RE THE ANDHIKA SAMYRA

AJ Folio Nos. 10, 12-15/88

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

ADMIRALTY JURISDICTION

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J U D G M E N T

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1. Five summonses lie before me for determination. They are applications made by the Defendants for a stay of the proceedings which have been commenced in Hong Kong.

2. As a matter of convenience it was agreed that as the five actions are of a similar nature I should consider the papers in Folio 10 as being representative of the papers in all the actions.

3. The Plaintiffs are claiming damages, on the various Bills of Lading in respect of goods shipped on the Defendants ship, the 'Andhika Samyra' or in the alternative in negligence.

4. The cargo was shipped in late August, 1987 to Indonesia. While the cargo was still in Hong Kong there was a fire which was subsequently extinguished. When the ship arrived in Indonesia there was a further much more extensive fire and considerable damage was caused to the cargo.

5. The goods subject to four of the Bills of Lading originated from Taiwan and the balance of the goods referred to in the other 24 Dills were shipped in Hong Kong.

6. The flag of the vessel is Indonesian. The Defendants are also Indonesian.

7. The main ground in support of the summonses that Indonesia is the natural and appropriate forum for the trial of the actions.

8. The principals to be applied in determining an application of this nature are to be found the speech of Lord Goff in Spiliada Maritime Corp. v. Cansulex Ltd. 1987 1AC 460. However Bingham L.J. in Du Pont v. Agnew 1987 2 Lloyd's Reports 585 at 588 made a useful precis of the principals:

"Where a party duly served with proceedings within this jurisdiction seeks to stay them -

... 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 forum having competent jurisdiction which is the appropriate forum or 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. (At pp. 10 and 985F).

In general, the burden rests on the defendant to persuade the Court to exercise its discretion to grant a stay (pp. 10 and 985G). But if the Court is satisfied that there is another available forum which is prima facie the appropriate forum for the trial of the action, the burden will then shift to the plaintiff to show that there are special circumstances by reason of which justice requires that the trial should nevertheless take place in this country (pp. 10 and 985H). The initial burden 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 (pp.11 and 986H). The first step is to see what factors there are which point' in the direction of another forum (pp.11 and 987B). One must, look for connecting factors which point towards another forum as that with which the action has the most real and substantial connection (pp.11 and 987C). Such factors may not only affect convenience or expense (such as availability of witnesses) but may also relate to the law governing the relevant transaction and the places where the parties respectively reside or carry on business (pp.11 and 987D). If the Court concludes at that stage that there is no other availabic forum which is clearly more appropriate for the trial of the action, it will ordinarily refuse a stay (p.11 and 987E). If however the Court concludes at that stage that there is some other available forum which prima facie is clearly. more appropriate for the tiral of the action, it will ordinarily grant a stay unless there are circumstances by reason of which justice requires that a stay should nevertheless not be granted (pp.11-12 and 987F). If  the plaintiff can establish objectively by cogent evidence that he will not obtain justice in the foreign jurisidiction, that is a very relevant consideration (pp. 12 and 987G).

As this summary makes plain, the correct approach to this problem in principle is to compare the relative appropriateness of the English with the competing foreign forum for a just trial of the action in question. It is less important than it was once thought to be whether a stay will deprive the plaintiff of a legitimate personal or juridical advantage (pp.14 and 991D et passim). This aspect is to be considered as part of a more general judgment on which is the appropriate forum in the interests of all the parties and in the interest of justice (pp.15 and 992E)."

9. I have no doubt that Mr. Dicks for the Defendants has established that there is a suitable alternative forum namely Indonesia. The most important question in this case is whether the Plaintiff is able to demonstrate by cogent evidence that the interests of Justice would be better served if the stay is not granted.

10. The main criticism which is made by Mr. Sussex for the Plaintiffs is that if the cases are tried in Indonesia the amount recoverable will be limited by the Tonnage limitation pursuant to Article 474 of the Indonesian Commercial Code.

11. This question was considered in some depth by the Court of Appeal in the Adhiguna Meranti 1987 HKLR 904.

12. The Court had before it, like myself, various affidavits of law sworn by experts in Indonesian law. Hunter J.A. who delivered the decision of the Court referred to the following findings at page 916:

"(1) That Indonesian lacy is so uncertain that no finding can be made.

(2) The possibility of the court basing its calculation upon 1 Rupiah to 1 Guilder cannot be excluded.

(3)    It is perhaps more likely that the court would make some adjustment in some way to reflect current values but the probabilities are that any such adjustment would produce a figure very much less than the limitation figures for Hong Kong and Taiwan appropriate to this casualty which are respectively $1,276, 103: and $607, 135.

In summary, therefore, if a stay is granted, the plaintiff would lose the certainty of the Hong Kong limit of $1.27m and face the uncertainty of an unknown limit which could be as low as $2,541 but is more likely to be adjusted upwards from that figure to some unascertainable amount."

13. The Plaintiffs issued a Motice pursuant to 0.38 r.7 in accordance with S.59 of the Evidence Ordinance Cap. 8 to the effect that the Court of Appeal had found that Article 474 aforesaid was at best uncertain and at worst derisory". Mr. Sussex submitted that as no counter Notice had been served by the Defendants it was not open to them to now contest this finding.

14. Mr. Dicks argued that S. 59 was not appropriate to interlocutory proceedings and could only be sought in and at the trial of the action. S. 59(1). and (2) read as follows:

"59. (1) A person who is suitably qualified to do so on account of his knowledge or experience. is competent to give, in civil proceedings, expert evidence as to the law of any country or territory outside Hong Kong, irrespective of whether he has acted or is entitled to act as a legal practitioner there.

(2) Where any question as to the law of any country or territory outside Hong Kong with respect to any matter has been determined (whether before or after the commencement of this Part) in any such proceedings as are mentioned in subsection (4) then in any civil proceedings (not being proceedings before a court which can take judicial notice of the Paw of that country or territory with respect to that matter) -

(a) any finding made or decision given on that question in the first-mentioned proceedings shall if reported or recorded in citable form; be admissible in evidence for the purpose of proving the law of that country o territory with respect to that matter; and

(b) if that finding or decision, as so reported or recorded, is adduced for that purpose, the law of that country or territory with respect to that matter shall be taken to be in accordance with that finding or decision unless the contrary is proved:

Provided that paragraph (b) shall not apply in the case of a finding or decision which conflicts with another finding or decision on the same question adduced by virtue of this subsection in the same proceedings."

15. I can see nothing in S.59 to lend support to Mr. Dicks's contention. I am satisfied that I am bound by the Notice.

16. In case I am wrong in this I will deal shortly with the evidence in this connection.

17. Mr. Dicks took me through all of the affidavits sworn by the various Indonesian Lawyers. He argued that there was definitely more material in these affidavits to support the view being taken that it was highly improbable that the Indonesian Court calculating the amount of the Tonnage limitation would base it on 1 rupiah representing, l guilder.

18. With respect to Mr. Dicks I do not consider that the additional evidence which is before me, but which was not before the Court or Appeal, goes as far as this. Having considered all of the evidence carefully I think that it can still be characterized in a similar manner to the way in which Hunter J.A. described it at pages 914 to 916 of the judgment.

19. Accordingly I would have come to a similar conclusion to that of the Court of Appeal.

20. Mr. Dicks placed considerable reliance upon condition 19 on the reverse side of the Bills of Lading which provides that the law governing the contract is Indonesian law.

21. Ackner L.J. dealt with a similar position in the Benarty 1985 1Q.B. 325. Re had this to say at page 343:

"Can the cargo owners show strong grounds for the court refusing a stay of English proceedings?

It is common ground that he judge only dealt with this question on an obiter basis by reference to the principles laid down by Brandon L.J. in The El Amria [1981] 2 Lloyd's Rep. 119, 123 to 124. He concluded that the cargo owners had shown sufficiently strong grounds to justify refusing a stay, had he not decided in their favour that the exclusive jurisdiction clause was not valid. In reaching his conclusion he considered (1) there was a substantial balance of convenience in having the trial in London because all the evidence of fact could be more conceniently be given in England than is Djakarta. This view was based on the assumption that liability and the quantum were in issue and evidence would thus be necessitated from the master. and ship's officers who, were likely to be British, and from the surveyors all of whom were Europeans and many of them lived in England. However, as I have pointed out earlier, neither liability nor quantum' will be challenged in Indonesia. (2) He took into account that the cargo owners would be prejudiced by the lower limit of liability which operated in Indonesia Mr. Walker accepted that the question of prejudice raised in item 5(e) of the principles in The El Amria at p. 124 related to procedural prejudice e.g. inability to obtain security problems about enforcement time bar and difficulties of achieving a fair trial. The party seeking to extricate himself from an exclusive jurisdiction clause to which he has agreed cannot pray in aid that the legislation which would be applied for the resolution of the dispute would be more advantageous to his opponent. That was part of the bargain. (3) The judge considered that a factor "which militate heavily against granting a stay" was that the. action in personam (folio 9), in which the first defendants were the shipowners, would proceed in London in any event, since their motion to stay had been dismissed. He considered that "it would be a wholly unjustifiable waste of costs for there to be two actions arising out of the same incident running in concurrently, one in London and one in Djakarta." However in the proceedings against the Scottish shipowners in England there are issues both on liability and quantum. In the Indonesian proceedings, as previously stated, the only issue will be the entitlement of the charterers to rely upon the Indonesian tonnage limitation. Bearing in mind the limited nature of the issue which would be determined in Indonesia, the cargo owners cannot in my judgment show the strong grounds that are required to justify the court refusing a stay of the English proceedings."

22. Mr. Dicks submitted that there was no justification for my not dealing with these applications in a similar manner. The parties had of their own volition agreed that Indonesian law should govern the contract and they should be held to this.

23. While this on the face of it is an attractive argument it has to be considered in the context of the Carriage of Goods by Sea Act 1971 which was brought into operation in Hong Kong by the Carriage of Goods by Sea (Hong Kong) Order.1980.

24. Article III Rule 8 of the Hague Rules which are contained in the schedule to the Act provides:

"8. Any clause, covenant, or agreement in a contract of carriage relieving the carrier or the ship from liability for loss or damage to, or in connection with, goods arising from negligence, fault, or failure in the duties and obligations provided in this article or lessening such liability otherwise than as provided in these Rules, shall be null and void and of no effect. A benefit of insurance in favour of the carrier or similar clause shall be deemed to be a clause relieving the carrier from liability."

I accept Mr. Sussex's submission that this taken in conjunction with S.1(3) of the Ordr is a clear overiding provision and that the effect of this is to incorporate the Hague Visby Rules into contracts of Carriage of Goods from Hong Kong. It is evident from the affidavits of law which were filed that Indonesia is not a signatory to the convention and this being the case the Hague Visby Rules are not incorporated into Indonesian contracts and thus have no application.

25. On the evidence before me it is manifestly the case that the limitation referred to in Article 474 of the Indonesian Code is radically different from the provisions contained in the Hague Visby Rules.

26. What is of interest is to note how, attempt to depart from the Rules have been dealt with by the Courts.

27. Lord Diplock had this to say at page 573 of The Hollandia 1983 AC 565:

"The first paragraph of condition 2 of the bill of lading, prescribing as it does for a per package maximum limit of liability on the part of the carriers for loss or damage arising from neglience or breach of contract instead of the higher per kilogram maximum applicable and et the Hague-Visby Rules, is ex facie a clause in a contract of carriage which purports to lessen the liability of the carriers for such loss or damage otherwise than is provided in the Hague-Visby Rules. As such it is therefore rendered null and void and of no effect under article III, paragraph 3."

28. Mr. Dicks sought to overcome this difficulty by suggesting that as no one as yet had attempted to invoke any limitation provisions it was premature to Argue that Condition 19 was null and void. I disagree. It is evident from the tenor of Lord Diplock's speech that he had in mind a situation where such a departure was only anticipated.

29. I am satisfied that even at this early stage in the litigation that Condition 19 is void and that the Defendants can place no reliance upon it.

30. Having decided this it is now necessary to return to the basic principals laid down by Lord Goff in Spiliada.

31. The Tonnage limitation is of crucial importance to this litigation. In an affidavit Mr. Roberts, a partner in Deacons, the solicitors representing the Plaintiffs, states that on the information available to him from various sources the Tonnage limitation under Schedule 4 to the Merchant Shipping Act 1979 -which applies in Hong Kong virtue of the Merchant Shipping Act 1979 Order 1980 - would be of the order of Hong Kong $12.5 million.

32. When this is compared to the situation which would arise if a stay were to be granted and the litigation was to proceed in Indonesia it becomes transparently clear that the Plaintiffs would be placed at such a juridical disadvantage that a stay should be granted.

33. There are other matters which also should be weighed in the balance. I am by no means satisfied that the agreement which has been concluded by the parties concerning waiver of time limitation would be enforceable in the Indonesian Courts. The position is also far from satisfactory concerning the payment of interest and recovery of legal costs which have been incurred.

34. All of these matters bring me back to the approach which was adopted by the Court of Appeal in the Adhiguna Meranti. That case was in many respects similar to the present actions. I am convinced that for all material purposes the situation then facing the Court of Appeal was indistinguishable from the present one facing me and that I should make a similar order here.

35. Equally I am satisfied that that case was correctly decided and that nothing has transpired since then to alter the position.

36. Mr. Dicks sought to argue that the decision in De Dampierre v. De Dampierre 1987 2 All ER page 1 had altered the position and that the Courts were now more ready to grant a stay where the main reason for deciding to proceed in the English Courts was simply to obtain a higher award of damages. It is noteworthy to observe that the Court of Appeal did have notice of this case when they arrived at their decision. I am not persuaded that De Dampierre makes any difference to the outcome of these applications.

37. For the reasons I have given I would decline to grant a stay in all these actions and would dismiss these applications. I will hear the parties on costs.