Maritime disputes often involve parties from different countries, contracts governed by different laws, and events occurring in different jurisdictions. The choice of forum for the resolution of such disputes is thus of particular importance, potentially having significant impact on the outcome, costs, and enforceability of the claims.
The significance of forum was aptly demonstrated in the Singapore Court of Appeal decision of The “Sea Justice” [2024] SGCA 32. The case involved an application for a stay on the grounds of forum non conveniens and the return of a security to the owner of an arrested vessel. Notably, the dispute involved a consideration of the limitation fund regimes in Singapore and in the PRC, the difference in the respective limits, and whether the higher security obtainable was tantamount to a legitimate juridical advantage.
The dispute arose from a ship collision between two vessels. The Appellant managed to obtain the arrest of the Respondent’s vessel in Singapore, and the vessel was released after the Respondent furnished security to the Appellant. In the meantime, several sets of proceedings were commenced in the Qingdao Maritime Court, including the constitution of limitation funds by both the Appellant and Respondent.
The Respondent successfully obtained a stay of the Singapore proceedings and the return of the security. The Court of Appeal denied the Appellant’s attempts to avoid the stay and to retain the security, rejecting the Appellant’s argument that it would lose a juridical advantage in the form of the security if proceedings were stayed. The Court was of the view that this was an attempt to undermine the Respondent’s choice of the PRC as its limitation forum, on the ground that the limits of liability under the PRC’s limitation regime are lower than the Singapore limits.
As this decision illustrates, the choice of forum for dispute resolution in maritime cases is a crucial and strategic decision. This requires careful analysis of the legal, commercial, and practical factors involved. Parties should seek professional advice and draft clear and comprehensive dispute resolution clauses in their contracts, to avoid uncertainty and conflict in the event of a dispute.
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