XCHRX THYSSEN HANIEL LOGISTICS (HK) LIMITED v. PAM & FRANK INDUSTRIAL COMPANY LIMITED

1993, No. A11695

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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D E C I S I O N

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1. This is an appeal from Master Betts. He dismissed the defendant's application to stay all further proceedings in this action until an action in Tennessee USA is disposed of. That is an action between R.E. West Inc., West Rents Inc. and Distribution Corporation of America ("DCA") as plaintiffs and one Nasco Products Inc. ("Nasco") as defendant and the plaintiff herein Thyssen is the third party defendant.

2. The factual background to this case is not in dispute. The claim was made against the defendant who was a purchaser of services from the plaintiff. It based its case upon a written shipper's letter of instructions between the plaintiff and the defendant in which the defendant signed without any qualification. There is no dispute that the services were provided, the goods were shipped and that the plaintiff has not been paid for the freight.

3. The defendant alleged that it was signing as an agent for and on behalf of Nasco and the plaintiff at all material times well knew that to be the case. The second limb of the defence is that there has been an assignment of the debt due to the plaintiff from Nasco by the plaintiff to DCA in America. The pleaded case of Nasco in the US proceedings is that DCA was the mere agent of the plaintiff for the collection of sums owed to the plaintiff.

4. In the US proceedings, a claim was brought by an alleged assignee of the right purportedly held by a former agent of the plaintiff in the USA. That agency, according to the plaintiff, was terminated with notice to the defendant before any of these proceedings commenced. That claim is not brought against the defendant herein who is not a party at all in the US proceedings. It is brought against Nasco, the defendant's alleged principal. Third party proceedings have been brought against the plaintiff seeking merely the joining of the plaintiff in those proceedings and enjoining of the plaintiff from continuing the Hong Kong proceedings.

5. The plaintiff submitted that the defendant is liable on the shipper's letter of instruction signed by it, if they signed as principal. Even if the defendant signed those documents as an agent then they said that they are still liable. According to Chitty on Contracts, paragraph 2570, it was said by the learned editor that :-

"The fact that a person is an agent and is known to be so does not therefore of itself necessarily prevent him incurring personal liability. ... Whether this is so is to be determined by the construction of the contract, if written, and by its nature and the surrounding circumstances. ... He may undertake sole liability to the exclusion of his principal; he may undertake joint or joint and several liability on the main contract together with his principal. He may act as surety for his principal, or enter into a collateral contract with its own terms. The possibilities shade into one another, and there is no general rule."

6. The principle of staying proceedings in favour of a foreign proceedings has been set out in the case of Spiliada Maritime Corporation v. Cansulex [1987]1 AC 460. The burden is on the defendant to show that there is another available forum having competent jurisdiction which is the more appropriate forum for the trial of the action, and it is more suitably for the interest of all the parties and the ends of justice. The alternative forum must be "clearly and distinctly more appropriate."

7. It is not automatic that the existence of proceedings relating to the same subject matter in an alternative jurisdiction will lead to a stay of the Hong Kong proceedings even where the parties are the same (see Hawke Bay Shipping Co. Ltd. v. The First National Bank of Chicago [1986] 1 L.R.244).

8. Having heard the submissions of both parties, I am not convinced that the defendant has discharged the burden in showing that the Tennessee court is clearly and distinctly a more appropriate forum to try the case before me. The dispute between the two parties in the case before me involves a contract signed in Hong Kong and specifically provided to be subject to Hong Kong law. The majority of witnesses are all located in Hong Kong. Both parties are carrying on business in Hong Kong.

9. In contrast to the case in Tennessee, the parties are not the same, the issues, while they are overlapping, are by no means identical. The defendant is not even a party to that proceedings, the only relief sought against the plaintiff is a stifling of the Hong Kong action. The claims between the plaintiff and the defendant would not be adjudicated upon, even if they were raised, and the US court is unable to make any valid determination against a party who is not represented in that tribunal.

10. The defence raised by Nasco in the US proceedings is in line with the claim made by the plaintiff here, i.e. that DCA was merely a collecting agent of the plaintiff and the agency has been cancelled. Credit has been given to DCA by the plaintiff here and DCA therefore has no title to sue and could give West Rents no title. The only question that remains is whether the defendant before me has taken personal liability for the freight or not. This will be resolved by the proceedings before me, and will not be resolved by the Tennessee court.

11. In the end, the defendant has far from demonstrated that the Tennessee court is clearly and distinctly a more appropriate forum. I am satisfied that the Hong Kong forum is the more appropriate forum to resolve the dispute between the parties in Hong Kong. Accordingly the appeal is dismissed with costs to the plaintiff.