This case arose out of a collision between two US-flagged tuna fishing vessels, the Koorale (owned by M&F Fishing Inc (M&F)), and the American Eagle (owned and managed by American Eagle Fishing LLC and Tradition Mariner LLC (collectively, AETM)), on the high seas near American Samoa. After the collision, the Koorale came to New Zealand for repairs. AETM commenced in rem proceedings against the Koorale in New Zealand. AETM also applied to limit liability under the Maritime Transport Act 1994, which gives effect to the Convention on Limitation of Liability for Maritime Claims and its 1996 Protocol (the LLMC 1996). This application was served out of the jurisdiction on M&F in Nevada. M&F filed in rem proceedings against the American Eagle in American Samoa, but was unable to effect service. M&F also commenced proceedings in the US. The main issue for the Court was whether New Zealand was the proper forum for the collision dispute. M&F filed applications in both New Zealand proceedings seeking a stay on forum non conveniens grounds, on the basis that the US was the proper forum for this dispute. M&F also opted to file in personam proceedings in Florida against AETM.

Held: M&F Fishing Inc's application succeeds. Florida is forum conveniens. The New Zealand proceedings will be stayed on provision of an undertaking as to security.

As the in rem proceedings were validly served in New Zealand, M&F must show that New Zealand is not forum conveniens. However, as the limitation proceedings were served out of New Zealand, r 6.29 of the High Court Rules 2016 (HCR) applies. This Rule requires AETM to show that the Court should assume jurisdiction based on the factors in r 6.28.5(b)-(d) of the HCR, namely:

(b) There is a serious issue to be tried; and
(c) New Zealand is the appropriate forum for the trial;
(d) Any other relevant circumstance support an assumption of jurisdiction.

M&F accepts that AETM's proceedings raise a serious issue to be tried, but does not accept that New Zealand is the appropriate forum.

The Court applied the test set out in Spiliada (Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460) as adopted by the New Zealand Court of Appeal in Wing Hung Printing Company Ltd v Saito Offshore Pty Ltd [2010] NZCA 502:

(1) As to an available alternative forum, the Court held that American Samoa was not presently available to try an in rem proceeding, and that it was speculative to suggest that it would become an available forum in the foreseeable future. Florida, however, provided an alternative forum, with competent jurisdiction, for the trial of the collision dispute.

(2) In respect of connections, convenience and expense, and witnesses, the Court held that M&F had done enough to show that in a case involving two US companies; two US vessels, both flying the US flag, with crew largely based in the US and/or American Samoa, with masters hailing from Texas (the American Eagle), Arizona (the Koorale), and Portugal; and only two witnesses likely to be required from New Zealand, the US had a much closer connection to the dispute and that it would be more convenient to hear the collision dispute in the US.

(3) As to the applicable law, M&F submitted that, contrary to obiter observations made by Salmon J in Fournier v The Ship 'Margaret Z' [1997] 1 NZLR 629 (HC) [19]-[21], jurisdiction is not determinative of the applicable law and does no more than place the burden on the defendant to establish a more appropriate forum. Rather, the law of the flag (US law) should apply (referring to The Eagle Point, 142 Fed 453 (1906) (3rd Circ), where the law of the flag was applied to a case involving a collision between two British ships on the high seas). M&F also contended that the collision claim is a negligence claim subject to the Private International Law (Choice of Law in Tort) Act 2017 (the PILA). Section 9 of the PILA displaces the general rule that the law of the country where the tort took place applies if, in all the circumstances of the case, it is substantially more appropriate for the law of another country to apply. This analysis could only credibly point to US maritime law, given that the parties are both US foreign nationals. AETM argued that the lex fori should apply. AETM maintained that the PILA did not apply, given that it relates to torts or causes of action that occur within a country or countries. Moreover, whatever the position on the applicable law, the legal issues were straight-forward, so this factor should carry little weight.

The Court held that the law to be applied in the collision proceedings must be consistent with international law, including the LLMC and the COLREGS, and was satisfied that, if the collision dispute were to be heard in New Zealand, the law of New Zealand would be the applicable law. The Judge noted that Salmon J in Fournier had adopted a stronger position. He said at [20]: 'As to the law governing the transaction, it is clear that in respect of in rem claims in admiralty, lex fori resolves all issues, including priorities. Thus New Zealand law is applicable. In the case of an action in rem, the natural forum is arguably where the ship is situated. That is after all the whole point of the jurisdiction.' The Court also noted the longstanding approach of the English courts to resolve high seas disputes by reference to the traditions and principles adopted as English maritime law. Lord Goff's observation in Spiliada that he could see no reason why an English court would stay proceedings about a high seas collision exemplified this reasoning. There was, however, some force to the submission that, where the foreign vessels involved in the collision fly the same flag, the law of the flag should apply to the action, as occurred in The Eagle Point. That would appear reasonable where, as here, the COLREGS applied.

Ultimately, the Court concluded that the point was largely moot. It was for M&F to prove that the law of the flag was relevant and materially different from the lex fori. Brief mention was made of the potential for punitive damages, a separate cause of action against ship management based on privity, the law of causation, the 'totality of US tort law', and the potential for applying US regulations. New Zealand, like American Samoa and Florida, applied the COLREGS. The engagement of the Jones Act might be relevant to the assessment of the quantum of damages given the special repair requirements needed to maintain status under that Act. But that factor was another matter that could be readily considered by a New Zealand court. In the result, the law of the flag, as it relates to high seas collisions, was not obviously materially different from New Zealand law, and New Zealand law was not obviously materially disadvantageous to M&F, save in respect of the limitation issue. The Court was satisfied, therefore, that the law of New Zealand was the applicable law in this case, and was, at most, a neutral point in the forum conveniens calculus.

The Court further held that the PILA had no application in cases of high seas collisions. It was clear that, under the PILA, the applicable law would be determined by the general rule, which presupposed that the tort occurred in a 'country', or that the elements of the cause of action occurred in a 'country'. This general rule could only be displaced pursuant to s 9 if the law of 'another country' was substantially more appropriate. While the scope of s 9 literally appeared to include high seas torts, when read in this context, it only applied if and when the law of another country was substantially more appropriate than the law of the country where the tort, or the elements of the cause of action, occurred. In addition, given the ancient character of the law of admiralty, if Parliament had intended to include torts on the high seas within the reach of the PILA, it would have done so expressly.

(4) As to limitation of liability, the Court acknowledged that the New Zealand and US limitation regimes worked in different ways, the former being based on the LLMC 1996, and the latter being based on the market value of the vessel and its freight. If the collision proceedings were heard in New Zealand, the liability of the shipowners would be capped at about USD 2m. This compared to the Koorale’s estimate of likely damage and loss of over USD 10m. On its face, the limitation was prejudicial to M&F. However, the Court held, agreeing with the English Court of Appeal decision in Herceg Novi v Ming Galaxy [1998] 2 Lloyd's Rep 454 (CMI770), that differences in limitation regimes were not a reason to grant or decline a stay. The key issue was whether substantial justice would be done. The Court accepted that there were three curious features of this case that appeared to bear on the issue of substantial justice. First, both ships were US-flagged vessels. Second, the US was not a signatory to the LLMC or the 1996 Protocol. Third, AETM (as claimant) and M&F (as potential claimant) might both be juridically disadvantaged by the limitation. At first blush, it appeared that 'substantial justice' would be best achieved by referring the proceedings to a US court, so that the actual loss caused could be remedied. But, as M&F conceded, the Common Law regarded limitation regimes as procedural rather than substantive in nature and thus the lex fori would apply. Borrowing the reasoning of the Court in Herceg about the significance of limitation of liability, it was quite impossible to say that substantial justice was not available in New Zealand, seeing that there was significant agreement among civilised nations with the law as it was administered here. Limitation was therefore a neutral factor.

(5) The Court held that enforceability and security were also neutral factors.

The Court's overall conclusion on stage 1 of the Spiliada test was that Florida was 'a more appropriate forum', and that there were no stage 2 factors in this case, given that 'limitation of liability is irrelevant'.