The Pioneer Container (K.H. Enterprise)
| Jurisdiction | UK Non-devolved |
| Judge | Lord Goff of Chieveley,Lord Lowry,Lord Slynn of Hadley,Lord Lloyd,Berwick,Sir Thomas Eichelbaum |
| Judgment Date | 21 March 1994 |
| Court | Privy Council |
| Date | 21 March 1994 |
Bailment - Sub-bailment - Terms-shippers sub-bailing goods with owners' Consent under bill of lading providing for determination in Taiwan of all disputes under Contract - No contractual relationship between owners and sub-bailees - Sub-bailees' vessel sinking in Collision with loss of cargo-Owners bringing action against sub-bailees in Hong Kong courts - Whether sub-bailees entitled to rely on exclusive jurisdiction clause - Ships' Names - K.H. Enterprise-Pioneer Container
The first two groups of plaintiffs had each engaged carriers to ship goods by sea under bills of lading which gave the carriers authority to sub-contract the whole or part of the carriage of the goods “on any terms.” The carriers sub-bailed the goods to the defendant shipowners for carriage on board their vessel for part of the voyage, from Taiwan to Hong Kong, under feeder bills of lading containing an exclusive jurisdiction clause which provided that any claim or other dispute thereunder was to be determined in Taiwan. A third group of plaintiffs engaged the shipowners directly for the carriage of goods from Taiwan to Hong Kong on board the vessel. Following a collision in fog, the vessel sank with all her cargo off the coast of Taiwan. The plaintiffs issued a writ in rem in Hong Kong against a sister ship of the vessel for damages for failure to take care of or deliver, the goods. The shipowners issued a notice of motion in the High Court in Hong Kong seeking a stay of the proceedings in reliance on the exclusive jurisdiction clause. The judge made a preliminary ruling that the clause was valid and was binding on the plaintiffs notwithstanding that the first two groups of plaintiffs had not been parties to the contracts between the carriers and the shipowners contained in the feeder bills of lading; but he subsequently exercised his discretion to dismiss the motion for a stay on the ground that the plaintiffs' claims in Taiwan had become time-barred and, since they would have been required to provide advance costs and the security in that jurisdiction, they had not acted unreasonably in allowing the time bar to expire. On the shipowners' appeal, the Court of Appeal of Hong Kong held that the exclusive jurisdiction clause was binding on the plaintiffs; that the plaintiffs had acted unreasonably in failing to commence proceedings in Taiwan and the judge had erred in the exercise of his discretion; and, on a fresh exercise of discretion, stayed the proceedings in Hong Kong.
On plaintiffs' appeal to the Judicial Committee:—
Held, dismissing the appeal, that where goods had been sub-bailed with the authority of the owner, the obligation of the sub-bailee towards the owner was that of a bailee for reward and the owner could proceed directly against the sub-bailee under the law of bailment without having to rely on the contract of sub-bailment between the bailee and the sub-bailee; that a sub-bailee who voluntarily took goods into his custody could only invoke terms of the sub-bailment qualifying or otherwise affecting his responsibility to the owner if the owner had expressly or impliedly consented to those terms or had ostensibly authorised them; that the consent given by the first two groups of plaintiffs to their carriers to sub-contract the carriage of the goods on any terms was wide enough to embrace consent to an exclusive jurisdiction clause, the incorporation of which would have been in accordance with reasonable commercial expectations; that since the necessity under Taiwanese law for litigants to provide advance costs and security was insufficient justification for the plaintiffs' failure to issue a protective writ, the plaintiffs had acted unreasonably in allowing their claims in Taiwan to become time-barred; and that, accordingly, the Court of Appeal of Hong Kong had been entitled to order that all proceedings in the action be stayed (post, pp. 9D–F, 10C–D, E, 12H–13D, 16C–D, 17A, G, 19B–C, E–G).
The following cases are referred to in the judgment:
Aratra Potato Co. Ltd v. Egyptian Navigation Co. [
Blue Wave, The [
Cap Blanco, The [
Compania Portorafti Commerciale S.A. v. Ultramar Panama Inc. (No. 2) [
Elder, Dempster & Co. Ltd v. Paterson, Zochonis & Co. Ltd. [
Forum Craftsman, The [
Foulkes v. Metropolitan District Railway Co. (
Gilchrist Watt and Sanderson Pty Ltd v. York Products Pty Ltd [
Hispanica de Petroleos S.A. v. Vencedora Oceanica Navegacion S.A. (No. 2) (Note) [
Hooper v. London and North Western Railway Co. (
Johnson Matthey & Co. Ltd v. Constantine Terminals Ltd. [
Makefjell, The [
Midland Silicones v. Scruttons Ltd [
Morris v. C. W Martin & Sons Ltd [
New Zealand Shipping Co. Ltd. F. A. M. Satterthwaite & Co. Ltd. [
Singer Co. (U.K) Ltd. v. Tees and Hartlepool Port Authority [
Skips A/S Nordheim v. Syrian Petroleum Co. Ltd. [
Spiliada Maritime Corporation v. Cansulex Ltd. [
Thomas (T W) & Co. Ltd. v. Portsea Steamship Co. Ltd. [
Wilson v. Darling Island Stevedoring and Lighterage Co. Ltd. [
The following additional cases were cited in argument:
Abidin Daver, The [
Adolf Warski, The [
Benarty, The [
China Pacific S.A. v. Food Corporation of India [
Corsina (Far East) Ltd. v. Taipen Yusen Wharf & Godown Co. Ltd. [
Dresser U.K Ltd. v. Falcon gate Freight Management Ltd [
Duhai Electricity Co. v. Islamic Republic of Iran Shipping Lines [
Federal Bulk Carriers Inc. v. C. Itoh & Co. Ltd [
Frinton, The [
Gillespie Bros. & Co. Ltd v. Rowles Bottles Transport Ltd [
Harbour Assurance Co. (U.K.) Ltd v. Kansa General International Insurance Co. Ltd [
Learoyd Bros & Co. v. Pope & Sons (Dock Carriers) Ltd. [
Louvet v. Louvet [
Mackender v. Feldia A.G. [
Mahkutai, The (unreported), 2 July 1993, Hong Kong
Nippon Yusen Kaisha v. International Import and Export Co. Ltd [
Port Swettenham Authority v. T. W. Wu and Co. (M) Sdn. Bhd. [
Pyrene Co. Ltd v. Scindia Navigation Co. Ltd [
Southcote's Case (
Tappenden v. Artus [
Vita Food Products Inc. v. Unus Shipping Co. Ltd [
APPEAL (No. 46 of 1992) by the plaintiffs, the owners of cargo lately laden on board the K.H. Enterprise, against the decision of the Court oil Appeal of Hong Kong (Sir Derek Cons V.P., Power J.A. and Godfrey J.) of 10 April 1992 reversing in part the judgment of Sears J. of 14 May 1991 and ordering a stay of the plaintiffs' proceedings in Hong Kong against the defendants, the owners of Pioneer Container, a sister ship of K.H. Enterprise.
The facts are stated in the judgment.
Sydney Kentridge Q.C. and George Leggatt for the plaintiffs.
Michael Thomas Q.C. and Anthony Dicks for the defendants.
21 March 1994. The judgment of their Lordships was delivered by LORD GOFF OF CHIEVELEY.
The appellant plaintiffs were the owners of goods laden on board the respondent shipowners' Taiwanese container ship K.H. Enterprise (“the vessel”), which sank with all her cargo off the coast of Taiwan on 11 March 1987, following a collision in fog with another larger ship, Oriental Faith. The plaintiffs commenced the present proceedings in Hong Kong by the issue of a writ in rem dated 10 March 1988 against the Pioneer Container, a sister ship of the vessel, claiming damages in respect of the loss of their cargo. Pioneer Container was arrested in Hong Kong on 29 October 1988, but was released on 5 December 1988 against a Protection and Indemnity Club guarantee in the sum of U.S.$1.6m. On 8 September 1989 the shipowners issued a notice of motion in the High Court of Hong Kong, asking that the proceedings be stayed on the grounds (1) that the plaintiffs had, by clause 26 of the relevant bills of lading, agreed that any claim or other dispute thereunder should be determined at Taipei in Taiwan, or, alternatively, (2) that in all the circumstances the courts of Taipei were the...
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