[2020] NZHC 1935

High Court of New Zealand

Facts: two US-flagged fishing boats (The Koorale and The American Eagle) collided on the high seas near American Samoa. The Koorale entered a port in New Zealand for repairs. The American Eagle returned to Samoa but then left the island to avoid service of proceedings. The owner of The American Eagle then sued and arrested The Koorale in New Zealand, and filed an application for limitation of liability under the LLMC 1996. Subsequently, the owners of The Koorale filed lawsuits in the US and Samoa. The question arose whether the New Zealand proceedings should be stayed pending the outcome of the US claim, because New Zealand was arguably not a convenient forum (forum non conveniens).

High Court of New Zealand: proceedings should be stayed, New Zealand is not a convenient jurisdiction to hear the dispute.

In order to stay the proceedings due to forum non conveniens, the defendant (the owner of The Koorale) must show that there is a more appropriate jurisdiction to hear the dispute. This jurisdiction should have a closer connection with the dispute, taking into account the location of evidence, witnesses, place of incorporation of the parties, applicable law, convenience and cost of proceedings. The court also considered the existence of parallel proceedings abroad; whether the foreign defendant will be at an unfair disadvantage in the proceedings in New Zealand, and which court is able to provide the most effective remedies for the parties. Cases involving collisions on the high seas are special because they initially do not have a natural forum.

New Zealand is not a convenient forum. The defendant’s only connection with New Zealand is that the ship came there for repairs. The US is a more suitable jurisdiction. Both ships are US-flagged, the substantive law of the US applies to the dispute, and US government agencies are already investigating it. Although witnesses and evidence are located in Europe, Samoa and the United States, it is most likely that the same witnesses as those interviewed in the US investigation will be needed for the consideration of the case.

The fact that the US proceedings are more expensive and time-consuming is not critical. Merely because the US has a much lower limitation of shipowner's liability than New Zealand does not mean that New Zealand is a more appropriate forum. The dispute's connection with New Zealand is very weak, while trying the case in the US has clear advantages.

Comments: Russiam law does not formally recognize the concept of forum non conveniens. In other words, a Russian commercial court may not dismiss a claim or stay proceedings just because another jurisdiction is a more convenient place to hear the dispute, or Russia is clearly not a convenient place for it.

Nevertheless, in Russia a similar dispute would most likely be resolved in the same way. Suppose two Turkish-flagged vessels collided on the high seas and vessel 1 entered a Russian port for repairs. There it was arrested by the owner of the vessel 2, who later filed a substantive claim, as well as an application for limitation of liability (Art. 366(6) MSC) in Russia. After that, the owner of vessel 1 commenced proceedings in Turkey.

Turkish substantive law would apply to the dispute (Art. 420(3) MSC), which in itself is inconvenient for a Russian court. In addition, most of the evidence would likely also be located abroad (for example, in the materials of a Turkish investigation). Since the LLMC 1996 applies both in Turkey and in Russia, the limitation regime in both countries will likely be the same. Despite the fact that the Turkish proceedings began later, the Russian court has every reason to stay the proceedings pending the outcome of the Turkish proceedings (Art. 144(5) of the Russian Commercial Procedure Code). ■