This was an appeal from the decision of FA Chua J (see CMI928) dismissing the appellants' appeal against the orders of the Assistant Registrar refusing the appellants' applications in Admiralty in Rem Nos 230, 231 and 232 of 1988 for orders that all further proceedings in the said actions be stayed: (a) on the ground that the bill of lading upon which the action was founded contained an exclusive jurisdiction clause that any dispute arising thereunder should be determined by the courts in India according to the law of India; or, alternatively, (b) on the ground that India was the natural and more appropriate forum for the determination of the dispute in question.

Held: Appeal allowed.

In dismissing the appeal, FA Chua J applied the principles laid down by this Court in Amerco Timbers Pte Ltd v Chatsworth Timber Corp Pte Ltd [1977-1978] SLR(R) 112 (CMI930). After the decision of the Court of Appeal in Amerco Timbers, the law in Singapore in this type of case is that the judge has a discretion whether or not to grant the application for a stay, notwithstanding the exclusive jurisdiction clause. It is an established principle that in an appeal against a decision made in the exercise of a judicial discretion, the Court of Appeal may only interfere with it on limited grounds.

Counsel for the appellants contended that FA Chua J, in considering the factors to be taken into account, had failed to distinguish these factors as they operated in the context of an exclusive jurisdiction clause and in the context of forum non conveniens, as he had relied on a number of authorities in the latter category without directing himself on their lack of relevance or giving them their proper weight in the context of this case. It was also contended that the discretion under an exclusive jurisdiction clause was considerably limited on the authorities. We agree with counsel on this point. In a case involving an exclusive jurisdiction clause, the discretion of the court should not be exercised just by balancing the conveniences. In this application, the Court was not being asked to decide whether Singapore or India was the more convenient forum, but why the plaintiffs should be allowed to be relieved of their contractual obligation to bring their actions in India. The burden is on the plaintiffs to show that they have strong grounds, by which we mean that the circumstances must be exceptional. Notwithstanding that a number of recent English authorities have moved towards an assimilation of the two tests, we do not think that as far as Singapore is concerned the two tests should be assimilated.

The recoverability of costs should not be regarded as a material factor in this case. In The Vishva Ajay [1989] 2 Lloyd’s Rep 558, Sheen J said that the advantage of higher costs being recoverable in litigation in England accrued to both parties, and therefore, was a neutral factor in that sense. The same reasoning applies to Singapore vis-à-vis India. Furthermore, this factor cuts both ways. It would have been procedurally advantageous for the respondents to litigate in India should they fail in their claim.

FA Chua J followed Sheen J in The Indian Fortune [1985] 1 Lloyd’s Rep 344 in holding that although the plaintiffs must have been aware of exchange control restrictions in India when the contract was made, it was still of significance although marginal. The allegation here was not that there would be a risk of exchange control approval not being given at all to the remittance out of India of funds to pay any damages awarded to the respondents, but simply that there would be a delay of up to 9-12 months. Even on that basis, it did not have any significance in this case as it was not disputed that any judgment against the appellants would have been enforceable immediately against their P&I Club as guarantor under its letter of undertaking. The appellants' liability would have been due from the date of judgment and not from the date that they would have obtained exchange control approval to do so.

FA Chua J applied the views of Sheen J in The Biskra [1983] 2 Lloyd’s Rep 59 and The Sidi Bishr [1987] 1 Lloyd’s Rep 42 that delay was a material factor. Here, the appellants applied for the stay about 190 days after the service of the writ and 37 days after the filing of the statement of claim. However, delay by the defendant is a factor in favour of the plaintiff only if it amounts to a waiver of the defendant's rights under the exclusive jurisdiction clause. In this case, there was no waiver. The respondents had never been led to believe that the appellants would not apply for a stay. On the evidence, the respondents were aware that the appellants would apply for a stay. It is not necessary to make any finding as to why the appellants delayed the making of the application. They explained that it was due to the voluminous documents it had to collate. FA Chua J did not accept the explanation. This finding might be usefully contrasted with the fact that the respondents took about 180 days to file its affidavit in opposition to the application. There was no waiver by the appellants of their right to rely on the exclusive jurisdiction clause.

FA Chua J found that a trial in Singapore would not inconvenience the appellants as all the witnesses and the documents could be brought to Singapore. This, with respect, was the wrong approach to adopt as, equally, the respondents would also not be inconvenienced for the same reason if the disputes were litigated in Bombay. It was for the respondents to show that they would be greatly inconvenienced in this respect if they had to try their claims in India and that it would be unjust to have to do that.

The fact that the appellants had brought an action against the Dias in Singapore was irrelevant. Whether or not Singapore was an acceptable or convenient forum with respect to the appellants' claims against the Dias had nothing to do with its rights under the exclusive jurisdiction clause. The purpose of the action was to obtain security for the appellants' claim wherever the convenient forum might turn out to be. The irrelevance of this point was demonstrated by the fact that the respondents themselves had also commenced an action in India seeking the same reliefs as in the Singapore action. By a parity of reasoning, it could be said that the respondents had also regarded India as an acceptable forum.

The finding of uncertainty as to Indian law was based on the following evidence. Mr Rege, an Indian advocate, opined that the Hague-Visby Rules had no application to the respondents’ claim if made in India as India had not ratified the 1968 Brussels Protocol, and it was not certain whether or not the Indian courts might apply the Rules by virtue of cl 17 of the bill of lading. The respondents had argued before the Assistant Registrar that the Hague-Visby Rules did not apply and cl 17 would have the effect of decreasing the liability of the appellants under art 3.8, thus rendering it null and void. The argument was rejected. On appeal, FA Chua J accepted that there was some uncertainty in the law of India in this respect. Any uncertainty in the law of India in this respect was not a factor which should have been weighed against the appellants any more than it should be weighed against the respondents. The parties had agreed that the governing law of the bill of lading should be the law of India, and that being the case, the extent of the liability of the appellants would have to be determined in accordance with such law. Any uncertainty under Indian law as to the amount of damages recoverable by the respondents in accordance with whether the Hague Rules (lower damages) or the Hague-Visby Rules (higher damages) were applicable did not constitute a legitimate basis for allowing the respondents to be relieved from its obligations under the exclusive jurisdiction clause. The fact that the Hague-Visby Rules were applicable in Singapore was not a legitimate procedural advantage which the respondents were entitled to in the circumstances. This was not a case where an overriding statute of the forum applied: see The Hollandia [1983] 1 AC 565 (CMI597). The Carriage of Goods By Sea Act (Cap 33) did not apply to these actions.

As to the limitation under the different Merchant Shipping statutes, this factor also cannot be held against the appellants. This is not a legitimate juridical advantage in a case where the plaintiff is bound by a valid exclusive jurisdiction clause.

The conclusion that India was not the closest connection was based on the finding that many of the claimants were not resident in India. On the evidence, this finding was wrong. The cargo was being carried to Indian ports on an Indian ship by Indian shipowners under contracts of carriage governed by Indian law. It was highly probable that the risk and title to the cargo lay not with the European exporters but with the Indian importers and their insurers. In Admiralty in Rem 230/1988, the writ was endorsed with the addresses of the respondents. Three of them were in India and only one in Finland. The real plaintiffs were, in all likelihood, the consignees in India. Even if India were not the country that had the closest connection with the claims, Singapore was certainly not that country. The disputes had nothing whatever to do with Singapore. Singapore was neither the natural nor the most convenient forum for these claims.

The finding that the appellants had no desire to litigate in India was contrary to the evidence. The appellants were defending some nine suits brought in Bombay by the majority of the cargo claimants. It could not be said that they were not active in proceeding in India. They commenced a limitation action, albeit as it turned out, wrongly, even before any of the claimants had commenced proceedings in India. They had advertised all over Europe inviting potential claimants to lay claims in Bombay. They had provided security to abide by judgments in India. It could not be denied that the proceedings in India had progressed only up to the stage of discovery and inspection, but this fact had nothing to do with any lack of desire on the part of the appellants to have the claims tried in India. The appellants owned a fleet of more than 150 vessels trading worldwide, all in their name. It could not be in their interests to delay litigation in India in order to encourage claimants to litigate with them outside India.

The finding that there was only a theoretical possibility of conflicting decisions being given by a Singapore court and an Indian court was wrong. The finding did not take into account the fact that in addition to the Indian actions commenced by the respondents in India, there were many other claimants who had commenced actions against the carriers in India. Those suits commenced would still proceed to trial. As the claims arose out of the same incident, the same issues of fact and law would be raised. Therefore the possibility of conflicting decisions was not theoretical.

The delay in trial appeared to be the most weighty factor in this case. Indeed, it would appear to be the only factor which could be said to favour a trial in Singapore if the evidence adduced by the respondents as to the magnitude of the delay was conclusive. However, it was not. There was a conflict of evidence as to how long the court in Bombay would have taken to hear the respondents’ actions in India. The respondents claimed that it would take at least ten years on the basis of the crowded court calendar. The appellants claimed that the statistical evidence produced by the respondents was irrelevant as it related to cases filed under the court’s ordinary original civil jurisdiction, that the court in Bombay had given a direction that the limitation action be heard and determined as an expedited admiralty suit, that it would be shorter than four years and that such a period of time was neither unreasonable nor could it constitute an exceptional circumstance. FA Chua J accepted the pessimistic forecast of the respondents’ witness. Having regard to the conflicting evidence before the Court, the respondents did not make out a sufficiently cogent case on the evidence that there was excessive delay. Nor ought this to be a decisive factor in this case. In The Vishva Ajay, Sheen J held that delay in the magnitude of six to ten years was a denial of justice. That statement was made in a forum non conveniens case. In an exclusive jurisdiction clause case, different considerations must apply. One of them is that the court should give effect to what the parties had bargained for.

In this case, there was no suggestion whatever that the Indian consignees did not know that the goods were being shipped on one of the defendants’ vessels. That being the case, they must be deemed to have assumed the risk of any delay in the trial of any actions in the chosen forum. It is ironical that in these circumstances, the Indian consignees or their Indian insurers should now complain that it was unjust to them that they should have to litigate with the appellants in India. In this respect, the Court indorses the view of Yong Pung How J in The Asian Plutus (CMI927): '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 dispute to the exclusive jurisdiction of a foreign court, it is difficult to see how either party can in the ordinary circumstances complain of the procedure of that court.'

FA Chua J did not take into account a most important factor that was favourable to the appellants in this case. The governing law of the bills of lading was the law of India. There was some uncertainty in that law as to whether the Hague Rules or the Hague-Visby Rules were applicable, or what the effect of cl 17 of the bill of lading was. The Indian courts would be trying those actions and declaring what the law of India on these issues would be. In these circumstances, it would be most undesirable that a Singapore court should do the same. There is another consideration. In The Eleftheria, Brandon J, at 246, said:

A question of foreign law decided by a court of the foreign country concerned is appealable as such to the appropriate appellate court of the country. But a question of foreign law decided by an English court on expert evidence is treated as a question of fact for the purposes of appeal, with the limitations in the scope of an appeal inherent in that categorization. The consideration seems to me to afford an added reason for saying 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. Moreover, by more satisfactory I mean more satisfactory from the point of view of ensuring that justice is done.

FA Chua J failed to give sufficient weight to the exclusive jurisdiction clause. We should accord full recognition to exclusive jurisdiction clauses which are freely negotiated between the parties. The respondents had failed to discharge the burden of showing that it was unfair, unjust or unreasonable for the Court to hold them to their obligations under the relevant bills of lading.