This was an application by Nebula Shipping Pte Ltd (Nebula) for a permanent stay of proceedings in the Federal Court on forum non conveniens grounds. The proceedings had been commenced by Mitsui OSK Lines Ltd (Mitsui) and Protea Navigation Inc (Protea), the owner and bareboat charterer respectively of the Vega Dream, against Nebula, the owner of the Yangze 22. The proceedings arose out of a collision between these two vessels in PRC internal waters on 30 December 2024.

Following the collision, Nebula established a limitation fund in the Shanghai Maritime Court and commenced proceedings in the PRC against Mitsui and Protea for damages arising out of the collision. Mitsui and Protea registered claims against Nebula's limitation fund in the PRC one day before commencing proceedings against the Yangze 22 in Australia. The Yangze 22 was subsequently arrested in the Port of Newcastle, Australia. Nebula made an unconditional appearance before the Federal Court.

A limitation fund established in Australia would have been worth approximately AUD 48.7 million, far exceeding the PRC fund of approximately AUD 13.5 million, and would not have been shared with the 13 other claimants registered against the PRC fund.

Held: Permanent stay granted. The Federal Court of Australia is a clearly inappropriate forum.

The principles governing Australian courts' powers to stay proceedings on forum non conveniens grounds are well-established. An Australian court has the power to stay proceedings where it is a 'clearly inappropriate forum' for the trial of the plaintiff's action. In determining whether the forum is 'clearly inappropriate', the forum focuses only on its own jurisdiction and does not make value judgments about the system of justice in other jurisdictions. However, where the litigation in Australia arises out of the same substratum of fact as foreign litigation, the forum may have regard to the controversy as a whole to determine whether the local proceedings should be permanently stayed on forum non conveniens grounds.

The connecting factors all point toward Australia being a 'clearly inappropriate forum'. Because the collision occurred in PRC internal waters, and the Shanghai Maritime Safety Administration had incurred pollution clean-up costs, the PRC was the natural and obvious forum for the parties' dispute. Furthermore, the lex causae was PRC law, all witnesses were located in the PRC, and much of the documentary evidence was in the hands of PRC State agencies beyond the reach of an Australian court.

Australia’s higher limits of liability were not a significant factor against the grant of a stay of proceedings. Drawing on the reasoning in The Herceg Novi [1998] EWCA Civ 1223, [1998] 2 Lloyd's Rep 454 (CMI770), the Court held that there was no universally accepted view of what limits of liability should be, and that Mitsui and Protea's interest in a higher limit was equally matched by Nebula's interest in a lower limit. Therefore, having regard to the interests of all parties and the ends of justice, the higher limit in Australia did not weigh heavily against a stay.

The right to proceed in rem against the Yangze 22 in Australia was not a distinct juridical advantage. The underlying claim in tort was identical whether pursued in rem or in personam. Further, the expert evidence on PRC law established that the procedural consequences of arrest in the PRC and arrest in Australia were not materially different. In any event, Nebula's unconditional appearance before the Court to secure the release of the Yangze 22 had rendered the significance of the in rem claim moot.

Three sets of proceedings were already on foot before the Shanghai Maritime Court: all arising out of the same collision, and based on the same cause of action. Furthermore, the proceedings in Australia were instituted after Mitsui and Protea had already commenced proceedings in, and submitted to the jurisdiction of the Shanghai Maritime Court. So, having regard to the controversy as a whole, the continuation of the Australian proceedings was objectively vexatious and oppressive to Nebula, being seriously and unfairly burdensome, prejudicial and damaging, and productive of serious and unjustified trouble and harassment.