PROFIT COUNTRY ENTERPRISES LTD. v. SEA-LAND SERVICE, INC. AND ANOTHER

HCAJ000245/1997

1997, No. AJ245

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY ACTION NO. 245 OF 1997

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BETWEEN
PROFIT COUNTRY ENTERPRISES LIMITED Plaintiff
AND
SEA-LAND SERVICE, INC
Incorporated in Delaware, U.S.A.
1st Defendant
KAITONE SHIPPING COMPANY LIMITED 2nd Defendant

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Coram : The Hon. Mr. Justice Waung in Chambers

Date of Hearing : 9 November 1998

Date of Judgment : 9 November 1998

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J U D G M E N T

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1. This is an action where there was a claim by a Hong Kong company claiming for the loss of its cargo. The cargo was in one of the18 containers that fell off the ship in Whampo River as a result of an accident. The Defendants, shipowners, had commenced in theGuangzhou Maritime Court and had there obtained a limitation decree after contests. The Defendants have invited the Plaintiff byletter to commence its claim in the Guangzhou Maritime Court. That had not been done by the Plaintiff and that is the reason whythe Defendants are now seeking this stay.

2. In order for a Plaintiff to break a limitation limit under the 76 Convention which is substantially applied both in China under theChinese law and in Hong Kong, there is a very high burden on such a Plaintiff to discharge. I think in Marsdens book on Collisionsat Chapter 16 on Limitation of Liability, it clearly sets out the difference between the old regime under the 56 Convention and thenew regime under the 76 Convention. Under the renew regime of the 76 Convention, the limit is much higher but it is extremely andnotoriously difficult to show recklessness to break the limit. Article 4 of that 76 Convention provided that a person liable shallnot be entitled to liability if it is proved that the loss resulted from “his personal act or omission, committed with the intentto cause such loss, or recklessly and with knowledge that such loss would probably result”. The burden is a very high and there isno material put before the court as to suggest that the Plaintiff could possibly break the limit.

3. Now where there is no such material, this is not even a situation where the court can begin to say, between completing jurisdictionHong Kong and Guangzhou where it would be more convenient to have that limitation contest tried. This is a case where Defendantshave already limited its liabilities. There is already a limitation decree made in Guangzhou. A limitation fund has been establishedthere. The Plaintiff could easily go there and make a claim against the Fund. There is nothing which ought to compel the Hong KongCourt to enforce proceedings to continue here. I think this is a plain case where Defendants shipowners, should not be vexed furtherin Hong Kong. I think all questions of juridical advantages and so on in these particulars circumstances of the case do not arise.This is an ordinary situation where there had been a maritime accident. The shipowners obtained limitation and everyone who has aclaim arising out that casualty should go against that Fund and not try to prefer themselves in some other jurisdiction by separatelitigation. I therefore, in the circumstances, order that the action should be stayed in favour of the Guangzhou Maritime Court.

(William Waung)
Judge of the Court of First Instance

Representation:

Mr. Nicholas Mallard of Messrs. Dibb Lupton Alsop for 2nd Defendant.

Mr. Bernard Mak instructed by Messrs. Chan & Chiu for Plaintiff.

Absent – Messrs. Clifford Chance for 1st Defendant.