The plaintiff was the holder of a bill of lading evidencing shipment of 151 cartons of piece goods on board the Hai Yun. The defendant was the owner of the vessel. At the discharge port, the cargo was discharged into a barge which landed the goods in the warehouse. During this process, 14 cartons were found torn and there was also a short delivery of cargo.

The plaintiff sued the defendant in Taiwan, but the defendant alleged that under Taiwanese maritime law the defendant was not liable for damage caused by unsuitable packaging (a provision similar to art 4.2.n of the Hague Rules).

The plaintiff also sued in Hong Kong to obtain security. The defendant entered an appearance in Hong Kong but applied for an order that further proceedings be stayed on the ground that the bill of lading contained a foreign exclusive jurisdiction clause favouring Taiwan.

Held: Defendant’s application successful. Hong Kong proceedings stayed.

First, there was an exclusive law and jurisdiction clause in favour of Taiwan law and the Taiwan courts.

Second, there was neither prejudice suffered by the plaintiff nor any advantage gained by the defendant should the Taiwan proceedings continue, because there was no difference in the liability regime governing the dispute. The Hague Rules were incorporated into the bill of lading as well as Hong Kong’s Carriage of Goods by Sea Ordinance. The defence of unsuitable packaging in Taiwanese law was similar to art 4.2.n of the Hague Rules and such a defence under the Hague Rules would have similarly arisen in the Hong Kong proceedings. Likewise, there would not have been any difference in the issue of package limitation under art 4.5 of the Hague Rules and the issue of package limitation under Taiwan law.