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case of Kawasaki Kisen Kabushiki Kaisha of Kobe v. Mantham S.S.Co.,Ltd. (1939). 1. All England Reports 819 where Sir Wilfrid Greene M.R. in upholding the decision of the arbitrator who found that the owners were justified in cancelling a charter party which contained the clause "Charterers and owners to have the liberty of cancelling this charter party if war breaks out involving Japan" spoke of his happiness to be able to avoid coming to a conclusion which would violate all his feelings of common sense. Mr. Sheldon has been driven to argue that the judgment in each of these cases has relation only to the facts of the particular case. That is true, but the point at issue in each of these cases was just the one which I have to decide, and these judgments apply to the facts of the case now before me as cogently as they do to the facts of the cases in which they were delivered. Sir Wilfrid Greene's recourse to the touchstone of common sense fortifies me in my conclusion, not only on the authorities which I have cited but also on my inescapable knowledge of conditions on the China coast, that a state of war exists between China and Japan, and has existed at all times material to this application.
In January 1939 the local office of the company was closed and its Chinese employees departed from the Colony. On 1st February 1939 the Dairen Kisen Kabushiki Kaisha purported to act as agents of the company in this Colony.
In these circumstances can it be said that the company is still carrying on business in the Colony? Mr. T. F. Lo, a well qualified and acknowledged expert in Chinese law has filed a lengthy affidavit setting out in the clearest terms the common law and statutory provisions governing trading with the enemy of the Chinese Republic. No counter affidavits have been filed and I therefore accept Mr. Lo's statements as an accurate opinion on the legal principles applicable to this case.
According to Chinese law the action of the company in chartering ships to Japanese interests and in appointing Japanese agents is illegal and criminal and all such contracts are not only void but illegal. Can it then be said that the company is carrying on business in the Colony when its ostensible agents purport to act under a contract which is illegal by the law of China which is clearly the proper law? The answer must be no. The parent company in China is in process of compulsory winding up and the local branch is without lawful representation in the Colony. What then is the position of this Court? Mr. Cheshire in his recent work on Private International Law at p. 197 writes "It is axiomatic that a contract that is illegal by its proper law cannot be enforced in England. The dearth of authority for this propostition is not surprising, for few would be bold enough to sue on a contract that is prohibited by the legal system to which it properly belongs". In the Torni (1932) p. 78 at 88 Greer L.J. in considering the judgments in the Court of Appeal in In re Missouri Steamship Co. (42 Ch.D.321) said "I regard the decision as meaning that if, in the country where the contract was made, the contract was illegal - not merely void and unenforceable but illegal then the Courts in tuis Country would recognise the illegality and act in accordance with the Law of the country where the contract was made". Mr. Cheshire puts it thus: It has been suggested that a contract which is illegal by the law of the country where it is made cannot be enforced in England. Bold and sweeping statements of this nature are seldom tenable in Private International Law. This particular one, at any rate, derives little confirmation from the decisions usually cited in its favour, since they were concerned with cases in which the lex loci contractus was also the properṛ law. The casual place of compeltion cannot as a rule raise legal effects. It is academic and impracticable to suggest that a contract must be regarded as a nullity everywhere
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