On 8 January 1975, the plaintiffs, whose address is Colombo, Sri Lanka, issued a writ against the owners of the ship Carl Offersen for short delivery of cargo carried from Karachi, Pakistan, to Colombo. On the same day the writ was served on the Carl Offersen and the ship was arrested in Singapore. The ship was released on 17 January 1975, on the defendants providing security for the plaintiffs’ claim in the sum of USD 1,750,000. On 18 January 1975, the defendants entered a conditional appearance. The defendants applied for a stay of proceedings.

Held: Motion for a stay of proceedings granted, on the conditions that the defendants provide a similar security in Denmark and give an undertaking not to plead time limitation as a defence in Denmark if the plaintiffs commence proceedings in Denmark within a period of three months from the date of the order made by this Court.

The Carl Offersen is registered at the port of Aabenraa, Denmark, and is owned and managed by Rhederi M Jebsen A/S (Ltd) of Aabenraa, Denmark. The proper law of the contracts of carriage contained in or evidenced by the bills of lading is Danish law. All the contracts were subject, in effect, to the Hague Rules. Denmark, Pakistan, Sri Lanka and Singapore would all apply the Hague Rules in the event that a dispute of the present nature appeared before their courts. The plaintiffs are at present faced with a time bar in Denmark.

The general principle of law applicable to cases of this kind is that the court has a discretion whether to grant a stay or not, but should exercise that discretion by granting a stay unless the plaintiffs show strong cause why the action should continue (see The Adolf Warski [1976] 1 Lloyd's Rep 107).

The plaintiffs relied on the following matters, apart from the question of the claim now being time-barred in Denmark, as displacing the prima facie case for a stay:

(a) They have caused a business search to be made on the defendant company by their solicitors in Denmark and are informed that the four directors of the defendant company were at all material times resident in Hong Kong. They say that the control and management of the defendant company is in fact concentrated in Hong Kong and apart from being merely registered in Denmark, the defendant company has no real connection with Denmark.

(b) During the course of correspondence between the plaintiffs and the defendants, the defendants through their agents and their solicitors have on various occasions admitted that the goods were in fact short-delivered and the defendants’ allegation that the goods were never shipped at all is incorrect.

(c) The bills of lading issued by the defendants were clean and marked 'shipped in apparent good order and condition'; they were informed by their Danish solicitors that the position in Denmark with regard to clean bills of lading is that evidence contrary to the said bills of lading is not permissible. Thus, even if the action were to be heard in Denmark, the defendants would not be requiring the crew members as witnesses.

(d) They were informed that the position in Singapore as regards statements appearing in bills of lading are more or less the same and the defendants would be estopped from adducing evidence contrary to the said bills of lading. Therefore, if the action were allowed to be continued in Singapore it would not be necessary for the defendants to obtain witnesses to attend here or incur any costs of translation, transport and other expenses.

(e) It would cost the plaintiffs twice as much to get their witnesses from Karachi, Sri Lanka and Hong Kong to Denmark than it would cost the defendants to bring their witnesses to Singapore, which is, due to its geographical situation, central and within convenient distance of both parties.

(f) All relevant documents such as the bills of lading, correspondence and agreements between the plaintiffs and the shippers are in the English language and the plaintiffs are unaware of any other documents which may require translation if the action is to be heard in Singapore. If, however, the action were to be commenced in Denmark, an interpreter would be required for interpretation of the testimonies of all the plaintiffs’ witnesses.

(g) The defendants intend to rely on crew members employed by them and the defendants would have no problems in requiring their staff to attend court. In contrast, it is the plaintiffs who have to obtain witnesses from various jurisdictions over which they have no control and it is they who face the problems of being unable to compel witnesses to attend.

(h) The plaintiffs have been advised by their Danish solicitors that party and party costs for an action to be tried in Denmark would on a very conservative scale amount to USD 48,000-USD 60,000. In contrast, they are advised that the costs in Singapore would not reach such an astronomical scale and it would be best for all parties concerned that the action be allowed to continue in Singapore.

(i) The plaintiffs' desire to continue the litigation in Singapore is bona fide. It has been pointed out to the plaintiffs that the Singapore jurisdiction is favourable to the defendants in that the tonnage limitation in Singapore is lower than that in Denmark. Despite that, however, the plaintiffs are prepared and willing to carry on with the action in Singapore. The defendants, on the other hand, have given no heed to practical considerations in favour of litigation in Singapore and are insisting on Danish jurisdiction merely to inconvenience the plaintiffs.

The defendants rely strongly, as they are entitled to do, on the prima facie case for a stay. They further contend that the prima facie case is strengthened by the following matters. First, the defendants have a real and substantial connection with Denmark in that they are a Danish company and the ship is a Danish ship.

Second, the officers of the ship at the relevant time were Danish and that several of them are now resident in Denmark; that the defendants would wish to call ship’s officers and crew as witnesses; that these officers and crew cannot be compelled by a Danish court to appear as witnesses in connection with the case pending before the Singapore court and therefore, unless the relevant Danish witnesses are prepared voluntarily to appear before the court in Singapore, the defendants will not be able to put their evidence to the court; that even if they are prepared to appear the defendants would have to meet the expenses for bringing them to, and providing for their stay in, Singapore, and this might also entail having to pay for any loss of income they suffer.

Third, if the Danish witnesses wish to give evidence in their native tongue in Singapore, they would have to do so through an interpreter whereas before a Danish court they can give evidence and be cross-examined in their native tongue.

Fourth, Denmark has ratified the International Convention relating to the Limitation of Liability of Owners and Sea-going Ships signed at Brussels in 1957 (the LLMC 1957) and has adopted the Convention in ch 10 of the Danish Maritime Code (No 227 of 24 April 1974), and under Danish law the limitation action will be tried as part of the main proceedings.

Fifth, the Danish Maritime and Commercial Court in Copenhagen, which is the court this case will be referred to if the proceedings are in Denmark, will accept documents in the English language without a translation; that it follows, therefore, that if the entire proceedings including the limitation of liability aspect of the matter were to be tried in Denmark, documents in the English and Danish languages would be accepted by the court without translations, whereas in Singapore any documents other than in the English language must be translated.

Sixth, the disputes between the plaintiffs and the defendants are not in any way connected with Singapore or Singapore law and the only reason why the case is before the Singapore court is because the Carl Offersen was arrested in Singapore by the plaintiffs for security when it was in port in the course of another voyage.

Seventh, the security given in respect of the Singapore arrest will be replaced by like security by the defendants' P&I club for the purposes of litigation in Denmark if the Singapore action is stayed; that in fact on 5 February 1975, the defendants' solicitors wrote to the plaintiffs' solicitors and made such an offer.

Eighth, apart from the provisions in the bills of lading as to jurisdiction, the plaintiffs had timely notice of the defendants' intention to litigate in Denmark because the motion was filed on 30 January 1975, and by the letter dated 5 February 1975, the defendants even nominated solicitors in Denmark to accept service of proceedings in Denmark; that in spite of that the plaintiffs allowed the one-year period of limitation in Denmark to expire.

Ninth, if the Court is of the view that the defendants should not plead time limitation as a defence in Denmark, the defendants were prepared to give an undertaking not to do so if the plaintiffs commence proceedings in Denmark within a period of three months from the date of the order made by this Court.

In exercising its discretion the court should take into account all the circumstances of the particular case. The matters, where they arise, that may be properly regarded are summarised by Brandon J in The Eleftheria [1969] 1 Lloyd’s Rep 237.

The contention of the plaintiffs that the control and management of the defendant company is in fact concentrated in Hong Kong is not well-founded. Nor is their allegation that the defendants through their agents and their solicitors have on various occasions admitted that the goods were in fact short-delivered substantiated. The copies of correspondence that are exhibited to the affidavit of one of the plaintiffs’ witnesses are correspondence not between the defendants’ agents and the plaintiffs but between the agents of the charterers and the plaintiffs.

Having considered carefully all the factors advanced by either side in support of and against a stay in the present case other than the factor of the time bar in Denmark, the plaintiffs have failed to show strong cause why this action should continue.

The main matter which is of dominant significance in this case is that no evidence at all relating to the likely issues of fact is in Singapore. The disputes between the plaintiffs and the defendants are not in any way connected with Singapore or Singapore law. The only reason why the case is before this Court is because the ship was arrested here by the plaintiffs for security when it was in port in the course of another voyage. This is a strong factor tending to reinforce the prima facie case for stay. There are other factors of substantial importance, namely the real connection of the defendants with Denmark and the defendants' willingness to protect the plaintiffs in relation to security for their claim and their willingness to give an undertaking not to plead time limitation as a defence in Denmark if the plaintiffs commence proceedings in Denmark.