<center><span class="news-text_italic-underline">Judgment Date: 18 February 2025</center>
Background
The claimants (“<span class="news-text_medium">C1</span>” and “<span class="news-text_medium">C2</span>”) applied to vary and make final the terms of an anti-suit injunction (ASI) granted pursuant to CPR r.3.1(7) . C1 was the registered owner of a shipping vessel (“<span class="news-text_medium">P</span>”) and C2 was the registered owner of a sister vessel (“U”). Both vessels were managed and operated by the same group company. By a charterparty dated 10 May 2024, P was chartered to the defendant (“<span class="news-text_medium">Z</span>”) to carry a full cargo of wheat from Russia to Yemen. The charterparty included a standard LMAA arbitration clause. Conflicts arose when the cargo intended for Yemen was redirected to Djibouti due to non-payment issues, leading to multiple legal proceedings in Djibouti and Yemen.
In August 2024, Z applied to a Djibouti court to arrest P to secure its claim for damages for misdelivery and the return of the goods which it had paid for. The Djibouti court arrested P on Z's application as surety or guarantee for value of the cargo and the costs of transport of the goods. The court ordered P's release subject to the provision of an international bank guarantee in favour of Z. An Emirati bank issued the guarantee. On Z's appeal, the Djibouti Court of Appeal declared that the bank guarantee offered by the Emirati bank was valid and ordered the lifting of P's arrest.
The terms of the guarantee included payment to Z in the event of a binding LMAA award on appeal, pursuant to clause 28 of the charterparty. C commenced arbitration prior to the issue of the guarantee. After P was released, Z appealed to the Djibouti Supreme Court on grounds that the Djibouti Court of Appeal should have ordered the guarantee to be given by a Djibouti bank. P learned about the appeal via arrest proceedings in relation to U, in Yemen.
An interim ASI was granted ex parte restraining Z from commencing or prosecuting or taking any steps in or otherwise participating in proceedings (including ship arrest proceedings) in any court or tribunal in Yemen, or in any other court or tribunal other than London-seated arbitration against C1, against the claimants in respect of any dispute arising out of or in connection with the charterparty between C1 and Z dated May 2024. A further order was made on 3 December 2024, which was in essence a mandatory injunction compelling Z to procure the release of U from arrest, as well as interim prohibitor injunctions in relation to three Yemeni proceedings.
The claimants applied to the English court to make the interim relief final and to vary the terms of the order so as to include two sets of Djibouti proceedings in the order, of which they were unaware when the interim order was sought.
Held:
Application granted.
- <span class="news-text_medium">ASI - general principles:</span> As a matter of English law the High Court has power to grant an ASI in support of arbitration proceedings under the section 37 of the Senior Courts Act 1981. Where an ASI was sought on a contractual basis to enforce an exclusive London arbitration agreement, an ASI would be granted if: (i) the claimant could demonstrate with a high degree of probability the existence of an arbitration clause to which the defendant was a party and which covered the dispute; and (ii) there were no exceptional circumstances which militated against the grant of relief, such as the failure to act promptly (applying Aggeliki Charis Compania Maritima SA v Pagnan SpA (The Angelic Grace) [1995] 1 Lloyd's Rep 87 and Specialised Vessel Services Ltd v MOP Marine Nigeria Ltd [2021] EWHC 333 (Comm)).
- <span class="news-text_medium">Effect and enforceability of the guarantee:</span> The claimants' primary basis for seeking an ASI was clause 1 of the guarantee. To comply with that clause, Z had to refrain from detaining any other vessel in the same or associated ownership, beneficial ownership, or management as P and Z could not prosecute any legal proceedings in Yemen in relation to the charterparty. Clause 1 had to be construed as precluding Z from initiating fresh proceedings. It would be nonsensical for the clause to require Z to withdraw legal proceedings but permit it to recommence them immediately. The hurdle of establishing the existence of an express contractual covenant not to sue to a high degree of probability had been met. There were no strong reasons militating against the grant of an ASI. The reasoning that led to the granting of interim ASI relief by two separate judges was endorsed and there was no reason not to make that relief final.
- <span class="news-text_medium">ASI - alternative basis:</span> The claimants also contended for an alternative basis for the grant of relief on the basis of the charterparty and its arbitration clause (clause 28), which provided for any dispute arising out it to be referred to London-seated arbitration under the terms of the LMAA. That was both in relation to the proceedings in Yemen and in Djibouti. It maintained that where a respondent sought to obtain relief under or in relation to the contract from a non-contracting party in a non-contracting forum, the respondent should be restrained from doing so by an ASI. U was not a party to the charterparty or its arbitration clause. Z's conduct in commencing proceedings against U rendered those proceedings inequitable or oppressive and vexatious . Whilst that alternative basis was not necessary to the application, the fact that there was a feasible alternative basis provided a further level of confidence in the appropriateness of the grant of final injunctive relief.
- <span class="news-text_medium">Variation of order:</span> The court had a wide power under CPR r.3.1(7) to vary or revoke a previous order. Through no fault of the claimants were the facts on which the previous orders had been made innocently misstated.
