XCHRX PROFIT COUNTRY ENTERPRISES LTD. v. SEA-LAND SERVICE, INC. AND ANOTHER

1997, No. AJ245

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY ACTION NO. 245 OF 1997

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J U D G M E N T

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1. This is an action where there was a claim by a Hong Kong company claiming for the loss of its cargo. The cargo was in one of the 18 containers that fell off the ship in Whampo River as a result of an accident. The Defendants, shipowners, had commenced in the Guangzhou Maritime Court and had there obtained a limitation decree after contests. The Defendants have invited the Plaintiff by letter to commence its claim in the Guangzhou Maritime Court. That had not been done by the Plaintiff and that is the reason why the Defendants are now seeking this stay.

2. In order for a Plaintiff to break a limitation limit under the 76 Convention which is substantially applied both in China under the Chinese law and in Hong Kong, there is a very high burden on such a Plaintiff to discharge. I think in Marsdens book on Collisions at Chapter 16 on Limitation of Liability, it clearly sets out the difference between the old regime under the 56 Convention and the new regime under the 76 Convention. Under the renew regime of the 76 Convention, the limit is much higher but it is extremely and notoriously difficult to show recklessness to break the limit. Article 4 of that 76 Convention provided that a person liable shall not be entitled to liability if it is proved that the loss resulted from "his personal act or omission, committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result". The burden is a very high and there is no material put before the court as to suggest that the Plaintiff could possibly break the limit.

3. Now where there is no such material, this is not even a situation where the court can begin to say, between completing jurisdiction Hong Kong and Guangzhou where it would be more convenient to have that limitation contest tried. This is a case where Defendants have already limited its liabilities. There is already a limitation decree made in Guangzhou. A limitation fund has been established there. The Plaintiff could easily go there and make a claim against the Fund. There is nothing which ought to compel the Hong Kong Court to enforce proceedings to continue here. I think this is a plain case where Defendants shipowners, should not be vexed further in Hong Kong. I think all questions of juridical advantages and so on in these particulars circumstances of the case do not arise. This is an ordinary situation where there had been a maritime accident. The shipowners obtained limitation and everyone who has a claim arising out that casualty should go against that Fund and not try to prefer themselves in some other jurisdiction by separate litigation. I therefore, in the circumstances, order that the action should be stayed in favour of the Guangzhou Maritime Court.