TRANG SEAFOOD PRODUCTS CO LTD AND ANOTHER v. SEA-LAND SERVICES INC

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REASONS FOR JUDGMENT

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1. This is an application by the Defendant for stay of the proceedings in favour of Thailand on the ground of forum non conveniens. At the end of the hearing, I dismissed the application with costs and I indicated that I would give my reasons later, which I now hand down.

2. By a Bill of Lading issued by the Defendant, the Defendant agreed to ship a refrigerated container of some 1,300 cartons of frozen octopus ("Sashimi Cargo") for carriage from a Chilean port to a Thailand port. The Bill of Lading provided for the Sashimi Cargo to be kept as refrigerated cargo at -18^o. Unfortunately, such required low temperature for the Sashimi Cargo was not maintained and upon arrival in Thailand, the Sashimi Cargo was found to have risen to temperature of -4^o and therefore damaged and unsuitable to be used as Japanese raw fish, sashimi. Some of Sashimi Cargo had to be thrown away while the rest was boiled and used as cooked food. The amount of the damage alleged to be suffered by the Plaintiffs was put at some Yen 11 million. The damage was put in Yen because although the 1st Plaintiff is a Thai company, the 2nd Plaintiff is a Japanese company.

3. Ashby, the Hong Kong recovery agent acting for the Plaintiffs' cargo owners or cargo underwriters made a claim for the damage to the Sashimi Cargo against the Defendant company, which is an American company with large number of offices located world wide, including Hong Kong and Thailand. After a great deal of chasing by Ashby, the Defendant directed Ashby to discuss this cargo claim with the Defendant's Hong Kong office and this was done but without too much success as the Defendant was only willing to offer some 5 million Yen for the cargo loss. The matter of giving security to the Plaintiffs for the cargo claim also gave no joy to Ashby, thereby forcing the Plaintiffs to issue this Action in July 1997, by service of the Writ on the Defendant at its Hong Kong office on 9th July 1997. The Defendant, more than two months after the service of the Writ, issued the present application for stay of the proceedings on the ground of forum non conveniens. There could be no stay application based on exclusive jurisdiction agreement as there was no such clause in the Bill of Lading. But there was a Clause Paramount in the Bill of Lading whereby it was agreed that the United States Carriage of Goods by Sea Act applied to the contract.

4. The applicable principle governing forum non conveniens stay is what had been laid down by the Hong Kong Court of Appeal in Adhiguna Meranti [1987] HKLR 904 at 907F-I, which provided a three stage Test namely:-

5. The first dispute of the parties at the hearing is under Test I. Mr. Kerr for the Defendant contends that Hong Kong is not the natural or appropriate forum but that Thailand is the natural and appropriate forum whereas Mr. Coleman argues that Hong Kong is a natural and appropriate forum and that Thailand is not a natural or appropriate forum. In order to decide which forum is appropriate or natural for the resolution of the dispute, one must first ascertain what exactly is the dispute between the parties. This is however made difficult because of the rather vague nature of the Defendant's case put forward in support of its stay application. As I understand the submission of Mr. Kerr, although there is no admission of liability by the Defendant, the Defendant would probably not dispute that it was due to its fault that the temperature of the refrigerated container had risen from the contractual -18^o to -4^o but its main defence would be that either the Plaintiffs had suffered no loss because -4^o was still good for sashimi or alternatively that it was due to the fault of the Plaintiffs in Thailand that further damage was caused so to render the Sashimi Cargo to be unsuitable to be used as sashimi. It is to be noted that the Defendant's case in this application consists largely of assertions rather than admissible credible evidence and that as Mr. Coleman puts it, the Defendant failed to condescend on particulars as to enable issues to be identified and to enable the Court to determine on those identified issues what is the natural forum.

6. It is well established that when a jurisdiction had been rightly founded, whether by service in Hong Kong on a defendant in an action in personam or on a defendant's vessel in an action in rem, the court does not lightly take away such jurisdiction as of right chosen by the Plaintiffs. The burden therefore is always on the Defendant to show that it was unjust to subject the Defendant to the chosen jurisdiction of the Plaintiffs and that burden can only be discharged if the Defendant can show clearly that under Test I, there is another jurisdiction in which the dispute will be more appropriately and conveniently tried. If there is uncertainry as to what exactly is the dispute or the issues to be tried in this case, then it follows that the Defendant must fail in its stay application.

7. On the assumption that Mr. Kerr has correctly stated and shown the dispute required to be tried, then what this amounts to is a defence that notwithstanding the admission that the refrigerated cargo was wrongly allowed to rise in temperature from -18^o to -4^o, the trial would be on whether:-

8. I agree with Mr. Coleman that on the above basis of what Mr. Kerr said was the real dispute in the Action, then this is a classic case that the Court is likely to grant summary judgment in the amount claimed by the Plaintiffs or alternatively the Court might enter interlocutory judgment with damages to be assessed. It is perhaps worth pointing out that there is no evidence from the Defendant to even challenge, let alone prove that when temperature had risen to -4^o, Sashimi Cargo would still be suitable to be used for sashimi. Common sense suggests that Plaintiffs are obviously correct in this respect and that the Defendant is clutching at straws with Mr. Kerr's contention that nevertheless even with the substantial rise in temperature, the octopus could still be used as sashimi. What is however significant is that in relation to this issue of whether Sashimi Cargo at -4^o was nevertheless suitable to be used for sashimi, there is nothing to show let alone satisfy this Court that Hong Kong is not the natural or appropriate forum and that Thailand is the more appropriate forum to try such issue.

9. On the second issue of the Plaintiffs failing to mitigate their loss, it seems to me again that the alleged dispute is more fanciful than real. If the Sashimi Cargo upon arrival in Thailand was not suitable for consumption as sashimi then the action taken by the Plaintiffs are likely to be more than reasonable and there is no credible evidence adduced by the Defendant as to what else the Plaintiffs could have done which would reduce the loss. Again in relation to this dispute, I am not satisfied that the Defendant has shown that Hong Kong is not a natural and appropriate forum but that Thailand is a natural and appropriate forum.

10. On the third issue of the quantum of loss of the Plaintiffs, the proof by the Plaintiffs of the loss is really straightforward and I am uncertain from the evidence placed before me what exactly is the case of the Defendant on the quantum of loss. But in any event, there is nothing to suggest that this aspect cannot easily be the subject of adjudication by the Hong Kong Court or that Thailand is clearly and distinctly more appropriate than Hong Kong in respect of the trial of that issue.

11. Mr. Kerr made reference to many connecting factors with Thailand and no connecting factor with Hong Kong. I do not accept his submissions. In my judgment he has totally failed to persuade me on his contentions. It is to be borne in mind that both parties regarded Hong Kong rather than Thailand as being the appropriate and natural forum to deal with this dispute and the claim. The Defendant being a US company could have asked for the dispute to be resolved in the USA. After all the Bill of Lading was governed by US law. But the Defendant chose to refer the Hong Kong recovery agent of the Plaintiffs to the Hong Kong office of the Defendant and there was thereafter extensive communication in Hong Kong between the parries on the claim. Neither party considered Thailand to be the appropriate forum and accordingly nothing happened in Thailand. Therefore so far as conduct is concerned, both parties regarded Hong Kong as the appropriate forum. But as pointed out by Litton, V.P. (as he then was) in The Kapitan Shevetasov [1997] 1 HKC 485, the conduct of the parties in relation to litigation is not necessarily decisive in the determination of what is the natural forum.

12. As for connecting factors, it is not a mere list of connecting factors which would prove what is the appropriate and natural forum but it is the weight of each connecting factor with the dispute required to be decided by the Court, which would determine what is the natural forum. On the assumption that what might be at issue is really only a matter of damages, then all that had been shown to the Court by the Defendant is some vague suggestion that there could be witnesses from Thailand who could give evidence. What is the appropriate weight for the Court to attach to such vague alleged connecting factors with Thailand. Surveyors which had surveyed the Sashimi Cargo could give their evidence equally well in English in Hong Kong or in Thai in Thailand. US law if relevant would also be appropriately received in the Hong Kong Court and I would very much doubt this point would assist the Defendant in showing a weighty Thailand connecting factor. The Defendant is as much in Hong Kong as in Thailand. So far as this claim is concerned, the Defendant seems to be more connected in Hong Kong to this Action than in Thailand as the Defendant in Hong Kong dealt with the Ashby's claim for the Plaintiffs. What is to be borne in mind is that it is not the "mere practical convenience" of a party which determines what is the natural forum for the dispute. In any event, following Litton, V.P. in The Kapitan at page 495D, the Defendant is required to show that the convenience of Thailand as a forum to the Defendant (which is not a Thai company) objectively viewed is such as to be enough to displace the Plaintiffs' right of access to the Hong Kong Court. In my judgment, the Defendant has not proved that Hong Kong is not a natural forum and more decisively has totally failed to show that Thailand compared to Hong Kong is clearly and distinctly a more natural and appropriate forum for the resolution of the dispute. The Defendant therefore fails on Test I and the application must accordingly be dismissed as Mr. Kerr has acknowledged if such be the case.

13. However, even if I am mistaken on Test 1, I entertain no doubt that upon consideration of Test 2 and Test 3, the application for stay will fail as it would clearly be unjust to grant a stay in the circumstances.

14. The evidence and the arguments persuade me that under Test 2, the Plaintiffs in Thailand will be deprived of juridical advantages which are enjoyed in Hong Kong. The following are the juridical advantages relied on by the Plaintiffs which are lost in Thailand:-

Even without the time bar point, I find that the loss of all the other advantages stated above are very serious to the Plaintiffs in a claim such as this where the amount involved is not very large and the loss of advantages are substantial.

15. The time bar disadvantage however is for me decisive. There is a conflict of evidence but it is clear that if the Plaintiffs are right and that as a matter of Thai law which applies its mandatory time limitation (even with waiver by the Defendant), then the Plaintiffs would be time barred in Thailand and the sending of the Plaintiffs to Thailand would end the Plaintiffs claim for good. Even if it may be true that the point is arguable, it seems me that the mere fact that there is a serious risk that the Plaintiffs would be subject to the time limit bar is a juridical disadvantage which the Court is entitled to take into account under Test 2. I therefore find as a fact that the Plaintiffs would be subject to serious loss of juridical advantages if compelled to proceed in Thailand.

16. Once Test 2 is found in favour of the Plaintiffs, then under Test 3. the balance of justice goes all one way in favour of the Plaintiffs and against the Defendant. For the Defendant, all that can be said is that it might be somewhat inconvenient to bring, at most, a few witnesses from Thailand. But balanced against that are the disadvantages referred to earlier and most decisively the time bar disaster for the Plaintiffs. Mr. Kerr said that it was the Plaintiffs own fault in not issuing proceedings in Thailand in time. I reject that. There is no question here of the Plaintiffs deliberately taking a chance on Hong Kong proceedings or consciously trying to avoid the Thailand proceedings so that they became time barred in Thailand. In the circumstances of this case, I regard the Plaintiffs and their recovery agent Ashby as having done what was reasonable. The argument of Mr. Kerr is wholly devoid of merit. It is to be also noted that the Court leans against a stay where there is a possibility that a party may have to come back to lift the stay because of the time bar being found applicable in the foreign court (see The Blue Wave [1982] 1 Lloyd's Rep. 151 at 156-7). In all the circumstances, I find as a fact that substantial justice will not be done to the parties in Thailand. Therefore the Plaintiffs succeed on Test 3.

17. In the circumstances, the Motion of the Defendant for stay of proceedings on the ground of forum non conveniens must be dismissed with costs.