High Court: Judge declines jurisdiction in favour of Hong Kong in shipping dispute



Killian Flood BL
Killian Flood BL

The High Court has acceded to an application brought by a defendant to have a case heard in Hong Kong pursuant to an exclusive jurisdiction clause. The court determined that a sea waybill produced by the defendant was “excellent evidence of contractual terms” and that no proper controverting evidence to the jurisdiction clause had been properly adduced by the plaintiff.

In so ruling, the court noted its dissatisfaction with evidence produced by the plaintiff’s senior counsel solicitor, saying that certain averments were of “significant concern.”

Background

The plaintiff, Teva (Canada) Limited, was a large pharmaceutical company based in Toronto, while the defendant was Panalpina World Transport (Ireland) Limited. Under a sea waybill from 4 December 2017, the parties agreed to the shipping of a consignment of Novo Salbutamol. The plaintiff was described on the waybill as the consignee, with Ivax Pharmaceuticals Ireland being the shipper, while the defendant was described as an agent of the carrier, Pantainer (HK) Limited.

After the goods arrived in Canada, the shipment was found to be defective. It was alleged that the goods were not stored/shipped properly. Subsequently, the plaintiff issued a plenary summons against the defendant, claiming damages for negligence and breach of contract pursuant to a bill of lading.

No statement of claim was delivered by the plaintiff and the bill of lading referred to in the plenary summons was never exhibited before the court.

The sea waybill contained certain standard conditions on its face, including the exclusive jurisdiction clause on the reverse side. When this was raised by the defendant in May 2019, the plaintiff claimed that this was the first time the reverse side had been provided and the plaintiff had never previously been aware of the jurisdiction clause.

The defendant submitted that the contract between the parties was evidenced by the sea waybill, and therefore Hong Kong was the proper jurisdiction. The plaintiff asserted that the waybill was not part of the contract between the parties because it was uploaded on 4 December 2017, a day after the ship had set sail. Further, it was alleged that the waybill had not been provided to the plaintiff when the contract concluded on 23 November 2017.

The plaintiff also argued that the waybill did not reflect the contractual terms which were agreed between the parties under the bill of lading. Finally, it was submitted that Ireland was the forum conveniens for the dispute.

High Court

Giving judgment in the case, Ms Justice Niamh Hyland began by highlighting some irregularities with the plaintiff’s evidence. First, it was noted that despite the plaintiff claiming that the waybill did not reflect the contract terms, the plaintiff failed to put the conflicting bill of lading before the court at all. As such, the court mainly had to rely on the evidence proffered by the defendant. Further, the court said it was a “notable feature” that no representative of the plaintiff had sworn an affidavit in the case, which did not assist with resolving factual conflicts in dispute. The court said that the “indirect nature of the evidence in this case gave rise to problems.”

The greatest point of interest related to averments made by the plaintiff’s solicitor, which was a “significant concern” to the court. In the solicitor’s affidavit, the plaintiff resiled from the position that the waybill was only presented to it in May 2019, and apparently accepted this occurred in December 2017. However, the court was not satisfied that this was sufficiently clear in the affidavit, which required “careful reading” to properly assess. The error was repeated in the written submissions at several points.

The error was significant because, under the case law, the date which the plaintiff received the entirety of the waybill was important to determine the applicable contractual terms. This prompted the court to state that, as senior counsel, the solicitor had a “particular obligation to the court to ensure that the material placed before the court is clear and accurate and that counsel are properly briefed.” The court said this did not occur in the present case.

The court then considered the applicable principles regarding the legal status of the waybill. The court considered old cases such as Glyn Mills Currie & Co v. The East and West India Dock Company (1882) 7 App. Cas. 591 and Armour and Company Limited v. Leopold Walford (London) Limited [1921] 3 K 473. Based on these authorities, the court held that the waybill was very strong evidence of the contractual terms agreed between the parties.

The court rejected submissions from the plaintiff that the Irish courts had jurisdiction in the matter under the Brussels Regulation (Recast), stating that the Regulation only applied in the context of clauses conferring jurisdiction on EU states. The exclusive jurisdiction clause was a valid term of the contract and, accordingly, Hong Kong was the appropriate forum.

Further, the court declined to rule that Ireland was the forum conveniens for the proceedings, holding that the case was “a truly international situation” with parties based in Canada, Ireland, Hong Kong and Switzerland. The key facts did not centre did not centre on Ireland at all, the court said. As such, the court was not persuaded that Ireland was an appropriate forum for the dispute based on the common law rules.

Conclusion

The court acceded to the defendant’s application to decline jurisdiction and held that Hong Kong was the proper jurisdiction for the proceedings. The court’s provisional view was that the defendant was entitled to the costs of the proceedings.

© Irish Legal News Ltd 2021



Other judgments by Ms Justice Niamh Hyland