This was an application for a stay of proceedings commenced in Hong Kong for damages on various bills of lading in respect of goods shipped on the defendant’s ship the Andhika Samyra, or in the alternative for negligence. The cargo was shipped in August 1987 from Hong Kong to Indonesia. While the cargo was still in Hong Kong, there was a fire which was subsequently extinguished. When the ship arrived in Indonesia there was a further, much more extensive, fire causing considerable damage to the cargo.

The goods subject to four of the bills of lading originated in Taiwan and the balance of the goods referred to in the other 24 bills of lading originated in Hong Kong. The flag of the ship was Indonesian and the defendant was Indonesian. The defendant asserted that Indonesia was the natural and appropriate forum for the trial of the action.

Held: Application dismissed. Stay of proceedings denied.

The principals to be applied in determining an application of this nature are found in the speech of Lord Goff in Spiliada Maritime Corp v Cansulex Ltd [1987] 1 AC 460 and summarised by Bingham LJ in Du Pont v Agnew [1987] 2 Lloyd's Rep 585:

Where a party duly served with proceedings within the jurisdiction seeks to stay them - ... The basic principle is that a stay will only be granted on the ground of forum non conveniens where the Court is satisfied that there is some other forum having competent jurisdiction which is the appropriate forum or the trial of the action i.e. in which the case may be tried more suitably for the interests of all the parties and the ends of justice.

The defendant has established that there is a suitable alternative forum, namely Indonesia. The plaintiffs must establish objectively by cogent evidence they will not obtain justice in the foreign jurisdiction. The main argument made by the plaintiffs is that if the cases are tried in Indonesia, the amount recoverable will be limited by tonnage limitation pursuant to art 474 of the Indonesian Commercial Code.

The parties agreed that Indonesian law should govern the contract (condition 19 in the bill of lading). However, this has to be considered in the context of the Carriage of Goods by Sea Act 1971 (UK) (the Act), which was brought into operation in Hong Kong by the Carriage of Goods by Sea (Hong Kong) Order 1980. Article 3.8 of the Hague-Visby Rules, which are contained in the schedule to the Act, provides:

Any clause, covenant, or agreement in a contract of carriage relieving the carrier or the ship from liability for loss or damage to, or in connection with, goods arising from negligence, fault, or failure in the duties and obligations provided in this article or lessening such liability otherwise than as provided in these Rules, shall be null and void and of no effect. A benefit of insurance in favour of the carrier or similar clause shall be deemed to be a clause relieving the carrier from liability.

The Hague-Visby Rules are incorporated into contracts of carriage of goods from Hong Kong. Indonesia is not a signatory to the Convention and thus the Hague-Visby Rules are not incorporated into Indonesian contracts.

The limitation in art 474 of the Indonesian Code is radically different from the provisions contained in the Hague-Visby Rules. Condition 19 in the bill of lading is a clause which lessens the liability of the carrier and is void. The defendant cannot place reliance on it. Lord Diplock had this to say in The Hollandia [1983] AC 565, 573 (CMI597):

The first paragraph of condition 2 of the bill of lading, prescribing as it does for a per package maximum limit of liability on the part of the carriers for loss or damage arising from neglience or breach of contract instead of the higher per kilogram maximum applicable and et the Hague-Visby Rules, is ex facie a clause in a contract of carriage which purports to lessen the liability of the carriers for such loss or damage otherwise than is provided in the Hague-Visby Rules. As such it is therefore rendered null and void and of no effect under article III, paragraph [8].

Tonnage limitation is of crucial importance to this litigation. The plaintiffs say that in Hong Kong the tonnage limitation would be the order of HKD 12.5 million. This is significantly higher than the limitation in Indonesia. If litigation were to proceed in Indonesia it is clear that the plaintiffs would be placed at a juridical disadvantage if a stay is granted. It is also not clear that the agreement concluded by the parties concerning waiver of time limitation would be enforceable in the Indonesian courts.