The "Hyundai Fortune" (CofA)
DMC Category Rating: Confirmed
This case note is contributed by Ang & Partners, the International Contributors to the website for Singapore
The melons were supposed to be carried at a temperature of 3 degrees C at all times. However, evidence was adduced to the effect that the reefer container did not maintain the required temperature. According to the evidence, the temperature rose to as high as 25 ºC during transit. Consequently, the melons arrived at Singapore in a badly damaged state.
The claimants wrote to the shipowners demanding compensation but the shipowners ignored their demands for a period of almost 1 year. The claimants then commenced an action in rem against the owners of the "Hyundai Fortune" in Singapore.
The shipowners applied to court to stay the proceedings in Singapore by relying on the exclusive jurisdiction clause in the Bill of Lading, which referred all claims arising from or in connection with or relating to the Bill of Lading to the Seoul District Court in Korea.
The High Court refused to stay the proceedings in Singapore after taking into consideration the following factors:
The shipowners appealed against the decision refusing a stay of proceedings in Singapore.
2. In cases where there was an exclusive jurisdiction clause, the discretion of the court whether to grant a stay of proceedings should not be exercised by just balancing the conveniences as if it were dealing with a case of forum non conveniens (inappropriate forum)
3. The issue of whether there was a defence to the claim and the issue of whether it was reasonable for the Plaintiffs not to have instituted a protective writ in Korea before the limitation period had set in, was - in the view of the Court of Appeal - crucial.4. As a) there was no defence to the claim; b) there was no likelihood of there being a trial in Korea as the time bar had already set in; c) the Defendants were not prepared to waive the time bar defence and d) there existed strong connecting factors to Singapore, the overall justice was not to grant a stay of proceedings.
5. It was not unreasonable that the claimants had not issued a protective writ in Korea. The shipowners had adopted a stonewalling approach with regard to the claim and the claimants assumed from this that the shipowners had no answer to the claim. The Court inferred from the shipowners’ conduct in waiting for time to elapse in order to seek a procedural advantage (the time bar defence under Korean law) that the shipowners did not want a trial in the contractual forum, namely the Seoul District Court.
6. The exercise of determining "strong cause" against a stay based
on a foreign jurisdiction clause cannot be subject to rigid rules or
classification. The decision of the judge was based on her discretion in
evaluating all the factors for and against a stay. The appellate court would
not interfere with her decision unless she had wrongly applied the law, or
had wrongly appreciated the facts, or her decision was plainly wrong. It was
clear that the judge below had not erred in any manner.
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