The Hyundai Fortune: Stay of Proceedings and Exclusive Jurisdiction Clause Dispute

In The Hyundai Fortune, the Court of Appeal of Singapore heard an appeal against the decision of the High Court to refuse a stay of proceedings despite the existence of an exclusive jurisdiction clause in a bill of lading that stipulated disputes be resolved in Korea. The plaintiffs-respondents, wholesale fruit merchants, brought an action in Singapore to recover losses for damaged cargo. The defendant-appellants, owners of the vessel Hyundai Fortune, applied for a stay of proceedings in favor of the contractual forum in Korea. The Court of Appeal dismissed the appeal, finding that exceptional circumstances amounting to strong cause existed to warrant the refusal of a stay.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal Dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

The Court of Appeal dismissed an appeal, upholding the refusal to stay proceedings in Singapore despite an exclusive jurisdiction clause favoring Korea, due to strong cause.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Hyundai FortuneAppellantCorporationAppeal DismissedLost
Wholesale fruit merchantsRespondentCorporationJudgment for RespondentWon

3. Judges

Judge NameTitleDelivered Judgment
Chao Hick TinJustice of the Court of AppealYes
Tan Lee MengJudgeNo

4. Counsels

Counsel NameOrganization
Bazul AshhabT S Oon and Bazul
Karnan ThirupathyT S Oon and Bazul
Liew Teck HuatNiru and Co

4. Facts

  1. Respondents' cargo of hami-melons was damaged during shipment.
  2. Bill of lading contained an exclusive jurisdiction clause favoring Korea.
  3. Respondents brought an action in Singapore despite the jurisdiction clause.
  4. Appellants applied for a stay of proceedings in favor of the Korean forum.
  5. Temperature in the reefer container was not maintained at the prescribed 3°C.
  6. Appellants did not respond to the respondents' claim for almost a year.
  7. The limitation period had expired in Korea.

5. Formal Citations

  1. The Hyundai Fortune, CA 138/2003, [2004] SGCA 41
  2. Unknown, , [2004] 2 SLR 213

6. Timeline

DateEvent
Cargo packed into reefer container in Shenzhen, China
Bill of lading issued
Cargo arrived in Singapore; damage discovered
Joint survey carried out
Respondents made a claim against the appellants
Respondents' solicitors made another demand
Respondents' solicitors issued a further reminder
Respondents' solicitors instituted in rem action
Vessel arrested
Appellants applied to have the action stayed
Appeal heard
Judgment delivered

7. Legal Issues

  1. Stay of Proceedings
    • Outcome: The court held that exceptional circumstances amounting to strong cause existed to refuse a stay of proceedings.
    • Category: Procedural
    • Sub-Issues:
      • Exclusive jurisdiction clause
      • Strong cause exception
    • Related Cases:
      • [1969] 1 Lloyd’s Rep 237
      • [1981] 2 Lloyd’s Rep 119
      • [1975–1977] SLR 258
      • [1992] 2 SLR 175
      • [2000] 1 SLR 8
      • [2001] 3 SLR 146
      • [2004] 1 SLR 6

8. Remedies Sought

  1. Monetary Damages

9. Cause of Actions

  • Breach of Contract
  • Negligence

10. Practice Areas

  • Commercial Litigation
  • Shipping Litigation

11. Industries

  • Shipping
  • Freight Transport
  • Agriculture

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
The EleftheriaBrandon JYes[1969] 1 Lloyd’s Rep 237EnglandCited for the principles to consider when deciding whether to grant a stay of proceedings in favour of a foreign jurisdiction clause.
The El AmriaUnknownYes[1981] 2 Lloyd’s Rep 119EnglandCited for approving and adopting the principles in The Eleftheria regarding stay of proceedings.
Amerco Timbers Pte Ltd v Chatsworth Timber Corp Pte LtdCourt of AppealYes[1975–1977] SLR 258SingaporeCited for approving and adopting the principles in The Eleftheria regarding stay of proceedings.
The Vishva ApurvaCourt of AppealYes[1992] 2 SLR 175SingaporeCited for reiterating that the court's discretion should not be exercised just by balancing conveniences when an exclusive jurisdiction clause is involved.
The Jian HeUnknownYes[2000] 1 SLR 8SingaporeCited for the principle that a stay should be refused where there is no real defence to the claim and the defendant is only seeking a procedural advantage.
The Hung Vuong-2UnknownYes[2001] 3 SLR 146SingaporeCited for the principle that a stay should be refused where there is no defence to the claim, resulting in unnecessary delay.
Golden Shore Transportation Pte Ltd v UCO BankHigh CourtYes[2004] 1 SLR 6SingaporeCited for the principle that a stay should be refused where there is no real defence to the claim and all factors favor an action in Singapore.
The Atlantic SongUnknownYes[1983] 2 Lloyd’s Rep 394UnknownCited for the principle that the defendant should indicate the defences which the appellants would be relying on with an indication of the evidence in support.
The Frank PaisSheen JYes[1986] 1 Lloyd’s Rep 529EnglandCited for the principle that it is appropriate to discuss the merits of a claim to save the cost of litigation.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Exclusive jurisdiction clause
  • Stay of proceedings
  • Strong cause
  • Reefer container
  • Bill of lading
  • Limitation period
  • Forum shopping

15.2 Keywords

  • stay of proceedings
  • exclusive jurisdiction clause
  • shipping
  • cargo damage
  • Singapore
  • Korea

17. Areas of Law

Area NameRelevance Score
Civil Procedure90
Jurisdiction80
Shipping Law70
Contract Law60
Breach of Contract50
Evidence40
Property Law30
Arbitration20

16. Subjects

  • Shipping
  • Civil Procedure
  • Contract Law