The "Hyundai Fortune"

• Judgment Date: 09 September 2004
• Date: 09 September 2004
• Docket Number: Civil Appeal No 138 of 2003
• Court: Court of Appeal (Singapore)

The “Hyundai Fortune”

[2004] SGCA 41

Chao Hick Tin JA

and

Tan Lee Meng J

Civil Appeal No 138 of 2003

Court of Appeal

Civil Procedure–Stay of proceedings–Respondents bringing action in Singapore in breach of exclusive jurisdiction clause–Appellants applying for stay of proceedings in favour of contractual forum–Whether court should refuse to grant stay of proceedings –Factors to be considered

The appellants were the owners of the Hyundai Fortune (“the vessel”). On 3 July 2002, hami-melons (“the cargo”) bought by the respondents were packed at Shenzhen, China, into a reefer container provided by the appellants. The reefer container containing the cargo was loaded onto the vessel in Hong Kong, which was bound for Singapore. On arrival in Singapore on 7 July 2002, it was discovered that most of the cargo was badly damaged. The bill of lading stated that the cargo was to be stowed in a reefer container at the requisite temperature of 3 C.

On 9 July 2002, a joint survey was carried out by surveyors appointed by the appellants and the respondents. Following the report made by the respondents' surveyor, on 21 August 2002, the respondents made a claim against the appellants in respect of their loss. On 7 December 2002, the respondents' solicitors made another demand for the same, stating that proceedings would be instituted against the appellants in Singapore unless the claim was met. The respondents' solicitors sent another reminder in March 2003. However, the appellants remained silent throughout. Finally on 2 July 2003, shortly before the expiry of the limitation period of one year, the respondents brought an in rem action against the appellants in Singapore.

On 20 August 2003, the appellants applied to have the action stayed on the ground that the bill of lading contained an exclusive jurisdiction clause whereby claims arising from the bill of lading were to be brought in Korea. The senior assistant registrar granted the stay application. The respondents appealed to the High Court, which reversed the senior assistant registrar's decision. The appellants appealed.

Held, dismissing the appeal:

(1) It was settled law that in refusing a stay of proceedings, the judge was exercising a discretion and unless it was shown that the judge had wrongly applied the law, or had wrongly appreciated the facts, or that her decision was plainly wrong, the appellate court should not interfere in the exercise of her discretion: at [22].

(2) The judge had not erred in any manner. She had correctly set out the principle which should apply in a case of this nature, ie,exceptional circumstances amounting to strong cause. She had also rightly stated that the burden of showing such strong cause rested with the party who sought to have the action continued in Singapore: at [23].

(3) With respect to every such application, the weight to be given to each of the relevant factors was not something that was amenable to precise definition. Connecting factors favouring Singapore had to be placed in the basket together with other factors to see if, in their totality, they added up to “strong cause”: at [24].

(4) The voyage Partlow chart showed that the temperature in the reefer container was unusually high while the container was being moved from Shenzhen to Hong Kong. These readings were not challenged. There was a clear breach of the appellants' obligation to maintain the temperature of the reefer container at the requisite temperature. This fact, coupled with the fact that the appellants totally ignored the respondents' claim for almost a year and were not able in their affidavits to identify the defences which the appellants would be relying on with an indication of the evidence in support, was clear evidence that the appellants had no defence to the claim: at [11], [25] and [26].

(5) It was not unreasonable for the respondents not to have instituted a protective writ in Korea before the limitation period had set in in that forum. Bearing in mind that the appellants' surveyor would have submitted his report to the appellants after the joint survey on 9 July 2002 and that the respondents' solicitors' letter of 7 December 2002 had stated that proceedings would be commenced in Singapore unless the claim was met, it was not unreasonable for the respondents to have assumed that the appellants had adopted the stonewalling approach because they had no answer to the claim. The fact that the appellants were not willing to waive the time-bar defence and have the security furnished here transferred to Korea, further showed that they did not desire a trial in Korea but wanted to obtain a tactical advantage: at [28].

(6) Weighing these factors, together with the other connecting factors which favoured a hearing in Singapore, the court was of the view that exceptional circumstances amounting to strong cause had been established. The appellants had also not shown that the judge had exercised her discretion wrongly: at [29].

(7) It was not possible for an exercise in determining strong cause, which would necessarily involve an evaluation of the differing factors, to be the subject of rigid rules or classification. It was only fair and in accordance with common sense that foreseeable factors, which were within contemplation of the contract should not be accorded the same weight as unforeseeable factors: at [30].

Amerco Timbers Pte Ltd v Chatsworth Timber Corp Pte Ltd [1977-1978] SLR (R) 112; [1975-1977] SLR 258 (folld)

Atlantic Song, The [1983] 2 Lloyd's Rep 394 (folld)

El Amria, The [1981] 2 Lloyd's Rep 119 (folld)

Eleftheria, The [1970] P 94; [1969] 1 Lloyd's Rep 237 (folld)

Frank Pais, The [1986] 1 Lloyd's Rep 529 (folld)

Golden Shore Transportation Pte Ltd v UCO Bank [2004] 1 SLR (R) 6; [2004] 1 SLR 6 (folld)

Hung Vuong-2, The [2000] 2 SLR (R) 11; [2001] 3 SLR 146 (folld)

Jian He, The [1999] 3 SLR (R) 432; [2000] 1 SLR 8 (folld)

Vishva Apurva, The [1992] 1 SLR (R) 912; [1992] 2 SLR 175 (folld)

Bazul Ashhab and Karnan Thirupathy (T S Oon & Bazul) for the appellants

Liew Teck Huat (Niru & Co) for the respondents.

Chao Hick Tin JA

(delivering the judgment of the court):

1 This was an appeal against the decision of Belinda Ang Saw Ean J who refused the defendant-appellant's application for a stay of proceedings despite the existence of an exclusive jurisdiction clause (reported at [2004] 2 SLR (R)...