HOUSE OF LORDS
LORD DIPLOCK, LORD EDMUND-DAVIES, LORD KEITH OF KINKEL, LORD BRANDON OF OAKBROOK AND LORD TEMPLEMAN
19, 20 DECEMBER 1983, 26 JANUARY 1984
Practice - Stay of proceedings - Foreign defendant - Action in rem - Action by foreign plaintiffs against defendants' vessel whilst vessel in English port - Grounds for justifying stay of English proceedings - Proceedings pending in foreign court commenced by defendants - Whether existence of foreign proceedings sufficient ground for granting stay of English proceedings - Whether existence of foreign proceedings a factor to be taken into account in weighing balance of convenience.
As a result of a collision in the Bosphorus between the plaintiffs' vessel and the defendants' vessel, the Turkish defendants commenced proceedings in Turkey for damages against the Cuban plaintiffs. Subsequently the plaintiffs served a writ on a sister ship of the defendants' vessel in England and brought an action in rem in the Admiralty Court against the defendants for damages in respect of the collision. The defendants applied for a stay of the proceedings in the Admiralty Court. The judge stayed the proceedings on the grounds that there were in existence other proceedings in the Turkish court, that the litigation between the parties could be more conveniently tried in the Turkish court and that the plaintiffs would not be deprived of any juridical advantage if the proceedings in the English court were stayed, since an undertaking had been offered by the defendants to provide security for any cross-claim that the plaintiffs might decide to make in the Turkish action. The plaintiffs appealed to the Court of Appeal, which allowed the appeal and removed the stay, on the grounds that mere balance of convenience was not a sufficient ground for depriving the plaintiffs of the advantage of pursuing their action in the English courts and the fact that there was a claim by the defendants against the plaintiffs pending in Turkey was not of itself a bar to the plaintiffs bringing their claim in England. The defendants appealed to the House of Lords.
Held - Where a plaintiff wished to pursue his claim in the English courts despite the fact that there was already an action between the plaintiff and the defendant pending in a foreign jurisdiction which was a natural and appropriate forum for the resolution of the dispute between the parties, the court ought to exercise its discretion to stay the English action unless the plaintiff established objectively by cogent evidence that even-handed justice might not be accorded to him in the foreign jurisdiction or that there was some personal or juridical advantage only available to him in the English action and of such importance that it would be unjust to deprive him of that advantage. Although the mere balance of convenience or the mere disadvantage of a multiplicity of suits could not, of themselves, be decisive in tilting the scales, a strong or an overwhelming balance of convenience or a multiplicity of suits involving serious consequences with regard to expense and other matters might easily, and most probably would, tilt the scales. On the balance of convenience, there was an overwhelming case for the English proceedings to
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be stayed, since Turkey was the country with which the matter litigated had the closest connection and was also the natural and appropriate forum from the point of view of convenience and expense. Moreover, there was no evidence that in Turkey a counterclaimant in a maritime collision case would be under any disadvantage compared with a plaintiff, or that the plaintiffs would not obtain justice in the Turkish courts. Accordingly, the appeal would be allowed and a stay granted (see p 475
c to
e and
j to p 476
d and
g to
j, p 478
f to
j, p 479
c to
f and
h j, p 482
c to
h, p 483
a b and
g to p 484
b and
f g, p 485
f to p 486
a and p 487
a to
f, post).
The Atlantic Star [1973] 2 All ER 175 and
MacShannon v Rockware Glass Ltd [1978] 1 All ER 625 applied.
The Tillie Lykes [1977] 1 Lloyd's Rep 124 explained.
Decision of the Court of Appeal [1983] 3 All ER 46 reversed.
Notes
For general principles governing stay of proceedings, see 8
Halsbury's Laws (4th edn) paras 407, 787-788, and for cases on the subject, see 11
Digest (Reissue) 631-633,
1696-1689.
Cases referred to in opinions
 | Amin Rasheed Shipping Corp v Kuwait Insurance Co, The Al Wahab [1983] 2 All ER 884, [1983] 3 WLR 241, HL.
Aratra Potato Co Ltd v Egyptian Navigation Co, The El Amria [1981] 2 Lloyd's Rep 119, CA.
Atlantic Star, The, Atlantic Star (owners) v Bona Spes (owners) [1973] 2 All ER 175, [1974] AC 436, [1973] 2 WLR 795, HL; rvsg [1972] 3 All ER 705, [1973] QB 364, [1972] 3 WLR 746, CA.
Hyman v Helm (1883) 24 Ch D 53.
Janera, The [1928] P 55, [1927] All ER Rep 49.
Logan v Bank of Scotland ( No 2) [1906] 1 KB 141.
London, The [1931] P 14.
Lucile Bloomfield, The [1964] 1 Lloyd's Rep 324.
McHenry v Lewis (1882) 22 Ch D 397.
MacShannon v Rockware Glass Ltd [1978] 1 All ER 625, [1978] AC 795, [1978] 2 WLR 362, HL.
Madrid, The [1937] 1 All ER 216, [1937] P 40.
Monte Urbasa, The [1953] 1 Lloyd's Rep 587.
Peruvian Guano Co v Bockhwoldt (1883) 23 Ch D 225, [1881-5] All ER Rep 715.
Quo Vadis, The [1951] 1 Lloyd's Rep 425.
Soya Margareta, The, Soya Lovisa (cargo owners) v Soya Margareta (owners) [1960] 2 All ER 756, [1961] 1 WLR 709.
St Pierre v South American Stores (Gath & Chaves) Ltd [1936] 1 KB 382, [1935] All ER Rep 408, CA.
Thornton v Thornton (1886) 11 PD 176, [1881-5] All ER Rep 715.
Tillie Lykes, The [1977] 1 Lloyd's Rep 124.
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Interlocutory appeal
The defendants, the Turkish owners of the vessel Abidin Daver, appealed with leave of the Appeal Committee of the House of Lords granted on 7 July 1983 against the decision of the Court of Appeal (Sir John Donaldson MR, Dunn and Purchase LJJ) on 17 May 1983([1983] 3 All ER 46, [1983] 1 WLR 884) allowing an appeal by the plaintiffs, the Cuban owners of the vessel Las Mercedes, from the judgment of Sheen J given on 4 May 1983, whereby he ordered the plaintiffs' action against the defendants for damages arising out of a collision between the two vessels in the Bosphorus, which was commenced by writ issued on 29 June 1982, to be stayed on an undertaking being given by the defendants to provide security for any cross-claim that the plaintiffs might decide to make in proceedings commenced by the defendants against the plaintiffs on 16 April
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1982 in the Sariyer District Court in Turkey arising out of the same cause of action. The facts are set out in the opinion of Lord Diplock.
 | David Steel QC and Nigel Teare for the Turkish owners.
Bernard Rix QC and Elizabeth Blackburn for the Cuban owners.
Their Lordships took time for consideration.
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26 January 1984. The following opinions were delivered.
LORD DIPLOCK. My Lords, shortly before midnight on 23 March 1982 there was a collision between a Turkish ship, the Abidin Daver, and a Cuban ship, the Las Mercedes. It happened in the Bosphorus just outside the Turkish port of Buyukdere where both vessels had anchored to shelter from high winds and strong currents. The Turkish ship is owned by a Turkish state corporation (the Turkish shipowners). She was on a voyage from Braila in Romania to Iskenderun in Turkey laden with a cargo of petroleum prospecting pipes. The Cuban ship is owned by a Cuban state corporation (the Cuban shipowners). What the voyage was on which she was engaged at the time of the collision does not appear from the evidence before your Lordships. Both vessels sustained damage in the collision.
Although navigation in the Bosphorus by merchant vessels of other nationalities is subject to an international convention (see Convention regarding the Regime of the Straits (Montreux, 20 July 1936; TS 30 (1937); Cmd 5551)), the place where the collision took place is situated in Turkish territorial waters. The Turkish shipowners accordingly took prompt steps in the District Court of Sariyer, the Turkish court which exercises Admiralty jurisdiction in the area in which Buyukdere is situated to have the Cuban ship arrested and to start an action in that court (the Turkish action) against the Cuban shipowners as defendants for damages for negligence in the navigation and management of the Cuban ship. The Cuban ship owners, or their P & I insurers on their behalf, put up security to obtain the release of their ship, but they do not appear to have taken any other active step in the Turkish action. Until 2 July 1982 the Turkish action was proceeding normally in accordance with the Turkish Code of Civil Procedure under which the Cuban shipowners would have been entitled to bring a cross-claim against the Turkish shipowners if they had wished to do so.
The Turkish Code of Civil Procedure was introduced in 1927 as part of the westernisation of Turkish law instituted by Kemal Ataturk. It is based on the civil procedure code of the Swiss canton of Neuchatel of 1922. At the date of the Turkish law reforms this had been the most recently drafted of the procedural codes in use in those European countries which follow the system of the civil law. Consequently, it is one in which the court itself plays a more active investigatory role than does a judge under the English system of civil procedure. The substantive commercial law of Turkey which has been in force since the reforms of the 1920s for similar reasons has its basis in the German Commercial Code of 1895. It is not suggested that as respects collisions at sea Turkish substantive law differs in any relevant respect from English law.
On 2 July 1982, some three months after the commencement of the Turkish action in which they were defendants, the Cuban shipowners took advantage of the presence in an English port of a sister ship of the Abidin Daver to arrest her and commence an action in rem (the English action) against the Turkish shipowners as defendants claiming damages for their negligence in causing the collision at Buyukdere on 23 March 1982, which was the subject of the Turkish action in which the Turkish shipowners were plaintiffs and the Cuban shipowners defendants. Security was duly provided to obtain the release of the sister ship.
It is in proceedings on a motion by the Turkish shipowners to stay the English action that this appeal to your Lordships is brought. Sheen J granted the stay on an undertaking that was offered by the Turkish shipowners to provide security for any cross-claim that
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the Cuban shipowners might decide to make in the Turkish action. He regarded the case for exercising his discretion in this way as a clear one and refused leave to appeal; but leave was granted by the Court of Appeal and subsequently the judge's exercise of his discretion was reversed and the stay removed by a unanimous Court of Appeal (Sir John Donaldson MR, Dunn and Purchas LJJ) (see [1983] 3 All ER 46, [1983] 1 WLR 884). Leave to appeal from the Court of Appeal's judgment was granted by this House.
My Lords, it is I hope not unfair to say that the decision of the narrow majority of this House in
The Atlantic Star, Atlantic Star (owners) v Bona Spes (owners) [1973] 2 All ER 175, [1974] AC 436 was initially accepted with reluctance, particularly by the judges of those English courts, Admiralty and Commercial, to which foreigners so often voluntarily resort for resolution of their legal disputes. It was treated at first as having been decided on its own special facts rather than being of wider import. This is not surprising since it may not be possible to recognise as such a decision that will turn out to have provided a landmark in the development of English law, until time has exposed to view the legal landscape that lies beyond the decision. Looked at in the perspective of the ten years that have now elapsed since the decision in
The Atlantic Star, it has become readily identifiable not as a mere decision on its own exceptional facts but as a landmark case.
The decisions of English courts during the hundred years between the passing of the Judicature Acts, the relevant starting point, and the hearing in this House of
The Atlantic Star are analysed in some detail in four of the speeches in that case. The effect of those decisions was the subject of a scathing summary by Lord Reid as follows ([1973] 2 All ER 175 at 180-181, [1974] AC 436 at 453):
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'They support the general proposition that a foreign plaintiff, who can establish jurisdiction against a foreign defendant by any method recognised by English law, is entitled to pursue his action in the English courts if he genuinely thinks that that will be to his advantage and is not acting merely vexatiously. Neither the parties nor the subject-matter of the action need have any connection with England. There may be proceedings on the same subject-matter in a foreign court. It may be a far more appropriate forum. The defendant may have to suffer great expense and inconvenience in coming here. In the end the decisions of the English and foreign courts may conflict. But nevertheless the plaintiff has a right to obtain the decision of an English court. He must not act vexatiously or oppressively or in abuse of the process of the English court, but these terms have been narrowly construed.'
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After referring to an observation of Lord Denning MR adulatory of the administration of justice by English courts (see [1972] 3 All ER 705 at 709, [1973] QB 364 at 381-382), Lord Reid said:
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'My Lords, with all respect, that seems to me to recall the good old days, the passing of which many may regret, when inhabitants of this island felt an innate superiority over those unfortunate enough to belong to other races.'
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Or, as Kipling more forthrightly phrased it, 'lesser breeds without the Law'.
The last sentence in Lord Reid's summary of the general proposition to be extracted from the previous authorities is derived from the statement of Scott LJ in
St Pierre v South American Stores (
Gath & Chaves)
Ltd [1936] 1 KB 382 at 398, [1935] All ER Rep 408 at 414 as to the applicable rule which is cited in full in the speeches of Lord Morris, Lord Wilberforce and Lord Kilbrandon. I shall refer to this as 'the 1936 rule'.
The approach adopted by the majority of this House to the re-examination of what Lord Reid had described as 'the rather insular doctrine' as he had stated it in the passage that I have cited, followed the step-by-step technique that is typical of the way in which principles that have informed the common law of England undergo development by judicial decision so as to enable justice to be done in the changing circumstances in which the common law falls to be applied. In
The Atlantic Star the particular device employed was to give to the words 'vexatious' and 'oppressive' in the 1936 rule a more flexible or liberal application than would have accorded with the interpretation that had been placed
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on these expressions as terms of legal art in any of the previous authorities or, as Lord Kilbrandon pointed out, would be ascribed to them in ordinary speech. How 'flexible' and how 'liberal' this application was to be it was left to subsequent cases to show.
The next significant pace forward in the step-by-step approach was taken four years later in
MacShannon v Rockware Glass Ltd [1978] 1 All ER 625, [1978] AC 795. In three of the four reasoned speeches expounding the unanimous decision of this House the continued use of the words 'vexatious' and 'oppressive' in expressing the principles on which the court's discretion to grant a stay of English proceedings was specifically deprecated and abandoned.
MacShannon was not a case where litigation on the same subject matter between the same parties was simultaneously proceeding in any jurisdiction other than England; nor had
The Atlantic Star been treated as a case in which there was lis alibi pendens between the same parties, although technically the plaintiffs in the English action had taken a precautionary step in the Belgian court to forestall a time bar operating against them in that country if they were to be prevented from proceeding with their action in England.
Accordingly, in
MacShannon's case, when I ventured to restate the 1936 rule in amended form, I was not concerned to deal with what account should be taken of the existence of lis alibi pendens in exercising a discretion to grant a stay of proceedings brought in England in the capacity of plaintiff by a person who is defendant to an action with the same subject matter which is being actively pursued against him in a foreign court that is unquestionably one of competent jurisdiction. In
St Pierre v South American Stores (
Gath & Chaves)
Ltd there was in fact a lis alibi pendens, but this had been brushed aside by Scott LJ and is not referred to in his statement of the rule that until the decision of this House in
The Atlantic Star had been so often cited and applied with the words 'vexatious' and 'oppressive' being used in their literal sense.
In the interval between the judgments of this House in
The Atlantic Star and those in
MacShannon's case the question of the weight, if any, to be given to lis alibi pendens fell to be determined by Brandon J in
The Tillie Lykes [1977] 1 Lloyd's Rep 124. Founding himself on certain passages in the speech of Lord Wilberforce in
The Atlantic Star he reached the conclusion which he expressed in the following words (at 126): '... the
mere existence of a multiplicity of proceedings
is not to be taken into account at all as a disadvantage to the defendant' (my emphasis). He later qualified that categorical statement by acknowledging that there might be exceptional cases where the bringing of the second action in England while the foreign action was proceeding might cause an unusual hardship to a particular defendant but as a general rule the fact that to permit the England action to be pursued would result in concurrent actions on the same subject matter proceeding in two different jurisdictions could not be sufficient to justify depriving the plaintiff of the advantage to which he was entitled, if an English court of competent jurisdiction could be found, to choose it as the forum in which he preferred to litigate the matter.
My Lords, in the instant case Sheen J was of opinion that the minimal importance attached by Brandon J in
The Tillie Lykes to the avoidance of concurrent actions between the same parties and about the same subject matter in two different courts of competent jurisdiction was no longer consonant with the general approach to the question of staying proceedings in English courts that had been adopted by this House in
MacShannon's case. It was because the members of the Court of Appeal took the view that Sheen J's assessment of the effect of the speeches in
MacShannon's case disclosed an error of law that they felt justified in setting aside the Admiralty judge's exercise of his discretion in favour of staying the English proceedings and in assuming a discretion of their own, which they proceeded to exercise in the opposite way. This conflict of judicial opinion, as it seems to me, makes it incumbent on your Lordships to provide guidance as to the extent to which the existence of lis alibi pendens ought to influence a judge in exercising his discretion whether or not to impose a stay on an action which it is sought to bring in England on the same subject matter by a person who is already a defendant in the foreign action.
Before turning to this topic, however, it may be convenient to draw attention to the
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other factors that point to Turkey as the forum in which justice can be done between the parties at less inconvenience and expense than in England. Neither of the parties has any connection with England, nor has the subject matter of the action. The collision took place in Turkish territorial waters between a Turkish ship manned by a Turkish crew, who reside in the vicinity of the Bosphorus, and a Cuban ship manned by a Cuban crew that had been piloted by a local Turkish pilot to the place at which she was brought to anchor at some time previous to the collision. Surveyors appointed by the Turkish court made a report on the collision within a few days of its occurrence and the damage to the Turkish ship was surveyed after the collision in a Turkish port in the locality. So far as witnesses on the Turkish side are concerned, the convenience and economy of having the action tried in the nearby Turkish court of Admiralty jurisdiction as compared with having it tried in England are all one way; while so far as the convenience of witnesses on the Cuban side is concerned, there is little to choose between England and Turkey, except for a suggestion that the master and first officer of the Cuban ship might be able (though perhaps unwise) to give their evidence in the English language instead of in their native tongue, which is Spanish. In my view, as in that of Sheen J, not only was Turkey the country with which the matter litigated had the closest connections, but also the natural and appropriate forum from the point of view of convenience and expense has, from the outset, been and still remains the District Court of Sariyer in Turkey, where proceedings were promptly started by the Turkish shipowners against the Cuban shipowners as defendants and were proceeding with all due dispatch when the writ in the English action was issued by the Cuban shipowners. I may add that there is no evidence to suggest that the costs of litigation, as represented by the total amount of court and lawyers' fees, are greater in Admiralty cases tried in Turkey than they are in similar cases when they are tried in England. One thing however is self-evident: it must be more expensive to litigate about liability for the same collision in two jurisdictions than it would be to litigate in one alone.
True it is that, by arresting the sister ship of the Abidin Daver in an Admiralty action in rem in England, the Cuban shipowners obtained security for their claim in respect of the collision in the Bosphorus of 23 March 1982. In some cases this may well be a decisive juridical advantage to be gained by a plaintiff by pursuing an Admiralty action in England, rather than in some foreign jurisdiction which would otherwise be more appropriate but in which security cannot be obtained by arresting the ship involved in the collision or a sister ship. But security where, as is usual, it has been put up by P & I insurers is readily transferable from one jurisdiction to another. In the instant case it does not appear from what source the security to obtain the release of the Turkish sister ship was provided; but the Turkish shipowners undertook before Sheen J to put up security in the District Court of Sariyer for any counterclaim the Cuban shipowners may wish to pursue in that court. So the advantage of security for the respective claims of the Turkish and Cuban shipowners arising out of the collision has no effect in tilting the balance in favour of continuing the English action by the Cuban shipowners.
My Lords, both Sheen J and the Court of Appeal avowedly refrained from embarking on a comparison of the quality of justice obtainable in a collision case conducted in a Turkish court which adopted a procedural system that is followed in civil law in other countries and that obtainable in a similar case conducted in an English court under the common law system of procedure. The Court of Appeal had expressed a similar view in the judgment of Brandon LJ in
Aratra Potato Co Ltd v Egyptian Navigation Co, The El Amria [1981] 2 Lloyd's Rep 119. This House, too, in
Amin Rasheed Shipping Corp v Kuwait Insurance Co, The Al Wahab [1983] 2 All ER 884 at 892, [1983] 3 WLR 241 at 251-252, has very recently indorsed the view that it is quite inappropriate for English judges to undertake any such supposed comparison or to allow the exercise of their discretion to stay an English action to be influenced by it.
In the same case this House also made it clear that the balancing of advantage and disadvantage to plaintiff and defendant of permitting litigation to proceed in England rather than, or as well as, in a foreign forum is to be based on objective standards
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supported by evidence. Unlike the rule as it was stated by Lord Reid to have been applied before
The Atlantic Star, a mere belief, however genuinely held, by a would-be plaintiff or his legal advisers that it would be to his advantage to pursue an action in the English court rather than to participate in proceedings in what would appear to be the more natural and appropriate forum is insufficient to justify refusal of a stay, unless the belief is supported by objective evidence.
The possibility cannot be excluded that there are still some countries in whose courts there is a risk that justice will not be obtained by a foreign litigant in particular kinds of suits whether for ideological or political reasons, or because of inexperience or inefficiency of the judiciary or excessive delay in the conduct of the business of the courts, or the unavailability of appropriate remedies. But, where there is already a lis alibi pendens in a foreign jurisdiction which constitutes a natural and appropriate forum for the resolution of the dispute, a plaintiff in an English action, if he wishes to resist a stay on the ground that even-handed justice may not be done to him in that particular foreign jurisdiction, must assert this candidly and support his allegations with positive and cogent evidence. In the instant case the affidavit filed on behalf of the Cuban shipowners in opposition to the stay contained no cogent evidence of this kind. It confined itself to tenuous innuendoes that Turkish lawyers might prove to be timorous advocates in a suit against a Turkish state-controlled corporation. The contents of this part of the affidavit are most aptly described by quoting the complete couplet of Alexander Pope, of which the first line when cited on its own is too familar to have escaped banality (see
Epistles and Satires of Horace Imitated, Prologue, Epistle to Dr Arbuthnot):
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'Willing to wound, and yet afraid to strike,
Just hint a fault, and hesitate dislike.'
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So I turn to the crucial question of what influence on the exercise of his discretion whether to grant a stay of the English proceedings or not the judge should have attributed to the fact that at the time the stay was applied for there was already proceeding in a natural and appropriate forum, the District Court of Sariyer, litigation between the same parties about the same subject matter in which the roles of plaintiff and defendant were reversed.
My Lords, the essential change in the attitude of the English courts to pending or prospective litigation in foreign jurisdictions that has been achieved step by step during the last ten years as a result of the successive decisions of this House in
The Atlantic Star, MacShannon and
Amid Rasheed is that judicial chauvinism has been replaced by judicial comity to an extent which I think the time is now ripe to acknowledge frankly is, in the field of law with which this appeal is concerned, indistinguishable from the Scottish legal doctrine of forum non conveniens.
Where a suit about a particular subject matter between a plaintiff and a defendant is already pending in a foreign court which is a natural and appropriate forum for the resolution of the dispute between them, and the defendant in the foreign suit seeks to institute as plaintiff an action in England about the same matter to which the person who is plaintiff in the foreign suit is made defendant, then the additional inconvenience and expense which must result from allowing two sets of legal proceedings to be pursued concurrently in two different countries where the same facts will be in issue and the testimony of the same witnesses required can only be justified if the would-be plaintiff can establish objectively by cogent evidence that there is some personal or juridical advantage that would be available to him only in the English action that is of such importance that it would cause injustice to him to deprive him of it.
Quite apart from the additional inconvenience and expense, if the two actions are allowed to proceed concurrently in the two jurisdictions the courts of the two countries may reach conflicting decisions, a possibility which (pace Sir John Donaldson MR's use of the adjective in the instant case) is far from being merely 'theoretical' in a case of a collision between two ships, where the measure of liability of one ship to the other is dependent on the court's view of the comparative fault of each ship. Since the District
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Court of Sariyer would be recognised by the English High Court as a court of competent jurisdiction, any judgment given by it against the Cuban shipowners would be enforceable in England by action; so an unseemly race to be the first to obtain judgment in the jurisdictions in which the Turkish shipowners and the Cuban shipowners respectively are plaintiffs might well ensue; and novel problems relating to estoppel per rem judicatam and issue estoppel, which have not hitherto been examined by any English court, might also arise. Comity demands that such a situation should not be permitted to occur as between courts of two civilised and friendly states. It is a recipe for confusion and injustice.
Faced with such a daunting prospect it may well be that a defendant on being refused a stay of the concurrent action brought against him subsequently in England will feel driven to settle on terms more favourable to the other party than he would if the litigation had proceeded in the form of claim and cross-claim in the court of competent jurisdiction in which he had already instituted proceedings as plaintiff, or, if attempts at settlement fail, will become a counterclaimant in the English proceedings instead of continuing with his foreign action. The failure of judges in any of the decided cases to embark on an examination of the inevitable inconveniences, expense and injustices that might result if concurrent actions between the same parties arising out of the same collision did in fact continue to be fought out to the bitter end, suggests that those judges acted on the assumption that the parties in their own commercial interests would never allow this to happen. The assumption, although probably realistic, has nevertheless remained tacit until it was articulated in the instant case in the judgment of Sir John Donaldson MR where he said ([1983] 3 All ER 46 at 51, [1983] 1 WLR 884 at 892):
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'If there is any serious inconvenience to the Turkish shipowners in being involved in two sets of proceedings, they have their remedy. They can transfer their claim here where it will be dealt with in the same proceedings as that of the Cubans.'
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My Lords, in his judgment in the instant case Sheen J considered that those factors to which I have already referred and which are set out in greater detail in the speech of Lord Brandon pointed ineluctably to the District Court of Sariyer as the forum in which the litigation between the parties arising out of the collision can be much more conveniently tried and that the Cuban shipowners would not suffer any juridical disadvantage from trial at Sariyer. In his reserved judgment the judge did not lay particular stress on the increase in inconvenience, expense or the potential confusion which would result from Turkish and English actions being pursued concurrently; but that these considerations were among those that were in his mind as well as those to which he referred expressly is evident from his rejection of the submission that the interpretation placed on
The Atlantic Star in
The Tillie Lykes, if it were understood as suggesting that very little weight should be attached to the fact of there being lis alibi pendens, could survive the ratio decidendi of the speeches in this House in
MacShannon.
On appeal from this exercise by the judge of his discretion, Sir John Donaldson MR in his judgment, which was extempore, expressed his own opinion that, if one ignored the fact that there was already a Turkish action on foot, the factors in favour of the Turkish and the English Courts respectively as the more convenient forum in which to carry on litigation about the collision, among which he included the greater experience of the English Admiralty Court of collision cases, would be fairly evenly balanced. Consequently it would seem, though this is not explicitly spelt out in the judgment, he did not think that the Turkish shipowners as defendants in the English action had satisfied the court that there was another forum to whose jurisdiction they were amenable in which justice could be done between them and the Cuban shipowners at substantially less inconvenience or expense. The Turkish shipowners thus, in his opinion, did not satisfy the first and positive condition in the restatement to be found in
MacShannon of the 1936 rule. Such a balancing of the weight to be attached to different factors in favour of one forum rather than another is of the very essence of discretion, and with the way in which it has been exercised by a judge of first instance an appellate court is not entitled to interfere except
477
on principles that have been so often stated by this House that I need not repeat them here.
The justification for exercising their own discretion in substitution for that of the Admiralty judge and with the opposite result that was relied on by all three members of the Court of Appeal was that Sheen J had erred in law in thinking, as it was inferred he had, that the effect of the speeches in this House in
MacShannon was that the fact that the Turkish action was in existence and was being actively pursued with due dispatch should be given more than that minimal weight that it had been said in
The Tilly Lykes ought to be ascribed to the existence of the lis alibi pendens that existed in that case. If this can be correctly classified as a question of law at all, it will be evident from what I have previously said that I think the judge rightly identified the step forward from
The Atlantic Star that had been taken in
MacShannon. If, as I think would be more accurate, the question is classified as one of discretion, the judge's exercise of it could only be reversed if it could be credibly said that no reasonable judge who had not misunderstood the evidence before him could have reached the conclusion that the English action ought to be stayed. This, however, was not a ground relied on by the Court of Appeal.
Dunn LJ, with whose judgment as well as that of Sir John Donaldson MR, Purchas LJ expressed his own agreement, considered that the Admiralty judge had also erred in law in failing to treat as a legitimate juridical advantage of which the Cuban shipowners would be deprived if prevented from pursuing their action in England, the fact that they would, as plaintiffs, be in control of the English action whereas in Turkey they would be counterclaiming as defendants. So the second and negative condition of the
MacShannon restatement of the 1936 rule, as well as the first and positive condition, was not complied with.
My Lords, in my own practice at the Bar, I was not conscious of any handicap to my clients in obtaining justice, even under the English adversarial system, in consequence of their appearing as counterclaimants in an action rather than as plaintiffs. My own practice, it is right to say, did not embrace actions about collisions either at sea or on land; but, when as a Queen's Bench judge, particularly on circuit, I acquired considerable familiarity with actions about collisions on land, it never crossed my mind that the outcome of the action before me could be influenced by which party was plaintiff and which defendant and counterclaimant. But the disadvantages, if any, of being counterclaimant instead of plaintiff in an English Admiralty action are beside the point. The juridical disadvantage to the Cuban shipowners which Dunn LJ was contrasting with the advantage of being plaintiff in the English action is being counterclaimant in the Turkish action; and there is no evidence that in that jurisdiction, where civil law procedure is adopted, a counterclaimant in a maritime collision case labours under any disadvantage compared with a plaintiff, except as regards security. If the lodging of security be a safeguard that is of any significance in an action in a Turkish court against a Turkish state corporation that, according to the Cuban shipowners' writ in the English action, operates a fleet of not less than 58 vessels, this matter is disposed of by the Turkish shipowners' offer to provide in the Turkish action security for the Cuban shipowners' counterclaim. An undertaking to this effect can be embodied in the order granting a stay of the English action.
For all these reasons I would allow the appeal and restore the stay of the English action granted by the Admiralty judge, incorporating in the order the undertaking proffered by the Turkish shipowners to put up security for any counterclaim in the Turkish action that the Cuban shipowners may bring, the amount of the security in default of agreement by the parties to be settled by the Admiralty registrar.
Since preparing this speech I have had the opportunity of reading in draft the speech which will be delivered by my noble and learned friend Lord Brandon, with which, as will become evident, I am in complete agreement.
LORD EDMUND-DAVIES. My Lords, on completing my reading of the relevant material preparatory to hearing this appeal, I wrote the words 'Wasn't he right?' alongside the following passage in the brief reversed judgment of Sheen J:
478
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'I am left in no doubt that the Sariyer Court is clearly a more appropriate forum than this court ... [Counsel for the plaintiffs] was unable to point to any juridical advantage of which the plaintiffs would be deprived if I grant a stay. [She] submitted that this court has an almost overwhelming advantage of experience of collision actions. It is true that this court has considerable experience of collision actions, but I must not allow myself to be drawn into making comparisons between the ability of this court and the ability of another court in a friendly state to do justice in such cases. Since I have formed the view that the litigation between the parties to this action arising out of the collision can be much more conveniently tried in the District Court of Sariyer and that the plaintiff will not suffer any juridical disadvantage from trial at Sariyer, it follows that justice demands that this action be stayed.'
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My Lords, the subsequent hearing of the appeal convinced me that the proper answer to my initial question is an affirmative one. The reasons leading me to that conclusion are those fully expounded in the speeches of my noble and learned friends Lord Diplock and Lord Brandon, both of which I gratefully adopt.
I therefore concur in allowing the appeal and in the order they propose.
LORD KEITH OF KINKEL. My Lords, I agree that this appeal should be allowed for the reasons given in the speech of my noble and learned friend Lord Diplock to which I would add only a few supplementary observations.
In
MacShannon v Rockware Glass Ltd [1978] 1 All ER 625, [1978] AC 795 I sought to analyse the speeches of Lord Reid and Lord Wilberforce in
The Atlantic Star, Atlantic Star (owners) v Bona Spes (owners) [1973] 2 All ER 175, [1974] AC 436 and observed that a distinction was to be drawn between a case where England is the natural forum for the plaintiff to bring his action and a case where it is not. By 'the natural forum' I mean that with which the action has the most real and substantial connection. In the present case it is abundantly plain, having regard to the features which are very fully described in the speech of my noble and learned friend Lord Brandon, that Turkey is, and England is not, the natural forum.
I said in
MacShannon's case [1978] 1 All ER 625 at 645, [1978] AC 625 at 829:
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'Where, however, the defendant shows that England is not the natural forum and that if the action were continued there he would be involved in substantial (ie more than de minimis) inconvenience and unnecessary expense, or in some other disadvantages, which would not affect him in the natural forum, he has made out a prima facie case for a stay, and if nothing follows it may properly be granted. The plaintiff may, however, seek to show some reasonable justification for his choice of forum in the shape of advantage to him. If he succeeds it becomes necessary to weigh against each other the advantages to the plaintiff and the disadvantages to the defendant, and a stay will not be granted unless the court concludes that to refuse it would involve injustice to the defendant and no injustice to the plaintiff.'
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The last sentence should be read with the insertion of the words 'the grant would involve' before the words 'no injustice to the plaintiff.'
In this case the defendants would, if required to meet the plaintiffs' claim in an English rather than in a Turkish court, plainly be involved in substantial inconvenience and unnecessary expense. The dependence in the Sariyer District Court at Buyukdere in Turkey of the proceedings instituted by the defendants, in which the plaintiffs' claim is capable of being dealt with, has the effect that the inconvenience and expense would be compounded. The plaintiffs have entirely failed to demonstrate any reasonable justification for their choice of the English forum in the shape of a legitimate forensic or personal advantage. It follows that, on a proper application of the principle I have set out, Sheen J correctly concluded that a stay should be granted and that the Court of Appeal wrongly reversed his decision.
479
LORD BRANDON OF OAKBROOK. My Lords, on 23 March 1982 a collision took place in the Bosphorus off the port of Buyukdere between two ships, the Las Mercedes and the Abidin Daver. The Las Mercedes is a Cuban ship owned by a Cuban state corporation, who are the respondents in this appeal. The Abidin Daver is a Turkish ship owned by a Turkish state corporation, who are the appellants. Each ship blames the other for the collision, and each of the owners claims to be entitled to recover damages for the other in respect of it.
Following the collision, the Turkish owners obtained immediately from the local court, the Sariyer District Court, an order for the detention of the Las Mercedes. On 16 April 1982 the Turkish owners as plaintiffs began proceedings against the Cuban owners as defendants in the same Turkish court, in which they claimed damages in respect of the collision. Turkish lawyers acting for the Cuban owners performed the equivalent of acknowledging service in the Turkish action, so putting their clients in a position to defend that action. The Cuban owners further provided such security for the Turkish owners' claim as enabled the Las Mercedes to be released from detention.
On 29 June 1982 the Cuban owners as plaintiffs began an action in rem in the Admiralty Court in England against the Abidin Daver and 57 sister ships of hers, in which they also claimed damages in respect of the same collision. On 2 July 1982 the Cuban owners served the writ in the English action on the ship Gazi Osman Pasha, one of the sister ships of the Abidin Daver, which was then in a Welsh port, and arrested her there. English lawyers acting for the Turkish owners acknowledged service of the writ and the Turkish owners provided such security for the Cuban owners' claim as enabled the Gazi Osman Pasha to be released from arrest.
On 28 July 1982 the Turkish owners issued a notice of motion in the English action in which they applied for a stay of it, broadly on the ground that both the claim of the Turkish owners and the cross-claim of the Cuban owners should be adjudicated on by the Turkish court, and the Turkish court alone.
Affidavits relating to the application for a stay of the English action were filed by both sides and the motion later came on for hearing before Sheen J on 28 and 29 April 1983. On 4 May 1983 the judge, after delivering a reserved judgment, made an order by which he granted the Turkish owners' application for a stay with costs and refused the Cuban owners leave to appeal.
Subsequently the Cuban owners applied to the Court of Appeal for leave to appeal from the order of Sheen J and to adduce further affidavit evidence in support of their case. The applications were heard and granted by a division of the Court of Appeal consisting of Sir John Donaldson MR, Dunn and Purchas LJJ, which then proceeded to hear the substantive appeal. By an order dated 17 May 1983 the Court of Appeal allowed the Cuban owners' appeal with costs and removed the stay (see [1983] 3 All ER 46, [1983] 1 WLR 884). By a further order dated 25 May 1983 the Court of Appeal refused an application by the Turkish owners to appeal to your Lordships' House. Leave for them to do so was, however, later granted by the Appeal Committee.
My Lords, it is not in dispute that both the Sariyer District Court in Turkey and the Admiralty Court in England are courts of competent jurisdiction to try and determine the question of liability for the collision and to assess the damages payable by the one side or the other. So far as the Admiralty Court in England is concerned, jurisdiction to hear and determine the Cuban owners' claim in an action in rem is conferred on it by ss 20 and 21 of the Supreme Court Act 1981. It does not, however, necessarily follow that, because an English court has jurisdiction to try and determine a particular claim, it is always and in all circumstances obliged to exercise that jurisdiction. On the contrary, so far as the High Court in England (including the Admiralty Court) is concerned, the court has power, even though it has jurisdiction to try and determine a particular action brought before it, to decline to exercise that jurisdiction, and instead to grant a stay of the action, either of its own motion or on the application of any person, whether a party to the action or not. That power to stay is part of the inherent jurisdiction of the High Court, expressly preserved by s 49(3) of the 1981 Act.
480
The exercise of the High Court's power to grant a stay under that section is a matter for the discretion of the court. Such discretion is not, however, unfettered. On the contrary, it is a discretion which has to be exercised with great caution in accordance with principles which have been established by judicial authority over the years.
My Lords, until two recent decisions of your Lordships' House, the principles governing the exercise of the High Court's power to grant a stay of an action even though it had jurisdiction to try and determine it, were accepted as being those laid down by Scott LJ in
St Pierre v South American Stores (
Gath & Chaves)
Ltd [1936] 1 KB 382 at 398, [1935] All ER Rep 408 at 414. In that case Scott LJ, referring to the power to grant a stay under s 41 of the Supreme Court of Judicature (Consolidation) Act 1925 (the predecessor of s 49(3) of the 1981 Act), said:
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'The true rule about a stay under s.41, so far as relevant to this case, may I think be stated thus: (1) A mere balance of convenience is not a sufficient ground for depriving a plaintiff of the advantages of prosecuting his action in an English Court if it is otherwise properly brought. The right of access to the King's Court must not be lightly refused. (2) In order to justify a stay two conditions must be satisfied, one positive and the other negative: ( a) the defendant must satisfy the Court that the continuance of the action would work an injustice because it would be oppressive or vexatious to him or would be an abuse of the process of the Court in some other way and ( b) the stay must not cause an injustice to the plaintiff. On both the burden of proof is on the defendant. These propositions are, I think, consistent with and supported by the following cases: McHenry v. Lewis ((1882) 22 Ch D 397); Peruvian Guano Co v. Bockhwoldt ((1883) 23 Ch D 225, [1881-5] All ER Rep 715); Hyman v. Helm ((1883) 24 Ch D 531); Thornton v. Thornton ((1886) 11 PD 176, [1886-90] All ER Rep 311); and Logan v. Bank of Scotland ( No. 2) ([1906] 1 KB 141 at 150-151, [1904-7] All ER Rep 438 at 443).
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The application of these principles operated in practice in such a way as to make it extremely difficult for a defendant to obtain a stay of an action brought in the High Court in England, otherwise than where the bringing of it was of itself an abuse of the process of the court. The reason for this was that it was extremely difficult for a defendant to satisfy the court that the continuance of the action would work an injustice to him because it would be oppressive or vexatious to him in the opprobrious sense which these epithets were generally regarded as having in the context in which they were used.
It is not now, and was not in the past, infrequent, following a collision between two ships, A and B, for two actions to be brought in respect of it, one by the owners of ship A as plaintiffs against the owners of ship B as defendants in a foreign court of competent jurisdiction, and the other by the owners of ship B as plaintiffs against the owners of ship A as defendants in the Admiralty Court in England, which is, of course, precisely what has happened in the present case. In such cases it also occurred from time to time that the owners of ship A would apply to the Admiralty Court here for a stay of the action before it, on the ground that both claim and cross-claim could and should be decided by the foreign court concerned. The situation until 1973, however, was that such applications were invariably dismissed, the broad ground for refusing a stay being that the bringing and continuance of the action here was not, merely by reason of the co-existence of the action abroad, so oppressive or vexatious to the owners of ship A as to work them an injustice. Reported examples of such cases include
The Janera [1928] P 55, [1927] All ER Rep 49,
The London [1931] P 14,
The Madrid [1937] 1 All ER 216, [1937] P 40,
The Quo Vadis [1951] 1 Lloyd's Rep 425,
The Monte Urbasa [1953] 1 Lloyd's Rep 587,
The Lucile Bloomfield [1964] 1 Lloyd's Rep 324 and
The Soya Margareta, Soya Lovisa (cargo owners) v Soya Margareta (owners) [1960] 2 All ER 756, [1961] 1 WLR 709. The result in practice therefore was that, although the court in such cases had, and recognised that it had, a discretion to grant or refuse a stay, it invariably exercised such discretion (so far as any reported applications are concerned) in the same way, namely by refusing a stay.
My Lords, I said that this was the situation until 1973. In that year the principles in
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accordance with which a court should exercise its discretion to stay an action properly brought before it came to be considered for the first time in your Lordships' House in
The Atlantic Star, Atlantic Star (owners) v Bona Spes (owners) [1973] 2 All ER 175, [1974] AC 436. Some four years later they came to be considered a second time in
MacShannon v Rockware Glass Ltd [1978] 1 All ER 625, [1978] AC 795.
It would not, I think, serve any useful purpose to go into the facts of these two cases, which differed from each other and from those in the present case, although
The Atlantic Star had some features analogous to the latter. All that I consider that it is useful to do is to express my view of the combined result of these two decisions, so far as the principles governing the exercise by a court of its discretion to grant or refuse a stay are concerned. That result can, in my opinion, be put into three separate, but interconnected, compartments.
First, the need for an applicant for a stay to satisfy the court that the continuance of the action against him would work him injustice because it would be oppressive or vexatious to him no longer exists. In
The Atlantic Star it was said that the words 'oppressive' and 'vexatious' were not terms of art and must be given a much broader and much less rigid sense than had been given to them in the past. In
MacShannon v Rockware Glass Ltd the process in the development of the law which had been begun in
The Atlantic Star was carried a long step further: it was said that it would be better for the future, in order to avoid confusion, to get rid altogether, in the formulation of the relevant principles, of the words 'oppressive' and 'vexatious', and with them of the opprobrious concepts which their ordinary and natural meaning necessarily evoked.
Second, with these two opprobrious epithets out of the way, the second part of the test laid down by Scott LJ in
St Pierre v South American Stores (
Gath & Chaves)
Ltd could be reformulated as follows:
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'(2) In order to justify a stay two conditions must be satisfied, one positive and the other negative: (a) the defendant must satisfy the court that there is another forum to whose jurisdiction he is amenable in which justice can be done between the parties at substantially less inconvenience or expense, and (b) the stay must not deprive the plaintiff of a legitimate personal or juridical advantage which would be available to him if he invoked the jurisdiction of the English court.'
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The reformulation just cited, which omits significantly, in relation to (b), any reference to burden of proof, is contained in the speech delivered in
MacShannon v Rockware Glass Ltd [1978] 1 All ER 625 at 630, [1978] AC 795 at 812 by Lord Diplock. I venture to think, however, that it accorded with the opinions of all the other members of the Appellate Committee in that case.
Third, and this concept emerges most clearly from the speech of Lord Wilberforce in
The Atlantic Star, the exercise of the court's discretion in any particular case necessarily involves the balancing of all the relevant factors on either side, those favouring the grant of a stay on the one hand, and those militating against it on the other. Such balancing may be a difficult process and some cases may be very near the line.
My Lords, as I indicated earlier, the decision whether to allow or refuse an application for the stay of an action, even though the court has jurisdiction to try and determine it, is a discretionary decision for the judge of first instance to whom the application is made. It follows that, where the judge of first instance has exercised his discretion in one way or the other, the grounds on which an appellate court is entitled to interfere with the decision which he has made are of a limited character. It cannot interfere simply because its members consider that they would, if themselves sitting at first instance, have reached a different conclusion. It can only interfere in three cases: (1) where the judge has misdirected himself with regard to the principles in accordance with which his discretion had to be exercised; (2) where the judge, in exercising his discretion, has taken into account matters which he ought not to have done or has failed to take into account matters which he ought to have done; or (3) where his decision is plainly wrong. That being the position, I turn to consider how Sheen J dealt in his judgment with the
482
application for a stay which was before him in the present case, and, since the Court of Appeal thought fit to reverse his decision, to see whether any of the three permissible grounds entitling them to do so are established.
I consider, first, whether the judge directed himself correctly with regard to the principles in accordance with which he was obliged to exercise his discretion. So far as this is concerned only an affirmative answer is possible. He began his judgment by saying:
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'On this motion counsel for the defendants moves for an order that this action be stayed on the ground that there is another forum to whose jurisdiction the defendants are amenable, namely the Sariyer District Court at Buyukdere in Turkey, in which justice can be done between the parties at substantially less inconvenience and expense and that a stay of this action will not deprive the plaintiffs of a legitimate or juridical advantage in this court.'
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It is clear that the judge derived this passage from the formal grounds for the grant of a stay set out in the Turkish owners' notice of motion dated 18 July 1982. It is equally clear that whoever drafted those grounds was seeking to adapt as closely as possible to the present case the reformulation of the relevant principles in the speech of Lord Diplock in
MacShannon v Rockware Glass Ltd which I cited earlier.
In relation to the first and positive question formulated by Lord Diplock, the judge went on to say:
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'The first question which I must answer is whether there is another jurisdiction which is clearly more appropriate than England for the trial of the action. The defendants must satisfy me of the existence of such other jurisdiction.'
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Later in his judgment, after dealing with the first question and answering it in the affirmative, he said this about the submissions made to him by junior counsel in this appeal, who appeared as sole counsel for the Cuban owners before him: 'Mrs Blackburn was unable to point to any juridical advantage of which the plaintiffs will be deprived if I grant a stay.' In this connection it is necessary to mention that the Turkish owners had all along offered to provide security for any counterclaim which the Cuban owners might wish to raise in the Turkish action if a stay of the English action were granted, and your Lordships were told that this offer still stands. There was accordingly no risk that, if the Cuban owners were compelled, by a stay of their action here, to bring a counterclaim in the Turkish court, they would be deprived of adequate security in respect of it.
The passages which I have quoted from the judge's judgment support the view which I expressed earlier that the question whether the judge directed himself correctly with regard to the principles according to which he was obliged to exercise his discretion could only be answered in the affirmative.
I consider, second, whether the judge, in exercising his discretion, took into account the right matters and not the wrong matters. He began by taking into account the following numerous matters which he regarded as favouring a stay. First, the collision occurred in Turkish waters. Second, one of the two ships involved, the Abidin Daver, was a Turkish ship manned by a Turkish crew resident in Turkey. Third, the Las Mercedes had been led to her anchorage shortly before the collision by a Turkish pilot whose evidence was material. Fourth, any members of the crew of the Las Mercedes who might be required to attend the trial could attend the Turkish court without any more inconvenience than they would be subjected to by having to come to London. Fifth, if the case was tried by the Turkish court, the Turkish witnesses would be away from their homes for a much shorter period, and that for that reason there would be less disruption caused to their work. Sixth, under the system of justice administered in Turkey, the Turkish court had appointed a surveyor who had already interviewed relevant witnesses and prepared a report for the court. Seventh, the litigation had no connection with England, except for the arrest of one of the sister ships of the Abidin Daver in an English port.
483
The judge went on to consider the following further matters put forward by counsel for the Cuban owners as militating against a stay. First, the Cuban witnesses whom it would be necessary to call could speak English but not Turkish. Second, the Cuban owners chose to sue in England because they understood English procedure but might not understand Turkish procedure. And, third, the Cuban owners wished to make progress with the action.
Subject to one point to which I shall refer later, it seems to me that the judge took into account all the right matters and did not take into account any wrong matters.
I consider, third, whether it could be said that the judge's decision was plainly wrong. With regard to this he said, after referring to the first four of the seven factors which he regarded as favouring a stay:
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'There is thus an overwhelming balance of convenience for the witnesses if the trial takes place in Turkey rather than in London.'
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Later, after referring to the matters put forward by counsel for the Cuban owners as militating against a stay, he said:
 |
'I have come to the conclusion that I should give very little weight indeed to any of these points. The first and second are balanced by the facts that the defendants' witnesses speak the language of the Turkish court and the defendants understand Turkish procedure. As to the third point, I have no reason to think that the Turkish shipowners do not want to press on with this litigation.'
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Finally, in the last paragraph of his judgment, the judge said:
 |
'Since I have formed the view that the litigation between the parties to this action arising out of the collision can be much more conveniently tried in the District Court of Sariyer and that the plaintiff will not suffer any juridical disadvantage from trial at Sariyer, it follows that justice demands that this action be stayed.'
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I set out earlier the factors on either side which the judge took into account. The assessment of the weight to be given to those factors, and the balancing of the factors on one side against those on the other, were matters entirely for the judge to deal with. On the footing, therefore, that he directed himself correctly with regard to the principles in accordance with which he had to exercise his discretion, and that he took into account the right factors and not the wrong ones, it is, in my opinion, impossible to say that the decision which he reached was plainly wrong. On the contrary, it appears to me to have been plainly right.
My Lords, I now turn to examine the grounds on which the Court of Appeal thought it right to reverse the judge's conclusion. A study of the judgments of Sir John Donaldson MR and Dunn LJ, with both of whom Purchas LJ agreed, shows that they considered that Sheen J had erred in principle in regarding, as he undoubtedly did, the co-existence of the Turkish action as a decisive factor in the exercise of his discretion.
Sir John Donaldson MR said ([1983] 3 All ER 46 at 51, [1983] 1 WLR 884 at 891-892):
 |
'Further, I think it is clear that the judge, in balancing the various factors, was giving very full weight, as, indeed, he was entitled to do on the view he took of the law, to the fact that there were already proceedings on foot in Turkey. But I have come to the conclusion that the judge erred in principle ... It is a factor of which account should be taken, but it is not a factor which, of itself, is of sufficient weight to displace the right of a plaintiff to choose his own forum and, of itself, to create a tilt in the other direction.'
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Dunn LJ said ([1983] 3 All ER 46 at 51-52, [1983] 1 WLR 884 at 892):
 |
'At the outset of his judgment the judge asked himself the question whether the Turkish court or the English court was the more appropriate forum for the trial of 484 this action, and held on a balance of convenience that the Turkish court was clearly the more appropriate. With respect to the judge, that was the wrong question to ask. The Atlantic Star and MacShannon v Rockware Glass Ltd ... show that the English Court of Admiralty, whose jurisdiction has been invoked in rem, is prima facie the natural and appropriate forum in which to bring an action of this kind, and is recognised as such by international convention. A mere balance of convenience is not a sufficient ground for depriving the plaintiffs of the advantages of pursuing their action in the Admiralty Court. The fact that there is a claim by the defendants against the plaintiffs already pending in Turkey is not of itself a bar to the plaintiffs claiming in this country against the defendants for damages arising out of the same collision as is being litigated in Turkey ... '
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Both Sir John Donaldson MR and Dunn LJ, in expressing the views which they did, appear to have placed considerable reliance on an earlier decision made by me when sitting as a judge of first instance in the Admiralty Court. That case was
The Tillie Lykes [1977] 1 Lloyd's Rep 124, and both the members of the Court of Appeal referred to appear to have regarded my judgment in that case as authority for the proposition that, in cases of the kind here concerned, little or no importance should be attached to the co-existence of another action relating to the same subject matter in a foreign court.
The Tillie Lykes was decided after the decision of your Lordships' House in
The Atlantic Star but before its later decision in
MacShannon v Rockware Glass Ltd. In my judgment in
The Tillie Lykes I had directed myself by reference to statements in the speech of Lord Wilberforce in
The Atlantic Star [1973] 2 All ER 175 at 194, [1974] AC 436 at 469, in which he had said that the disadvantage to the defendant, in order that it should be taken into account at all, must be serious, and in particular that it must involve more than the mere disadvantage of multiple suits. After considering what I regarded as all the relevant factors on either side in that case, the facts of which were materially different from those of the present case, I concluded that there was no sufficiently serious disadvantage to the defendants, apart from and additional to the mere disadvantage of multiple suits, to justify a stay of the action against them. I did not purport to lay down any principle of law at all; I only sought to apply to the particular facts of the case before me the principle of law laid down by Lord Wilberforce in the passage from his speech in
The Atlantic Star to which I have referred.
With great respect to the members of the Court of Appeal in the present case, I think that they have fallen into error by giving insufficient weight to the epithet 'mere' in the expressions 'mere balance of convenience' and 'mere disadvantage of multiplicity of suits', as these expressions, or other expressions similar to them, are used in the authorities. Mere balance of convenience cannot, of itself, be decisive in tilting the scales; but strong, and a fortiori overwhelming, balance of convenience may easily, and in most cases probably will, be so. Similarly, the mere disadvantage of multiplicity of suits cannot of itself be decisive in tilting the scales; but multiplicity of suits involving serious consequences with regard to expense or other matters, may well do so. In this connection it is right to point out that if concurrent actions in respect of the same subject matter proceed together in two different countries, as seems likely if a stay is refused in the present case, one or other of two undesirable consequences may follow: first, there may be two conflicting judgments of the two courts concerned; or, second, there may be an ugly rush to get one action decided ahead of the other, in order to create a situation of res judicata or issue estoppel in the latter.
In my judgment the criticism made by the Court of Appeal, that Sheen J erred in principle in treating the co-existence of the Turkish action as a decisive factor on the facts of the present case, is not justified. It was not a case of mere balance of convenience: it was an overwhelming case. It was not a case of mere disadvantage of multiplicity of suits: it was a case which was liable to cause, if both actions continued, much difficulty and trouble. On the footing that the Court of Appeal was wrong in holding that the judge
485
erred in principle in the way that it thought, there was, in my opinion, no valid ground for its interfering with the exercise of the discretion vested in him as the judge of first instance.
My Lords, leading counsel who appeared for the Cuban owners before your Lordships submitted that the judge had failed to take into account a matter which was in evidence before him, namely that, if the Cuban owners were compelled, by a stay of their action here, to counterclaim in the Turkish action, the procedure of the Turkish court would require them to deposit in advance, as security for the costs of the court, a proportion, probably about 15%, of the amount of their counterclaim. It is only right to say that there is no reference in the judge's judgment to this matter as a factor to be taken into account as militating against a stay. In my view, however, there are two reasons why this circumstance should not be regarded as in any way vitiating his judgment. The first reason is that, although the judge did not mention this matter in his judgment, it does not follow that he did not have it in mind and take it into account. The evidence before him was confined to three affidavits only, and it is unlikely that the judge would have overlooked anything which appeared in them. The second reason was given by Sir John Donaldson MR, when he pointed out that the Cuban owners would probably have to give security for costs under English procedure if their action here were allowed to continue, so that their liability in respect of security for costs might well be the same, or something like the same, in the one court as in the other (see [1983] 3 All ER 46 at 49, [1983] 1 WLR 884 at 889).
My Lords, there are two further matters with which I feel that it is necessary to deal.
The first matter is that the judge expressly declined to enter into any comparison between the capacities of the Turkish and English courts to try justly and satisfactorily the dispute between the parties. In doing so he was following observations made by me when sitting in the Court of Appeal in
Aratra Potato Co Ltd v Egyptian Navigation Co, The El Amria [1981] 2 Lloyd's Rep 119 at 126-127, observations which appear to me to accord with the views of your Lordships' House, as recently expressed by Lord Diplock in
Amin Rasheed Shipping Corp v Kuwait Insurance Co, The Al Wahab [1983] 2 All ER 884 at 892, [1983] 3 WLR 241 at 251-252.
I hope that I shall not be thought discourteous to Sir John Donaldson MR if I say that, while paying lip service to the avoidance of any comparisons of that kind, his heart was not really in what he felt obliged to concede. Thus he said ([1983] 3 All ER 46 at 49, [1983] 1 WLR 884 at 889):
 |
'I share entirely the reluctance of Sheen and Brandon JJ to express any view as to the relative merits of particular courts. That must be a matter of subjective judgment which I, as a judge of an English court, and an ex-Admiralty judge, do not feel that I should make. What I think can be said, and I doubt whether it would be controverted by anybody, is that the English Admiralty Court has a vast amount of international maritime experience in this field going back over the centuries. While I do not doubt for one moment that the Turkish courts have long maritime experience, I doubt very much whether it is as international or extensive. That is not a criticism, and should not be taken as a criticism, of the Turkish courts; it is an accident of geography. The English courts are situated on an island off Europe. That has led, as a matter of history, to their being involved in far more maritime disputes than Turkey or any country similarly situated.'
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Sir John Donaldson MR will, I trust, forgive me if I say that, having paid lip service to the need to avoid comparison between English and foreign courts, he then proceeded to make just such a comparison.
The second matter arises from certain paragraphs in the affidavit sworn in support of his clients' case by a solicitor in the distinguished firm of solicitors acting for the Cuban owners in this case. Paragraphs 13 and 14 of his affidavit are drawn in such a way as to cast aspersions on the capacity of the Turkish court to try the Turkish action properly, and on the independence from the executive of any Turkish lawyer acting for the owners
486
of a foreign ship against the owners of a Turkish ship. No sufficient grounds are given for these aspersions, and they should, in my opinion, never have been made.
Having dealt with those two further matters, it only remains for me to say that, for the reasons which I have given earlier, I would allow the appeal with costs here and below, and restore the order of Sheen J dated 4 May 1983, save in so far as it refuses the Cuban owners' application for leave to appeal. I would, however, vary the order in one respect, by making the stay conditional on the provision by the Turkish owners within 28 days of sufficient and satisfactory security for any counterclaim of the Cuban owners in the Turkish court. If there should be any dispute about the amount or nature of such security, it should be referred to the Admiralty Registrar for decision.
LORD TEMPLEMAN. My Lords, for the reasons given by my noble and learned friends Lord Diplock and Lord Brandon, I too would allow this appeal.
There was ample material from which Sheen J came to the conclusion that the Sariyer District Court of Turkey is a forum in which justice can be done between the parties at substantially less inconvenience and expense and that a stay of the English proceedings will not deprive the Cuban owners of a legitimate personal or jurisdictional advantage which will be available to the Cuban owners if they invoke the jurisdiction of the English court. In other cases, where these conditions are not satisfied, English proceedings will not be stayed merely because of the dangers and difficulties of concurrent actions. There is ample scope for a litigant to choose the exercise of the English jurisdiction, of which Sir John Donaldson MR is justly proud, notwithstanding that proceedings have already been instituted under a foreign jurisdiction provided that the events which happen prior to the hearing of an application for a stay of the English proceedings do not demonstrate that the foreign forum is to be preferred on grounds of convenience and expense. An ugly rush to get one action decided ahead of the other is not to be replaced by an ugly rush to issue proceedings in one country before the issue of proceedings in another. Most collision cases are collisions between insurance companies. They can by agreement avoid or put an end to concurrent actions. An insurance company should not endeavour to insist on choosing a forum by reference to the national flag of the insured vessel or the nationality of the insured owners in the hope that patriotism will affect the result. In the present case, however, Sheen J rightly came to the conclusion that there was no justification for inflicting English proceedings on the Turkish owners in addition to the Turkish proceedings.
Solicitors:
Holman Fenwick & Willan (for the Turkish owners);
Richards Butler & Co (for the Cuban owners).
 | Mary Rose Plummer Barrister.
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end of selection