This case concerned an application by Delmas Hong Kong Ltd (the defendant) for an order that all further proceedings in this action against the defendant be stayed in favour of the Tribunal de Commerce du Havre in France, pursuant to the law and jurisdiction clause in bills of lading issued by the defendant.

The defendant alleged that the goods had been shipped on the Bunga Mas Lima and the Bunga Mas 11 in good order and condition for carriage to, and delivery at, Dar es Salaam, Tanzania. Chan Chi Keung t/a Tadi Land International (the first plaintiff) was the owner of the cargoes and the lawful holder of the bills of lading. The first plaintiff had agreed to sell the cargoes to Mukubaganyi Mulume (the second plaintiff). The plaintiffs alleged that the defendant was under a duty to the plaintiffs as bailee and/or carrier for reward and/or under the contract of carriage contained in or evidenced by the bills of lading to take reasonable care of the cargoes and to deliver them at Dar es Salaam upon presentation of the bills of lading. The plaintiffs alleged that the defendant failed to deliver any of the cargoes at Dar es Salaam. Further, the plaintiffs alleged that the defendant, its servants or agents wrongfully and without authority delivered the cargoes to a person unknown without production of the bills of lading. As a result of this, the plaintiffs had suffered loss or damage and incurred expenses. The plaintiffs claimed the sum of USD 153,780 or damages, interest and costs.

The defendant's case was that the goods under the bills of lading were lost after discharge from the vessels at Dar es Salaam, after the cargoes had been delivered to the agent of the second plaintiff who was the consignee named in the bills, and after the completion of the contractual carriage by the defendant. The defendant further claimed that under cl 4 of the bills of lading, it had discharged its obligations after the cargoes were discharged from the vessels concerned.

The plaintiffs disagreed with the defendant's contention that the cargoes were delivered to Tanzania International Container Terminal Services (TICTS) as the second plaintiff's agent. The plaintiffs also contended that the defendant was not entitled to rely on cl 4 as exempting the defendant from liability. The plaintiffs submitted that, even though the defendant as carrier unloaded the cargoes from the vessels, it still had an obligation to deliver them to the consignee or his agent. The defendant failed to do so.

The defendant's application was made on the basis of an exclusive jurisdiction clause (the clause) contained in the bills of lading. The clause relied on is as follows:

LAW AND JURISDICTION: Any claim or dispute against the carrier arising under this Bill of Lading, including third-party proceedings or those involving several defendants, shall be governed, for the maritime part of the carriage either by the International Convention for the unification of certain rules relating to Bills of Lading dated Brussels, the 25 August 1924 as enacted in the country where the Bill of Lading is issued or when the Convention is not compulsorily applicable, by the said Convention non amended and, for the non-maritime part of the carriage either by the provisions contained in any International Convention or National Law compulsorily applicable or by the French Law applicable to the means of transport utilized and shall be determined in France by the 'Tribunal de Commerce du Havre'.

The defendant submitted that on a proper construction of the clause this was an exclusive jurisdiction clause where the parties had agreed that the forum for resolving claims or disputes was the Tribunal de Commerce du Havre in France.

The plaintiffs submitted that the clause was not an exclusive jurisdiction clause. The plaintiffs submitted that the clause was invalid because it provided for several different governing laws. In particular, the plaintiffs submitted that the wording of this clause meant that either the Hague Rules as enacted in the country where the bill of lading was issued (in this case, Hong Kong) applied or only the Hague Rules as unamended would apply. The plaintiffs submitted that this provided for the application of two different types of law.

Held: The defendant's application is allowed.

The clause is an exclusive jurisdiction clause whereby the parties have agreed that any claim or dispute against the defendant as carrier shall be determined in France by the Tribunal de Commerce du Havre.

Hong Kong is the place where the bills of lading were issued. By s 3 of the Carriage of Goods by Sea Ordinance, Cap 462, the Hague Rules as defined in the Ordinance apply to Hong Kong and shall have the force of law. The Hague Rules, as defined by s 2(1) of the Ordinance, are not the unamended version of the Hague Rules, but the Hague Rules as amended by the Protocol signed at Brussels on 23 February 1968 and by the Protocol signed at Brussels on 21 December 1979 which apply in Hong Kong. These are commonly referred to as the Hague-Visby Rules. The clause does not incorporate Hong Kong law as the governing law of the contract. The Court is unable to accept the plaintiffs' submission. The defendant rightly points out that the clause merely provides that for the maritime part of the carriage the Hague Rules, whether in its amended form, being the Hague-Visby Rules, or in its unamended form should apply.

The Court accepted the defendant's submission that there was an implied choice of law by the parties, namely, French law. The Court exercised its discretion in favour of a stay of proceedings. Therefore, it was unnecessary for the Court to consider whether the defendant is entitled to rely on cl 4 as a defence to the plaintiffs' claim.