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Colonial Cases

Peninsular and Oriental Steam Navigation Company v. Imperial Japanese Government, 1893

[admiralty - appeals]

Peninsular and Oriental Steam Navigation Company v. Imperial Japanese Government

Imperial Japanese Government v. Peninsular and Oriental Steam Navigation Company

Supreme Court for China and Japan
Hannen CJ and Jamieson AJ, 10 October 1893
Judicial Committee of the Privy Council

Source: North China Herald, 13 October, 1893

H.B.M.'S SUPREME COURT.
Shanghai, 10th October.
ON APPEAL FROM H.B.M.'S COURT FOR JAPAN, AT KANAGAWA. (IN ADMIRALTY.)
Before N. J. Hannen, Esq., Chief Justice, and Geo. Jamieson, Esq., Assistant Judge.
BETWEEN THE PENINSULAR AND ORIENTAL STEAM NAVIGATION COMPANY, DEFENDANTS,
AND
THE IMPERIAL JAPANESE GOVERNMENT, PLAINTIFF AND RESPONDENT.
  Mr. Francis, Q.C., of Hongkong, Mr. J. F. Lowder, of Yokohama, and Mr. A. P. Stokes (Messrs. Johnson, Stokes and Master) appeared for the P. and O. Company, and Mr. H. S. Wilkinson, Crown Advocate, Mr. M. Kirkwood, Yokohama, and Mr. H. P. Wilkinson on behalf of the Imperial Japanese Government.
  Mr. G. Hoyashi, Acting Consul-General for Japan, occupied a seat on the Bench, and there were several interested auditors in Court.
  Upon the case being called on,
  Mr. Lowder proceeded to address their Lordships - May it please the Court. In the month of November last a collision occurred in waters of which your Lordships will take judicial cognizance, waters commonly known as the Inland Sea of Japan. The collision was between a vessel belonging to an English Company and a public ship of Japan. The result of the collision was that the Chishima - which was the public ship - was sunk and unfortunately a number of lives were lost and the Ravenna - which was the other ship I have referred to - sustained very serious damages.  A correspondence ensued between the representatives of the defendants in Yokohama with reference to an action which the plaintiff contemplated bringing against the defendants. And in the course of time an action was brought in Her Majesty's Court for Japan.
  The action was brought on the Admiralty side of the Court for Japan. The defendants put in an answer to the petition which had been filed in the action, and acting upon the advice given then applied to the Court for leave to file a counter-claim in the same action against the plaintiff and that the action and cross action should be heard together. And further that the plaintiff should be required to deposit security for such damages as might be recovered in the cross petition. This application was resisted on various grounds.
  The only one which I shall put before your Lordships at the present moment is one which was decided in the Court below, viz., that the collision having taken place in Japanese territory or Japanese territorial waters is to be governed by the law of Japan, and it having been shown by an affidavit which is on the file and which is before the Court, that according to the law of Japan  the plaintiff being the Sovereign of Japan, is exempted from liability, that he can do no wrong, and no action can be brought against him in his own Courts. Therefore it follows, according to the judgment of the Court below, that no action can be brought against him in a British Court, therefore, on the same ground, no counter-claim can be brought against him. I think I have fairly stated the issue, before your Lordships.
  The propositions which we shall endeavour to establish are shortly these. First, that the collision did not take place in the territory of Japan; it took place on the high seas. Secondly, even if it took place in Japanese territory a counter-claim will be against the plaintiff in the absence of proof that by Japanese law ship owners are exempted from liability for the acts of their servants in Japanese territory. These are the two propositions which we shall endeavour to support by cases which have been decided and by allusion to the principles which have always governed the decisions in those cases.
[Not transcribed.]
.  .  .   the Court rose for the day and the case was adjourned till Friday morning.

Source: North China Herald, 20 October, 1893.

[As above.]
13th October.
 

.  .  .   governed the decisions in these cases.
  

The learned counsel then proceeded to refer to Mr. Mowat's judgment in the Court below. He first of all read the following extract:-
  The plaintiff's Counsel resist the application on several grounds. They say, in the first place, that Rule 55, under which it is made, does not apply to any foreign plaintiff; they say, in the next place, that even if it is applicable to foreign plaintiffs other than Japanese, it cannot be applied to Japanese because under the Treaty with Great Britain  Japanese are (it is contended) entitled to have the cases which they bring into our Courts in Japan heard without having to submit to counter-claims; in the third place it is alleged on behalf of the plaintiff  that he has sovereign rights in this Court, and it is contended accordingly that the principle that the Crown can do no wrong applies; and, lastly, it is argued that even if the plaintiff is not to be treated as the Crown in this Court, the law to be applied is the law of Japan because the collision occurred in Japanese waters, and inasmuch as by that law there is no remedy , an English Court can give none - the M. Moxham (L.R.I.P.D.107). I have come to the conclusion that the last of these objections is sound and must prevail, but before stating my reasons for coming to that conclusion, it will be convenient - as the matter will, both from its general importance and amount involved, no doubt be taken to the Court of Appeal - that I should state shortly the answers to the first three objections to allowing the counter-claim. The first two objections may be disposed of together.  It was argued that Rule 55 had no application in the case of suits brought by the foreign plaintiffs, but, even if it had in such cases, it had none in the case of suits brought by Japanese plaintiffs. I do not propose to express any opinion on either of these points, for they do not arise in the present case. The plaintiff, as was recently decided in another proceeding in this cause, and in accordance with the then contention on his behalf, is not a "foreigner" within the meaning of the word in our Orders in Council. The term is there confined to subjects of the Emperor of China or of the Mikado of Japan and subjects or clients of any other state in amity with her Majesty. Whatever view, therefore, I might take of the application or non-application of Rule 55 to foreigners, it is evident that the Rule could have no application to the Emperor.
  He paused here to explain to their Lordships how it came about that the application for leave to file a counter-claim was made in the Court below.  The petition having been heard "in Admiralty" of course it became ab initio an Admiralty case.  The appellants could of course have followed the practice at home and have lodged a counter-claim without applying for the leave of the court to file a counter-claim, but it was decided to first pf all ask the leave of the Court. After all it was a matter of procedure, and he did not think it could affect the judgment of their Lordships on the point now before them. Whether it would have been better to file a counter-claim without asking permission or not he (the learned counsel) did not know, but he was inclined to think he followed the better practice. Anyhow the question for the Court to decide was whether his clients had a right to counter-claim against the plaintiff or not, the other part of it was a mere matter of procedure.  Having made up his mind that it would be the proper mode of procedure to apply for leave, the application was made. Had he proceeded to file his counter-claim without obtaining the permission of the Court the chances were that counsel on the other side would have immediately applied to the court to strike out the counter-claim on the very ground that they resisted the counter-claim which was now before their Lordships. After all it merely came to a matter of procedure, and which ever method he had adopted the same question would have come before this Court for decision.
  The judgment then proceeded:-
  The third reason urged against allowing a counter-claim is one which, I presume, I must treat as serious, because Counsel for the plaintiff advanced it at two different stages of his argument. It was contended that the plaintiff was in no sense a foreign Sovereign in this Court, but on the contrary that he had Sovereign rights here and in fact was "the Crown." I cannot allow those propositions to pass unchallenged, and I meet them by saying simply - first, that His Imperial Majesty, the plaintiff in this case, is, in strictness, in this Court as much a foreign sovereign would be the Emperor of China, the other Sovereign specifically named with him in the Order in Council next; that his Majesty has no more sovereign rights in this Court than any other foreign Sovereign or State in amity with her Majesty has - that is to say, he has none; and, lastly, that "the Crown" in this Court is, and is only, Her Majesty the Queen,  who was "pleased by and with the advice of her Privy Council, to order" that, together with the Provincial Courts of Her Majesty established under an earlier Order, "there shall be in and for Japan a Court styled Her Britannic Majesty's Court for Japan" - in which Court is vested "Her Majesty's jurisdiction, civil and criminal, exercisable in Japan."  I do not think it would be consistent with the dignity of the court of Her Majesty here were its Judge to say less than what he has now said on the propositions put forward by plaintiff's Counsel.
  I come now to the fourth, and the only valid argument against the admission of the counter-claim - viz., that, the collision having occurred in Japanese waters, the law to be applied is the law of Japan, and inasmuch as by that law there is no remedy, no proceeding can be brought in respect of it in an English Court. On this branch of the case several questions arise, the first of which is - Did the collision occur within the territorial waters of Japan? I had certainly assumed, from the statements in the petition and answer -  there is no conflict between them as to the actual locality of the collision - that the collision did occur in such waters, and the case of M. Moxham, relied upon by Counsel for the plaintiff in this part of his argument, was authority only on that theory. However, it appeared, in answer to a question from myself to defendant's Counsel after he had concluded his argument without having at all referred to that case, that he disputed the fact and contended that the collision occurred on the high seas; and he suggested that if otherwise, I should be of opinion that a counter-claim would lie, I should give him liberty to file one and leave the present point to be raised in the plaintiff's reply to the cross-petition. It did not seem to me that I ought to follow that course, which would, besides entailing additional expense upon the parties, only be postponing to another time a question which had been fairly raised then, and which I had the materials before me to determine. It was accordingly agreed between Counsel that the question should be left to me to decide upon the petition and answer, with the assistance of such charts and authorities bearing on the point as they should furnish me with.
  I entertain no doubt that the collision occurred in the territorial waters of Japan - giving to that term its recognised meaning in international law. The Chishima is stated in the petition to have been cut nearly in two, sinking immediately, and the spot where she sank is given as Long 132 40' E, and Lat. 33 56'20' N. The answer states that "prior to and at the time of the collision, both vessels were in a narrow channel," "known as Gogoshima straits, between the islands of Musuki and Gogo." These islands are in fact what is known as the "Inland Sea" of Japan - a succession of landlocked bays extending for about 24 miles from east to west. This sea has four entrances, two miles in width, and the fourth with two branches, the wider of which is about four miles wide. The island of Gogo, referred to in the answer, is close to the northern shore of Shikoku, which is one of the four large islands of Japan, and which forms the southern boundary pf the eastern portion of the Inland Sea. The channel between Gogo and Musuki, described in the answer as the scene of the collision, is not two miles wide, and the place of the collision is less than three miles from, the nearest part of Shikoku. On these data it is impossible from any point of view to contest the proposition that the collision occurred within the territorial waters of Japan.
  If His Honour had proposed to confine himself to that proposition of law and not drawn the conclusion that he had from it, he (the learned Counsel) would not perhaps be in a position to contest that the term "territorial waters" was in international law metaphorically applicable to the waters where this collision took place; that was to say, as between nation and nation it might be in diplomatic language, or in the language of international law correct to term those waters territorial waters, but to go beyond that and to say that because they were, as he described, and with the limitations he had put to it, territorial waters, therefore a tort committed in these waters was committed in Japan, wholly untenable.
  The judgment proceeded:-
  The only authority in Admiralty which Plaintiff's Counsel were able to cite for the propositions that the local law determines the character of the act and therefore (so far) the existence or not of a remedy, with the M. Moxham (L.R. 1 P.D.107).  In that case an English ship ran against and seriously damaged a pier in the port of Marbella in Spain, and it was held that proof of the law of Spain to the effect that the masters and crew, and not the owners, of a ship are liable for damage caused by her negligent navigation, would be a good answer to an action in England for damage so caused. No doubt in that case the damage was done to a pier annexed to the soil of Span, and the Judges were careful in their judgments to confine themselves to that state of facts; but I should have had no difficulty in holding that the principle was the same whether the damage was caused to a pier, or to another vessel lying within Spanish territorial waters. For the territorial waters are part of the territory of a country, and the terns are constantly used interchangeably in the cases dealing with collisions.
  Continuing, the learned Counsel said he would proceed to call their Lordships' attention to a series of cases which had been decided from time to time showing that waters situated similarly to the waters connected with the present suit were really the high seas, although they might in a  sense be called the territorial waters of a foreign country.
  The first was the case of R. v. Carr and Wilson (Law Reports, 10 Q.B., page 76).  It was a case of felony, some bonds having been stolen from a ship lying in the river at Rotterdam, moored to the quay. She was at a point 16 or 18 miles from the sea, and within the ebb and flow of the tide. It was held that the person guilty of the theft could be properly tried and convicted at the Central Criminal Court, as the offence was committed within the jurisdiction of the Admiralty Court.
  The Chief Justice - You do not deny, I suppose, that he would have been amenable to the foreign jurisdiction also?
  Mr. Lowder said he did not dispute that, but his point was that there was not an exclusive jurisdiction in Japan. The next case to which he would call attention was that of R. v. Anderson (1 Crown Cases Reserved, page 161). An American citizen serving on a British ship caused the death of another American citizen under circumstances amounting to manslaughter. The ship was in the river Garonne, within the ebb and flow of the tide, and it was held that the ship was within the Admiralty jurisdiction and the prisoner was rightly tried and convicted at the Central Criminal Court. In the case of the Saxonia (Lushington on page 410) which arose out of a collision on the Solent, half a mile from the shore, it was held that although the accident occurred within half a mile from the coast of England, nevertheless it was within the Admiralty jurisdiction and not within the municipal jurisdiction as contradistinguished from the Admiralty jurisdiction. The case of the Fairless v. Thorsen (Marsden's Admiralty Cases, page 130) also supported his contention. It was a collision between an English and a foreign ship which occurred near the Isle of Dogs, and the Admiralty Court was held to have jurisdiction. It would probably be contended by his learned friends on the other side that these were all cases of ancient history and not applicable to the case which their Lordships were asked to decide, and one could not help admitting in taking a review of all these cases that there might have been some little indistinctness od idea in the minds of the learned Judges from time to time as to what was properly the high seas and what properly territorial waters. The cases he had submitted were very clear upon this point, that even though a tort be committed within the three-mile limit still the Admiralty Court had jurisdiction on the ground that those waters were none the less on the high seas because they were within the three-mile limit; in other words, the high seas began from low-water mark.
  The case of the Mercantile Bank of India v. the Netherlands India Steam Navigation Company, was a strong one to put upon the others he had cited to show, what might not perhaps have been apparent at first sight, that in order to say that a tort was not committed on the high seas, it was to be shown  that it occurred within the exclusive jurisdiction of a foreign country, and that unless the tort were committed in territory which was under the exclusive operation of foreign law, then an English Court of Admiralty had jurisdiction, that was, the jurisdiction  of the one did not oust the other; foreign law, which might be opposed to English law, would not hold its own under these circumstances. It must be, as it was in the case of the Moxham, a place which was under the exclusive jurisdiction of the country whose laws were invoked, and he did not think that the case of the Machin carried the case of the Moxham further at all. If his argument upon this point commended itself to the Court then the basis of the judgment of the Court below was cut away, but on the assumption that the Court was not with him and would like him  further to consider the case he would proceed to his next proposition, which was - Even if the collision did take place on Japanese territory a counter-claim  would still lie against the plaintiff in the absence of proof that the Japanese ship owners are not liable for the torts of their servants committed in Japanese territory.
  He would further quote from the judgment:-
  And if the owners of the Ravenna could not sue successfully in an original action for their damage under such circumstances, it would seem necessarily to follow that they could not counter-claim for such damage in an action instituted by the owners of the Chishima for their damage. If R has no right of action at all against C, but against some other person only, it is difficult to understand on what principle R should be allowed to transfer that other person's liability to C's shoulders simply because C should see fit to prosecute his own undoubted right of action against R.
  Now to apply this to the present case. The Chishima was a public vessel belonging to the Emperor of Japan. What, then, is the law of Japan as to the Emperor's liability for the negligent navigation of his vessels by his servants? That, like all foreign law, has to be proved by the evidence of experts, and the evidence on that point is furnished by the declaration of Mr. Nobushige Hozumi who has been for eleven years Professor of Law at the Imperial Japanese University, and is now Chief Professor of the College of Law there. The declaration states:-
     "The Emperor's immunity is thus by the law of Japan absolute, and on that ground, therefore - quite apart from any other - no action for damage resulting from his servants' negligent navigation of his vessels in the waters of Japan would be against him in an English Court. And, for the reason I have given in dealing with the supposed case of the private Japanese ship-owner protected from liability by the law of Japan, it would equally appear that counter-claims could be raised in an action where the Emperor sued."
  But this point, say the defendants, had been settled otherwise in the case of the Neubattle (L.R. 10 P.D. 33). In that case, which was an Admiralty action brought by the King of the Belgians for damages to his vessel the Marie Louise, the owners of the Neubattle obtained an order staying all proceedings in the plaintiff's action until security should be given to answer their counter-claim. That case certainly seems at first sight to be a direct authority for defendant's application here, but on examination it does not appear that the point involved in the present case arose there, and the decision therefore has no real bearing on this case. Brett, M.R., after referring to the case of the Parlement Belge (L.R. 5 P.D. 197), in which it was decided that the ship of a foreign prince could not be arrested, goes on to say:- "It has always, however, been held that if a Sovereign Prince invoked  the jurisdiction of the Court as a plaintiff the Court can make all proper orders against him."
  So Cotton, L.J., after a similar reference to the decision in the Parlement Belge, says:- "But when a Government comes in as suitor, it submits to the jurisdiction of the Court,  and to all orders that may properly be made."  The question then arises: Would an order granting the leave asked for, be a "proper order"? Could such an order "properly be made?"  Now it is to be observed that, prior to the decision in 1883 if the Neubattle, all the "orders" that had been made against foreign Sovereigns had been confined to matters of procedure - e.g. to answer on oath, to grant discovery, to give security for costs. In the Neubattle for the first time was an "order" made against a Sovereign virtually making him a defendant and as such liable to be called upon to pay money; and everything will depend here upon the true appreciation of that case. In my view all that it decided was that the immunity from suits which a foreign Sovereign enjoys in English Courts because of his sovereign character, is lost to the extent of any counter-claim which might be established in any suit in which he is himself suing, and the subject of which counter-claim could have forfend the ground of an action against him had he not been a Sovereign. On other words, the immunity which he surrendered by coming into the Court was only the immunity with which he was clothed, quod Sovereign, by English law - not any other immunity or any other advantage. The benefit of his own law, for example, which equally with his subjects (but no more than they) he is entitled to have in an English Court when that law comes properly into question there, is an advantage which remains to him, and his position in that respect is in my judgment in no way touched by the decision in the Neubattle.
  "Regard must of course be had," says Lord Justice Cotton there, " to the fact that in this case the King of the Belgians is a Sovereign Prince,  but the order is nevertheless a proper one. It is a reasonable principle that a plaintiff whose ship cannot be seized    .  .   .   . shall put the defendant in the same position as if he (the defendant) were a plaintiff in an original action against a defendant whose ship could be arrested as security."  But the Lord Justice there, as I understand him, is referring only to the particular case before him, viz., the case of the ship of a sovereign which on account of its ownership could not be arrested, and his remarks have, in my view no application  to the case of a ship of an owner (Sovereign or subject) against whom in consequence of the law of the country where the collision occurred, no remedy in an English Court exists.
  It is in this way I read the decision in the Neubattle, and if I am right no authority for the application of the defendants in this case. To apply it to the present case, as the defendants ask me to apply it, would be to transfer to the lex fori, whose function it is to supply a remedy when a wrong is shown to exist, the functions of the lex loci, which has first to declare whether a wrong does exist.
  He would turn his attention next to that part of the judgment which he had just read, which stated that because an action would not lie against a foreign Sovereign it followed a counter-claim would not. His Honour cited no authority in support of that proposition, which he (the learned counsel) submitted could not be maintained. He would be able to cite cases to show that a claim and counter-claim were one and the same action, or at all events were to be treated as one and the same action; that a counter-claim was really a defence; that a counter-claim was really a remedy; that a counter-claim was really procedure and came within the lex fori to the exclusion of the lex loci.  With regard to the lex loci and lex fori he would mention the case of Adamson, Bell and Co, v. Tai Won Wah, reported in the North China Herald of 10th September, 1884, but which he would not read. He would only say that the Chief Justice expressed himself strongly to the effect that in China, and the same applied to Japan, there could be no such thing as lex loci and the lex fori must be applicable. There was the recent case of Neck v. Taylor upon the point to which he would call attention. A boarding-house keeper began an action for £69. The defendant, who was a foreigner living out of the jurisdiction, counter-claimed for £250 for the retention of jewellery. He cited the case for the purpose of showing that a counter-claim might be advanced notwithstanding that the sum claimed in the counter-claim far exceeded the claim in the original action. Amongst the other cases quoted in support of the connection between the claim and counter-claim were those of Delobbel-Flipe v. Barly (1 Queen's Bench Reports, 1893, page 663). Chapman v. Royal Netherlands Steam Navigation Company (4 Probate Division Reports, page 167), Macgowan v. Middleton (II Queen's Bench Division Reports, page 364).
  In the latter case Vavasour v. Crook was referred to, which had a curious interest in connection with the present case. Certain shells purchased by the Japanese Government in Germany were brought into England, and seized, and the Mikado by his Minister, in his own name applied to be made a defendant  in the case and paid £100 as security for c0sts, and then upon an affidavit showing  that these shells which had been seized were the property of Japan, obtained an order that they were  to be released on those grounds, notwithstanding the fact, even if it were established, that the plaintiff had a good right as against the defendant. The shells were released and returned to their proper owner. In that case the Mikado sought to establish a counter-claim and it was decided that as the original action had been discontinued the counterclaim fell with it, and that became a leading case upon the point until it was over-ruled. The learned counsel mentioned it as a curious coincidence that the plaintiff should have had so much to do with counter-claims in a British Court.
  At this stage the Court adjourned for tiffin.
  Upon the resumption, The learned counsel continued his argument addressing himself to the consideration of the conflicts between the laws of various nations. He contended that although a set-off or compensation or counter-claim might not be admissible by the law of the country when the debt was contracted, or as in this case where the tort took place, nevertheless the law of the country where the wrong occurred or the tort took place would not be considered, but the action would be entirely governed by the lex fori and the lex loci would not be considered at all. Therefore, in this case the plaintiff having invoked the jurisdiction of the Court had laid himself open to the reply which would meet any other suitor who came into the Court and asked for its assistance. If he were not a foreign Sovereign there would be no question about it at all, but cases went to show that if a foreign Sovereign came into one of our Courts in the position of a plaintiff, he laid himself open to a counter-claim the same way as any other plaintiff asking for the protection of the Court. If it could be shown that a tort has been committed in Japanese territory  all ship owners were exempt from liability for the torts of their servants, then the assumption would be incontestable that the law of Japan would apply, and that the ship owners on that particular case could not be sued directly, but it would follow also that the owners of the steamer would be equally protected on the assumption that the collision took place in Japanese territory, because equality was equality, and it was impossible for any Country to administer in the same action two different sets of law.
  It had not been attempted to be shown that that was the law of Japan, and he therefore contended, in accordance with well-known principles, that the law of Japan was that all ship owners were liable for the negligence of their servants.  Although he (the learned counsel) admitted to the full that no Sovereign could be directly impleaded in his own Courts without his consent, or in the Courts of a foreign country - that he was absolutely free from actions of any kind whatever on the principle that "the king can do no  wrong" -  it was a very different thing indeed when the Sovereign divested himself of the dignity of his Crown and descended to place himself in the position of a suitor in a foreign Court. Under those circumstances the mere fact of his coming into Court was evidence that he asked the assistance of the Court.  He could not have the assistance of the Court without submitting to the jurisdiction of the Court; and in submitting himself to the jurisdiction he divested himself of all those safe-guards which he would otherwise have a perfect right to ask for for the protection of himself from attack. When he became a plaintiff he dropped his dignity as Sovereign and had to take the humble position of a suitor in the Courts and he could ask nothing more than a suitor in our Courts could ask. After quoting cases in support of this view the learned counsel concluded by saying that His Majesty had chosen to invoke the assistance of that Court and must take the consequences and remedy which that Court would give to its own subjects. That Court would not go out of its way to treat a foreign sovereign coming to it differently from any of its own subjects. Upon the grounds he had urged he asked their Lordships to reverse the decision of the Court below.
   Mr. Francis, Q.C., in support of the appeal contended that the Judge of the Court below was premature in coming to his decision. According to the procedure of the Courts at home, in the Colonies, and under the provisions of the Order in Council for China and Japan the sole duty of His Honour was to ascertain whether a prima facie case was made out to justify the admission of a counter-claim. His Honour should not have attempted to decide the very important point now raised, but should have admitted the counter-claim and have allowed it to be discussed on the trial and hearing of the case. To a very considerable extent his learned friend (Mr. Lowder) was taken by surprise with reference to this particular point, which was really raised by His Honour himself in the course of the discussion, and the greater portion of the arguments of the other side were addressed to other points. Such a point having been raised, an order might have been made for the whole question to be re-argued. There was not sufficient material before the Court to justify His Honour dealing with the matter as he had done. The only reason he could suggest for this was that His Honour desired to save expense and trouble. By what evidence was the judgment supported? By an affidavit put in by the other side which simply set out no more that then Court itself could have assumed as a matter of course. There was nothing more claimed in the affidavit than had been claimed for every Sovereign in his own Courts as well as every foreign Court. He (the learned counsel) asked that the decision of the Court below should be reversed.
  Mr. H. S. Wilkinson on behalf of the plaintiff and respondent said that Mr. Francis had referred to the affidavit which had been filed in the case, and had remarked that the affidavit would not have been received except by consent without the deponent being subject to cross-examination. He (Mr. Wilkinson) was bound to say that if the other side considered that anything in that affidavit was not correct it was open to them to give notice for the deponent to appear and be cross-examined upon it, and if there had been any doubts upon the facts put forward in the affidavit counter-affidavits could no doubt have been filed. The
learned counsel then went on to speak as the M. Moxham and Machin cases, and he had not concluded when the Court rose for the day.
11th October.
  Mr. H. S. Wilkinson said he had already proceeded somewhat at the adjournment, but he might just recapitulate what he conceived to be the case that he had to meet.
  The learned Judge in the Court below was in favour of the respondents upon one point and against them upon others, but the appellants had naturally confined themselves to the one point upon which the learned Judge gave his decision against them, and he (Mr. Wilkinson) proposed in the distribution of his argument to confine himself pretty closely to that part of the case, and to leave his learned friend (Mr. Kirkwood) to bring before the Court such arguments as he might consider right, with regard to those points upon which the learned Judge was against the respondents or did not express an opinion. If their Lordships had decided that the Court below was right upon the particular point now being debated, it would not be necessary absolutely to consider the other part of the case, but as their lordships might not entirely agree with the arguments which he placed before them, it would be necessary in order to place before their Lordships the whole case on behalf of the respondents, that those other points should be dealt with.  His learned friend would deal with them, but he (Mr. Wilkinson) might have to refer incidentally to that part of the case.
  Four propositions had been laid down by the other side. Mr. Lowder laid down two, first, that the collision did not take place in territory of Japan, so as to bring the action under the exclusive jurisdiction of the municipal laws of Japan; it took place on the high seas. Secondly, even if it took place in Japanese territory, a counter-claim will lie against the plaintiff in the absence of proof that by Japanese law ship-owners are exempt from liability for the torts of their servants in Japanese territory. There was really another proposition laid down, but he (Mr. Wilkinson) did not know how far Mr. Lowder intended to carry it.
  The Chief Justice - Is the second proposition worded exactly as you intended to put it, Mr. Lowder?
  Mr. Lowder - The defendants in the Court below, would be equally not liable upon the assumption that the tort was committed in the territory of Japan, and, as all ship owners are not liable by the law of Japan they themselves would come under the same law.
  The Chief Justice - But as that is not said to be the law of Japan we need not ---
  Mr. Lowder - No, it is only hypothesis,
  Mr. Wilkinson resuming said Mr. Lowder had also contended that whether a counter-claim was to be allowed or not was a matter of procedure and was therefore to be determined by the lex fori and not the lex loci. How far his learned friend proposed to go with this argument he did not know, but in dealing with other propositions he should have occasion to refer to cases in which that point was dealt with. He took it that the law was this, that whether the procedure were by way of counter-claim or cross-petition, or new suit, was all a matter of form. But whether upon a cross-suit being brought or cross-petition in the same suit, or a counter-claim, the defendant would be entitled to recover, was to be determined by the law of the place where the act complained of took place. He did not know whether his learned friend quite agreed to that proposition, but it was a general proposition on the subject.
  The Chief Justice - The way in which I have got your proposition is this, "Whether the claim of the defendant should be by counter-claim in the same suit or by some other method is a matter of procedure and therefore to be dealt with by the lex fori, but whether such counter-claim is allowable at all is a question to be determined by the law of the place where the tort is committed."
  Mr. Wilkinson - I think the word "allowable" is a little ambiguous; "Whether the defendant would be entitled to recover on the counter-claim" I would suggest.  That all pre-supposes that the defendant is entitled to sue the plaintiff at all. I put it in a very general way because I propose to put the argument whether the defendant in this suit could sue the plaintiff in any way.
  The Chief Justice - Mr. Lowder admits that. (To Mt. Lowder.) - You admit that the defendants in this case could not sue except on a counter-claim?
  Mr. Lowder - I admit that to the full.
  Mr. Wilkinson continuing said Mr. Francis laid down two propositions - (1) that the Court below was premature in deciding the point, the whole duty of the Court was to find whether there was a prima facie case; (2) and that without a counter-claim the Court could not have any enquiry as to the amount of the defendant's damages. Mr. Lowder's first proposition was that this was Japanese territory for some purposes, but not Japanese territory for the purposes of this suit.  He (Mr. Lowder) admits that the place of collision was in the territorial waters of Japan, but he said they were so only metaphorically and diplomatically. The learned Judge in the Court below had decided what the limits of the waters were, and that particular point had not been in any way called in question.
  The Chief Justice - As to the spot?
  Mr. Wilkinson - And as to the features of the land. That he took it - and his learned friend (Mr. Lowder) did not dispute it - brought the particular point within the Japanese territorial waters as ordinarily understood in books upon international law, but what he understood the other side to say was that the municipal law of Japan did not extend to those waters in matters relating to ships.
  The Chief Justice -so as to exclude any other law; that is what I imagine the proposition to be.
  Mr. Wilkinson remarked that proposition would be equally barren, for the reason that if the Japanese municipal law applied there, it did not matter what other Courts had jurisdiction. What his learned friends said was this: "Inasmuch as other Courts have jurisdiction there the municipal law of Japan relating to collisions - leaving aside all questions of extraterritoriality - does not extend to the three-mile limit, that it stops at low water mark." They contended that the law that extended beyond low water mark was the general maritime law and not the law of the country, and the cases which were cited were intended to show that.
  Proceeding to comment upon the cases cited, the learned counsel argued that the Chartered Mercantile Bank v. the Netherlands Steam Navigation Company, was a very different case from the present one, as it arose out of a collision between two steamers on a voyage from Singapore to Sourabaya, and undoubtedly on the high seas. The cases did not go to show the extent of the exclusive jurisdiction of the country, but his learned friend, on account of the use of that word "exclusive," founded an argument which he (Mr. Wilkinson) submitted was fallacious. Mr. Lowder had cited other cases to show the Court of Admiralty had jurisdiction in territorial waters of other countries and argued that therefore those countries had no exclusive jurisdiction. The learned counsel went on to quote copiously from a number of leading cases, and was interrupted by the rising of the Court for tiffin.
  Upon resuming,
  Mr. Wilkinson said his argument in the morning was addressed to Mr. Lowder's contention that where the collision on the Moxham took place was within the exclusive jurisdiction of the country, and the place where the cause of the present suit happened was not within the exclusive jurisdiction, and therefore the doctrine in the Moxham did not apply.  It was, he thought, a little unfortunate that the words "exclusive jurisdiction" had been used, because there was no such thing, he ventured to say, as "exclusive jurisdiction" existing in the world, that was to say, that nothing could be done within that space that the Courts of another country could not take cognisance of.
  The Chief Justice - What do you say is the real meaning of the words "exclusive jurisdiction?"
  Mr. Wilkinson - Territorial jurisdiction.
  Mr. Lowder pointed out that the words "sole territorial jurisdiction" occurred on the same page as "exclusive jurisdiction" in one of the cases cited.
  Mr. Wilkinson went on to argue that exclusive jurisdiction extended to all enclosed waters such as the Inland Sea, and within the three-mile limit, and he then read numerous extracts from leading cases, with regard to Mr. Francis' statement that the Judge of the court below had acted prematurely in refusing leave to enter a counter-claim; the learned counsel went on to refer to the practice in regard to counter-claims in H.M.'s Courts. In no case where an ordinary Japanese sued had it been the custom to entertain a counter-claim.
  Mr. Lowder - I think that is not before the Court.
  The Chief Justice (to Mr. Wilkinson) - Have you any authority for that?
  Mr. Wilkinson - Except official statements made under my own hand some time back. I would refer to the Treaty which shows in effect that it was not intended to have counter-claims, and I propose now to consider what the practice of the Supreme Court has been with regard to counter-claims. My learned friend wll be able to tell us if he knows of any counter-claims.
  Mr. Lowder - I was only admitted yesterday, by your kindness. (Laughter.)
  Mr. Wilkinson said he was speaking of Japan.
  The Chief Justice (to Mr. Wilkinson) - You say the practice of this Court is that counter-claims are not entertained where the Chinese are concerned.
  Mr. Wilkinson - Yes, I may say that is the practice. Proceeding he said he had asked for a reference to be made to find any case in which a deposit had ever been made for costs of a counter-claim, and he believed the records of the Court did not reveal any. Of course, that was not perfectly conclusive, because security might have been given in some other way.
  The Chief Justice - So many have been cases by junks run down and absolutely lost, and run down by steamers.
  Mr. Francis said that was the case of the Hochung and the Lapwing.
  The Assistant Judge - That was a cross-petition.
  Mr. Wilkinson - In that case there was no security given.
  The Assistant Judge - I do not know about security, but there was a cross-petition.
  Mr. Wilkinson referred to the case of the Kouarts-sors and the Norua (North China Herald, June, 1871). That was an application for costs, which were allowed by Mr. Goodwin, and Sir E. Hornby afterwards refused the application for costs. The case of the Fusing and Ocean (North China Herald, May, 1875), and Seng Hong-mow and the Peking (North China Herald, August, 1878), were also referred to and quoted by the learned Counsel in support of his contention.
  The Chief Justice remarked that unless Mr. Wilkinson had some perfectly fresh argument founded upon the reading of the Treaty, they neither of them would have the slightest doubt if anybody had applied under the Order in Council of 1871, that they could have made the order, unless there was some special reason; but that they had the power to make the order, there was no question.
  Mr. Wilkinson said he understood the question was as to power to allow the counter-claim. The words of the Order in Council and the Rules were wide enough to cover everybody, so that as far as that was concerned power was given to the Court to grant a counter-claim in any case in which the application was made, but that power was given knowing that the Court would exercise its discretion if in the circumstances of the case it thought fit.  The question was - What were the circumstances of the case? He should not press upon their Lordships an argument upon the Treaty if their Lordships intended to intimate that the point had been decided and that the Treaty itself did not prevent a counter-claim.
  The Chief Justice - The point had never been raised.
  Mr. Wilkinson said he proposed to leave the argument as to the Treaty to his learned friend (M r. Kirkwood). He only wished to point out that what Mr. Francis said amounted to this, that in every instance where there was a prima facie case set up the Court should allow the counter-claim.  He (Mr. Wilkinson) submitted that if the Rules clearly stated that a counter-claim must be granted, then it might violate any agreement entered into between the Governments.
  The Chief Justice - You need not deal with that at all, because I am quite clear that this does not apply to the present case. It speaks of a "foreigner" and it defines a foreigner as a subject of the Emperor of China or the Mikado of Japan. The Mikado of Japan, therefore, does not come within the definition of a foreigner, and that is, I imagine, why this case was brought under the other Rule.
  Mr. Wilkinson - And therefore, I say the Judge below had to exercise a discretion and to take into consideration all the circumstances of the caser, whatever they might be.
  Mr. Kirkwood then proceeded to address the Court on behalf of the plaintiff and respondent. He pointed out that the application in the Court below was made under a Rule of Procedure in Admiralty, and most particularly under Rules 1 to 12. He contended that no counter-claim had been allowed where the Sovereign had been a plaintiff in the Court.
  The Chief Justice - Has a Sovereign ever been a plaintiff in a case before where under any circumstances it would have been possible that the question of counter-claim could have arisen?
  Mr. Kirkwood -  I think in many cases where a counter-claim might have been made the Sovereign has been a plaintiff in the Courts of Japan, such as for ground-rent. He sues, it is true, through the local government.
  The Chief Justice - I am inclined to think the case has arisen. First of all there was a suit for ground-rent in an American Court. The American Court disallowed any counter-claim, but decided against the Japanese Government. On the other hand, the Japanese Government brought an action against an English person. If I remember rightly a cross-petition was filed, and certainly, if not in the form of a counter-claim, then in some other.  I think the Court decided in favour of the Japanese Government on its merits.
  Mr Wilkinson - It was the case of the Governor of Tokio v. Mrs. Blockley, and Mrs. Blockley v. The Governor of Tokio.
  Mr. Kirkwood said there was the case of an action for right of way by the Sovereign against Mitchell & Co., and in that suit no counter-claim was set up. Proceeding, counsel contended that Japan being a governed country the Queen had no inherent foreign jurisdiction over her subjects.
  The Chief Justice -  While they remain there?
  Mr. Kirkwood - While they remain there.  He submitted that there was no inherent right in Parliament to give that power to her.
  The Chief Justice - I daresay you are perfectly right, but what I was smiling at was whether this Court is going to determine whether parliament has the right.
  Mr. Kirkwood said he was quite aware that this view had frequently not been accepted and in common parlance very erroneous views were expressed on the subject, but he thought that what he was saying was quite borne out by general principles of international law, that the only jurisdiction exercised by the Queen in Japan was absolutely by virtue of the permission she had received from the Sovereign. He need not remind their Lordships that the point had been lately raised in connection with the subjects of the King of Portugal.
  The Chief Justice - I do not see, Mr. Kirkwood, how I can make use of the argument you put before me without expressing an opinion as to whether Portugal or Japan was right, and do you expect me to do that?
  Mr. Kirkwood - No, but in that case ----
  The Chief Justice - I think, perhaps, it would be better not to draw in such a dangerous topic as that.
  Mr. Kirkwood proceeded with his argument. - In the case of a British subject in Japan he had to obey British law whilst there, not because it had any inherent extraterritorial force in Japan, but because he owed any local or territorial allegiance whilst in Japan to the Queen of England, but solely because he owed a local allegiance to the Emperor who had ceded jurisdiction over him to the Queen of England. He (the learned counsel) was quite aware that contrary opinions were very prevalent, and it was surprising that during so many years these questions should have gone on without having been fully ventilated and decided.
  But erroneous opinions on the question had existed, he submitted, only because they had not become a subject of careful judgment, but on the contrary, the judgment which should have been pure and careful had been distorted by many and varied opinions. The exercise of jurisdiction by the Queen in Japan had nothing to do with the Sovereign rights of the British Crown and as it had nothing to do with the British Parliament's inherent rights, and its existence depended entirely upon the concessions made by the Emperor of Japan so also did its extent. The first question he would therefore submit would be: "Did the Treaty between England and Japan give to the Queen a jurisdiction over a counter-claim by a British subject firstly, as against a plaintiff being a Japanese subject, and secondly, against a Japanese plaintiff when that plaintiff is the Sovereign? He would first like to deal with the case of a Japanese subject, and then contend that the Emperor could not be put on a worse footing in a British Court in Japan than one of his subjects. Whether he should not stand on a better footing might be reserved for future argument. The Treaty clearly went to show that claims against British subjects should be tried by the British Court, and cases against Japanese should be tried by the Japanese Court.  For the sake of argument, he put the case of an assault committed by a British subject on a Japanese subject. The latter could take proceedings in a British Court, but supposing the British subject replied that he was first of all assaulted by the Japanese, would he be entitled to enter a counter-claim for damages against the Japanese and have it tried in the British Court? To all intents and purposes a counter-claim was an action by a defendant against a plaintiff.
  The learned counsel had not concluded when the Court rose for the day and the case was adjourned till Friday morning.

 

Source: North China Herald, 27 October, 1893.

[Not transcribed.]
It was lastly argued before us that in the event of our being of opinion that the Rules of the High Court of Admiralty applied, we could not in any case order security to be given because the defendants' ship had not been arrested. No had bail been given. As the Chief Justice is of opinion that Rule 55 of our own Rules does apply, the point does not arise, but I may say that I read the  correspondence between the parties which is made part of the record as amounting to a contract that each shall waive his strict legal rights as to security in favour of the other, excepting a simple "undertaking" in place of more formal bail.  The plaintiff does not arrest the ship but simply asks for an "undertaking" to defend the suit and pay such damages as may be awarded.  The defendants give this undertaking and express a hope that the plaintiffs will give a similar undertaking to meet damages and costs on the counter-claim. This in turn the Japanese Government agreed to do "subject to the existence of any right to counter-claim and to demand security therefore."
  This existence of this right has now been established and the undertaking becomes therefore absolute. Each side had pledged its word to the other to abide by the decision of the Court and declares itself satisfied, and on this basis I think the case should proceed.

 

Source: The Times, 22 May, 1895

LAW REPORT, May 21.
JUDICIAL COMMITTEE OF THE PRIVY COUNCIL.
(Present The Lord Chancellor, Lord Watson, Lord Hobhouse, Lord MacNaghten, Lord Shand, Lord Davey, and Sir Richard Church.)
THE IMPERIAL JAPANESE GOVERNMENT v. THE PENINSULAR AND ORIENTAL STEAM NAVIGATION COMPANY.
  This is an appeal by the Japanese Government from a judgment of the British Supreme Consular Court at Shanghai, and involves a variety of questions, some of which are of considerable international importance.  It arises out of a collision which took place before daylight on November 30, 1892, in the Inland Sea of Japan, between the P. and O. steamer Ravenna and the Japanese torpedo cruiser Chishima, in which the latter was cut nearly in two and immediately sank with 75 of her officers and crew.
  The Ravenna was, at the time, on a voyage from Kobe or Hiogo), a port on the Inland Sea, to Nagasaki, while the Chishima was on her way from France, where she had been built, to Yokohama. The precise spot at which the collision took place is a point of considerable importance in the case, as will be seen later on, is described in the judgment of the Judge of the Consular Court at Yokohama as the Gogo Shima Straits, at a part where they are about two miles wide, between the Japanese  islands of Musuki and Gogo. These straits form part of what is commonly known as the Inland Sea of Japan, a body of water about 240 miles long from east to west, with four entrances from the ocean, two being very narrow, the third being under two miles in width, and the fourth having two branches, the widest being about four miles in width.  Gogo, one of the many islands in the Inland Sea is near the northern shore of Shikoku, one of the four main islands of Japan, and the place where the collision occurred is within three miles from the nearest part of Shikoku.
  These being the general facts, on May 6. 1893, the Japanese Government initiated proceedings by petition in Her Majesty's Court for Japan, in Admiralty, alleging that the collision was caused by the negligent navigation of the Ravenna, and claiming $850,000 damages for the loss of the Chishima. The defendants answered denying the alleged negligence, and pleading negligence on the part of the Chishima, by which, it was said, the Ravenna suffered damage to the extent of $100,000.
  On June 6, 1893, the defendants applied under the Rules of the British Court in Japan for leave to file a counterclaim for this sum of $100,000. And also that the plaintiff Government be required to give security "to abide by and perform the decision of the Court on the counterclaim."  The present contest arises wholly out of this application.
  Mr. Mowat, the Judge of the Yokohama Court, refused to allow the defendants to file this counterclaim, on the grounds that the collision occurred within the territorial waters of Japan, where the law of Japan applied; that by Japanese law the Mikado could not be impleaded for the wrongful acts of hi servants; and that, therefore, even if the defendants established all their allegations, they would not be entitled to relief against the plaintiff Government.
  From this decision the company applied to the Supreme Court at Shanghai, and the Chief Justice, Mr. Hannen, and the Assistant Judge, Mr. Jamieson, allowed the appeal, and ordered the plaintiffs to give security to abide the result of the counterclaim. The Chief Justice held that, although the place of the collision was within a marine league of the shores of Japan, and therefore within the territorial waters of that country, it was on the highway of nations, in regard to which the law to be administered in a British Admiralty Court was not Japanese law, but general maritime law, one principle of which is that the owner of a ship doing damage to another is liable for the negligence of his servants ("The Saxonia," Lushington, 410, and 15 Moore, P.C. Cases, 262, and "The Chartered Mercantile Bank v. the Netherlands Steam  Navigation Company," L.R. 10 QA.B.D., 521.). His Lordship also held that the plaintiff, by coming into a British Court affirms its jurisdiction, and all proper orders can therefore be made against him, including an order to answer a counterclaim ("the Neubattle," L.R. 1o P.D., 33), and that the Rules of the Court gave a discretion to admit a counterclaim in such a case, which discretion was properly exercised in this case by admitting it.
  The Assistant Judge came to the same conclusion, mainly on the ground that the British Admiralty Court in Japan had the same jurisdiction as the Vice Admiralty Courts in British possessions abroad and that, in all matters not expressly provided for in its rules, the procedure in the Court of Admiralty in England  was to be followed. Hence the counterclaim was admitted, and the plaintiffs were ordered to give security for costs.
  Against this judgment and order the present appeal is brought. In the printed statement of their case the plaintiffs contend - (1) that under the treaties the British Court in Japan can entertain no complaint against other than British subjects, that therefore no counterclaim ought to be allowed against a Japanese, and that the rules as to counterclaims have no application to the present action; (2) that the plaintiff is entitled under the treaties to bring this action without being liable to a counterclaim; (3) that, in any event, a counterclaim cannot be preferred against the plaintiff unless the grievance in respect of which it is preferred is one for which an action would lie in Japanese law; (4) that in English law (if that be applicable) a sovereign is not liable for the negligence of his servants; (5) but that the law of Japan is the law applicable to the place at which the collision occurred.
  The contentions of the respondents' case briefly amount to this - that for the purposes of this case the place of the collision was the high seas, and the law applicable general maritime law, which renders the appellants in Admiralty Courts subject to the same liabilities and obligations as any other plaintiff. It has been admitted on both sides that the rights of the sovereign of Japan are properly presented in the name of the Imperial Japanese Government.
.  .  .  
  Mr. Arthur Cohen's argument on behalf of the appellants lasted all day, and was not concluded when the Court rose.

Note

See also North China Herald, 27 October, 1893
THE CHISHIMA-RAVENNA APPEAL.
27th Oct.
The judgments given on Wednesday in the Supreme Court here by the Chief Justice Mr. Hannen and the assistant Judge Mr. Jamieson, in the appeal from Japan in the Chishima-Ravenna case, will surely commend themselves to all who take a common-sense view of the question at issue, and "Law," it has been said, "is the perfection of common-sense." .  .  . 

Published by Centre for Comparative Law, History and Governance at Macquarie Law School