By a bill of lading dated 2 May 1987 issued in Osaka, Japan, the defendant acknowledged shipment on board its vessel Asian Plutus at Kobe, Japan, of four steel boxes containing a lathe machine for carriage to and delivery at Singapore to the plaintiff. Among the large number of clauses in the bill of lading were the following:

2 Clause Paramount. As far as this bill of lading covers the carriage of the goods by water, this bill of lading shall have effect subject to the provisions of the International Carriage of Goods by Sea Act 1957 of Japan, unless it is adjudged that any other legislation of a nature similar to the International Convention for the Unification of Certain Rules relating to Bills of Lading signed at Brussels on 25 August 1924 compulsorily applies to this bill of lading, in which case it shall have effect subject to the provisions of such legislation, and the said Act or legislation (hereinafter called the Hague Rules legislation) shall be deemed to be incorporated herein. If any provision of this bill of lading is held to be repugnant to any extent to the Hague Rules legislation or any laws, statutes or regulations applicable to the contract evidenced by this bill of lading, such provision shall be null and void to such extent but no further.

3 Governing Law and Jurisdiction. The contract evidenced by or contained in this bill of lading shall be governed by Japanese law except as may be otherwise provided for herein, and any action against the carrier thereunder shall be brought before the Tokyo District Court in Japan.

The vessel arrived in Singapore on 11 May 1987 and the cargo, including the steel boxes containing the lathe machine, was duly discharged into a warehouse to be unstuffed for delivery. The warehouse, known as Keppel Block 37, belonged to the Port of Singapore Authority (PSA), and was leased to the carrier’s agent, Integrated Agency Pte Ltd, and operated by it. Later, while the boxes were still in the possession of the carrier’s agent and were being unstuffed, the machine was found to be seriously damaged.

After a lapse of almost one year, the plaintiff commenced an action in rem against the vessel. The bill of lading showed that the carrier was Interasia Lines Ltd of Japan, and the shipper Yamazen Co Ltd of Osaka, Japan. An exhibit to one of the plaintiff's affidavits disclosed that the Lloyd's Register of Ships (1985-1986) showed the port of registry of the vessel as Panama, and the Lloyd’s List of Shipowners (1983-1984) showed the owners as Fairwind Navigation SA, with its principal place of business in Panama City, the Republic of Panama.

On 27 May 1989, the defendant applied to the Court for the plaintiff's action to be stayed, on the ground that the contract of carriage upon which the plaintiff's claim was brought expressly provided for any action against the carrier under the contract to be brought in the Tokyo District Court in Japan. On 15 September 1989, the Registrar ordered that the plaintiff's action be stayed on condition that: (a) the defendant provides security acceptable to all parties for the plaintiff's action to be brought in the Tokyo District Court in Japan; (b) the defendant refrains from raising the time bar as a defence in the action in the Tokyo District Court, if the plaintiff commences the action there within four months; and (c) that the defendant appoints a firm of solicitors to accept service of process in the proceedings to be commenced in the Tokyo District Court. The defendant complied with the conditions, and in due course the period for commencing the action in the Tokyo District Court was also extended. On 18 September 1989, the plaintiff appealed to the Judge in chambers against the Registrar’s order.

Held: Appeal dismissed.

Although the contract of carriage under this bill of lading is to have effect under the International Carriage of Goods by Sea Act 1957 of Japan (the Japanese COGSA) to the extent that it is not otherwise affected by the Hague Rules, it is not in dispute that this Court has jurisdiction to entertain in Singapore the plaintiffs’ claim against the defendants under s 3(1)(g) of the High Court (Admiralty Jurisdiction) Act (Cap 123, 1985 Rev Ed).

Except in countries in which a foreign jurisdiction clause is void per se under local legislation, courts have exercised a wide discretion in deciding whether they will hear the parties to an action or whether they will uphold a foreign jurisdiction clause and stay an action. In deciding such questions in the absence of a relevant local law, a Singapore court has recourse to English law and the practice followed by the courts in England, subject only to such modifications and adaptations as may be necessary to suit local circumstances in Singapore. A convenient starting point in considering the English law on the subject is the leading judgment of Brandon J in The Eleftheria [1969] 1 Lloyd’s Rep 237, 242.

The legal basis for these principles was the presumption that contracts freely entered into must be upheld and given full effect unless their enforcement would be unreasonable and unjust. The manner in which these principles have been applied in England in later cases has not always produced uniform decisions. As extreme examples, in The Adolf Warski [1976] 2 Lloyd’s Rep 241, the Court of Appeal in applying these principles upheld a decision by Brandon J to refuse a stay when the foreign jurisdiction was Polish; but, on the same day and on very similar facts the same Court of Appeal upheld another decision by Brandon J in The Makefjell [1976] 2 Lloyd’s Rep 29 to grant a stay when the foreign jurisdiction was Norwegian. Notwithstanding the lack of uniformity at times in the results of their application, the principles enunciated by Brandon J in The Eleftheria have been consistently applied by English courts in later cases in considering foreign jurisdiction clauses: Trendtex Trading Corp v Credit Suisse [1980] 3 All ER 721, 735-737; The Benarty [1984] 2 Lloyd’s Rep 244 and in particular The El Amria [1981] 2 Lloyd’s Rep 119.

Brandon J’s views which he stated in The Eleftheria were adopted in their entirety by the Court of Appeal in Singapore in Amerco Timbers Pte Ltd v Chatsworth Timber Corp Pte Ltd [1977-1978] SLR(R) 112 (CMI930).

Counsel for the plaintiff accepted that the burden was on him to show exceptional circumstances amounting to strong cause before the plaintiff could succeed in its appeal against the stay obtained by the defendant. In doing so, he relied on several arguments. First, as his main argument, he contended that the major issues as to liability would revolve around the questions touching on two matters: in whose care, custody and possession was the machine when the damage to it occurred; and what was the direct and proximate cause of the damage. He contended that the damage was incurred in Singapore, 'during the voyage', and not in Japan. Since the plaintiff had pleaded in the endorsement on the writ that the damage was incurred 'during the voyage from Kobe, Japan to Singapore', he contended that this was a standard form of endorsement and that, in relation to the cargo, the term 'voyage' properly construed extended to cover the whole of the period after the vessel arrived in Singapore until the time the cargo was delivered to consignees. A landing report by Nikkanen Services Pte Ltd, and an outward survey report between the parties, both done in Singapore, indicated that there were in Singapore surveyors, freight forwarders, PSA officials and experts whom the plaintiffs would want to call as witnesses. He contended therefore that the relevant evidence that was available on these matters, including all relevant documentary evidence and the witnesses whom the plaintiffs proposed to call, was almost exclusively to be found in Singapore. If these witnesses had to be taken to Japan, the plaintiff would suffer substantial inconvenience and expense. The evidence of these witnesses would also have to be interpreted and the documents translated into Japanese, causing further inconvenience and expense.

This was not a completely one-sided argument, however, as the defendant's counsel drew the Court's attention to the fact that, apart from the foreign jurisdiction clause providing for the action to be brought in the Tokyo District Court, there was the agreement by the parties that the contract should be governed by Japanese law, in particular the Japanese COGSA. Japanese law would be best administered by the Japanese court. The port of shipment was Kobe, Japan, and the shippers and their forwarders were Japanese. The defendant claimed that, if the dispute continued to be tried in Singapore, it would in its turn have to bring into Singapore Japanese lawyers and several witnesses from Japan, and would suffer similar inconvenience and expense. It was by no means accepted by it, to put it at its weakest, that the damage to the machine had taken place in Singapore. In fact, the plaintiff itself had not formally claimed this, because the endorsement to its writ claimed damages from the defendants for loss of and for damage to the cargo 'during the voyage from Kobe, Japan to Singapore', and in this connection the defendant did not accept the stretched definition of 'voyage' contended by the plaintiff. The damage might have been caused 'pre-shipment', and evidence on this which was available in Japan was called for. There was also other material evidence on the defendant's side which was in Japan, and not in Singapore. The reports prepared in English in Singapore could readily be translated into Japanese.

To begin with, therefore, in considering and determining this appeal, there is for the Court the prima facie case for a stay arising from the foreign jurisdiction clause. A party must be bound by a foreign jurisdiction clause which it has agreed to, unless it can show exceptional circumstances amounting to strong cause to the contrary, and thereby discharge the burden placed on it.

Apart from the dispute over jurisdiction, there was no contention in the present case that the law to be applied should be any other than that chosen by the parties in their contract. A factor which was therefore pressed very strongly by counsel for the defendant was that cl 3 of the bill of lading provided that the contract of carriage is governed by Japanese law which, even on the affidavits and exhibits to them, appears to be not in all material aspects the same as English law. While it may be that a court in Singapore, working in English, will not be precluded from deciding questions of Japanese law on the basis of expert evidence from Japanese lawyers, assisted by competent interpreters, it need hardly be said that it is very much more satisfactory for the law of Japan to be decided by the courts of that country, with a view to ensuring that justice is done. This is so much a matter of common sense that no authority should be necessary.

Assuming for the time being that the plaintiff is right in its interpretation of the period of time covered by the term 'voyage', an anomalous problem which it has created for itself by over-reliance on the use of standard forms and which it will have to resolve when the case goes to trial, the plaintiff's main argument was based on its contention that the damage occurred in Singapore, and that there are witnesses in Singapore, and documents in the English language. The purely geographical location of the accident can be of relatively minor significance. It does lead inevitably to some connection with that location, as a large number of such claims would be for damage discovered after discharge, and much of the evidence would be in the country of discharge. But, so far as the transportation of witnesses is concerned, it must be borne in mind that this is an unavoidable problem which may arise in every case where a foreign jurisdiction clause is applied. With the ever improving means of travel between countries, this is not normally a problem which causes insuperable difficulties. In the present case, it appears to be very much a neutral factor. Second, counsel for the plaintiff contended that the relevant documentary evidence and the oral evidence were essentially based on the English language. If the action was brought in the Tokyo District Court, and conducted in the Japanese language, there would be language communication problems, and much time and effort would be taken up in ensuring that the evidence and the notes of the proceedings were properly and accurately recorded. In view of this, the plaintiff's position could be unfairly prejudiced. While this is a factor which has had to be considered in many such cases which have come before the courts in England, it is difficult to attribute much weight to it in a court in the multi-lingual society of Singapore, where the use of interpreters in court proceedings can be an established daily routine.

On the contention that the plaintiff's position could be unfairly prejudiced if legal proceedings had to take place in Japan, affidavit evidence by a Japanese lawyer on certain aspects of Japanese civil procedure was filed by the plaintiff which purported to show some disadvantages in using a Japanese forum as compared to a forum like Singapore which follows English law and civil procedure. Thus, reference was made to the fact that it generally takes two to three years for an admiralty action to be tried in the Tokyo District Court; that a hearing before this court could be followed by hearings before the Appeal Court, and before the Supreme Court; that this Court only hears two or three cases a year involving the Japanese COGSA; that in Japanese proceedings the rules relating to discovery and interrogatories are very restrictive compared to the English rule followed in Singapore; and, although a Japanese court may issue a subpoena to compel the attendance of witnesses in a civil case, this is very rarely done, and the Japanese lawyer who provided the evidence was himself unaware of a case where a subpoena had been issued. Where parties have agreed beforehand on the choice of jurisdiction, they must be deemed to have done so with sufficient knowledge of how it works, and what it can and cannot do, and to accept the situation for what it is. If the parties have chosen to submit their disputes to the exclusive jurisdiction of a foreign court, it is difficult to see how either party can in ordinary circumstances complain of the procedure of that court, whether it be that the process of discovery is much restricted or that the process for the issue of subpoenas is not what is followed elsewhere; by choosing the court, they have chosen the procedure.

It may well be that, in very exceptional cases, really serious defects in the procedure of a foreign court, if clearly established by cogent evidence, may justify a Singapore court taking another view of the matter; but this is clearly not the position in the present case, where it is the Tokyo District Court which is concerned, for Japan is a leading maritime country, whose courts must be well-versed in such commercial disputes. Even in such exceptional cases, a Singapore court would need to be cautious about taking the same approach as English courts have been wont to take in the past. With several centuries of legal development and history behind them, and a well-deserved reputation for justice which is second to none, English judges and courts have sometimes tended to assume an English court to be the natural forum of choice for foreign litigants. In the process, they have not been averse to rejecting a foreign jurisdiction clause and deciding in favour of exercising an English jurisdiction, even though this has meant that an English court must apply a foreign law. In administering the law of England by virtue of s 5(1) of the Civil Law Act (Cap 43, 1988 Rev Ed), it will often be more appropriate, because of the different circumstances of Singapore, for courts in Singapore to avoid adopting this lofty perspective and to seek instead to apply the law of England with the modifications and adaptations permitted by s 5(3)(a). It is of significance that even in England there has been a discernible movement away from this partiality in recent years. Judicial chauvinism is said by the House of Lords to have been replaced by judicial comity.

In addition to the claim in the present case, counsel for the plaintiff drew attention to the fact that, as the plaintiff considered that liability for the loss could fall either on the defendant or on its servants or agents, it has also commenced an action in Singapore against the defendant's agent, Integrated Agency Pte Ltd, for breach of duty as bailee and for negligence, in which both the statement of claim and the defence should closely mirror the corresponding pleadings in the present case. The plaintiff contends, therefore, that there are two actions in Singapore arising out of the same facts, and revolving around the same issues, and requiring investigations and presentation of identical evidence. In the circumstances, if the plaintiff was forced to institute proceedings in the Tokyo District Court, it would result in a highly undesirable situation of two actions based on the same issues and evidence being tried in two different forums. Since, in exercising its discretion, the Court must take into account all the circumstances of the case, this multiplicity of proceedings is a consideration which must also be taken into account. However, this second action has been commenced in the High Court in Singapore in circumstances in which, on the bare facts which have been made available to this Court, it is not possible to be convinced that the action against the servant or agent need have been taken at all. While the existence of more than one action in different jurisdictions will cause difficulties and can be a relevant factor in deciding whether or not to grant a stay, the plaintiff should be precluded in the present case from using this circumstance to its advantage when it has been brought about by it. It requires little more effort to commence the second action, and to take this circumstance into account in its favour would be to allow the plaintiff to choose another preferred forum to that previously agreed to by it in entering into the contract of carriage.

Whether to grant a stay or not is a matter for the discretion of the Court. This was a dispute which the parties had expressly agreed under the bill of lading should be decided by the Tokyo District Court, and decided in accordance with Japanese law. The choice of Japanese law tied to the choice of a Japanese court as the selected forum are strong factors in upholding the jurisdiction clause. The parties are therefore bound by the jurisdiction clause in the bill of lading to which they have agreed unless exceptional circumstances amounting to strong cause to the contrary can be shown. The inconvenience and expense to the plaintiff in having to transport witnesses to Japan, and having to use the Japanese language instead of English, is not a sufficiently telling factor, especially when matched against the inconvenience and expense to which the defendant in turn would be subject if the action were allowed to be continued in Singapore. While the vessel is shown by the plaintiff to have been owned some two or three years before the accident by a Panamanian entity, with its principal place of business in Panama City, the carriers and the shippers were Japanese; on the other hand, the plaintiff has not proved that it has any real connection with Singapore. Neither has it been seriously suggested that the defendant does not genuinely desire trial in Japan or is only seeking procedural advantages. The existence of another action which has been commenced by the plaintiff in the High Court in Singapore is not of sufficient relevance to affect the prima facie case for a stay. The plaintiff has not discharged the burden of proof which was placed on it, and has not proved the exceptional circumstances amounting to the strong cause which it must prove if the Court is to refuse a stay.