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The Owners And/or Those Entitled To Sue In Respect Of A Cargo Lately Laden On Board The Ship Or Vessel “Jin Hui 588” v The Owners And/or Demise Charterers Of The Ship Or Vessel“jin Hui 588”

Judgment Cited authorities 9 Cited in Precedent Map Related
Vincent
Judgment Date17 March 2016
Subject MatterAdmiralty Action
Judgement NumberHCAJ139/2014
CourtHigh Court (Hong Kong)
HCAJ139/2014 THE OWNERS AND/OR THOSE ENTITLED TO SUE IN RESPECT OF A CARGO LATELY LADEN ON BOARD THE SHIP OR VESSEL “JIN HUI 588” v. THE OWNERS AND/OR DEMISE CHARTERERS OF THE SHIP OR VESSEL“JIN HUI 588”

HCAJ 139/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY ACTION NO 139 OF 2014

_________________

Admiralty action in rem against: the ship or vessel “JIN HUI (金輝) 588”
BETWEEN
The owners and/or those entitled to sue in respect of a cargo lately laden on board the ship or vessel “JIN HUI (金輝) 588” Plaintiffs
and
The owners and/or demise charterers of the ship or vessel “JIN HUI (金輝) 588” Defendants

_________________

HCAJ 140/2014

THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY ACTION NO 140 OF 2014

_________________

BETWEEN
廣州市番禺區口岸實業公司蓮花山公共保稅倉庫 1st Plaintiff
FEDERAL INSURANCE COMPANY 2nd Plaintiff
POLEX INTERNATIONAL LIMITED 3rd Plaintiff
ZKG INTERNATIONAL LIMITED 4th Plaintiff
THAI TAFFETA CO., LTD. 5th Plaintiff
MITSUI BUSSAN TECHNO PRODUCTS CO., LTD. 6th Plaintiff
KUN YOUNG TEXTILE 7th Plaintiff
LEAD EAGLE LIMITED 8th Plaintiff
W. L. GORE & ASSOCIATES (HONG KONG) LIMITED 9th Plaintiff
W. L. GORE & ASSOCIATES TECHNOLOGIES (SHENZHEN) COMPANY LIMITED 10th Plaintiff
W. L. GORE & ASSOCIATES (UK) LIMITED 11th Plaintiff
ZIANG KONG GARMENT MANUFACTURING COMPANY LIMITED 12th Plaintiff
W. L. GORE & ASSOCIATES CO., LTD. 13th Plaintiff
YU YUANG TEXTILE CO., LTD. 14th Plaintiff
RENTEX MILLS INC. 15th Plaintiff
BEMIS HONG KONG LIMITED 16th Plaintiff
TSUBASA HONG KONG COMPANY LIMITED 17th Plaintiff
TAI TUNG INTERLINING INTERNATIONAL LIMITED 18th Plaintiff
JANNING LIMITED 19th Plaintiff
EVER CREST LIMITED 20th Plaintiff
TAI CHEONG HOO CLOTH COMPANY LIMITED 21st Plaintiff
GCC INTERNATIONAL LIMITED 22nd Plaintiff
KOLON FASHION MATERIAL, INC. 23rd Plaintiff
EUROJERSEY S.p.A. 24th Plaintiff
FREUDENBERG & VILENE INTERNATIONAL LIMITED 25th Plaintiff
TOYOTA TSUSHO (H.K.) CORPORATION LIMITED 26th Plaintiff
and
CONTECH INTERNATIONAL GROUPS LIMITED
trading as CONTECH INTERNATIONAL SHIPPING		 1st Defendant
THE OWNERS AND/OR DEMISE CHARTERERS OF THE SHIP OR VESSEL “JIN HUI(金輝) 588” 2nd Defendant
TOP GRACE SHIPPING LIMITED 3rd Defendant

(Consolidated by the Order of the
Honourable Mr Justice Ng dated 26 March 2015)

Before: Hon Ng J in Chambers
Date of Hearing: 4 September 2015
Date of Judgment: 17 March 2016

____________________

J U D G M E N T

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Introduction

1. This case involves a simple cargo damage claim of less than HK$500,000. The 1st Defendant in HCAJ 140/2014 (“Contech”) is a Hong Kong company. The 3rd Defendant in HCAJ 140/2014 (“Top Grace”) is also a Hong Kong company with a registered office in Tuen Mun, although it says its principal place of business is in Guangzhou, PRC. For reasons which will later become apparent, the Defendant in HCAJ 139/2014 and the 2nd Defendant in HCAJ 140/2014 (“Owner”) is either a PRC company or a PRC resident. On 26 March 2015, this court ordered the two proceedings to be consolidated and tried together at the same time.

2. There are two applications before this court:

a. By Notice of Motion dated 4 May 2015 and Summons dated 22 May 2015, the Owner seeks an Order staying the consolidated proceedings on the grounds (i) that the dispute was subject to the jurisdiction of the PRC Court pursuant to an exclusive jurisdiction clause in a Bill of Lading numbered HKL1308158 and dated 30 August 2013 issued by Top Grace (“Top Grace Bill of Lading”); (ii) of forum non conveniens — the proceedings should be conducted in the PRC Court.

b. By Summons dated 6 May 2015, Top Grace similarly seeks a stay of the consolidated proceedings on the same grounds save that it specifically points to the Guangzhou Maritime Court[1] of the PRC as the natural and appropriate forum.

3. The applications are opposed by the Plaintiffs.

Stay based on “Exclusive” Jurisdiction Clause

4. By the Top Grace Bill of Lading, it was agreed that a container of 440 pieces of garment fabric and accessories be shipped on board the “Jin Hui 588” (“Vessel”) from Hong Kong to Lian Hua Shan, PRC. The 3rd Plaintiff (“Polex”) was named as shipper and the 1st Plaintiff was named as consignee in the bill. The bill was marked “Signed for and on behalf of the Master” and signed by Top Grace “As Agent For The Carrier”.

5. In the Affirmation of Cai Ruchen (“Cai”), director of Top Grace, dated 5 May 2015 (“Cai Affirmation”), Cai stated that Top Grace was the charterer of the Vessel and had agreed with the Owner that it was fully authorised to issue bills of lading on its behalf. This accords with the evidence of Zheng Junxiang (“Zheng” and “Zheng Affirmation”), said to be the beneficial owner and master of the Vessel. Zheng said Top Grace had chartered the Vessel from him and was authorized to issue bills of lading on his behalf as Master. Zheng also said after he had bought the Vessel in 2010 from Jin Hui Shipping and Transportation Limited (“Jin Hui”), he “continued to appoint Jin Hui as the registered owner of the Vessel”.

6. Clause 2 on the reverse side of the Top Grace Bill of Lading (“Clause 2”) contains a jurisdiction clause which provides:

“JURISDICTION

All disputes arising under and in connection with this Bill of Lading shall be determined by the Court in the Mainland of People’s Republic of China.”

7. The Owner’s and Top Grace’s case is that, in accordance with the contract of carriage evidenced by the Top Grace Bill of Lading, the Plaintiffs and the Owner agreed that all disputes are to be referred to the PRC Court. Both of them submit that Clause 2 is an “exclusive” jurisdiction clause.

8. On the Plaintiffs’ evidence, at the material time, Polex, on behalf of all the Plaintiffs, was responsible for arranging shipment of the cargo. It had only dealt with Contech and had only received the Bill of Lading numbered HKL1308158 and dated 30 August 2013 issued by Contech (“Contech Bill of Lading”) for the shipment in question. Polex had no knowledge of Top Grace or the Top Grace Bill of Lading until the dispute had broken out. The Plaintiffs’ solicitors first received the reverse side of the Top Grace Bill of Lading from the Owner’s solicitors, Ms Brenda Chark, on 23 March 2015. For this reason, presumably, Mr Alder submits that the Plaintiffs are not parties to the Top Grace Bill of Lading and hence not bound by Clause 2. Nevertheless, in para 1 of the Statement of Claim filed herein on 9 April 2015, the Plaintiffs have relied on the Top Grace Bill of Lading and pleaded that it was issued by Top Grace on behalf of itself and/or the Owner.

9. In addition to the Top Grace Bill of Lading, the Plaintiffs have also relied on and pleaded that the Contech Bill of Lading was issued by Contech on behalf of itself and/or the Owner. In the Contech Bill of Lading, Polex was similarly named as shipper and the 1st Plaintiff as consignee. The Contech Bill of Lading provides for the shipment of the same cargo on the same Vessel from Hong Kong to Lian Hua Shan, PRC. It contains the following words in the signature box in Chinese: “Signed on behalf of the Master”, although the copy in the hearing bundles appears to be unsigned.

10. Nevertheless, in its Defence dated 29 May 2015, Contech has pleaded that the Contech Bill of Lading was issued by it as agent/sub‑agent for the Owner and/or Top Grace and that Top Grace was the carrier and demise charterer of the Vessel.

11. Significantly, Clause 3 on the reverse side of the Contech Bill of Lading (“Clause 3”) provides:

“3. Governing Law

In so far as anything has not been dealt with by the terms and conditions of this Bill of Lading, Hong Kong SAR law shall apply. Hong Kong SAR law shall in any event apply in interpreting the terms and conditions hereof.

Jurisdiction

The contract evidenced hereby or contained herein shall be governed by English law. Any claim or other dispute thereunder shall be solely determined by the Courts in Hong Kong Special Administrative Region and no other court unless the Carrier otherwise agrees in writing.” (emphasis added)

12. Mr Luxton, for the Owner, submits that, in circumstances where a plaintiff is contractually bound by a foreign exclusive jurisdiction clause, the court will ordinarily grant a stay of proceedings commenced in Hong Kong unless the plaintiff can demonstrate strong cause for not doing so: The KH Enterprise v The Pioneer Container [1994] 2 HKLR 134, 150; Noble Power Investments Ltd v Nissei Stomach Tokyo Co Ltd [2008] 5 HKLRD 631 at [37]. See also Donohue v Armco Inc[2] [2001] UKHL 64 at [24] – [25]. In this regard, Mr Luxton concedes that a relevant consideration in the exercise of the court’s discretion is whether by granting a stay, it will result in multiplicity of proceedings in different forums. In the view of this court, the concession is made advisedly and in accordance with the guidance from the House of Lords in Donohue v Armco Inc supra at [27].

13. Another relevant consideration for the court is whether, by granting a stay, the Plaintiffs would be prejudiced by having to sue in the foreign court because he would be faced with a time bar not applicable in the Hong Kong proceedings: The KH Enterprise supra at 150.

14. However, Mr Luxton submits, in the present case, there will be multiplicity of proceedings in different forums only if the Plaintiffs can demonstrate they have a valid claim under the...

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