THE OWNERS OF THE SHIP "KAPITAN SHVETSOV" v. THE OWNERS AND/OR DEMISE CHARTERERS OF THE SHIP "NANTA BHUM"

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JUDGMENT

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1. Late at night on the 16th day of January 1996, there was a collision in the waters of Bangkok's Chao Phraya River between the Plaintiffs' Russian ship "Kapitan Shvetsov" ("Russian Ship") and the Defendants' Singaporean ship "Nanta Bhum" ("Singaporean Ship"). The Plaintiffs' Russian Ship was outward bound for Indonesia and the Defendants' Singaporean Ship was inward bound from Singapore on her weekly feeder service between Singapore and Bangkok. Local pilots were on board both vessels. Substantial damage was suffered by the Russian Ship to the extent that she had to be beached and salvage operation performed by salvors from Singapore but she eventually became a constructive total loss and she was sold for scrap. The Singaporean Ship fortunately suffered comparatively less serious damage and she could subsequently resume her regular employment of feeder service.

2. Because of the serious nature of the collision, it was inevitable that claims would be made mutually by the two vessels against each other. Lawyers from Singapore of both sides were on the scene very quickly after the collision. Messrs Drew and Napier were the lawyers from Singapore engaged by the Singaporean Ship and Holman Fenwick Willan of Singapore were the lawyers engaged by the Russian Ship.

3. The lawyers from Singapore for each side took statements from the relevant witnesses. The Russian Ship's lawyers from Singapore were also involved with a host of other matters arising out of the damage caused to the Russian Ship and her cargo.

4. The Singapore lawyers of the Singaporean Ship moved quickly and a week after the collision (23rd January 1996), an action in rem in the Singapore Court ("the Singapore Action") was commenced by the owners of the Singaporean Ship ("Singaporean Owners") against the owners of the Russian Ship ("Russian Owners") wherein the Singaporean Owners claimed damages against the Russian Owners for the collision damage caused by the Russian Ship. Memorandum of Appearance was entered by the Russian Owners on 25th January 1996. The Singaporean Owners filed their Preliminary Act on the 23rd March 1996 and on the 25th March 1996 the Russian Owners issued their application to the Singapore Court to stay the Singapore Action. The alleged justification for this application by the Russian Owners in Singapore is that they wished to litigate the collision dispute in Hong Kong and not in Singapore. The real reason for this stay application is that the Russian Owners wished to obtain a higher limitation limit in Hong Kong. On the 12th of April 1996 at the hearing of the Russian Owners' application for stay of the Singapore Action, the Singapore Court refused to make the order sought by the Russian Owners and the Singapore Action thereafter proceeded with the Russian Owners issuing a Summons for Directions on the 26th April 1996 and the Singapore Court on the 15th May 1996 making an order that:-

On the 17th of May 1996, the Statement of Claim was filed by the Singaporean Owners and on the 1st of June 1996, the Russian Owners filed their Defence. No Counterclaim was filed by the Russian Owners notwithstanding the Order of the 15th May 1996. On the 17th of July 1996 the Singaporean Owners issued a Summons for Directions and on the 30th July 1996, the Singapore Court upon hearing the Singaporean Owners and the Russian Owners made the following order:-

5. On the 28th of August 1996, the Singaporean Owners filed its List of Documents. Under the 30th July 1996 Order of the Singapore Court, the Russian Owners were due to file their List of Documents on the 10th of September 1996 and the parties are to exchange the Affidavits of Evidence-In-Chief of the Witnesses of fact and expert witnesses on the 30th October 1996 with the Trial of the Singapore Action to take place from 18th to 22nd November 1996.

6. In Hong Kong, in an attempt to establish jurisdiction in Hong Kong the Russian Owners having issued the Writ on the 29th January 1996 (Acknowledgment of Service filed on 10th February 1996), amended the Writ on the 22nd March 1996 and filed the next day their Preliminary Act. On the 3rd of April 1996, the Singaporean Owners issued their Motion to stay the Hong Kong Action in favour of Singapore on the ground of forum non conveniens and lis alibi pendens and thereafter the parties filed extensive affidavits in support of and in opposition to the Singaporean Owners' application for stay of the Hong Kong proceedings. On the 28th June 1996 the parties caused the Clerk of Hong Kong Court to fix the hearing of the stay application to be heard on 21st November 1996. On the 11th July 1996, upon the application of the Russian Owners, having regard to the undesirability of the late hearing date in November 1996, I ordered that the hearing of the stay application be moved forward to be heard on 4th to 6th September 1996.

7. At the hearing of this Motion by the Singaporean Owners for a stay of this Hong Kong Action, the parties (quite unusually for this type of application) are at issue on every one of the three stages of what the Hong Kong Court of Appeal in The Adhiguna Meranti [1987] HKLR 904 had laid down as the principle applicable for stay of proceedings on the ground of forum non conveniens. The issues did not fully and clearly emerge until after Mr. Sussex completed his submissions on behalf of the Russian Owners and subsequently sent to the Court the Plaintiffs' Supplementary Skeleton Argument to which Mr. Haddon-Cave lodged with Court a dismissive Reply Skeleton. The issues thus raised are as follows:-

STAGE 1-RELATIVE FORUM ISSUE

8. In the progressive development of the modem English law on what I will conveniently call forum disputes, Lord Goff occupied a prominent position. From his seminal argument as Leading Counsel in The Atlantic Star [1974] A.C. 436 and by way of his judgements at first instance in European Bank v Punjab [1981] 2 Lloyd's Report 651, in Trendtex Trading v Credit Suisse [1980] 3 A.E.R. 721 and 734, at the Court of Appeal in Bank of Tokyo v Karoon [1987] 1 A.C. 45 and 61, leading to his judgments in the House of Lords and the Privy Council in Spiliada Maritime Corp. v Cansulex [1987] A.C. 460, de Dampierre v de Dampierre [1988] 1 A.C. 92, Societe Nationale Industrielle Aerospatiale v Lee Kui Jak [1987] A.C. 871, Lord Goff progressively developed and illuminated the applicable principles on the difficult problem of forum disputes.

9. In the Spiliada, the House of Lords in late 1986 carried the development of forum dispute legal principle to its logical conclusion. The legal principle on forum non conveniens laid down by the House of Lords was then applied and interpreted by the Hong Kong Court of Appeal in The Adhiguna Meranti [1987] HKLR 904 and Louvet v Louvet [1990] HKLR 670 with Hunter, J.A. in both cases delivering the leading judgment. Counsel for both parties at the hearing before me agreed that the three stages test laid down in the two Hong Kong judgments correctly set out the principle to be applied for a forum non conveniens stay application. The three stages test is set out at page 907 of The Adhiguna Meranti where Hunter, J.A. said:-

10. What Hunter, J.A. did in Adhiguna Meranti was to split up the second phase of consideration of loss of juridical disadvantage and the balancing exercise to achieve objective justice in Spiliada into Stage II and Stage III. It is accepted that the Hong Kong Court of Appeal had not laid down any new law different from Spiliada but was merely applying Spiliada and set out the principle in a clearer formulation which makes the task of the court and the legal advisers in applying the governing principle somewhat easier.

11. The first substantial and fundamental issue of the parties is in their respective interpretation of the Stage I test. The novel point raised by Mr. Sussex for the Russian Owners is that Stage I requires the applicant to show that the other forum is the most appropriate forum, not just comparatively more appropriate. Mr. Haddon-Cave for the Singaporean Owners characterised that argument as going against all the authorities. The argument of Mr. Sussex is presented in the following logical sequence:-

The emphasis of Mr. Sussex is on the word "most" which I have highlighted above and therefore in order to succeed on Stage I according to him, a party applying for stay in favour of another jurisdiction must show that the other jurisdiction is a forum with which the action had the most real and substantial connection, namely the most appropriate forum and not merely a more appropriate forum.

12. In my judgment, the proposition advanced by Mr. Sussex is clearly erroneous. Whether considered by reference to:-

it seems to me that in law, Stage I does not require the absolute test but only a comparative test.

Historical Development of Stay of Proceedings

13. The modem development of the English law leading to principle of forum non conveniens spanned a period of some fifty years starting with the well known judgment of St. Pierre v South American Stores [1936] 1 K.B 382 where Lord Justice Scott said in the famous passage at page 398 that:-

"In order to justify a stay two conditions must be satisfied, one positive and the other negative: (a) the defendant must satisfy the court that the continuance of the action would work an injustice because it would be oppressive or vexatious to him or would be an abuse of the process of the court in other some way; and (b) the stay must not cause an injustice to the plaintiff..."

In The Atlantic Star, the House of Lords was invited to discard Lord Justice Scott's authoritative statement of the stay principle and substitute for it the Scottish legal doctrine of forum non conveniens and this the House of Lords unanimously in The Atlantic Star refused to do (see page 810 of MacShannon). But what the majority of the House of Lords decided in The Atlantic Star was that St. Pierre's very restrictive criterion for staying proceedings was too nationalistic and the House relaxed somewhat the requirements of oppression and vexation and that the court should take into account the advantages and disadvantages of the parties. In MacShannon v Rockware Glass [1978] A.C. 795 the House of Lords relaxed even further the requirements of oppression and vexation (see the historical account by Goff, L.J. in Bank of Tokyo v Karoon [1987] 1 A.C. 45 at 61). Lord Diplock in fact restated the principle of stay of proceedings in the following terms at page 812A:-

"(2) In order to justify a stay two conditions must be satisfied, one positive and the other negative: (a) the defendant must satisfy the court that there is another forum to whose 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"

This was in 1978. Then in 1984 in The Abidin Daver [1984] A.C. 398, the House of Lords accepted that the English principle of stay of proceedings was indistinguishable from the Scottish principle of forum non conveniens (see page 411F-G). Two years later in the Spiliada, the House of Lords stated authoritatively and conclusively the principle of forum non conveniens which the Hong Kong Court of Appeal then followed and applied in 1987 in The Adhiguna Meranti [1987] HKLR 904. The above historical account shows that progressive relaxation of the requirements for stay of proceedings from the very stringent St. Pierre test up to 1974 during which year The Atlantic Star made the sea change so that by 1978 (MacShannon) and 1984 (Abidin Daver) it could be said that the English law on stay of proceedings was indistinguishable from the Scottish principle of forum non conveniens. In 1978, the requirement for a stay had already been sufficiently relaxed so that Lord Diplock in the passage cited earlier from McShannon had in mind only a competing forum in which justice could be done between the parties at substantially less inconvenience or expense. Even in 1978, all that was required was only a forum where comparatively, justice could be done at less inconvenience and expense. There was no requirement in 1978 that such forum must be where the best justice could be done or where it is most convenient and least expensive. With the progressive relaxation of the requirements to obtain a stay, it is unlikely some 8 years later that in Spiliada the House of Lords had gone back on its previously more relaxed requirements and demanded that under Stage 1, the natural forum requirement should be understood as that of the "most appropriate forum", namely an absolute test calling for the best forum as opposed to a better forum. In my judgment, the above historical account does not bear out a case for the absolute test advanced by Mr. Sussex and the point is made even more clear when the whole judgment of Spiliada is studied.

Fair Reading of the Spiliada Judgment

14. The heart of the principle laid down in the Spiliada by Lord Goff can be found in section (5) and section (6) of the Judgment (pages 474 to 478). The starting point of Lord Goff's Judgment when he examined the fundamental principle is his reference at page 474 C-D to the classic statement of Lord Kinnear in Sim v Robinow as expressing the principle of forum non conveniens applicable in both England and Scotland where Lord Kinnear said:-

"the plea can never be sustained unless the court is satisfied that there is some other tribunal, having competent jurisdiction, in which the case may be tried more suitably for the interests of all the parties and for the ends of justice."

I have highlighted the word "more" used by Lord Kinnear and this classic statement of the principle shows clearly that there was no requirement for the most suitable forum. Both Lord Kinnear and Lord Goff were looking only for a more suitable forum.

15. Lord Goff then at page 474-5 referred to the later statement of principle in the case of the Societe du Gaz v Societe Anonyme de Navigation "Les Armateurs" Francais 1926 S.C. 13 and cited the passage in that judgment of Lord Sumner where he said "to find that forum which is the more suitable" and concluded at page 475B where he said that:-

"In the light of these authoritative statements of the Scottish doctrine, I cannot help thinking it is wiser to avoid use of the word "convenience" and to refer rather, as Lord Dunedin did, to the appropriate forum."

It is therefore made even clearer by the reference to what Lord Sumner said in Societe du Gaz that Lord Goff had only in mind a principle of comparatively more suitable forum and not a doctrine of absolutely the most suitable forum.

16. The point of relative suitability is driven home in the clearest possible term when Lord Goff at page 476C summarised the law where he 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." (emphasis supplied)

Lord Goff was there explaining what is meant by an appropriate forum, namely where the case can be more suitably tried for the interests of all parties. This authoritative statement of a comparative or relative test, gives rise to no room for an argument that Lord Goff really had in mind an absolute test of the most suitable forum.

17. Finally if there is still any further doubt on the matter, the illuminating additional exposition of the principle at page 477E by Lord Goff made the contention wholly untenable. There Lord Goff said that:-

"...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." (emphasis-supplied)

If Lord Goff had in mind the best forum for an absolute test, then he would not be laying down a requirement of "the other forum being clearly and distinctly more appropriate." The other forum was not just required to be marginally more appropriate but the other forum had to be clearly and distinctly more appropriate. The emphasis is therefore not just on the comparativeness of the forum being appropriate but on the quality of that comparativeness. If Mr. Sussex's contention is correct, I would expect Lord Goff to be expressing his summary of the principle in a totally different form and language and he would certainly not be stating a requirement of a clearly or distinctly more appropriate forum.

18. The further references by Lord Goff, at page 477G under heading (d), at page 478B-C under heading (e) and at page 478C-D under heading (f), to "more appropriate" are simply fortification and confirmation of the above reading of Lord Goff's view that the law only calls for a more suitable forum, not for the most suitable forum.

19. The whole argument of Mr. Sussex on this first issue is derived from the reference by Lord Keith in The Abidin Daver to natural forum as being "that with which the action had the most real and substantial connection" quoted by Lord Goff at page 477H-478A of Spiliada. From this reference, Mr. Sussex as I see it built up his edifice of requirement of most suitable forum and equate appropriate forum to the forum with which the action had the most real and substantial connection. With the greatest respect to Mr. Sussex, I believe that notwithstanding the admirable skill with which the whole argument was deployed and advanced, ultimately that submission is not well founded. All that Lord Goff was doing when he referred to what Lord Keith said about real and substantial connection, was to underline and justify the point that one must look for connecting factors to answer the question whether the other forum is clearly more appropriate (see the first sentence under heading (d) at page 477G). The juxtaposition of his exposition at page 477G to 478B made it clear that he referred to what Lord Keith had said in order to correct the previous over-emphasis and reliance on convenience and expense by Lord Diplock in McShannon. Connections of Lord Keith was preferable to convenience of Lord Diplock and that was really the context in which Lord Goff referred to Lord Keith's natural forum being that with the most real and substantial connection. In my judgment, in that sentence at page 477H-478A, Lord Goff certainly did not intend or could be seen to be intending to abandon his requirement of a comparatively more appropriate forum.

20. I have no doubt that Mr. Haddon-Cave is correct in his submission that Lord Goff was talking in relative terms and not in absolute terms in the Spiliada as can be demonstrated by his use of language and the context in which he expounded the principle in the Spiliada. In my view, a close reading of the Spiliada judgment disproves the case advanced by Mr. Sussex.

Principle

21. I finally turn to the consideration of principle. When a plaintiff has founded jurisdiction perfectly properly and very often by a right conferred under statute (as in this admiralty action in rem) what is the principle or underlying basis for a court to decline to exercise its jurisdiction. The historical development of the principle of stay of proceedings shows the gradual relaxation of the former strict requirement so that what is aimed to be achieved under the new principle, is that objectively justice can be done for the interests of all parties at the other forum. A forum where objectively justice can be done does not have to be the most perfect or ideal forum or the most appropriate forum. A much better forum than the local forum for the trial of the action would be sufficient so long as it can result in objective justice being done. All that is required is that the other forum must be distinctly more appropriate and not just marginally more appropriate and if that other forum has those characteristics then such forum does not need to be the most appropriate forum so long as it is also a forum where objectively justice can be done for all the parties. In my judgment a consideration of basic principle does not favour the argument of the Russian Owners. The law on stay of proceedings works well on a relative test and there is no justification in principle to require an absolute test.

22. If the absolute test is adopted then very often, objective justice would not be done for all parties because when the local forum is clearly inappropriate but the other appropriate forum is not absolutely the most appropriate forum though clearly the more appropriate forum, then no stay would be ordered even though the local forum is clearly not a forum where objective justice can be obtained for all parties. In my judgment the whole fallacy of the approach adopted by the Russian Owners is to confuse "appropriate" forum with "ideal" forum. The law only requires the other forum to be clearly the better forum not that it must be the best forum.

STAGE 1-IS THE SINGAPORE COURT THE "NATURAL" FORUM

23. A comparison between the Hong Kong forum and the Singapore forum shows that firstly Hong Kong is not the natural or appropriate forum for the trial of the collision dispute between the Russian Owners and the Singaporean Owners and secondly that Singapore is by far the more appropriate forum.

24. The fact that Hong Kong is not the natural or appropriate forum for the trial of the collision dispute was never disputed by the Russian Owners and in fact it was incapable of dispute having regard to the fact that the Russian Owners has no connection with Hong Kong and the Singaporean Owners none worthy of mention. I agree with Mr. Haddon-Cave that this is a pure case of forum shopping by the Russian Owners.

25. Mr. Sussex did not accept that Singapore was the natural and appropriate forum for the trial of the collision dispute. The following recital of connections with Singapore points however overwhelmingly to the contrary:-

In the light of the above connections with Singapore, Singapore is clearly and distinctly not only the more appropriate forum than Hong Kong for the trial of the collision action but in my judgment Singapore is also by whatever standards one cares to adopt, a natural forum for such a trial.

26. Mr. Sussex however says that Bangkok is the natural forum and Singapore is not. Even in the sense of natural forum being the most appropriate forum with the most real and substantial connections, I still find that Singapore is such a forum. It is true of course that the collision took place in Bangkok and that many of the factual witnesses on the Singaporean Ship's sides are Thai nationals and that the other potential Thai witnesses such as the Thai pilots live in Thailand, but counterbalanced against these matters are the numerous factors which I have set out in the recital earlier and most potent for the present purposes is the fact that both sides regard Singapore as the natural forum since both sides right at the beginning chose to go to Singapore lawyers and professionals to prepare for the resolution of the respective claims and defences. Thai legal proceeding was available to both sides and Thai lawyers could be immediately at hand to the Russian Owners if they regarded Thailand as the natural forum for the resolution of the dispute. They did not take any such step in Thailand but chose to go to Singapore (not Hong Kong) for all matters related to the rights arising out of the collision. This may well be because for the two parties, Thailand did not have the necessary proper facility or well-established legal machinery to resolve this type of collision dispute. It seems to me that in the circumstances, what might theoretically be the most natural forum was in fact displaced by the actions of the parties and by subsequent events including the impending trial in Singapore. In my judgment therefore, even applying the absolute test advanced by Mr. Sussex, the Singaporean Owners have satisfied me that as matters now stand, Singapore is the natural forum or the most natural forum with the most real and substantial connections.

MANDATORY FORUM ISSUE

27. The bold and novel argument under this Mandatory Forum Issue advanced by Mr. Sussex is that the Hong Kong Court has no discretion to stay an action in rem in favour of another jurisdiction where the limitation limit in the other forum is lower than the 1976 limit applicable in Hong Kong. A brief account of the historical development of limitation of liability of shipowners will assist in a proper appreciation of the submission now advanced by the Russian Owners and of the full implication of such a submission.

28. In Chorley & Giles on Shipping Law 8th edition at page 394, the history of limitation of liability is described in the following terms:-

In Grime on Shipping Law, 2nd edition, the modern story is continued as follows at page 264:-

"In the twentieth century limitation was the subject of several international conventions, the general tendency of which was to promulgate the "English system" of a fixed value per ton. Two are important. The Convention Relating to the Limitation of the Liability of Owners of Seagoing Ships (Brussels 1957) came into force internationally in 1968 but before that, it was enacted in the United Kingdom in the Merchant Shipping (Liability of Shipowners and Others) Act 1958. The Convention on Limitation of Liability for Maritime Claims (London 1976) came into force in December 1986 and was brought into effect in the United Kingdom on the same date, through the provision of the Merchant Shipping Act 1979 ... English law is thus now the 1976 Convention ..... But the 1957 Convention remains important worldwide, as well as having until recently represented English law."

29. The 1957 limit ("1957 Limit") under the 1957 Convention ("1957 Convention") is lower than the 1976 limit ("1976 Limit") under the 1976 Convention ("1976 Convention"): However, in terms of general application by the world, the 1976 Limit could not be said to be universally accepted. Vast majority of the countries of the world and no less than some 60% of the flags countries of the world's tonnage have not implemented the 1976 Convention. Some countries such as the United States of America simply prefer their own limitation regime (e.g. ship's value for USA). A very large number of countries prefer the 1957 Limit with its lower limit and the greater ease of breaking the limit by proof of "actual fault or privity" as compared to the higher limit under the 1976 Limit with the practical impossibility of breaking the limit.

30. For a long time, Hong Kong applied the 1957 Limit for limitation of liability. But following the United Kingdom's adoption of the 1976 Convention, the 1976 Limit became the operative limitation limit in Hong Kong pursuant to the Merchant Shipping (Limitation of Shipowners Liability) Ordinance ("1993 Ordinance") which came into effect in Hong Kong in October 1993. Singapore (as a large number of civilised countries) has been applying for some time and still applies the 1957 Limit and the main reason for the Russian Owners (whose country does not apply the 1976 Limit) seeking Hong Kong jurisdiction is to gain the benefit of the higher limit under the 1976 Limit. There is no dispute at the hearing that under the 1957 Limit, the maximum liability of the Singaporean Owners would be about US$1 million whereas under the 1976 Limit, the maximum liability of the Singaporean Owners would be just under US$3 million.

31. What started as a tentative submission of Mr. Sussex became in the course of his argument, a forceful argument that the 1976 Limit as a matter of law applies to Hong Kong and thereby giving the court no discretion to stay any proceedings in favour of another jurisdiction with a lower limit. The argument runs as follows:-

"This Convention shall apply wherever any person referred to in Article I seeks to limit his liability before the court of a State Party or seeks to procure the release of a ship or other property or the discharge of any security given within the jurisdiction of any such State."

32. As I understand the submissions which had been made to me not only orally but also as contained in the Skeleton Arguments presented to me after the completion of the oral hearing, there is no dispute by the Singaporean Owners to Arguments (1) to (4) of Mr. Sussex. Issues are however taken on Arguments (5) to (8) of Mr. Sussex and in particular on Argument (5).

33. On 30th April 1996, the Swedish Club provided security to the Russian Owners in respect of the claim in relation to the collision. The security was not stated to be in respect of any Hong Kong Action but was merely expressed to be the Swedish Club's promise to pay such sum as may be due from the Singaporean Owners to the Russian Owners by final judgment of a court of competent jurisdiction. The consideration expressed for the giving of the security was said to be "your releasing and/or refraining from arresting or otherwise detaining" the Singaporean Ship or any of her sisterships.

34. Under Argument (5) above of Mr. Sussex, the facts are quite clear that the Singaporean Owners had not sought to limit their liability before the Hong Kong Court and that therefore (i) of Argument (5) is obviously not applicable. The real argument is on (ii). Mr. Haddon-Cave contends that the Singaporean Owners were not persons who sought to procure the release of a ship under Article 15 of the 1976 Hong Kong Convention because:-

I accept both submissions of Mr. Haddon-Cave.

35. As it is common ground that neither the Singaporean Ship nor any of her sisterships was ever arrested either in Hong Kong or elsewhere, there was simply no question of the Singaporean Owners having ever sought the release of a ship. It seems to be erroneous for Mr. Sussex to argue that by posting security, the Singaporean Owners procured the release of the ship. This would be true if a ship had been arrested but when no ship had ever been arrested or detained, there was simply no arrest or detention from which the ship could be released. To my mind, it is insufficient to say that there was the threat of arrest and therefore, there was the procuring from release. The release is of a ship, a physical object and the avoidance of an arrest by the posting of a guarantee is not the release of a ship.

36. Further, it seems to me that the scheme of the Hong Kong 1976 Convention and the 1993 Ordinance is such that section 21 of the 1993 Ordinance and Articles 13 and 15 of the Hong Kong 1976 Convention must all be read together. Article 13 of the Hong Kong 1976 Convention and Section 21 of the 1993 Ordinance are both headed "Bar to other actions". Article 13 paragraph 2 refers to release of a ship (belonging to a person on behalf of whom limitation fund has been constituted) arrested or attached by an order of the court. Section 21 provides that in such circumstance where a ship has been ordered by the court to be released under Article 13 paragraph 2, then the person who had applied for such release of ship is deemed to have submitted to the jurisdiction. It can be seen therefore from Article 13 and Section 21 that what was intended was a scheme whereby after a limitation fund had been established under Article 11, an owner of a ship who has constituted that fund (which of course should stand in the place of the ship detained even though it might be of less value) can obtain the release of his detained ship and in such a situation, the owner is deemed under Section 21 to have submitted to the jurisdiction of the court to adjudicate on the claim for which the ship was arrested. The fair way to read Article 15 is to appreciate the three ways in which the Hong Kong 1976 Convention was to apply:-

The release of ship under Article 15 being interpreted by Mr. Haddon-Cave as being limited to release under Article 13 gives life and coherence to this Hong Kong 1976 Convention (and for that matter seems to confirm that Article 15 of the 1976 Convention is no more a radical departure than Article 7 of the 1957 Convention [see page 2970 of Singh on International Maritime Conventions] which is in similar terms in respect of application) whereas the interpretation Mr. Sussex has contended is to make the release of a ship free standing and totally independent of any connection with limitation. The above analysis has convinced me that Argument (5) of Mr. Sussex is not well founded.

37. It follows therefore that it is strictly speaking not necessary for me to reach any decision on Argument (6), (7) and (8) of Mr. Sussex. However having regard to the wide implication of Mr. Sussex's submissions, it seems to me that I should at least indicate my views on a number of the points addressed to me by Mr. Sussex. Central to the submission of the mandatory nature of the Hong Kong 1976 Convention is the contention by Mr. Sussex that any plaintiff in Hong Kong has the right to force upon the Hong Kong 1976 Convention Limit on any unwilling shipowner, who might have no connection whatsoever with Hong Kong and whose ship had never been arrested in Hong Kong and where security might have been given outside Hong Kong for a judgment of a court of worldwide competent jurisdiction.

38. Firstly, section 21 of the 1993 Ordinance makes it clear that there was no submission to Hong Kong jurisdiction unless and until the release in Hong Kong under Article 13 rule 2 of an arrested ship by an owner who has constituted a limitation fund in Hong Kong under Article 11. If Mr. Sussex is right that security given by any threat of arrest anywhere worldwide or even by the actual arrest of a ship in Hong Kong will automatically thereby makes it mandatory the application of the Hong Kong 1976 Convention, Article 21 seems to contradict such mandatory application. Section 21 therefore seems to me to be a strong pointer against the mandatory nature of applicability of the Hong Kong 1976 Convention as advocated by Mr. Sussex.

39. Secondly, the invocation of The Hollandia principle seems to me to be misplaced. The Hollandia [1983] 1 A.C. 565 was a decision on whether the exclusive jurisdiction clause was invalid as being contrary to the Hague-Visby Rules which applied by English law to carriage from England. There was no question that the Carriage of Goods Act 1971 deprived the English court of its jurisdiction or discretion to grant stay of proceedings.

40. Thirdly, it is not the stated purpose and cannot be the purpose of the 1976 Convention to force its provisions onto non-contracting states or onto parties who should have their dispute heard in a non-contracting state. The very principle of comity of nations, which underlie so much of the revolution started by The Atlantic Star culminating in Spiliada, would suggest that each country should adopt a non-intrusion attitude.

41. Fourthly, having regard to the two large equally viable regimes of limitation of liability which civilised countries have been applying, namely the 1957 Limit and the 1976 Limit, Hong Kong Court should be very slow to come a decision that the statute intended the Court to apply by its coercive force the 1976 Limit even to those ships and defendants with no connection with Hong Kong but with strong connections or from a state subscribing to the 1957 Limit and where otherwise the forum of dispute should clearly be in a state applying the 1957 Limit.

STAGE 2-NATURE AND EXTENT OF 1976 LIMIT JURIDICAL ADVANTAGE

42. The Russian Owners claimed that they could recover, on their best case, a sum of US$2,900,000 from the Singaporean Owners and that whereas in Hong Kong under the 1976 Limit the Russian Owners would be able to recover in full, in Singapore as the 1957 Limit is only some US$1 million, they would suffer a substantial disadvantage because as much as US$2 million might not be recoverable or in other words they would receive a juridical advantage in Hong Kong. But the so called juridical advantage must be looked at in the light of this particular dispute.

43. The first and most important feature to bear in mind in this context is that this is a collision action with all the uncertainty on apportionment of blame which comes with this type of proceedings. Collision actions seem to be somewhat vulnerable to different views of blameworthiness by different levels of the courts (see for example The Koningin Juliana [1973] 2 Lloyd's Report 308 (division 2/3 and 1/3) at first instance, [1974] 2 Lloyd's Report 353 (division 1/2 and 1/2) by Court of Appeal and [1975] 2 Lloyd's Report 111 (division 2/3 and 1/3) by the House of Lords). Where an Admiralty Judge in an Admiralty Court sits with nautical assessors and the higher courts sit with different panels of nautical assessors, very often different conclusions are reached on matters even of good seamanship or frequently on apportionment of blame (see what were said on this nautical assessors at different levels by The House of Lords in the notes to The Australia [1927] A.C. 145 at page 162-166.) The very recent judgment of the English Court of Appeal in The Koscierzyna [1996] 2 Lloyd's Report 125 altering the apportionment of blame made by the Admiralty Judge Clarke, J. is a case in point. It is to be noted that the advice of the nautical assessors given to the Court of Appeal in that case was different from the advice of the nautical accessors given to the Admiralty Judge (see page 129-130).

44. The collision in question took place when both ships were under way in a river. The circumstances of the collision gave rise to the usual questions which are relevant to apportionment, such as the speed, lookout, right or wrong side of the river, what manoeuvres undertaken, what alterations of course and speed and when, the location of the collision. The Russian Owners have asserted before me (on evidence which as Mr. Haddon-Cave rightly pointed out, can hardly be said to be acceptable) that the majority of the blame or the preponderance of the blame will rest with the Singaporean Ship. The strong evidence of the Singaporean Owners is to the contrary and point towards the Russian Ship being on the wrong side of the river and being mostly to blame for the collision.

45. As a result of the collision, the Russian Ship became a constructive total loss and it also suffered loss to its cargo. The Singaporean Ship also suffered considerable though less fatal physical damage. The evidence of the Russian Ship's quantum of loss was subjected to much adverse criticism in the Affirmation of Mr. Yap for the Singaporean Ship. There is therefore some uncertainty as to what extent the best case of the Russian Owners even on quantum might be established. Broadly speaking the evidence filed showed a possible claim of the Russian Owners of some US$2.9 million and a strong claim of the Singaporean Owners of some US$650,000. The net sum payable to the Russian Owners according to paragraph 20 of Mr. Yap's 2nd Affirmation would be $900,000 if the apportionment is 50/50 apportionment and the figure will rise to some US$1,480,000 on a 70/30 apportionment in favour of the Russian Owners (adding US$290,000 for every 10% of additional blame against the Singaporean Ship). The equivalent figures produced by the Russian Owners are US$1.175 million for 50/50 and US$1.83 million for 70/30 apportionment. If the apportionment is 70/30 but in favour of the Singaporean Owners, then Mr. Yap's evidence shows only a net sum of US$300,000 payable by the Singaporean Owners to the Russian Owners, which is well below the 1957 Limit applicable in Singapore.

46. The evidence before the Court does not convince me that there is any strong likelihood that the Russian Owners will eventually succeed in establishing that the preponderance of the blame will rest with the Singaporean Ship. I certainly cannot say on the evidence before me that the Russian Owners are bound to have a finding in their favour where they could recover (disregarding limitation) more than US$1 million. All it is possible to say on the present evidence before me is that there is a possibility (on most unsatisfactory evidence) that the Russian Owners might find that eventually after a trial and various appeals that they are entitled to recover from the Singaporean Ship substantially more than US$1 million. The alleged juridical disadvantage of the Russian Owners if the present Hong Kong proceedings is stayed in favour of Singapore is therefore in my judgment, not a certainty but no more than a possibility and I will not even characterise the likelihood as even a strong probability.

47. The second relevant consideration in this context of considering the juridical disadvantage of Singapore or the juridical advantage of proceeding in Hong Kong is the possibility of the lower 1957 Limit in Singapore being broken. This point was not stressed by the parties in the course of their submissions to me, but it seems to me that this is a very significant consideration. It is well recognised that whereas it is quite possible and very often not difficult to break the 1957 Limit (test being "without his actual fault or privity"), it is notoriously difficult to break the 1976 Limit (test being "loss resulted from his personal act or omissions, committed with intent to cause such loss, or recklessly and with knowledge that such loss would probably result"). Having regard to the possibility of the Russian Owners being able to break the 1957 Limit applicable in Singapore, it seems to me that the Court must be even more circumspect in evaluating the possible juridical disadvantage to the Russian Owners in respect of the lower limitation amount in Singapore. In this connection, I should do no more but refer to the fact that Singapore is also the natural forum for the trial of the issue of the actual fault or lack of privity of the Singaporean Owners.

48. My conclusion on this issue of the alleged juridical advantage of the Russian Owners in Hong Kong is that I am not satisfied that the Russian Owners have established either a strong or sufficient case of juridical advantage in Hong Kong by reason of the limitation provisions prevailing in Singapore being lower. In my view, it is speculative whether at the end of the day that the Russian Owners will gain any juridical advantage in Hong Kong or conversely will suffer any juridical disadvantage in Singapore. Even if any disadvantage should eventually materialise, I am certainly unable to hold, what will be the likely extent of such disadvantage in Singapore or conversely what would be the extent of the juridical advantage in Hong Kong.

STAGE 2-NATURE & EXTENT OF HEARSAY JURIDICAL ADVANTAGE

49. The attempt to rely on the so called disadvantage in respect of Singapore's more restricted rules relating to hearsay statements of witnesses beyond the seas must be viewed in the proper context. No court will give very strong weight to hearsay statements of an important witness when that witness has not given viva voce evidence. Much of course will depend on the circumstances and if they are reliable contemporaneous third party statements, the truth of the contents of which is likely to be not serious questionable, then the court is obviously going to give appropriate weight to such out of court statements. But if these statements are merely statements made to lawyers for the purpose of litigation, these statements are not likely to be more than of marginal significance and unlikely to influence the outcome of a case.

50. Further, it seems to me that the Russian Owners have exaggerated the significance of this aspect. The evidence clearly shows that the evidence of overseas witnesses who cannot attend Court in Singapore can be received into the Singapore's proceedings in other ways, such as by taking evidence abroad, by video link and by other means. I am sure that if any really important evidence (from a witnesses who cannot attend the Singapore Court) which the Russian Owners wish to rely on, an appropriate means will be found notwithstanding the more restricted rules of evidence prevailing in Singapore.

51. Finally, it seems to me that I must have proper regard to the total lack of evidence on the precise nature or extent of the so called disadvantage in Singapore on this matter. I do not know who is the likely witness whose hearsay statements might be excluded or the significance of what he might say and what weight to attach to such lack of evidence. In the absence of adequate material placed before me, I can only come to a view that whatever might be alleged to be the juridical advantage from the Singapore evidence rules is highly speculative.

52. Having regard to all the material placed before me on this issue and to the nature of this collision action, I hold on this question the Russian Owners have failed to establish any juridical advantage in Hong Kong arising from the Singapore rules of evidence.

STAGE 3-CAN SUBSTANTIVE JUSTICE BE DONE IN SINGAPORE

53. In the light of my findings above that:-

I have no hesitation in reaching my conclusion that Singapore is the appropriate forum at which in the interests of justice the trial should take place and accordingly I would grant the stay of proceedings sought in this application by the Singaporean Owners.

54. But as the Russian Owners have urged upon me so forcefully that they would gain a great juridical advantage in Hong Kong from the higher Hong Kong limit and that I should not depart from the decision of Clarke, J. in Caltex Singapore Pte Ltd. v BP Shipping [1996] 1 Lloyd's Report 286, I will proceed to consider the case on the basis that the Russian Owners might be able to secure an eventual judgment, based on a very favourable apportionment of liability and the appropriate findings of damages, resulting in a net sum of probably very much in excess of US$1 million (therefore in excess of the Singapore limit) payable to the Russian Owners by the Singaporean Owners. On that basis, it seems to me that I must first examine Caltex v BP in order to decide to what extent the reasoning in that judgment should be extended to this case.

55. In Caltex v BP, the Singaporean Caltex companies sued the English defendant BP for damages to the Caltex jetty in Singapore. The defendant sought a stay of English action and Clarke, J. refused the stay on the ground, inter alia of the higher English limit. As it was a ship/land collision there was no question of cross claim or apportionment of liability. Liability was in fact admitted. Caltex is a judgment where most of the energy and concentration of the English Admiralty Court was spent and directed towards the difficult issue of whether limitation was procedural or substantive and whether the English Admiralty Court would apply the Singapore limitation provision as the lex loci delicti. Less than a page and half of the judgment was devoted to the question of the juridical advantage of the higher limit and the consequential balancing exercise arising from this juridical advantage.

56. The reasoning in Caltex v BP against the stay because of the higher United Kingdom limit proceeded on the following basis:-

57. Where an international convention does not command universal acceptance or agreement by all the countries in the world, the wide divergence of views normally indicate a deep-seated difference of opinion as to the acceptability of such convention. Comity of nations should therefore dictate a respect for the strong view of the other country. It is of course desirable that as many countries as possible should apply the same standard but the debate is always what standard. In this case should it be the 1957 Convention or the 1976 Convention. I do not therefore accept the argument in Caltex that it is desirable that as many countries should apply the 1976 Convention. What may be desirable to Great Britain, is not desirable to many of the civilised countries such as USA, Canada, Italy, Portugal, Singapore and Malaysia which have chosen not to apply the 1976 Convention. When there are more countries which apparently apply the 1957 Convention than countries which apply the 1976 Convention, it seems to me to be presumptuous for any country (including Hong Kong) which applies the 1976 Convention to say that the 1976 Convention is more desirable as a uniform standard. That begs the very question. Both the 1976 Convention and the 1957 Convention represented in their different ways a balance between the interested parties. The fact that 1976 Convention is a development from the 1957 Convention does not make the 1976 more widely acceptable objectively or more desirable objectively. There are pros and cons in respect to the two Conventions and a country's preference for one Convention over another is a very complicated matter, very often dictated by factors such as whether it is a country of shipowners or cargo owners/traders, its level of economic activity and development and the overall impact of the two Conventions on the country's economic welfare.

58. Where I find I cannot accept the reasoning of Caltex is the part of the decision expressed to be based on English public policy. It may be the law of Hong Kong that the 1976 Convention is given the force of law in Hong Kong but that is not the same thing as saying that the 1976 Convention reflects Hong Kong public policy or that it is Hong Kong public policy to give full coercive force to the 1976 Convention or to apply the 1976 Limit against parties whose countries have not subscribed to the 1976 Convention (e.g Singapore and Russia). It seems to me that this approach goes directly against the very high authority of Spiliada and the very case which came to be decided immediately after Spiliada, namely de Dampierre v de Dampierre.

59. The essence of the Spiliada and what is so revolutionary about the Spiliada is that the advantages and disadvantages are no longer the key factors in the determination of whether stay should be granted but that the test should be notwithstanding the advantages of the natural forum and the disadvantages by being confined to that natural forum, whether substantive justice could be done at the natural forum. The solution of Lord Goff to the insoluble problem of one man's advantage is the other man's disadvantage (as observed with his usual penetration by Oliver, L.J. in the Court of Appeal, see page 473A and 482D of the Spiliada) is that objective substantial justice should be the test. The Caltex judgment is to equate the local public policy (which is a subjective value judgment) as objective substantial justice. In fact the Caltex judgment does more, for it converted what was an advantage in England, namely the higher limit, into English pubic policy and then to say that is objectively justice.

60. A study of de Dampierre v de Dampierre will help to understand the basic philosophy which underlies the Spiliada. The analysis at page 110 of de Lampierre shows that it is not the advantage which points towards whether there is substantial justice done but it is after weighing the loss of the advantage in the natural forum, the court then comes to a view as to whether objective justice can be done at that natural forum. What the principle of Spiliada is seeking to do, is to look at the end result and to say whether notwithstanding the gain of advantages of natural forum and the loss of advantages from the local forum, would substantial justice be done in the natural forum. The court is not looking merely at the quality of the advantage to say if there is objective justice at the natural forum. The court is looking at many factors and in the process of weighing the advantages and disadvantage, the court is concerned to find out whether substantial justice can be done at the natural forum for the interests of all the parties and for the ends of justice. Therefore, examples such as different but well recognised discovery procedure at the natural forum could not be said to cause injustice. Similarly, lower compensation under French matrimonial law which is a well recognised system also could not be said to do injustice, even though in England such a system would not be considered domestically acceptable. It is this approach which led Lord Goff at page 482 of the Spiliada judgment to refer to examples of loss of advantages such as higher damages, more complete discovery procedure, power to award interest and more generous limitation period, as being no deterrent for the Court to grant a stay, so long as the primary objective can be achieved namely that substantial justice will be done at the natural forum.

61. After all the familiarity of the legal community now with the high authority of the Spiliada, the Scottish case of Société du Gaz which provided the foundation for the principle of forum non conveniens is forgotten. In that case, the cargo claimant against the French shipowner resisted the stay application of the shipowner on the ground that even though France was the natural forum, a stay would deprive the claimant of the full damages recoverable in Scotland as the French shipowner would be able to rely in France on the limitation defence under French law. Lord Sumner said at page 22 that he could see the non-profitability of the court endeavouring to conciliate and promote the interests of both parties. The object of the forum non conveniens principle is to find if the natural forum is preferable "for securing the ends of justice" and if it is, then notwithstanding the disadvantage to the claimant of the French forum, France is the forum preferable because "pursuit of the litigation in that forum is more likely to secure those ends" of justice (see page 22 of the Société du Gaz judgment).

62. In my view, the judgment in the Caltex case had overlooked the fundamental principle which govem the stay of proceedings on the forum non conveniens ground and it seems to me that instead of adopting the approach of Clarke, J. in the Caltex case as urged by Mr. Sussex, it would be more correct for this Court to follow the approach of Lord Goff in the Spiliada and in de Dampierre referred to earlier and bearing in mind all the time the principle as explained in the instructive judgment of Société du Gaz. Adopting that approach, it seems to me that the following considerations all point powerfully towards Singapore being where the ends of justice can be secured and where substantial justice can be done for the interests of all the parties:-

"Comity demands that such a situation should not be permitted to occur as between courts of two civilised and friendly states. It is a recipe for confusion and injustice").

63. It is plain from all what had been said earlier that in my judgment, the Singaporean Owners have made out an overwhelming powerful case of stay of proceedings in favour of Singapore. Accordingly therefore I make an order for stay of proceedings sought by the Singaporean Owners in their Notice of Motion. I also make an order nisi that the Plaintiffs herein do pay the Defendants herein the costs of the Motion.