clr/1982/1982_1_385.pdf

(1982)by the first defendants, at their office in Cyprus on behalf of thesecond defendants. Clause20*ofthebilloflading contained an "exclusive jurisdiction clause" which provided that disputes arising under the bill of lading shall be determined, unless the parties expiessly agree on both the choice of another Court 5 and the law to be then applicable, at the place the carrier had its head office, namely Haifa, Israel. As the cargo in question never reached Italy because it went bad and it was destroyed the plaintiff brought an action against the defendants for damages. Copy of the writ of summons was served on 10 defendants 1by leaving it with one of their Directors who, was, also, served with a copy for the second defendants. The thiid defendants, the carrier, were not served with copy of the writ. Following service as above the first and second defendants applied for an order setting aride the issue and/or the service of the writ of summons and for an order staying all proceedings against them, on the ground that the first defendants were not authorised to accept service on behalf of the second defendants and on the ground that the bill of lading contained an "exclusive jurisdiction clause". Counsel for the plaintiff submitted that and service on the second defendants was a good one in view of the provisions of rule 21**of the Cyprus Admiralty Jurisdiction Order, 1893 because the second defendants were carrying on business in Cyprus. Plaintiff's assertion that the second defendants were carrying on business in Cyprus was based on the fact that their name appeared on the window of the offices of the first defendants at Limassol, Nicosia and Larnaca and on the issue of the bill of lading. 15 20 25 Held,

(1)(after stating the principles governing the question 3Q of stay of proceedings—vide pp. 390-3 post) that since all the parties except the first defendants, are foreigners living abroad; that since the first defendants, who are a Cyprus Company, signed on behalf of the second defendants theBill of Lading and they are not in a position to say why the cargo went bad, and 35 therefore, they will not be in a position to help the Court; that since there is ample evidence that most, if not all material witnesses, are in Israel and that the second defendants, if the case * Clause 20*of the bill of lading is quoted at p. 3S9 post. ** Rule 21 is quoted at pp. 393-4post. 386 1 C.L.R. 5 10 15 20 25 30 35 ' Scuderie τ. Shoham Cyprus Ltd. proceeds in Cyprus, may not be able to propeily defend their case, as this Court has no power to summon witnesses living abroad, because they will be outside its jurisdiction and cannot force themto attendtheCourtandgiveevidence; and thatsince it is clear from the evidence that the dispute is in no way con­ nected with Cyprus, this is a proper case in which this Court can exercise its discretion and order a stay of proceedings.

(2)That from the evidence one cannot reach the conclusion that theauthorityexercised by thefirstdefendants is so extensive as tojustify one to hold that the second defendants are, for the purpose of seivice, residing in this country and, therefore, amenable to the jurisdiction of the Courts; accordingly, the service of the writ of summons in the present case, on thefirst defendants, should be set aside. Application granted. Cases referred to: JadranskaSlobodna Plovidba v. PhotosPhotiades & Co.,

(1965)1 C.L.R. 58; Cubazucarand another v. Camelia Shipping Company Ltd.

(1972)1 C.L.R. 61; Sonco CanningLimited v. "Adriatica"

(1972)1 C.L.R. 210; TheFehmarn [1958] 1 All E.R. 333; The Eleftheria [1969] 2 All E.R. 641; Trendtex Trading"'Corporation and-Another- v.- Credit. Suisse [1980] 3 All E.R. 721 at pp. 734-35; Tanagbav. PipinosShippingCo. Ltd.

(1981)1 C.L.R. 255; Westcott&LawrenceLinev. TheMayor,Deputy Mayor, Council­ lors and Townsmen of Limassol, 22 C.L.R. 193. Application. Application by defendants 1 and 2 for an order setting aside the issue and/or the service of the writ of summons and/or for an order staying all proceedings against them. M. Montanios with P. Panayi (Miss), for the applicants. D. Zavallis, for the respondent. Cur. adv. vult. DEMETRIADES J. read the following judgment. This is an application by the first and the second defendants by which they 387 Demetrtades J. Scuderie τ. Sboham Cyprus Ltd.

(1982)pray for an order setting aside the issue and/or the service of thewrit of summons and/orfor an order staying all proceedings against them, on the ground that thefirst defendants were not authorised to accept service on behalf of the second defendants and that the bill of lading contains an "exclusive jurisdiction clause", which provides that disputes arising under the bill of lading shall be determined, unless the parties expressly agree on both the choice of another Court and the Law to be then applicable, at the place the carrier has its head office, namely, Haifa, Israel. 5 10 The application was opposed by the plaintiff. The plaintiff is a merchant carrying on his business in Italy. The first defendants are shipping agents canying on their business in Limassol, Larnaca and Nicosia. The second defen­ dants who aie ship-owners and ship agents with their head 15 offices in Haifa, have vessels calling regularly at the ports of Limassol and Larnaca for the transportation of goods from and to Cyprus. Thethird defendants is a container ship owned by a Germancompany and is registered in the Federal Republic of Germany. 20 By his action the plaintiff claims damages which he allegedly sufteied on a quantity of fish which had been stuffed by him at Limassol in a container, which was then loaded on the vessel (at Limassol) for Trieste, Italy, via Haifa or Ashdod, Israel. In respect of this container a bill of lading, with the name of 25 the second defendants printed on the top of the face page was issued on the 9th June, 1981. Photocopy of this bill of lading is attached as exhibit "A" to the affidavit of Miss Persephoni Panayi, dated 8th October, 1981, which accompanies the appli­ cation. Copy of the writ of summons of the action was seived 30 on defendants

(1)by leavingitwith oneof their Directors,who was, also, served with a copy for the second defendants. Copy of the writ was not served on the third defendants. On the face of the said bill of lading the following clause appears: "In accepting this Bill of Lading the Merchant expressly accepts and agrees to be bound by all the stipulations, exceptions, limitations, liberties and conditions stated herein, whether written, printed, stamped or otherwise 388 35 1 C.L.R. Scuderie v. Shofaam Cyprus Ltd. Demetriades J. incorporated on the front and/or reverse side heieof as fully as if they were all signed by the Merchant". Paragraph 20 of the said bill of lading, which appears at the back side of it and which is headed "Law and Jurisdiction", 5 provides: "Disputes arising under this Bill of Lading shall be determined at the option of the Meichant, and subject to Paragraph (I)of Clause 3hereof, bythecourts and in accordance with the law at 10 (

1. a)the place where the Carrier has its Head Office, namely Haifa-Israel, or (
2. b)if the cargo originates in or is destined for the U.S.A. by the United States District Court for the Southern District of New York, N.Y. U.S.A. 15 No proceedings shall be brought before other courts unless the parties expressly agree on both the choice of another court and the law to be then applicable". The bill of lading was issued by the second defendants at Limassol and bears on the face of it the stamp of the first defen20 dants. On the 2nd January, 1982, Mr. Prodromos Papavassiliou, the Managing Director of the first defendants, swore ___a_supplementary affidavit in support of the application, in which he denies the alie^ions~~contained~in-the-affidavit-accompa^ nying the opposition and says that the second defendants are 25 an Israeli company incorporated and carrying on their business in Haifa; that they do not and did not have an office in Cyprus and that his company has for many years been acting in Cypius as the agents of the second defendants. Mr.Papavassiliouwas cross-examined bycounselfor theplain30 tiff/respondent and though he admitted that on the window of hiscompany's offices thenameofthe second defendants iswritten —a thing which is very usual, as he said, for all shipping agencies, to expose or show the names of the companies they represent—he alleged that they have no authorisation to accept 35 service of writs of summons on behalf of the second defendants, though as their agents they are authorised to sign on their behalf bills of lading. As no pleadings have been filed the case for the plaintiffs 389 Demetriades J. Scuderie v. Shoham Cyprus Ltd.

(1982)appears in paragraph 10 of the affidavit which accompanies the opposition and it is briefly as follows: "On 8th October, 1981, a bill of lading was issued at the offices of the first defendants for the carriage of the goods earlier mentioned; that in bleach of the terms of the said 5 bill of ladingthedefendants failed toprotect and/or conserve the load of fish which was placed in the container; that they failed to supervise diligently and constantly the said load and/or to keep it under continuous freezing conditions and that they failed to inspect in time and find out that 10 there was slight leakage (flowing through), and/or the non-existence of freezing in the cold stores before the departure of thevessel and/or immediately after it dcpaited, and/or whilst the load was on the ship, and as a result the load went bad". It is an undisputed fact that the cargo never reached Trieste and that when it arrived at Haifa having been found that it went bad it was destroyed, Having summarised the background of the application I propose to see what is the legal position governing the issues 20 raised by it. It is clear from the authorities that once the party moving for a stay has shown that the dispute is within a valid and a subsisting Exclusive Jurisdiction Clause, the burden of showing cause why effect should not be given to the agreement is upon 25 the party opposing the application for stay. His obligation is not to persuade the Court that such a party has a right to continue, but that he ought·to be allowed to continue. With regard to this issue useful refeience may be made to the cases of Jaciranska Shbodna Plovidba v. Photos Photiades &Co., 30

(1965)1 C.L.R. 58, Cubazucar and another v. CameliaShipping Company Ltd.,

(1972)1 C.L.R. 61, and Sonco Canning Limited v. "Adriatica'' (Societe Per Azioni Di Navigazione),

(1972)1 C.L.R. 210, in which judgments of the English Courts, such as The Fehmam, [1958] 1 All E.R. 333 and The Eleftheria, 35 [1969] 2 All E.R. 641,weie considered and the principles enunciated therein were followed and applied. In the very recent case of Trendtex Trading Corporation 390 15 1 C.L.R. 5 Scuderie v. ShotaamCyprus Ltd. Demetriades J. and another v. Credit Suisse, [1980] 3 All E.R. 721, Robert Goff J. summarises the law applicable to issues called to be decided on the "inherent jurisdiction of the Court" and the "exclusive jurisdiction clause" and states the following (at pp. 73Φ-735), which I fully adopt: "As I understand it those principles are as follows: 10 15 20 25 30 35

(1)' the real test of stay depends on what the court in its discretion considers that justice demands' (see [1978] 1 All E.R. 625 at 636, [1978] A.C. 795 at 819 per Lord Salmon).

(2)The court must first consider whether there is another jurisdiction which is clearly more appropriate than England for the trial of the action, (

1. a)Such a jurisdiction has been called the 'natural or appropriate forum' (see [1978] 1 All E.R. 625 at 631, [1978] A.C. 795 at 812 per Lord Diplock) or the 'natural forum' (see [1978] 1 All E.R. 625 at 636, [1978] A.C. 795 at 818 per Lord Salmon). The court looks for another forum which is clearly more appro­ priate, because the couit will not lightly stay an action properly commenced in this country (see [1978] 1 All E.R. 625 at 629, 636, [1978] A.C. 795 at 810, 818 per Lord Diplock and Lord Salmon), the reason being that, since the jurisdiction of the English court has been completely invokedraTstay should-not-be-granted_withou_t_good reason (see [1978] 1 All E.R. 625 at 642, [1978] A . C 795~aT826" per Lord Keith), (
2. b)The burden rests on the defendant to prove the existence of such other jurisdiction, (
3. c)In considering whether there is another jurisdiction which is cleaily more appropriate the court will consider all the circumstances of the particular case, including, for example, where thecause of action arose, theconnectionof the parties with any particular jurisdiction, the applicable law, the availability of witnesses and the saving of costs.

(3)If the court concludes that there is another clearly more appropriate jurisdiction, then two slightly different tests have been adumbrated, (a) A stay will be granted unless the plaintiff shows that a stay would deprive him of a legitimate personal or juridical advantage available to him in England (see [1978] 1 All E.R. 625 at 630, 639, 391 Demetriades J. Scuderie v. Sbotuun Cyprus Ltd.

(1982)[1978] A.C. 795 at 812, 822, per Lord Diplock, approved generallybyLord Fraser). (b)Theburdenof proof remains on the defendant. If he can show that trial in England would affoid the plaintiff no real advantage, it would be unjust to refuse a stay. But, if trial in England would 5 offer the plaintiff a real advantage, then a balance must bestruckandthecourtmustdecideinitsdiscretionwhether justice demands a stay (see [1978] 1 All E.R. 625 at 636, 645, [1978]A.C.795at 819,829peiLord Salmon and Lord Keith). On either test the court will only consider advantages totheplaintiff which areread,i.e.objectively demonstrated. (It is not clear which of these two approaches enjoyed the support of Lord Russell; but from the general tenor of his speech I infer that he preferred the latter). 15

(4)If the court concludes that there is no other clearly moreappropriatejurisdiction, thenonlyLordKeithappears to have considered that a stay might be granted. Such a case must surely be veryrare , It will at once be apparent that the principles now appli- 20 cable are not far different from those applicable in thecase of anexclusivejurisdiction clause. Butthereare important differences. First, in the case of an exclusive jurisdiction clause, the burden of,proving that there is strong cause for not granting a stay lests on the plaintiff, because the 25 parties have chosen the foreign jurisdiction. But in other cases, where no such choice has been made, the burden of proof (including the burden of proving that there is another clearly more appropriate forum) restson the defendant. There is another important point of difference. 30 If the parties have chosen to submit then- disputes to the exclusive jurisdiction of a foreign court it is difficult to see how either can in ordinary circumstances complain of the procedure of that court; whereas the mere fact that there exists another more appropriate forum should 35 not of itself preclude the plaintiff from seeking to obtain the benefit of a procedural advantage in the Englishjurisdiction". Counsel appearing in theseproceedingsveryrightlysubmitted 392 10 I C.L.R. Scuderie v. Shoham Cyprus Ltd. Demetriades J. thatwhat Ihave todecideiswhetherIshould exercise mydiscre­ tion to stay the proceedings in view of the provision of the "exclusive jurisdiction clause" provided in the Bill of Lading. In considering the various matters raised by the exclusive 5 jurisdiction clause, Robert Goff J. followed the same order as Biandon J. did in The Eleftheria case (supra) and I propose to do thesame as Idid in thecase of Tanagba v. Pipinos Shipping Co. Ltd.

(1981)1 C.L.R. 255, to the extent that the piesent case requires. 10 From the evidence adduced it appears that all the parties except the first defendants, are foreigners living abroad; that the first defendants, who are a Cyprus Company, signed on behalf of thesecond defendants theBill of Lading and they are not in a position to say why the cargo went bad, therefore, 15 they will not be in a position to help the Court; that there is ample evidence that most, if not all material witnesses, are in Israel and that the second defendants, if the case proceeds in Cyprus may not be able to properly defend their case as this Court has no power to summon witnesses living abroad. 20 because they will be outside its juriidiction and cannot force them to attend the Court and give evidence. Further, it is clear from theevidence that the dispute is in no way connected with Cyprus. In the light of the particular^iroimstances~of-this-case-as— 25 I found them to be and the legal position earlier stated, 1 find that this is a ρτορβτ case in which I can exercise my discretion and order a stay of proceedings. The second issue that calls for decision is whether the service of thewrit of summons effected on one of the Directorsof the 30 first defendants, for and on behalf of the second defendants, is a good one. Learned counsel for the respondents submitted that the service on thesecond defendants is a good oneinview of theprovisions of rule21of theCyprus Admiralty Jurisdiction Order, 1893, which provides: 35 "21. Where no such provision exists, a writ of summons against a corporation may be served by leaving an office copy of the writ with the President or other head officer, or the clerk, treasurer, or secretaiy of the corporation, and a 393 Demetriades J. Scuderie τ. ShohamCyprus Ltd. (1982. srit of summons against a public company may be served by leaving with the secretary, manager or other person authorized to transact the business of the company in Cyprus an office copy of the writ or by leaving the same at the office of the company". The words "other person authorized to transact the business of the company in Cyprus" appearing in the above rule have never been judicially interpreted but I feel that useful guidance may be derived from the case of Westcott & Lawrence Line v. TheMayor, Deputy Mayor, Councillors and Townsmen of Limassol, 22 C.L.R. 193, where it was held: 5 10 "

(1)that the great similarity between the English Rules of the Supreme Court and the Cyprus Civil Procedure Rules indicated forcibly that the underlying principles in both sets of rules were similar, and, unless an express 15 provision or the context led to a contrary view, in inter­ preting the Cyprus Civil Procedure Rules, preference should be given to a construction more consonant with the corresponding English Rules of the Supreme Court;

(2)that the words 'any person in Cyprus who appears to 20 be authorised', in Order 5, rule 7, meant 'a person who is obviously or manifestly authorised to transact business etc.;' and that the words 'to transact business' in the same rule meant nothing more and nothing less than 'carrying on business'; 25

(3)that Order 9, rule 8, of the English Rules of Supreme Court, in its judicially interpreted and enlarged form, was substantially similar to our Order 5, rule 7, arid, since both rules in material parts were in pari materia, the English authorities were necessarily binding on the 30 Cyprus Courts;

(4)that the dominant factor in the English authorities was the nature and character of the authority of the local agent conferred on him by his foreign principal corpora­ tion. If the authority exercised by the agent was so 35 extensive as to justify one to hold that the foreign prin­ cipal was for thepurpose of service resident in thecountry of the agent and therefore amenable to the jurisdiction 394 1 C.L.R. Scuderie τ. Sbofaam Cyprus Ltd. Demetriades J. of suchcountry,thentheserviceof awrit of summonsor other legal process on the agent for his principal would be considered good; and

(5)thattheseiviceof the writ inthepiesentcaseonthelocal agent was bad and ought to be set aside". In thepiesent case, theonly evidence adduced by therespon­ dent that the second defendants carry on business in Cyprus, is thatof Mr. Georghios M. Michaelides,anadvocate piactising in Nicosia, who is the affiant of thetwoaffidavits thataccom­ pany theoppositiontothis application. He said that thename of the second defendants appearsonthewindow of the offices that thefirstdefendants have in Limassol, NicosiaandLarnaca. Thisfact coupledwith theissueof thebill of lading, thewitness said, led him to the conclusion that the second defendants do carry on business in Cyprus. I do not think that from this evidence one can reach the conclusion that the authority exercised by the first defendants is so extensive as to justify one to hold that the second defendants are,for thepurpose of service, residing in this country and, therefore, amenable to the jurisdiction of the Courts. For this reason Ihold thattheserviceof thewrit of summons in thepresent case, on thefirstdefendants, should be set aside. —For-all the above reasons this application succeeds. The respondent shall pay the costs of these proceedings! Application granted with costs. 395