CMA CGM SA v Ship 'Chou Shan'

OUTLINE OF DISPUTE 7 It is against those broadly stated facts that the Chou Shan pursues its stay application. 8 As noted in the Introduction, the Chou Shan puts its argument for a stay on two interrelated reasons. The first is that Australia is a clearly inappropriate forum for the hearing and determination of the dispute. The second is that the existence of the Chinese proceeding, in which the CCF interests are 'actively and voluntarily participating', renders the continuation of this proceeding vexatious and oppressive. 9 The Chou Shan relies on what it says are the following significant factors: (a) The natural and obvious forum for all disputes relating to the collision is China. (b) Other than the fact that the proceeding was commenced here, nothing and no one in this proceeding has any connection with Australia. (c) The claim is governed by Chinese law as to liability, damages and limitations. (d) There are proceedings before a Chinese court that has jurisdiction over all persons and claims. Substantial justice will be done in China. (e) Conversely, substantial justice cannot and will not be done in Australia in the circumstances of this case. (f) Regardless of what happens in Australia, the proceedings in China will continue. Those proceedings will determine, according to Chinese law, questions of liability and damages. Continuation of proceedings in China and in Australia raises real risks about inconsistent findings and verdicts. Where there is a need to enforce a judgment in a third country, the existence of conflicting findings and verdicts 'presents an intolerable situation'. That situation is only avoided, it is contended, by a stay of this proceeding. (g) The reality is that the plaintiffs have made an election between two fundamentally different causes of action by filing in China after the parties were subject to the jurisdiction of this Court. 10 The plaintiffs oppose the Chou Shan's stay application on the basis that they have properly and regularly invoked the in rem jurisdiction of this Court against the Chou Shan. The subsequent commencement of a number of separate actions in China, in particular, by the Chou Shan in seeking to limit its liability to claims made against it by entities other than the plaintiffs, in arresting the plaintiffs' ship and in subsequently filing a civil complaint against the plaintiffs, are not such that the prima facie rights of the plaintiffs to have their claim against the Chou Shan determined by this Court should be displaced. 11 The plaintiffs reject any suggestion that they are seeking to bring, by way of this proceeding, any claims on behalf of third parties. There is no question of the plaintiffs' standing to pursue the claims. Rather, the plaintiffs have simply included as part of the damages claimable from the Chou Shan in this proceeding, those amounts which the plaintiffs are or may be liable to pay to third parties. These include (amongst other things) claims for damage to their cargo and containers, for pollution damage and clean up costs and to the Shanghai MSA as a result of the collision and the alleged negligence of the Chou Shan causing the collision.

BACKGROUND FACTS 12 The facts discussed below give a more complete picture of relevant events as they have unfolded. They are drawn from several affidavits and from the oral evidence given concurrently by two experts on Chinese law. 13 The affidavit evidence for the Chou Shan includes an affidavit of Mr Julian Davies, sworn on 31 July 2013, which concerns the events immediately after the collision and exhibits a deck log, copies of radar snapshots and the conning page from the Chou Shan's vessel data recorder. There is affidavit evidence of Ms Jenny Bazakas, solicitor, affirmed on 8 July 2013, giving evidence of the nationalities of the crew and the residence of the Master, the second officer and the chief engineer. The Chou Shan also relies upon an affidavit of Mr Lushan Charles Qin, affirmed on 8 July 2013, translating Chinese documents and witness statements of Mr Xiangyong Chen, an expert in Chinese law, dated 1 July 2013, 6 July 2013 and 19 August 2013. 14 It is necessary to recite in further detail the events summarised in the Introduction. The collision occurred in the China's EEZ on 19 March 2013. The Chou Shan was subsequently directed to Qushan Port in China by her owners for repairs. The CCF proceeded to the Yangshan Terminal in China. 15 On 26 March 2013, the Zhoushan MSA issued a Notice of Departure Prohibition to the Chou Shan. On the same day, there was a 'without prejudice' meeting between the Shanghai MSA, representatives of the Chou Shan and representatives of the CCF. On 31 March 2013, the Shanghai MSA issued Notices Concerning Provision of a Financial Guarantee for Emergency Expenses (in relation to the pollution clean up) to the Chou Shan and to the plaintiffs. (The role of these documents is amplified in the discussion of the expert evidence.) The Shanghai MSA sought total security of RMB70 million from each vessel. 16 On 2 April 2013, China Maritime Services Company Limited sought RMB 20 million from the Chou Shan as security for loss or damage to fisheries. 17 On 3 April 2013, CCF interests provided security to the Shanghai MSA. 18 On 9 April 2013, the plaintiffs commenced proceedings in this Court against the Chou Shan claiming USD 60 million plus interest and costs arising out of the collision. On 15 April 2013, the plaintiffs made an ex parte interlocutory application to suspend the plaintiffs' obligation to file a Preliminary Act pursuant to r 25(1) of the Admiralty Rules 1988 (Cth) until further order. 19 On 27 April 2013, the Chou Shan entered into an agreement with the Shanghai MSA to provide security. On 6 May 2013, the owners of the Chou Shan applied to the Ningbo Maritime Court to set up a limitation fund in Special Drawing Rights (SDR) in the sum of SDR 11,850,278. 20 On 9 May 2013, cargo interests arrested the Chou Shan in Zhoushan Port in China and commenced proceedings against the Chou Shan in the Ningbo Maritime Court. On the same day, China Reinsurance (Group) Corporation provided Letter of Undertaking (LOU) on behalf of the Chou Shan to China Maritime Services Company Ltd in response to the request for security for fisheries claims. On 10 May 2013, the Chou Shan was released from arrest in China on provision of security by way of Britannia Steam Ship LOUs dated 8 May 2013. 21 Three days later, the Ningbo Maritime Court issued a notice accepting the Chou Shan's application to set up a limitation fund. On 14 May 2013, the owners of the Chou Shan applied to the Ningbo Maritime Court to arrest the CCF in China. 22 This Court issued the arrest warrant for the Chou Shan and on 17 May 2013, I ordered the plaintiffs to file and serve a Preliminary Act seven days after service of the writ. On that same day, the Chou Shan owners arrested the CCF in Zhoushan Cosco Shipyard in China. 23 On 20 May 2013, the Chou Shan owners filed a civil complaint against the CCF in the Ningbo Maritime Court. The following day, that Court issued a notice to the owners of the Chou Shan confirming that its application to set up a limitation fund for maritime claims was in compliance with the law and that credit registration would be announced. 24 On 22 May 2013, pursuant to the warrant issued by this Court, the Chou Shan was arrested in Port Hedland at 11.30 am Western Standard Time. On the same day, the Ningbo Maritime Court issued an announcement that the Chou Shan owners' application for limitation was accepted by that Court for the limits under the Maritime Code of China (Maritime Code). The announcement directed interested parties to submit objections within 30 days and required creditors to apply within 60 days for claims against the fund from the date the last public notice was published. The Ningbo Maritime Court was to notify certain parties within seven days of the announcement. 25 On 23 May 2013, the Chou Shan owners applied to the Ningbo Maritime Court to board the CCF for pre-trial evidence preservation. That application was refused because the Shanghai MSA already had all relevant documents. 26 The following day they applied to this Court for release of the Chou Shan. On the same date, the owners of Chou Shan filed a conditional appearance in this Court and I made a conditional order for the release of the Chou Shan. 27 On the same day, the Chou Shan owners' claims against the CCF were accepted by the Ningbo Maritime Court. The Chou Shan owners also applied to the Ningbo Maritime Court to increase the security demand against the CCF to USD 40 million. Between 27 and 29 May 2013, the announcement of the Chou Shan limitation fund was published in two newspapers, the People's Daily and People's Daily Overseas Edition. 28 On 29 May 2013, the Chou Shan was released at 3.25 pm Western Standard Time and the Shanghai MSA filed an objection in the Ningbo Maritime Court to the Chou Shan application for limitation. On the same day there was a 'without prejudice' meeting in China with representatives of the Chou Shan, the plaintiffs and Shanghai Xiyang Environmental Science and Technology Co Ltd regarding the clean up costs. 29 A day later, on 30 May 2013, the plaintiffs filed their Preliminary Act in this Court. 30 A further 'without prejudice' meeting occurred on the same day in China with representatives of the Chou Shan, CCF, Zhoushan MSA and Zhoushan Haian Oil Spill Treatment Co Ltd concerning the clean up costs. 31 On 3 June 2013, the Ningbo Maritime Court granted the Chou Shan's application to increase the CCF security amount from USD 5 million to USD 40 million. 32 On 14 June 2013, I held a directions hearing and made programming orders in relation to the Chou Shan's foreshadowed stay application. On 18 June 2013 the Chou Shan duly filed its stay application. A statement of claim was filed on 25 June 2013 with further and better particulars being sought two days later. 33 On 27 June 2013, the plaintiffs provided security for the Chou Shan claims by way of a Swedish Club LOU. On 2 July 2013, there was a meeting at the Shanghai MSA with representatives of the Chou Shan and the plaintiffs. 34 On the following day, the Chou Shan interests applied to the Ningbo Maritime Court for release of the CCF following the provision of a LOU and on 4 July 2013, the plaintiffs provided further and better particulars of the statement of claim in this Court. On 9 July 2013, the Chou Shan filed its Preliminary Act in this Court. 35 On 10 July 2013, the CCF was released from arrest in China and the Chou Shan interests served the Ningbo Maritime Court Bill of Complaint on the plaintiffs. On the same day, the Ningbo Maritime Court rejected MSA's and Fisheries Bureau's objections to the setting up of the limitation fund by the Chou Shan owners and approved an application for setting up a limitation fund. On 29 July 2013, the CCF interests registered claims against the limitation fund in the Ningbo Maritime Court. 36 On 2 August 2013, the CCF interests filed a Bill of Complaint against the Chou Shan interests in the Ningbo Maritime Court and on 8 August 2013, CCF interests filed an objection to jurisdiction in the Ningbo Maritime Court in the liability proceedings brought by the Chou Shan. 37 On 20 August 2013, the Ningbo Maritime Court dismissed the plaintiffs' objection to jurisdiction and on 26 August 2013, the Ningbo Maritime Court issued a Certificate of Limitation Fund. 38 It is unnecessary on this application to refer to all details of the evidence but it is desirable to say something about the different points of view expressed by two Chinese legal experts who gave concurrent evidence. There is no doubt as to the expertise of either witness. I will deal first with the general evidence-in-chief of each expert and then the specific areas where their evidence differed.

Mr Xiangyong Chen 39 Mr Chen is the expert called by the Chou Shan. He is a Chinese lawyer practising in China, being a senior partner of Wang Jing & Co and the partner in charge of the firm's admiralty practice. He has been practicing since 1994. His area of expertise is maritime litigation and he is frequently involved in cases concerning ship collisions, ship-induced oil spills and pollution and liability of maritime claims. Amongst other languages, he speaks fluent English. 40 His witness statement describes how maritime cases move through Chinese courts. Mr Chen gave evidence that maritime cases in China are first heard by the Maritime Courts located in the ten major coastal and river ports which he identified. The Higher People's Court (HPC) of the province where the Maritime Court is located then hears appeals lodged by the litigating parties who may disagree with the conclusion of the Maritime Court in the first instance judgment. 41 The second instance judgment from the HPC thereafter becomes effective and fully enforceable, although a case can be put before the Supreme People's Court of China for retrial in instances where the litigating parties are still dissatisfied with the second instance judgment of the HPC. 42 Ship collision cases are typical maritime cases with which the Maritime Courts and the appellate courts are very familiar. The maritime legal system over the decades has become highly specialised and comprehensive legislation consisting of domestic laws and international conventions has been enacted. 43 Mr Chen observed that judges hearing maritime cases are experienced professionals. They are well versed in relevant laws and procedures and have handled and adjudicated numerous maritime cases of all kinds. Some of the judges have been ex-mariners before taking up their judicial position. They are familiar with international shipping practice. 44 Mr Chen explained that before a Maritime Court schedules a hearing for a ship collision case, the parties are usually given a certain period of time to collect evidence and formulate their cases. They are also obliged to complete the Maritime Court's Marine Accident Investigation Form. This is a standardised questionnaire consisting of questions going into detailed information about the vessels, the crews and the accident. The evidence organised by each party is to be disclosed for examination by the other. The Maritime Court also examines evidence collected by the MSA which is empowered to investigate marine traffic accidents whenever necessary. The Marine Court will summons expert witnesses retained either by the litigating parties or by the Court to render assistance in technical issues and to give oral evidence at the Marine Court's hearing. By reaching a decision on collision liability apportionment, the judges take into account all available evidence and apply their thorough understanding of the laws. 45 Mr Chen gave evidence that in relation to collision cases, the Marine Court is normally requested to adjudicate on both liability and quantum. Chapter 8 of the Maritime Code sets out basic principles on how collision liability will be apportioned and provides by Art 167 that neither party will be liable to the other 'if the collision is caused by force majeure or other causes not attributable to the fault of either party or if the cause thereof is left in doubt'. Article 168 provides that if the collision is caused by a ship in fault, that ship will be liable. Article 169 of the Maritime Code provides: If the colliding ships are all in fault, each ship shall be liable in proportion to the extent of its fault; if the respective faults are equal in proportion or it is impossible to determine the extent of the proportion of the respective faults, the liability of the colliding ships shall be apportioned equally. The ships in fault shall be liable for the damage to the ship, the goods and other property on board pursuant to the proportions prescribed in the preceding paragraph. Where damage is caused to the property of a third party, the liability for compensation of any of the colliding ships shall not exceed the proportion it shall bear. If the ships in fault have caused loss of life or personal injury to a third party, they shall be jointly and severally liable therefor. If a ship has paid an amount of compensation in excess of the proportion prescribed in paragraph 1 of this Article, it shall have the right of recourse against the other ship(s) in fault. (emphasis added) 46 The Maritime Code was in evidence along with an accompanying English translation of each article in it. 47 Mr Chen explained that the principles established under the Maritime Code, particularly Arts 167, 168 and 169, are further interpreted and supplemented by the Supreme People's Court's Interpretations on Several Issues on Trial of Cases on Ships Collision Disputes (Collision Interpretations). In circumstances where the Maritime Code and the Collision Interpretations do not make specific provision, the Chinese courts may apply general principles concerning liabilities for tort provided by Chs 1-4 in the Tortious Liability Law of China (TLL). These documents were also put in evidence through Mr Chen. 48 Having regard to those materials, Mr Chen says that it can be seen that collision liability is essentially fault based tortious liability. In ascertaining the extent of respective faults on the colliding ships the Maritime Courts primarily look into the Convention on the International Regulations for Preventing Collisions at Sea 1972, opened for signature 20 October 1972, 105 UNTS 16 (entered into force 15 July 1977) (COLREG) and the International Convention on Standards of Training Certification and Watchkeeping for Seafarers, opened for signature 7 July 1978, 1361 UNTS 2 (entered into force 28 April 1984) (STCW). In addition, each port or certain navigable waters may have local regulations and by-laws such as a traffic separation scheme which also bind vessels entering the relevant areas. 49 Mr Chen's evidence was that with regard to determination of collision liability, the formal investigation report issued by the MSA is a significant piece of evidence in the eyes of the Maritime Courts. The MSA investigation report on a maritime accident mainly covers the following matters: (a) particulars of the involved vessels, general information about the on-board crew, cargo or passengers, and about owners and operators of the involved vessels; (b) the navigational circumstances in the area of the accident; (c) analysis of the evidence collected by the MSA; (d) a chronological course of the accident as reconstructed by MSA on the collected evidence; (e) the process of any search and rescue action taken; (f) possible property damage, loss and personal casualty resulting from the accident; and (g) analysis of the possible accident causes and the opinion of MSA and conclusion on the collision liability issue. 50 In relation to investigation reports for ship collision cases, the MSA usually comments only on which vessel should undertake the major liability and which should be liable on a secondary basis or whether one of the colliding vessels should be solely and exclusively liable for the collision or whether the vessels should be equally liable. It is rare for the MSA to specify any concrete apportionment by way of percentage in the reports as that is an issue to be determined by the Maritime Courts. 51 As to quantum, in order to quantify ship and cargo damage, the Chinese Courts usually refer to the Supreme People's Court's Interpretations on Several Issues on Property Damage Compensation and Trial of Ships Collision or Contact Cases (Collision Damage Interpretations). The Collision Damage Interpretations by Art 2 endorse the basic principle of restitutio in integrum. Article 2 sets out the general categories of loss and damage which may compensable together with the guidelines on how reasonable compensation should be calculated. 52 In the context of pollution, there are special provisions which apply. China is a signatory to the International Convention on Civil Liability for Oil Pollution Damage, opened for signature 29 November 1969, 973 UNTS 3 (entered into force 1975) and its 1992 Protocols (CLC 92). CLC 92 deals with liability arising from pollution damage resulting from maritime casualties involving oil tankers. China is also a member state of the International Convention on Civil Liability for Bunker Oil Pollution Damage, opened for signature 27 March 2001, 40 ILM 1493 (entered into force 21 November 2008) (Bunker Convention) which deals with liability for damage caused by spill of bunkers carried on board as fuel. Domestically, Ch 6 and Ch 7 (Arts 50-57) of the Regulations on Administration on Prevention and Control of Ship-induced Pollution to Marine Environment (Pollution Prevention Regulations) also stipulate principles for determining liabilities for ship-induced marine pollution damage. Articles 3, 4 and 5 of the Supreme People's Court's Interpretations on Several Issues on Trial on Cases of Ship-induced Oil Pollution Damage Compensation Disputes (Oil Pollution Interpretations) provide additional details. 53 Article 3 of the Oil Pollution Interpretations provides: In case of oil pollution damage caused by oil leakage from two or more ships, where the aggrieved party brings a lawsuit against the ship-owners of the oil-leaking ships to bear compensation liability, if the respective damage can be reasonably divided based on factors such as the amount of the leaked oil and the hazardous nature of the leaked oil to the environment, the owners of the leaking ships shall bear the several liability; if the respective damage cannot be reasonably divided, they shall bear joint and several liability. 54 In cases of owners of leaking ships bearing joint and several liability, the amount of compensation shall be ascertained proportionate to the degree of fault. Where liability cannot be ascertained proportionally, compensation liability shall be borne equally by each owner. Where the owner of an oil-leaking ship has made a payment that exceeds the proportion of liability, he or she has a right of recourse against the owners of the other oil-leaking ship. 55 Article 4 provides that where oil pollution damage is caused by a ship collision where both ships were at fault, the aggrieved party may request the owner of the oil-leaking ship to bear full liability for compensation. 56 Article 5 provides: Where the oil pollution damage was caused by persistent oil carried by oil tankers, the amount of compensation limitation shall be ascertained in accordance with the provisions as stipulated in the Pollution Prevention Regulations and CLC 92. 57 Mr Chen identifies that Art 9 of the Oil Pollution Interpretations set out the scope of compensable ship sourced pollution damage while Arts 10-17 set out guidelines on how to determine and calculate the compensation. 58 In relation to liability limitation, China is not a member state of the Convention on Limitation of Liability for Maritime Claims, opened for signature on 19 November 1976, 1456 UNTS 221 (entered into force 1 December 1986) (the LLMC 76). However, Ch 11 of the Maritime Code which provides rights and conditions of the limitation of liability for maritime claims is legislated by reference to the LLMC 76 and the limitation regime established under it is similar to that under the LLMC 76. Mr Chen explains that the Supreme People's Court's Interpretation on Several Issues on Trial of Cases of Limitation of Liability for Maritime Claims (Limitation Interpretations) also specify details on the ordinary limitation fund for maritime claims. 59 The most common sources of law for limitation of liability for oil pollution damage include Art 5 and Art 6 of the CLC 92 and the Oil Pollution Interpretations. Article 6 of the Bunker Convention leaves the limitation issue to be referred to the national or international regime which is LLMC 76 of each acceding state. Therefore, as China is not a signatory to the LLMC 76, reference is to be made to Ch 11 of the Maritime Code. 60 Additionally, Ch 9 and Ch 10 of the Special Maritime Procedure Law of China (SMPL), the Supreme People's Court's Interpretations on Several Issues on the Application of SMPL (SMPL Interpretations) and the Limitation Interpretations also contain legal provisions applicable to the limitation proceedings. 61 While Mr Chen emphasises that this is not an exhaustive summary of all domestic legislation and international instruments applicable to ship collision cases, pollution cases and limitation of liability for maritime claims, they are the ones which are most general called upon and are the most instructive. However, for any particular case, the Chinese court may apply specialised regulations depending on the facts concerned. Where there is no codified legislation or where the law is not explicit and remains arguable (which Mr Chen says is not uncommon under a civil law system), Chinese courts adjudicate the case at their own discretion by taking into consideration customary practices, case precedent, international law and leading academic opinion.

Mr Chen's evidence on jurisdiction 62 On the question of jurisdiction, Mr Chen reiterated that the collision occurred in the East China Sea in China's EEZ. The EEZ is defined by the United Nations Convention of the Law of the Sea, opened for signature 10 December 1982, 1833 UNTS 3 (entered into force 16 November 1994) (UNCLOS) to which China acceded in 1997, and stretches from the state's territory sea baseline (TSB) out to 200 nautical miles, that is, 188 nautical miles beyond the territory water boundary which is 12 nautical miles off the TSB. Although the collision position was 100 nautical miles off China's TSB, it is only about 116 nautical miles away from South Korea's Marado Island which is the closest non-Chinese territory. The position is within the EEZ of China. Pursuant to Art 3 and Art 50 of the Maritime Traffic Safety Law (MTSL) which was in evidence, and Art 2 and Art 5 of the Marine Environmental Protection Law of China (MEPL) which was also in evidence, the MSA had authority to investigate the collision accident and the pollution it gave rise to in the EEZ. 63 Mr Chen identified that the MSA's authority to investigate marine traffic accidents is conferred by Art 43 of the MTSL whilst its authority to investigate ship-induced marine pollution accidents is conferred by Art 5 of the MEPL. Its authority to investigate maritime traffic accidents is also to be found under Art 10 of the Regulations on Maritime Traffic Accident Investigation and Administration (RMTAIA) which provides that for maritime traffic accidents occurring in the port area, the local port affair authority (which was merged into the MSA in 2000) will investigate it. For maritime traffic accidents occurring outside the port area, the port affair authority of the nearest port or the first Chinese port the vessel arrives at will investigate it. The Central Port Affair Authority will determine which port affair authority will investigate when it is necessary to do so. 64 On the assumption that after the accident the CCF proceeded to Yangshan Terminal, it fell under the administration of the Shanghai MSA. The Chou Shan, however, proceeded to Zhoushan Port, under the administration of the Zhejiang MSA. Therefore, according to Art 10 of the RMTAIA, both the Shanghai MSA and the Zhejiang MSA had authority to investigate the collision accident and to board CCF and the Chou Shan respectively to carry out on-board investigations when the vessels entered their respective jurisdictions. 65 Because bunker oil had spilled out of the CCF into China's EEZ as a result of the collision, there was ship-induced oil pollution which fell for the MSA to investigate. For the MSA's investigation into ship-induced oil pollution, Art 2 of the MEPL stipulates that Chinese waters that are subject to the MEPL include inland waters, territorial waters, the contiguous zone, the EEZ, the continental shelf and other waters under Chinese jurisdiction. Accordingly, the MSA had investigative authority in pollution occurring in China's EEZ. 66 In relation to deciding which MSA should investigate the pollution accident, Mr Chen gave evidence that Art 44 of the Pollution Prevention Regulations provides that for an unexpectedly serious ship-induced pollution accident involving an oil spill of more than 1000 tonnes or direct economic loss over RMB 200 million, China's State Council or Ministry of Transportation delegated by the State Council will organise the investigation. For serious ship-induced pollution accidents (meaning an oil spill over 500 tonnes or direct economic loss over RMB 100 million) the Central MSA will organise the investigation. For relatively serious ship-induced pollution accidents (oil spill over 100 tonnes or direct economic loss over RMB 50 million) and an ordinary ship-induced pollution accident being under 100 tonnes or under RMB 50 million) the MSA of the place where the accident occurred is to organise the investigation. 67 Different considerations apply to determining jurisdiction for the collision case, the pollution case and the limitation case. 68 Turning to each of those, Mr Chen explained that Art 30 of the Civil Procedure Law of China (CPL) (also in evidence) and the SMPL Interpretations stipulate that claims arising from ship collisions will be under the jurisdiction of the Maritime Court in the place where: (a) the collision occurred; or (b) the ship involved in a collision first arrived after the accident; or (c) the ship at fault was arrested; or (d) the defendant has its domicile. 69 As Yangshan Terminal and Zhoushan Port were where CCF and the Chou Shan respectively first arrived after the collision, the Shanghai Maritime Court and the Ningbo Maritime Court both had jurisdiction to hear the collision case. However, the fact that the CCF was arrested in Zhoushan Cosco Shipyard by the Ningbo Maritime Court further strengthened the jurisdiction of the Ningbo Maritime Court. 70 In relation to the pollution case, Mr Chen referred to Art 7(2) of the SMPL which provides that claims arising out of pollution damage to the sea caused by oil or another hazardous substance that is discharged from a ship are to be heard by the Maritime Court of the place where the pollution occurred, where the damage occurred or where the pollution prevention measures have to be taken. Although the place where the collision and pollution occurred was outside Chinese territorial waters, the CCF (the leaking vessel) was directed to the Yangshan Terminal following the collision. As a result, oil pollution and contamination may have occurred to the waters of the Yangshan Terminal. This resulted in the pollution case being under the jurisdiction of the Shanghai Maritime Court pursuant to Art 7(2) of the SMPL. 71 In relation to the limitation case, Mr Chen referred to Art 109 of the SMPL which provides, in effect, that after a limitation fund for maritime claims has been constituted, the parties will file their related claims with the Maritime Court where the fund for limitation liability has been established, unless a jurisdiction or arbitration agreement has been concluded by the parties. Therefore, if the Chou Shan interests had successfully constituted a limitation fund for maritime claims before a Chinese Maritime Court, that Maritime Court would be seized of jurisdiction to hear all maritime claims against the Chou Shan interests arising out of the accident. 72 In addition to this, Art 102 of the SMPL provides that an application for the constitution of a limitation fund for maritime claims before litigation should be filed with the Maritime Court of: (a) the place where the accident has occurred; (b) the place where the contract is performed; or (c) the place the ship is under arrest. 73 Article 80 of the SMPL Interpretations provides, in effect, that for maritime accidents occurring outside China, the first port within the territorial sea of China where the vessel arrives after the accident is to be considered as the place where the accident occurred for the purposes of Art 102 of the SMPL. From this Mr Chen says it follows that the Ningbo Maritime Court is the proper forum where the Chou Shan interests should apply to set up the limitation fund for maritime claims arising from the collision. 74 Notwithstanding this, Shanghai MSA filed a statement of objection with the Ningbo Maritime Court stating that the owners of the CCF had signed an agreement with the Shanghai MSA and other sub-contractors in relation to the emergency response actions adopted to cope with the accident and of all costs thereby incurred. In Mr Chen's view, such an agreement would enable the Shanghai Maritime Court to be a competent court to accept the Chou Shan's application to set up a limitation fund in addition to the Ningbo Maritime Court. 75 In theory, therefore, according to Mr Chen, both the Shanghai Maritime Court and the Ningbo Maritime Court have jurisdiction in relation to the limitation case. 76 Although the Shanghai MSA did not make it clear in its statement of objection which Maritime Court it thought should have jurisdiction in respect of the collision, in the present case the Ningbo Maritime Court was the first court to accept the limitation case. Moreover, the Chou Shan was arrested at the Zhoushan Port upon application by the cargo interests. The CCF was also arrested at the Zhoushan Cosco Shipyard. 77 Taking all those matters into account, it would be unlikely that the limitation proceeding would be transferred from the Ningbo Maritime Court to the Shanghai Maritime Court, according to Mr Chen.

Mr Chen's evidence in relation to the limitation proceeding 78 Limitation proceedings in China consist of three stages, according to Mr Chen: (a) constitution of a limitation fund; (b) registration of claims against the fund and substantive trial of each registered claim; and (c) distribution of the limitation fund. 79 In the limitation proceedings, once the claims have been duly registered, only the sequence of claims as set out in the particular provisions are to be taken into account. It is unclear whether the MSA claims for clean up costs are limitable. Different courts in China may have different opinions on that issue. In a recent precedent, the Supreme People's Court concluded the MSA claims for clean up costs were not limitable. This accorded with Art 55 of the Pollution Prevention Regulations specifying that the MSA's claim for clean up costs has priority over the other claims for compensation arising from the oil pollution. 80 The plaintiffs have a specific time within which to file a defence and counter-claim, either of which, Mr Chen says, constitutes acceptance of the jurisdiction of the Ningbo Maritime Court. Article 150 of China's CPL sets out six circumstances where a proceeding may be suspended. One such circumstance is Art 150(5) which provides that a proceeding may be suspended where the subject of the proceeding will be part of the findings of another case under trial. That Article does not refer to trial by foreign courts according to Art 306 of the Supreme People's Court's Interpretations of Several Issues on Application of CPL (CPL Interpretations). Judgments delivered by foreign courts are not directly applicable or enforceable in China unless the country where the judgment has been delivered has entered into a bilateral treaty with China on recognising and enforcing judgments on a mutual basis. 81 Importantly, for the present proceeding, Mr Chen expressed the view that there is no basis on which the plaintiffs can apply for a stay of the proceedings before the Ningbo Maritime Court. If a plaintiff before the Ningbo Maritime Court does not apply to withdraw its claim or the claim has not been settled between the parties, usually the Chinese court, in this case the Ningbo Maritime Court, is expected to deliver the first instance judgment within one year excluding the time used for hearing the jurisdiction issue and any suspended period of the proceeding, or within 1.5 years subject to the approval of the President of the Ningbo Maritime Court. However, citing Art 270 of the CPL, Mr Chen noted that those timeframes are not rigid, particularly where there are foreign elements involved. 82 There is a 30 day period within which the first instance judgment may be appealed, failing which it becomes binding at the end of that period and enforceable immediately. Where there is an appeal, enforcement of the first instance judgment, in this case delivered by the Ningbo Maritime Court, would be suspended until the appeal court decided to uphold it or it was overturned. Under Ch 16 of the CPL, parties may apply for a retrial within six months from the time when the judgment becomes effective or six months from the time when the applicant knows or should have known certain facts to support the application. The application for retrial will not affect the enforcement of the original judgment. 83 Mr Chen supplemented his report with a second report dealing with certain specific questions. First, he was asked what the 'cut off date' is for lodgement of objections to an application to constitute a limitation fund. He advised that if an interested party became aware of an application by owners of the Chou Shan for the constitution of a limitation fund via a public announcement made or published for three consecutive days, the cut off date for the party to the objection is the thirtieth day, counting the next day of the last public announcement. 84 Secondly, Mr Chen was asked whether there was a time limit within which a creditor must lodge a suit for confirmation of its debts before the Maritime Court where registration has been accepted. He explained that according to Art 19 of the SMPL Interpretations, after duly registering claims, creditors may lodge suits for confirmation of their debts within seven days counting from the date of completing registration before the Maritime Court where registration has been accepted. As to the law and practice applicable to determination of liability, quantification of loss and damage, and limitation of liability for fishery interests' claims, Mr Chen provided further information in relation to liability and quantification. 85 Mr Chen was next asked whether a creditor could withdraw a claim against the limitation fund after the claim has been registered and, if so, in what circumstances. To this Mr Chen explained that there is no procedure of withdrawal in the SMPL, but a creditor would still have the right to apply for withdrawing the claim under his or her basic rights under the rules of civil procedure. Accordingly, a claimant may withdraw his or her claim against the fund at his or her own discretion after the claim is registered and a Chinese court will rule to approve or reject such an application. 86 On the topic of challenging a party's right to limit liability, Mr Chen said that interested parties can lodge objections, in this case, against the Chou Shan's application for constitution of the limitation fund. The Maritime Court will only consider whether an objection can be upheld on one of three grounds specified in Art 83 of the SMPL Interpretations which Mr Chen discussed in more detail. He also expanded upon his discussion of substantive trial for each individual creditor in the context of liability proceedings.

Professor Jinsong Zhao 87 Professor Zhao gave expert evidence at the instance of the plaintiffs. He holds a PhD from the University of Southampton in Maritime Collision and Liability having graduated from Dalian Maritime University with a Masters Degree in Maritime Studies in 1989 and a Bachelor of Science in Nautical Studies in 1986, both specialising in collisions at sea. He qualified as a Chinese lawyer in 2001 and has been practicing Chinese law since 2002. He is a Professor of Maritime Law and Dean of the International Shipping Law School of East China University of Political Science and Law in China. He was the Visiting Professor with the Marine and Shipping Law Unit of the University of Queensland for a brief period and holds numerous other positions. As stated above, there is no doubt as to the expertise and independence of each of the primary expert witnesses. 88 Professor Zhao makes the point that under Chinese law there is no general doctrine of precedent or stare decisis. However, interpretations published by the Supreme People's Court form part of Chinese law and bind all courts in China. 89 Professor Zhao gave evidence that a shipowner may establish a limitation fund before a Chinese court decides whether or not it is entitled to limit its liability arising out of a collision. Although the major principles of the LLMC 76 have been adopted into Ch XI of the Maritime Code entitled 'Limitation of Liability for Maritime Claims', there is no provision under Chinese law which authorises Chinese courts to recognise or give effect to limitation funds established in jurisdictions outside of China. If a claimant fails to register his or her claim against a limitation fund constituted by interests of a ship in a Maritime Court of China within the required time, the claimant is not entitled to claim against the fund and is not otherwise able to bring his or her claim or enforce a foreign judgment concerning his or her claim against the party in China who constituted the fund. Chinese law does not prevent a person attaching the assets outside of China of a shipowner who has established a limitation fund in China, even if that person has brought a claim against that fund. 90 With regard to proceedings in China, the Chou Shan is not a party to any of those proceedings. Chinese law does not recognise the concept of an in rem claim. 91 Professor Zhao explained that China regulates parallel proceedings by legislation. The existence of parallel proceedings in other jurisdictions will not impact on the equivalent Chinese proceedings. Chinese law does not prevent a person from commencing a parallel proceeding in another jurisdiction when a claim has been first commenced in China. Equally, Chinese law does not prevent a person from commencing parallel proceedings in China when a claim has been first commenced in another jurisdiction. 92 Professor Zhao points out that if any interests of the CCF, such as her owners, have registered their claims with a Maritime Court, such as the Ningbo Maritime Court in this case, or commenced proceedings against the owners of the colliding vessel, such as the Chou Shan in China, there is no sound reason why the Ningbo Maritime Court would not accept the plaintiffs' application to withdraw its claim against the owners of the Chou Shan in China. Even if the Ningbo Maritime Court would not accept such an application, the plaintiffs could otherwise take no further steps in China and the Ningbo Maritime Court would dismiss their claim or give a default judgment. 93 Professor Zhao is a little less sanguine than Mr Chen as to the experience and capacity of the Maritime Courts. However, I am of the impression after hearing all the evidence that as a whole, the Chinese system is highly sophisticated albeit that it differs in some respects from the Australian system. 94 Professor Zhao refers to Art 3(1) of the Law on the Exclusive Economic Zone and the Continental Shelf of the People's Republic of China 1998 (EEZ Law) which provides that: [China] exercises its sovereign rights over the [EEZ] for the purpose of exploring, exploiting, conserving and managing the natural resources of the waters superjacent to the seabed and of the seabed and its subsoil, and in its other activities for economic exploitation and exploration of the zone, such as production of energy from water, currents and winds. 95 Professor Zhao points to the fact that there is no mention in Art 3(1) of the EEZ Law of ship collisions or shipping generally. His view is that because the collision was on the high sea, by reason of Art 273(2) of the Maritime Code, the applicable law for the collision is to be the law of the place of the Maritime Court hearing the collision case, that is, for those proceedings in China, the applicable law shall be the Chinese law, while for those proceedings in Australia, the applicable law shall be Australian law not Chinese law. Insofar as pollution cases are concerned, there is also the MEPL which may apply. In the present case, because only one of the ships was leaking oil, Professor Zhao was of the view that Art 273(3) of the Maritime Code would not apply as that relates to claims against one another for damages arising from the collision. 96 In Professor Zhao's opinion it should be the Shanghai Maritime Court and not the Ningbo Maritime Court which has jurisdiction for the Chou Shan interests to constitute the limitation fund. The Shanghai MSA filed its statement of objection with the Ningbo Maritime Court raising similar issues but they were rejected. Professor Zhao considers that the legal position of the owners of the Chou Shan would not be affected by any provisions of any contract between the CCF interests and the Shanghai MSA. 97 Professor Zhao expresses the view that as a matter of law, if the CCF interests had failed to register their claim with the Ningbo Maritime Court, they would waive all rights to claim against the limitation fund constituted by the Chou Shan owners due to the effect of Art 112 of the SMPL. It would only be by registering the claim against the limitation fund that the plaintiffs would be able to recover compensation from the Chou Shan owners in China arising from the collision. This assumes that the Chou Shan owners are entitled to limit liability to the amount of the fund and that all of the plaintiffs' claims are subject to limitation. Accordingly, if the plaintiffs do not want to lose any rights to recover compensation from the Chou Shan owners in China, and assuming all claims may be subject to limitation, they must register their claims with the Ningbo Maritime Court against the fund. The failure to do so would be a waiver of any right. The registration of the claim against the fund is only an expression to the court of willingness not to give up the right to the claim against the fund; it does not constitute a submission to the jurisdiction of China, according to Professor Zhao. Professor Zhao also expressed the view the Chou Shan owners' lawyer who signed the application for the establishment of the limitation fund had no authority to do so. (This issue fell away and, in any event, I do not consider that there was sufficient evidence to support this assertion other than speculation.) 98 On the topic of recognition and enforcement of foreign judgments, Professor Zhao noted that, in theory, Chinese law provides that foreign judgments under any treaty to which China is a party or from any countries in which Chinese judgments will be recognised and enforced. However, China is not a member state of the Convention on Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters, opened for signature 1 February 1971, 1144 UNTS 249 (entered into force 20 August 1979) (Hague Judgments Convention 1971) nor has it reached a bilateral judicial assistance agreement in civil and commercial matters with Australia. 99 Accordingly, Australian civil, commercial and admiralty judgments cannot be recognised and enforced in China. Rather, the party would have to sue on the claim it sued on in Australia. Further, Professor Zhao expresses the view that, in practice, Chinese courts do not recognise or enforce foreign judgments. Moreover, he says, it is very difficult, if not impossible, to enforce a foreign judgment even if a relevant treaty exists. Such a treaty usually deals only with judicial assistance in matters such as service and not with recognising or enforcing any foreign judgment. 100 In the context of distribution of the limitation fund, Professor Zhao generally agreed with Mr Chen. 101 As to parallel proceedings, Professor Zhao said there are only a few provisions under Chinese law which deal with parallel proceedings. Chinese law allows the existence of parallel proceedings as long a Chinese court has jurisdiction over civil cases, regardless of whether a foreign court has earlier accepted jurisdiction and regardless of whether the foreign court is a more convenient forum. Provided a plaintiff sues in China as well, the Chinese court can accept the case. Given that Chinese law recognises parallel proceedings, the existence of parallel proceedings in another jurisdiction will not impact on the equivalent Chinese proceedings in any way. If the holder of a foreign judgment applies to Chinese courts for recognition or enforcement, Chinese courts will not enforce it. There is also no provision under Chinese law which prevents a person from commencing parallel proceedings for a claim in another jurisdiction when the same claim was first commenced in China. Chinese law does not prevent a person from commencing parallel proceedings in another jurisdiction when the claim was first commenced in China. 102 As to the lawfulness under Chinese law of the arrest instituted by the Chou Shan, Professor Zhao said (at [108]-[109], [111] and [113]-[114] of his affidavit) respectively: 108 Article 214 of the Maritime Code does not impose a duty on the party seeking security to not arrest a vessel or attach property, be it in China or anywhere else in the world. Article 214 only grants a defence to the person constituting the fund in another court of China against any order to arrest a vessel or attach property and provides that other court which has arrested or attached property with jurisdiction to release the vessel or property. 109 Accordingly, the second part of Article 214, which provides for "the court" to order the release of the ship arrested, creates a power for other Chinese courts to take certain action, rather than imposing any duty on the claimant (the plaintiff under the current case), to not arrest the vessel or release the security provided. The words "the court" are referring to another Chinese court which has ordered the arrest of the vessel or the attachment of any property. … 111 Because no Chinese court has jurisdiction to determine whether Article 214 has been breached and Article 214 does not confer powers on non-Chinese courts, although in theory once they constitute a limitation fund in China whether the [Chou Shan] owners could apply for the return of the security provided in Australia for the release of the [Chou Shan] maybe subject to Australian law, and the Chinese Court should not make such an order. … 113 Article 214 is also a matter of substantive law, as the Maritime Code is a substantive law, not a procedure law. Whether or not … conduct is contrary to Article 214 of the Maritime Code is a matter of substantive law. The [Ningbo Maritime Court] should not deal with the application of Article 214 at the procedure stage. Rather, the question of whether there is a breach of Article 214 is a substantive issue requiring a substantive hearing by the people's court to which the plaintiff had applied for arrest or attachment, and the issue would be whether the plaintiff has to pay compensation to the [Chou Shan] owners for breaching Article 214. In summary, Article 214 of the Maritime Code is a defence which a liable person can rely upon to prevent another Chinese court from arresting his ship or attaching his property for a claim subject to limitation when he has established a limitation fund.

POINTS OF DEPARTURE BETWEEN THE EXPERTS 103 By way of summary, then, in relation to the expert evidence, there were four main areas on which the experts differed. The areas of difference were as follows: (a) The first question was whether Chinese law permits double recovery or compensation. In relation to that Mr Chen said no. In relation to that, Professor Zhao also answered no except that there is the question of enforcement under Chinese law. A Chinese court will not take into account whether the same claim heads before it are also under consideration in another case by a foreign court. However when one party, for example, the plaintiffs in this case, obtains two judgments from two different courts on the same heads of claim, it cannot enforce both judgments against the same party in China during the enforcement procedure. This means that double recovery of compensation will not be allowed at the enforcement stage under Chinese law. It seems to me that this factor is neutral in the matters I am to assess. Even if both proceedings continue, there will not be double recovery of compensation. (b) A second topic of departure was the law applicable to pollution related incidents and collisions in China's EEZ. As a result of Chinese law, Mr Chen contended that Chinese law applies to both pollution and collision cases (such as the current case) where the collision occurs in China's EEZ. Professor Zhao, however, answered that Chinese law applies except that the applicable law over pollution occurring in China's EEZ is Chinese law, while the applicable law in relation to collisions occurring in China's EEZ may or may not be Chinese law, it depends on the particulars of the collision case. For reason expressed below, I favour the view expressed by Professor Zhao, but again, that is just one consideration and not, taken alone, determinative of the stay application. (c) The third area of difference raised two sub-questions: (i) The first of those questions was whether the registration of a claim against a limitation fund is a submission to Chinese jurisdiction. In relation to that, Mr Chen answers that it depends on various circumstances but it may be. Professor Zhao's answer is that it is not a submission to Chinese jurisdiction. Mr Chen says that it may be possible depending on the circumstances, whereas Professor Zhao denies that this is so. (ii) As to whether a claim can be commenced 'under protest' against a limitation fund, Mr Chen answered that the court would not take such a 'protest' into consideration. Professor Zhao said the court would do so. On this topic, in my view, there has not been an unequivocal submission to jurisdiction but a temporary measure of protection exercised. (d) The final point of distinction was on the question of whether a lawyer can commence a proceeding and apply to constitute a limitation fund under a power of attorney. Mr Chen said this was possible provided the power of attorney has been granted validly to the lawyer. Professor Zhao said it was not. Counsel for the Chou Shan made it clear that they were not relying upon that contention in the stay application. As a result, for present purposes, that issue falls away. 104 Generally speaking, although considerable energy, time, paper and no doubt money was devoted to the expression of views by the experts, ultimately as a whole little turned on their evidence. In my view, more basic principles are properly capable of being applied to determine the stay application.

The principles 105 Although the Chou Shan has suggested that there are two inter-related reasons for a stay, its argument, correctly in my view, really centres on one central theme of 'clearly inappropriate forum' which embraces as an aspect of that contention a submission that the existence of the Chinese proceedings would render the continuation of these proceedings vexatious and oppressive. 106 The principles governing determination of an application of a stay are well trodden ground and I will refer to them only briefly. The High Court of Australia has suggested that evidence and arguments in support of and in opposition to such an application should be relatively contained. That has not always been the practice and while I raise no criticism, it is clear that where there may be significant stakes in play, the arguments and evidence have been relatively expansive in this as in other stay applications. 107 A starting point to the relevant principles is that a plaintiff who regularly invokes the jurisdiction of a court has a prima facie right to insist upon its exercise: Oceanic Sun Line Special Shipping Company Inc v Fay (1988) 165 CLR 197 per Deane J (at 241) and Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 per Mason CJ, Deane, Dawson and Gaudron JJ (at 554). Such a prima facie right should not be lightly displaced. As the plaintiffs note, the jurisdiction of an Australian court to grant a stay of proceedings properly brought before it is to be exercised with 'great care' or 'extreme caution': Oceanic (at 243-244) and Voth (at 554). 108 The 'clearly inappropriate forum' test as propounded by Deane J in Oceanic (at 247-248) (emphasis added) is different from the 'more appropriate forum' test adopted by the House of Lords in Spiliada Maritime Corporation v Cansulex Ltd [1987] 1 AC 460 (emphasis added). 109 It is for the Chou Shan and any other applicant for a stay to bear the onus of proving within the ordinary meaning of the words that an Australian court is a clearly inappropriate forum. As an element of that onus, such an applicant should establish that continuation of the proceeding in this Court would be oppressive or vexatious in the sense in which those words were used by Deane J in Oceanic (at 247-248) where his Honour said: In the light of the foregoing and at the cost of some repetition, it is possible to identify in summary form what I see as the modern content of the traditional principles governing the power of a court in this country to order that proceedings which have been regularly instituted within jurisdiction should be dismissed or stayed on inappropriate forum grounds. That power is a discretionary one in the sense that its exercise involves a subjective balancing process in which the relevant factors will vary and in which both the question of the comparative weight to be given to particular factors in the circumstances of a particular case and the decision whether the power should be exercised are matters for individual judgment and, to a significant extent, matters of impression. The power should only be exercised in a clear case and the onus lies upon the defendant to satisfy the local court in which the particular proceedings have been instituted that it is so inappropriate a forum for their determination that their continuation would be oppressive and vexatious to him. Ordinarily, a defendant will be unable to discharge that onus unless he can identify some appropriate foreign tribunal to whose jurisdiction the defendant is amenable and which would entertain the particular proceedings at the suit of the plaintiff. Otherwise, that onus will ordinarily be discharged by a defendant who applies promptly for a stay or dismissal if he persuades the local court that, having regard to the circumstances of the particular case and the availability of the foreign tribunal, it is a clearly inappropriate forum for the determination of the dispute between the parties. The reason why that is so is that, once it is accepted that the adjectives "oppressive" and "vexatious" are not to be narrowly or rigidly construed and are to be applied in relation to the effect of the continuation of the proceedings rather than the conduct of the plaintiff in continuing them, the continuation of proceedings in a tribunal which is a clearly inappropriate forum would, in the absence of exceptional circumstances being established by the plaintiff (cf Spiliada Maritime Corp v Cansulex Ltd), be oppressive or vexatious to such a defendant if there is some available and appropriate tribunal in another country. Admittedly, that approach to the "vexatious" and "oppressive" test is less stringent and less rigid than would have been accepted in the nineteenth century. Under it, the applicable test pursuant to traditional principles can, in the ordinary case, properly be seen as an "inappropriate forum" test. It cannot, however, properly be seen as a "more appropriate forum" test since the mere fact that a tribunal in some other country would be a more appropriate forum for the particular proceeding does not necessarily mean that the local court is a clearly inappropriate one. (footnotes omitted) (emphasis added) 110 The expressions oppressive and vexatious were amplified in Voth (at 555) where it was established that 'oppressive' should be understood to mean 'seriously and unfairly burdensome, prejudicial or damaging' and 'vexatious' should be understood to mean 'productive of serious and unjustified trouble and harassment'. Also emphasised in the same passage in Voth was the rationale underlying the power to stay, being to avoid injustice between the parties to the case. As indicated by Deane J in Oceanic, to a limited extent the analysis by Lord Goff in Spiliada (at 478 and 482-484) has been adopted in Australia such that the concepts of 'connecting factors' and 'legitimate juridical advantage' are of assistance in exercising the discretion: Voth (at 564-565). 111 But these are relevant only to the extent of determining whether the local court is clearly inappropriate not by way of some determination of which forum would be better or more convenient or more appropriate: see Garsec Pty Ltd v His Majesty The Sultan of Brunei (2008) 250 ALR 682 per Campbell JA (at [43]) with whom Spigelman CJ and Hodgson JA agreed, following Mason CJ, Deane, Dawson and Gaudron JJ who identified (at 554) the four principles that were common ground to the majority in Oceanic as being: First, a plaintiff who has regularly invoked the jurisdiction of a court has a prima facie right to insist upon its exercise. Secondly, the traditional power to stay proceedings which have been regularly commenced, on inappropriate forum grounds, is to be exercised in accordance with the general principle empowering a court to dismiss or stay proceedings which are oppressive, vexatious or an abuse of process and the rationale for the exercise of the power to stay is the avoidance of injustice between parties in the particular case. Thirdly, the mere fact that the balance of convenience favours another jurisdiction or that some other jurisdiction would provide a more appropriate forum does not justify the dismissal of the action or the grant of a stay. Finally, the jurisdiction to grant a stay or dismiss the action is to be exercised 'with great care' or 'extreme caution'. (emphasis added) 112 The plaintiffs approach the question on the basis that if the Court is not satisfied that it is a clearly inappropriate forum for the plaintiffs' claim against the Chou Shan in the sense identified from the cases, then the proceeding and its continuation cannot be vexatious or oppressive in the Voth sense even if there are other proceedings in China. 113 The Chou Shan says that it has established that this Court is a clearly inappropriate forum. It emphasises, in particular, the nature and degree of connection between the proceeding and the forum as being fundamental factors to take into account: Voth (at 570-571). 114 Relevant connecting factors include significant connection between the forum and the subject matter, the parties' domiciles (Oceanic (at 245) per Deane J), convenience and expense (Spiliada (at 478) per Lord Goff) and the applicable substantive law (Voth (at 566) per Mason CJ, Deane, Dawson and Gaudron JJ).

Connection with Australia 115 For the Chou Shan it is stressed that the only factor connecting this dispute with Australia is the arrest of the Chou Shan, the defendant ship. The Chou Shan accepts that the plaintiffs have a right to invoke the Court's jurisdiction when it regularly invoked but excessive weight should not be given to that right. It argues that it would only be significant in what would otherwise be a finely balanced contest. In this regard it cites Voth (at 565-566) and Oceanic per Deane J (at 248). This is a central area of dispute between the parties. 116 A primary consideration, the Chou Shan argues, will be the availability of a foreign tribunal that has jurisdiction over all of the elements of the proceeding. Thus, in Garsec Campbell JA observed (at [141]) that if the subject matter of the dispute had a tenuous connection with Australia such that an Australian court would have jurisdiction concerning it, but on the other hand all the witnesses and documents were in another country and moreover the transaction was governed by the law of that country, there could be little doubt that the Australian court was a clearly inappropriate forum. 117 Compellingly, in my view, the Chou Shan argues that there is no connection between Australia and the subject matter of the action, nor is there any connection with the parties, nor is there any connection with the place of collision. No witness or evidence are located in Australia and Chinese law applies. These alone are significantly powerful factors, the Chou Shan contends with considerable force, to warrant a stay being granted. 118 The plaintiffs argue that the Chou Shan gives far too little weight to the fact that they have validly and regularly invoked the in rem jurisdiction of this Court in a proceeding against the Chou Shan. It is separate and distinct in nature from any in personam claim by or against the Chou Shan interests. The plaintiffs stress that the Chou Shan itself is not a party to any proceeding in China, in particular, one also involving the CCF. 119 This is not merely form but substantive in that the in rem action in Australia confers on the plaintiffs certain legitimate juridical advantages (in particular, greater financial security for their claim). The plaintiffs would not have the benefit of the same security in any proceeding conducted in China as proceeding in rem is not recognised in China. The possibility of the CCF claiming on a limitation fund established by the owners of the Chou Shan is not to be equated with such security. 120 As a second substantive point, the plaintiffs also contend that pursuit of their claim against the Chou Shan in proceedings is not governed by Chinese law as to liability, damages or the right of the owners of the Chou Shan to limit their liability to the plaintiffs. They argue that to the extent that the Chou Shan suggests otherwise, the contention should be rejected. That is because: (a) although the collision occurred in China's EEZ, that does not mean that the CCF claim against the Chou Shan for negligence and for the consequence of the collision requires the substantive law of China to apply for the purpose of the proceedings in Australia; and (b) the rights of the plaintiffs to limit any liability in Australia is to be governed by the Limitation of Liability for Maritime Claims Act 1989 (Cth) (LLMCA). It is not governed by Chinese law or any similar provisions of Chinese law. In particular, the claim against the Chou Shan in Australia is not subject to the limitation provisions of the law in China or any entitlement of the owners of the Chou Shan to limit their liability under Chinese law. 121 As the plaintiffs contend, the difference between the limitation provisions under Australian and Chinese law and the application of the former and not the latter to the present proceedings represents a further real juridical advantage to the plaintiffs. 122 Further, it is argued that the fact that there are parallel proceedings arises only because the Chou Shan interests have sought to pursue claims arising from the collision against the CCF in China. To the extent that the plaintiffs have filed against the Chou Shan in China, that has been under protest in the face of and pending the outcome of this application for a stay of the proceedings. It was supported by an undertaking to withdraw those claims if the stay sought by the Chou Shan is refused. The plaintiffs are not otherwise a party to any proceedings in China to the extent that they may be the subject of any claims for damage to cargo on board the CCF. Those claims are most likely to be determined in France rather than in China pursuant to an applicable law clause in the relevant bills of lading. The other relevant connecting factors, such as the location of the parties and the domicile of likely witnesses, do not indicate any forum other than Australia is particularly significant with respect to the matters in issue. Nor do they indicate that this Court is a clearly inappropriate forum. 123 Accordingly, (and also persuasively), the plaintiffs argue that where they have validly and regularly invoked the jurisdiction of this Court, did so prior to the commencement or service of any Chinese proceeding, are entitled to legitimate and significant juridical advantages by reason of this proceeding, have only taken steps in China against the Chou Shan interests to protect their position pending the determination of the application by the Chou Shan for a stay of this proceeding and have undertaken to withdraw from any Chinese proceedings they have instituted including claiming against the limitation fund in the event that the stay is refused, it cannot be said that these proceedings or their continuation can be vexatious and/or oppressive in the sense discussed in Voth.

The plaintiffs' security 124 As to the invocation by the plaintiffs of Australian jurisdiction, s 5(1) of the Admiralty Act 1988 (Cth) (Admiralty Act) expressly grants jurisdiction in relation to 'all ships irrespective of the places of residence or domicile of their owners' and 'all maritime claims, wherever arising'. It expresses a clear intention to operate with respect to foreign vessels and claims that arise beyond Australia. It follows that the presence of the Chou Shan in Australian waters and, therefore, its amenability to service of a writ in rem in its arrest proceeding commenced on the filing of that in rem writ, enables this Court to exercise the jurisdiction conferred on it by the Admiralty Act. No challenge is raised to that jurisdiction. 125 As the plaintiffs note, the sum of USD 61,751,213 (to obtain release from arrest) remains available to meet any judgment that CCF may ultimately obtain against the Chou Shan in this proceeding. There is no suggestion that CCF would be entitled to such security in respect of an action brought in China. Economically, that cannot be equated with the possibility of claiming on a limitation fund established in China by the owners of the Chou Shan because the amount of the limitation fund is less than the security and the limitation fund is subject to claims or potential claims of numerous others wishing to bring claims against the owners of the Chou Shan, whereas there is exclusive entitlement to the security in respect of the present action. 126 In addition, the claim against the Chou Shan is also a maritime lien under s 15(2)(b) of the Admiralty Act which provides as follows: 15 Right to proceed in rem on maritime liens etc. (1) A proceeding on a maritime lien or other charge in respect of a ship or other property subject to the lien or charge may be commenced as an action in rem against the ship or property. (2) A reference in subsection (1) to a maritime lien includes a reference to a lien for: … (b) damage done by a ship; … 127 Being a maritime lien is itself a substantive right attaching to the ship from the time of the occurrence of the events giving rise to the lien, in this instance, the collision. It survives a subsequent transfer of ownership of the vessel. It is a substantive right that can only be enforced as an action in rem: Comandate Marine Corp v Pan Australia Shipping Pty Ltd (2006) 157 FCR 45 (at [112]-[113]). Once an unconditional appearance is filed, the proceeding retains its in rem nature as well as being an in personam proceeding against the relevant person who appears: see Comandate (at [128]) and Geraldton Port Authority v The Ship "Kim Heng 1888" (No 2) (2012) 291 ALR 471 (at [18] and [40]). 128 A factor which may be given weight is the order in which the proceedings were commenced: Henry v Henry (1996) 185 CLR 571 (at 592). The plaintiffs stress that this proceeding was commenced first on the filing of the writ in rem on 9 April 2013. This was prior to commencement of any proceeding relating to the collision by any party in China. In a technical sense, the issuing of that in rem writ immediately encumbered the Chou Shan, the defendant ship, with the plaintiffs' claim and from that point the plaintiffs were entitled to the status of secured creditor in respect of their claim in Australia: see Atlasnavios Navegacao, LDA v The Ship "Xin Tai Hai" (No 2) (2012) 301 ALR 357 (at [124]-[125], [130] and [136]). Having regard to the proximity of the timing of the events as discussed, I consider little turns on this factor in this instance.

Lex Causae 129 The Chou Shan also contends that this Court would have to apply Chinese law because the lex causae is the law of the place of the wrong, namely, China's EEZ. That applies even for special rules applicable to maritime torts. In all cases except where the tort occurs on the high seas, the lex causae is the law of the littoral state that asserts jurisdiction and rights over the waters: MacKinnon v The Iberia Shipping Company Limited (1955) SC 20 and Union Shipping New Zealand Ltd v Morgan (2002) 54 NSWLR 690. 130 The Chou Shan stresses that the EEZ of a country is not the high seas. To suggest otherwise would be to ignore the developments in international and domestic law since UNCLOS entered into force. Where the collision and damage occurs in China's EEZ, Chinese law will be the lex causae: Lord Collins of Mapesbury, Briggs A, Dickson A, Harris J, Dicey, Morris & Collins on the Conflict of Laws (Sweet & Maxwell Ltd, 2012, 15th ed, vol 2, pp 2215-2216). Chinese law regulates navigation in China's EEZ, liability for pollution in China's EEZ and the protection of fisheries and the marine environment in China's EEZ. The collision and the resultant pollution and damage are intimately connected with China's regulation of the EEZ and therefore, the Chou Shan argues, the collision is governed by Chinese law. 131 The Chou Shan says the proposition can be tested by asking whether or not Australian law would govern a claim had a collision occurred in Australia's EEZ. It is clear, the Chou Shan argues, that Australia does regulate its own EEZ. The Commonwealth regulates Australia's EEZ by virtue of the Seas and Submerged Land Act 1973 (Cth): see ss 10A-10C. In particular, s 139 - s 140 of the Navigation Act 2012 (Cth) (Navigation Act) will be contravened if a vessel is operated in a manner that causes pollution or damage to the marine environment in Australia's EEZ. Australia also asserts jurisdiction over the navigation of foreign vessels within Australia's EEZ pursuant to s 175 and s 176 of the Navigation Act. 132 The Chou Shan argues that the control by China over its own EEZ in the same way that Australia controls its EEZ renders irrelevant and inapplicable the question posed by the plurality in Blunden v The Commonwealth of Australia (2003) 218 CLR 330 (at [23]) per Gleeson CJ, Gummow, Hayne and Heyden JJ, namely: Where, as in this case, the relevant events giving rise to a "maritime tort" occurred on the high seas, one asks, what body of law other than that in force in the forum has any better claim to be regarded by the forum as the body of law dispositive of the action litigated in the forum? 133 The Chou Shan contends that Chinese law has the best claim to be regarded as the law governing the collision. The extent of liability, if any, of the Chou Shan to the plaintiffs for the collision and vice versa will be governed and limited by Chinese law. Once this is so, it attracts Chinese defences. Chinese law caps or limits the claims that may be made against both the CCF and the Chou Shan in the manner explained by Mr Chen. According to Australian law, those limits are substantive and, thus, governed by Chinese law. As noted by Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ in John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 (at [100]), '[A]ll questions about the kinds of damage, or amount of damages that may be recovered, would likewise be treated as substantive issues governed by the lex loci delicti'. 134 It follows, the Chou Shan argues, that it is entitled to limit liability to the CCF interests, if any, under the provisions of Ch 11 of the Maritime Code. It submits that any juridical advantage perceived by the plaintiffs in bringing this proceeding in order to access the higher limit of liability under Australian law is illusory. 135 As observed by Callinan J in Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491 (at 563): No doubt, courts in Australia can and do regularly apply foreign law, but it would be vain to claim that they can, or would do it with the same familiarity and certainty as the courts of the jurisdiction in which it was created. 136 Foreign law must be proven as a matter of fact and it must be applied by a judge who does not have a day to day familiarity with its workings. Here, those matters are further complicated by the need to translate the laws into English and the further fact that courts in China will clearly hear and determine the same questions. This also means a prospect of conflicting judgments. There is no dispute that the system of law that is to be applied by the Australian court in disposing of a claim made in a proceeding before it is a relevant factor for determining whether the Australian court is a 'clearly inappropriate forum' for the determination of that claim. What is in dispute between the parties, however, is the contention by the Chou Shan that this Court would have to apply Chinese law in the determination of the claim. 137 The law governing liability is not without its complexity. Shortly put, the submission for the Chou Shan is that as the accident occurred in China's EEZ where there is control by the littoral state of many aspects of the maritime legalities and as the accident did not occur on the high seas, it is clear Chinese law applies. 138 In contrast, the plaintiffs are emphatic that the lex causae of the collision is not Chinese law. The collision did not occur in China and is not subject to Chinese law simply because it occurred within the waters of China's EEZ. 139 In this regard, the plaintiffs contend that although Art 56(1)(a) UNCLOS, entitled 'Rights, Jurisdiction and Duties of the Coastal State in the Exclusive Economic Zone', confers 'sovereign rights' on the coastal state in the EEZ for the purpose of exploring and exploiting the natural resources of the water column, seabed and subsoil of the EEZ, it does not confer full sovereignty. Rather, it is a set of rights specifically relating to exploration, exploitation, conservation and management of the natural resources within the EEZ: in this regard note the discussion by Finn J in Akiba v Queensland (No 3) (2010) 204 FCR 1 (at [729]-[730]). 140 In my view, the EEZ is neither part of the territorial sea nor part of the high seas. Rather, it is a sui generis in nature being situated between the territorial sea and the high seas: Churchill, RR and Low, AV, The Law of the Sea (Manchester University Press, 1985) (at p 130). The legal regime which applies within the EEZ is determined in UNCLOS by reference to the specific activity in question. If a particular activity is contemplated in Pt V of UNCLOS, then the coastal state, arguably, has the right to regulate in respect of that activity but if it does not, then the state does not have the right to do so. The plaintiffs argue that the conduct and navigation of vessels is not an activity contemplated by Pt V, therefore UNCLOS does not confer upon coastal states the general right to regulate or control navigation of vessels within the EEZ. In fact Art 58(1) and Art 87 generally preserve the traditional freedoms of the high seas particularly in respect of navigation within the EEZ. There is only an abrogation of this freedom where a particular navigational activity coincides with any of the functional bases of coastal state power within the EEZ. It follows, therefore, that the coastal state may make laws relating to pollution within the EEZ. However, its sovereignty does not extend to generally regulating the conduct of ships in the material context, namely, the navigation of ships resulting in a collision and consequential property damage to vessels. 141 The argument for the plaintiffs is that within a littoral state's EEZ, responsibility for regulating navigation of vessels remains with the flag state of the vessel, and that a littoral state must not claim sovereignty with respect to the EEZ by, amongst other things, purporting to regulate navigation within this part of the sea. This is made clear by Art 94(3)(c) of UNCLOS which expressly provides that is the responsibility of the flag state to take such measures as necessary for vessels flying its flag to ensure safety at sea with regard to the use of signals, the maintenance of communications and the prevention of collisions. This provision of UNCLOS applies within the EEZ by virtue of Art 59(2) because it is not incompatible with Pt V of UNCLOS. 142 In short, the waters of the EEZ are not part of the territory of China nor part of the high seas. A collision occurring in the waters of the EEZ does not occur in China. There is no general application of the laws of China to the EEZ. As Professor Zhao noted, China does not exercise sovereignty with respect to the law regulating ship collisions or navigation generally within its EEZ but does regulate within specific legal areas such as pollution. 143 The plaintiffs also argue that the Chou Shan's contention that, except where the tort occurs in the high seas, the lex causae will be the law of the littoral state that asserts jurisdiction and rights over the waters is not correct. They argue: the authorities relied upon for that assertion do not make it good. MacKinnon and Union Shipping New Zealand Ltd involved torts occurring on vessels in the territorial sea of the Dominican Republic and Australia respectively while The "Omega King" [2011] 2 Lloyds Rep 206 concerned a tort in the territorial waters of the United Kingdom. Those decisions do not provide authority for the proposition contended for by the Chou Shan because of the distinction between the territorial sea and the EEZ. there is no authority for the proposition that the presence of a ship in the EEZ renders it subject to all of the laws of the littoral state and, in particular, those governing navigation. The citation from Dicey, Morris and Collins on The Conflict of Laws (see pp 2215-2216) makes it clear that the rights granted in the EEZ are restricted. It is only if the activity giving rise to the dispute is associated with the exercise of those limited rights that there is sufficient connection to establish the law of the littoral state of the EEZ as the lex causae. there was no activity giving rise to the collision which was connected closely or otherwise with the exercise of the exploitation of natural resources under the EEZ. The comparison with Australia discussed above does not assist the Chou Shan. Australia does not assert jurisdiction over the navigation of foreign vessels in Australia's EEZ by reason of s 175 and s 176 of the Navigation Act. Section 175 does not apply Pt 3 of that Act to foreign vessels in Australia's EEZ. None of the provisions of the Navigation Act apply Australian law to such vessels other than in limited respects permitted by UNCLOS to expressly protect certain interests and also in relation to pollution. it follows, therefore, that the determination of the claim for damages by the plaintiffs would fall for assessment by application of Australian choice of law principles. There is no presumption that Chinese law will apply because a collision occurred in China's EEZ. much of the evidence of the experts was focused on how Chinese law would apply but that is not the question presently falling for consideration. The substantive law governing the plaintiffs' claim in this Court will be determined by reference to the lex loci delicti: Regie Nationale des Usines Renault SA (at 520). Although China exercises certain rights over the EEZ, in terms of a navigation collision, it occurred in a region of the seas over which no country exercises sovereignty of the kind which would regulate the liability of the Chou Shan and/or the plaintiffs arising from the collision. Thus, the lex loci dilicti is legally indistinguishable for present purposes from the high seas. 144 In any event, the plaintiffs argue, even if Chinese law does apply, that would not, taken alone, provide sufficient support for a conclusion that this Court is a 'clearly inappropriate forum' to hear the plaintiffs' claim against the Chou Shan or for the present proceeding to be stayed on that basis. However, there are clearly practical considerations arising that need to be taken into account. 145 The plaintiffs stress that even if, contrary to their primary submission, Chinese law is to be applied to the determination of the present claim, there is nothing to indicate that the applicable Chinese law is relevantly or materially any different to Australian law or that any Australian judge would have any difficulty in applying that law. All the indications are that in ascertaining respective faults of the Chou Shan and the CCF, a Chinese court would apply the COLREGs. There is no evidence of any difference in approach between Australia and China in determining fault. 146 Obviously, there is a significant advantage to the plaintiffs having security established here. In China, the plaintiffs would have to share the limitation fund established by the Chou Shan interests in China with any other persons wishing to bring a claim against the owners of the Chou Shan arising from the collision. This was a factor (amongst others) taken into account by Rares J in The Ship "Xin Tai Hai" (No 2) (at [143]). The practical outcome of a stay of this proceeding may be to result in greatly reduced prospects of recovery by the plaintiffs of claims under, effectively, the LLMC 76, rather than the 1976 Convention as amended by the 1996 Protocols which applies under Australian law. Although the limitation available under Chinese law may be functionally similar to that applicable under the LLMCA, the amount of the security is significantly different.

Other connecting factors 147 It should be reiterated that other connecting factors are limited and variable. Specifically, the place of domicile of the first plaintiff is France, the second plaintiff is a domicile of the Republic of Ireland and the owners of the Chou Shan are domiciled in the Marshall Islands. Additionally the Chou Shan is registered in Panama while the CCF is registered in the United Kingdom. The crew of the Chou Shan who might be called as witnesses are Chinese and Taiwanese nationals ordinarily resident in those countries. The crew members of the CCF who may be called as witnesses are Philippino, Romanian and Chinese nationals and ordinarily resident in those countries. It would seem that the location of the parties, vessels and likely witnesses does not lead to the conclusion that any specific jurisdiction has a significantly better claim than any other jurisdiction to be the law pursuant to which the CCF claim is to be resolved. Moreover, even though the crew who are likely to be called to give evidence are ordinarily resident in specific locations, they are by virtue of their vocation, likely to be peripatetic. There is no reason to think that either party is unable to conduct litigation either in Australia or China, each party having demonstrated the capacity to do both. None of these factors would support any conclusion that this Court is a clearly inappropriate forum for resolution of the plaintiffs' claims.

Parallel related proceedings - vexation and oppression 148 The Chou Shan stresses that there are multiple proceedings in China brought by the CCF interests, the Chou Shan interests, parties associated with the Shanghai MSA, the Fisheries Bureau and many cargo interests. All of these turn on liability for the collision. The litigation in Australia of only one of those claims is, according to the Chou Shan, inherently vexatious and oppressive. In relation to the proceedings in China, the Chou Shan points to the fact that the proceedings are before a single court, the Maritime Court, which has jurisdiction over all aspects of the proceeding. Secondly, a Chinese court will not stay a proceeding in China in favour of a foreign proceeding (this is according to Mr Chen and not disputed by Professor Zhao). This is important because no matter the outcome of the present proceeding, there will be proceedings that continue in China in which liability for the collision will necessarily be determined. 149 As noted in Henry by Dawson, Gaudron, McHugh and Gummow JJ (at 590-591), the Court will be astute to avoid multiplicity of proceedings including a situation where there are parallel proceedings in courts of different nations in respect of what is substantively the same dispute. The inconvenience and embarrassment of allowing two independent actions involving the same question of liability to proceed contemporaneously in different courts is self-evident.

SUMMARY AND CONCLUSION 150 It is not simply a question of determining which proceeding was first in time. This is particularly so where the procedural history demonstrates a series of steps taken by each side and very closely related in time. 151 Where the courts of another country have jurisdiction over all the parties and subject matter of the claims and can afford substantial justice, the courts should consider the implications and burdens to the parties and to third parties arising from multiple proceedings and the 'very likely' prospect of different outcomes: Henry (at 591). 152 It must be accepted that these implications and burdens are significant and include duplication of work, additional costs, questions as to availability of evidence and the legal and commercial uncertainty that arises from the potential of inconsistent findings. 153 There is a further difficulty where it is necessary to enforce a judgment in another jurisdiction. The Ningbo Maritime Court is a specialised maritime court and is part of the Chinese court hierarchy that controls jurisdiction over maritime matters. The Ningbo Maritime Court can exercise jurisdiction over all parties involved in the dispute or potentially involved in the dispute. On the other hand, the present claim in this Court simply relates to the dispute between the Chou Shan and the plaintiffs. The consequential disputes concerning liability for lost, damaged and transhipped cargo, pollution clean up costs and fishery damage would not be dealt with by this Court in any direct sense. All of those claims are already before the Ningbo Maritime Court and all of the claims made against the Chou Shan and the plaintiffs are before the Ningbo Maritime Court. (I accept that there may be questions as to the applicable law for the bill of lading claims.) In that court, each claim will be a separate case, but as Mr Chen has explained, there are procedural rules for the tender of or reliance upon earlier court decisions which are designed to ensure consistency in outcome. 154 The fact that the collision occurred in China's EEZ in respect of which China may or may not assert sovereignty over maritime traffic and marine protection has led to the giving of securities in China. There is a fund established by the Chou Shan interests. There are securities provided by the CCF interests. 155 Procedurally, the Ningbo Maritime Court will not only hear evidence from the parties but also evidence collected by the Shanghai MSA which will include the navigational circumstances in the area of the collision accident. This, as the Chou Shan argues, may involve evidence from a number of small fishing vessels that were between the two ships before the collision. It is doubtful, at least according to Mr Chen, whether the Shanghai MSA report would be disclosed to an Australian court which could give rise to a different conclusion on the basis of different evidentiary input. 156 The Chou Shan contends that the CCF interests have 'voluntarily and actively submitted to, and invoked, the jurisdiction of the Chinese courts'. I do not consider this to be a crucial factor. Those courts have jurisdiction over the claim in this Court and powers to afford substantial justice and there is a fund in China against which to make a claim. There is no threat to the participation of the plaintiffs in that proceeding. 157 There is no one factor which would lead to this Court being a clearly inappropriate forum but there are multiple factors, taken cumulatively which do, in my view, lead to that conclusion. 158 I turn to the factors outlined in [9] above on which the Chou Shan relies. In relation to those factors and dealing with them seriatim, I accept the submission that: (a) the natural and obvious forum for all disputes relating to the collision is China. Unlike the The Ship "Xin Tai Hai" (No 2), this collision occurred proximate to China, in China's EEZ. It was not a collision occurring off the Malaysian coast. Following the collision, both ships steamed to Chinese ports for repair. Neither ship sank but there was considerable oil spillage in China's EEZ which was expressly governed by Chinese jurisdiction. That jurisdiction is well and truly in train and was immediately in train following the collision. Generally speaking, the amount of activity in China in the present case, appears to me have been significantly greater and certainly involving a greater number of interests than the proceeding in Australia. (b) I also accept the submission and take into account that other than the fact that the in rem proceeding was commenced in Australia, there was nothing and no one in this proceeding which has any connection whatsoever with Australia. While that is certainly no reason why the proceeding in rem should not have been commenced and, indeed, the peripatetic nature of ship travel gives rise to such a prospect, there is simply no connection with Australia at all other than the commencement of the in rem proceeding and the arrest of the ship. That could have occurred in any country having comparable legislation. (c) as to the submission that the claim is governed by Chinese law as to liability, damages and limitations, I have some reservations. It does seem to me that there is a good argument that the law of the high seas would be applicable in relation to liability for collisions in the EEZ as distinct from those areas of responsibility for which there is expressly prescribed jurisdiction such as pollution control. (d) as to the submission that there are proceedings before a Chinese court that has jurisdiction over all persons and claims such that substantial justice will be done in China, in essence I accept this submission. There is no doubt that the Chinese Maritime Court is a sophisticated and experienced legal system which has already substantially embraced all of the disputes arising out of the collision. There is no evidence that the manner in which it would resolve liability concerning those disputes would give rise to a significantly different outcome from resolution of the liability dispute in Australia. Indeed, there is some expert evidence suggesting to the contrary that the approach taken would be similar. It seems pointless for both sets of proceedings to occur contemporaneously when they are already well underway in China. (e) as to the argument that, conversely, substantial justice cannot and will not be done in Australia in the circumstances of this case, I did not understand this to be developed much beyond the submission in relation to (d), namely, that all elements are well advanced in China which has the capacity to deal with all aspects albeit that it is not possible to pursue a claim in rem. (f) I also take into account the submission that regardless of what happens in Australia, proceedings in China will continue. That is relevant, at least, to the cost factor referred to above. It is highly relevant also to the risk as to inconsistent findings and 'verdicts'. (g) as to the final argument that the plaintiffs have made an election between two fundamentally different causes of action by filing in China after the parties were subject to the jurisdiction of this Court, I heavily discount this factor for the reasons expressed. My view is that the plaintiffs were protecting their position on a temporary basis. Nevertheless, that having occurred, they are at least in a position to pursue the action they have taken in China. 159 I turn then to consider the loss of the increased security. I accept that that is a factor to take into account and that it was a factor considered in The Ship "Xin Tai Hai" (No 2). However, such a factor was discounted by the English Court of Appeal in Herceg Novi (owners) v Ming Galaxy (owners) [1998] 2 Lloyds Rep 454 (at 456) where, admittedly, the parties had already accepted that England was not the 'natural or appropriate forum for the trial of the action' and 'that Singapore was clearly and distinctly shown to be more appropriate than England' (see at 456). The question, however, was whether the loss of the increased security under the LLMC76 would be a loss of a legitimate juridical advantage so as to justify refusal of a stay. The Court of Appeal said in its conclusion: We have to say that we agree with Waung J and with Liu J.A., rather than with the majority of the Court of Appeal in Hong Kong and the English Judges at first instance. We reach that decision for these reasons: (1) The [LLMC76] has not received universal acceptance, or anything like it. It is not "an internationally sanctioned and objective view of where substantial justice is now viewed as lying". It is simply the view of some 30 states. (2) The International Maritime Organisation is not a legislature. It may commend the [LLMC76] to the international community. But if by doing so it were found to have enacted an international consensus, that would be to deprive sovereign states to a large extent of their right to stay with some other regime. We say that because jurisdiction could often be obtained by arresting a ship in a 1976 country, and if that action were allowed to proceeding despite there being a more appropriate forum where 1957 prevailed, the 1957 country would be left with no effective use for its own law. (3) In our view it is quite impossible to say that substantial justice is not available in Singapore, seeing that there is a significant body of agreement among civilised nations with the law as it is there administered. The preference for the [LLMC76] has no greater justification than for the 1957 regime. Loss in the cases we are considering will often be borne by the insurers of one side or the other. The [LLMC76] provides a greater degree of certainty, which they will perhaps welcome. But in terms of abstract justice, neither Convention is objectively more just than the other. Our task is not to decide whether our law is better than the law of Singapore. It is to decide whether substantial justice will be done in Singapore. In our view it will be. This appeal should be allowed, and an unconditional stay of the English action granted. (emphasis added) 160 I take into account the fact that the plaintiffs have the benefit of increased security in the proceeding in rem in this Court but having regard to all the other factors which I have discussed above, it does not appear to me that that is sufficient to undermine the conclusion that I have reached that this Court is a clearly inappropriate forum. 161 Accordingly, I exercise my discretion in favour of the Chou Shan and grant the stay sought. I will make orders that within 14 days the defendant file and serve a minute of the relief they seek. The plaintiffs should have 10 days to respond to that minute. 162 If there is any disputation as to the terms of the minute, submissions not exceeding two pages in length should be filed and the disputation will be resolved on the papers.

A post-script: Chou Shan's Application to File Further Evidence 163 After hearing oral argument and reserving my judgment on the Chou Shan's stay application, shortly before the Christmas recess, the Chou Shan's solicitor Ms Bazakas emailed chambers an affidavit affirmed by her on 20 December 2013. The Chou Shan sought leave to put that further affidavit in to evidence to update the Court on the status of the proceedings in China. That application was subsequently opposed by the plaintiffs. 164 On 3 January the plaintiffs provided short submissions opposing the Chou Shan's application to rely on the further affidavit or, in the alternative, asking me to give the affidavit little weight. As the plaintiffs submit, whether an application to reopen a case will be entertained will depend on whether the interests of justice are better served by granting or refusing the application: Urban Transport Authority of New South Wales v Nweiser (1991) 28 NSWLR 471 (at 476). This involves consideration of the type of proceeding, the relevance and probative value of the additional evidence sought to be relied on, the prejudice that would be caused to the respondent and the efficient disposition of the proceeding. The plaintiffs point to Rares J's observations in The Ship 'Xin Tai Hai' (No 2) where although his Honour granted leave to the parties to file additional evidence after judgment on a stay application had been reserved, his Honour observed (at [127]-[128]) that adjudicating the stay application necessitated pausing the Australian proceeding while the foreign proceedings continued, and it would be unfair to allow that delay to prejudice the plaintiffs and tip the balance in favour of the party seeking the stay of the Australian proceeding. The plaintiffs submit with some force that in exercising my discretion to grant a stay, the most relevant circumstances are those that occurred at the time the Chou Shan was arrested. Additionally I accept the plaintiffs' submissions that granting leave for the Chou Shan to rely on the further affidavit would result in additional costs and delays in the disposition of the present application. 165 On 10 January 2014 the Chou Shan provided short submissions in reply, submitting that Rares J in The Ship 'Xin Tai Hai' (No 2) did ultimately allow the parties to reopen their cases and that the plaintiffs in the present case have not particularised what sort of reply evidence they would be required to put on in response to the Bazakas affidavit. I am not privy to the moving state of affairs between the parties in China but I can accept, as a general proposition, that the plaintiffs should have a general right of reply if the Chou Shan was granted leave to adduce additional evidence. The nature of previously adduced evidence has required translation. 166 As the Chou Shan has already succeeded in obtaining its stay application on the basis of the evidence as it stood at the date judgment was reserved, I see no utility in allowing the further Bazakas affidavit in to evidence. I certify that the preceding one hundred and sixty-six (166) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.

Associate: Dated: 14 February 2014 ANNEXURE OF ABBREVIATIONS Admiralty Act Admiralty Act 1988 (Cth) Bunker Convention International Convention on Civil Liability for Bunker Oil Pollution Damage, opened for signature 27 March 2001, 40 ILM 1493 (entered into force 21 November 2008) CCF The Ship 'MV CMA CGM Florida' China People's Republic of China Chou Shan The Ship 'Chou Shan' CLC 92 International Convention on Civil Liability for Oil Pollution Damage, opened for signature 29 November 1969, 973 UNTS 3 (entered into force 1975) and its 1992 Protocols Collision Damage Interpretations Supreme People's Court's Interpretations on Several Issues on Property Damage Compensation and Trial of Ships Collision or Contact cases Collision Interpretations Supreme People's Court's Interpretations on Several Issues on Trial of Cases on Ships Collision Disputes COLREG Convention on the International Regulations for Preventing Collisions at Sea 1972, opened for signature 20 October 1972, 105 UNTS 16 (entered into force 15 July 1977) CPL Civil Procedure Law of China CPL Interpretations Supreme People's Court's Interpretations of Several Issues on Application of CPL EEZ Exclusive Economic Zone EEZ Law Law on the Exclusive Economic Zone and the Continental Shelf of the People's Republic of China 1998 Hague Judgments Convention 1971 Convention on Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters, opened for signature 1 February 1971, 1144 UNTS 249 (entered into force 20 August 1979) HPC Higher People's Court Limitation Interpretations Supreme People's Court's Interpretation on Several Issues on Trial of Cases of Limitation of Liability for Maritime Claims LLMC 76 Convention on Limitation of Liability for Maritime Claims, opened for signature on 19 November 1976, 1456 UNTS 221 (entered into force 1 December 1986) LLMCA Limitation of Liability for Maritime Claims Act 1989 (Cth) LOU Letter of Undertaking Maritime Code Maritime Code of China MEPL Marine Environmental Protection Law of China MTSL Maritime Traffic Safety Law of China Navigation Act Navigation Act 2012 (Cth) Oil Pollution Interpretations Supreme People's Court's Interpretations on Several Issues on Trial on Cases of Ship Induced Oil Pollution Damage Compensation Disputes Pollution Prevention Regulations Regulations on Administration on Prevention and Control of Ship Induced Pollution to Marine Environment RMTAIA Regulations on Maritime Traffic Accident Investigation and Administration SDR Special Drawing Rights Shanghai MSA Shanghai Maritime Safety Administration SMPL Special Maritime Procedure Law of China SMPL Interpretations Supreme People's Court's Interpretations on Several Issues on the Application of SMPL STCW International Convention on Standards of Training Certification and Watchkeeping for Seafarers, opened for signature 7 July 1978. 1361 UNTS 2 (entered into force 28 April 1984) TLL Tortious Liability Law of China TSB Territory Sea Baseline UNCLOS United Nations Convention on the Law of the Sea, opened for signature 10 December 1982, 1833 UNTS 3 (entered into force 16 November 1994)