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	England and Wales High Court (Commercial Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Markel International Company Ltd v Craft & Ors [2006] EWHC 3150 (Comm) (12 December 2006) URL: http://www.bailii.org/ew/cases/EWHC/Comm/2006/3150.html Cite as: [2006] EWHC 3150 (Comm), [2007] Lloyd's Rep IR 403, [2006] ArbLR 48

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		12th December 2006

The Hon. Mr Justice Morison :

1. This is an application for an interlocutory anti-suit injunction made by an insurance company, Markel, who are amongst other things P & I indemnity insurers, against three personal defendants whom I shall call the Craft family which comprises Mr Craft's widow and two children.  
2. The background is as follows.   Through a tragic series of events, Clive Craft, the deceased, lost his life whilst returning to the port of Tunis from working on a drilling rig.   He and others had had to abandon ship when a fire broke out on the vessel which was ferrying passengers from the platform.   The accident occurred in the late afternoon of 21 April 2005 and the Craft family have started an action in the courts of Tunis against Markel, and others.

The Policy of Insurance

3. The underlying insurance documents suggest that Markel's insured [P & I insurance] in relation to the Norseman was an entity called Timmaz Trading & Transport Limited, rather than VPJ Limited, who were the owners of the platform.   But there is an issue about this and the documents are not entirely straightforward.   Timmaz have not been joined as defendants in the Tunisian proceedings.   The Insurance Certificate incorporates the Terra Nova P & I policy wording as at 1 January 2005.    For the purposes of this application it is not disputed that the policy terms include liability for the risk of death of any member of the crew of the vessel named within the policy and for any other person to whom the assured was liable.   The Insured gave various warranties about the vessel and its condition, and a Pay to be Paid clause in these terms:

"It is a condition precedent of the Assured's right to recover from the insurer in respect of any liabilities, costs or expenses that it shall first have discharged and paid the same."

Clause 2 of section D of the Policy Terms provided as follows:

"2.1     Notwithstanding anything else to the contrary contained in this Policy, this policy of Insurance is subject to English Law and practice and incorporates the provisions of the Marine Insurance Act 1906 and any modification or re-enactment thereof.

2.2       Any dispute arising under or in connection with this insurance is to be referred to Arbitration in London: one arbitrator to be nominated by the Assured and the other by the Insurer.   The Arbitration shall be conducted pursuant to the exclusive supervision of the English High Court of Justice.   In case the Arbitrators shall not agree, then the dispute shall be submitted to an Umpire and the Umpire's decision shall be final and binding upon both parties.

2.3       In the event of a conflict between this clause and any other provision of this insurance, this clause shall prevail and the right of either party to commence proceedings before any Court or Tribunal in any other jurisdiction shall be limited to the process of enforcement of any award hereunder."

Proceedings in Tunisia

4. The Craft family commenced proceedings in the Tunisian courts on 13 July 2005 claiming damages for the death of Clive Craft.   There are three named defendants to those proceedings: an entity called "Mediterranean Charter Limited – VPJ Limited" of Malta; Hull and Machinery Insurers of the vessel, British Marine Luxembourg Ltd, with their head office in London; and Markel, also located in London.   The vessel concerned is described in the claim as a tugboat called Norseman.
5. According to the claim, the accident was investigated and it was found that Norseman had no fire equipment, no basic safety equipment or fire extinguisher or radio and the captain is blamed for giving the order to abandon ship as the

"incident was not serious at all and that the captain commanding the tugboat was not careful and attentive, and has not taken any measure in order to find out the reasons of the noise emitted by the engine and the small and light fire that broke out in it; he could ask for help since the place of the incident was not far from land and there had been several fishing boats that could rescue the tugboat and tow it to the port of Sidi Frej without any risk on the passengers, and the most evident proof for that is that the tugboat went towards the land alone aided by the wind after everyone had left it."

6. Jurisdiction is asserted in the claim on the basis that the incident occurred within Tunisian territorial waters and the first named defendants were responsible, as owners ["holder"] of the tugboat and employer of the crew and had used the vessel which was "not meant at all for transporting persons" without proper equipment and

"considering it appears from the declarations of the [first] defendant that it is insuring the drilling platform [Mooseman] and the tugboat Norseman by the two insurance companies, the second and third defendants; and hence, they shall substitute the first defendant concerning the compensation and reparation of the harm."

7. Damages are claimed on the basis of what we would recognise as a dependency claim in the sum of £273,000, and damages for "important moral harms" of a fixed sum of £100,000 for each of the three claimants.
8. Having been served with the proceedings, Markel took issue with the claim that the Tunisian Court had jurisdiction.
9. For a hearing on 23 November 2005, Markel served a  preliminary defence and made a number of points about jurisdiction, but they do not appear to have argued that by reason of the terms of the Insurance Policy, as a matter of English Law the claim was one which should have been advanced in an English Arbitration. 
10. A reply was filed for a hearing on 4 January 2006.   There were further hearings on 19 April, at which the court was presented with a further submission on behalf of Markel that as there were arbitration proceedings between Timmaz and Markel the action should await its outcome, 7 June 2006 and a proposed hearing set for 4 October 2006.  There is a proposed further hearing date fixed for 6 December 2006, but I am told that that hearing is unlikely to take place.

The arbitration proceedings

11. In late July 2005 Markel notified the Assured's brokers that they declined coverage:

"In the circumstances it appears to us that each of these matters puts the vessel in breach of the conditions of the licence issued by the Malta Maritime Authorities.   Underwriters now put owners on notice that underwriters consider themselves free from liability in respect of any and all losses arising out of the casualty on 22 April 2005 on the basis that there were numerous breaches of the warranty in section B, clause 11 of the Policy.   Further the voyage may have been in contravention of the implied warranties pursuant to section 39(5) and 41 of the Marine Insurance Act 1906 and/or there is no cover pursuant to section C clause 4 of the policy as the Owners' losses arises out of an act described therein."

12. On 7 February 2006 Markel commenced arbitration proceedings against Timmaz who are the owners of Norseman.   In relation to ownership, they rely on a certificate from the Malta Registry and the report of survey dated 29 March 2005, which identified Timmaz as the owners and the contention that Timmaz were the only assured in respect of Norseman under the contract of insurance.    Arbitrators were appointed and on 12 October 2006 they made, by consent, an Award declaring that Markel were discharged from any liability to Timmaz and that the insurance provided by Markel was to indemnify only Timmaz, subject to the terms of the Policy.   The arbitrators did not make a declaration that Timmaz were liable to indemnify Markel for any liabilities which may attach directly to Markel arising out of the Norseman incident.
13. The Craft family were not parties to the arbitration and were unaware of its existence until Markel's solicitors' letter dated 21 August 2006 which set out Markel's position as advanced before me in this court.   Very properly, Markel invited the Craft family to seek legal advice.   They did so and these proceedings were commenced on 3 October 2006.   These proceedings have proceeded at a fairly leisurely pace and came before me on 4 December 2006.

The expert evidence

14. I understand that there are difficulties in obtaining timely assistance from lawyers who practice in the Tunisian courts.   This court is faced with two statements from lawyers; the Craft family's lawyer's statement is dated 1 November 2006 and there is no evidence in reply to it.
15. The evidence filed on behalf of the Claimants is from Maitre Dhrif a practising lawyer in the Tunisian courts.   He is an experienced advocate entitled to practice before the Supreme Court and is currently the Secretary General of the Bar Council of Tunisia.    He is representing Markel in its litigation there.
16. Article 26 of the Tunisian Insurance Code gives a plaintiff a direct right of action against an insurance company:

"within the bounds of the total amount of damage suffered and limit of liability fixed in the policy of insurance, the third party who has been wronged has the right to bring an action directly against the insurer."

17. It is her opinion that the right of action against the insurance company

"does not prevent [it] from pleading or asking for the application of the insurance policy conditions.   However, the conditions of the policy of insurance will be interpreted and applied according to Tunisian law, and the Tunisian courts will apply no principle of English law to these insurance policy conditions because that might derogate from the right of direct action permitted by Tunisian law [Article 26]."

18. She expressed the view that Markel's defences based on breach of warranties entitling them to decline covereage will not be accepted as valid defences under Tunisian Law.  

"The Tunisian courts will only recognise English law and the arbitration clause in circumstances where there is mention made in the contracts between [the deceased] and his co-contracting partners."

19. For the Craft family, Maitre Marzouk, who is acting for them in Tunisia, and who has not provided a CV, refers to Article 26 and says that

"The direct action [against insurers] is something which is exclusively created by the Tunisian Insurance Code and is not one which is derived from the contract of insurance in the sense of it being an action which is equivalent to a claim brought by someone to whom the rights of an insured under the policy have been assigned or transferred.   It exists because of the existence of the insurance policy which provides the insured with an indemnity against the claims of third parties, but it is not the equivalent to a claim under the policy.   It is an independent right of recovery created by the Code."

20. He went on to state that

"The direct action under Article 26 exists separately and independently of both the cause of action for damages which a victim has against the tortfeasor himself and the cause of action for an indemnity against such a claim which an inured tortfeasor has against his insurer.   Neither of these causes of action is affected by the existence of the direct action and in particular the victim is able to sue the tortfeasor either alone or as an additional defendant if he chooses.   He cannot of course receive his damages twice over, and similarly the insurer cannot be obliged to pay twice."

21. He said that until the point about arbitration had been raised in the letter of 21 August 2006, of which he became aware in late September, it had been his view that Markel were conducting the case on the basis that if the court ruled that it had jurisdiction over the subject matter of the claim, Markel were content for it to determine the merits of the claim.   He said that the Tunisian courts had not yet ruled on the jurisdiction objection.    By the time the arbitration point was first raised

"my clients had incurred substantial fees in connection with addressing the specific matters which [Markel] had raised by way of defence (both in relation to jurisdiction and the merits) and this had of course been done against the background of [Markel] freely participating in the Tunisian proceedings without at any point raising the issue that the claim was the subject of a valid arbitration agreement."

22. It will be seen that the state of play in relation to this expert evidence is not altogether satisfactory.   It appears that they do not agree, but the true nature of their disagreement is not evident to me.   It appears to be common ground that, at no stage prior to the point being taken by Markel in August 2006, was any suggestion made that the claim in Tunisia was one which was subject to an English Arbitration agreement.   For Markel it was suggested that this might be because, under Tunisian law, an English arbitration clause in the policy would have no effect upon the Craft family's claim because the arbitration agreement was not contained in a contract to which the deceased was a party.

The Parties' arguments

23. For Markel, in an able submission, Mr Nigel Cooper argued that:

(1) There is a very real danger that Markel will be found liable to the Craft family in the courts in Tunisia in circumstances where:

(a)       The family would be unable to bring a direct claim against Markel as a matter of English Law and any action that they might commence should have been begun by way of London

            arbitration.

(b)       Markel have no insurance relationship with the first named defendant in the Tunisian action.

(c)       Markel have good defences to any claim under the contract of insurance as a matter of English law, which means that any claim against them under English law would be untenable.

(d)        The action is brought against Markel in breach of the exclusive arbitration clause in the contract of insurance.

(2) The principles governing the grant of an anti-suit injunction are well summarised in OT Africa Line Ltd v Magic Sportswear Corporation [2005] 2 Lloyd's Rep 170  at page 178 et seq.   Those principles apply equally where the relationship is governed by an arbitration clause; see The Angelic Grace [1995] 1 Lloyd's Rep. 87.

(3) Whilst these cases concern claims made directly between the contracting parties, the same principles apply to determine whether it is appropriate to restrain proceedings brought by third parties seeking to enforce a contractual relationship for their own benefit: see Through Transport Mutual Insurance Association (Eurasia) Limited [2005] 1 Lloyd's Reports page 67.   This was a case where the shippers of goods which were lost sued the carriers' insurers directly in Finland relying on their right of action under a Finnish statute.   Mr Cooper submitted that the Court of Appeal decided that

(a)       The principles governing the grant of an anti-suit injunction apply not only as between parties to the relevant contract but also to those who by agreement or by operation of law become entitled to enforce the bargain;

(b)       Neither the Brussels Convention nor the EU Judgments Regulation apply to prevent a court in one contracting state granting an injunction to restrain proceedings brought in another contracting state in breach of an arbitration clause (because such application for injunctive relief falls outside the scope of the Convention or Regulation).

(c)       That in the light of the reasoning in Turner v Grovit [2004] 1 Lloyd's Law Reports 216 and in the circumstances of the case it was not appropriate to grant an anti suit injunction to restrain the shipper in that case.

           

            (4) An anti suit injunction should be granted in this case because:

(a)       Markel may find themselves being held liable to the Craft family despite the fact that it has no liability under the policy and because under the pay to be paid clause their insured has paid nothing.

(b)        The grant of an injunction will prevent the further expenditure of costs in the Tunisian courts.

(c)        There is no doubt that if the assured had sought to recover from Markel in a Tunisian Court, this court would have granted an anti-suit injunction and the position should be no different merely because the proceedings were brought by the Craft family.   Their right of action is dependent upon there being an insurance contract.   Under English law their claim would be properly categorised as "as being a claim under the contract" entitling Markel to rely upon the terms of contract to defeat or limit the claim [paragraph 81 of the judgment in Through Transport].   The claim is oppressive and vexatious so far as Markel is concerned.   The injunction is aimed at the Craft family and not the Tunisian court.

(d)       Although the court of Appeal relied upon the decision of Turner v Grovit, the essence of the European Court's decision was to emphasise the level of trust between courts of contracting States that underpins the Brussels Convention or the EU Judgments Regulation and conclude that from the perspective of the ECJ injunctive relief was seen as an interference with the jurisdiction of the foreign court.   Longmore LJ in the OT Africa Line case stressed that the reasoning in Turner v Grovit has not affected the principles to be applied in relation to cases involving non-contracting states, such as Tunisia.   The reasoning in Through Transport "sits uneasily" with the fact that by allowing the direct action against insurers to continue the basis upon which Markel were prepared to enter that contract of insurance is ignored and the insurers are exposed to a liability that it had never contracted to accept.

24. For the Craft family, Mr Pierre Janusz made these submissions:

(1) The essential facts of the Through Transport case cannot be distinguished from the present case.   If it was not just and convenient to grant an anti suit injunction in that case; so here, it would not be just and convenient.    

(2) It is fundamental to the Markel's application for relief that the Craft family are seeking to enforce an obligation arising under the contract between Markel and the Insured.   Yet, that is a mis-characterisation.   The right to sue the insurer in Tunisia is a right independent of the contract of insurance and therefore Markel cannot establish that they are bound to pursue their claim by arbitration in London.   There is a direct claim under Article 26; it is a right which exists otherwise than in an insolvency situation where the third party steps into the shoes of the insolvent assured.   The words in Through Transport were "is entitled to claim compensation in accordance with the insurance contract" which are words more likely to lead to the conclusion that what was being claimed was a breach of an obligation under the contract.

(3) Even if Markel were otherwise entitled to an anti suit injunction, they have lost that right through delay and the doctrine of waiver and estoppel are relied upon.   It was also argued that Markel had effectively submitted to the jurisdiction of the court in Tunisia.

Decision

25. I start with an analysis of the decision in Through Transport on which both parties relied.  In his judgment at first instance, Moore-Bick J. dealt with the question of characterisation in this way:

17. "Section 67 of the Finnish Insurance Contract Act 1994 provides as follows:

"Section 67

Injured person's entitlement to compensation under general liability insurance

A person who has sustained bodily injury, property damage or financial loss under general liability insurance is entitled to claim compensation in accordance with the insurance contract direct from the insurer if

(1) . . . . . . . . . .

(2) the insured has been declared bankrupt or is otherwise insolvent;"

18. … The District Court in the course of giving judgment on the issue of jurisdiction held that the Act gives the injured party the right to claim compensation "according to the insurance policy" if the insured is insolvent and that the application of the statutory provisions was mandatory under Finnish law. The court did not really express a view on the question with which I am concerned, but in any event it is for this court to characterise the issue for itself by reference to the substance of the matter.

19. Applying that test I consider that the issue in this case is to be characterised as one of obligation. The effect of section 67 is in substance to enable an injured party who has a claim against an insolvent insured to bring proceedings directly against the insurer to obtain the benefit that the insured would himself have been entitled to obtain under the contract. No doubt it would have been possible for the legislature to have created a right of compensation in such cases that was wholly independent of and did not fully reflect the terms of the contract of insurance, but in my view that is not what section 67 is designed to achieve. Although it gives claimants a right of action directly against the insurer without the need for the formalities of an assignment, what he obtains by the operation of the Act is essentially a right to enforce the contract in accordance with its terms. The statute renders void those terms of the contract which have the effect of restricting the right to recovery in a way that is inconsistent with its terms and those provisions must, of course, be applied in any action before the Finnish courts. However, that does not in my view detract from the conclusion that the essential nature of the right created by section 67 is to enforce the terms of the contract.

20. The obligations of the Club under the contract of insurance are governed by English law and accordingly, Finnish legislation will not be recognised in this country as effective to modify them. It follows that if New India wishes to pursue a claim against the Club, it must do so in accordance with the terms of the contract under which it arises. That includes the arbitration clause. It follows that in my view the court had jurisdiction in this case to give permission to serve the claim form out of the jurisdiction under rule 6.20(5)(c) and rule 62.5(1)(c) and that it has jurisdiction to grant an injunction to prevent the continuation of proceedings contrary to the terms of the arbitration clause."

26. As Mr Janusz rightly observes, the wording of the Finnish statute gave rise to a conclusion that the essential nature of the right was to enable the third party to enforce the terms of the contract.    The Court of Appeal agreed with this characterisation and drew a distinction between a case where the third party becomes a party to the contract containing the arbitration clause and the case where he does not.   If he does not become a party to it but nonetheless is seeking to enforce his rights in accordance with its terms then he is bound to do so in accordance with the arbitration clause, as that is just one of the terms.   In other words, the third party has to take the contract as it stands, arbitration clause and all, in a case where he is seeking to enforce obligations under the contract.

52. Some of the argument in this appeal proceeded on the footing that the question is whether New India became a party to the agreement to arbitrate contained in clause D2 of the General Provisions in the Club Rules. However, we do not think that that is quite the right question and, as we read his judgment, the judge did not go so far. We accept Mr Smith's submission that New India did not become a party to an arbitration agreement. We agree that self-evidently New India was not an original party and there is no basis upon which it could be held that there was any novation or transfer to New India of the rights and obligations of the insured under the Club Rules. This is in our view important on the question whether it was appropriate to grant an anti-suit injunction discussed below.

53. As we read his judgment, the judge accepted the submission made to him on behalf of the Club that, if New India wished to make a claim against it under section 67 of the Finnish Act, the claim was properly characterised under English principles of conflict of laws as a claim under the contract to enforce the obligations of the Club and that, just as New India could rely upon the terms of the rules to establish liability, so the Club could rely upon the terms of the rules to defeat or limit the claim. One of those rules was the arbitration clause in clause D2 of the General Provisions and another was the Scott v Avery clause in clause D2.3, which expressly provided that no action can be brought on a dispute "unless and until it has been referred to arbitration and the award has been published and become final".

54. In our judgment, if the judge was right to hold that the claim under section 67 of the Finnish Act was properly characterised under English principles of conflict of laws as a claim under the contract to enforce the obligations of the Club, he was plainly correct to hold that the Club could, as a matter of English law, rely upon the terms of the rules, whether they be provisions relating, say, to the extent of the cover or the arbitration clause. The key question under this head is therefore whether he correctly classified New India's claim under section 67 of the Finnish Act.

…

58. The question is therefore what is the substance of New India's claim under section 67 of the Finnish Act. The judge held that the claim is in substance to enforce against the Club as insurer the contract made by the insured. He was in our opinion right so to hold for the reasons he gave. In short, the title to section 67 is the "insured person's entitlement to compensation under general liability insurance" and the right is defined as a right "to claim compensation in accordance with the insurance contract direct from the insurer" in certain defined circumstances. The claim under the Act is not therefore in any sense independent of the contract of insurance but under or in accordance with it. In these circumstances it seems to us that the judge was correct to hold that the issue under the Act is one of obligation under the contract. The judge noted in passing in paragraph 18 of his judgment that the Finnish court itself described the Act as giving the injured party the right to claim compensation "according to the insurance policy".

59. In all the circumstance, we agree with the judge that, although the Act gives the claimant a right of action directly against the insurer without the need for the formalities of an assignment, what he obtains is essentially a right to enforce the contract in accordance with its terms. As to the anti-avoidance provisions in section 3 (quoted above), the judge said this in paragraph 19:

"The statute renders void those terms of the contract which have the effect of restricting the right to recovery in a way that is inconsistent with its terms and those provisions must, of course, be applied in any action before the Finnish courts. However, that does not in my view detract from the conclusion that the essential nature of the right created by section 67 is to enforce the terms of the contract."

We agree.

27. The distinction which the court drew between a third party who, in effect became a party to the contract and one who was simply asserting entitlements under it was important when considering whether the third party was in breach of contract by starting proceedings in a court.   Thus, the Court of Appeal held that the claimants in that case were not entitled to a declaration that the proceedings brought in the courts were a breach of the arbitration clause in the contract but were entitled to a declaration that the third party was bound to refer any claims against the claimant to arbitration, in accordance with the contract.

63. The declarations granted were set out in paragraphs 2(a) and (b) of the order as follows:

"(a) It is declared that the Defendant is bound to refer any claims against the Claimant, in respect of the consignment carried from Calcutta (India) to Kotka (Finland) and onwards to Moscow (Russia) pursuant to 2 bills of lading … and CMR International Way Bill ("the consignment"), to arbitration in accordance with the arbitration clause contained in Section D, Clause2.1 of [the certificate] ("the arbitration clause").

(b) It is declared that the proceedings commenced by the Defendant against the Claimant in Kotka, Finland, by summons dated 16 December 2002 ("the Kotka proceedings"), are in breach of the arbitration clause."

64. It seems to us to follow from the conclusions which we have reached so far that the Club is entitled to the first of those declarations. For the reasons given above under the heading 'the arbitration clause', an application of English conflict of laws principles leads to the conclusion that, if New India wishes to pursue a claim under the section 67 of the Finnish Act, it must do so in arbitration in London because the Club is entitled to rely upon the arbitration clause in the Club Rules, which are the very rules which New India relies upon in order to make a claim under the Act: see, in the context of the Third Parties (Rights Against Insurers) Act 1930, The Padre Island (No 1).

65. It is less clear that the Club is entitled to the second declaration. In our view the Club is not entitled to such a declaration if it means, on its true construction, that New India was in breach of contract in commencing the Kotka proceedings. As indicated in paragraph 52 above, we do not think that New India was in breach of contract. So, for example, the Club could not in our view sue New India for damages for commencing the proceedings in Finland. It seems to us that the declaration could be so construed and for that reason we think it right to set aside that declaration. As we see it, the Club is sufficiently protected by the first declaration and either does not need the second or, if it is construed as just suggested, is not entitled to it.

28. The court then considered the question of an anti-suit injunction.   They accepted that Turner v Grovit was dealing with a Convention case where the grounds for an anti suit injunction were the familiar ones of vexation and oppression on the one hand as opposed to an anti suit injunction to restrain a party from bringing proceedings in breach of a contractual promise that the dispute would be referred to arbitration in London, on the other.

92. ……   We do not accept Mr Smith's submission that the court should not grant an anti-suit injunction in a case where a party to an arbitration agreement begins proceedings in the courts of a contracting state in breach of an arbitration clause in a contract.

93. That is not, however, this case. We therefore turn finally to Mr Smith's submission that the judge should not have granted an injunction in this case, where the highest that it can be put against New India is that the only reason that it can be said in England that New India should not be permitted to proceed in Finland is that, because of English principles of conflict of laws, the claim is classified as a claim under the contract so that New India is bound to bring any claim against the Club in arbitration in London. Mr Smith submitted that in these circumstances there is no parity of reasoning between this case and the principles relied upon by the judge and set out above.

94. We accept that submission. This claim is brought in Finland under a Finnish statute conferring rights on third parties against liability insurers in circumstances in which the insured is insolvent. The statute was no doubt passed because, as a matter of public policy in Finland, it was thought that liability insurers should be directly liable to third parties who had suffered loss in respect of which the insured was liable. The public policy behind the Finnish Act was the same as or very similar to the public policy behind the Third Parties (Rights Against Insurers) Act 1930. It appears that the only difference of importance between them is that in England the anti-avoidance provision does not defeat the pay to be paid clause, whereas it may be that section 3 of the Finnish Act will do so, although it is right to say that that is a matter yet to be determined by the Finnish courts. It may also be observed that by section 3(3) section 3(1) and (2) do not apply to "marine or transport insurance taken out by businesses". There is, as we understand it, an issue between the parties as to whether the liability insurance provided by the Club is within the exception. The court in Kotka appears to have been of the view that it was not, but was liability insurance outside the exception. However, it is not entirely clear to us whether the court has made a final decision to that effect in its decision on jurisdiction.

95. The question is whether in all the circumstances the English court should grant an injunction restraining New India from bringing its claim under the Finnish Act in Finland. It is always a strong step to take to prevent a person from commencing proceedings in the courts of a contracting state which has jurisdiction to entertain them. The ECJ has either held or in effect held that no such injunction should be granted in the case of an exclusive jurisdiction clause (Gasser) or on the ground that the proceedings are vexatious and oppressive (Turner v Grovit). New India is not in breach of contract in bringing these proceedings in Finland, so that the principles in cases like The Angelic Grace do not apply directly. In this regard we accept Mr Smith's submission that, while such cases may provide some assistance by analogy, they do not apply by parity of reasoning, as the judge thought. None of the cases to which we were referred, including Akai, was considering a case quite like this.

96. Further, this is not a case in which it can fairly be said that the proceedings in Finland are vexatious or oppressive. New India is simply proceeding in Finland under a Finnish statute which gives it the right to do so. The question is whether the English court should restrain it from doing so.

97. Given our view that the principles in the decided cases cannot be applied by parity of reasoning and given the further fact that the judge did not have the assistance of either Gasser or Turner v Grovit, both of which have made an important contribution to the jurisprudence in this area, this court is in our opinion free to form its own conclusion on the question whether to grant an anti-suit injunction on the facts of this case. We have reached the conclusion that, having regard to all the circumstances of the case, including those set out above and the reasoning underlying the approach of the ECJ in Turner v Grovit, this was not a case in which, in the language of section 37(1) of the Supreme Court Act 1981, it was or would be just and convenient to grant an injunction restraining New India from pursuing a claim under the Finnish Act in Finland.

29. It seems to me that the Court is saying in paragraph 97 that "all the circumstances" include the significant fact that by starting an action in Finland the third party were not in breach of the arbitration clause.   This was not a case, therefore, where the third party had committed any wrong which required to be restrained by the court.   The reference in that paragraph to the reasoning underlying the approach of the ECJ in Turner v Grovit is less easy to understand, bearing in mind that they have distinguished an arbitration case from cases to which the ECJ case would apply.   But, it seems to me that what is being recognised is a more general point made by the ECJ.

27. However, a prohibition imposed by a court, backed by a penalty, restraining a party from commencing or continuing proceedings before a foreign court undermines the latter court's jurisdiction to determine the dispute. Any injunction prohibiting a claimant from bringing such an action must be seen as constituting interference with the jurisdiction of the foreign court which, as such, is incompatible with the system of the Convention.

28. Notwithstanding the explanations given by the referring court and contrary to the view put forward by Mr Turner and the United Kingdom Government, such interference cannot be justified by the fact that it is only indirect and is intended to prevent an abuse of process by the defendant in the proceedings in the forum State. In so far as the conduct for which the defendant is criticised consists in recourse to the jurisdiction of the court of another Member State, the judgment made as to the abusive nature of that conduct implies an assessment of the appropriateness of bringing proceedings before a court of another Member State. Such an assessment runs counter to the principle of mutual trust which, as pointed out in paragraphs 24 to 26 of this judgment, underpins the Convention and prohibits a court, except in special circumstances which are not applicable in this case, from reviewing the jurisdiction of the court of another Member State.

30. It is traditional for theses courts, when making an anti-suit injunction to emphasise that it is an order directed to a party and not to the court and is not to be seen as an interference with the foreign court's process.   Courtesy, alone demands that such statements be made; however, the reality is that it is to be seen as an interference with another court's jurisdiction.   As a remedy, an anti suit injunction may be appropriate in an individual case but it is a remedy which is to be used sparingly.   It is this, I think, which prompted the Court of Appeal in the Through Transport case to refer to the ECJ decision as it did in paragraph 97 of its judgment.   But whether or not I am right about that I must now form a view on the proper characterisation of the claim being asserted in Tunisia against Markel.
31. I remind myself that this is an interlocutory decision without oral evidence and without the opinions of the foreign advocates being subjected to cross-examination.   As I have already observed, there has been no reply to the assertions made by Maitre Marzouk in his report.   If, as he says, the claim under Article 26 exists separately and independently of both the cause of action which the victim has against the tortfeasor and the rights of an insured against the insurer, then I agree with Mr Janusz that this right conferred by the Tunisian statute cannot be characterised as enforcing a contractual obligation to which the arbitration clause would apply.   The fact that it is a necessary condition for the application of Article 26 that there is in existence a contract of insurance does not say anything about the characterisation of the right or obligation.   I would feel reluctant to decide this point finally, at this stage.   At trial, the position may be different.    But for the purposes of an interlocutory application for an anti-suit injunction, I am not satisfied that Markel have shown a good arguable case to justify one.   Furthermore, in my view the reasoning adopted by the Court of Appeal in reversing the judge's decision to grant an anti-suit injunction applies here, a fortiori.   The Craft family have committed no breach of contract in suing Markel in Tunisia.   The most that could be said is that at trial it will be decided that Markel are entitled to a declaration that their rights against Markel are to be enforced through arbitration in London, which would impact on the enforceability of any judgment given in Tunisia.
32. Finally, in the exercise of my discretion I would have refused injunctive relief on grounds of delay.   It seems to me that too much water has passed under the bridge in the Tunisian proceedings to make it just to bring them to an end now.   It is a remarkable fact that the 'arbitration point' was only taken in August of this year after the proceedings had been running for over a year.   But I reject the submission of Mr Janusz that there has been any waiver or estoppel or submission to the jurisdiction.   The plain fact is that an objection to jurisdiction has been made and has yet to be determined.   In the eyes of the foreign court the right to challenge jurisdiction has not been waived and is still alive and despite the absence of evidence from a Tunisian lawyer about it, I am prepared to accept the evidence of Markel's English solicitor that as a matter of procedure a challenge to jurisdiction must be accompanied by a defence on the merits if there is a dispute on the merits.   That is common in civil law jurisdictions and in certain common law jurisdictions [USA] as well.   But the real delay was between the date when the proceedings were started in Tunisia, when an application for an anti suit injunction should have been made, and 3 October 2006 when it was made.   An application for an anti suit injunction should always be made timeously.   I am not impressed by the argument that there has been greater delay in other cases.   Each case is fact specific.   Having regard to the nature of the claim in this case, it was essential that the parties acted with speed.
33. The net result is that I dismiss the application for an interlocutory anti suit injunction.