XCHRX The PLANETA (OWNERS OF CARGO) v. The PLANETA (OWNERS OF THE SHIP)

1991, AJ-384

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

ADMIRALTY JURISDICTION

(Admiralty action in rem against)
the ship or vessel "PLANETA"

________________

--------------

DECISION

--------------

1. This is an application by the Defendants for the action to be stayed on the grounds that Japan is the jurisdiction to which the Plaintiffs agreed all disputes should be referred, and/or is the appropriate forum for trial. The first ground has not been pursued, the Defendants very sensibly, in my view, having recognised the difficulties involved in attempting to rely upon a jurisdiction clause in a bill of lading to which they were not parties. I need say no more about that. I am concerned only with the second ground, that of forum non-conveniens.

2. There are 23 Plaintiffs. By their addresses given on the writ, 10 are Japanese, 10 Malaysian, 1 Indonesian, 1 Singaporean and 1 Hong Kong. The last, however, by its name is plainly connected with Japan. The Plaintiffs were the shippers, sellers, buyers or consignees of cargo which was loaded in Tokyo but found damaged on delivery in Indonesia and Malaysia. They have brought this claim for the benefit of subrogated insurers who are Japanese and Malaysian.

3. The Defendants are a Cypriot company. Their vessel is registered and managed in Limassol. At the material time, some of the ships officers were German, the rest of the officers and crew being Philippine nationals. Apparently they all speak English. The ship was operating under a time charter to Nippon Yusen Kaisha (NYK) under a modified New York Produce Exchange Form. In turn NYK had sub-time chartered the vessel to Tokyo Senpaku Kaisha (TSK) under a similar form.

4. The cargo in question had all been loaded in Tokyo in November 1990. It was carried under 14 bills of lading issued on four different forms by TSK and others who became carriers for the purposes of Japanese law. Each bill of lading was expressly governed by Japanese law and required actions to be brought in the Tokyo District Court. Each bill also included a Himalaya clause. By such a clause, a carrier seeks to avoid liability on the part of himself, his agents, servants, contractors and sub-contractors.

5. After loading, the vessel called at 4 intermediate ports, including Kobe and Hong Kong, before discharging cargo when the damage was found. There is no information as to why the vessel called at Hong Kong and certainly no indication that it was for commercial purposes.

6. It is the Plaintiffs' claim that the cargo, which was principally carried in Hold No. 3, was damaged by salt water as a result of ballasting at Kobe on 23rd November. The Hold was flooded through a manhole on the starboard side tank wall to a height of some 7.5 metres so that the lower two tiers of containers in the Hold were covered. There was also some minor flooding of Hold No. 1 through cracks in the bottom tank which caused damage to some cargo there.

7. This claim was based upon a survey report prepared by two surveyors of Shin Nihon Kentei Kyokai, a firm of Japanese surveyors. The report is lengthy and detailed. It is in impeccable English.

8. Further evidence led by the Plaintiffs for the purpose of this application shows that the Captain, Officers and crew of the vessel denied any knowledge of cargo being contaminated by seawater. Subsequently, a member of the crew made a statement in which he said that the crew had been told by the officers not to disclose what had happened, and confirmed that hold No. 3 had been flooded as the surveyors had concluded save that he stated the flooding was through a manhole cover on the port tank wall.

9. On 24th January 1991, the Plaintiff's solicitors wrote to the vessel's managers asking for security for their clients' claim. They pointed out that the vessel was due in Hong Kong in a few days time. A draft undertaking which accompanied that letter provided, inter alia, for submission to the exclusive jurisdiction of the Supreme Court of Hong Kong. On 28th January, the Defendants' solicitors wrote to the Plaintiffs' solicitors indicating, inter alia, that the Defendants did not wish to agree to submit to the jurisdiction of the Hong Kong courts. On 30th January, the Defendants' P & I Club provided an undertaking for the security required and also undertook to instruct solicitors to accept, on behalf of the owners of the ship, service of in rem proceedings brought in Hong Kong as if the writ had been served on the ship in Hong Kong, and to file an acknowledgment of service. At the same time, however, they reserved the right to challenge the jurisdiction of the Hong Kong courts.

10. There was further correspondence between the respective solicitors in October and November 1991. The effect of the correspondence was that the Plaintiffs' solicitors confirmed that they intended commencing proceedings in Hong Kong but were open to suggestion from the Defendants' solicitors as to the appropriate jurisdiction. The Defendants' solicitors declined to assist the Plaintiffs' solicitors and continued to reserve their right to challenge Hong Kong jurisdiction. In the event, a writ in rem was issued in Hong Kong on 30th November 1991. Service of the writ and of a statement of claim was accepted by the Defendants' solicitors on 19th October 1992 but without any submission to the Hong Kong jurisdiction. On 11th September 1992, the Defendants issued their summons to stay the proceedings.

11. For the Defendants, Mr. Thomas reminded me of the principles applicable to an application of this nature as laid down in Spiliada Maritime Corporation v. Cansulex Ltd. [1987] 1 AC 460 where at p.476 Lord Goff, after reviewing the authorities, said:

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

12. After dealing with the question of the burden of proof Lord Goff continued:

"The question being whether there is some other forum which is the appropriate forum for the trial of the action, it is pertinent to ask whether the fact that the Plaintiff has, ex hypothesi, founded jurisdiction as of right in accordance with the law of this country, of itself gives the Plaintiff an advantage in the sense that the English court will not lightly disturb jurisdiction so established."

13. Lord Goff then referred to certain U.S.A. and other authorities and continued:

"I can see no reason why the English court should not refuse to grant a stay in such a case, where jurisdiction has been founded as of right. It is significant that, in all the leading English cases where a stay has been granted, there has been another clearly more appropriate forum - in The Atlantic Star (1974) A.C. 436 (Belgium); in MacShannon's case (1978) A.C. 795 (Scotland); in Trendtex (1982) A.C. 679 (Switzerland); and in the The Abidin Daver (1984) A.C. 398 (Turkey). In my opinion, the burden resting on the defendant is not just to show that England is not the natural or appropriate forum for the trial, but to establish that there is another available forum which is clearly or distinctly more appropriate than the English forum. In this way, proper regard is paid to the fact that jurisdiction has been founded in England as of right (see MacShannon's case [1978] A.C. 795, per Lord Salmon); and there is the further advantage that, on a subject where comity is of importance, it appears that there will be a broad consensus among major common law jurisdictions. I may add that if, in any case, 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.

(d) Since the question is whether there exists some other forum which is clearly more appropriate for the trial of the action, the court will look first to see what factors there are which point in the direction of another forum. These are the factors which Lord Diplock described, in MacShannon's case [1978] A.C. 795, 812, as indicating that justice can be done in the other forum at "substantially less inconvenience or expense." Having regard to the anxiety expressed in your Lordships' House in the Societe du Gaz case, 1926 S.C. (H.L.) 13 concerning the use of the word "convenience" in this context, I respectfully consider that it may be more desirable, now that the English and Scottish principles are regarded as being the same, to adopt the expression used by my noble and learned friend, Lord Keith of Kinkel, in the Abidin Daver [1984] A.C. 398, 415, when he referred to the "natural forum" as being "that with which the action had the most real and substantial connection" So it is for connecting factors in this sense that the court must first look; 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 (as to which see Credit Chimique v. James Scott Engineering Group Ltd., [1982] S.L.T. 131), and the places where the parties respectively reside or carry on business."

14. The principles were neatly set out by the late Hunter, J.A. in the Adhiguna Meranti [1987] HKLR 904 where at p.907 he said :

"(I) Is it shown that Hong Kong is not only not the natural or appropriate forum for the trial, but that there is another available forum which is clearly or distinctly more appropriate than Hong Kong (p. 986H). The evidential burden is here upon the applicant. The emphasis is upon "appropriate" rather than "convenient" because this is not simply a matter of practical convenience. The purpose is to identify the forum "with which the action has the most real and substantial connection" per Lord Keith in the Abidin Daver [1984] AC 398. The principal factors are enumerated at p.987D. Failure by the applicant at this stage is normally fatal.

(II) If the answer to (I) is yes, will a trial at this other forum deprive the plaintiff of any "legitimate personal or juridical advantage"? (pp. 987F, 991-3). The evidential burden here lies upon the plaintiff (pp.986A and 987G).

(III) If the answer to (II) is yes, a court has to balance the advantage 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 or 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] AC436."

15. For the Plaintiffs, Mr. Ribeiro did not seek to rely on stages (II) and (III). His single submission was that the Defendants had failed to discharge the burden placed upon them at stage (I).

16. Mr. Thomas also referred me to a passage in the judgment of Hunter, J.A. in Louvet and Louvet and Another [1990] 1 HKLR 670. There stage (III), the balancing exercise, was under discussion at p.677 where the judge said :

"There is no half-way house. You have to recognise that there is going to be one loser and one winner in the result. The court has accordingly to resort to wider considerations, to perhaps a supra-national standpoint, and try to determine in each case which is the fairer jurisdiction to the parties collectively or, perhaps putting it more brutally, which overall produces the least unjust result."

17. Mr. Thomas invited me, if necessary, to view his application from a supra-national standpoint. I do not think that permissible. I am dealing only with the stage (I) exercise, that is, the identification of factors that demonstrate the jurisdiction with which the action has the most real and substantial connection. It is only after that exercise has been carried through and if necessary the exercise at stage (II) that the court, as it were, has to stand back and ask itself what is right or fair in all the circumstances.

18. For his argument, Mr. Thomas accepted as he was bound to do that the Plaintiffs have established jurisdiction as of right in Hong Kong. That apart, he maintained that with one minor exception nothing else in the case connects it with or points to Hong Kong as the appropriate forum. His submission fell neatly, I thought, into two parts; namely, the facts and the law. As far as the facts are concerned, Mr. Thomas pointed out that apart from a surveyor who was retained by the Plaintiffs to examine the vessel when it called at Hong Kong after the voyage in question there is no other witness in or from Hong Kong. Witnesses of fact (as I hope my outline demonstrates) will either be members of the officers and crew of the vessel, now no doubt widely scattered around the world, or from Japan, Indonesia or Malaysia. Mr. Thomas went so far as to submit that witnesses of fact are irrelevant to my consideration. He said that although the Defendants make no admission, they have not adduced any evidence to contradict the allegations and the evidence of the Plaintiffs as to how the damage occurred and the consequences flowing therefrom. He invited me therefore to use my experience as a commercial judge and to assess what will be the real issues if the action comes on for trial. Those issues, he suggested, will be issues of Japanese law (to which I shall come in due course).

19. In support of this submission, Mr. Thomas referred me to the dictum of Lord Templeman in the Spiliada where at p.465 he said :

"In the result, it seems to me that the solution of disputes about the relative merits of trial in England and trial abroad is pre-eminently a matter for the trial judge. Commercial court judges are very experienced in these matters. In nearly every case evidence is on affidavit by witnesses of acknowledged probity. I hope that in future the judge will be allowed to study the evidence and refresh his memory of the speech of my noble and learned friend Lord Goff of Chieveley in this case in the quiet of his room without expense to the parties; that he will not be referred to other decisions on other facts; and that submissions will be measured in hours and not days. An appeal should be rare and the appellate court should be slow to interfere."

20. It is tempting to adopt Mr. Thomas's suggestion but again I do not think it permissible to do so. To date, the Defendants with leave of the court have not yet served a Defence. They have made no admission. Their attitude at present is one of putting the Plaintiffs to proof. I do not think it right, therefore, to discount at this stage the possibility of a trial on the facts. Accordingly, the identity and whereabouts of witnesses of fact cannot immediately be discounted.

21. In relation to the law, Mr. Thomas made two points. First, he said that on the Plaintiffs' own allegations the tort occurred in Kobe. From this flow two consequences. First, Japanese law applies. That proposition, however, as Mr. Thomas accepted, has to be qualified. If the trial takes place in Japan it will of course be entirely subject to Japanese law. Should the trial take place in Hong Kong, however, Japanese law is relevant only for the purpose of the double actionability test in order to show whether or not the act was justifiable in the place where it was committed. Subject thereto, and there is no dispute that by Japanese law the act in this case was not justifiable, the question of liability will be judged in accordance with the law of Hong Kong. A useful discussion of the choice of law is to be found in the judgment of Hunter, J.A. at p.911 in the Adhiguna Meranti.

22. The second consequence is that Japan is the natural forum for the determination of the dispute. Mr. Thomas referred to the Albaforth [1984] 2 Lloyd's Rep 91 where at p.94 Ackner, L.J. (as he then was) said:

"The learned Judge's attention was not invited to the Privy Council case of Distillers Co. (Biochemicals) Ltd. v. Laura Ann Thompson, [1971] A.C. 458.... In giving the opinion of the Privy Council Lord Pearson said:

..... The defendant has no major grievance if he is sued in the country where most of the ingredients of the cause of action against him took place ..... [-(467D)..] But when the question in which country's courts should have jurisdiction to try the action, the approach should be different : the search is for the most appropriate court to try the action, and the degree of connection between the cause of action and the country concerned should be the determining factor..... [-(467F).] It is manifestly just and reasonable that a defendant should have to answer for his wrongdoing in the country where he did the wrong ..... [-(468D).]

These quotations make it clear that the jurisdiction in which a tort has been committed is prima facie the natural forum for the determination of the dispute."

23. In the same case after considering the authorities, Robert Goff, L.J. (as he then was) said :

"Now it follows from those decisions that, where it is held that a Court has jurisdiction on the basis that an alleged tort has been committed within the jurisdiction of the Court, the test which has been satisfied in order to reach that conclusion is one founded on the basis that the Court, so having jurisdiction, is the most appropriate Court to try the claim, where it is manifestly just and reasonable that the defendant should answer for his wrongdoing. This being so, it must usually be difficult in any particular case to resist the conclusion that a Court which has jurisdiction on that basis must also be the natural forum for the trial of the action. If the substance of an alleged tort is committed within a certain jurisdiction, it is not easy to imagine what other facts could displace the conclusion that the Courts of that jurisdiction are the natural forum."

24. The generality of that pronouncement has been eroded by Ackner, L.J. who delivered the judgement of the court in the Forum Craftsman [1985] 1 Lloyd's Rep 291. At page 297, he referred to it and said :

"We have no doubt that Lord Justice Robert Goff did not have in mind torts committed other than on dry land. He had no reason in the context of that case to contemplate the situation where a tort was committed by a member of a crew on board a ship as it passed through territorial waters, when neither the member of the crew nor the ship had any connection at all with the country whose territorial water was than being navigated. Nor do we imagine that he had in mind the somewhat analogous situation of a tort being committed by a member of the crew of or a passenger on board an aeroplane flying through the airspace of a country which had no connection with either the aeroplane or the tort-feasor. While we accept that the jurisdiction in which a tort has been committed is prima facie the natural forum for the determination of the dispute, that assumption is easily displaced in a case like the present one where, although the vessel was still moored to the wharf, loading of the vehicles which were ultimately damaged had already been completed and no doubt but for the accident the vessel would shortly have left Japanese territorial water on her voyage to Luanda."

25. Mr. Thomas pointed that this case was decided before the Spiliada and upon the principle laid down in Rockware Glass Ltd. v. MacShannon [1978] A.C.795 to the effect that :

"(a) the defendant must satisfy the court that there is another forum to which jurisdiction he is amenable in which justice can be done between the parties at substantially less inconvenience or expense and

(b) the stay must not deprive the plaintiff of a legitimate personal or juridical advantage which would be available to him if he invoked the jurisdiction of the English court."

26. The words emphasised, said Mr. Thomas, comprehend a narrower test. Whilst I accept Mr. Thomas's observations, I do not think that the force of Ackner L.J.'s remarks is undermined. It seems to me no more than a matter of common sense that a tort committed in a mobile vehicle may find a more natural home in a jurisdiction other than the one in which it fortuitously occurred.

27. The second point on the law made by Mr. Thomas again fell into two parts. He submitted that, first the Defendants may have a complete defence because by Japanese law arguably a ship owner is not liable in tort when he carries goods for the lessee or charterer of his ship who, having issued bills of lading, becomes the carrier for the purpose of the Japanese Carriage of Goods By Sea Act. Second, even if the Defendants are liable, they may be entitled to rely upon the Himalaya clauses in the bills of lading to obtain the benefit of a limitation of liability based upon the number of containers or the number of packages which were damaged.

28. I do not think I need go into these issues in any depth. Mr. Ribeiro analyzed the evidence of the two Japanese lawyers to identify where the lawyers are really in dispute. It was an analysis with which Mr. Thomas did not disagree. Where a vessel is under time charter, the lawyers seem agreed that, while Article 690 of the Japanese Commercial Code makes the owner prima facie liable for the torts committed by the master and crew, the owner may escape liability if he can show that he has divested himself of control over the master and the vessel's operations. This would occur where the vessel is chartered by demise. Depending on the facts of each case, however, it might occur where the vessel is time chartered. Further, it seems agreed that the charterer to whom an owner has effectively transferred control may be equated with a 'lessee' for the purposes of Article 704. The charterer may then be held liable in respect of the same duties as an owner would have. A charterer by demise would fall in this category. Again, depending on the facts of the case, a time charterer might also be classified as a 'lessee'. Where the lawyers disagree is over whether an owner's liability is wholly displaced when a charterer is brought within Article 704. The crucial question is whether the charterer becomes liable 'instead of' or only 'in addition to' the owner.

29. In relation to the Himalaya clauses, the lawyers agree that Civil Code Articles 537 and 538 enable third parties to take the benefit of contracts made for their benefit and may do so by declaring an intention to accept the benefit from the obligor. These provisions are applicable to a ship owner who wishes to take the benefit of a Himalaya clause entered into by a charterer and who may be regarded as a sub-contractor for this purpose. The real dispute between the lawyers is as to the construction of the Himalaya clauses and in particular whether the Defendants fall within the term 'sub-contractors'.

30. Should the Defendants be able to take the benefits of the Himalaya clauses, the question would then arise as to the meaning of package. The lawyers agree that this falls to be determined by considering the reasonable intention of the parties, the most important factor being any descriptions on the bills of lading particularly the number of packings, the number of commodities, capacity and weight according to notice given by the shippers. The issue, therefore, is one of construction.

31. Finally, the lawyers disagree whether the package limitation clauses might be void by virtue of Articles 13 and 15 of the Japanese COGSA. Again this is a matter of construction.

32. Mr. Thomas said that the issues of Japanese law are important and better decided by a Japanese Court. In particular, he pointed out that the question of whether or not an owner avoids liability when a vessel has been time chartered is one of fundamental importance and yet, on the authorities cited by the two Japanese lawyers, is one which has not yet been authoritatively decided in Japan. Given the importance of this point, it should be decided in a Japanese Court where if necessary it could be the subject of a final and determinative appeal. Mr. Thomas submitted that in approaching the question of foreign law, I should have regard to the comments made by Mustill, L.J. (as he then was) in Muduroglu Ltd. v. T.C. Ziraat Bankasi [1986] 1 Q.B. 1225 where at p.1246 he said:

"First, many actions are brought each year in which some aspect of the relationship between the parties is governed by foreign law. This is so particularly in the Commercial Court, because of the large proportion of foreign litigants who choose, or are brought, to appear before the court. Secondly, so far as my own experience has shown, most of these cases are decided solely in accordance with English law, not so much because the court has applied the presumption that foreign law is the same as English law, but because in so many practical respects there is insufficient difference between the commercial laws of one trading nation and another to make it worth while asserting and proving a difference. There does, however, remain a residue of cases where foreign law is hotly in dispute. Here, the issue has to be fought on expert evidence, with the help of written materials, in the light of jurisprudential concepts and procedural systems markedly different from our own. It is part of the stock-in-trade of the practitioner and judge in the Commercial Court to deal with this kind of dispute, and the volume of business in the court would give the lie to any suggestion that the court is seen by its users as incapable of dealing with any but characteristically English disputes. At the same time, it would be unrealistic not to acknowledge that the trial of an issue of foreign law must be more complicated and expensive here than in the court to which the law belongs. Moreover, although it does not follow that the judge at first instance here is more likely to misunderstand or misapply the law than his counterpart abroad, the fact that any appeal is treated as a question of fact rather than law does make it more uncertain whether any mistake that may be made is going to be put right.

At first sight, I doubted whether these considerations had much bearing on the present case. The points are mostly very short, and if argued under English law in an English court would not take long to decide. (I say "mostly" because the question whether it was a condition precedent to a demand under the counter-guarantee that demand should first be made on the plaintiffs is not, even in English law, as short as it might seem. It might be for argument, under English law, whether the authorities which dispense with the performance of a condition properly described as an "idle formality" are material in a case like this). It struck me initially that they would be just as short if decided under Turkish law in an English court since they are concerned principally with the interpretation of documents, which are unlikely to require the marshalling of numerous statutory provisions, commentaries and decided cases, and the examination of principles unknown to the English law and English lawyers.

On reading the affidavits of Turkish law, I am no longer so sure about this. I do not say that the Commercial Court could not cope with the issues, and decide them correctly. But they are not entirely straightforward, and I consider that the business of trial and appeal can be performed with markedly more convenience, and less expense, in Turkey than in England."

33. Mr. Thomas also referred me to Credit Chimique v. James Scott Engineering Group Ltd. [1982] SL 131 where at p.135 Lord Jauncey said:

"In this state of the authorities I consider that there can be no hard and fast rule as to the effect of the necessity for the application of foreign law on a plea of forum non conveniens but that each case must depend upon its own circumstances. In some cases the questions of foreign law may be relatively simple and the application of that law by a Scottish court may not present undue difficulties. In such cases the necessity to apply foreign law would not suffice to found the plea. In other cases the questions of foreign law likely to be involved may be numerous and complex and in such cases the necessity to apply the law might properly be a factor which the court would take into account in deciding whether or not to exercise its discretion to sustain the plea."

34. Mr. Thomas had to contend again with The Forum Craftsman. That case was very similar to the present one. It involved a ship owned by a Panamanian company and managed by a Greek Company. It loaded in Yokohama in Japan. After loading, damage was caused to certain cargo by the negligence of one of the crew. The vessel was under charter to an Angolan company. Inter alia, there arose the same point of Japanese law namely whether or not an owner is liable in tort when a time charterer has issued a bill of lading. Upon the affidavits of Japanese law placed before him, the judge apparently concluded that the point was a straightforward one which could be dealt with in England. In any event, the defendants' application for a stay was dismissed. At p.299 Ackner, L.J. said:

"Mr. Longmore fairly concedes that as he is asking us to review the exercise by Mr. Justice Sheen of his discretion, he must establish that no reasonable Judge would have accepted the view put forward by Mr. Mori in his first affidavit that it is not at all a difficult question of Japanese law as to whether or not there is a claim in tort against ship-owners where time charterers bills of lading are issued. In the light of the material which we have described, this is a very heavy burden and one which we consider that Mr. Longmore cannot discharge. There was clearly material which justified the learned Judge in accepting Mr. Mori's view despite the existence of a District Court decision."

35. About that case, Mr. Thomas makes two comments. First, he reminded me that it was decided pre-Spiliada. Second, he said that the evidence of the defendant's Japanese expert was weak and tentative in contrast with the evidence of the Defendants' lawyer in the present case. I accept the latter comment. Plainly there is a very live issue between the parties with either view point strongly and authoritatively supported. The position as it seems to me is very different from that obtaining in the Forum Craftsman.

36. Mr. Thomas adverted to a number of other factors which he suggested connect the case with Japan. I do not think there is any significance in these. In summary, his argument is that nothing points to Hong Kong as the natural or appropriate forum other than the founding of jurisdiction as of right. In contrast, Japan is prima facie the natural forum because the tort was allegedly committed in Kobe; while the real issues between the parties, those of Japanese law, strongly connect the case to Japan.

37. Mr. Ribeiro took me back to the Spiliada. He said that the focus of the case is on the appropriateness of the forum for the trial of the action and not on abstract connecting factors that do not affect the litigation process. He pointed to the many references to 'the trial of the action' which appear in the passages which I cited earlier in this judgment and elsewhere in the speeches, particularly that of Lord Goff. With that in mind, Mr. Ribeiro treated me to a close scrutiny of the evidence as to facts upon which the Plaintiffs say they will rely at trial. That evidence, said Mr. Ribeiro, will establish that the holds were flooded and that the flooding caused the damage of which the Plaintiffs complain; and goes to quantum. I have already given an indication of the nature of that evidence and I do not propose to do more than follow Mr. Ribeiro's summary:

(a) Cargo surveys were carried out by surveyors in Malaysia and Indonesia who made reports in English.

(b) Other documentary evidence such as bills of lading, invoices, contracts of sale and average adjustments are in English.

(c) The principal evidence of flooding in Hold No. 3, although by Japanese surveyors, is in English in their report.

(d) Other expert evidence as to the vessel will be given in English by experts based in Hong Kong or Germany.

(e) The evidence of the officers and crew could be given in English but not Japanese.

38. Leaving aside questions of Japanese law, Mr. Ribeiro submitted that the issues for trial on the facts very much favour Hong Kong and in no way suggest an advantage to a trial in Japan.

39. Mr. Thomas said that Mr. Ribeiro was in effect doing no more than to say that the Hong Kong courts are capable of dealing with the action; and that the matters addressed no more point to Hong Kong as being appropriate than to Singapore had the vessel been arrested there, or indeed to any other common law English-speaking jurisdiction. Whilst there is some merit in that point, it is not wholly compelling. As Mr. Ribeiro pointed out, the burden is upon the Defendants. If he is able to show that various factors are in effect neutral and thus eliminated from consideration, they do not avail the Defendants.

40. Further, Mr. Ribeiro argued that these factors do point to Hong Kong rather than Japan because plainly there will be a saving in time and cost to the benefit of everyone if the court and witnesses are speaking the same language, and if the court is considering and interpreting documents in its own language. With those comments I have to agree. These are matters which the Defendants have to overcome.

41. As to Japan being the prima facie natural forum, Mr. Ribeiro adopted the views of Ackner L.J. in the Forum Craftsman. I have already dealt with that aspect of the case. I accept that it may be easier for a plaintiff to displace the prima facie natural forum where a tort has been committed on a vessel in circumstances such as those obtaining here. As Mr. Ribeiro said, it was entirely fortuitous that, according to the Plaintiffs, the flooding occurred in Kobe. Further, he suggested that that was only part of the mischief. He said that the negligent fixing of the manhole cover plainly occurred other than in Kobe and not necessarily in Japan, while the actual damage to the cargo by salt water action continued if not commenced during the voyage after Kobe.

42. On the Plaintiffs' case, I am not inclined to doubt at this stage that the proximate cause of the damage was the flooding in Kobe and that that is where the tort occurred. But I accept that it was fortuitous that the tort occurred there and that the task of showing that the prima facie natural forum is elsewhere is not insuperable.

43. Turning to the real issues of Japanese law, Mr. Ribeiro said that upon his analysis the question of the Defendants' liability in tort is a narrow and manageable issue no more or less difficult than other issues of foreign law with which the Hong Kong courts have satisfactorily come to grip in the past. As to the Himalaya clauses, that is a matter of pure construction for the Hong Kong courts (who would anyway be construing an English document) guided by any evidence of canons of Japanese construction. On the state of the evidence at present, the only such canon is one analogous to our contra proferentem rule. Again the Hong Kong courts would have no difficulty in dealing with this issue.

44. It is agreed that the correct approach to foreign law is that stated by Lord Greene, M.R. in Rouver Guillet Et Compagnie v. Rouver Guillet & Co. Ltd. [1949] 1 All E.R. 244 where he said:

"As I understand the law of England, evidence as to the meaning of the statute is to be obtained from the evidence of expert French witnesses and the decisions of the French courts. On a matter of French law the decision of a French court would be most persuasive. On the other hand, evidence on the construction of a private document, such as articles of association, is admissible so far as it deals with French rules of construction or French rules of law or the explanation of French technical terms, but evidence as to its meaning after those aids have been taken into account is not admissible. It is for the court to construe the document, having fortified itself with the permissible evidence. I would add that when you come to the statute law itself, although it is right that prima facie what must be considered is the evidence of the experts and not the text of the law, when the experts differ as to its meaning an English court is entitled and, if it is to perform its function properly, is, indeed, bound, to apply its own mind, fortified by the opinion of the witnesses and giving what weight it thinks ought to be given to it, to the test itself and to examine it in order to make up its mind on the question of interpretation as between the two sets of witnesses."

45. On its own, it seems to me that the question of the interpretation of the Himalaya clauses is one which could comfortably be carried out by the Hong Kong courts. The question of an owner's liability in tort, however, although an issue which is easily defined is not necessarily narrow and manageable. In particular, the question of whether a time charterer is liable 'instead of' rather than 'in addition to' an owner will require the canvassing of a considerable number of Japanese authorities as well as the consideration of the strongly held opinions of the respective experts.

46. I approach my decision in this way. The Plaintiffs established jurisdiction in Hong Kong as of right. Such jurisdiction is not lightly to be disturbed. The strength of the Plaintiffs' position is fortified, but not greatly, by the fact that all witnesses or documents as to the facts are apparently English speaking or in the English language so that they may be conveniently and at less expense dealt with by the Hong Kong courts. The Defendants, however, on the Plaintiffs' own case can show that Japan is prima facie the natural forum. I do not see any factors which are of such overwhelming compulsion that I can without hesitation say that the prima facie forum has been displaced. On the contrary, it is clear to me that, although a trial on the facts cannot be discounted at this stage, the real issues which will be litigated between the parties are those which depend upon Japanese law namely: whether an owner is liable in tort when the vessel has been time chartered; the availability of the Himalaya clauses for the benefit of the Defendants; and the interpretation of those clauses. Those issues, it seems to me, are of crucial and fundamental importance. It cannot, I think, be denied that they can be far better resolved in a Japanese than a Hong Kong court. The case, in my judgment, is one of that "residue of cases where foreign law is hotly in dispute.

47. I come to the conclusion therefore that the Defendants have discharged the burden of showing that not only is Hong Kong not the natural or appropriate forum for this claim, but that Japan is clearly and distinctly more appropriate, that is, where the claim may be tried more suitably for the interests of all the parties and for the ends of justice. Accordingly, I make an order that these proceedings be stayed. I make an order nisi that the Defendants have the costs of this application in any event.

48. I should like to make a closing comment. Mr. Thomas accused the Plaintiffs of forum shopping. I reject that. From the correspondence between solicitors to which I referred earlier, it is plain that the Plaintiffs were open to suggestion as to the proper forum. The Defendants did not respond. They cannot be criticized for that. But they cannot. legitimately criticize the Plaintiffs for choosing a forum in which they could establish jurisdiction as of right. Further, the reliance by the Defendants upon the defences said to be available in Japanese law, which were, in my judgment, critical to the resolution of this application, was not then known to the Plaintiffs. Therefore, I absolve the Plaintiffs of this 'crime'.

(N.J. Barnett)
Judge of the High Court