The owners of cargo lately laden on board the vessel “K H Enterprise” v The owners of the vessel “Pioneer Container” - Privy Council (Lord Goff, Lord Lowry, Lord Slynn, Lord Lloyd and Sir Thomas Eichelbaum) - 21 March 1994

Whether sub-bailees entitled to rely on terms of sub-bailment as against the owners of the goods

The owners of cargo lately laden on board the vessel K H Enterprise brought proceedings against the sub-bailee shipowners in Hong Kong. At first instance, the judge had held that the shipowners were able to rely on an exclusive jurisdiction clause providing for the determination of all claims in Taiwan in the feeder bills of lading notwithstanding that two of the three groups of plaintiffs were not parties to the contract with the shipowners. However, in the exercise of his discretion he refused to stay the plaintiffs’ proceedings in Hong Kong. On appeal, the Court of Appeal of Hong Kong upheld the judge’s decision that the shipowners were entitled to rely on the exclusive jurisdiction clause, but reversed the judge’s decision to refuse a stay.