Pelayran Nasional Indonesia (the defendant) contracted, by way of three bills of lading, to carry the plaintiff’s cargo of 349 pallets of oil drilling muds on board its vessel, the Epar, from Singapore to Belawan in Indonesia. Fifty three pallets of the cargo were found to be damaged at delivery. The plaintiff served a writ in rem in Singapore on the Epar, claiming damage to goods under s 3(1)(g) of the High Court (Admiralty Jurisdiction) Act.

Articles 3.8, 4.5.a, 10.a and 10.b of the 1968 Protocol to amend the International Convention for the Unification of Certain Rules of Law relating to Bills of Lading, signed at Brussels on 25 August 1924 (the Hague-Visby Rules), are given domestic effect in Singapore via the Carriage of Goods by Sea Act 1972 (COGSA 1972).

The clauses in the bills of lading indicate, amongst other things, that if the value has not been declared in the bill of lading, the carrier is not bound to refund an amount exceeding GBP 100 per package; that the bill of lading shall be governed by Indonesian law; that the claim for damage shall be dealt with in the Court (Pengadilan Negeri) in Djakarta; and that the bill of lading is to have effect subject to the provisions of the rules contained in the Schedule to the Carriage of Goods by Sea Ordinance 1927.

The plaintiff claimed damages, submitting that the exclusive choice of jurisdiction clause should be treated as inoperative or of no effect (relying on The Morviken [1983] 1 Lloyd's Rep 1), and that the Singapore Court, rather than the Djakarta Court, was the most appropriate forum to determine the dispute.

The defendant entered an unconditional appearance and subsequently filed its statement of claim, asserting that the Singapore Court ought to give effect to the parties' choice of forum by granting a stay, and further contending that the Djakarta Court is the most appropriate and convenient forum for the resolution of the disputes between the parties in all the circumstances. Notably, the defendant submitted that the reason why Singapore’s COGSA 1972 did not use the same terms as the Carriage of Goods by Sea Act 1971 (UK) (COGSA 1971), which provide that the Hague-Visby Rules in the Schedule to COGSA 1971 shall have the force of law, was because the Singapore Parliament wanted to preserve the freedom for parties to contract outside COGSA 1972.

Held: The Judge dismissed the defendant’s motion and refused the stay of proceedings in Singapore. The defendant failed to satisfy the Court that a stay would not deprive the plaintiff of a personal or judicial advantage which would be available to it in the Singapore courts. To hold otherwise would ignore the provisions of art 10.a and art 10.b of the Hague-Visby Rules and would be contrary to its purpose.

In this case, the shippers' or consignees’ claim would be subjected to a maximum limit of carrier liability which was very much lower than that in Singapore. If this claim was tried in the Court in Djakarta, the liability of the carrier per package would be limited to SGD 400 (fixed by contract) or SGD 13 (fixed in Djakarta), which was lower than the limits imposed by art 4.5.a of the Hague-Visby Rules in Singapore at SGD 1,563.65 per package; and the actual liability fixed by cl 9 of the said bill of lading was GBP 100 per package (art 4.5, International Convention for the Unification of Certain Rules of Law relating to Bills of Lading (1924) (Hague Rules)). If these bills of lading were subject to the provisions of the Hague-Visby Rules by way of arts 10.a and 10.b, the limits of the maximum liability must comply with art 4.5.a of the Hague-Visby Rules. Accordingly, the maximum liability of the carriers would be limited to a much smaller sum in Indonesia under the Hague Rules than they would be liable for in Singapore under the Hague-Visby Rules.

While the effect of the exclusive choice of jurisdiction clause to confer exclusive jurisdiction does not, on the face of it, offend art 3.8 of the Hague-Visby Rules, where the dispute concerns the negligence, fault, or failure of the carrier arising between the parties which they are unable to resolve by agreement, and involves the assertion of their respective legal rights and duties under the contract with the carrier seeking to bring the exclusive jurisdiction clause into operation and to rely upon it, the effect of which was shown or accepted to result in the limiting of the carrier’s liability to a lower sum than that to which it would be subjected to under art 4.5.a of the Hague-Visby Rules in Singapore, art 3.8 of the Hague-Visby Rules will come into play, and the exclusive jurisdiction clause will be treated as if of no effect.

The submission by the defendant on the Parliamentary intention behind COGSA 1972 was rejected by the Judge because it would ignore art 10.a and art 10.b of the Hague-Visby Rules, and such a construction was contrary to the unification of the domestic laws of the contracting States. The Judge cited with approval the passage in The Morviken by Lord Diplock that ‘the only sensible meaning to be given to the description of provisions in contracts of carriage which are rendered null and void and of no effect by this rule is one which would embrace every provision in a contract of carriage which, if it were applied, would have the effect of lessening the carrier’s liability otherwise than as provided in the rules’. Accordingly, the Judge ruled that the choice of exclusive jurisdiction clause giving the Court in Djakarta exclusive jurisdiction is rendered null and void and of no effect. Since the conditions for a stay order to be granted were not satisfied, the stay of proceedings was refused.

Finally, the Judge added that he would rule against the plaintiff’s submission that, since the defendants had not entered a conditional appearance, they had submitted to the jurisdiction of this court, because the application here was an application for a stay of proceedings rather than an application to set aside the writ and its service.