The Reecon Wolf(1) was an appeal before the Singapore High Court from the decision of the assistant registrar to refuse to stay an admiralty action between foreign parties arising from a collision between foreign vessels of different nationalities. The decision highlights that Singapore's courts do not merely pay lip service to the doctrine of international comity and will not look favourably on the argument that being subject to a lower limitation fund constitutes a juridical or personal disadvantage.
Facts
The case arose from the collision between the Capt Stefanos (the plaintiffs' vessel) and the Reecon Wolf (the defendants' vessel) in the Straits of Malacca.
Both the plaintiffs' and the defendants' claims were within the admiralty jurisdiction of the Singapore High Court and the High Court of Malaya, respectively. The substantive issues in both proceedings were the same: which vessel was liable for the collision and, if there were negligence on both sides, how would liability be apportioned between them?
Both the plaintiffs and the defendants instituted admiralty actions in Singapore and Malaysia, respectively, as well as stay applications in both jurisdictions.
The Reecon Wolf demonstrates the application of the principles enunciated in the leading case, Spiliada Maritime Corporation v Cansulex Ltd (The Spiliada),(2) when deliberating a stay application on grounds of forum non conveniens (whereby a court may decline jurisdiction on the basis that there is a court in another jurisdiction which is clearly a more suitable forum for the trial of the action). The guidelines provided by the House of Lords in The Spiliada were made part of local law when adopted by the Singapore Court of Appeal, most recently in JIO Minerals FZC v Mineral Enterprises Ltd.(3)
The Spiliada sets out a two-stage test for the court to apply when exercising its discretion to decide whether a matter should be stayed on the basis that it is not the natural or appropriate forum. The first stage requires the defendant to discharge the burden of proof that Singapore is not the natural or appropriate forum for the trial of the action, and that there is another available forum which is more appropriate than Singapore. If this condition is met, the court will ordinarily grant a stay, unless the plaintiff can show why a stay should not be granted. The second stage requires the plaintiff to show that it will suffer a juridical or personal disadvantage if the stay application is allowed.
The importance of the decision in The Reecon Wolf lies in two factors: the issue of international comity and the relevance of the limitation regimes to juridical and personal advantage. Although both The Spiliada and JIO Minerals had given guidance on both issues, the court in the present case went to great lengths in explaining the importance of achieving international comity when deciding such applications. It also made clear that it will not favourably regard an argument that a party would suffer a juridical or personal disadvantage due to the application of the limitation regime of the 1957 International Convention on the Limitation of the Liability of Owners of Seagoing Ships.
First stage
The court narrowed the issues to be dealt with at the first stage of the Spiliada test to three factors: concurrent proceedings, the place of the tort and international comity. The judgment reveals a certain overlap in the judge's comments on concurrent proceedings and international comity, although the issues were considered under separate headings.
Concurrent proceedings
The judge considered that both Malaysian and Singapore courts would have in rem jurisdiction over the matter. In that regard, both parties would have a basis to commence their respective actions as of right in either jurisdiction. The judge noted that both sets of action were founded on the same cause of action and the issues in dispute were largely similar (eg, questions about the failure of the Reecon Wolf's steering gear and the reason for such failure, and the issue of whether the defendants were at fault and, if so, the degree of such fault, including contributory negligence). There were therefore obvious overlaps between such issues in each jurisdiction and the application of substantially the same collision regulations in determining liability would lead to a real risk of the courts giving conflicting judgments. As neither proceeding was very advanced, and as it was not disputed that the collision had occurred in Malaysian territorial waters, the judge gravitated to the position that it might be more appropriate for proceedings to continue in Malaysia, rather than Singapore. The judge relied on the view expressed in Civil Jurisdiction and Judgments that where it is clear that:
"foreign proceedings will continue despite the existence of English proceedings, it [would] be more appropriate to allow parties' rights to be determined by the foreign court rather than to create the conditions for a conflict of judgment."
Place of tort
There was no dispute that the collision had occurred in Malaysian territorial waters. The judge made clear that although the jurisdiction in which the tort was committed is normally the forum in which it is just and reasonable for the wrongdoer to answer for its wrongdoing, this is only a prima facie position. Unless the plaintiffs were unable to show why Malaysia would not be the more appropriate forum, the court would apply the prima facie position and grant the stay in favour of Malaysia. In this case, despite various arguments, the plaintiffs could not displace this position. Furthermore, the judge took account of the Malaysian court's decision to exercise jurisdiction on the basis that it was a more appropriate forum. In light of the above, the judge decided the issue in the defendants' favour.
International comity
The Singapore courts acknowledge the doctrine of international comity and will give it due regard in a proper case. Unless international comity offends the public policy of the domestic legal system, the former will prevail.
It was common ground that the Spiliada principles apply in Malaysia. The fact that the Malaysian court had applied these principles and found that Malaysia was the more appropriate forum constituted a weighty factor in the defendants' favour. Moreover, the judge in Singapore considered that Malaysia was the natural forum. Thus, staying the Singapore action would avoid the risk of conflicting judgments, as well as the inconvenience and expense of preparing for two trials. The judge ruled in the defendants' favour on this point.
Given that all three factors were in favour of the defendants' position, the defendants had satisfied the burden in the first stage of the test. Therefore, the court would stay the action unless the plaintiffs could show that they would suffer a personal or juridical disadvantage if the stay application were allowed.
Second stage
The judge considered that the plaintiffs had failed to identify a personal or juridical advantage of which they would be deprived if the Singapore action were stayed. The court made clear that it would not draw a comparison between the merits of two statutory limits (ie, that in the 1957 Limitation Convention in Malaysia and that in the 1976 Limitation Convention in Singapore), and would not take the view that being subject to lower limits of liability justified a dismissal of the stay application.
The case is not an outright indication that Singapore will cease to be the more appropriate forum if a collision between two foreign vessels occurs in the territorial waters of another jurisdiction. Where the factors in favour of the parties are largely balanced, the court will evaluate the more appropriate forum for the trial by taking into account:
- the existence of concurrent proceedings, if any;
- the place of commission of the tort; and
- international comity.
The decision invites two key conclusions.
First, the stay application taken out by the defendants was heard before the plaintiffs' stay application, although the plaintiffs had filed their application earlier. Hence, during the hearing at first instance, the assistant registrar did not have to consider the decision of a foreign court. However, when the defendants' appeal regarding the outcome of the stay application was heard, the judge had to take into account the dismissal of the plaintiffs' stay application, where the High Court of Malaya had ruled that Malaysia was the appropriate forum for the resolution of the issues between the parties, and the plaintiffs' intention to appeal against that ruling.
Singapore's courts evidently do not intend merely to pay lip service to the principle of international comity. Regardless of the assistant registrar's decision at first instance, the court evidently would have factored in the outcome of the Malaysian stay application before deciding on the appeal. By allowing the defendants' stay application, the judge was giving due regard to international comity: she was trying to prevent a situation in which there would be a race for the parties to be first to obtain a favourable judgment, as well as the likelihood of conflicting judgments.
On the facts, it is unclear whether the Malaysian court took into account the outcome of the Singapore stay application hearing in the first instance in reaching its decision.
Second, the court has again taken a strong stand against the argument that being subject to a lower limitation fund in an alternative forum is a personal or juridical disadvantage. This argument had been raised in the past, but the court has now firmly stated that future attempts to do so will be rejected. This illustrates that the courts acknowledge the doctrine of international comity and will play their part in enforcing it.
For further information on this topic please contact Mohamend Goush Marikan or Syed Isa Bin Mohamed Alhabshee at Oon & Bazul LLP by telephone (+65 6223 3893), fax (+65 6223 6491) or email ([email protected] or [email protected]).
Endnotes