The appellant's vessel, the Interhill King, carried the respondent's cargo of 6,378 pieces of freshly cut Malaysian hardwood round logs from Kuala Mukah in Sarawak, East Malaysia, to Hong Kong under a bill of lading. The vessel capsized and the cargo was lost while in transit. The respondent claimed damages for breach of the duty of the appellant and its servants, agents, bailees and carriers to deliver the cargo in the same good condition and order as it was when shipped, implying that it was their responsibility to exercise care regarding the handling, loading, custody, care, carriage, delivery and discharge of the cargo.

On 12 February 1994, the appellant filed an application for a stay of proceedings on the basis of cl 3 of the bill of lading which states:

(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 herein, and any action thereunder shall be brought before the Tokyo District Court in Japan.

The appellant also referred to cl 2 which stipulates:

(Clause Paramount) 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 statute 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 Statute and the said Act or Statute shall be incorporated herein. Nothing herein contained shall deprive the Carrier of any protection from, or limitation of liability authorized by any provisions of any nation's laws, statutes or regulations which may be pertinent. If any provision of this Bill of Lading is held to be repugnant to any extent to the Hague Rules Legislation or any other 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.

The respondent argued that, as the carriage of the cargo was from Malaysia and the bill of lading was issued in Malaysia, the relevant provisions of Malaysian law, which gives effect to the International Convention for the Unification of Certain Rules relating to Bills of Lading signed at Brussels on the 25 August 1924 (the Hague Rules) are applicable.

The High Court dismissed the appellant's application for a stay of the Malaysian proceedings (see CMI906). The appellant appealed.

Held: Appeal dismissed.

Forum selection clauses are commonplace in commercial contracts, especially those with an international flavour. By that clause the parties in this case agreed to the contract being governed by Japanese law and to their disputes being adjudicated upon by the District Court of Tokyo. The appellant submitted that the Judge was wrong in the way in which he assessed the competing considerations when deciding that the action should continue before him. The Judge merely weighed these on a balance. This was an exercise more appropriate to a case governed by the doctrine of forum non conveniens but entirely unsuitable to a case such as the present where there is a forum selection clause.

There is much to be said in favour of leaving the law upon this subject in a state of certainty. Equally, it is also desirable that there be uniformity in the common law. No decision has been cited to show that the Eleftheria test has been questioned in the jurisdiction from which it emanates or, for that matter, in any other jurisdiction. It must not be forgotten that what is under consideration is the discretionary power of a Court to stay proceedings. The advantages of leaving the question of whether a stay should be granted or refused with the Judge of first instance has not found any insuperable difficulty in other areas of the law where discretionary relief is sought.

The relative merits of having a trial either in this country or in the agreed foreign tribunal as well as the competing considerations that have to be weighed in the balance when deciding whether to give effect to a forum selection clause or to ignore it are matters pre-eminently within the province of the trial Judge. An appeal should be rare and this Court will be slow to interfere with the discretion exercised by the Judge unless, of course, it can be demonstrated to a conviction that the case is one that falls within the category of cases in which appellate interference is called for.

Here, the Judge has committed no error in the way in which he stated the law. He took into account the fact that the vessel and the appellant are both Malaysian. The cargo was loaded at a Malaysian port. The evidence is admittedly both here and in Manila. But the Judge took this into account and came to the conclusion that trial in this country will be less expensive and more convenient. His judgment discloses that he was conscious of the burden on the respondent to produce strong grounds to displace the forum that had been selected. He asked himself all the right questions and, acting in obedience to binding precedent, came to the conclusion that there ought not to be a stay. In these circumstances, this is not a case for appellate interference.