THE OWNERS AND/OR THOSE ENTITLED TO SUE IN RESPECT OF A CARGO LATELY LADEN ON BOARD THE SHIP OR VESSEL "KAPPA SEA" V THE OWNERS AND/OR DEMISE CHARTERERS OF THE SHIP OR VESSEL "KAPPA SEA"

[2017] HKCFI, HKSAR Court of First Instance, Hon Ng J in Chambers, 25 August 2017

Admiralty - Action in rem - Cargo discharged in Yangon in contaminated condition - Vessel not arrested pursuant to P&I Club undertaking - Defendant outside HK served through solicitors - Challenge to jurisdiction - Clearly more appropriate forum - Loss of legitimate personal or juridical advantage - Hague Rules and Hague-Visby Rules

This was the defendants' application that the court should not exercise its jurisdiction, on the basis that the proceedings in the case should be conducted in the District Court of Yangon, Myanmar. The defendant demise charterer had issued a bill of lading in respect of the carriage of a cargo of palm oil from Indonesia to Yangon. At discharge, the palm oil was found to be contaminated, and was sold at less than market value. The surveyors' conclusion was that the contamination was from the vessel's internal discharge line. The bill was a clean bill of lading and incorporated the Hague-Visby Rules. The plaintiff cargo owner claimed for the diminished value and for storage fees, reprocessing costs etc. To avoid the arrest of the vessel, the defendants' P&I club issued a letter of undertaking, wherein they undertook to instruct solicitors on behalf of the demise charterers and to acknowledge service of the claim. As neither the vessel nor the defendant was served in Hong Kong, there was no statutory jurisdiction.