The plaintiffs' claim is for damages in respect of the total loss of the plaintiffs' cargo shipped on board the defendants' ship, the Vishva Apurva, of the port of Bombay. The loss arose out of a collision in the Red Sea on or about 6 August 1987 between the Vishva Apurva and the Greek ship, the Dias. Following the collision, the Vishva Apurva sank with its entire cargo. The plaintiffs commenced the present proceedings in Singapore on 5 August 1988, and seized the defendants' ship, the Kalidas.

Proceedings were instituted against the defendants on 5 August 1988 in the High Court of Bombay on behalf of Pohjola Insurance Co Ltd in respect of its subrogated claims under the bills of lading issued in respect of the plaintiffs's cargo. The defendants are the State Shipping Corp of India Ltd.

The bills of lading issued in respect of the plaintiffs' cargo contain the following clause:

17 Jurisdiction Clause: The contract evidenced by this bill of lading shall be governed by the law of India and any dispute arising hereunder shall be determined by the Indian courts according to that law to the exclusion of the jurisdiction of the courts of any other country.

The defendants applied by summons in chambers for a stay of all further proceedings in this action. The summons was dismissed by the Assistant Registrar on 6 February 1990. The defendants filed a notice of appeal to the Judge in chambers on 9 February 1990.

Held: Appeal dismissed.

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). The question for determination is whether this action ought to be stayed in view of the foreign jurisdiction clause in the bills of lading.

It is also not in dispute that this Court has a wide discretion in deciding whether to hear the parties to this action or whether to uphold the foreign jurisdiction clause and stay the action. In deciding such questions the Singapore court has recourse to English law and the practice followed by the courts in England, unless in any case other provision is made by any law in force in Singapore (s 5 of the Civil Law Act (Cap 43)). In England, the principles are enunciated in the leading judgment of Brandon J in The Eleftheria [1969] 1 Lloyd’s Rep 237, 242. In Singapore, the Court of Appeal in Amerco Timbers Pte Ltd v Chatsworth Timber Corp Pte Ltd [1977-1978] SLR(R) 112 (CMI930) stated the principles in words very similar to that of The Eleftheria.

There is a prima facie case for a stay arising from the foreign jurisdiction clause. The plaintiffs must be bound by the foreign jurisdiction clause which it has agreed to. But this Court has a discretion to refuse an application for a stay if the facts and circumstances of the case are so exceptional as to amount to strong cause to the contrary. The burden lies with the plaintiffs.

The plaintiffs have shown that the facts and circumstances of the case are so exceptional as to amount to strong cause and to warrant a refusal of stay. It has been clearly shown by the plaintiffs that if the case were to proceed in the Indian court there will be very considerable delay (of at least ten years) before the matter comes to trial, by comparison with its determination by the Singapore court. The Singapore action has been set down for trial on 6 September 1990. Very great delay in the hearing of an action seems to be a denial of justice. The fact that the Singapore proceedings have been under way for a substantial time and have involved the parties in substantial costs and are ready for trial, is a strong factor in favour of the grant of stay of the Indian proceedings.

The plaintiffs have adduced evidence that a successful litigant in India will not be able to recover party and party costs or even costs on a realistic basis. Party and party costs was abolished in India on 1 January 1977. The amount of costs recoverable by a successful litigant in the Bombay High Court is governed by r 606 of the Rules of the High Court on its original side. The amount recoverable under r 606 is based on the quantum of the claim but there is a ceiling to the amount of advocate’s fees recoverable from the other side which is presently fixed at INR 38,500. If this case should proceed to litigation in Bombay, and should the plaintiffs succeed in the action, the maximum amount of costs recoverable from the defendants is limited to INR 38,500. Substantial justice would thus not be done if this case were to proceed in the Indian court as the success of the plaintiffs in monetary terms would necessarily and substantially be diminished as they would have to pay much higher costs than in Singapore. The effect of costs is relevant in considering juridical disadvantage.

The plaintiffs have adduced evidence that a successful litigant who is resident outside India will have to wait for a further period of nine months to one year before being paid. A judgment debtor will, owing to exchange control, have to apply for and obtain permission for remittance of moneys outside India in satisfaction of the judgment sum. Some of the cargo claims against the defendants in India are brought by foreign insurers in exercise of subrogation rights and exchange control approval must be sought before payment can be made outside India. The defendants say that the plaintiffs have the security of the defendants' P&I Club, London Steamship Owners' Association Ltd, which undertook to make payment on the plaintiffs obtaining final judgment in India or Singapore. Enforcement of any judgment whether obtained in India or Singapore would be against the London P&I Club for which no exchange control restrictions exist. That might be so, but the guarantee is only enforceable in the event that the defendants failed to pay. Still the plaintiffs will have to wait and see if they will be paid. The plaintiffs must have been aware of the exchange control in India when the contract was made. It is still of significance albeit marginal.

There has been delay on the part of the defendants in applying for a stay of proceedings. An application for a stay on grounds that the parties have agreed to submit the dispute to a foreign court should be brought without delay after the service of the writ. The defendants say that their solicitors had informed the plaintiffs' solicitors shortly after the arrest of the vessel in January 1989 of the defendants' intention to apply for a stay and such intentions were repeatedly made known to the plaintiffs' solicitors. The reason that the defendants did not file the application earlier was due to the voluminous documents that had to be collated from court files in Bombay and the defendants's agents all over Europe. It should not take such a long time for the defendants to collate all the relevant documents to be exhibited to its affidavit to be filed in support of their application for stay. There was unreasonable delay by the defendants after the writ was served.

It is not absolutely correct for the defendants to contend that most, if not all, of the evidence and documents pertaining to the voyage and operations of the Vishva Apurva are readily available in India, for the purposes of determining the issues in the dispute. The defence filed in this action put the plaintiffs to strict proof of its title to sue. The plaintiffs' contention is that the Vishva Apurva was improperly crewed and equipped or supplied or that the owners had failed to exercise due diligence to make the ship seaworthy and that it sank, not because of the collision, but by reason of its unseaworthiness. The plaintiffs say that they intend to call as witnesses the Danish master and crew of the Alice Riis who saw and took photographs of the Vishva Apurva as it sank. Witnesses at ports of loading as well as from one or more of the loading ports where some repairs to the Vishva Apurva were carried out will also be called. The plaintiffs say that in so far as there is any dispute as to the plaintiffs' right to claim damages, evidence of quantum of claim will have to be brought from Finland. Even if most of the evidence is in India, the convenience and advantage in proceeding in Bombay is rendered nugatory by the excessive delay faced by litigants in Bombay. Oral testimony of eye-witnesses is of utmost importance. With delays their memory may fade and the longer the delay, the less chance there is of the evidence being convincing. Delay in India will have a significant effect on the location of evidence: witnesses may die or no longer can be found, all of which will seriously prejudice the plaintiffs if their action in Singapore is stayed.

The defendants say that the jurisdiction clause in the bills of lading is not a jurisdiction clause per se but also stipulates the governing law to be the law of India. The defendants submit that there is a distinct advantage which an Indian court has in determining its own law. There appears to be some doubt as to the law the Indian court will apply. The Hague Rules are applicable in India by virtue of the Indian Carriage of Goods by Sea Act 1925. The defendants in the defences filed in India have denied that 'in view of the alleged contract of carriage, the dispute is covered by the provisions of the Carriage of Goods by Sea Act 1925'. The position under Indian law is uncertain since the Indian Carriage of Goods by Sea Act 1925 applies only to shipments out of India. The Hague-Visby Rules do not apply in India as India has not ratified the relevant 1961 [sic] Brussels Protocol. Singapore applies the Hague-Visby Rules. The Indian court may decide that, as the Indian Carriage of Goods by Sea Act does not apply and that by cl 17 of the bill of lading disputes 'shall be determined by the Indian courts according to that law', neither the Hague nor the Hague-Visby Rules will be applicable. The legal position in India is uncertain. It is clear that in general, and other things being equal, it is more satisfactory for the law of a foreign country to be decided by the courts of that country. But all things are not equal in the present case. Singapore courts have always applied the Hague Rules under the Singapore Carriage of Goods Ordinance prior to the enactment of the Carriage of Goods by Sea Act 1972 which gives effect to the Hague-Visby Rules.

Following the casualty, the defendants was confronted with numerous claims by cargo owners for the loss of their cargo. On 28 June 1988, the defendants commenced limitation proceedings under the Indian Merchant Shipping Act 1958 (Admiralty No 17 of 1988) seeking a declaration that their liability be limited to INR 5,252,241.50. By order of court dated 9 August 1988, the High Court at Bombay ordered and directed that the defendants deposit with the Admiralty Registrar of the High Court, Bombay, the sum of INR 5,252,241.50 or furnish a bank guarantee for the same sum to constitute the limitation fund for the Vishva Apurva. Pursuant to this order, the defendants furnished a banker’s guarantee in the sum of INR 5,252,241.50 on 19 August 1988, to abide by the further outcome of the proceedings in Admiralty No 17 of 1988.The plaintiffs say that the limitation of owners' liability under the Singapore Merchant Shipping Act (Cap 179) for loss of or damage to goods, where the loss or damage occurred without their actual fault or privity, would be higher than the limitation under the Indian Merchant Shipping Act. In the present case the limits of the defendants' liability in Singapore would be approximately SGD 1,485,776.50 or equivalent approximately to USD 769,832.38 as against INR 5,252,241.50, or equivalent approximately to USD 353,000 in India. The defendants have not disputed these figures. If a stay is granted the plaintiffs would lose the certainty of the Singapore limit of approximately USD 769,832.38. It would be unjust to the plaintiffs to deprive them of the Singapore limit.

The defendants say that none of the parties to these proceedings has any real connection with Singapore. The plaintiffs would either be the Finnish shippers or the Indian consignees with places of business in their own countries. Whereas the defendants are an Indian government company with their headquarters in Bombay. The Vishva Apurva is registered in India and was crewed by Indian nationals. Apart from the fact that the defendants' ship Kalidas was served with the writ and that their ships call at Singapore regularly as part of their worldwide trade, there is no real connection by any of the parties in this dispute with Singapore. The plaintiffs, however, are not all Indians. They reside in Finland, Netherlands, and other European countries. It cannot be said that the country with the closest connection is India.

The defendants say that their genuine desire for trial in India is well demonstrated by the active steps taken by them both in India and elsewhere. The defendants had wasted no time in setting up the limitation fund (albeit now set aside); had provided securities both to abide by Indian and foreign court judgments; had advertised actively all over Europe inviting potential interests to lay claims in Bombay; and had taken steps to expedite the trial of the limitation action in Bombay. It appears to the Court that the defendants have no genuine desire for trial in India. They were seeking a procedural advantage when they wasted no time in commencing limitation proceedings under the Indian Merchant Act 1958. They did not issue a stay summons until after the plaintiffs had filed their statement of claim which indicates that the defendants does not mind Singapore jurisdiction. The defendants commenced in rem action on 27 July 1989, in Singapore against the Dias, the other vessel involved in the collision, well after the plaintiffs commenced their action in Singapore on 5 August 1988 and after the defendants filed their stay summons on 20 January 1988. This is very indicative that the defendants regards Singapore as an acceptable forum and shows that the defendants are only after a procedural advantage in India where the limitation is lower and do not genuinely desire trial in India.

The plaintiffs say that the Indian action Suit No 2567 of 1988 commenced on behalf of Pohjola Insurance Co Ltd was solely to protect the right for enforcement of those claims from being extinguished following the defendants' refusal to extend time beyond the one year time limit. Further, it is the advice of the solicitors of the insurance company that under Indian law, it is not possible by agreement between shipowners and cargo claimants to validly extend the one-year time limit prescribed by law for commencing legal proceedings. Under Indian law there is no procedure by way of a mere issuance of a writ to protect the right for enforcement of the claims from being extinguished. It is necessary for a claimant to file a suit by lodging a plaint with full statement of claim incorporated therein. Apart from filing the suit and serving the writ of summons on the defendants on 7 October 1988, the insurance company, as plaintiffs, took no further steps in these proceedings. Although some defences have been filed recently, the proceedings in India can be regarded as at initial stages. A limitation action is a separate matter from the cargo claim. Now that the limitation fund created ex parte has been set aside, the defendants would have to start all over again for it to be constituted and it would this time be contested. It is not necessarily unjust or inconvenient for liability and limitation to be tried separately (see The Volvox Hollandia [1988] 2 Lloyd’s Rep 361 (CMI2407)).

The defendants say that in exercising its discretion, the Court here must take into account the multiplicity of actions here and in India. The Indian courts are already seized with a vast majority of the cargo claims arising out of the casualty. The main and real issue in the Indian actions and these proceedings that would ultimately determine the case is whether or not the Vishva Apurva was unseaworthy and/or whether the defendants had actual fault or privity in the collision and the consequent sinking of the vessel and its cargo. It would be disastrous, say the defendants, if the courts in India and the Court here come to differing conclusions despite facts arising from the same casualty. Furthermore, action has been taken to consolidate all the actions in Bombay but this would not be possible in respect of the plaintiffs' case here. Discovery proceedings in this action would be duplicating similar processes in India and the defendants would be put to unnecessary expenses. The plaintiffs say that such an outcome is only a theoretical possibility. If stay is refused, the Indian action will be withdrawn, since the plaintiffs genuinely desire Singapore litigation.

[For the successful appeal to the Court of Appeal, see The Vishva Apurva [1992] 1 SLR(R) 912 (CMI931).]