The Hong Kong High Court issued a Judgment on 25/8/2017 to determine whether the Hong Kong Court or the Yangon Court was the natural and appropriate forum in an in rem legal proceedings in relation to a cargo damage claim of USD143,852.02. [HCAJ 101/2015]
Introduction
This was the Defendant’s application by summons dated 26 September 2016 (“Summons”) for an Order under RHC O 12 r 8(2)(a) and (b), r 8(2A)(a) and inherent jurisdiction that the court should not exercise any jurisdiction it had in this Action; alternatively, that all further proceedings in this Action be stayed. In the Summons, it was stated that the grounds for the application were that in all the circumstances of the case considering the best interests and convenience of the parties to the proceedings and the witnesses in the proceedings, the proceedings should be conducted in the District Court of Yangon, Myanmar (“Yangon Court”).
Background Facts
The claim of the Plaintiffs (the cargo owners) was a cargo claim, the cargo being RBD Palm Olein (“Palm Olein”), an edible oil. The Defendant, Yangtze Navigation, a Singapore company, was the demise charterer of the vessel “Kappa Sea” (“Vessel”). Golden Agri International (“1st Plaintiff”), a Singapore company, was the seller and shipper of 3,200 MT of Palm Olein (“Cargo”).
By a Bill of Lading dated 17 August 2014 issued in Singapore, the demise charterer acknowledged receipt of the Cargo in good order and condition and agreed to carry the same from Tarjun, Indonesia to Yangon, Myanmar on board the Vessel. The Hague‑Visby Rules were incorporated into the Bill of Lading by virtue of clause 1(b) the General Paramount Clause and owing to the fact that the Bill of Lading was signed in Singapore. Alternatively, the Hague Rules were incorporated into the Bill of Lading by virtue of clause 1(a) of the General Paramount Clause by contractual incorporation.
Yangon Technical and Trading (“2nd Plaintiff”), a Myanmar company, was the buyer of the Cargo and the notify party under the Bill of Lading. It was also said to be the endorsee and/or the lawful holder of the Bill of Lading.
The Vessel together with the Cargo laden thereon departed from Tarjun, Indonesia on or around 17 August 2014. The Vessel arrived at Yangon, Myanmar on or around 29 August 2014 and began discharging on the same day. While the Vessel was discharging to the shore tank “J”, contaminants were discovered in the Cargo. The contaminated Cargo was then moved to a site approximately 20 km from the port for storage.
Both the cargo owners and the demise charterer had appointed their own local surveyors to assess inter alia the particulars of the contaminants and cause of contamination. The conclusion of the surveyors was that the contamination was from the Vessel’s internal discharge line which contained remains of stearin, being the previous cargo carried by the Vessel.
Both surveyors found that 383.86 MT of the Cargo was contaminated. Out of the 383.86 MT, 345.988 MT were successfully separated from the contaminant (“de‑contaminated Cargo”). A sample of the de‑contaminated Cargo was later certified by the Food and Drugs Administration of Myanmar (“FDA”) as fit for human consumption. Notwithstanding the certification, it was the cargo owners’ case that the de‑contaminated Cargo could not be sold at full market rate because potential buyers knew that they had been contaminated. The 2nd Plaintiff eventually sold them at less than their commercial value. Some of the remaining contaminated Cargo was sold for industrial use (“Industrial Use Cargo”) at a much lower price while the remainder was simply disposed of as being unusable. Apart from loss in the value of the Cargo, the cargo owners also claimed various “salvage costs” eg storage fees, reprocessing charges etc.
The cargo owners claimed the demise charterer was negligent, in breach of contract, in breach of duty, in breach of the Hague‑Visby Rules alternatively Hague Rules for inter alia failing to properly handle the Cargo or deliver the Cargo at Yangon, Myanmar in the same good order and condition as when shipped. The amount of damages claimed was US$143,852.02.
Service of Process
While this was an in rem action, the court’s jurisdiction was not founded on the arrest of the Vessel or the service of the Writ on the Vessel in Hong Kong. Further, since this was an in rem action, there could be no service of the in rem Writ on the demise charterer, a Singaporean Company, outside jurisdiction.
Under RHC O 75 r 8, “(1) Subject to paragraph (2), a writ by which an action in rem is begun must be served on the property against which the action is brought… (2) A writ need not be served or filed as mentioned in paragraph (1) if the writ is deemed to have been duly served on the defendant by virtue of Order 10, rule 1(4) or (5).”
RHC O 10 r (1)(4) provides: “(4) Where a defendant’s solicitor indorses on the writ a statement that he accepts service of the writ on behalf of that defendant, the writ shall be deemed to have been duly served on that defendant and to have been so served on the date on which the indorsement was made.”
What happened was that the P & I Club of the demise charterer, in order to avoid the arrest of the Vessel, acceded to the cargo owners’ request and signed a Letter of Undertaking dated 23 May 2016 which provided inter alia that:
“(2) We undertake that we will, within 14 days of the receipt from you of a request so to do: (a) instruct solicitors to accept on behalf of the Demise Charterers service at your option of in rem and/or in personam proceedings brought by Cargo Owners and to file an acknowledgment of service thereof…”
Thereafter, the amended Writ was served on the demise charterer’s Hong Kong solicitors who, at the time of accepting service in June 2016, expressly reserved the demise charterer’s right to contest the jurisdiction of the Hong Kong Courts and made clear that service would be accepted on that basis only, and also made an endorsement on the amended Writ to that effect.
This prompted the parties to raise an interesting preliminary argument as to whether or not the court should treat this as a so‑called “as of right” case.
The cargo owners argued that the P & I Club had contractually agreed to instruct solicitors to accept service of in rem and/or in personam proceedings, in consideration of the cargo owners refraining from arresting the Vessel. The acceptance of service of the Writ within the jurisdiction under the terms of the Letter of Undertaking was akin to jurisdiction being established by the arrest of the Vessel: PT Krakatau Steel (Persero) v Mount Kerinci LLC [2009] 1 HKLRD 264. Hence, this was in effect an “as of right” case and the Hong Kong Court’s jurisdiction should not lightly be disturbed: The Kapitan Shvetsov [1997] HKLRD 374; Hong Kong Civil Procedure 2017 Vol 1 para 11/1/10A. The cargo owners further submitted that the onus was on the demise charterer to show that (i) Hong Kong was not the forum conveniens; and (ii) the Myanmar Court was an available forum and was clearly or distinctly more appropriate than Hong Kong.
The demise charterer submitted that service was not “as of right” in the sense that neither the demise charterer nor the Vessel was served in Hong Kong to give the court statutory jurisdiction. Rather, acceptance of the service of the Writ was pursuant to the Letter of Undertaking and, importantly, with an express reservation of the right to challenge jurisdiction. Thus, this case was unusual in that it was neither a RHC O 11 service outside jurisdiction case where the onus would be on the cargo owners to show interalia that Hong Kong was the natural forum, nor an “as of right” case where the onus would be on the demise charterer to show the Yangon Court was the natural forum. The demise charterer submitted that the case in question was closer to the factual situation in New Link Consultants Ltd v Air China [2005] 2 HKC 260. At [38]–[39], Deputy Judge Poon (as he then was) observed:
“38. Under the Rules of the High Court, service of a writ on a defendant within jurisdiction may be by way of personal service (Order 10, rule 1(1)), registered post at the defendant’s usual and last known address (Order 10, rule 1(2)(a)), insertion through letter box (Order 10, rule 1(2)(b)), indorsement by the defendant’s solicitors on the writ to accept service (Order 10, rule (4)) or in suitable cases, substituted service (Order 65, rule 4). Where the defendant is outside jurisdiction, the writ may be served outside jurisdiction under Order 11. 39. The rules do not prevent the parties from agreeing on how the service of a writ is to be effected. Thus, in cases where a foreign defendant is involved, in order to “short‑circuit” the cumbersome procedure under Order 11 and hence saving costs, solicitors have developed a practice, which is laudable, of agreeing to accept service on behalf of that defendant but reserving at the same time its right to dispute jurisdiction later. (This reservation is important because if the indorsement on the writ by the solicitors is not so qualified, the defendant will be precluded from disputing jurisdiction later: see Hong Kong Civil Procedure, Vol 1, paragraphs 10/1/9 and 11/1/13A at pp 88 and 103). The writ so served on the defendant’s solicitors would then be regarded as if it had been served on the defendant outside jurisdiction under Order 11. The defendant will then be free to dispute jurisdiction in the normal way under Order 12, rule 8. See generally Sphere Drake Insurance Plc & others v. Gunes Sigorta Anonim Sirketi [1988] 1 Lloyd’s LR 139.” (emphasis added)
Where a Writ is served on a foreign defendant’s solicitors in Hong Kong by agreement coupled with a reservation of right to dispute jurisdiction, it will be treated as having been served on the foreign defendant outside jurisdiction ie an RHC O 11 situation. The defendant is still free to dispute jurisdiction under RHC O 12 r 8 but in such an application, the onus is on the plaintiff to show, inter alia, that Hong Kong is the natural forum.
In the court’s view, it was unhelpful and unnecessary to characterise the case in question as an “as of right” case or not an “as of right” case.
The cargo owners’ argument overlooked the important distinction between the case in question and PT Krakatau Steel (Persero) v Mount Kerinci LLC ie there was an express reservation of the right to contest jurisdiction in the case in question which was absent in PT Krakatau Steel (Persero). PT Krakatau Steel (Persero) was “an example of defendants which had submitted to the jurisdiction by instructing the solicitors to accept service in Hong Kong”: see the judgment at [41] and that “Service on their solicitors was equivalent to serving the defendants themselves within the jurisdiction, and thus there was no right to challenge the jurisdiction of the court under O 12 r 8”: see the judgment at [42].
On the other hand, the demise charterer’s submission by analogy with New Link Consultants Ltd v Air China was also unsatisfactory. Given that an in rem Writ cannot be served outside jurisdiction as such, the decision of New Link Consultants Ltd v Air China that a Writ served on a foreign defendant’s solicitors in Hong Kong by agreement (coupled with a reservation of right to dispute jurisdiction) would be treated as having been served on that defendant outside jurisdiction was clearly distinguishable from the case in question — it did not assist in resolving the dichotomy of “as of right” and “not as of right” or where the onus of proof lay.
In the court’s view, the really important question was which party bore the onus of proof in the application in question. To that question, the answer was plain and obvious — the onus must be on the demise charterer.
Under RHC O 75 r 8 (2), a writ in rem need not be served on the ship if it is deemed to have been duly served on the defendant by virtue of RHC O 10 r 1(4). Under RHC O 10 r 1(4), a writ is deemed to have been duly served on a defendant by an endorsement on the Writ by its solicitors. That was what happened in the case in question, albeit with an express reservation of the demise charterer’s right to contest jurisdiction. The significance of the express reservation was simply this: without it, the demise charterer would be precluded from disputing jurisdiction later: New Link Consultants Ltd v Air China at [39].
The onus could not fall on the cargo owners to show that Hong Kong was the natural forum. As the only ground set out in the Summons for disputing jurisdiction concerned forum, specifically under RHC O 12 r 8(2A)(a), it was difficult to escape the well‑established principle that a defendant who disputes the Hong Kong Court’s jurisdiction on the ground of forum non conveniens has the onus of proof: Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460, 480H–482A.
Deliberation
Both parties accepted that the principles derived from Spiliada Maritime Corp v Cansulex Ltd and re‑affirmed by the Court of Final Appeal in SPH v SA (2014) 17 HKCFAR 364, were applicable. In SPH v SA at [51], Lord Collins of Mapesbury NPJ stated:
“51. We adopt the re‑statement of the principles…in DGC v SLC (née C) [2005] 3 HKC 293, 297–298, applying Spiliada Maritime Corporation v. Cansulex Limited [1987] 1 AC 460, 477 and Louvet v. Louvet [1990] 1 HKLR 670, 674–675:
“1. The single question to be decided is whether there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of an action ie in which the action may be tried more suitably for the interests of all the parties and the ends of justice? 2. In order to answer this question, the applicant for the stay has to establish that first, Hong Kong is not the natural or appropriate forum (‘appropriate’ in this context means the forum has the most real and substantial connection with the action) and second, there is another available forum which is clearly or distinctly more appropriate than Hong Kong. Failure by the applicant to establish these two matters at this stage is fatal. 3. If the applicant is able to establish both of these two matters, then the plaintiff in the Hong Kong proceedings has to show that he will be deprived of a legitimate personal or juridical advantage if the action is tried in a forum other than Hong Kong. 4. If the plaintiff is able to establish this, the court will have to balance the advantages of the alternative forum with the disadvantages that the plaintiff may suffer. Deprivation of one or more personal advantages will not necessarily be fatal to the applicant for the stay if he is able to establish to the court’s satisfaction that substantial justice will be done in the available appropriate forum.”
In The Peng Yan [2009] 1 HKLRD 144, the Court of Appeal also re‑affirmed that the court’s basic approach in admiralty proceedings in determining applications for stay on the ground of forum non conveniens is the same as in any action ie the application of the Spiliada principles: the burden on the applicant for a stay based on forum non conveniens is still to demonstrate there is another jurisdiction that is clearly or distinctly more appropriate than Hong Kong — the legal burden is not on the party suing in Hong Kong to demonstrate the appropriateness of continuing proceedings in Hong Kong.
According to the demise charterer, there were at least three likely issues in dispute at trial: (1) whether the cargo owners had title to sue the demise charterer — the issue being connecting the contaminated Cargo with the cargo owners (“1st Issue”); (2) whether the demise charterer had discharged their contractual duty under the Bill of Lading and/or any duty of care in tort in relation to the cleanliness of the internal discharge line (“2nd Issue”); (3) quantum of damages — whether the cargo owners could have sold the de‑contaminated Cargo at market rate, bearing in mind that it was certified by the FDA in Myanmar as fit for human consumption (“3rd Issue”). This was said to be a key issue since the cargo owners’ sale of the de‑contaminated Cargo at below market rate in Myanmar accounted for a substantial part of their claim for damages.
While the cargo owners submitted that the demise charterer had no arguable defence on liability ie to the 1st and 2nd Issues, it was, in the Judge’s view, inappropriate to make a determination of the two issues at this stage.
Firstly, for an application of this nature, the evidential materials were by affidavits and those on the merits were almost invariably incomplete. It was not the function of the court to try a case on affidavits and it was wholly unsafe to purport to dismiss the demise charterer’s defences on liability merely on such incomplete evidence, unless of course the matter was open and shut eg the demise charterer’s liability in this case was strict. As far as liability was concerned, the demise charterer was not under a strict liability.
Secondly, making a determination on the merits in the course of the application in question was conceptually unsound. The whole purpose of a forum non conveniens application is to determine whether there is another forum which is clearly or distinctly more appropriate than Hong Kong to try the action. By taking upon itself to adjudicate on the merits, the court would be presupposing that Hong Kong was the natural and appropriate forum and that no other forum was clearly or distinctly more appropriate than Hong Kong to try the action. In any event, the quantum was a live and substantial issue. That live issue had to be tried, along with other live issues, at an appropriate forum, the determination of which was the whole point of the application in question.
The demise charterer must first establish that Hong Kong was not the natural or appropriate forum — “appropriate” in the sense that the forum had the most real and substantial connection with the action. In this regard, the demise charterer submitted that neither the cargo owners, the demise charterer nor the material events had any connection with Hong Kong. On the facts, the only Hong Kong connections were that the Vessel was Hong Kong‑registered and, for reasons unknown, the cargo owners engaged solicitors in Hong Kong to institute and serve proceedings in Hong Kong.
In the court’s view, the fact that the Vessel was Hong Kong‑registered was irrelevant. It had no relation to the claim, it was not a material fact and did not have any bearing on the question where this action could most appropriately be tried. Also irrelevant was the fact that the cargo owners elected to institute and serve proceedings in Hong Kong. To hold otherwise would be an official endorsement of the practice of forum‑shopping since a plaintiff can without undue difficulty institute and serve proceedings in a forum of its choice and use that fact to boost the preferred forum’s connection with the action. The whole point of the application in question was to determine whether the cargo owners’ choice of forum ie Hong Kong was inappropriate and whether there existed another forum which was more suitable for the trial of the action in the interest of all parties and the ends of justice. For these reasons, the court agreed with the demise charterer that Hong Kong was evidently not the natural or appropriate forum for the trial of the action in question. The real question was whether the demise charterer could satisfy the court that there was another available competent forum which was clearly or distinctly more appropriate than Hong Kong. The demise charterer said the Yangon Court was such a forum.
To begin with, given the Cargo was discharged in Yangon, Myanmar and the contaminated part of it, ie the de‑contaminated Cargo and the Industrial Use Cargo, was subsequently sold in Myanmar, the Yangon Court had and would accept jurisdiction to hear the cargo owners’ claim. This was supported by the legal opinion of the demise charterer’s Myanmar lawyers and not seriously in dispute. What the cargo owners did dispute was that the Yangon Court was clearly or distinctly more appropriate than Hong Kong for the trial of the action.
On that question, the demise charterer submitted that there were numerous factors which demonstrate the Yangon Court was clearly and distinctly the more appropriate forum:
(1) Under the Bill of Lading, the Cargo was shipped to and discharged at Yangon, Myanmar. (2) The buyer of the Cargo viz the 2nd Plaintiff was a Myanmar company. (3) The process of “de‑contaminating” the contaminated Cargo took place in a facility 20 km away from the discharge port in Yangon. (4) Both the cargo owners’ surveyor Myanmar Marine and the P & I Club’s surveyor Pandi General Surveyors, who had examined the contaminated Cargo and prepared their respective survey reports, were based in Yangon. (5) The Vessel’s officers and crew were of either Chinese or Myanmar nationality. (6) The FDA, which certified the de‑contaminated Cargo as fit for human consumption, was a government department in Myanmar. (7) The de‑contaminated Cargo and the Industrial Use Cargo were subsequently sold in the local market in Myanmar. (8) All incidental expenses, such as transport and storage charges, were incurred in Myanmar
It could be seen from the list above that the Yangon Court had much more real and substantial connection with the action and was in this sense a more appropriate forum. In particular, since the de‑contaminated Cargo and the Industrial Use Cargo were sold in the local market and all incidental expenses were incurred in Myanmar, it was highly likely that the trial of the action would require the attendance of Myanmar‑based witnesses. These would potentially be factual witnesses who conducted the sale and incurred the expenses, the surveyors who had examined the contaminated Cargo and gave the observations and opinions in their reports, as well as experts who were familiar with the local market condition for Palm Olein at the time of the discharge.
On the issue of the market condition for Palm Olein at the time of the discharge, the cargo owners said they had lined up experts from Hong Kong and Singapore while the demise charterer had identified SGS (Myanmar) and OMIC Myanmar Inspection & Surveying who were able to give expert evidence on the quality and value of the de‑contaminated Cargo should the action be tried in the Yangon Court. Of course, it was up to the parties to appoint expert witnesses of their choice but the cargo owners could not “pull themselves up by their own bootlaces” by appointing a Hong Kong (or Singapore) expert who did not speak the local language of Myanmar in order to make the point that the Yangon Court was not a clearly or distinctly more appropriate forum. In any event, the cargo owners’ experts could easily travel to Myanmar and, witnesses were allowed to testify in English in Myanmar Courts. Further, submission of documents in English was also allowed in Myanmar Courts. So the cargo owners could not complain of any serious disadvantage if the action be tried in the Yangon Court even if they adhered to their Hong Kong or Singapore expert.
It was the demise charterer’s position that it had exercised due diligence to clean the internal discharge lines so that the Vessel was cargoworthy ie it was fit and safe to carry the Cargo. Hence, on this issue, it would also likely entail inter alia factual evidence from the Vessel’s officers and crew, some of whom were of Myanmar nationality. It would obviously be more natural and convenient if they were able to testify in the Myanmar language in the Yangon Court.
All in all, the court had no doubt that the Yangon Court was clearly and distinctly the more appropriate forum for the trial of the action than Hong Kong.
The next issue was whether the cargo owners could show they would be deprived of a legitimate personal or juridical advantage if the action was tried in the Yangon Court rather than in Hong Kong. It was necessary to go back to basics and set out the true principle underlying the courts’ treatment of “legitimate personal or juridical advantage” and its impact on the question of forum.
In Spiliada Maritime Corp v Cansulex Ltd at 482B–F, Lord Goff of Chieveley observed:
“(8) Treatment of “a legitimate personal or juridical advantage” Clearly, the mere fact that the plaintiff has such an advantage in proceedings in England cannot be decisive. As Lord Sumner said of the parties in the Société du Gaz case, 1926 S.C. (H.L.) 13, 22: “I do not see how one can guide oneself profitably by endeavouring to conciliate and promote the interests of both these antagonists, except in that ironical sense, in which one says that it is in the interests of both that the case should be tried in the best way and in the best tribunal, and that the best man should win.” Indeed, as Oliver L.J. [1985] 2 Lloyd’s Rep 116, 135, pointed out in his judgment in the present case, an advantage to the plaintiff will ordinarily give rise to a comparable disadvantage to the defendant; and simply to give the plaintiff his advantage at the expense of the defendant is not consistent with the objective approach inherent in Lord Kinnear’s statement of principle in Sim v Robinow, 19 R 665, 668. The key to the solution of this problem lies, in my judgment, in the underlying fundamental principle. We have to consider where the case may be tried “suitably for the interests of all the parties and for the ends of justice.” Let me consider the application of that principle in relation to advantages which the plaintiff may derive from invoking the English jurisdiction. Typical examples are: damages awarded on a higher scale; a more complete procedure of discovery; a power to award interest; a more generous limitation period. Now, as a general rule, I do not think that the court should be deterred from granting a stay of proceedings, or from exercising its discretion against granting leave under R.S.C. Ord 11, simply because the plaintiff will be deprived of such an advantage, provided that the court is satisfied that substantial justice will be done in the available appropriate forum.” (emphasis added) Then, at 483 B–C, Lord Goff continued: “Then take the scale on which damages are awarded. Suppose that two parties have been involved in a road accident in a foreign country, where both were resident, and where damages are awarded on a scale substantially lower than those awarded in this country. I do not think that an English court would, in ordinary circumstances, hesitate to stay proceedings brought by one of them against the other in this country merely because he would be deprived of a higher award of damages here.”
The cargo owners submitted that if this action was tried in Hong Kong, the claim would be subject to the Hague‑Visby Rules whereas if the dispute was adjudicated in the Yangon Court, it would be determined in accordance with the unamended Hague Rules. According to the cargo owners, the advantages to the cargo owners of the Hague‑Visby Rules were two‑fold.
a. First, under Article III, rule 4 of the Hague‑Visby Rules, if a bill of lading had been issued specifying the good order and condition of the Cargo, it was conclusive evidence if the bill of lading had been passed to a third party acting in good faith, being the buyer or consignee viz 2nd Plaintiff. By contrast, under Article III, rule 4 of the unamended Hague Rules, it was not conclusive evidence. This was important to the cargo owners since the demise charterer said it did not admit any contamination of the Cargo from the residue of stearin in the Vessel’s internal discharge line. b. Second, there are different package/unit limits under the Hague‑Visby Rules and the unamended Hague Rules for cargo claims. Under Article IV rule 5 of the Hague‑Visby Rules, liability is limited to 666.67 SDRs per package or 2 SDRs per kilogram of the Cargo lost or damaged, whichever is the higher. Under Article IV rule 5 of the unamended Hague Rules, the carrier was entitled to limit his liability for loss or damage to £100 per package or unit. Given the value of the Cargo ie US$830 per MT and the amount of the claim, limit of liability was not a concern to the cargo owners under the Hague‑Visby Rules whereas it was unclear whether the limit of liability of the unamended Hague Rules would be applicable. Accordingly, there was a risk that the cargo owners’ claim would be subject to the package/unit limit if tried in the Yangon Court. The possibility of a higher award of damages in Hong Kong was a legitimate juridical advantage: The Kapitan Shvetsov [1997] HKLRD 374.
The court was not satisfied these were legitimate juridical advantages to the cargo owners. Nor was the court satisfied that substantial justice could not be obtained in the Yangon Court by reason of its adherence to the unamended Hague Rules as opposed to the Hague‑Visby Rules. The reasons were these. First, it was inherently dangerous to take one or two provisions in the unamended Hague Rules at their face value and jump to the conclusion that the application of the unamended Hague Rules, in comparison with the Hague‑Visby Rules, was necessarily less advantageous or that it would lead to a denial of justice to the cargo owners. As far as the “conclusive evidence” provision in the Hague‑Visby Rules was concerned, it was unlikely to be significant in the case in question since the demise charterer had never suggested that the Cargo was already contaminated prior to loading — indeed, in the P & I Club’s surveyor report, the surveyor found that the Cargo was contaminated by the residual of the previous cargo carried by the Vessel. Now that the contaminated Cargo had been sold or otherwise disposed of, it would be far too late for the demise charterer to make that suggestion at the trial.
Regarding the different package/unit limits under the Hague‑Visby Rules and the unamended Hague Rules, the short answer was that the limit under the unamended Hague Rules has no application to bulk cargo such as grain or liquids in bulk since the word “unit” only referred to a physical unit for shipment: The Aqasia [2016] EWHC 2514 (Comm); [2016] Lloyd’s Rep 510. Hence, the perceived risk that the cargo owners’ claim would be subject to the package/unit limit under the unamended Hague Rules if tried in the Yangon Court was more apparent than real. Second, courts should in general be slow, if at all, to pass judgment on two international maritime conventions and decide which one is more conducive to the attainment of substantial justice or objectively more just than the other, unless there is consensus or substantial consensus in the international community on the matter. That is the point made by the English Court of Appeal in Hercceg Novi v Ming Galaxy [1998] 4 All ER 238 in relation to the International Convention Relating to the Limitation of the Liability of Owners of Seagoing Ships 1957 and the Convention on Limitation of Liability for Maritime Claims 1976. The former prevailed in Singapore at the time of the decision while the latter, which provided for a higher limit of liability, had the force of law in the United Kingdom. The Court of Appeal held that the 1976 Convention was not an internationally sanctioned and objective view of where substantial justice lay, but was simply the preference of those states who were signatories to it. It seemed to the court that the same could be said of the unamended Hague Rules and the Hague‑Visby Rules. The Hague Rules, adopted in Brussels in 1924, are a scheme for uniformity of bills of lading representing a compromise between the interest of carriers and that of owners of cargoes. The Hague‑Visby Rules, adopted in Brussels in 1968, are “simply the Hague Rules with certain amendments which carriers and shipowners describe as clarifying and rectifying certain difficulties which had emerged over 40 years of the Rules. Cargo interests may, however, see them as being largely in the interests of carriers.” Presently, there are still countries in the world who have declined to ratify the Hague‑Visby Rules and stick with the unamended Hague Rules or some domestic legislative version of them, including the USA and countries in the South America eg Argentina. In these circumstances, it is extremely difficult to come to an objective conclusion on where, as between the unamended Hague Rules and the Hague‑Visby Rules, substantial justice lies.
The cargo owners further submitted that their claim was now time‑barred in Myanmar by reason of the expiry of the one‑year time limit. On the other hand, the Writ in the action in question was issued in Hong Kong within time and no question of time‑bar arose. Unless the cargo owners had acted unreasonably in failing to commence proceedings in Myanmar within the one‑year limitation period, the Court should not deprive them of the advantage of having sued in Hong Kong within time.
On this issue of time‑bar, one must again turn to the speech of Lord Goff in Spiliada Maritime Corp v Cansulex Ltd at 483E‑484A for guidance:
“…Again, take the example of cases concerned with time bars. Let me consider how the principle of forum non conveniens should be applied in a case in which the plaintiff has started proceedings in England where his claim was not time barred, but there is some other jurisdiction which, in the opinion of the court, is clearly more appropriate for the trial of the actions, but where the plaintiff has not commenced proceedings and where his claim is now time barred. Now, to take some extreme examples, suppose that the plaintiff allowed the limitation period to elapse in the appropriate jurisdiction, and came here simply because he wanted to take advantage of a more generous time bar applicable in this country; or suppose that it was obvious that the plaintiff should have commenced proceedings in the appropriate jurisdiction, and yet he did not trouble to issue a protective writ there; in cases such as these, I cannot see that the court should hesitate to stay the proceedings in this country, even though the effect would be that the plaintiff’s claim would inevitably be defeated by a plea of the time bar in the appropriate jurisdiction. Indeed a strong theoretical argument can be advanced for the proposition that, if there is another clearly more appropriate forum for the trial of the action, a stay should generally be granted even though the plaintiff’s action would be time barred there. But, in my opinion, this is a case where practical justice should be done. And practical justice demands that, if the court considers that the plaintiff acted reasonably in commencing proceedings in this country, and that, although it appears that (putting on one side the time bar point) the appropriate forum for the trial of the action is elsewhere than England, the plaintiff did not act unreasonably in failing to commence proceedings (for example, by issuing a protective writ) in that jurisdiction within the limitation period applicable there, it would not, I think, be just to deprive the plaintiff of the benefit of having started proceedings within the limitation period applicable in this country.” (emphasis added)
The question for the court was this: had the cargo owners acted reasonably in commencing proceedings in Hong Kong and had they acted unreasonably in failing to issue a protective writ in Myanmar within the limitation period applicable there?
The only explanation from the cargo owners which shed light on this question consisted of a few paragraphs in the affidavit of the cargo owners’ lawyer. There was an assertion in paragraph 48 thereof that “The Plaintiffs took reasonable steps to protect this claim by issuing protective proceedings in 3 separate forums (ie Court proceedings in Hong Kong and Singapore as well as arbitral proceedings.) before the time bar. The Plaintiffs very sensibly did not commence proceedings in Myanmar…”.
In the absence of a clear explanation as to why the cargo owners did not commence proceedings in Myanmar to protect the limitation period, the court was unable to be satisfied that they had acted reasonably in failing to do so. This was not a case where the factors connecting the action to Hong Kong were, rightly or wrongly, thought to be much stronger than Myanmar so that one might perhaps be excused from coming to the view that it was unnecessary to protect the limitation period in Myanmar. Nor was this a case where the factors connecting the action to Hong Kong and Myanmar were evenly balanced, and owing to the cargo owners’ view on the comparative quality of justice in both jurisdictions, they had decided to sue in Hong Kong, instead of Myanmar. As the court pointed out earlier, the action had no or no relevant connections with Hong Kong at all. In these circumstances, the court must reject the time bar argument as something which weighed against a stay of the proceedings in question. Nor was the court minded to impose as a condition for stay by requiring an undertaking from the demise charterer not to plead the time bar defence in the Yangon Court. This was a case where practical justice demanded that the cargo owners be deprived of the advantage of having commenced proceedings within time in Hong Kong, a jurisdiction to which the action had no real connection.
To conclude, for the reasons set out above, the court was satisfied that the Yangon Court was clearly and distinctly the more appropriate forum for the trial of the action in question and the proceedings in question should be stayed.
Disposition
All further proceedings in the Action were stayed to the Yangon Court.
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23/F, Excel Centre, 483A Castle Peak Road, Lai Chi Kok, Kowloon, Hong Kong 香港九龍荔枝角青山道483A卓匯中心23樓 Tel: 2299 5566 Fax: 2866 7096 E-mail: gm@smicsl.com Website: www.sun-mobility.com A MEMBER OF THE HONG KONG CONFEDERATION OF INSURANCE BROKERS 香港保險顧問聯會會員
The Hong Kong District Court issued a Judgment on 26 April 2022 dealing with a case concerned with transfer of business and lifting the corporate veil, and held a forwarder and its shareholder and director jointly and severally liable for a debt of HK$975,733.71. [DCCJ 2104/2019] [2022 HKDC 289]
The Shanghai Maritime Court issued a Judgment on 24/12/2009 to deal with the question whether a shipping company could charge the container demurrage based on the tariff published on its website.
The English Court of Appeal issued a Judgment on 31/7/2009 holding a charterparty clause (concerning late redelivery) as a penalty clause and thereby unenforceable. [2009] EWCA Civ 855;[2009] All ER (D) 35 (Aug)
The amendment to the International Convention for the Safety of Life at Sea (SOLAS) 1974 Chapter VI, Regulation 2 in respect of the verified gross mass of a container carrying cargo (laden container) is for entry into force globally on 1 July 2016.
The Hong Kong Court of Appeal issued a Judgment on 4 October 2019 upholding the High Court’s Decision dated 9 April 2018 (reported in our Chans advice/208). [CACV593/2018][2019HKCA1101]
The Hong Kong High Court issued a Judgment on 27/5/2011 in relation to an air shipment that a forwarder issued two sets of its House Air Waybills to two different parties for one lot of cargoes. [HCCL 117/1994]
Remember our last issue Chans advice/129 that the forwarder was held liable for its refusing to release the goods to the named consignee without original straight Bill of Lading? On 12/8/2011, the Hong Kong Court of Appeal issued a Judgment dismissing the forwarder’s application for leave to appeal. [HCMP 683/2011]
The 12th annual SMIC seminar on uncollected cargoes pulled some 300 participants to attend with much curiosity for 3 hours in the YMCA Assembly Hall. The accumulated questionmarks and enigmas about the subject matter lurking in the trade were unleashed among the audiences.
The Hong Kong High Court issued a Judgment on 16 January 2019 dealing with the appeal of the wasted costs’ case reported by our Chans advice/214. [HCA1919/2016] [2019HKCFI127]
The Hong Kong High Court issued a Judgment on 3/8/2011 holding that a Korean shipping company could not rely on its Bill of Lading’s Korean jurisdiction clause to stay a Hong Kong legal action. [HCCL 13/2010]
The Hong Kong High Court issued a Judgment on 2/6/2017 dealing with the liability apportionment among 3 vessels in 2 almost simultaneous collisions that happened near Hong Kong on 14/5/2011. [HCAJ158/2012 and HCAJ49/2013 and HCAJ48/2011]
The Hong Kong High Court issued a Decision on 15 March 2021 converting a domestic Mareva injunction into a worldwide Mareva injunction in a shipowner’s freight and demurrage claim against a charterer. [HCMP 1190/2020] [2021 HKCFI 680]
The High Court of Hong Kong issued a Judgment on 22/5/2017 holding that the District Court has jurisdiction to determine bill of lading and bailment cases. [HCAJ 150/2014]
The High Court of Hong Kong issued a Judgment on 3/2/2012 concerning which currency (US$ or Euro) should be the proper one for the cargo owners in a shipment to claim against the forwarder for compensation in a cargo damage case. [HCAJ 152/2010]
The Hong Kong High Court issued a Judgment on 22/8/2016 dealing with a case that a forwarder wanted to strike out a cargo misdelivery claim on the ground that the claim disclosed no reasonable cause of action. [HCCL 5/2015]
The Hong Kong Court of Final Appeal (“the CFA”) issued a Judgment on 10/9/2014 dismissing a cargo owner’s (“the Assured”) cargo insurance claim of US$1,555,209.00 against an insurance company (“the Insurer”) on the ground that the Assured had breached an insurance warranty relating to the carrying vessel’s deadweight capacity. [FACV No. 18 of 2013]
The Ningbo Maritime Court issued a Judgment on 25/5/2016, and dismissed a cargo insurer’s (PICC Ningbo) recovery claim of USD25,238.40 against Mitsui O.S.K. Lines Ltd (“MOSK”) in relation to the vessel MOL Comfort sinking into the Indian Ocean on 17/6/2013.
The Montreal Convention is an international treaty agreed by 140 states in respect of governing carriers’ liability for injury or death of passengers, damage to or loss of baggage and cargo and losses caused by delays. Hong Kong has adopted it through the Carriage by Air Ordinance (Cap 500).
The English High Court issued a Judgment on 26/2/2010 holding that a shipping company could follow the shipper’s instructions to change the consignee and the destination in its bill of lading and that the original consignee became having no title to sue. (2010 WL 606031)
Remember our Chans advice/171 of 31/3/2015 reporting that the Hong Kong Court of Appeal discharged the Mareva injunctions against Hin-Pro? The Hong Kong Court of Final Appeal issued a Judgment on 14/11/2016 reversing the Court of Appeal’s Judgment of 11/3/2015. [FACA No. 1 of 2016]
The Hong Kong Court of Appeal’s Judgment dated 11/4/2008 explained some legal principles relating to whether indemnity claims are allowed by in rem legal actions against vessels. [CACV 257/2007]
We refer to our Chans advice/251 last month reporting the Hong Kong High Court’s decision to sentence Mr Ma (Hyundai Hong Kong’s former deputy general manager) to 15 years’ imprisonment. The High Court issued another Judgment on 27 April 2022 holding Mr Ma liable to compensate HK$387,655,303.70 to Hyundai Hong Kong. [HCA 619/2016] [2022 HKCFI 1153]
The District Court of Hong Kong issued a Judgment on 21/4/2011 dismissing a forwarder’s cargo indemnity claim of US$46,201.81 against a trucking company. [DCCJ 2092/2009]
The Hong Kong Court of Appeal issued a Judgment on 17/7/2014 holding a Hong Kong forwarder liable to pay US$852,339 plus costs and interest (as damages for conversion) to an Indian bank in an air cargo misdelivery case. [CACV 282/2012]
The Hong Kong Court of Appeal issued a Judgment on 12/2/2018 to deal with the cargo owners’ seeking leave to appeal against the High Court’s Judgment reported in our Chans advice/209 last month. [CAMP 38/2017] [2018 HKCA77]
In Chans advice/14 dated 28/2/2002, we discussed this topic 15 years ago. In its Judgment dated 16/10/2017, the District Court of New South Wales in Australia had to deal with, inter alia, a malpractice that a forwarder issued its own house B/Ls but signed off with as agent for China Ocean Shipping, Pacific International Lines, Mitsui O.S.K. Lines Limited or Orient Overseas Container Line without authority. [2017 NSWDC 279]
The English Commercial Court issued a Judgment on 7/11/2012 holding a carrier liable for US$458,655.69 owing to its issuing 13 clean Bills of Lading for a consignment of steel pipes which had some pre-shipment damage. [2012 EWHC 3124 (Comm)]
The Court of Appeal of Hong Kong issued a judgment on 28 March 2019 dealing with a matter concerning the sale pendente lite of an oil tanker Brightoil Glory. [CAMP49/2019][2019HKCA395]
The High Court of Hong Kong issued a Decision on 31/8/2018 concerning a feeder company’s claim against a shipping company’s lawyer for wasted costs. [HCA1919/2016] [2018HKCFI1879]
Our Chans advice/191 reported a Hong Kong High Court’s case concerning a shipping company’s restitution claim against its former deputy general manager (Mr Ma) for HK$387,655,303.70. The latest development of this case is: the Hong Kong High Court issued a Judgment on 1/2/2018 and a Decision on 9/2/2018 holding that Mr Ma was in contempt of Court as a result of his breach of a Mareva Injunction Order and that he be committed to prison for 4 months. [HCMP1115/2017] [2018 HKCFI176] [2018 HKCFI328]
The Hong Kong High Court issued a Decision on 21 July 2023 in relation to a case that an aircraft (worth at least USD 80 million) and its cargoes were destroyed by a fire caused by the goods of chlorine dioxide disinfection tablets. [HCA 837/2022] [2023 HKCFI 1896]
The High Court of Hong Kong issued a Judgment on 26/8/2011 to determine which ship to blame in a collision case that occurred at Shanghai. [HCAJ 200/2007]
The Hong Kong High Court issued a Judgment on 22/11/2013 concerning an unless order in relation to a freight forwarder’s claims for outstanding freight charges of HK$4,427,336. [HCA 1755/2011]
Remember Chans advice/142 dated 31/10/2012 that the High Court of Hong Kong held the forwarder liable for cargo misdelivery without production of original bills of lading? The High Court of Hong Kong issued another Judgment on 4/12/2012 dealing with the interest and costs. [HCCL 20/2011 & HCCL 21/2011]
The Hong Kong Court of Appeal issued a Judgment on 29/1/2016 dealing with a case of one or two days’ delay in appeal in relation to a barge sinking accident. [HCMP 3172/2015]
In our Chans advice/169 last month, we mentioned the English Court’s Judgment dated 14/10/2014 holding CSAV’s bill of lading’s English jurisdiction clause to be an exclusive jurisdiction clause. In this issue, let’s look at that English High Court Judgment [2013 Folio No 1248, 2014 EWHC 3632 Comm, 2014 WL 5113447] issued by Justice Cooke in detail.
According to the Hague-Visby Rules, the carrier shall be discharged of all liability in respect of the cargoes unless suit is brought within one year of their delivery or the date when they should have been delivered. The English High Court issued a Judgment on 22nd July 2025 explaining the meaning of “suit”. [2025 EWHC 1878 (Comm)]
The Hong Kong High Court issued a decision on 31 May 2022 ordering a South Korean shipowner to provide a Hong Kong shipowner with security for costs in the amount of HK$600,000 in relation to a ship collision case that happened in Hong Kong during the super typhoon Hato in August 2017. [HCAJ 80-85/2019] [2022 HKCFI 1631]
Without even knowing, we have published including this one 200 issues of the Chans Advice. As this is a monthly bulletin, 100 issues took more than 8 years and 200 issues took 17 years to run.
On 12/4/2017, the Hong Kong High Court dismissed an application made by a cargo owner for stay of proceedings commenced by two forwarders in relation to an uncollected cargo case. [HCA 1927/2016]
The Hong Kong High Court issued a judgment on 30/4/2015 dealing with the legal principles in respect of the order of priorities in distributing the sale proceeds of an arrested ship. [HCAJ 129/2013]
The Hong Kong District Court issued a Judgment on 8/4/2014 holding that the one year’s suit time limit under the Hague Visby Rules does not apply to the carrier’s claims against the shipper. [DCCJ 4438/2013]
The English Court of Appeal gave a Judgment on 6/7/1987 explaining how to calculate the suit time limit for the indemnity claim under the Hague Visby Rules. ([1987] 1 W.L.R. 1213)
The Hong Kong High Court issued a Decision on 25 February 2019 dealing with Changhong Group’s delayed application for leave to appeal in relation to the collision case reported in our Chans advice/218 and Chans advice/215. [HCAJ3/2018, 2019HKCFI542]
The Hong Kong High Court on 18/11/2011 issued a Judgment concerning a quite confusing situation that three different laws (the USA, the PRC, and Hong Kong) might apply to the one shipment. [HCAJ 198/2009]
The Hong Kong High Court issued a Judgment on 18/11/2016 dismissing a shipping company’s application for summary judgment against its former deputy general manager (Mr Ma) for restitution of the sum of HK$387,655,303.70 on the ground of money had and received and/or unjust enrichment. [HCA 619/2016]
The Hong Kong District Court issued a Decision on 30 April 2021 dealing with a personal injury case in relation to a container terminal. [DCPI 110/2020] [2021 HKDC 463]
The Hong Kong High Court issued a decision on 11/9/2013 concerning a shipowner’s application to extend the validity of a writ of summons against a Taiwan hull and machinery insurer. [HCAJ 95/2012]
The Hong Kong High Court issued a Decision on 13 May 2021 to deal with an interpleader action concerning the stakeholding of US$700,000 in relation to a dispute over some management fees between two transport operators. [HCMP510/2020] [2021 HKCFI 1373]
The Hong Kong High Court issued a Judgment on 24/11/2015 dealing with a mandatory injunction and specific performance in respect of a letter of indemnity in connection with a delivery of cargo without production of the original bills of lading. [HCCL 12/2015]
The Hong Kong High Court issued a Decision As To Costs on 5 December 2024 ordering a shipowner (which lost in an anti-suit injunction court case) to pay the winning party’s (a cargo owner) costs on an indemnity basis. HCCT 66/2024 [2024 HKCFI 3511]
The Hong Kong High Court issued a Decision on 22 Feb 2021 holding that the wreck removal claims of a ship sunk were not subject to the Convention on Limitation of Liability for Maritime Claims 1976. [HCAJ 98/2019] [2021 HKCFI 396]
The Hong Kong High Court issued a ruling on 2/12/2016 dealing with a shipowner’s interrogatory application in relation to an uncollected cargo case. [HCAJ 118/2015]
We have received some enquiries from our forwarder clients about the FCR e.g. what is FCR? How many types of FCR are there? What are the uses of FCR? We would like to discuss these in this issue.
More than 10 years ago, we broke new grounds unheard of before among insurance brokers by introducing genuine claim support (by truly employing a team of professional transport claim handlers) independent of that from the insurers. Since then, the knowledge advantage of the insurer over that of the transport operator insured has been evened. Those who buy transport liability insurance are truly better protected with professionals standing at their side who really know the freight industry and are conversant in transport insurance and claims handling.
The High Court of Hong Kong issued a Decision on 15 November 2018 concerning the tragic collision between the cargo vessel CF Crystal and the tanker Sanchi, which happened on 6 January 2018 and led to the death of all the officers and crew of the Sanchi. [HCAJ3/2018] [2018HKCFI2474]
The Hong Kong High Court issued a judgment on 12/4/2016 to dismiss a cargo owner’s action in respect of breaking a barge owner’s tonnage limitation. [HCAJ 178/2014]
The Hong Kong High Court issued a Judgment on 13 August 2021 holding a forwarder liable to pay nominal damages of HKD1,000 to a shipper in a cargo misdelivery claim case of USD1,299,189.87. [HCA 937/2016] [2021 HKCFI 2310]
The Hong Kong High Court issued a Decision on 20/12/2017 dealing with a dispute of US$948,802.05 (as the price of bunkers supplied to a vessel) between a vessel charterer and a bunker supplier. [HCA2265/2016]
In Chans advice/215, we reported the High Court of Hong Kong refused Changhong Group’s application to stay the Hong Kong action. The Court of Appeal also subsequently dismissed Changhong Group’s appeal. On 13 July 2020, the Court of Final Appeal finally dismissed Changhong Group’s application for leave to appeal. [FAMV No. 34 of 2020] [2020 HKCFA 24]
There are three ways of fulfilling the deposit requirement of the Ministry of Transport (“MOT”) in the People’s Republic of China (“PRC”) for your NVOCC license.
The Hong Kong High Court issued a Decision on 29 January 2019 dismissing Changhong Group’s application for stay of the legal proceedings against it brought by the consignee and the insurer of the cargo on board the Sanchi. [HCAJ6/2018, 2019HKCFI263]
Following the Hong Kong Court of Appeal’s Judgment dated 11/3/2015 discharging the Mareva Injunctions and the receivership orders (mentioned in our monthly newsletter of Chans advice/171 two months ago), the Hong Kong High Court issued a Judgment on 12/5/2015 to determine the question of who should pay the remuneration to the receivers. [HCMP 1449/2014]
Are Standard Trading Conditions (“STC”) equivalent to the House Bill of Lading (“HB/L”) terms or the House Air Waybill (“HAWB”) terms? We have been frequently asked this question by our forwarder clients.
Following the issue of Chans advice last month, we would like to report the latest decision issued by the court over this theft case. On 17 January 2023, the Hong Kong High Court dismissed Mr Ma’s application to withdraw HK$1.5 million out of his frozen assets for paying the legal costs for his appeal against conviction in theft. [HCA 619/2016] [2023 HKCFI 197]
While the MOL Comfort incident was a disaster widely talked about among forwarders, all who suffered loss without exception will try whatever means to recover their losses down the line wherever the legal regimes permit.
The English High Court issued a Judgment on 31/7/2015 dismissing a cargo owner’s conversion claim US $565,891.58 against a shipowner in an uncollected cargo case. [(2015) EWHC 2288 (Comm), (2015) 2 C.L.C. 415]
We have received a lot of cargo claims from our forwarder clients in the recent months. In this issue, we would like to discuss in general how the forwarders should handle the cargo claims.
In our newsletter last month, we talked about some essential terms in house Air Waybills. In this issue, as the continuation of the loss prevention exercise for freight forwarders, we would like to discuss some essential terms in house Bills of Lading.
The Hong Kong High Court issued a Decision on 2 October 2024 dismissing a shipping company’s application to strike out a forwarder’s third party indemnity claim in a cargo (frozen beef) damage case. [HCAJ 9/2023, HCAJ 22/2023, 2024 HKCFI 2708]
The limit of liability for international carriage of cargoes by air under the Montreal Convention has been revised from 19 SDR/Kg to 22 SDR/Kg of the gross weight of the cargoes effective from 28 December 2019. We have received many enquiries from freight forwarders about changing their house Air Waybills’ terms to cope with the new limit of liability. We would like to take this opportunity to discuss some essential terms in house Air Waybills.
The United States District Court (Southern District of New York) issued an order on 29 November 2021 to deny a shipping company’s motion to rely on the Singapore jurisdiction clause in its bill of lading. [1:19-cv-5731-GHW-RWL]
Remember our Chans advice/163 about the English High Court’s Judgment holding the Hague Visby Rules instead of the Hague Rules to apply to the cargo damage claim case in excess of US$3.6 million? The English Court of Appeal issued a Judgment on 24/2/2016 upholding the High Court’s conclusion but with different reasons. [Case No: A3/2014/1285, 2016 EWCA Civ 101, 2016 WL 00692394]
The Hong Kong High Court issued a Decision on 4 March 2020 dismissing a shipowner’s application for a stay of proceedings in favour of arbitration in a case of cargo misdelivery without presentation of original bill of lading. [HCAJ 5/2019] [2020 HKCFI 375]
More and more junior staff of the banks insist all the Bills of Lading to be signed and issued with the above remark “As agent for the Carrier”. This is of course right if the concerned Carrier does not have its own office in the place of issuing the Bill of Lading and therefore instruct its agent there to issue the Carrier’s Bill of Lading.
The Hong Kong Court of Appeal issued a Judgment on 18/12/2014 in connection with a cargo misdelivery claim of US$27,835,000 involving also anti-suit injunction and worldwide freezing order issued by the English Court. [CACV 243/2014 & HCMP 1449/2014]
The High Court of Hong Kong issued a Judgment on 21/7/2014, in which some legal principles relating to the in rem jurisdiction of the Court to arrest vessels were explained. [HCAJ 241/2009]
The Hong Kong High Court issued a Judgment on 9/4/2018 dealing with a cargo total loss case in which a NVOC in Malta was wrongly sued (because it had the same name as that of the correct NVOC in BVI). [HCAJ 65/2016], [2018 HKCFI 699]
In the last issue of Chans advice, we reported the case that the Hong Kong Court of Appeal rejected the mortgagee’s appeal against the High Court’s order of granting a stay until 24 April 2019 for the sale of the Vessel Brightoil Glory. On 17 May 2019, the Court of Appeal issued another judgment refusing the shipowners’ appeal in respect of their application for a further stay of the sale of the Vessel until 22 May 2019. [CAMP81/2019] [2019 HKCA 561]
The High Court of Hong Kong issued a Judgment on 4/5/2012 explaining some legal principles as to when shipowners should fear the arrest of their ships. [HCAJ 141/2010]
On 5/8/2011, the District Court of Hong Kong dismissed a shipping company’s container claims against a forwarder for want of prosecution and abuse of process. [DCCJ 765/2005]
The Hong Kong High Court issued a judgment on 21/4/2016 and disallowed a cargo owner’s application for summary judgment against a forwarder in connection with a cargo (a diamond) missing claim of US$900,000. [HCCL 10/2015]
The Hong Kong Court of Appeal issued a Judgment on 9/7/2015 in relation to the High Court Judgment dated 21/7/2014 (reported in our Chans advice/167 dated 28/11/2014). [HCMP 2315/2014]
This continues the Q&A in our off-line real seminar on Uncollected and Undelivered Cargo on 28 May 2024. Participants were keen to know more about seaway bills, how war plays in insurance? How modes of transport differ mis-delivery claims handling? What is insurers’ attitude towards transloading claims? And finally, why mis-delivery and uncollected cargo claims deserve special attention. SMIC deals with similar questions daily. Each case varies in its cause, and therefore healing recipe differs. But if you are conversant with fundamentals. They could be simple.
To continue our recent series of loss prevention articles, we would like to discuss in this issue the major provisions of the PRC Maritime Code as far as the international carriage of goods by sea is concerned.
In our Chans advice/244, we reported the Hong Kong High Court case [HCA937/2016] [2021 HKCFI 2310] that the forwarder was held liable to pay nominal damages of HKD1,000 to the shipper in the cargo misdelivery claim of USD1,299,189.87. On 20 October 2021, the Hong Kong High Court issued a Decision on Costs holding the shipper liable to pay the costs of the forwarder. [2021 HKCFI 3021]
The High Court of Hong Kong issued a Judgment on 1/11/2012 ordering the USA/Canada owners of a cargo (a yacht) to put up HK$250,000 as further security for costs in their legal action against the ship owners. [HCAJ 177/2009]
The VGM laws have come into operation in Hong Kong since 1/7/2016. They are mainly contained in Section 3 and Section 3A of the Merchant Shipping (Safety) (Carriage of Cargoes and Oil Fuel) Regulation (Chapter 369AV) as follows:
In our last issue of Chans advice/253, the Hong Kong District Court’s judgment dated 26 April 2022 mentioned a case authority of China Ocean v Mitrans Shipping. We would like to discuss this judgment dated 11 July 1995 of the Hong Kong Court of Appeal in our Chans advice this month. [1995 No. 71 Civil]
The English Court of Appeal issued a Judgment on 13/12/2017 dealing with a cargo damage claim of EUR2,654,238 and a charter hire claim of USD1,012,740 in connection with a NYPE charterparty. [2017 EWCA Civ 2107] [2017 WL 06343564] [Case No. A3/2016/4770]
The Hong Kong High Court issued a Decision on 11 May 2021 staying a South Korea container terminal’s legal action in Hong Kong with respect to its allision claims of more than US$90,000,000 against the owners of a container ship. [HCAJ 31/2020] [2021 HKCFI 1283]
The English High Court issued a Judgment on 2/4/2014 holding the Hague Visby Rules instead of the Hague Rules (as incorporated by a Paramount Clause) to apply to a shipment ex Belgium. [Case No: 2012 Folio 102, 2014 EWHC 971 Comm, 2014 WL 1219313]
In Chans advice/215, we reported that the Hong Kong High Court refused Changhong Group’s application to stay the Hong Kong proceedings; and in Chans advice/234, we reported that the Court of Final Appeal dismissed Changhong Group’s application for leave to appeal. On 7 April 2022, the Hong Kong High Court issued a Decision dealing with Changhong Group’s action to re-litigate its stay application. [HCAJ 3/2018] [2022 HKCFI 920]
The Hong Kong High Court on 13/8/2013 held a shipper liable to a shipping company for paying demurrage of US$1,645,286.74 plus interest and costs. [HCAJ 166/2011]
The English Court of Appeal issued a Judgment on 20/1/2011 holding two clauses in the standard trading conditions of the British International Freight Association valid. One of them was about all sums due to the forwarder to be paid without reduction or deferment on account of any claim, counterclaim or set-off. The other was about the 9-month suit time limit. [2011] All ER (D) 128 (Jan); [2011] EWCA Civ 18
The English High Court issued a Judgment on 15/5/2015 maintaining an anti-suit injunction to restrain the Xiamen Maritime Court’s legal proceedings in breach of a London arbitration agreement. [Case No: 2015-515], [2015 WL 2238741], [2015 EWHC 1974 COMM]
In the transport industry, the contracts of carriage (e.g. Bills of Lading, Air Waybills) usually contain an exclusive jurisdiction clause for settling disputes. However, it is not uncommon that the shippers and consignees sue the transport operators in a court other than the one specified in the exclusive jurisdiction clause. In Hong Kong, the transport operators may rely on the Foreign Judgments (Restriction on Recognition and Enforcement) Ordinance to tackle this kind of situation.
The Hong Kong High Court issued a Judgment on 9/2/2010 holding a carrier entitled to rely on its bill of lading clause to lien the cargoes for the damages, costs, expenses, charges resulting from the shipper’s overloading the cargoes in the containers. [HCA 1579/2008]
As reported in our Chans advice/170 dated 27/2/2015, the English High Court on 14/10/2014 held CSAV’s bill of lading’s English jurisdiction clause as an exclusive jurisdiction clause. On 23/4/2015, the English Court of Appeal issued its Judgment reaching the same conclusion. [Neutral Citation No: 2015 EWCA Civ 401, Case No: A3/2014/3584]
Remember Chans advice/142 and Chans advice/145 that the High Court of Hong Kong held the forwarder liable for cargo misdelivery without production of original bills of lading? The Court of Appeal of Hong Kong issued a Judgment on 31/1/2013 dismissing the forwarder’s applications for an extension of time to appeal. [HCMP 2366/2012 & HCMP 2367/2012]
Remember our Chans advice/165 (reporting the Hong Kong Court of Appeal holding the Hong Kong forwarder liable to pay US$852,339 plus costs and interest to the Indian bank in the air cargo misdelivery case)? On 19/5/2016, the Court of Final Appeal dismissed the Hong Kong forwarder’s application for seeking leave to appeal. [FAMV Nos 45 & 52 of 2015]
Remember our Chans advice/112 that the Hong Kong High Court held the Rotterdam terminal liable to pay the cargo value of €950,071.20 for the misdelivery of one container of Sony Play Stations? On 2/4/2013, Judge To of the Hong Kong High Court issued another Judgment holding that the forwarder was entitled to limit its liability to US$24,392 in accordance with its B/L terms. [HCAJ 106/2008]
The Hong Kong High Court issued a Decision on 9/5/2017 allowing a time extension for some cargo interests to claim against the Tonnage Limitation Fund constituted by the owner of one of the two vessels involved in a collision that happened on 7/11/2013. [HCAJ 189/2013]
In the issue of our Chans advice last month, we talked about the major provisions of the Montreal Convention (which is for the international carriage of goods by air). In this issue, we would like to discuss the major terms of an equally important international convention for the international carriage of goods by sea, viz. the Hague Visby Rules.
The High Court of Hong Kong issued a Decision on 21/9/2017 dealing with the principles in respect of the real risk of dissipation of assets in a case of Mareva Injunction involving a shipowner and a charterer. [HCMP 1010/2017]
The Hong Kong High Court issued a Judgment on 25/11/2009 holding a barge owner entitled to enjoy the tonnage limitation despite its entering into an Indemnity Agreement with a charterer to fully indemnify the charterer against all losses. (HCAJ 134/2009)
The Hong Kong Court of Appeal on 1 December 2021 allowed a charterer’s appeal against a High Court’s Decision dated 13 April 2021 (which disallowed the charterer’s charter hire claims of US$234,955 against the shipowner because the High Court was not satisfied the claims were well founded). [CACV 294/2021] [2021 HKCA 1865]
Does the law require forklift trucks to have the third party insurance of motor vehicles? The Hong Kong High Court’s Judgment [Magistracy Appeal No 241 of 1996] dated 2/5/1996 explained the legal principles to answer this question.
The Hong Kong High Court issued a Decision on 30 September 2021 holding a shipowner’s Defences as an abuse of process in a case of unpaid crew wages. [HCAJ 76/2020] [2021 HKCFI 2961] [HCAJ 91/2020]
Remember our Chans advice/138 regarding the Hong Kong High Court’s Judgment holding the He Da 98’s owners fully liable in the collision that happened off Shanghai? The Hong Kong High Court issued its Decision on 18/1/2013 dealing with the damages to be paid to the Pontodamon’s owners. [HCAJ 200/2007]
What is the difference between a straight bill of lading and an order bill of lading? This can be illustrated in the Wuhan Maritime Court’s Judgment dated 17 September 2019 concerning a cargo misdelivery claim of US$89,838.
The High Court of Hong Kong issued a summary Judgment on 28/9/2012 holding a forwarder liable for US$626,389 plus costs and interest for misdelivery of cargoes without production of the original bills of lading. [HCCL 20/2011 & HCCL 21/2011]
The Hong Kong High Court issued a Decision on 19 March 2018 dealing with some legal principles in relation to granting relief against unless orders in a ship collision case. [HCAJ 84/2017] [2018 HKCFI 609]
The Hong Kong Court of Appeal issued a Judgment on 20 September 2019 declining to give leave of appeal to Changhong Group in relation to the High Court Decision dated 29 January 2019 (reported in our Chans advice/221). [CAMP197/2019] [2019HKCA1061]
The 10th annual SMIC seminar on Forwarders’ Standard Trading Conditions wrapped a decade of unabated effort hammering for the freight industry’s attention to loss prevention by proper freight documents. The topic had attracted over 300 participants to attentively listening for 3 hours in the YMCA Assembly Hall. We thank them all for the patience.
The Hong Kong Court of Appeal issued a Judgment on 20 February 2019 dismissing Changhong Group’s appeal against the High Court’s Decision of 15 November 2018 (reported in Chans advice/215) because Changhong Group had not obtained leave to appeal from the Hong Kong High Court. [CACV576/2018] [2019HKCA246]
The Court of Final Appeal landmark case on delivery of cargo without bills of lading has set off the alarm bell that bills of lading terms must be reviewed before it is too late.
The Hong Kong High Court issued a Judgment on 21/7/2014 discharging a Mareva injunction in relation to a cargo misdelivery claim of about US$12 million. [HCA 2368/2012]
The Hong Kong High Court issued a Decision on 22 January 2021 dealing with an appeal against a Small Claims Tribunal’s award concerning a dispute over a container terminal’s storage charges. [HCSA 44/2020] [2021 HKCFI 200]
In Chans advice/191 and Chans advice/206, we reported a case relating to a shipping company’s claim against its former deputy general manager (Mr Ma) over the alleged theft of the company’s money. The Hong Kong High Court on 16 December 2020 sentenced Mr Ma to 15 years’ imprisonment. [HCCC 20/2018] [2021 HKCFI 195]
The Hong Kong High Court issued a Judgment on 11/8/2009 holding a shipping company could rely on two letters of indemnity to seek compensation of US$253,655.50 from a forwarder and a trading company in a case of cargo release without production of original bills of lading. [HCA 208/2008]
The Hong Kong District Court issued a Judgment on 8/2/2011 holding a Hong Kong forwarder liable for its refusing to release the cargoes to a consignee without production of the original straight Bill of Lading. [DCCJ 3467/2009]
The Hong Kong High Court issued a Judgment on 11/12/2013 holding that a Hong Kong plaintiff needed to put up a security for costs in a court case concerning a yacht sinking incident. [HCCL 5/2013]
Against the post-Covid tide, we ran an off-line real seminar on Uncollected and Undelivered Cargo on 28 May 2024. Attendance could not be compared with any webinars but the number of enthusiastic questions in the Q&A session reflected the demand for transport liability issue solutions. For the sake of recapitulations and sharing the Q&A among the Chan Advice readership, we like to report the Q&A in two issues. We welcome any other questions you may have on the following.
The Hong Kong High Court issued a Judgment on 7/6/2011 explaining the concept of the package limitation of the United States Carriage of Goods by Sea Act. [HCAJ 181/2008]
The Hong Kong High Court issued a Judgment on 5/8/2015 holding that a shipment of formula milk powder without the legally required export licence should not be forfeited. [HCMA171/2015]
The High Court of Hong Kong issued a Decision on 23 May 2018 allowing a shipowner to be represented by 2 different firms of solicitors (one appointed by its hull underwriters and the other appointed by its P&I Club). [HCAJ84/2017] [2018HKCFI1136]
The Hong Kong District Court issued a Judgment on 28/4/2014 dismissing a seller’s cargo misdelivery claim of US$122,302.80 against a freight forwarder and holding the seller liable to pay the outstanding freight charges of US$28,855 to the forwarder. [DCCJ 344/2010]
The Hong Kong High Court issued a Judgment on 3/2/2017 holding Natural Dairy liable to pay HK$4,360,948.38 to Schenker being the outstanding freight charges. In the Judgment, the Judge also explained the principles regarding the meaning of notice of the forwarder’s standard trading conditions. [HCA 1755/2011].
The PRC Supreme Court on 26/11/2015 issued a Judgment holding a shipping company’s container demurrage claim against a shipper time barred. [2015民提字第119號]
The Hong Kong Court of Appeal issued a Judgment [CACV144/2017] [2018HKCA299] on 29/6/2018 upholding the High Court’s Judgment dated 2/6/2017 (which was reported in our Chans advice/201).
In this issue, we would like to continue with the case (CSAV v Hin-Pro) mentioned in our monthly newsletter of Chans advice/169 two months ago. The Hong Kong Court of Appeal issued its Judgment on 11/3/2015 discharging the Mareva Injunctions and the receivership orders granted by DHCJ Saunders against Hin-Pro and Soar. [CACV 243/2014]
The Hong Kong High Court issued a Judgment on 11 January 2019 dealing with a dispute of US$335,858.31 between a bunker supplier and a ship agent. [HCA119/2015] [2019HKCFI57]
SMIC has finally jumped on the bandwagon of the cyber media rush by its presence on the Facebook. We would have done this for a long time had it not been for the daily chores and that we were then not too convinced of its value in the commercial world. Thereafter, it becomes obvious that more and more firms are capitalizing on this new media; and unlike the old economies where information flow was imperfect, consumers of the new economies tend to prefer looking up for information by themselves from the web, or augmenting information they are given.
We mentioned in our Chans advice/225 that the limit of liability under the Montreal Convention for carriage of cargoes was increased from 19 SDR/kg to 22 SDR/kg of the gross weight of the cargoes effective on 28 December 2019. We have recently received some forwarders’ request asking us to talk about the major terms in the Montreal Convention. We in this issue would like to introduce the Montreal Convention’s major provisions as follows:
The Hong Kong High Court issued a Judgment on 29/4/2013 relating to a discovery order ancillary to and in support of a Mareva injunction. [HCA 2124/2011]
We recently have received a lot of uncollected cargo claim cases from our forwarder clients, which have kept our 6 claim handlers very busy. We would like to take this opportunity to talk about this troublesome problem of uncollected cargoes. Actually, the forwarders have been facing this real headache in at least these two decades.
The Hong Kong High Court issued a Judgment on 23/12/2013 dealing with an application for security for costs in relation to a ship sinking case. [HCAJ 213/2009]
In the Shanghai Maritime Court’s Judgment dated 25 August 2005, the court explained how the PRC Maritime Code dealt with the liability of carriers for cargo loss and damage in warehouse fires. [(2005)沪海法商初字第249 号]
We reported in our Chans advice/252 that the Hong Kong High Court held Hyundai Hong Kong’s ex-Deputy General Manager (Mr Ma) liable to compensate HK$387,655,303.70 to Hyundai Hong Kong in the case of his theft of his employer’s money. On 23 December 2022, the Hong Kong High Court issued a decision ordering a sum of HK$500,000 (which was deposited by Mr Ma as bail money) to be released to Hyundai Hong Kong in partial satisfaction of Mr Ma’s judgment debt. [HCA 619/2016] [2022 HKCFI 3798]
The Hong Kong District Court issued a Decision on 8 May 2020 upholding a summary judgment ordering one forwarder to pay outstanding airfreight charges of HK$440,000 to another forwarder. [DCCJ1202/2018] [2020HKDC307]
