Stettin Bay Lumber Company Pty Ltd v Arya Ship Management Ltd

• Jurisdiction: Papua New Guinea
• Citation: (1995) SC488
• Date: 29 September 1995
• Court: Supreme Court
• Year: 1995

Supreme Court: Los J, Doherty J, Andrew J

Judgment Delivered: 29 September 1995

1 Administrative law—leave to apply for stay of proceedings—whether judge acted within bounds of discretion—contract terms re loss of or damage to cargo—proviso that issues to be determined under Japanese law in a Japanese court

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By the Court: This is an appeal against an order of the National Court refusing an application by the Appellant to stay certain proceedings between the parties in the National Court. Insofar as that order was an interlocutory judgment, leave to appeal is required by s14(3) of the Supreme Court Act and leave has been applied for.

The appeal, being an appeal from an interlocutory judgment for which leave is required, is an appeal against the exercise of a discretion and for the Appellate Court to substitute its discretion for that of the Judge appealed from, it must be shown that the Judge appealed from exercised his discretion upon a wrong principle, allowed extraneous or irrelevant matters to guide or affect him, mistook the facts or did not take into account some matter for consideration: See The Government of Papua New Guinea and Richard Harold Davis v Stanley Barker [1977] PNGLR 386.

The background to this matter is as follows. The ship, "ANDHIKA ASOKA" was chartered by the Respondent pursuant to a bare boat charter. A cargo of logs was loaded by the Appellant onto the ship at Kimbe. Some logs were placed under the deck of the ship and some were placed on the deck of the ship. The ship then departed for Japan where the logs were to be unloaded. At the time the ship sailed for Japan (8 July 1993) a document "Letter of Indemnity" was signed by an officer of the Appellant (SBLC). Approximately 364 pieces of the logs were lost overboard on 18 July 1993 when the ship was off the coast of Japan.

The appellant contends that on the 5th August 1993 the Respondent, through its agent, the insurer, provided to the owner of the logs, NISSHO IWAI CORPORATION of Japan, also being the majority shareholder in Stettin Bay Lumber Co Pty Limited, a letter referred to as the NEPI letter (which shall be referred to later), which it says, binds the Respondent to have all the issues concerning the loss of or damage to the cargo being determined according to Japanese law, in Japan (by the Tokyo District Court). Further, it is submitted that the relevant contract, comprising the Bill of Lading and the indemnity, are to be construed according to Japanese law and that it will suffer prejudice in bringing Japanese witnesses of law and fact to Papua New Guinea.

The Respondent commenced proceedings in the National Court by way of Writ of Summons seeking a Declaration that the Defendant was liable to indemnify the Plaintiff in accordance with the provisions of the Letter of Indemnity. Paragraph 4 of the Statement of Claim was as follows:

"On or about the 8th day of July 1993, the Plaintiff and the Defendant entered in to a written agreement whereby, in consideration for the Master of the "ANDHIKA ASOKA" signing a clean Bill of Lading No. PEN/BUL–1 in respect of 779 pieces serial numbered PNG round logs measuring 2,723,868 cubic meters which were loaded on board "ANDHIKA ASOKA" at Penlolo and Buluma by the Defendant and part–stowed on deck with the Defendant's knowledge and agreement and at the risk of the Defendant and the consignee NISSHO IWAI CORPORATION, the Defendant undertook to indemnify the Plaintiff against all the consequences of the Master signing the said clean Bill of Lading No. PEN–BUL–1 as aforesaid. The Plaintiff will refer to the said agreement at the time of trial for its full force and effect."

Paragraph 8 of the Statement of Claim states that on or about July 1993, NISSHO IWAI CORPORATION (as the owners of the said logs) and its underwriters made claim against the Plaintiff for Japanese Yen, Y65,000,000 for the value of the loss of the said logs including interest and costs. Paragraph 9 stated "that on or about the 5th day of August 1993, the Plaintiff gave a written undertaking to the owners and underwriters of the said logs to pay such sums as might be found to be due to the owners and underwriters by the Tokyo District Court and by way of damage arising out of the loss of the said logs together with interest and costs and in consideration for the said owners and underwriters refraining from arresting or otherwise detaining the Plaintiff's vessel "ANDHIKA ASOKA" as...