Your World of Legal Intelligence
 Hong Kong | 1-800-335-6202

Bright Shipping Ltd v Changhong Group (Hk) Ltd

Judgment Cited authorities 10 Cited in 1 Precedent Map Related
Vincent
Judgment Date18 March 2020
Neutral Citation[2020] HKCA 162
Year2020
Judgement NumberCACV102/2019
Subject MatterCivil Appeal
CourtCourt of Appeal (Hong Kong)
CACV102A/2019 BRIGHT SHIPPING LTD v. CHANGHONG GROUP (HK) LTD

CACV 102/2019

[2020] HKCA 162

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 102 OF 2019

(ON APPEAL FROM HCAJ NO 3 OF 2018)

________________________

BETWEEN

BRIGHT SHIPPING LIMITED Plaintiff
and
CHANGHONG GROUP (HK) LIMITED Defendant

________________________

Before: Hon Kwan VP, Cheung JA and Barma JA in Court
Dates of Written Submissions: 31 October 2019, 14 and 22 November 2019
Date of Judgment: 18 March 2020

________________________

J U D G M E N T

________________________

Hon Kwan VP (giving the Judgment of the Court):

1. On 20 September 2019, the Court of Appeal (Kwan VP and Barma JA) handed down its judgment (“CA Judgment”) dismissing the appeal of the defendant (“Changhong”) against the decision of Anthony Chan J on 15 November 2018 (“CFI Judgment”), by which the judge dismissed Changhong’s application to stay an action brought against it by the plaintiff (“Bright Shipping”) on the ground of forum non conveniens. Changhong issued a notice of motion on 17 October 2019 seeking leave to appeal to the Court of Final Appeal from the CA Judgment[1].

2. We adopt the same expressions and abbreviations as in the CA Judgment. The relevant background matters are set out in §2 of the CA Judgment quoting the relevant parts of the CFI Judgment and in §§31 to 43 of the CA Judgment which gave an overview of the various proceedings brought in Hong Kong and the Shanghai Maritime Court (“SMC”) by various parties arising out of the collision between Changhong’s vessel and Bright Shipping’s tanker.

3. There was no dispute that Hong Kong is not the natural forum for this inter-ship action, even though Bright Shipping is entitled to bring this action as of right (ie first question for the stage 1 analysis applying the Spiliada principles). The judge held against Changhong it was not established that the SMC is clearly and distinctly more appropriate than Hong Kong as the forum for the trial of this action (ie second question for the stage 1 analysis). We saw no basis to interfere with the judge’s assessment in that respect, which is closely analogous to the exercise of a discretion. He has not misdirected himself on the applicable principles or fallen into error in his evaluation of the factors he took into account[2]. The appeal was dismissed on this basis.

4. The judge also held even if Changhong should succeed on the stage 1 analysis, Bright Shipping has shown that it will be deprived of legitimate juridical advantage if this action is to be tried in the SMC rather than Hong Kong (ie stage 2 analysis) in two respects: the significant disparity in tonnage limitation that apply in Hong Kong and the SMC; and the expiry of the time limit for Bright Shipping to bring claims in the SMC against the limitation funds set up there. We dealt with the former only and on an obiter basis. We agree with the judge if it had been necessary to undertake the stage 2 analysis, Bright Shipping has shown that it will be deprived of a legitimate juridical advantage if the action is tried in the SMC[3].

5. The orders sought to be appealed from are interlocutory orders. Appeals from interlocutory orders to the Court of Final Appeal are rare and exceptional. Leave to bring such an appeal will generally be refused unless it can clearly be seen that (1) the proposed appeal genuinely raises a question of law of great general or public importance; (2) the result of the appeal would indeed turn on how that question is answered; and (3) such result is likely to make a significant contribution to the just disposal of the litigation (Pacific Electric Wire & Cable Co Ltd v Hu Hung Chiu & Anr, FAMV 73/2007, 13 March 2008, at §§7 to 8).

6. Four questions are set out in the notice of motion as questions of great general or public importance. As they ran into four pages, we do not propose to set them out verbatim. Changhong also relied on the “or otherwise” limb.

Question 1

7. This question is concerned with the correct test for lis alibi pendens for the purpose of forum non conveniens.

8. On behalf of Changhong, it is contended the correct test should be as follows:

“where proceedings about a matter are pending in a foreign court which is a (or the) natural or appropriate forum for those proceedings and a party to those foreign proceedings institutes action in Hong Kong against another party concerning the same matter, then the additional inconvenience and expense which results from allowing both to be pursued concurrently where the same facts will be in issue and the same evidence required can only be justified if the first-mentioned party establishes objectively by cogent evidence that there is some personal or juridical advantage that would be available to it only in Hong Kong that is of such importance that it would cause injustice to deprive that party of that advantage”.

9. Mr Alder submitted that the above test is supported by The Abidin Daver [1984] AC 398 at 411H to 412B and 423F to H. He contended that the judge had wrongly applied a test of “unusual hardship” and the CA Judgment at §54, which appeared to perpetuate the same erroneous approach, would create confusion as to the correct test unless rectified by the Court of Final Appeal.

10. We decline to grant leave to appeal on question 1 for these reasons:

(1) The dichotomy between the test contended by Changhong to be correct and the test of “unusual hardship” is a false dichotomy. On a proper reading of the CFI Judgment and the CA Judgment[4], “unusual hardship” was not applied as a strict test but rather that unusual hardship caused to a defendant by parallel proceedings may be relevant depending on an assessment of all the factors. A parallel proceeding in another jurisdiction is only one of the factors to be taken into account on the issue of forum non conveniens.

(2) Previous decisions of the Court of Appeal have provided clear guidance on the approach for lis alibi pendens (The Peng Yan [2009] 1 HKLRD 144 at §§23, 31 to 33; LN v SCCM, CACV 62/2013, 4 June 2013, at §§19 to 24, 33; China Construction Bank (Asia) Corp Ltd v Shanghai Pudong Development Bank Co Ltd, CACV 14/2016, 3 February 2017 at §§5.2 to 5.3). The CA Judgment did not cast doubt on any of these decisions and there is no confusion arising.

(3) The test propounded by Changhong wrongly assumes that the existence of lis alibi pendens satisfies the stage 1 analysis in Spiliada, such that the onus shifts to the plaintiff to show deprivation of some personal or juridical advantage if the action is tried in a forum other than Hong Kong. The test of Changhong, which is a paraphrase of Lord Diplock’s statements in The Abidin Daver at 411H to 412B, has overlooked the context of those statements in that Lord Diplock was referring to a situation where parallel proceedings exist in a foreign court which is the natural forum in any event (at 409F to 410B)[5]. It is well established that it is only after the stage 1 analysis is satisfied that the onus shifts to the plaintiff in stage 2 to show deprivation of a legitimate personal or juridical advantage (SPH v SA (2014) 17 HKCFAR 364 at §51).

Question 2

11. This concerns the relevance of limitation and liability proceedings in the SMC (not true lis alibi pendens) and the proper weight to be given to them.

12. This question has five sub-questions with sub-paragraphs for two of them. The submissions made by Mr Alder are essentially repetitive of the arguments made at the hearing before us[6], and were dealt with fully in the CA Judgment[7]. We do not propose to repeat them here.

13. Before considering whether leave to appeal should be granted for each of the sub-questions, we have these general remarks.

14. It was contended on behalf of Changhong that this is the first case that came before the Hong Kong courts where limitation funds have been established in another jurisdiction in respect of multiple claims...

To continue reading

Request your trial
1 cases
  • Changhong Group (Hk) Limited v Bright Shipping Limited
    • Hong Kong
    • Court of Final Appeal (Hong Kong)
    • 16 July 2020
    ...2018 (“CFI Judgment”). [4] [2019] HKCA 1062, CACV 102/2019 (Kwan VP and Barma JA), Judgment dated 20 September 2019 (“CA Judgment”). [5] [2020] HKCA 162, CACV 102/2019 (Kwan VP, Cheung & Barma JJA), Judgment dated 18 March [6] Nan Tung Bank Ltd, Zhu Hai v Wangfoong Transportation Ltd [1999]......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT