The "Hung Vuong-2"

• Jurisdiction: Singapore
• Judge: Amarjeet Singh JC
• Judgment Date: 26 November 1999
• Neutral Citation: [1999] SGHC 307
• Docket Number: Admiralty in Rem No 733 of 1998
• Date: 26 November 1999
• Published date: 19 September 2003
• Year: 1999
• Plaintiff Counsel: Haridass Ajaib (Haridass Ho & Partners)
• Citation: [1999] SGHC 307
• Defendant Counsel: Philip Tay (Rajah & Tann)
• Court: High Court (Singapore)
• Subject Matter: Admiralty jurisdiction and arrest,Whether action should be stayed,Choice of jurisdiction,Claim for misdelivery or conversion,Admiralty and Shipping,Exclusive jurisdiction clause in bill of lading,Conflict of Laws,Whether defendants raised genuine dispute to be tried in contractual forum,Stay of proceedings,Foreign exclusive jurisdiction clause in bill of lading,Whether defendants only seeking procedural advantage,Applicable principles,Whether strong cause for refusing stay shown

: The case

The issue arising in this appeal is whether the appellants (`defendants`) are entitled to stay the admiralty in rem action brought against them by the respondents (`plaintiffs`) in the light of an exclusive jurisdiction clause contained in the Conditions and Exceptions to the bill of lading as follows:

Jurisdiction: Any dispute arising under this B/L shall be decided in the country where the carrier has his principal place of business, and law of such country shall apply except as provided elsewhere herein.

The carrier was `Hung Vuong 03` (`the vessel`) owned by the Vietnam Shipping Co with its principal place of business in Vietnam. The plaintiffs under these proceedings however arrested another vessel the`Hung Vuong 02` in Singapore which also belonged to the defendants to enforce their claim. The `Hung Vuong 02` was released after sufficient security was posted to meet the plaintiffs` claim by the defendants` P & I Club.

The plaintiffs` case was that theirs was a straight forward claim in respect of which the defendants had nothing to dispute. In other words, no genuine dispute had been raised on the facts and law and they had no defence. Also the plaintiffs` application for summary judgment in the meantime was awaiting hearing.

The defendants` application to stay the proceedings was dismissed by the assistant registrar. The subsequent appeal to the High Court was further dismissed by me.

The simple facts adduced by the plaintiffs` affidavit evidence and exhibits giving rise to the action are that by Contract No 469/8333S dated 19 December 1997 the plaintiffs sold 4000 metric tons of Thailand cane raw sugar to Guangxi Yulin Prefecture Economic Trade Development Co (`Guangxi`). Shipment was to be effected during the period 15 December 1997 to 15 February 1998. In part performance of the above contract the plaintiffs purchased 2,000 metric tons of Thailand cane raw sugar (`the cargo`) from Pacific Sugar Corporation Limited (`the shippers`) of Bangkok, Thailand for sale to Guangxi. The cargo had been loaded on board the defendants` vessel in Bangkok by the shippers. The shippers received a Bill of Lading No BK04 dated 16 January 1998 from the defendants. The bill of lading evidenced the receipt of the cargo in good order and condition for shipment from Bangkok, Thailand for discharge at the main port of South China. This was not in dispute.

The plaintiffs` case was that the plaintiffs having purchased the cargo from the shippers, the plaintiffs were given by the shippers possession of the bill of lading and all the copies thereof (three in all) with an endorsement in their favour on the reverse page as follows:

Pacific Sugar Corporation Limited Sgd.

(Yonchailai Jaturafis)

General Manager

The plaintiffs claimed that the bill of lading provided for a `To Order` bill of lading and that the shippers had `blank endorsed` the bill of lading to the plaintiffs upon sale and that as holders and/or indorsees and being in possession of the original bill of lading and all copies, they were the owners of the cargo and/or the party entitled to delivery of the same. The defendants` period of responsibility as carriers commenced under the bill of lading from the time when the cargo was loaded on board the vessel. It was only to cease upon the cargo`s discharge.

The vessel arrived at the port of Beihai, China on or about 23 January 1998. The value of the cargo was US$654,000 of which US$120,772.95 had been paid earlier by Guangxi. A letter of credit had been issued by The China & South Sea Bank, Ltd, Hong Kong Branch, in favour of the plaintiffs for the sale price of the cargo. The applicant of the letter of credit was one Hinwell Development Ltd which caused the letter of credit to be issued on behalf of Guangxi. The plaintiffs had tendered all the relevant documents to their bank to negotiate the letter of credit but the documents were not taken up and their bank had failed to receive payment under the letter of credit.

Instead, the cargo was misdelivered/converted by the defendants when it was delivered by them to Guangxi without them producing the original bill of lading to the defendants. Thereafter, the defendants at Beihai had given the plaintiffs` representative a `Cargo Receipt` evidencing the delivery of the cargo to Guangxi on 23 January 1998. The `Cargo Receipt` after identifying the vessel, port of delivery, date of discharge, name and quantity of cargo states:

Cargo Receipt

This is certificate that the above mentioned cargo as per manifest or bill of lading quantity has been discharged and received from above vessel at the this port.

Importantly, the `Cargo Receipt` bears the signature of the consignee/recipient of the cargo, namely, Guangxi, the master of the vessel `MV Hung Vuong-3` and date of delivery.

The plaintiffs suffered a loss of US$533,227.05 being the balance value of the cargo misdelivered/converted.

There was an exchange of correspondence between the defendants and the plaintiffs between 27 January 1999 and 2 February 1999. The defendants wrote to the plaintiffs on 27 January 1999 stating that whilst both parties were `sufferers` the defendants were not responsible to make payment of the plaintiffs` claim but the responsible party was Guangxi. They were however trying to `push` Guangxi to pay the balance payment for the cargo and that Guangxi were preparing to make payment and that to this end the defendants were willing to go to China to `push` Guangxi and to pay in RMB. By their reply of 28 January 1999, the plaintiffs noted the effort being made by the defendants to obtain payment from Guangxi in RMB which they would accept but at the same time the plaintiffs told the defendants they would not be absolved from their liability to pay the plaintiffs for wrongful delivery of the cargo without presentation of the original bills of lading and/or commission of the same. By their further letter of 2 February 1999, the defendants reiterated they were trying all their efforts to `force` Guangxi to pay the plaintiffs by RMB through the defendants` branch in Beijing and asked the defendants to confirm urgently the balance of the amount due to them in RMB. Subsequently, however, no payment was received by the plaintiffs from Guangxi or the defendants.

Defence submissions

Defence counsel made a number of submissions as follows:

(i) that there was no admission on the part of the defendants that they had misdelivered the cargo in Beihai to Guangxi;

(ii) that in law as long as a claim was not admitted it was disputed;

(iii) the defendants` letters of 27 January 1999 and 2 February 1999 did not constitute admission of liability of the claim and in any case ought not to be considered by the court as they were a without prejudice as they were part of the settlement talks;

(iv) that it was not enough for the plaintiffs to show the cargo was misdelivered. They had to go on to prove their measure of loss and their loss could not be based on the plaintiffs` Invoice of US$670,000 which was an incorrect value and that the measure of loss was the market value at the discharge port which was the subject of proof and therefore this amounted to a dispute;

(v) on the applicable Vietnamese law under the bill of lading, the plaintiffs were barred in law from succeeding in their claim by virtue of the application of the law under art 84(b) of the Vietnam National Maritime Code (`the Code`) and that this section raised an issue/dispute of law which a Vietnamese court should decide.

(vi) the plaintiffs had to show a strong cause to resist the stay application and the court had to consider the several principles laid down by Braden J in The Eleftheria [1969] 1 Lloyd`s Rep 238. The plaintiffs had not discharged the high burden placed on them.

The plaintiffs` counsel refuted these submissions.

Evaluation and findings

The principles of law concerning the decision of a Singapore court as to whether proceedings brought in Singapore should be stayed in favour of a named foreign jurisdiction which the parties have elected by choice are well established. The court is not bound to stay the proceedings automatically on the court`s attention being drawn to an exclusive jurisdiction provision in an agreement naming a foreign country as to where the proceedings should be brought. A judge has a discretion whether or not to grant an application for stay notwithstanding such an exclusive jurisdiction clause: The court in The Vishva Prabha [1979] 2 Lloyd`s Rep 286 in its discretion dismissed an application to stay proceedings on the ground of an absence of a dispute on the question of liability. See similarly, The Atlantic Song [1983] 2 Lloyd`s Rep 394; The Frank Pais [1986] 1 Lloyd`s Rep 529.

The Eleftheria The court however, in exercising its discretion takes all the circumstances into consideration including the following:

(i) the court should give effect to the agreement and grant the stay unless strong cause is shown by the plaintiffs for not doing so;

(ii) the strong cause ought to reflect exceptional circumstances for the plaintiffs to succeed in resisting the application for a stay and in favour of continuance of the...