Spiliada Maritime V. Cansulex Notes

Spiliada Maritime v. Cansulex

Facts

The appellants are owners of a bulk carrier, of about 20,000 tonnes deadweight, called Spiliada. The shipowners are a Liberian Corporation, and their vessel flies the Liberian flag; but their managers are in Greece, though some part of the management takes place in England. The respondents carry on business in British Columbia as exporters of sulphur. The shipowners chartered their vessel to an Indian company called Minerals & Metals Trading Corporation of India Ltd. (whom I shall refer to as "M.M.T.C.") under a voyage charter dated 6 November 1980, for the carriage of a cargo of sulphur from Vancouver to Indian ports… The sulphur was loaded on board the vessel by order of Cansulex, who were f.o.b. sellers of the sulphur to M.M.T.C. Bills of lading were then issued to, and accepted by, Cansulex… Clause 21 on the reverse of the bills of lading provided that, subject to certain clauses which are for present purposes immaterial, the bills of lading “no matter where issued, shall be construed and governed by English law, and as if the vessel sailed under the British flag.”

It has been alleged by the shipowners that the cargo of sulphur so loaded on the vessel was wet when loaded and as a result caused severe corrosion and pitting to the holds and tank tops of the vessel. The shipowners have claimed damages from Cansulex in respect of the damage so caused.

Leave was obtained by the shipowners to issue and serve a writ upon Cansulex outside the jurisdiction on a ground contained in the then R.S.C., Ord. 11, r. 1(1)(f)(iii), viz. that the action was brought to recover damages in respect of breach of a contract which was by its terms governed by English law… Cansulex then applied for an order to set aside such leave and all subsequent proceedings.

Court of First Instance

Staughton J. heard that application and dismissed it, holding that there was a good arguable case that the Canadian companies were parties to a contract governed by English law, and that the case was a proper one for service out of the jurisdiction.

1. Convenience of Witnesses - It is also true that two witnesses in the Cambridgeshire action decline to come to England to give evidence, so that their evidence will have to be taken on commission in North America. Nevertheless, I reach the clear conclusion that Vancouver is not overall a more suitable place for trial than England in terms of the convenience of witnesses. Indeed, if one assumes that the parties will wish to have the same experts as in the Cambridgeshire, I would say that England is shown to be more suitable.

2. Cambridgeshire Factor - The plaintiff's solicitors have made all the dispositions and incurred all the expense for the trial of one action in England; they have engaged English counsel and educated them in the various topics upon which expert evidence will be called; they have engaged English expert witnesses; and they have assembled vast numbers of documents. They have also, no doubt, educated themselves upon the issues in the action. All that has been done on behalf of Cansulex as well, save that one of their expert witnesses is Canadian. If they now wish to start the process again in Canada, that is their choice. But it seems to me that the additional inconvenience and expense which would be thrust upon the plaintiffs if this action were tried in Canada far outweighs the burden which would fall upon Cansulex if they had to bring their witnesses and senior executives here a second time.

3. Limitation Period: After he had prepared his judgment, evidence was placed before him on behalf of the shipowners with regard to the relevant limitation period applicable in British Columbia. It transpired that that period was two years, and had expired by November 1982. However the judge, having already concluded that the action should be tried here, irrespective of the time bar point, did not think it necessary to consider that matter.

Court of Appeal

1. With regard to the availability of witnesses, he felt that, even on the judge's own analysis of the facts, the convenience of the parties and the witnesses probably tilted the scales towards British Columbia as the forum, but certainly did not show that an English court was "distinctly more suitable for the ends of justice."

2. On multiplicity of proceedings, he saw force in the criticism of Mr. Goldsmith (counsel for Cansulex) that this was at most a neutral factor, and certainly did not bring the scales down heavily on the side of England.

3. On the relevance of the Cambridgeshire factor, while rejecting Mr. Goldsmith's primary submission that the Cambridgeshire litigation was wholly irrelevant, he considered that the judge attached far too much importance to it.

House of Lords

Fundamental Principle

I feel bound to say that I doubt whether the Latin tag forum non conveniens is apt to describe this principle. For the question is not one of convenience, but of the suitability or appropriateness of the relevant jurisdiction…. But it is most important not to allow it to mislead us into thinking that the question at issue is one of “mere practical convenience.”… If you read it as 'more convenient, that is to say, preferable, for securing the ends of justice, I think the true meaning of the doctrine is arrived at… I cannot help thinking that it is wiser to avoid use of the word "convenience" and to refer rather, as Lord Dunedin did, to the appropriate forum.

Stay of Proceedings

1. The basic principle is that a stay will only be granted on the ground of forum non conveniens where the court is satisfied that there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of the action, i.e. in which the case may be tried more suitably for the interests of all the parties and the ends of justice.

2. Furthermore, if the court is satisfied that there is another available forum which is prima facie the appropriate forum for the trial of the action, the...

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