Mahavir Minerals Ltd v Cho Yang Shipping Company Ltd ('The MC Pearl') [QBD (Admiralty)]
| Jurisdiction | England & Wales |
| Judge | Rix J. |
| Judgment Date | 25 February 1997 |
| Date | 25 February 1997 |
| Court | Queen's Bench Division (Admiralty) |
Queen's Bench Division (Admiralty Court)
Rix J.
David Goldstone (instructed by Elbourne Mitchell) for the plaintiffs.
Claire Blanchard (instructed by Richards Butler) for the defendants.
The following cases were referred to in the judgment:
Adolf Warski, TheUNK [1976] 1 Ll Rep 107; [1976] 2 Ll Rep 241 (CA).
Aggeliki Charis Compania Maritima SA v Pagnan SpA (“The Angelic Grace”)UNK [1995] 1 Ll Rep 87.
Aratra Potato Co Ltd v Egyptian Navigation Co (“The El Amria”)UNK [1981] 2 Ll Rep 119.
Blue Wave, TheUNK [1982] 1 Ll Rep 151.
Cap Blanco, TheELR [1913] P 130.
Citi-March Ltd v Neptune Orient LinesWLR [1996] 1 WLR 1367.
Continental Bank NA v Aeakos Compania Naviera SAWLR [1994] 1 WLR 588.
Eleftheria, TheUNK [1969] 1 Ll Rep 237.
Eschersheim, TheUNK [1974] 2 Ll Rep 188.
Goldean Mariner, TheUNK [1989] 2 Ll Rep 390.
Goulandris Brothers Ltd v B Goldman and Sons LtdELR [1958] 1 QB 74.
Media, TheUNK (1931) 41 Ll L Rep 80.
Pioneer Container, TheELR [1994] 2 AC 324.
Spiliada Maritime Corp v Cansulex Ltd (“The Spiliada”)ELR [1987] AC 460.
Stay of Proceedings — Foreign exclusive jurisdiction clause — Numerous plaintiff cargo owners took action in England — One defendant carrier disputed jurisdiction on basis of exclusive jurisdiction clause — Whether strong cause shown for jurisdiction in England and for refusing stay — Materiality of time bar in foreign jurisdiction — Rules of the Supreme Court, O. 12, r. 8.
This was an application to stay an English action on the basis of a foreign exclusive jurisdiction clause and where the claim was time barred in the foreign jurisdiction.
The action was brought by cargo owners against the carriers claiming damages for loss of or damage to cargo and an indemnity against liability for salvage and damages. The parties to the action were very numerous. The 125 plaintiffs comprised the shippers and receivers of the cargo carried in 123 containers under 62 bills of lading. There are no less than 17 defendants, because apart from the demise charterers who actually operated the vessel (the seventeenth defendants) there were 16 separate alleged contractual carriers under the bills of lading (the first to sixteenth defendants). Eighteen separate cargo underwriters are involved.
The application was brought by the fifteenth defendants, Cho Yang, a South Korean company. It concerned only two of the plaintiffs. There was no claim for cargo damage in their case: their claim was purely in respect of their rateable proportion of liability for salvage, in the sum of $3,875.42, based on a cargo value of $11,264. The total salvage claim was compromised at $435,000.
The great majority of the parties were foreign. Twelve of the original 16 defendants appointed London solicitors to accept service of the writ in England, and leave was obtained under O.11, r. 1 against the others. In the case of the ninth defendant, the relevant bills of lading contain an English jurisdiction clause. In the case of the others, including Cho Yang, leave to issue and serve out was obtained under subr. 1(1)(c) on the basis that they were necessary or proper parties.
Cho Yang sought to enforce their exclusive jurisdiction clause. Theirs was the only opposition to jurisdiction.
The summons was argued on the basis that the relevant time limit was either nine months under the bill of lading or the one-year Hague Rules period. No proceedings had been commenced in South Korea which was where the jurisdiction clause in the bill of lading directed them to be brought.
Held,dismissing Cho Yang's application:
1 This was a paradigm case for the concentration of all the relevant parties' disputes in a single jurisdiction. If in such a case a host of different jurisdiction clauses were to be observed, the casualty at the root of the action would become virtually untriable. Separate actions would have to proceed in both England and South Korea and would involve the determination of identical issues as to the cause and responsibility for the casualty leading to a danger of inconsistent findings. Apart from the existence of the time-bar in South Korea, there did not appear to be any particular legal or procedural advantage available to Cho Yang there. The small size of the relevant claim was a neutral factor. Thus apart from the time-bar point, there was strong cause for jurisdiction in England.
2 The plaintiffs' failure to commence proceedings in time in the contractual jurisdiction of South Korea was either a deliberate, but reasonable, decision to concentrate on England, or was the result of overlooking the jurisdiction clause followed by failing to realise that the relevant time-limit was one year rather than nine months, or was the result of first overlooking the clause followed by a deliberate decision to leave the action in England. Whichever of those three it was, the plaintiffs had acted in the result for the best. The only thing that they had omitted to do, whether by design or default, was to issue a purely protective writ in the contractual jurisdiction. Such a writ would have been a wholly formal matter. Having issued it, the plaintiffs would then have had to apply to stay it themselves. Their action in England was well within time, the defendants had timely notice of the claim, and they suffered no prejudice from the plaintiffs' failure to duplicate proceedings in South Korea. The choice of forum in England had nothing to do with seeking jurisdiction in a country which had a more favourable limitation period than was available in the contractual forum.
3 Save possibly in some exceptional circumstance, a plaintiffs failure to preserve a time-limit in the contractual forum could not assist him to found jurisdiction in England where he did not have a strong case for it separately from the time-bar point; and that even where he did have a strong case for jurisdiction in England apart from the time-bar point, the fact that he had allowed the time-bar to go by default in the contractual jurisdiction always required some consideration or explanation. (Citi-March Ltd v Neptune Orient LinesWLR[1996] 1 WLR 1367 followed.)
4 If strong cause had not been shown for refusing to stay these proceedings so far as concerned the parties to the summons, the existence of a limitation defence in South Korea would not have saved this action, nor would it have been stayed on terms that the Korean limitation defence be waived. (Dictum of Colman J in Citi-March Ltd v Neptune Orient LinesWLR[1996] 1 WLR 1367 at p. 1374E not followed.)
Rix J:
This is an application to stay an English action on the basis of a foreign exclusive jurisdiction clause. The essential problem is: what is the relevance and importance of the fact that the claim is time-barred in the foreign jurisdiction? Is that a fact which assists the plaintiff to establish jurisdiction in England, where he is not time-barred, despite the contractual clause? Or is it a fact which supports the defendant's demand that the parties' jurisdictional bargain be enforced?
The English action in which this application has been brought arises out of a casualty suffered by the MC Pearl, a container vessel, during her voyage from Kandla in India to Dubai in September 1995. It is alleged that on 23 September 1995, shortly after she sailed from Kandla, the vessel developed a list of up to 40° and lost 12 containers overboard. Salvage services were supplied under a Lloyd's Open Form dated 29 September 1995 and she was towed to Port Bandar, where she remained for some 40 days, and thence to Dubai, where she arrived around 25 October 1995. Final discharge was only accomplished on 7 February 1996.
The action has been brought by cargo owners against the carriers. The statement of claim alleges that the casualty was due to the vessel's unseaworthiness, in that she began her voyage in a tender condition with very low stability, and that her ballast tanks were corroded and common with one another. Some of the cargo was damaged by water or crushing. The writ claims damages for loss of or damage to cargo; an indemnity against liability for salvage and damages in a like amount; and a declaration for an indemnity against liability in general average and for delivery up of general average bonds and guarantees. The statement of claim, however, omits any reference to that third claim relating to general average. The statement of claim in respect of cargo's salvage liability is put as a claim for an indemnity, but in the context that is clearly intended to embrace a claim in damages, arising out of the unseaworthiness of the vessel, to be indemnified against the liability in salvage.
The parties to the action are very numerous. The 125 plaintiffs comprise the shippers and receivers of the cargo carried in 123 containers under 62 bills of lading. There are no less than 17 defendants, because apart from the demise charterers who actually operated the vessel (Momentum Maritime Services (Panama) SA, the 17th defendants) there are 16 separate alleged contractual carriers under the bills of lading (the first to sixteenth defendants). Eighteen separate cargo underwriters are involved.
This application is brought by the fifteenth defendants, Cho Yang Shipping Co Ltd (“Cho Yang”), a South Korean company. It concerns only two of the plaintiffs, namely Mahavir Minerals Ltd, an Indian company, and Mr Steven Kong of H Rogers (Malaysia) Sdn Bhd, a Malaysian company. There is no claim for cargo damage in their case: their claim is purely in respect of their rateable proportion of liability for salvage, in the sum of $3,875.42, based on a cargo value of $11,264. The total salvage claim was compromised at $435,000.
I have therefore entitled this judgment in the names of the relevant parties to the summons. The principal names to the action on the writ, however, are by virtue of alphabetical precedence Al Bustan al Khaleeji...
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