B/L Jurisdiction – A case in Singapore : “The Hyundai Fortune”
The case was decided by the Singapore Court of Appeal in 2004 concerning exclusive jurisdiction clause in a bill of lading involving a claim from cargo interest where there was no effective defence from the carrier/ship-owner. Claimant commenced proceeding in Singapore and in response the carrier applied for stay of proceeding as the relevant bill of lading provides for all claims to be referred to the Seoul District Court in Korea.
Claimant owned a shipment of melons, which was loaded in a reefer container in Shenzen. The container was loaded onboard Hyundai Fortune in Hong Kong for the voyage to Singapore. The bill of lading contained the exclusive jurisdiction as stated above. The melons arrived badly damaged with evidence pointing to the reefer container not maintaining the required low temperature. The temperature should have been 3 degrees all times but evidence showed this had risen to 25 degrees during transit.
Following the submission of claim for compensation, the carrier did not respond for almost a year. The claimant eventually commenced legal proceeding against the carrier in Singapore High Court. The carrier tried to rely on the exclusive jurisdiction clause for a stay of proceeding by which time, time limitation would have prevented the cargo claimant from pursuing the claim in Korea.
The High Court rejected the application for stay of proceeding, having considered the following factors:
- there was no effective defence on the merits of this claim.
- action in Korea would have been time barred.
- other factors connected with this claim relate to Singapore
- overall justice should be with the claimant.
The ship-owner appealed to the Court of Appeal and this was subsequently dismissed. Points to note from the appeal judgement include the following:
- notwithstanding the exclusive jurisdiction clause in the bill of lading, the court could refuse a stay of proceeding in exceptional circumstances,
- the discretion of the court should not be exercised by just balancing the convenience as if it were dealing with a case of inappropriate forum,
- it is crucial with regard to the issue of defence whether it was reasonable for the plaintiff not to have instituted a protective writ in Korea before the limitation period set in,
- there was no effective defence and time limitation already set in with the defendant not prepared to waive time bar defence
- it was not unreasonable that claimant had not issued a writ in Korea and from the approach of the defendant, the claimant assumed the ship owner has no defence.
While this case shows that notwithstanding the jurisdiction clause, the court in a different jurisdiction may choose to hear a claim from cargo interest. Carrier should therefore exercise prudence in responding to claim not following the jurisdiction clause in the bill of lading.
Disclaimer: The above case note is not intended to replace professional advice. Carrier should seek advice from their liability insurer or legal adviser accordingly.
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