the Cai Affimation and the Zheng Affirmation in which they stated that Top Grace had express authority to issue bills of lading on behalf of the Owner whereas Contech had not.  He further submits Contech was acting merely as a freight forwarder in arranging carriage of the cargo and had no contractual relationship with the Owner. He stressed the fact that the copy of Contech Bill of Lading before this court was not signed. Lastly, he said the master of a vessel has no authority to sign a second bill of lading for the same cargo: Scrutton on Charterparties22^nd Ed para 3-024; The Atlas [1996] 1 Lloyd’s Rep 642, 649 (Longmore J); Daewoo Hong Kong Ltd v Mana Maritime Inc [1997] 3 HKC 109, 116 (Stone J).  For all these reasons, only the Top Grace Bill of Lading is evidence of a contract of carriage between the Plaintiffs and the Owner but not the Contech Bill of Lading.

15.  Mr Ko, for Top Grace, adopts Mr Luxton’s submissions.  He submits that the burden is on Mr Alder, for the Plaintiffs, to demonstrate strong grounds for not staying the consolidated proceedings.

16.  Pausing here, I should immediately point out a number of fallacies of Mr Luxton’s submission.

a. First, albeit the copy of Contech Bill of Lading before this court was not signed, the Plaintiffs’ and Contech’s case[3] in the present proceedings is that it was indeed issued and passed to Polex to evidence the contract of carriage of the cargo in question.

b. Second, the evidence is unclear which bill of lading was issued first. While there is evidence from the Plaintiffs that the Contech Bill of Lading was issued to Polex, the evidence is unclear whether and if yes under what circumstances the Top Grace Bill of Lading was issued to Polex, or any of the Plaintiffs. At para 7 of Cai’s affirmation dated 5 May 2015 (filed on behalf of the Owner), Cai only mentioned that in the past, Top Grace would hand over its bills of lading to Contech.[4]

c. Third, for the sake of argument, even on the assumption that Contech had no authority to issue the Contech Bill of Lading on behalf of the master of the Vessel or the Owner, the Plaintiffs may have a claim against Contech for breach of warranty of authority.  Since Contech is a Hong Kong entity, it makes sense for the Plaintiffs to sue Contech in Hong Kong.  In that event, there will still be multiplicity of proceedings in different forums if the proceedings against the Owner and Top Grace are stayed.

17.  Mr Alder submits that the stay applications should be dismissed on a number of grounds.  This court need only state three of them which, in its view, are unanswerable:

a. First, Clause 2 of the Top Grace Bill of Lading is a non-exclusive jurisdiction clause and hence, for the purpose of RHC O 12 r 8(2A)(b), the jurisdiction of the Hong Kong court has not been excluded (“1^st Ground”).

b. Second, the Owner had submitted to the jurisdiction by inter alia signing a draft consent summons, prior to the hearing before this court on 26 March 2015, consenting to the consolidation of HCAJ 139 of 2014 and HCAJ 140 of 2014.  Top Grace had also submitted to the jurisdiction by signing the said draft consent summons (“2^nd Ground”).

c. Third, the Plaintiffs have good reasons to commence proceedings in Hong Kong against Contech.  It will result in multiplicity of proceedings in Hong Kong and the PRC if the court were to stay the consolidated proceedings against the Owner and Top Grace.  This is wholly unjustified given the small amount of the claim and the Plaintiffs will suffer prejudice if there were to be a stay. The court should dismiss the stay applications in the exercise of its discretion (“3^rd Ground”).

1^st Ground

18.  The principles pertaining to the 1^st Ground have been helpfully summarised by Deputy High Court Judge Reyes SC (as he then was) in Hwoo Huang Linda v Fu Being San belatedly reported in [2013] 1 HKLRD 259 (involving a stay application on the ground inter alia that the Plaintiff had breached an exclusive jurisdiction clause requiring disputes be brought “in the Court in the United States of America”) at [40] and [44] – [45]:

“Whether the Deed contains an exclusive jurisdiction clause

…

40. Both Mr Scott and Mr Wright cited Sohio Supply Co. v. Gatoil (USA) Inc. [1989] 1 Lloyds Rep 588 and Yu Lap Man v. Good First Investment Ltd [1999] 1 HKC 622 (CA) as exemplifying the approach in determining whether a clause should be treated as an exclusive jurisdiction clause. The fact that the forum clause does not explicitly impose exclusive jurisdiction is inconclusive. The question:-

‘is whether on its true construction the clause obliges the parties to resort to the relevant jurisdiction, irrespective of whether the word ‘exclusive’ is used” (Gatoil at 591 col.2 (Staughton LJ quoting a footnote in Dicey & Morris on the Conflict of Laws)).’

As an aid to construction I can, in addition to looking at the plain meaning of the words used by the parties, take account of the factual matrix or surrounding circumstances in which the forum clause was agreed. See Gatoil at 591 col.2 – 592 col.1 and Yu Lap Man at 626‑7.

…

44. The forum clause evidences an agreement to litigate in the US, but where in the US? The US is comprised of state and federal jurisdictions. Literally read, the forum clause enables a dispute to be brought before any US state court or federal court, whether or not such court was a convenient forum and whether such court had a significant or trivial link to the parties or their business. If the clause is viewed thus, it is hard to see how the parties could have intended to confer exclusive jurisdiction en bloc to any US court whatsoever. The notion of “exclusive jurisdiction” connotes particularity, that is, a discriminating choice of a specific jurisdiction, typically for some reason rendering it desirable to impose an obligation to litigate in that geographical location and no other. This particularity is at odds with a wholesale, indiscriminate designation of any US state or federal jurisdiction as an acceptable forum.

45. If the parties had actually intended the forum clause to be exclusive in character, they would effectively be saying by it: “We do not care where in the US any one of us brings proceedings or whether such US forum is appropriate, convenient or relevant to us or our business venture, so long as suit is brought inside and only inside the US.” From an objective viewpoint, such stance does not seem logical. It is hard to believe that is what ordinary, reasonable persons would have in mind in agreeing to litigate “inside the United States of America”. In my view, it is more probable that the parties (if they had addressed their mind to the point at all) intended the forum clause as a permissive stipulation. In other words, whether or not the US was convenient, appropriate or relevant to the parties and matters arising from the Deed, each agreed to submit to a US forum if any one of them happened to bring suit there.” (emphasis added)

19.  The observations above are equally applicable to the present case by analogy. Clause 2 simply refers to the “Court in the Mainland of People’s Republic of China” without expressly (i) stating that the jurisdiction so conferred is exclusive or (ii) specifying a PRC Court of a particular geographic location or jurisdiction eg the Maritime Court for the resolution of the disputes under the Top Grace Bill of Lading.

20.  It is unclear to this court how a jurisdiction clause can be construed as an exclusive jurisdiction clause in the present case by taking into account of the factual matrix or surrounding circumstances.  It may or may not be possible in other cases.  However, it is clear to this court that as a matter of ordinary contractual principle, if the jurisdiction so conferred by Clause 2 is not expressly stated to be exclusive, it can only be implied if the criteria for implication of terms set out in Kensland Realty Ltd v Whale View Investment Ltd (2001) 4 HKCFAR 381, 391J‑392B are satisfied.  For the present purpose, this court need only state one of them ie the term must be so obvious that “it goes without saying”.  Objectively speaking, it is difficult to see the logic of Top Grace, a Hong Kong company, requiring a Hong Kong shipper ie Polex to bring legal proceedings anywhere in the PRC irrespective of whether such a PRC forum is appropriate, convenient or relevant to the disputes in question.  Nor can this court see the logic of Polex agreeing to it.  In other words, this court is not satisfied it is so obvious that it goes without saying Clause 2 is an exclusive jurisdiction clause.

21.  Like Deputy High Court Judge Reyes SC, in this court’s view, if Clause 2 is to have any sensible meaning and effect at all, the intention of the parties[5] must be that it is a permissive and not a mandatory stipulation.

22.  In other words, Clause 2 is a merely a non‑exclusive jurisdiction clause, the effect of which is that the parties have agreed to submit to the jurisdiction of any PRC Court if an action is brought against it in that Court: Hwoo Huang Linda v Fu Being San supra at [45]; Noble Power Investments Ltd v Nissei Stomach Tokyo Co Ltd [2008] 5 HKLRD 631 at [29].  If so, the proper approach of the court in deciding whether to stay the present proceedings is to apply the principles of forum non conveniens: Cheshire, North & Fawcett Private International Law 14^th Ed pp 447‑8; The Rothnie [1996] 2 Lloyd’s Rep 206.  This issue will be canvassed below. 

2^nd Ground

23.  In any event, this court accepts Mr Alder’s submission that both the Owner and Top Grace have submitted to the jurisdiction of the Hong Kong court.  If so, the stay applications must also fail on this Ground.

24.  The principles pertaining to the 2^nd Ground have also been helpfully summarised by Deputy High Court Judge Reyes SC (as he then was) in Hwoo Huang Linda v Fu Being San supra at [26]:

“26. … I derive the following guidelines (which are not intended to be an exhaustive statement of the law) for evaluating whether there has been a submission to Hong Kong jurisdiction in the present case:-

(1) A party may be treated as having submitted to the jurisdiction if he files a pleading setting out his case on the substantive merits of an action.

(2) A party may be treated as having submitted to the jurisdiction if he invokes the Court’s jurisdiction to obtain an interlocutory or final order requiring the opposite party to perform some act (for example, disclose documents, provide further and better particulars, or answer interrogatories).

(3) A party does not submit to the jurisdiction if he merely acts to preserve the status quo pending the mounting and resolution of an application to challenge forum.

(4) A party does not submit to the jurisdiction if he merely takes defensive action in interlocutory injunction proceedings brought by the other side.

(5) A party may be able to preserve an option to challenge forum, despite having engaged in conduct which might be regarded as submission to the jurisdiction, if before or at the time of such conduct he makes it clear that his action is without prejudice to the bringing of a challenge to forum.

(6) The Court should adopt a common sense approach. It must not be overly subtle or astute to find that a party has submitted to the jurisdiction. Otherwise the question of submission could easily become a technicality trap for the unwary. The real question is whether a party’s conduct is so inconsistent with maintaining an option to challenge forum that the party should be assumed to have waived such option. In the case of any doubt, the party proposing to challenge forum should probably be given the benefit of that doubt.” (emphasis added)

25.  Adopting a common sense approach, this court asks whether the Owner and Top Grace’s conduct is so inconsistent with maintaining an option to challenge the Hong Kong forum as to amount to a waiver of that option.  Looking at the matter fairly and sensibly[6], it seems to this court that the answer must be yes: by consenting to the consolidation of the two proceedings and not stating that the consent is without prejudice to an intended challenge to Hong Kong court as the forum, the Owner and Top Grace were effectively saying they are content to have the consolidated proceedings tried by this court.

26.  The starting point is that both the Owner and Top Grace were fully aware that the Plaintiffs’ case against Contech and/or the Owner is based on the Contech Bill of Lading which is governed by Hong Kong law and contains an exclusive Hong Kong jurisdiction clause: see 1^st Affidavit of Andrew Horton (“Horton 1”) and exhibit “ADH-1” in support of the Plaintiffs’ application to consolidate the two proceedings.  Both the Owner and Top Grace were also fully aware of the Plaintiffs’ reasons for seeking a consolidation order.  At paras 5 and 24 of Horton 1, he said:

“5. I believe that the Actions should be consolidated because both the in rem and in personam Actions:

a. Refer to the same common question of law and fact; and/or

b. The rights to relief claimed are in respect of and arise out of the same facts; and/or

c. It is desirable to make an Order to consolidate the Actions in the interest of efficiency and saving costs

…

24. Furthermore, the danger in not consolidating the Actions is that it is conceivable that if the two Actions were heard separately by different Courts / Judges, there could potentially be conflicting judgments rendered in which the Plaintiffs may be left with no compensation for their loss against any of the Defendants in either Action.  For this reason, I believe it is desirable for the Actions to be consolidated.”

27.  Since the Plaintiffs’ claim against Contech must be brought in Hong Kong, and, in any event, since Contech is a Hong Kong entity and it makes sense to issue proceedings against Contech in Hong Kong, the proceedings against Contech will be tried in Hong Kong, with or without the consolidation. If there were to be a consolidation of the two proceedings, one would naturally expect the consolidated proceedings to be tried in Hong Kong, in the interest of efficiency, saving of costs and time for all parties as well as the avoidance of the danger of conflicting judgments.  These were the reasons cited in Horton 1 for seeking a consolidation.

28.  By consenting to the consolidation, both the Owner and Top Grace must be assumed to have accepted the validity of some if not all the reasons put forward in Horton 1.  Otherwise, they should and would have opposed the application.  They must also be assumed to have agreed that the consolidated proceedings should be tried in Hong Kong, at the same time and before the same judge.  In other words, looking at the matter fairly and sensibly, their conduct was so inconsistent with maintaining an option to challenge Hong Kong court as the forum for trying the consolidated proceedings that both the Owner and Top Grace must be assumed to have waived such option.  Their conduct cannot fairly and sensibly be regarded as merely acting to preserve the status quo pending the mounting of a challenge to forum – they did not mention any intended challenge to Hong Kong as the forum and there was no status quo which need to be preserved.  Nor can it be regarded as merely taking a defensive step in interlocutory proceedings brought by the other side.

29.  But there is more.

30.  As far as the Owner is concerned, it is the Defendant in HCAJ 139 of 2014.  That is an in rem action against the Vessel and the court’s jurisdiction is founded by the service of the in rem Writ on the Vessel and its arrest on 17 December 2014.  Service of the writ was acknowledged by its solicitors on 29 December 2014.  The effect of the acknowledgment was that HCAJ 139 of 2014 continues not just as an action in rem and also an action in personam against the Owner.  In The August 8 [1983] 2 AC 450, 456, Lord Brandon of Oakbrook, delivering the judgment of the Privy Council, said this:

“By the law of England, once a defendant in an Admiralty action in rem has entered an appearance in such action, he has submitted himself personally to the jurisdiction of the English Admiralty Court, and the result of that is that, from then on, the action continues against him not only as an action in rem but also as an action in personam: The Gemma [1899] P. 285, 292 per A. L. Smith L.J.” (emphasis added)

31.  As far as Top Grace is concerned, it had filed skeleton submissions for the hearing of the Plaintiffs’ application for consolidation on 26 March 2015.  In the submissions, Top Grace said at para 10 that instead of consolidation, it would be sufficient for the purpose of saving time and costs by ordering the two actions be heard one after the other by the same judge.  Subsequently, shortly before the hearing, Top Grace consented to full consolidation.  The stance taken by Top Grace in its skeleton submissions was explicable only on the basis that it also agreed that all the Plaintiffs’ claims against Contech, the Owner and Top Grace should be heard in the same forum in Hong Kong ie by the same judge.  Such conduct cannot fairly and sensibly be regarded as merely acting to preserve the status quo or taking a defensive step in interlocutory proceedings brought by the other side — Top Grace positively asked this court to order the trial of the two proceedings one after another by the same judge.

3^rd Ground

32.  Lastly, for the reasons set out in Horton 1 and Mr Alder’s written submissions at para 42 on the exercise of discretion, this court is of the view that there are “strong reasons” for refusing to stay the consolidated proceedings.

33.  As I said earlier, it is both necessary and desirable for the Plaintiffs’ claim against Contech to be tried in Hong Kong.  Contech is obviously content with that course - it has filed a Defence in the consolidated proceedings.  There is no evidence that Contech is also content with being sued by the Plaintiffs in the PRC or that it is somehow subject to the jurisdiction of the PRC Courts.  Hence, if this court were to stay the consolidated proceedings against the Owner and Top Grace, multiplicity of proceedings in Hong Kong and the PRC is almost inevitable.  This will result in increased legal costs and time costs for the Plaintiffs and a danger of conflicting results in the two proceedings.

34.  Given the small amount in monetary term of the Plaintiffs’ claims, it is unrealistic to expect the Plaintiffs to undertake such a task, the consequence of which is that the Plaintiffs may be forced to abandon their claims against the Owner and Top Grace. Alternatively, if the Plaintiffs’ claims are now time-barred in the PRC, as stated by Mr Horton in his 3^rd affidavit, the result will be more or less the same.  The Plaintiffs have, through no fault of them, lost their claims against the Owner and Top Grace.

35.  In these circumstances, this court’s discretion should be exercised in favour of the Plaintiffs by refusing the stay applications.

Stay based on Forum Non Conveniens

36.  Given this court’s conclusion above that the Owner and Top Grace have submitted to the jurisdiction of the Hong Kong court and that, as a matter of discretion, this court should refuse the stay applications in any event, the question of whether the PRC Court, whatever that may refer, or more specifically the Guangzhou Maritime Court, is clearly or distinctly the more appropriate forum than Hong Kong can be dealt with very briefly.

37.  The principles governing a stay based on forum non conveniens are well‑established and can be found in, for instance, Spiliada Maritime Corp. v Cansulex Ltd [1987] AC 460 and The Adhiguna Meranti [1987] HKLR 904.  They shall not be repeated here.

38.  As far as the Owner is concerned, judging from the skeleton argument of Mr Luxton dated 27 August 2015, it would appear that the Owner is not pressing for a stay on this ground: that skeleton is silent on it.  At para 37, Mr Luxton submitted that “For the reasons specified above, it is submitted that the Consolidated Proceedings should be stayed on the grounds that the Plaintiffs are contractually bound to pursue any claim against the Owners in the PRC Courts”.  It is only in his Reply Skeleton Argument dated 2 September 2015 that Mr Luxton, half‑heartedly in this court’s view, adopts the submissions of Mr Ko, for Top Grace, on forum non conveniens. To his credit, when asked by this court at the hearing, Mr Luxton reverted to his original position of only relying on the “exclusive” jurisdiction clause.

39.  As far as Top Grace is concerned, its evidence in support of a stay based on forum non conveniens consists of a paragraph in the Cai Affirmation at para 17:

“17. Besides, the 1^st Plaintiff of this action (the addresses of the other Plaintiffs are not clear), the 2^nd Defendant, Top Grace’s principal place of business, the place of unstuffing of the cargo, the place where the survey was taken place, the Surveyor company, the Vessel’s registration, the crew members of the Vessel are all within the jurisdiction of China. In the premises, I believe it is more appropriate to have this case adjudicated by the Maritime Court of Guangzhou.”

40.  At paras 52 - 68 of the submissions of Mr Ko, a number of factors were identified by him suggesting the Guangzhou Maritime Court as the appropriate forum.  None of them, in this court’s view, are valid or sufficiently point to the Maritime Court of Guangzhou as clearly or distinctly the more appropriate forum for the trial of the action.

41.  First, Mr Ko submits that Top Grace has undertaken to submit to the jurisdiction of the PRC Courts generally in its Bill of Lading.

42.  This is completely irrelevant or close to being completely irrelevant.  It amounts to no more than saying Top Grace is willing and prefers to litigate in the PRC Courts which is always the case when a defendant seeks to stay Hong Kong proceedings in favour of PRC Courts.

43.  Second, Mr Ko submits the principal location of business for the Owner and Top Grace, as well as the 1^st and 2^nd Plaintiffs, are located in the PRC.

44.  In my view, this factor has little weight.  Top Grace itself is a Hong Kong incorporation.  The Owner, while a PRC entity or natural person, has chartered the Vessel to Top Grace at the material time.  The Top Grace Bill of Lading was not issued by the Owner from its principal business location.  It was issued by Top Grace.  Hence the Owner’s principal business location is hardly relevant.  As for the 1^st and 2^nd Plaintiffs, whether or not they are located in the PRC also has little weight.  The shipment was not arranged by them - it was arranged by Polex with Contech.

45.  Third, Mr Ko submits the destination and examination of the cargo in question and the location of the surveyors are in Guangzhou.  

46.  This is a relevant factor but not sufficient to render Guangzhou clearly or distinctly the more appropriate forum for the trial of the action.  What it means is that some witnesses may have to travel from Guangzhou to Hong Kong, which is hardly a demanding journey.  On the other side of the equation is that some witnesses of the Plaintiffs and Contech are likely to be located in Hong Kong.  Hence, whether the trial is to take place in Hong Kong or Guangzhou, some witnesses will have to travel.

47.  Fourth, Mr Ko submits the directors and shareholders of Top Grace are residents of Guangzhou.  

48.  This is again irrelevant or close to being completely irrelevant, in the absence of indication that any of them are going to be witnesses for Top Grace. In any event, traveling from Guangzhou to Hong Kong is hardly a demanding journey.

49.  Fifth, Mr Ko submits the Owner is a resident in the Zhejiang Province, PRC.  

50.  Assuming the Owner is going to testify at the trial, traveling between Zhejiang and Guangzhou is not much different from traveling between Zhejiang and Hong Kong.  Hence, this factor has little weight.

51.  Sixth, Mr Ko submits the crew members of the Vessel are all located in the PRC.  

52.  This is again irrelevant or close to being completely irrelevant, in the absence of indication that any of them are going to be witnesses for the Owner or Top Grace.

53.  Lastly, Mr Ko submits PRC law is the applicable law of the Top Grace Bill of Lading.  While there is no express choice of law clause, Mr Ko submits that the parties intended for PRC law to apply since there is a PRC jurisdiction clause in the Bill of Lading.  

54.  This may have some relevance if Mr Ko can identify some distinct PRC legal issues in the proceedings which render the trial in a PRC Court more convenient.  But Mr Ko has not.  In any event, this court hears PRC legal expert evidence from time to time and if need be, the parties can always instruct PRC lawyers from cities nearby, say Shenzhen or Guangzhou, to testify in Hong Kong.  As I said, traveling from Guangzhou, or a fortiori Shenzhen, to Hong Kong is hardly a demanding journey.

55.  To conclude, for reasons stated above, this court is of the view that the Owner and Top Grace have failed to demonstrate that the Maritime Court of Guangzhou is clearly or distinctly the more appropriate forum for the trial of the action than Hong Kong.  For the avoidance of doubt, this court would in any event decline to exercise its discretion to order a stay of the proceedings, for reasons stated in paras 32 to 35 above.

Disposition

56.  The stay applications by the Owner and Top Grace are hereby dismissed.

57.  There shall be an order nisi that costs of and occasioned by the Notice of Motion dated 4 May 2015, the Summons dated 22 May 2015 and the Summons dated 6 May 2015 be to the Plaintiffs, to be taxed if not agreed, and paid forthwith, with certificate for counsel.