In March 2009, Star Rich contracted with S-Net Freight (HK) Ltd, a freight forwarder (S-Net), for the carriage of frozen meat from Hong Kong to Vietnam. S-Net (acting through Champion Service as agent) in turn engaged Namsung Shipping Co Ltd, a Korean company (Namsung), to carry the goods. The goods were stuffed into 10 containers and loaded on the Bohai Star. S-Net issued a house bill of lading (HBL) to Star Rich in respect of the goods. Namsung (acting through its Hong Kong office) in turn issued a master bill of lading (MBL) to S-Net. The HBL and MBL were issued in Hong Kong. The legal effect of the paramount clause (cl 2) and the governing law and jurisdiction clause (cl 3) in the MBL were disputed. The Bohai Star collided with the Pacific Grace en route. Two containers fell overboard but were eventually delivered in Vietnam. The two containers and their meat were severely damaged. Star Rich sued S-Net for around USD 220,000.

S-Net applied for an indemnity from Namsung in the event that the cargo owner was successful. S-Net obtained leave from Stone J to serve the writ on the defendant in Korea. Namsung applied to the Court to set aside the leave granted by Stone J, or to stay the Hong Kong proceedings in favour of Korea. The application was based on the following grounds:

1. There was material non-disclosure;
2. The plaintiff should be bound by the exclusive jurisdiction clause (cl 3) in the MBL; and
3. Korea was the more appropriate forum.

Held: Application dismissed.

This Court must apply the Hague-Visby Rules to the carriage. The present action was a claim brought under the Hague-Visby Rules as made compulsorily applicable by the Carriage of Goods by Sea Ordinance (Cap 462), because it involved carriage from Hong Kong to Korea. Korean law did not govern every action brought in respect of the MBL. The claim was not an action against Namsung 'under the law of Korea'. In so far as the Hague-Visby Rules governed S-Net's and Namsung's rights and obligations, the Korean Commercial Code would not govern the carriage.

Clauses 2 and 3 in the sample copy of the MBL exhibited by S-Net were illegible. This material non-disclosure would have been material to Stone J's decision whether to grant leave. If the Court set aside Stone J's leave for material non-disclosure, S-Net could reapply for leave under the Hague-Visby Rules. This application would still be within the time limit for bringing of an indemnity action before the Hong Kong Court (art 3.6 bis of the Hague-Visby Rules). The ambiguities identified in cls 2 and 3 of the MBL would still be there. S-Net would, in all likelihood, obtain leave again despite the Court's attention having been drawn to cls 2 and 3. It would, therefore, be a waste of time to set aside Stone J's leave.

The Korean Court did not have exclusive, as opposed to merely concurrent, jurisdiction where the claim related to damage suffered in the carriage by sea from Hong Kong to Vietnam. There was no cogent basis for granting a stay in favour of the Korean Court as a contractually agreed forum of exclusive jurisdiction. Clause 3 of the MBL did not operate as an exclusive jurisdiction clause. The Court would, however, still refuse a stay even if cl 3 were an exclusive jurisdiction clause. It would save time and money to hear the case in one rather than two jurisdictions. A Hong Kong trial between Star Rich and S-Net, and a Korean trial between S-Net and Namsung, would result in a real risk of the two legal forums arriving at inconsistent decisions, which would be inimical to the interests of justice.

There should not be a stay on the ground of forum non conveniens. Hong Kong was the proper and appropriate forum in which to litigate the dispute. S-Net was a Hong Kong company. Namsung's Hong Kong agent issued the MBL in Hong Kong. The shipment originated from Hong Kong. Although some of the crew on board the vessel might have been Korean, the crew members regularly visited Hong Kong on Namsung's vessels. Hence, they were readily available to give evidence as witnesses in Hong Kong. Star Rich's claim was for a relatively modest amount. It would not be just to grant a stay to compel S-Net to expend significant amounts of time and money to litigate this matter in two jurisdictions. Accordingly, Hong Kong was the more suitable forum to try S-Net's indemnity action.

Namsung was said to be relying on the error of navigation exception in the Hague-Visby Rules (art 4.2.a). The Court was unable to determine at this stage whether Namsung had a complete defence to S-Net's indemnity claim. It did not provide particulars of how the collision occurred and precisely what error of navigation was involved.