XCHRX HBZ FINANCE LTD. v. NIPPON YUSEN KAISHA

HCAJ90/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY ACTION NO. 90 OF 2001

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J U D G M E N T

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1. This is an application for a stay by the defendant Nippon Yusen Kaisha ("NYK") against the claim brought by HBZ Finance Ltd ("HBZ") for misdelivery of five consignment cargoes under five different Bills of Lading issued by the defendant. The cargoes were all shipped from a Chinese port to a port in Chile. The clause in the Bills of Lading all provide for exclusive jurisdiction of Japan and Japanese law. The goods were released in Chile, not to the plaintiff who is the holder of the Bills of Lading, but apparently to people unauthorized to receive them, most probably in the form of people closely connected to the notified parties under the Bills of Lading. The plaintiff sued for misdelivery and the answer of the defendant is that it relies on the exclusive jurisdiction for stay.

2. Pursuant to Chilean law and custom, all ship-owners carrying goods into Chile were obliged to give delivery of the goods to the Chilean Customs and upon this being done they have discharged their liability to the cargo. Therefore, as in the case which I have decided in AJ70 of 2001, the defendant argues that it has a good defence.

3. In this case, I have the similar two issues (as in AJ70 of 2001) which require to be considered on this application for stay. The first issue is whether the exclusive jurisdiction clause in the Bills of Lading can be relied upon and secondly, if it can be relied upon, whether the plaintiff has shown good cause why this court should not enforce this exclusive jurisdiction clause, but instead allow the plaintiff to proceed in Hong Kong notwithstanding that exclusive jurisdiction clause.

4. I think it is well recognized by the parties at the hearing that so far as the legal arguments as to the ability of the defendant to rely upon the exclusive jurisdiction clause is concerned, the points that the parties wish to advance are merely those that they have advanced at the previous hearing.

5. At the previous hearing, I came to the conclusion in my judgment that the clause can be relied upon notwithstanding the stamp clauses A, B, C on the relevant Bills of Lading. The relevant clauses are exactly the same and I think the same reasoning shall apply. I do not wish to repeat myself. A reading of my judgment given on 19 July 2001 will reveal the reasons why I have come to that conclusion.

6. Most of the time at today's hearing was spent on the question of whether good reasons had been shown by the plaintiff for the court not to enforce the exclusive jurisdiction clause. What I have said in my July 2001 judgment also applies. There is however a twist to today's case, and the additional twist really took the form of the way that the plaintiff is now seeking to rely on what is said to be an additional Hong Kong element as a result of some exchanges which took place between the parties in the course of the plaintiff making their claim or investigating its claim. It is said that the defendant had either not been forthcoming with its evidence on what took place in Hong Kong during the investigation stage, or that the defendant had made misrepresentation to the plaintiff so as to prejudice the plaintiff's claim in relation to proceedings in Japan. I think Mr Shieh is right in saying that : so far as the allegation concerning the way the claim had been handled by the plaintiff is concern they are not really addressing the central issue. The central issue here, on the Eleftheria principle, is whether having regard to the action that will be tried (based on the present material), the plaintiff had showed a strong case that the court should not apply the jurisdiction clause. That is a difficult task, I think, as recognized by everyone and normally therefore it would require very strong evidence of strong Hong Kong connection, evidence coming from Hong Kong, documents in Hong Kong, some exclusive role that Hong Kong court can play, vis-à-vis the Japanese court; and that is why the Hong Kong connection has to be of such a value that it overwhelms the other elements and therefore would induce the Hong Kong court not to enforce an exclusive jurisdiction clause.

7. The matter of how the claim had been handled is, in my view, at best, of marginal significance and at worst irrelevant. The question at present formulated requires little issue of fact of Hong Kong element and the issue of fact of the way the claim had been handled is really neither here nor there. However, even if it is relevant, then I agree with Mr Shieh that the key-person, Mr Miyakawa, who was the one dealing with the matter, swearing the affidavit, dealing with the correspondence, is no longer in Hong Kong but is in Japan, so that does not help the plaintiff but help the defendant.

8. So far as the other strand of the plaintiff's new case, what Mr Shieh has characterised as "opportunist case" advanced by Mr Kerr today is concerned, this is the case of a misrepresentation having been made by the defendant that the Bills of Lading relied upon for the release of goods in Chile was a second original set issued in Hong Kong and which then led the plaintiff to issue proceedings only in Hong Kong and not in Japan. So far as that strand is concerned, firstly it is not on affidavit, secondly it is highly debatable that it is likely to succeed, having regard to the documentary material at the hearing before me, and thirdly, I think, looking at it realistically, it is more a case of wishful thinking rather than a case which can be fully supported by real material e.g. such as reliance by the plaintiff on the alleged representation. It seems to me that there may be a great deal of truth in what Mr Shieh says that very often this sort of where to take the legal proceedings is decided on a commercial basis and that is often a high wire act of relying on only one jurisdiction and not take the back-up steps of issuing alternative jurisdiction.

9. If there has been truly a reliance alleged on the misrepresentation, one would expect the plaintiff's reaction when it received in July the affidavits in reply of the defendant's to be screaming and shouting that there had been a prejudice, and that it had thereby lost its opportunity of suing in Japan because of the misrepresentation made by the defendant. These are just some of the factors that seem to point to, if I may call it, the apparent weakness of the plaintiff's case. However, this second strand must be put into the context of the overall consideration by the court as to what need to be investigated at any trial of the action. In my view, the overall emphasis of the case must be on what took place in Chile against the background or material contested or not contested, and most likely contested, of the legal regime in Chile and the customary practice in Chile. Now, everything in this case points to Chile. There was reference, for example, in the course of the argument to Temporary Admission Title for Containers ("TATC"), and to the issue of the TATC by the container operator which enabled the goods to be released. The lawyer for the defendant Leslie Tomasello Hart has sworn affidavit evidence and it seems to me, I accept this submission of Mr Shieh, that there would be issues at the trial, among other things, as to what is the status of the container operator; whether the TATC was causative and what was the TATC regimes supposed to be aimed at. That is to say, what is supposed to be the role played by TATC? Is TATC really directed at the importation of container and therefore the movement of containers, i.e. quick in and quick out and therefore no duty paid as opposed to the contents of the container which was the role played by the Chilean customs.

10. There are many of these knotty issues which have to be resolved at the trial of this claim, and in order that the court might decide the ultimate responsibility of the defendant, the court must fully investigate into the different regimes in relation to the role played by the Customs under the Chilean law and the role played by the Container operator in relation to TATC, the private and public side of the different entities and the different practices under the different regimes.

11. I therefore have no doubt that this case is not that different from the one decided in my July 2001 Judgment. The overwhelming materials and factors strongly point to the necessity to investigate the Chilean side, and that, therefore, there is no strong reason for refusing to enforce the exclusive jurisdiction clause. There is really either little or marginal or insignificant Hong Kong connections in this Action so as to justify the court ignoring the exclusive jurisdiction clause and allowing the plaintiff to sue in breach of its agreement.

12. I think the conclusion I can reach, in the circumstances, can only be that the application be granted with costs to the defendant.

13. For the sake of clarity in relation to the application to amend, I think in the circumstances, I must refuse leave to amend this Statement of Claim because it seems to me that in absence of the necessary credible affidavit evidence in support, the proposed amendment cannot make any difference to the outcome of today's hearing. It seems to me that I should not increase costs by allowing the amendment.