CMA CGM SA v Ship 'Chou Shan'

Counsel for the Appellants: Mr G J Nell SC and Ms C O Gleeson

Counsel for the Respondents: Mr M Scott SC and Mr C Young

Solicitor for the Respondents: Holman Fenwick Willan

in admiralty WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION WAD 63 of 2014

JUDGE: ALLSOP CJ, BESANKO And PAGONE JJ DATE OF ORDER: 17 July 2014 WHERE MADE: SYDNEY (Heard in PERth)

1. Leave to appeal from the orders made in Perth on 4 March 2014 in WAD 106 of 2013 be granted in terms of the Draft Notice of Appeal dated 17 March 2014 and filed herein, such draft to stand as the Notice of Appeal without the need for the filing of a further document.
2. The appeal be dismissed.
3. The appellants pay the respondents' costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

in admiralty WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION WAD 63 of 2014

JUDGEs: ALLSOP CJ, BESANKO And PAGONE JJ DATE: 1 AUGUST 2014 PLACE: sydney (heard in PERTH)

the court 1 On 4 March 2014, a judge of the Court, for reasons published on 14 February 2014, stayed an in rem proceeding against the ship Chou Shan brought by the owner and operator of the ship CMA CGM Florida for damage caused by Chou Shan arising out of a collision that occurred between Chou Shan and CMA CGM Florida on 19 March 2013 about 100 nautical miles off the east coast of the People's Republic of China in the Chinese Exclusive Economic Zone (EEZ). Responsibility for the collision is in dispute. The stay was also of any in personam proceedings against the owner of Chou Shan, Rockwell Shipping Limited (Rockwell), if the procedural consequences of events that had happened would see an in personam proceeding in existence, as they did. On 17 July 2014, the Court made orders granting leave to appeal and dismissing the appeal with costs. These are the reasons of the Court for making those orders. 2 The stay was ordered consequent upon the primary judge's conclusion that Australia was a clearly inappropriate forum and that the prosecution of the proceeding would be vexatious and oppressive in the sense discussed by Deane J in Oceanic Sun Line Special Shipping Company Inc v Fay [1988] HCA 32; 165 CLR 197 at 247-248; Voth v Manildra Flour Mills Pty Ltd [1990] HCA 55; 171 CLR 538 at 552 and 554-561; and Henry v Henry [1996] HCA 51; 185 CLR 571 at 575. 3 The ships were a container carrier (CMA CGM Florida) and a bulk carrier (Chou Shan). CMA CGM Florida was registered in the United Kingdom. Chou Shan was registered in Panama. The plaintiffs were domiciled in France and Ireland. Rockwell was domiciled in the Republic of the Marshall Islands. 4 After the collision, the two ships immediately proceeded to different Chinese ports, Chou Shan to the port of Qushan and CMA CGM Florida to Yangshan Terminal. CMA CGM Florida leaked oil and fuel. 5 On 31 March 2013, the owners of both ships were required to provide security to the Shanghai Maritime Safety Administration (the Shanghai MSA) in relation to pollution clean-up costs, each to the value of RMB 70 million (over AUD 10 million). Also in April 2013, they were required to provide security to a Chinese authority in relation to loss or damage to fisheries, each in the value of RMB 20 million (over AUD 3 million). 6 On 9 April 2013, the plaintiffs filed a writ in rem in the Federal Court of Australia, commencing proceedings against Chou Shan claiming USD 60 million in damages plus interest and costs arising out of the collision. 7 The proceeding was for loss and damage suffered as a result of the collision and thus was a proceeding on a maritime lien, being a lien for damage done by a ship: Admiralty Act 1988 (Cth) s 15(2)(b). A maritime lien, being a creature of maritime law, distinct from possessory liens and equitable liens, is a form of security interest or privilege in the ship that arises on the occurrence of the events giving rise to it - here the collision and the acts of those on board Chou Shan leading to its asserted responsibility. It is a security interest perfected by the process of the maritime court, in Australia by a proceeding in rem, and in that sense inchoate until the commencement of proceedings to enforce it. The security, even while inchoate, remains indelible, notwithstanding the sale of the ship, being removed only by satisfaction of the claim or sale by the Admiralty Court: see generally Thomas, Maritime Liens (1980) [10] - [13]; Abbott, Law of Merchant Ships and Seamen (14th ed, 1901) at 1012; The Bold Buccleugh [1851] 7 Moo PC 267 at 284 (Sir John Jarvis for the Privy Council); and The Tolten [1946] P 135 at 150 (Sir Leslie Scott). It is unnecessary to delve into arguments as to its true character for other purposes: cf The Halcyon Isle [1981] AC 221, and see M Davies and K Lewin "Foreign Maritime Liens: should they be recognised in Australian Courts?" (2002) 76 ALJ 775 and S Rares "The Far from Halcyon Isle: Maritime liens, renvoi and conflicts of law" [2014] Lloyd's Maritime and Commercial Law Quarterly 183. It is sufficient to recognise that a maritime lien is a security interest or privilege recognised by maritime law in or against the ship. 8 On 6 May 2013, the owners of Chou Shan applied to the Ningbo Maritime Court to set up a limitation fund in Special Drawing Rights totalling 11, 850, 278 units. One week later on 13 May 2013, the Ningbo Maritime Court indicated its acceptance of Chou Shan's owners' application to set up the limitation fund. On 21 May 2013, the Ningbo Maritime Court issued a notice to the owners of Chou Shan to this effect, and confirming the announcement of credit registration. This announcement took place on 22 May 2013, and it instructed eligible parties to submit objections within 30 days, and creditors to apply for claims against the fund within 60 days, from the date of publication of the last public notice. These notices (appearing in the People's Daily and People's Daily Overseas Edition) were published between 27 and 29 May 2013. 9 The rights to limit in this way arose from Ch 11 of the Chinese Maritime Code. China is not a State Party or signatory to the Convention on Limitation of Liability for Maritime Claims 1976, done at London on 19 November 1976 (the 1976 Convention). Nevertheless, the substance of Ch 11 is taken from the 1976 Convention. China is also not a signatory to the 1996 Protocol to Amend the Convention on Limitation of Liability for Maritime Claims of 19 November 1976, done at London on 2 May 1996 (the 1996 Protocol). The 1996 Protocol, which amongst other things, significantly increased limitation amounts, has not been incorporated into Chinese law. Australia is a signatory to both the 1976 Convention and the 1996 Protocol and both form the basis for limitation of liability under the Limitation of Liability for Maritime Claims Act 1989 (Cth) (the LLMC Act). 10 Meanwhile, on 9 May 2013, cargo interests arrested Chou Shan in Zhousan and commenced proceedings against her owners in the Ningbo Maritime Court. The following day, Chou Shan was released from arrest upon the giving of security by its P & I club. 11 On 14 May 2013, Rockwell applied to the Ningbo Maritime Court for an arrest warrant against CMA CGM Florida. On 17 May 2013, Rockwell caused CMA CGM Florida to be arrested in China. On 20 May 2013, Rockwell filed a civil complaint against the plaintiffs in the Ningbo Maritime Court. Rockwell's claim was accepted by the Ningbo Maritime Court on 24 May 2013. Rockwell applied to increase their security demand against CMA CGM Florida from USD 5 million to USD 40 million. This application was accepted on 3 June 2013. CMA CGM Florida was released from arrest on 10 July 2013 after the provision of security by its P & I club. 12 Meanwhile, by May 2013, Chou Shan had resumed working. On 17 May 2013, at the request of the plaintiffs, the Federal Court of Australia issued an arrest warrant for Chou Shan. On 22 May 2013, Chou Shan was arrested in Port Hedland. Two days later, on 24 May 2013, Rockwell, as owner of Chou Shan, filed a conditional appearance in the Federal Court to apply for the release of Chou Shan. On the provision of security for the plaintiffs' claim in the sum of USD 61, 751, 213 by Chou Shan's P & I club, orders were made for the conditional release of the vessel that day. Chou Shan was released on 29 May 2013. 13 Under cl 4 of the letter of undertaking, the club was released from their obligations should the owners of Chou Shan establish a limitation fund in Australia under the LLMC Act, and the claims are found or agreed to fall within Art 2 of the 1976 Convention made to have the force of law in Australia by the LLMC Act, s 6. 14 On 18 June 2013, Rockwell (now placed on court process filed by it as the second defendant) and Chou Shan filed a stay application in respect of the proceedings commenced in the Federal Court, stating as its basis that Australia was a clearly inappropriate forum for the hearing and determination of the plaintiffs' claims, and that the proceedings were vexatious and oppressive as they were in respect of the same or substantially the same subject matter as proceedings in the Ningbo Maritime Court in China. A statement of claim was filed on 25 June 2013, in respect of which further and better particulars were supplied on 4 July 2013. 15 On 29 July 2013, CMA CGM Florida registered its claims as a creditor against the limitation fund in the Ningbo Maritime Court, under protest as to the jurisdiction of the Court, and stating that the Federal Court was the forum where the proceedings were first commenced and where they should proceed. 16 On 6 August 2013, CMA CGM Florida filed a Bill of Complaint against the owners of Chou Shan. 17 In the application before the primary judge, the plaintiffs undertook to apply to withdraw the claim against the Chinese fund and the law suit against Chou Shan if the stay was refused. 18 On 8 August 2013, CMA CGM Florida filed an objection to jurisdiction in the Ningbo Maritime Court in the liability proceedings brought by the owners of Chou Shan. This objection was dismissed on 20 August 2013. 19 On 26 August 2013, the Ningbo Maritime Court issued a Certificate of Limitation Fund. 20 The primary judge heard the stay application on 4 and 5 September 2013.

The nature of the Federal Court proceeding 21 The proceeding was commenced as an action in rem. A "conditional appearance" was filed; but there was no challenge made to the jurisdiction of the Court. Rule 23 of the Admiralty Rules requires any appearance to be in accordance with Form 9, which does not provide for a conditional appearance. After the filing of the document on 24 May 2013, the stay was sought, a step which presupposed both jurisdiction and unconditional appearance. The conditional appearance in those circumstances must be viewed as unconditional. The nature of the proceeding in these circumstances is as set out in Comandate Marine Corp v Pan Australia Shipping Pty Ltd [2006] FCAFC 192; 157 FCR 45 at 81 [128]: it continues as an action in rem against the ship, and also as if it were an action in personam against Rockwell.

The approach of the primary judge 22 In a careful and thorough judgment, the primary judge set out the background facts (at [12]-[38] of the reasons) and surveyed the competing evidence as to Chinese maritime law of Mr Chen, called by Rockwell and Chou Shan, and Professor Zhao, called by the plaintiffs (at [39]-[104]) before undertaking his analysis of the circumstances. Before turning to that analysis, it is convenient to identify the relevant areas of difference between the two experts as identified by the primary judge at [103] of the reasons. 23 The first was the question of the lex causae governing the collision. The primary judge favoured Prof Zhao's view that, whilst Chinese law governs the pollution claims by Chinese authorities (being a subject matter given over to the jurisdiction of the coastal State in its EEZ under Art 56 of the United Nations Convention on the Law of the Sea) (UNCLOS), the law governing the maritime tort in connection with a ship collision was not necessarily Chinese. Mr Chen contended that Chinese law applied to both the pollution case and as the lex causae of the tort claim. Rockwell challenges this finding in a notice of contention. For the reasons expressed below Rockwell's challenge should be rejected. 24 The second area of relevant difference concerned the registration of a claim against a limitation fund and concerning an action under protest. Prof Zhao said that the former was not a submission to jurisdiction and that a Chinese court would take a protest into account. Mr Chen said the former may be a submission and that a Chinese court would not take into account any protest in commencing an action. The resolution of the issue does not affect our view of the appeal. 25 The primary judge then, at [105]-[114], examined the applicable principles, referring to Deane J in Oceanic, Voth and Garsec Pty Ltd v His Majesty The Sultan of Brunei [2008] NSWCA 211; 250 ALR 682. No complaint is made about his expression of the governing principles. 26 At [115]-[149] of the reasons, the primary judge discussed the parties' submissions on the operative considerations by reference to connection with Australia ([115]-[123]), the plaintiffs' security ([124]-[128]), the lex causae ([129]-[146]), other connecting factors ([147]) and parallel related proceedings ([148]-[149]). 27 During the above discussion (at [115]-[149]) the primary judge expressed a number of relevant views or conclusions. At [117], the primary judge described certain matters as "compelling" as follows: 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. The reference to Chinese law applying was qualified by his conclusion referred to above and also expressed at [158(c)] to which we refer below. 28 At [147], the primary judge found many of the connecting factors to be neutral, saying: 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. 29 At [148]-[149], the primary judge recognised the importance of the consideration of multiple hearings. At those paragraphs, he said the following: [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. 30 The primary judge's reasoning is substantially to be found in [150]-[161]. At [151]-[152], the primary judge emphasised the importance of the avoidance of multiple proceedings, and the serious inconvenience of the potential for inconsistent findings. This weighty consideration can be seen to be at the forefront of the primary judge's consideration, and rightly so, given what Dawson, Gaudron, McHugh and Gummow JJ said in Henry v Henry at 590-591. Of course, in Henry v Henry the plaintiffs had begun their action after the party seeking a stay (unlike the position here); but, nevertheless, as the primary judge discussed at [153], the Ningbo Maritime Court was seized of all issues, was proceeding in a timely way, and had the advantage (as referred to by the primary judge at [155]) of the evidence collected by the Shanghai MSA. 31 At [157], the primary judge said: 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. 32 At [158], the primary judge turned to the seven factors set out earlier in [9] of his reasons, they being the factors relied on by Chou Shan. 33 At [159]-[160], the primary judge dealt with the juridical advantage of the greater security for the plaintiffs' claims in this Court. 34 All of [158]-[161] is set out below. Some importance was placed on the terms and structure of these paragraphs by the appellants in argument. It was submitted that they betrayed error by the primary judge in how he approached the task of evaluating whether this Court was a clearly inappropriate forum. We will deal with that argument later. It is appropriate to say at this point, however, that we would not segregate [158] of his Honour's reasons as the place where one finds his reasons for the conclusion that this Court is a clearly inappropriate forum. The reasons are to be found in [150]-[160] and include not only the matters in [158], but also the emphasis in [151]-[152] on inconsistent findings, as well as the consideration of the juridical advantage discussed at [159]-[160]. 35 Paragraphs [9] and [158]-[161] were as follows: [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. … [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. 36 Before turning to the substance of the application, it is important to recognise that the argument placed before the primary judge involved the proposition that the plaintiffs proposed to run the claims in this Court. That involved, necessarily, the spectre of parallel proceedings, in this Court and in the Ningbo Maritime Court. Hence, the primary judge placed some importance on the potentiality of inconsistent findings. No argument was run before him, and the position was not taken below, by the plaintiffs, that two parallel and competing proceedings should be avoided by managing the Federal Court action to await the findings by the Ningbo Maritime Court, and when those issues litigated between the parties were resolved, the Federal Court claim could proceed, and be finalised, by access to the Australian security or limitation fund. In other words, the case was not put to the primary judge that sought to avoid or ameliorate the vexation of two factual hearings and the potential for inconsistent findings, but to emphasise the retention of the significant juridical advantage given to the plaintiffs by the security put up by the P & I Club for the maritime lien or the value of a limitation fund, if set up, in an amount under the 1976 Convention and the 1996 Protocol under Australian law.

Leave to appeal 37 Rockwell contended that granting leave to appeal would be futile because the determination of the Chinese proceedings would preclude or would be likely to preclude the plaintiffs from continuing these proceedings. That submission should be rejected. If the proceeding in this Court were to continue, it may be that the earlier resolution of proceedings in China would lead to questions of issue estoppels arising, or to other principles that might affect the outcome of the Australian case. That does not necessarily make futile an in rem claim with attendant security (of either the Club letter or a fund) of over AUD 60 million. 38 The matters argued are important and leave to appeal should be granted. 39 Evidence was led before the primary judge as to the conduct of the litigation in China. Further evidence was led on the application for leave to appeal as to the progress of the matter in China. That evidence was only relevant should this Court be required to re-exercise the discretion, having, on this hypothesis, found error in the approach of the primary judge. For the reasons that follow, this does not arise.

The appeal 40 There were five principal arguments put forward as to error on the part of the primary judge and why the application for a stay should have been, and should now be, refused (on any re-exercise of the discretion): (a) the primary judge applied the wrong test: grounds 1, 2, 4, 9 and 20 of the draft notice of appeal; (b) the primary judge took into account irrelevant considerations: grounds 2, 3, 8, 10 to 15 and 19 of the draft notice of appeal; (c) the primary judge failed to make a finding about the lex causae: grounds 4 to 6 of the draft notice of appeal; (d) the primary judge failed to take into account that this Court was first seized of the matter: grounds 15 and 16 of the draft notice of appeal; and (e) the primary judge was in error in how he treated the significant juridical advantage to the plaintiffs in commencing in rem proceedings in Australia: grounds 16 to 18 of the draft notice of appeal. 41 It is convenient to deal with all these grounds as inter-related. All, individually and collectively, reduced to the proposition that the primary judge applied the wrong test. 42 It was accepted by the appellants that the primary judge directed himself correctly as to the appropriate test. The submission was, however, that the way the primary judge went about analysing the issues reflected, in point of substance, the English test of the clearly more appropriate forum. This error was revealed first, it was submitted, by an undue focus on the comparative suitability of China as a forum for the resolution of the dispute. In particular, criticism was levelled at the primary judge for what he said at [158(a)] about China being the "natural and obvious forum". This was said to be the primary focus of his Honour's decision and reasoning. Further, Henry v Henry was said to be distinguishable because the Australian case was commenced first, the lack of true identity of parties because of the in rem character of the proceeding, and the lack of recognition under Chinese law of parallel proceedings. 43 Further, it was submitted that the factors identified by the primary judge do not lead to the conclusion that China was the natural and obvious forum. 44 The application of the wrong test was also said to be revealed by the way the primary judge employed the decision of the English Court of Appeal in Herceg Novi (Owners) v Ming Galaxy (Owners) [1998] 2 Lloyds Rep 454, in particular the passage emboldened above at [35] in [159] of his Honour's reasons. 45 The error was also said to be revealed by the asserted failure of the primary judge to give real weight to the fact that the appellants validly invoked the jurisdiction of this Court first, and in aid of an in rem claim, based on a maritime lien. 46 The submissions of the appellants are not without force. There are parts of the primary judge's reasons that display a degree of concordance of expression with the English test. Nevertheless, taken as a whole, and not overly focussing on individual factors, we are not persuaded that the primary judge did anything other than that which he said he did: apply the clearly inappropriate test from Voth. 47 It is, however, important to appreciate the subtle, but important, differences between the approach mandated in Australia by the High Court and the approach in the United Kingdom. It is a difference of critical importance to the place of the juridical advantage to plaintiffs in the local proceeding. 48 In 1986, in Spiliada Maritime Corp v Cansulex Ltd [1987] 1 AC 460, for reasons contained in the speech of Lord Goff of Chieveley, the House of Lords stated authoritatively for the United Kingdom the principles concerning the staying of proceedings on the basis of the existence of a more appropriate forum. The principles had been in development for over 10 years in a series of appeals in the House of Lords: The Atlantic Star [1974] AC 436, MacShannon v Rockware Glass Ltd [1978] AC 795, Amin Rasheed Shipping Corporation v Kuwait Insurance Co [1984] AC 50 and The Abidin Daver [1984] AC 398. 49 In Spiliada at 474, Lord Goff expressed the underlying principle in the terms used by Lord Kinnear in Sim v Robinow (1892) 19 R 665 at 668: [T]he plea can never be sustained unless the court is satisfied that there is some other tribunal, having competent jurisdiction, in which the case may be tried more suitably for the interests of all the parties and for the ends of justice. 50 Lord Goff then (at 475-478) discussed how the principle was applied in cases of stay of proceedings. His Lordship set out six elements in his summary of the law at 476-478. The "basic principle" was described as follows at 476: The basic principle is that a stay will only be granted on the ground of forum non conveniens where the court is satisfied that there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of the action, i.e. in which the case may be tried more suitably for the interests of all the parties and the ends of justice. 51 Lord Goff then discussed the burden of proof. At 477-478, Lord Goff used the language of "natural forum" (a phrase used by Lord Reid in The Atlantic Star) as a synonym for an appropriate forum or a more appropriate forum; and preferred the use of that phrase "natural forum" as denoting the forum with which the action has the most real and substantial connection, including governing law. 52 Also at 477, Lord Goff noted that since the question is whether the other forum is clearly more appropriate, the court will focus first on that other forum. 53 At 482-484, Lord Goff dealt with the question of a legitimate personal or juridical advantage. His Lordship began this subject by noting what Oliver LJ had said in the Court of Appeal (in Spiliada): that one party's advantage is the other's disadvantage, and that to emphasise the plaintiff's advantage was not consistent with Lord Kinnear's statement of principle in Sim v Robinow (at [49] above). The key was to consider where the case may be tried "suitable for the interests of all the parties and for the ends of justice" (at 482, being words taken from Sim v Robinow). Lord Goff then gave some examples of relevance to this case: Typical examples are: damages awarded on a higher scale; a more complete procedure of discovery; a power to award interest; a more generous limitation period. Now, as a general rule, I do not think that the court should be deterred from granting a stay of proceedings, or from exercising its discretion against granting leave under R.S.C. Ord. 11, simply because the plaintiff will be deprived of such an advantage, provided that the court is satisfied that the substantial justice will be done in the available appropriate forum. 54 In Voth, the Court reconsidered the recent decision of Oceanic Sun 165 CLR 197 because of the absence of a clear statement of binding principle in that case. The majority in Voth (Mason CJ, Deane, Dawson and Gaudron JJ) authoritatively stated the principles and criteria to be applied: 552. The majority accepted the statement of principle of Deane J in Oceanic Sun at 247-248, including his Honour's statement as to the meaning of "oppressive" and "vexatious", as words not to be viewed rigidly, and as meaning seriously and unfairly burdensome, prejudicial or damaging ("oppressive") and productive of serious and unjustified trouble and harassment ("vexation"). 55 At 556-557, the majority discussed the comparison between the traditional test favoured by Brennan J and the "clearly inappropriate forum" test that they favoured. In expressing that difference, one can see the overwhelming influence of "legitimate advantage" for the plaintiff in the traditional test, and its place as a factor to balance in the "clearly inappropriate forum" test: Thus, in order to obtain a legitimate advantage, the plaintiff may commence an action in the selected forum though the subject matter of the action and the parties have little connexion with that forum and the defendant may be put to great expense and inconvenience in contesting the action in that forum. On the application of traditional principles, a stay would be refused in such a case, notwithstanding that the selected forum was a clearly inappropriate forum. 56 At 557-561, the majority discussed the comparison between the "clearly inappropriate forum" test that they favoured and the English "clearly more appropriate forum" test. At 558, the majority said that the tests were similar and their application would often yield the same result. It is instructive to examine their Honours' expression of where the difference was likely to arise in the context of the particular criticisms of the primary judge here. At 558, the majority said: The difference between the two tests will be of critical significance only in those cases - probably rare - in which it is held that an available foreign tribunal is the natural or more appropriate forum but in which it cannot be said that the local tribunal is a clearly inappropriate one. But the question which the former test presents is slightly different in that it focuses on the advantages and disadvantages arising from a continuation of the proceedings in the selected forum rather than on the need to make a comparative judgment between the two forums. That is not to deny that considerations relating to the suitability of the alternative forum are relevant to the examination of the appropriateness or inappropriateness of the selected forum. The important point is that, in those cases in which the ascertainment of the natural forum is a complex and finely balanced question, the court may more readily conclude that it is not a clearly inappropriate forum. (emphasis added) 57 Thus, here, the mere fact that the primary judge used expressions such as "natural and obvious forum" or examined factors as to the suitability of China as a forum does not necessarily betray any misapplication of Australian principle. The focus is upon the chosen local forum - its advantage and disadvantages, rather than on a true comparative analysis. This was emphasised by Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ in Regie Nationale des Usines Renault SA v Zhang [2002] HCA 10; 210 CLR 491 at 520-521 and by French CJ and Gummow, Hayne and Kiefel JJ in Puttick v Tenon Limited [2008] HCA 50; 238 CLR 251 at 276-277 [27]. See also Murakami v Wiryadi [2010] NSWCA 7; 268 ALR 377 at 388 [51]-[53]. Thus, the nature of a real juridical advantage in the local court will not be adequately dealt with by identifying the equal and opposite disadvantage as Oliver LJ and Lord Goff did in Spiliada, thereby cancelling out the juridical advantage. That is not to say, however, as was made plain by the majority in Voth in comparing the traditional test with the clearly inappropriate test, that a real juridical advantage is necessarily determinative. 58 One other consequence of the clearly inappropriate forum test's focus upon the local court is the avoidance of what might be the difficulty or inappropriateness of deciding whether a plaintiff will obtain justice in a foreign court: see 559. The primary judge here accepted that substantial justice will be done in the Chinese court. Notwithstanding what the majority said at 559, that assessment can be viewed as a consideration relating to the suitability of the alternative forum: see 558. 59 Relevant to the assessment of the primary judge's approach was what might be termed a "rule of law" consideration at 559-560 in the majority's reasons: The selected forum's conclusion that it is a clearly inappropriate forum is a persuasive justification for the court refraining from exercising its jurisdiction. Granted that there is an obligation on the domestic courts of this country to exercise jurisdiction which is conferred upon them - a matter on which the majority in Oceanic Sun was united - it does not extend to cases where it is established that the forum is clearly inappropriate. To say, in line with the Spiliada approach, that the selected forum is justified in refraining from exercising its jurisdiction when it concludes no more than that another available and competent forum is more appropriate is to acknowledge that a court can decline to perform its obligation to exercise jurisdiction even though it is an appropriate or not inappropriate court. That proposition is by no means easy to sustain as a matter of legal principle, though we acknowledge that the argument deriving from the obligation to exercise jurisdiction has less force in its application to cases falling within the extended jurisdiction where the plaintiff is required to obtain leave to serve outside the jurisdiction. The court then has a discretion to exercise and in exercising that discretion it may have regard to appropriate forum considerations. 60 The statements by the majority at 564-565 that the principles to be applied are those expressed by Deane J in Oceanic Sun at 247-248 and that the discussion by Lord Goff in Spiliada of relevant connecting factors and legitimate personal or juridical advantage provides assistance, make it impossible to conclude from the language used by the primary judge that he erred by applying the United Kingdom test when purportedly directing himself to the Australian test. 61 Nor does an analysis of the structure and substance of his reasons betray any error. The primary judge's reasons display a clear understanding of the nature and significance of the proceedings brought by the plaintiffs as an in rem claim indicating a maritime lien, and as the proceedings first brought: see [124]-[128] of his reasons. It is clear from [148]-[149] and [158(f)] of his reasons that a heavy consideration was the risk of inconsistent findings. Such was not only understandable, but demanded by Henry v Henry at 590-591. As Dixon J said in Union Steamship Co of New Zealand Ltd v The Caradale [1937] HCA 1; 56 CLR 277 at 281 (cited in Henry v Henry at 590): The inconvenience and embarrassment of allowing two independent actions involving the same question of liability to proceed contemporaneously in different courts needs no elaboration. 62 The primary judge's conclusion as to China being the natural and obvious forum was both defensible in fact and relevant to the assessment of suitability of Australia. In the context of the risk of inconsistent findings from two hearings, the clear proximity to China in terms of distance, the role of the Shanghai MSA, the commencement of suits there by a variety of parties, and the ships steaming to Chinese ports for repair, all place the over-arching control by a competent and skilled Chinese court as a natural and convenient consequence. That reflects as much on Australia (as a posited competing forum) as it does on China: see Voth at 558. That is not to ignore or discount the important jurisdictional character of the in rem action - the primary judge considered this: see [158(b)]. Whilst the primary judge's doubt (correctly formed, see below) that Chinese law was the lex causae undermined, to a degree, the force of a conclusion that China was the natural forum, the connections with China identified by the primary judge made the conclusion legitimate. 63 The treatment of the English cases by the primary judge in [159] of his reasons has its difficulties. These cases need to be viewed with caution for the reasons expressed below. Nevertheless, it is clear from [160] that the primary judge took the question of security into account in the proper framework of the clearly inappropriate forum test. 64 We are not persuaded of any error by the primary judge in his approach to, or exercise of, the discretion. The argument proceeded before this Court on the basis of the character of the decision being discretionary, the review of which being of the nature and character discussed in Voth 171 CLR at 571. No call therefore arises to consider the questions about appellate review raised, but not decided, in Murakami at 385-386 [32]-[34], Fleming v Marshall [2011] NSWCA 86; 279 ALR 737 at 750 [58]-[59], and Studorp Limited v Robinson [2012] NSWCA 382, and see M Davies, A Bell and P Brereton Nygh's Conflict of Laws in Australia (9th Ed) at 199-201. 65 Given that the discretion was presented to the primary judge that to refuse the stay involved competing actions with the risk of inconsistent findings, we are not prepared to conclude that the nature and character of the juridical advantage of the greater security demanded a conclusion that this Court was not a clearly inappropriate forum. 66 Two matters remain for some elaboration: first, the cases dealing with the juridical advantage of a higher security or limit of liability in the local chosen forum; and, secondly, the lex causae of the collision.

The differences as to limitation 67 Limitation of liability for maritime claims is governed from state to state by a variety of regimes. The ability of a shipowner (and others interested in the working of a ship) to limit its (and their) liability is an aspect of maritime law of some lineage. It is a concept of universality to shipping nations based on the recognition of the perilous nature of maritime activity and transport. In common law jurisdictions it was the product of statute; in civil law jurisdictions it rested in principles reflected in tables and codes: see generally in Tetley International Maritime and Admiralty Law (Editions Yvon Blais) Ch 7. There have been three major international conventions dealing with the subject matter: the International Convention for the Unification of Certain Rules relating to the Limitation of Liability of Owners of Sea-Going Vessels, done at Brussels on 25 August 1924 (the 1924 Convention), the Limitation of Liability of Owners of Sea-Going Ships, done at Brussels on 10 October 1957 (the 1957 Convention), and the 1976 Convention. 68 After a less than significant take up of the 1924 Convention, the 1957 Convention, which came into force in 1968, achieved widespread acceptance. A Protocol in 1979 replaced the limits in gold francs to special drawing rights. The right to limit was lost if it were proved that the negligence involved occurred with the "fault and privity" of the owner or person claiming limitation. 69 The 1976 Convention significantly increased the level of limitation over the 1957 Convention limits, but made the limitation regime exceptionally difficult to break by the replacement of "fault and privity" with a test based on concepts close to intention. The 1996 Protocol again increased the limits and established a rapid amendment procedure to update them. 70 It is possible (and not uncommon) for disputes to arise as to which limitation regime should govern, and with what universality. The terms of the conventions seek to deal with this question. For instance, in Ch III of the 1976 Convention, Art 11 provides for the constitution of the fund, and Art 13 provides for the barring of other actions. The bar to other actions in Art 13 is expressly predicated, however, on there being a fund constituted in accordance with Art 11 in any State Party in which legal proceedings are instituted. China is not a State Party to the 1976 Convention, and so Art 13 (as part of Australian law (LLMC Act, s 6)) does not operate. Thus, for this reason alone, under the 1976 Convention, there is no statutory bar on the plaintiffs bringing their claim in Australia against an asset of the owner, Rockwell, notwithstanding the constitution of a fund in China. Whether or not the 1976 Convention's requirement in Art 13 for a State's legal process to give way to that of the (foreign) State Party administering the fund under Art 11 was the reason that China was not willing to become a State Party to the Convention (though introducing much of its substance into its domestic law) does not matter. The point is that under Australian law, the constitution of the limitation fund in China is not a legal bar to the plaintiffs' action in Australia. 71 A number of recent cases have sought to deal with the tension between actions and limitation actions and funds in different states. It is self evident that parties to a dispute may have different interests in connection with the forum to hear the dispute, depending upon, amongst other things, the limit of liability, the prospects of breaking the limit, and the nature and character of the courts concerned. Here the differences are limited to the amount of the limitation. 72 In Caltex Singapore Pte Ltd v BP Shipping Ltd [1996] 1 Lloyd's Rep 286, Clarke J (as his Lordship then was) was dealing with the litigious wash of an allision in Singapore between the defendant's (BP's) vessel and a jetty owned by one Caltex company, used by another and administered by a third. BP had set up a limitation fund in Singapore that was based on the 1957 Convention. The plaintiffs (the Caltex companies) sued in England where the 1976 Convention (with higher limits) applied. The defendant (BP) sought to stay the actions by the Caltex companies in England. 73 Clarke J (being bound, of course, by Spiliada) accepted BP's submission that England was not the natural or appropriate forum for the trial of the action, and that Singapore was. Nevertheless he was of the view that English public policy favoured the support of the 1976 Convention. He thus accepted (for this reason) the legitimacy of Caltex retaining the significant advantage of the higher limit in England. Clarke J granted a temporary stay until quantum (liability being admitted by BP) had been resolved in Singapore. In other words, the trial would occur in one place, Singapore, but the plaintiffs should not be denied the advantage of the higher limit in England. 74 In a judgment delivered on 30 April 1997, Rix J (as his Lordship then was) in Caspian Basin Specialised Emergency Salvage Administration v Bouygues Offshore SA (No 4) [1997] 2 Lloyd's Rep 507 recorded the strong attack on Clarke J's reasoning by Mr Steel QC (the future Admiralty judge) as being inconsistent with what Lord Goff had said in Spiliada at 482-484 and in De Dampierre v De Dampierre [1988] AC 92 at 100 about juridical advantage to the effect that a stay should not be refused because of the loss to the plaintiff of a juridical advantage if the court is satisfied that substantial justice will be done in the appropriate forum elsewhere. Relevant to those comments in Spiliada and De Dampierre was the notion that one person's advantage is another's disadvantage. Mr Steel had referred Rix J to the decision of the Hong Kong Admiralty judge, Waung J, in The Kapitan Shvetsov (later reported in [1998] 1 Lloyd's Rep 199) in which Waung J had disagreed with Clarke J's approach, as contrary to the Spiliada test. After reserving, Rix J found that the Hong Kong Court of Appeal had overturned Waung J (by majority). Litton VP (for the majority) placed significant emphasis on the juridical advantage of the higher limit in Hong Kong. Rix J expressed the view in Caspian Basin [1997] 2 Lloyd's Rep at 530 that the two views were both strongly arguable. He rejected, however, any charge of chauvinism that was impliedly levelled at the approach of Clarke J. 75 A month later, in May 1997, Timothy Walker J in Bouygues Offshore SA v Caspian Shipping Co (No 5) [1997] 2 Lloyd's Rep 533 (in the next round of the same matter) did not disturb the approach of Clarke J. 76 The following year saw the English Court of Appeal in a judgment of the Court delivered by Sir Christopher Staughton in The Herceg Novi v The Ming Galaxy overrule Clarke J in Caltex. This is the judgment referred to by the primary judge at [159] of his reasons, the relevant parts of which are set out at [35] above. 77 The third of the reasons stated by the primary judge at [159] of his reasons (set out at [35] above) reflects the neutrality of so-called juridical advantage in the Spiliada test. As discussed earlier, the requirement in Voth to focus upon the local chosen forum and its asserted inappropriateness means that juridical advantage in that chosen forum must have a greater part to play in the analysis than it does under the Spiliada test. It may not have the potentially overwhelming importance that it does in the traditional test, nevertheless, the focus being upon the local chosen court means that it cannot be simply counterbalanced by an equivalent disadvantage to the defendant. That said, the majority in Voth did say at 564-565 that what Lord Goff said in Spiliada about juridical advantage at 482-484 provided "valuable assistance". Overall, however, the necessary focus upon the local court and whether it is inappropriate required by Voth gives the juridical advantage to the plaintiff (if otherwise legitimate) a degree of weight that is simply not cancelled out by a comparative equivalence approach mentioned by Oliver LJ in Spiliada and adopted by Lord Goff in Spiliada and De Dampierre. 78 Thus, caution needs to be employed in applying The Herceg Novi v The Ming Galaxy in an Australian analysis, that, in doing so, a Spiliada test is not introduced into the analysis. Indeed, reliance on the case is apt to lead to error. 79 The test in Australian law on an application such as the present is whether the local forum is a clearly inappropriate forum. The test in English law is stated in Spiliada and cases which have followed and applied that case. The first question is what is the more appropriate forum, and if prima facie it be the foreign forum, then to ask whether there are circumstances by reason of which justice requires that a stay should nevertheless not be granted. At this second stage of the inquiry, an important consideration will be whether it is shown that the plaintiff will not obtain substantial justice in the foreign forum. 80 In applying the English approach in the Herceg Novi, the Court of Appeal focused on the second stage of the inquiry in determining the significance to be attached to the juridical advantage claimed in that case. That juridical advantage was a higher limitation amount in England compared with Singapore. The Court said that because, in terms of abstract justice, neither Convention could be considered objectively more just than the other in terms of the limitation amounts and other provisions, the plaintiff's claimed juridical advantage did not mean that substantial justice could not be obtained in the Courts of Singapore. 81 The law in this country as laid down in Voth mandates a different approach to juridical advantage. As we have said, the test is whether the local forum is a clearly inappropriate forum, and the plaintiff's juridical advantage is to be assessed in that context, together with the other factors identified in Voth and in our reasons. It is, of course, to be properly assessed, but we do not think that, ordinarily at least, it is to be compared in terms of abstract justices with the laws of the foreign forum. It owes its existence to the laws of the local forum and those laws represent the views of the local legislature and are binding on the courts of the local forum. Having said that, it is also well-established that juridical advantage is not decisive. The decision in Voth itself provides an illustration of this proposition. Mason CJ, Deane, Dawson and Gaudron JJ (at 571) acknowledged certain juridical advantages but said that they were insufficient to resist the conclusion that the local forum was a clearly inappropriate forum. 82 The primary judge's reference to the Herceg Novi raises a concern that he may have discounted, perhaps heavily, the appellants' juridical advantage in considering whether or not to grant a stay. However, reading his reasons as a whole and having regard in particular to what he said in paragraph 160 (see [35] above) where he expressed himself in similar terms to Mason CJ, Deane, Dawson and Gaudron JJ in Voth (at 571), we are not satisfied that his Honour erred. 83 In a legal environment governed by Voth where a plaintiff had a legitimate advantage in an Australian limitation of liability regime in the enforcement of a maritime lien claim, in circumstances where the risk of inconsistent findings in parallel proceedings could be eliminated, or at least significantly ameliorated, it might be difficult to conclude that the Federal Court was a clearly inappropriate forum. In this context, the managed and staged approach in the Caltex case may well be a mechanism to vindicate rights under Australian law without engaging the risk of the vexation of inconsistent finding that may be unnecessary. Whether or not that approach is still open in this matter need not be discussed.

The lex causae 84 The collision took place in waters forming part of China's EEZ. The status of the EEZ is governed by international law in the terms of Part V of UNCLOS. By Art 55 the EEZ is an area beyond and adjacent to the territorial sea, subject to a specific legal regime in Part V. The territorial sea is subject to the sovereignty of the coastal State: UNCLOS, Art 2. The EEZ is not sovereign territory, but the coastal State has rights and responsibilities under the legal regime of Part V. The rights, jurisdiction and duties of the coastal State are set out in Art 56, as follows: Article 56 Rights, jurisdiction and duties of the coastal State in the exclusive economic zone 1. In the exclusive economic zone, the coastal State has: (a) sovereign rights for the purpose of exploring and exploiting, conserving and managing the natural resources, whether living or non-living, of the waters superjacent to the sea-bed and of the sea-bed and its subsoil, and with regard to other activities for the economic exploitation and exploration of the zone, such as the production of energy from the water, currents and winds; (b) jurisdiction as provided for in the relevant provisions of this Convention with regard to: (i) the establishment and use of artificial islands, installations and structures; (ii) marine scientific research; (iii) the protection and preservation of the marine environment; (c) other rights and duties provided for in this Convention; 2. In exercising its rights and performing its duties under this Convention in the exclusive economic zone, the coastal State shall have due regard to the rights and duties of other States and shall act in a manner compatible with the provisions of this Convention. 3. The rights set out in this article with respect to the sea-bed and subsoil shall be exercised in accordance with Part VI. 85 Article 58 sets out the rights and duties of other States in the EEZ, as follows: Article 58 Rights and duties of other States in the exclusive economic zone 1. In the exclusive economic zone, all States, whether coastal or land-locked, enjoy, subject to the relevant provisions of this Convention, the freedoms referred to in article 87 of navigation and overflight and of the laying of submarine cables and pipelines, and other internationally lawful uses of the sea related to these freedoms, such as those associated with the operation of ships, aircraft and submarine cables and pipelines, and compatible with the other provisions of this Convention. 2. Articles 88 to 115 and other pertinent rules of international law apply to the exclusive economic zone in so far as they are not incompatible with this Part. 3. In exercising their rights and performing their duties under this Convention in the exclusive economic zone, States shall have due regard to the rights and duties of the coastal State and shall comply with the laws and regulations adopted by the coastal State in accordance with the provisions of this Convention and other rules of international law in so far as they are not incompatible with this Part. 86 Article 87 expresses the freedom of the high seas. Articles 88 to 115 are the rest of the general provisions in s 1 of Pt VII dealing with the high seas. Relevant to note are Art 88: the invalidity of claims of sovereignty over the high seas; Art 90: the right of navigation; Art 97: the penal jurisdiction of the flag State in matters of collision or other incidents of navigation. 87 Subject to regulation and control by the coastal State (here China) in respect of the matters in Art 56 (including pollution under Art 56(1)(b)(iii)), the EEZ is not under the sovereign control of China and is not part of the territory of China. China has no sovereign right to regulate navigation there generally. Nor does it purport to do so. 88 The primary judge approached his task on the basis otherwise than that the law of China governed the collision as lex loci delicti. The appellants submitted that he erred in not being more definite in his conclusion on this question and in not finding that the governing law was the general maritime law as administered in Australia. Rockwell submitted in the notice of contention that the primary judge should have found that the lex causae was Chinese law. 89 Given the view to which we have come on the appeal, there is no necessity to deal with the notice of contention. If it were necessary to deal with that question, we would go further than the primary judge's reservations about the lex causae. It can be accepted that China has sovereign authority to deal with the protection of the environment. That, no doubt, will extend to laws governing financial and other responsibility for pollution. That does not lead to any necessity for the rights of ships of other nations being regulated by Chinese law as to navigation generally. That responsibility or right is not conferred on China by UNCLOS. The ships here were exercising rights under Arts 58 and 87 of UNCLOS. 90 The authors of Dicey, Morris and Collins on The Conflict of Laws (15th Ed) Vol 2 at 2216 note that if the tort occurs outside territorial waters but within an area (such as the EEZ) over which a State enjoys rights under UNCLOS and if the activity giving rise to damage is closely connected with the exercise of those rights, the circumstances point to the law of the coastal State. That is not the position here. Whilst pollution (a subject over which China has rights under UNCLOS) was caused, the activity concerned was the freedom of both parties to navigate under Arts 58 and 90. 91 The tort here is not internal to the vessel. Thus one is not directed to the law of the flag of that vessel: cf Blunden v Commonwealth [2003] HCA 73; 218 CLR 330 at 340 [25]. 92 Collisions on the high seas (the closest and most direct analogue) have been historically governed by the general maritime law as administered in the forum, rather than strictly by the law of any particular country: Lloyd v Guibert (1863) LR 1 QB 115 at 125; Chartered Mercantile Bank of India v Netherlands India Steamship Navigation Co (1883) 10 QBD 521 at 537, 544 and 545. 93 The expression of this should be understood with clarity. The general maritime law is not a supra-national binding law; it is not what Holmes J referred to as a "mystic over-law to which even the United States must bow": The Western Maid 257 US 419 at 432 (1922); it is maritime law (separate in source, and sometimes different in content, from common law) which is accepted and administered by the forum as its law and thus as governing. As Brett LJ said in Chartered Mercantile at 537: [I]t seems to me that, inasmuch as the injury to the plaintiffs was committed by the servants of the defendants, not in any foreign country, but on the high seas, which are subject to the jurisdiction of all countries, the question of negligence in a collision raised in a suit in this country is to be tried, not indeed by the common law of England, but by the maritime law, which is part of the common law of England as administered in this country; 94 This reflects the status of the general maritime law as a body of principle worthy and fit for expression as law, but not binding on any nation State or court thereof unless and until adopted (and perhaps adapted) by that State or court: see generally, The Scotia 81 US 170 at 179 (1871); The Lottawanna 88 US 558 at 572-573 (1874); The Tolten [1946] P 135 at 142; Lauritzen v Larsen 345 US 571 at 580-582 (1953). The essential point made in these and many other cases in the Admiralty Court of England in the 18th and 19th centuries and in the United States was that the general maritime law existed as a source of applicable operative principle if adopted for common convenience by the court in question, and then as a coherent part of the general law of that country. It was a principled source of national law, not a supra-national law binding by some unexplained authority. As Jackson J explained in Lauritzen v Larsen at 581-582: [The general maritime law had] the force of law, not from extra-territorial reach of national laws, nor from abdication of its sovereign powers by any nation, but from acceptance by common consent of civilised communities of rules designed to foster amicable and workable commercial relations. 95 The apparently stark difference between Lord Denning MR (in the Court of Appeal, [1970] P 21) and Lord Diplock (in the House of Lords, [1972] AC 242) in The Tojo Maru on this topic can be seen to be definitional. Lord Denning had referred to a "maritime law of the world". Lord Diplock emphatically rejected that in a passage at 290-291 cited by Gleeson CJ, Gummow, Hayne and Heydon JJ in their joint reasons in the High Court in Blunden v Commonwealth 218 CLR at 337-338 [13]. Lord Diplock said: Outside the special field of "prize" in times of hostilities there is no "maritime law of the world," as distinct from the internal municipal laws of its constituent sovereign states, that is capable of giving rise to rights or liabilities enforceable in English courts. Because of the nature of its subject matter and its historic derivation from sources common to many maritime nations, the internal municipal laws of different states relating to what happens on the seas may show greater similarity to one another than is to be found in laws relating to what happens upon land. But the fact that the consequences of applying to the same facts the internal municipal laws of different sovereign states would be to give rise to similar legal rights and liabilities should not mislead us into supposing that those rights or liabilities are derived from a "maritime law of the world" and not from the internal municipal law of a particular sovereign state. 96 That both Lord Denning and Lord Diplock cited the same case (The Gaetano and Maria (1882) 7 PD 137, per Brett L J) for their views is instructive. Of course, to the extent that Lord Denning might be interpreted as saying that there was a supra-national law binding on England, he was wrong. But that is not what he was saying, and it was not what Brett LJ was saying in The Gaetano and Maria or in Chartered Mercantile Bank or in The Gas Float Whitton (No 2) [1896] P 42 at 47-48, in the last case when he had become the Master of the Rolls as Lord Esher. The source of English law was the body of principle (called the general maritime law) that informed English law. In The Gaetano and Maria at 143, Brett LJ said: Now the first question raised on the argument before us was what is the law which is administered in an English Court of Admiralty, whether it is English law, or whether it is that which is called the common maritime law, which is not the law of England alone, but the law of all maritime countries. About that question I have not the smallest doubt. Every Court of Admiralty is a court of the country in which it sits and to which it belongs. The law which is administered in the Admiralty Court of England is the English maritime law. It is not the ordinary municipal law of the country, but it is the law which the English Court of Admiralty either by Act or Parliament or by reiterated decisions and traditions and principles has adopted as the English maritime law; and about that I cannot conceive that there is any doubt. It seems to me that this is what every judge in the Admiralty Court of England has promulgated (Lord Stowell and those before him, and Dr Lushington after him), and I do not understand that the present learned judge of the Admiralty Court differs in the least from them. He says that this case must be determined by the general maritime law as administered in England - that is in other words by the English maritime law. (emphasis added) 97 Blunden dealt with a claim arising from the Voyager disaster when two Australian navy ships collided in international waters. The common law of Australia was held to apply through s 80 of the Judiciary Act 1903 (Cth). The reasons for that (set out at 336-347) do not appear to deny, however, what was explicit in [13] of the joint reasons that the common law includes what sometimes has been called the general principles of maritime law, and what was implicit in the reference by their Honours in footnote 39 to Moragne v States Marine Lines Inc 398 US 375 at 386-388 (1970): the separateness of maritime law and the acceptance of that separate body of principle, as a source of law. 98 At [23], however, the plurality asked rhetorically: Secondly, 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 [cf Foote, A Concise Treatise on Private International Law, 5th ed (1925), p 524.] 99 What may not be clear from Blunden, in the light of [23] and the apparent acceptance of the passage from Lord Diplock's speech in the Tojo Maru, is whether the common law of the forum (Australia) is to be understood in the sense referred to by Brett LJ that is as "not the ordinary municipal law" (The Gaetano and Maria at 143), but as the common or general law including "the maritime law as administered" (Chartered Mercantile Bank at 537) in Australia. The importance of the question might arise if Australian domestic law could be seen to have a feature peculiar to Australia and not reflective of the general maritime law or not conformable with general principles affecting international activity. That is not so here as under Australian law, the almost universally adopted Convention on the International Regulations for Preventing Collisions at Sea, done at London on 20 October 1972 (the Collision Regulations), would be applicable: Navigation Act 2012 (Cth), s 176(2). 100 Further, what may not also be clear is the extent to which Lord Diplock's views in The Tojo Maru, and the supporting reasoning that is to be found immediately following the passage cited in the joint reasons in Blunden (at [1972] AC at 291-292), and which was later reiterated in another legal context in United Scientific Holdings Ltd v Burnleigh Borough Council [1978] AC 904 at 924-925, to the effect that the Judicature Acts brought about a fusion of the substantive laws of common law, equity and admiralty law (and ecclesiastical law), demand acceptance in Australia beyond the immediate purpose for their citation in Blunden: cf R Meagher, D Heydon and M Leeming, Meagher, Gummow and Lehane's Equity: Doctrines and Remedies (4th ed) at 52-54 and 77. 101 Here, there would be little doubt that the widespread acceptance of the Collision Regulations would mean that they were the operative rules under which the fault in the collision ought be determined. On the evidence, such rules also form the basis of Chinese law, in any event. 102 The importance of the conclusion that the lex causae was not Chinese law is that it is unnecessary to discuss whether, on the hypothesis that Chinese law was the lex causae, that meant that the Chinese limitation provisions necessarily applied to the exclusion of the LLMC Act. I certify that the preceding one hundred and two (102) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Allsop, Justice Besanko and Justice Pagone.