| The "Jian He" [2000] 1 SLR 8; [1999] SGCA 71 |
| CA 55/1999 | |
| 18 Sep 1999 | |
| Court of Appeal | |
| Chao Hick Tin JA, L P Thean JA | |
| Danny Chua and Mohd Goush Marikan (Khattar Wong & Partners) for the appellants, Govintharasah Ramanathan (Gurbani & Co) for the respondents |
Judgment
[Please note that this case has not been edited in accordance with the current Singapore Law Reports house style.] Judgment reserved. Chao Hick Tin JA (delivering the judgment of the court): 1 This is an appeal against a decision of the High Court refusing the defendants’ application for a stay of proceedings on the ground of an exclusive jurisdiction clause. The facts 2 The plaintiffs, Darvimn Distributors Pte Ltd, a Singapore company, sold certain electronic goods (“the goods”) to a company in Johannesburg, South Africa. The goods were shipped in a container on board the defendants’ vessel Jian He, pursuant to a bill of lading dated 24 June 1996. The shipment was insured by plaintiffs with an insurer. Upon arrival of the vessel at Johannesburg, the goods were discharged from the vessel and transferred to the container terminal, to be delivered to the consignee upon presentation of the original bill of lading. 3 On 24 July 1996, the consignees in South Africa presented the original bill of lading to the defendants’ agents there (“Cosren”) in order to take delivery of the goods. However, it was found that the goods had already been surrendered upon the presentation of an apparently false bill of lading. Correspondence ensued between the plaintiffs and the defendants’ Singapore agents, Costar Shipping Pte Ltd (“Costar”), from 25 July to 7 November 1996. When the correspondence produced no satisfactory results, the plaintiffs made a claim against the insurers, who met the claim. The present action is brought by the insurers, pursuant to their right of subrogation. 4 The plaintiffs issued the present writ in rem against Jian He on 14 June 1997 and had it served on the defendants’ solicitors two days later. On 17 July 1997, the plaintiffs applied to amend the writ to delete the nine sister ships named in the action. The amended writ was only served on the defendants on 28 August 1997. The defendants filed a memorandum of appearance the next day. 5 About a year later, on 29 July 1998, the plaintiffs applied for summary judgment. The hearing was scheduled for 4 September 1998. However, on that day, the assistant registrar granted an adjournment to 23 October 1998 on the ground that the parties were negotiating a settlement. On 23 October 1998, the hearing of the summary judgment application was again adjourned, because the defendants had yet to file their show-cause affidavit and the plaintiffs had also yet to file their statement of claim as required under O 14 r 1. In granting the adjournment, the assistant registrar directed the plaintiffs to file and serve their statement of claim by 28 October 1998 and the defendants to file their show cause affidavit by 4 November 1998. On 24 October 1998 the plaintiffs filed and served their statement of claim. 6 However, instead of filing the show cause affidavit, the defendants on 4 November 1998 filed an application to stay all further proceedings in Singapore on the ground that the dispute was one which the parties had agreed to be determined in China. On 26 February 1999 the application was heard by the assistant registrar who allowed it with costs. The plaintiffs filed a notice of appeal on the same day. The learned judge heard the appeal on 31 March 1999 and reversed the decision of the learned assistant registrar. Thus, this further appeal to the Court of Appeal. Relevant Clauses 7 For the purposes of the action, two clauses in the bill of lading are relevant: Clause 3 Jurisdiction: This Bill of Lading is governed by the laws of the People’s Republic of China. All disputes arising under or in connection with this Bill of Lading shall be determined by the laws of the People’s Republic of China and any action against the carrier shall be brought before the Maritime Court in Guangzhou or Shanghai or Tianjin or Qingdao or Dalian where the principal place of business of the relevant company is situated. [emphasis added.] Clause 6 PERIOD OF RESPONSIBILITY the carrier shall not be liable for loss of or damage to the goods occurring before receipt of the goods by the carrier at the port of loading or the place of receipt or after delivery by the carrier at the port of discharge or place of delivery. [emphasis added.] Decision of learned judge 8 In the court below, the learned judge gave two main reasons for refusing a stay: (i) The contract of carriage had ended when the loss of the goods occurred. Accordingly, the jurisdiction clause, which was part of the contract of carriage, had no relevance to the plaintiffs’ claim. (ii) Even if the clause did apply, exceptional circumstances had been shown why a stay should not be granted as it was clear from the conduct of the defendants that they did not genuinely desire a trial in the contractual forum but were merely seeking a procedural advantage to avoid liability for the plaintiffs’ claim. 9 Before us, counsel for the appellants argued that both these grounds are erroneous. He also contended that there was no delay on the part of the appellants in filing the stay application. Does the claim fall outside the bill of lading? 10 Before we proceed to examine the grounds raised, we would like to make this observation. We are here concerned with a foreign jurisdiction clause and it is settled law that such a clause should be construed acording to the governing law of the contract: see The Sindh [1975] 1 Lloyd’s Rep 372. In our present case the bill of lading expressly provides that the laws of the People’s Republic of China shall apply. It follows that Chinese rules of construction should apply in the construction of the jurisdiction clause. But as there is no evidence before us showing that the rules of construction under Chinese law are any different from those under Singapore law, a Singapore court would be entitled to construe the jurisdiction clause in accordance with the rules of construction here: see The Frank Pais [1986] 1 Lloyd’s Rep 529 at p 530. 11 On the first ground, the learned judge held that “the loss of the cargo occurred after the goods had been discharged from the vessel. Consequently, the contract of carriage evidenced in the bill of lading had no application” and thus “the jurisdiction clause in the bill of lading was irrelevant.” She felt that the claim was really one founded on negligence even though in the statement of claim the plaintiffs also relied upon the bill of lading. 12 Counsel for the plaintiffs argued that once the goods had been discharged from the vessel, they were no longer in the custody of the carrier who would, therefore, not be liable for any loss or damage to the goods caused by the mishandling of third parties after the discharge. But he accepted that the carrier, as the bailee of the goods, had a duty to ensure that his servants or agents effect proper delivery of the goods to the rightful party. But this aspect of the duty was governed by the general law of tort, not contract as evidenced by the bill of lading. Scope of jurisdiction clause 13 As would be seen above, the wording of the jurisdiction clause is extremely wide. It applies to “[a]ll disputes arising under or in connection with this Bill of Lading”. It clearly would apply to a case where the goods, to which the bill of lading relates, were handed over to a stranger without the production of the bill of lading, irrespective of whether the claim was formulated in contract or in tort. There is nothing in that clause to suggest that a claim in tort “arising under or in connection with” the bill of lading should be excluded. To take such a view would not be in accordance with the intention of the parties. 14 In our view, a case which illustrates the point succinctly is The Playa Larga [1983] 2 Lloyd’s Rep 171 where the defendants agreed to sell sugar to the plaintiffs. However, the ship delivering the sugar sailed away from the port of delivery without delivering the cargo which had already been paid for by the plaintiffs. The contract between the parties contained a clause where the parties agreed to refer “all disputes arising out of this contract” to arbitration. The plaintiffs thus claimed in arbitration for damages for breach of contract and for conversion. The defendants tried to argue (inter alia) that the jurisdiction clause did not cover a claim in tort so that the arbitrators had no jurisdiction to hear the claim for conversion. Although the case can be distinguished on technical grounds (ie it involved an arbitration and not a jurisdiction clause), the holding is still relevant to the case at hand. Ackner LJ said (at p 183): … the contract was not an item of past history leading up to the claim. It was central to the whole dispute. The common sense of the situation was that a trader who had bargained and paid for a quantity of sugar, in the contemplation that he would receive physical possession of it, had had that sugar snatched away by the vendor just as it was about to be delivered to him. Having regard to the nature of the defence, to suggest that the resultant dispute as to whether the trader had a remedy and if so for how much, was not a dispute arising out of the contract, seems to us to be commercially quite unrealistic. Accordingly, Ackner LJ held (at p 183 RHC): The claim in conversion had a sufficiently close connection with the claims under the contract that it came within the arbitration clause. Adopting the words of Mr Justice Mustill, the contractual and tortious disputes were so closely knitted together on the facts, that the agreement to arbitrate on one can properly be construed as covering the other. Accordingly, we would have held, had the matter required a decision, that the whole of the dispute as reflected in the pleadings could be properly regarded as falling within the scope of the agreement to arbitrate. 15 The test of “close connection” has much to commend itself and we think it ought to apply to the construction of jurisdiction clauses as well. Such a test is far more likely to give effect to the intention of the contracting parties, as compared to the blanket rule that a claim in tort automatically takes the case out of the scope of the jurisdiction clause. The test would also avert the need for the court to get itself entangled in a web of arguments as to whether the foreign governing law classifies the claim as being one in contract or in tort. 16 This approach was also adopted by the Singapore High Court in the case The Eastern Trust [Counsel for the plaintiffs] submitted, based on the case of Fillite (Runcorn) Ltd v Aqua- Lift (a firm), that the jurisdiction clause would not apply to those of the plaintiffs’ claims which are not based on the contract contained in the bill of lading. I did not think there was any merit in this submission either. As stated by the learned authors of Cheshire and North’s Private International Law (12th Ed) at p 237: A plaintiff cannot avoid a foreign exclusive jurisdiction clause by simply framing his action in tort, since it is for the law governing (presumably) the agreement on jurisdiction, and not for English law as the law of the forum, to determine whether the claim lies in contract or in tort. 17 Accordingly, it is our opinion that the wording of the jurisdiction clause is wide enough even to cover a claim in tort if that claim arises under or in connection with the bill of lading. Contractual duties do not end at rail 18 There are ample authorities which pronounce that a carrier’s contractual duty under a bill of lading does not end upon the goods passing the ship’s rails. In Sze Hai Tong Bank v Rambler Cycle [1959] 2 Lloyd’s Rep 114, Lord Denning, who delivered the judgment of the Privy Council, stated (at p 120): It is perfectly clear law that a shipowner who delivers without production of the bill of lading does so at his peril. The contract is to deliver, on production of the bill of lading, to the person entitled under the bill of lading. [emphasis added.] 19 In The Houda [1994] 2 Lloyd’s Rep 541, it was held by Legatt J that (at p 553): [D]elivery without production of the bill of lading constitutes a breach of contract even when made to the person entitled to possession … 20 The plaintiffs have, however, contended that by virtue of cll 2 and 6 of the bill of lading, the contractual obligations ended upon the goods passing the ship’s rail. Clause 2 (cl 6 has been quoted above) reads: APPLICABILITY Notwithstanding the heading ‘Combined Transport Bill of Lading’, the provisions wet out and referred to in this Bill of Lading shall also apply where the transport as described on the face of the B/L is performed by one mode of transport only, and in such circumstances, the liability of the Carrier shall be limited to that part of the transport performed by him. [emphasis added.] The plaintiffs argued that this was not a combined transport bill of lading. It only applied to the period of the carriage of the goods by sea. Once the goods were discharged from the carrier’s vessel, they would no longer be in the custody of the carrier and they cannot be held liable under the contract for losses due to the acts of third parties, after discharge. 21 While we agree that in this instance there is nothing to indicate that the carrier had agreed to undertake more than one mode of transportation, we do not think there is any merit in the other aspects of the argument. In Sze Hai Tong Bank, supra, the bill of lading contained a clause stating that “the responsibility of the carrier, whether as carrier or as custodian or bailee of the goods, shall be deemed … to cease absolutely after the goods are discharged.” Nevertheless, the Privy Council held that the clause had to be “limited and modified to the extent necessary to enable effect to be given to the main object and intent of the contract” and that it had to be modified in such a way “so as not to permit the shipping company deliberately to disregard its obligations as to delivery”. 22 In Motis Exports v Dampskibsselskabet AF 1912 [1999] 1 Lloyd’s Rep 837 where goods had been delivered against false bills of lading and where the relevant clause in the bills of lading read: Where the carriage called for commences at the port of loading and/or finishes at the port of discharge, the Carrier shall have no liability whatsoever for any loss or damage to the goods while in its actual or constructive possession before loading or after discharge over ships rail or if applicable, on the ship’s ramp, however caused … Rix J nevertheless, in spite of the clear words in that clause, held: I do not see why a natural reading of this language should regard it as including misdelivery of the goods by the defendants out of their possession, whether such misdelivery lie in the absence of any bill of lading or in the absence of an original or genuine bill of lading. If that alternative were a possible reading, it is not one which should lightly be adopted against the background of the fundamental importance of the shipowner’s promise to deliver up only against an original bill of lading. If that was what the defendants had intended to provide, they could so easily have done so. 23 In The Zhi Jiang Kou [1991] 1 Lloyd’s Rep 493, the Court of Appeal of New South Wales had the occasion to consider a clause identical to that of our cl 6. There the goods were, as in this case, handed over without the production of the bill of lading and it was contended that what had occurred amounted to conversion and was outside the scope of the bill of lading (or the equivalent provisions of the Hague Rules). This contention was rejected. We would quote this statement of Kirby P (at p 516): If there is an ambiguity, I should prefer to adopt the construction which gives the Hague Rules a sensible operation which does not artificially terminate their effect at the ship’s rail. In fact, Gleeson CJ was even more explicit when he said (at p 498): It should be added that cl 6 of the bill of lading by defining the carrier’s period of responsibility as a time extending up to delivery, eliminates the possibility of an argument that cl 10, (on time-bar) as a matter of construction, ceases to have effect after discharge. No escape in formulating claim in tort 24 Accordingly, we are of the view that the court below erred in holding that the jurisdiction clause had no relevance to the appellants’ claim. The bill of lading evidenced one transaction: to convey the goods to the port of discharge and to deliver them upon presentation of the original bill of lading. Clause 6 of the bill of lading provides that the period of responsibility of the carrier was up to “delivery by the carrier at the port of discharge”. Delivery must mean delivery to the rightful person entitled thereto. The fact that the wrongful delivery is also a tort, does not render it any less a breach of contract. 25 In our opinion, it is not open to the plaintiffs to contend that as they are also suing in tort, the foreign jurisdiction clause is not applicable. We are fortified in this view by the following passage of Lord Scarman in the Privy Council decision in Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank Their Lordships do not believe that there is anything to the advantage of the law’s development in searching for a liability in tort where the parties are in a contractual relationship. This is particularly so in a commercial relationship. Though it is possible as matter of legal semantics to conduct an analysis of the rights and duties inherent in some contractual relationships including that of banker and customer either as a matter of contract law when the question will be what, if any, terms are to be implied or as a matter of tort law when the task will be to identify a duty arising from the proximity and character of the relationship between the parties, their Lordships believe it to be correct in principle and necessary for the avoidance of confusion in the law to adhere to the contractual analysis: on principle because it is a relationship in which the parties have, subject to a few exceptions, the right to determine their obligations to each other, and for the avoidance of confusion because different consequences do follow according to whether liability arises from contract or tort, eg in the limitation of action. 26 Equally pertinent is the following observation of Oliver J in Midland Bank Trust Co Ltd v Hett, Stubbs and Camp A concurrent or alternative liability in tort will not be admitted if its effect would be to permit the plaintiff to circumvent or escape a contractual exclusion or limitation of liability for the act or omission that would constitute the tort. Subject to this qualification, where concurrent liability in tort and contract exists the plaintiff has the right to assert the cause of action that appears to be the most advantageous to him in respect of any particular legal consequence. 27 In a case such as the present, to allow a claim in tort to proceed in a different forum on the ground that such a claim is outside the jurisdiction clause would only give rise to a “forensic nightmare”: see per Steyn LJ in Continental Bank v Aeakos Compania [1994] 1 Lloyd’s Rep 505 at p 508. Strong cause 28 It is trite law that when a party seeks to bring an action in our courts in breach of an exclusive jurisdiction clause, he must show “strong cause” (The El Amria [1981] 2 Lloyd’s Rep 119) why the court should exercise its discretion in his favour and assist him in breaching his promise to bring the action in the contractual forum. What is “strong cause” and what are the circumstances the courts would take into account were addressed by this court in Amerco Timbers Pte Ltd v Chatsworth Timber Corp Pte Ltd [1975–77] SLR 258 at p 260, citing from a passage of Brandon LJ in The El Amria, supra, at pp 123–124, as follows: The court in exercising its discretion should grant the stay and give effect to the agreement between the parties unless strong cause is shown by the plaintiff for not doing so. To put it in other words the plaintiff must show exceptional circumstances amounting to strong cause for him to succeed in resisting an application for a stay by the defendant. In exercising its discretion the court should take into account all the circumstances of the particular case. In particular, the court may have regard to the following matters, where they arise: (a) In what country the evidence on the issues of fact is situated or more readily available, and the effect of that on the relative convenience and expense of trial as between the Singapore and foreign courts. (b) Whether the law of the foreign court applies and, if so, whether it differs from Singapore law in any material respects. (c) With what country either party is connected and, if so, how closely. (d) Whether the defendants genuinely desire trial in the foreign country, or are only seeking procedural advantages. (e) Whether the plaintiffs would be prejudiced by having to sue in the foreign court because they would: (i) be deprived of security for their claim; (ii) be unable to enforce any judgment obtained; (iii) be faced with a time-bar not applicable here; or (iv) for political, racial, religious or other reasons be unlikely to get a fair trial. 29 With regard to factor (a) listed above, the circumstances in the present case favour neither Singapore nor China, as the evidence touching on the main issue of breach of duty is to be found in South Africa. Of course, questions touching on ownership and shipment would be found in Singapore. Factor (b), prima facie, favours China because the jurisdictional clause provides that Chinese law shall apply to the bill of lading. Factor (c) is neutral in relation to the parties because the plaintiffs are a Singapore company and the defendants, a Chinese company. It seems to be in relation to factors (d) and (e)(iii) that the learned judge below felt that exceptional circumstances had been shown. 30 There is a limitation period of one year under Chinese law which may not be extended by mutual consent of the parties. It would be too late for the plaintiffs to commence any action in China. While these circumstances may, on first impression, seem quite compelling, we must point out an even stronger contrary argument. In Citi-March v Neptune [1997] 1 Lloyd’s Rep 72 at p 75 Colman J stated the point in this manner: The feature of the time bar consideration which differentiates it from all the others is that its existence arises from the omission of the plaintiff to take the steps necessary to preserve time in the Courts of the contractual jurisdiction. Therefore, when having failed to take such steps, he invites the English Court to refuse a stay on the grounds that he would be prejudiced by the claim then being time barred in the contractual forum, what he is really doing is praying in aid of the jurisdiction of an uncontractual forum his own failure to pursue his claim in the contractual forum in sufficient time. In essence, his prejudice is self-induced. [emphasis added.] 31 In the later case The MC Pearl [1997] 1 Lloyd’s Rep 566 at p 570 Rix J expressed a view in similar vein as follows: In the absence of any authority, I would have regarded the failure of a plaintiff to commence proceedings in time within the contractual jurisdiction as prima facie a factor assisting the defendant in enforcing the parties’ jurisdictional bargain. After all, those who contract for an exclusive jurisdiction must be taken to be aware of the limitation law of that jurisdiction, a fortiori if the time limit is a contractual one. If, therefore, a plaintiff fails to bring proceedings in the contractual jurisdiction within time, the defendant has an accrued right of limitation which prima facie ought to protect him. … The idea that one could escape the limitation period applicable in the contractual jurisdiction by commencing proceedings is another, ex hypothesi, uncontractual jurisdiction seems strange and contrary to principle. The further idea that the existence of a time bar in the contractual jurisdiction which does not apply in England should actually assist the plaintiff to preserve his action in England seems even stranger. 32 The rationale for such a judicial approach was elaborated in an earlier case, The KH Enterprise [1994] 1 Lloyd’s Rep 593, where Lord Goff quoted with approval (at p 606) the following passage taken from the judgment of the Hong Kong Court of Appeal: If you find yourself bound to litigate in a forum which is more expensive than the one you would prefer, deliberately to choose the latter rather than the former seems to me (although the judge thought otherwise) to be forum shopping in one of its purest and most undesirable forms. And if in pursuance of your deliberate decision to litigate here instead, you let time run out in the jurisdiction in which you are bound to litigate, without taking the trouble (because of the expense) even to issue a protective writ there, you are not, as I think, acting reasonably at all; you are gambling on the chance of a stay on being refused here and you cannot complain if you then lose that gamble. That may seem to you at the time a justifiable commercial risk to take. But that, in the context of the litigation, does not make your decision a reasonable one. 33 Thus, the mere fact that the action would be time-barred in China is not of itself a sufficient ground for the court to exercise its discretion in favour of a plaintiff. It is really a neutral point, as refusing a stay would deprive the defendants of their accrued rights and granting a stay would defeat the plaintiffs’ claim altogether. The plaintiffs must justify their conduct in allowing limitation to arise in the contractual forum. They must show that they did not act unreasonably in failing to commence proceedings within time in the contractual forum, such as, by issuing a protective writ: see also Spiliada Maritime Corp v Cansulex Ltd No explanation for non-issue of protective writ in contractual forum 34 We must point out that the plaintiffs have not filed any affidavit explaining their failure to file a protective writ in China. However, their counsel submitted here and below that they had not filed any protective writ in China because the appellants misled them into thinking that the appellants would not contest the jurisdiction of the Singapore courts. The learned judge accepted that argument as she stated in her grounds of decision: It was obvious that the defendants’ repeated requests for one document after another … were completely irrelevant to the issues of their liability and the plaintiffs’ entitlement to sue; they were ruses to delay the matter until the time-bar in China had lapsed. 35 There is a need to look at this ground. It is true that the defendants did request for documents, including those pertaining to the details of the plaintiff’s set-up, correspondence between the plaintiffs and the consignee and the equipment exchange receipts (EIR) issued by the Port of Singapore Authority. The court below accepted the plaintiffs’ evidence that an EIR is issued when a container enters a port and will not normally be provided to the shipper by his forwarder. The court below agreed with the plaintiffs that there was no rationale behind the defendants’ request for the EIR as there was no dispute that the goods were indeed shipped on the vessel and discharged at Johannesburg. Accordingly, the learned judge concluded that the repeated requests for the documents were “ruses to delay the matter until the time bar in China had lapsed.” 36 In our view, this may be reading too much into the requests for documents. In considering a claim of this nature it is logical for a shipowner to request for all documents which are deemed relevant, not just on the question of liability but also on the claimant’s entitlement to sue. The requests for documents were on a without prejudice basis. Nothing in the correspondence indicated that the defendants would not be enforcing the jurisdiction clause. 37 When the plaintiffs filed their writ here, the limitation period had not expired in China. It is true that the defendants could have made an application for a stay between the time when the writ was served on them on 16 June 1997 and 24 July 1997, when the time-bar in China would arise, which was a period of over five weeks. Such an application might then have prompted the plaintiffs to commence proceedings in China. But in our view such a failure on the defendants’ part could not in itself provide the plaintiffs with any good reason for failing to protect their position in China. In The Biskra [1983] 2 Lloyd’s Rep 59 at p 62 Sheen J opined: There is no obligation on a person who may become a defendant in proceedings to tell the plaintiff where to issue those proceedings or to spur the plaintiff into commencing proceedings. 38 In The Zhi Jiang Kou, supra, the bill of lading contained a limitation period within which the parties were to bring their action in the contractual forum. Prior to the lapse of the limitation period, there had been some correspondence between the parties concerning the settlement of the plaintiffs’ claim. By the time limitation set in, the plaintiffs had yet to commence any action in the contractual forum. The plaintiffs pleaded that the correspondence estopped the defendants from relying on the time-bar. The learned judge at first instance agreed. This was reversed on appeal. Kirby P held (at p 514 LHC): But did conscience, nonetheless, require … that [the solicitors for the defendants] should have alerted his opponent’s solicitor about an advancing time bar? Ordinarily, there would be no such duty. Indeed, in some cases, to do so would be in breach of the duty to the solicitor’s own client. 39 Even the plaintiffs have to concede before us, and we think rightly, that the defendants had no duty to warn them of the impending time bar. So there can be no question of the plaintiffs being misled. But even looking at the circumstances as a whole, the conduct of the defendants was also consistent with the fact that they themselves could also have overlooked the limitation point in the contractual forum. If the defendants were really waiting for limitation to set in before they applied for a stay, surely they would have done it much earlier, well before the O 14 application of the plaintiffs. They would not have waited for more than a year. 40 Accordingly, we hold that although limitation has set in in the contractual forum, that per se is really a neutral factor. Delay 41 The learned judge below also noted that the defendants made the stay application “inordinately late”, and that was a factor the court could take into account in deciding whether to grant a stay. 42 The defendants argued that there was no delay on their part and relied upon O 12 r 7, which provides: Dispute as to jurisdiction (O 12 r 7) 7—(1) A defendant who wishes to dispute the jurisdiction of the Court in the proceedings by reason of any such irregularity as is mentioned in Rule 6 or on any other ground shall enter an appearance and within the time limited for serving a defence [emphasis added] apply to the Court for … (g) a declaration that in the circumstances of the case the Court has no jurisdiction over the defendant in respect of the subject-matter of the claim or the relief or remedy sought in the action; or (h) such other relief as may be appropriate. 43 They said that while the writ was first served on them on 16 June 1996, the statement of claim was only filed and served on 24 October 1998. Under O 18 r 2(1) the defendants would only be required to serve their defence within 14 days of that date, that is, by 7 November 1998. As the application for stay was filed on 4 November 1998 it was well within the time period prescribed under O 12 r 7. Accordingly, there was no delay by the defendants. 44 In our opinion, this argument is misconceived. O 12 r 7 only applies where the jurisdiction of the court is being challenged. A stay application on the ground of a foreign jurisdiction clause does not challenge the jurisdiction of the court. It is asking the court to exercise its discretion not to assume jurisdiction over the case but to let the case be heard in another more appropriate forum, in this instance, a contractual forum. In The Sydney Express [1988] Lloyd’s Rep 257 at p 262 Sheen J said: Lord Fraser pointed out [in the case of Williams & Glyn’s Bank v Astro Dinamico [1984] 1 Lloyd’s Rep 453] that Order 12 r 8(1)(h) [ie the equivalent of our O 12 r 7(1)(h)], although wide in its terms … must be read in its context and is not appropriate to include an order to stay. O 12 r 8 deals with the case in which a defendant wishes to dispute the jurisdiction of the court. An application for a stay is the appropriate procedure for enforcing an agreement to litigate in some other jurisdiction when a writ has been issued and served without irregularity other than a breach between the parties. 45 In Dicey and Morris on The Conflict of Laws (12th ed) at p 289 the learned authors stated that “an application to stay proceedings is not a challenge to the jurisdiction of the court.” 46 In this regard, we would observe that in the section in The Supreme Court Practice 1999 dealing with stay on the ground of an exclusive jurisdiction clause, no mention of the English equivalent of our O 12 r 7 was made. It seems to us clear that the power of the court to grant a stay is pursuant to the provisions of para 9 of the First Schedule to the Singapore Court of Judicature Act, which read: Power to dismiss or stay proceedings where the matter in question is res judicata between the parties, or where by reason of multiplicity of proceedings in any court or courts or by reason of a court in Singapore not being the appropriate forum the proceedings ought not to be continued. 47 However, while a defendant should, if he wishes to have proceedings stayed on the ground that there is a foreign jurisdiction clause, make the application without delay after service of the writ (The Biskra [1983] 2 Lloyd’s Rep 59), it does not follow that when inordinate delay is shown, the stay application must be refused. 48 In The Ruben Martinez Villena (No 2) [1988] 1 Lloyd’s Rep 435, there was an exclusive jurisdiction clause to refer disputes to a Cuban forum. The writ instituted in England was served on 16 September 1986. The plaintiffs there entered judgment in default of appearance. This default judgment was subsequently set aside. On 21 May 1987 the plaintiffs served an amended statement of claim. On 29 May 1987, the defendants applied for a stay. Objection was taken that the application for stay was made very late and that no indication was given of such an intention at the time when the default judgment was set aside. Nevertheless, Sheen J held: [Counsel] argued forcefully that on any reasonable view the conduct of the defendants was such that it gave rise to the inference that the defendants had elected to litigate in England and should not now be allowed to change their minds. He submitted that as a matter of discretion the court should refuse to stay the action because the defendants had given a misleading impression of their intentions and had not moved the court for a stay at the earliest opportunity. I feel bound to say that it seems to me that it would be wrong in principle to exercise my discretion by refusing a stay on those grounds. I start from the premise that the plaintiffs entered into a contract to have the dispute which gave rise to this action decided in Cuba. If the conduct of the defendants had been such that it evinced a clear intention to vary the terms of the contract by waiving the right to trial in Cuba, the defendants’ application for a stay would fail. But there is no halfway house. In my judgment it is not open to the court to conclude that the conduct of the defendants falls short of waiver but is so ‘reprehensible’ that the court will decline to enforce the contract as a matter of discretion. 49 In The Vishva Apurva Delay by the defendants is a factor in favour of the plaintiffs only if it amounts to a waiver of the defendants’ rights under the exclusive jurisdiction clause. 50 It seems to us that to constitute “waiver”, the conduct of the defendants must have been such as to evince a clear intention to vary the terms of the contract, ie to waive the right to trial in the contractual forum. 51 The plaintiffs have sought to rely upon a fax from the defendants’ solicitors to the plaintiffs’ solicitors, indicating that the former had instructions to accept service of process, as constituting waiver. Reliance was also placed on Manta Line Inc v Seraphim Sofianites [1984] 1 Lloyd’s Rep 14 where it was held that a defendant would be treated as having submitted to jurisdiction once his solicitor accepts service on his instructions. The plaintiffs argued that in the present case as the defendants did not intend to challenge the jurisdiction of the Singapore courts, that amounted to an express waiver of their rights to apply for a stay of the proceedings on the basis of the foreign jurisdiction clause. 52 With respect, we think counsel for the plaintiffs fell into error in failing to appreciate the distinction between submission to jurisdiction and an application to court asking it to refrain from exercising jurisdiction because the parties have agreed to submit the dispute to a different forum. As mentioned above, in the latter situation the applicant is not questioning the jurisdiction of the court. In the case in hand, the defendants had done nothing else evincing an intention to waive the jurisdiction clause. This is unlike the position in The Sidi Bishr [1987] 1 Lloyd’s Rep 42 where the defendant took a step in the proceedings by filing a preliminary act. It is true that here there was a delay of some one year five months before the application was made. But we do not see how the delay per se could be translated into “waiver” when the defendants had taken no step in the proceedings. They cannot be said to have elected Singapore jurisdiction. Is there a “dispute” 53 We turn next to the final point. Is there a defence to the claim? Or putting it another way, is there a dispute? It is here that the defendants’ position becomes untenable and which shows that the defendants are really not interested in a trial in China but are seeking a procedural advantage. On the evidence before us, there is no indication by the defendants that they have any defence to the claim. Furthermore, on the question of the entitlement to sue, other than asking for certain documents, the defendants have not asserted that the plaintiffs are not entitled to sue. Accordingly, there is really no dispute to be determined by the contractual forum. 54 Shortly after we reserved judgment, counsel for the respondent drew our attention to a number of authorities which show that where a defendant has no real defence to the claim, the proceedings should not be stayed to allow the claim to be heard in the contractual forum. This is so even if the plaintiff’s entitlement to sue is being challenged. We will consider these cases in some detail. 55 We will start with The Vishva Prabha [1979] 2 Lloyd’s Rep 286, where the plaintiffs had shipped bales of cloth on board the defendants’ ship. However, there was a hole in the bulkhead of the hold. Oil went through the hole and damaged the cloth. The plaintiffs brought an action in England despite the existence of a jurisdiction clause referring disputes to the place of the carrier’s principal place of business, Bombay. The plaintiffs asserted that the hole had been in the bulkhead even before the loading of the goods, so that the defendants had no defence to the plaintiffs’ claim. All the defendants could do was to suggest that the hole could have been caused by an act of sabotage that occurred after the goods had been loaded into the hold. Sheen J, having examined the allegation of sabotage, rejected it. He said (at p 288): Apart from the suggestion of sabotage in Boulogne, as a suggestion that cannot be excluded, the shipowners have not at any stage since the damage occurred suggested any defence to this claim. I am left in no doubt that as to that part of the claim there is no dispute at all. I hold that there is no dispute on the question of liability, which ought to be submitted to the Court in India. Sheen J then had this to say about the possibility of disputes pertaining to the defendants’ entitlement to sue (at p 288): It is said in an affidavit of … the solicitor for the defendants, that the defendants dispute (a) the plaintiffs’ title to sue and (b) the quantum of claim. So far as both of these disputes are concerned, it seems to me that the attitude adopted by the defendants can be expressed as ‘You must prove your right to sue, you must prove the amount of your damage.’ I have no doubt that I should not grant a stay in respect of those matters which, if they really are seriously disputed, can be dealt with on documents which are in this country. I have to consider whether as a matter of discretion I should stay these proceedings in order that the suggested dispute as to title to sue and the suggested dispute as to quantum should be referred to the Court in Bombay. Having considered those matters which I am called upon to consider I refuse a stay. [emphasis added.] and concluded: It seems to me to be quite clear on all the facts, and having considered the way in which the matter has come to trial, that the defendants are only seeking the advantage of delay and are not really anxious that the matter should be heard in the courts of Bombay for any other reason. 56 The next case is The Atlantic Song [1983] 3 Lloyd’s Rep 394, where the plaintiffs’ cars shipped on board the defendants’ vessel were later found to have suffered discoloration when they were unloaded at their destination. The plaintiffs commenced proceedings in England to claim for the damage notwithstanding that there was an exclusive jurisdiction clause in the bill of lading requiring disputes to be submitted to the Swedish courts. In his judgment, Sheen J held (at p 396): No company other than the shippers and the consignees had any interest in the cars at any time relevant to the claim made in this action. [The solicitor for the plaintiffs] exhibited to an affidavit copies of the bills of lading, on which the names of the shipper and consignees appear, and also invoices relating to the sale of the cars by the shippers to the consignees. There can be no doubt that one or other of the plaintiffs has title to sue for the damage alleged to have been sustained. I mention that at the outset because this motion has been supported by an affidavit sworn by Mr Adrain Moylan [the solicitor for the defendants] … in which he set out what, in his view, are the issues in this action. The first issue was said by Mr Moylan to be: ‘Do the plaintiffs have title to sue?’ The answer to that question is clear. One of the plaintiffs must have title to sue. Mr Moylan was invited to give his reason for saying that there is an issue as to whether the plaintiffs have title to sue. He has not done so. But in his affidavit he said ‘Insofar as title to sue is concerned, the evidence will be provided from Japan’. He did not say what further evidence is needed. [emphasis added.] 57 Sheen J then went on to lay out certain other aspects of the case which in his view tended to indicate that the defendants were unable to raise any issue in dispute which they could possibly have wanted to be tried in the contractual forum. For example, the defendants had agreed to grant an extension of time for the plaintiffs to commence proceedings and in so agreeing did not even suggest that the plaintiffs were not entitled to the goods under the bill of lading. Thus Sheen J held (at p 399): I next turn to consider whether the defendants genuinely desire trial in Sweden, or are only seeking procedural advantages. On that question I have been left in no doubt from all that has passed between the parties and from what has been said and left unsaid in the affidavit of Mr Moylan that the defendants do not genuinely want a trial in Sweden. By this motion they are seeking to gain a tactical advantage. 58 The third case is The Frank Pais [1986] 1 Lloyd’s Rep 529, where goods were shipped on board the defendants’ vessel for carriage to Japan. When they were unloaded at their destination, there was found to be a shortage in the goods. Some of the goods were also damaged. In spite of there being a foreign jurisdiction clause, the plaintiffs commenced an action in England claiming for the damage to and the shortfall in the goods. Sheen J carefully went through the affidavits of the defendants’ solicitor that had been tendered in support of the stay application and took note of the correspondence that transpired between the parties. Some of the remarks made by the judge are germane to the present appeal. He said (at pp 532–533): In a second affidavit … [the solicitor for the defendants] says in para 3 that as the defendants have never admitted that they are liable to the plaintiffs there must be a dispute between the parties within the meaning of cl 3 of the bill of lading. He goes on to say - … I do not propose to engage in any further discussion on the merits of the plaintiffs’ claim, an exercise which I would submit is wholly inappropriate at this stage … I do not understand why it is inappropriate to discuss the merits of a claim if this can be done, thereby saving the cost of litigation. If the defendants have an answer to the claim put forward by the plaintiffs, I can see no reason why they should not say what that answer is. In relation to the plaintiffs’ title to sue, Sheen J (at pp 533–534) said: On this state of the evidence it is, in my judgment, clear that the defendants, upon whom the burden lies, have not demonstrated that there is any dispute about their liability for all but a very small part of the claim. They do, however, say that they do not admit the plaintiffs’ title to sue. If they wish to be satisfied on that point I have no doubt that the plaintiffs will disclose the necessary documents of title so that the defendants can satisfy themselves on that point. [emphasis added.] and concluded (at p 534): The court has a discretion whether to grant a stay or not, but that discretion should be exercised by granting a stay unless the plaintiffs show strong cause for not doing so. In exercising that discretion the court should take into account all the circumstances of the particular case. In particular I am concerned with whether the defendants genuinely desire trial in Cuba, or are only seeking procedural advantages. So far as the issue of title to sue is concerned that can be resolved by having the relevant documents posted from Japan and giving inspection of them in London or in Cuba. There is no need to spend money on litigation to resolve that issue. 59 The last case is the recent case of Standard Chartered Bank v Pakistan National Shipping Corp [1995] 2 Lloyd’s Rep 365 which concerned a contract for the sale of bituman. The buyers opened a letter of credit in favour of the sellers, which was confirmed by the plaintiff bank SCB. A condition of payment under the letter of credit was the tender of clean shipped on board bills of lading, shipment to be effected by the deadline specified. When loading of the goods was delayed so that the deadline could not be met, the sellers persuaded the shipowners (“PNSC”) to authorise the ante-dating of the bill of lading. PNSC agreed and authorised its agent (“Seaways”) to do so. Both PNSC and Seaways knew that the date being entered on the bill of lading was false. The plaintiff bank, who made payment on the letter of credit, subsequently brought an action in England for fraudulent misrepresentation against PNSC, Seaways and the buyers. There was however an exclusive jurisdiction clause referring all disputes to the courts of PNSC’s principal place of business, which was Pakistan. 60 Although the governing law of the contract was also that of Pakistan, Clarke J went on to consider the merits of the defences advanced by PNSC and Seaways and came to the conclusion that both parties had no arguable defence to SCB’s claim. He then held (at p 378): It appears to me that in a case where a defendant has no arguable defence on liability and quantum that would be a strong reason to refuse a stay because, as I said in the Adria Services YU case, there would be no real issues between the parties which should be tried either here or elsewhere. On the basis of the conclusions which I have expressed above, neither PNSC nor Seaways has an arguable defence on liability. There is therefore no sense in staying the action in order to enable liability to be determined in Pakistan, because SCB would either obtain summary judgment there; or would incur unnecessary costs in establishing liability there, that is a liability to which there is no defence 61 Counsel for the defendants sought to distinguish these cases on the ground that they involved claims for cargo damage whereas in our present case the cargo was lost because of theft brought about by the presentation of a forged bill of lading. We do not see how this distinction is relevant. The crucial question is whether the defendants are able to raise a genuine dispute to the claim. The manner in which the goods were lost is immaterial so long as liability cannot be disputed. 62 Reverting to the present appeal, in the light of these authorities, and on the evidence set out in the affidavits, there is really no defence to the claim, the defendants having released the goods against a forged bill of lading. There is nothing to proceed to trial in China. Even on the question of the entitlement to sue, the defendants have not challenged the plaintiffs’ right thereof. We would further add that even if the defendants do challenge the plaintiffs’ right to sue, the evidence relating thereto are to be found wholly in Singapore, the goods having been shipped from Singapore. No useful purpose would be served in ordering a stay. 63 In the premises we hold that a strong cause has been shown why there should not be a stay of proceedings. To grant the stay in these circumstances would not only cause further delay, it would also give undue advantage to the defendants. We, therefore, do not think the defendants genuinely wanted a trial in China. Judgment 64 In the result the appeal is dismissed. There shall accordingly be no stay of proceedings. 65 On the question of costs, it would have to follow the event. The only question is whether, although the defendants have ultimately failed, should the plaintiffs be entitled to costs even in respect of those issues upon which we have ruled in favour of the defendants. We do not think it would be just to give costs for that. Taking a broad brush, we are of the opinion that one-third costs of the appeal should be fair in the circumstances. We so order accordingly. 66 The security for costs shall be paid out to the plaintiffs’ solicitors to account of costs of this appeal. Appeal dismissed. Reported by Christopher Tan Pheng Wee