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England and Wales High Court (Commercial Court) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Specialised Vessel Services Ltd v MOP Marine Nigeria Ltd [2021] EWHC 333 (Comm) (18 February 2021) URL: http://www.bailii.org/ew/cases/EWHC/Comm/2021/333.html Cite as: [2021] EWHC 333 (Comm) |
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QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Rolls Building, Fetter Lane, London, EC4A 1NL |
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B e f o r e :
____________________
SPECIALISED VESSEL SERVICES LIMITED |
Claimant |
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- and - |
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MOP MARINE NIGERIA LIMITED |
Defendant |
____________________
No one in attendance for the Defendant
Hearing dates: 18 February 2021
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Crown Copyright ©
Mr. Justice Calver:
Application
i. MOP is obliged to arbitrate all disputes relating to the Bareboat charter between the parties dated 23 January 2019 ("the Bareboat Charter") in line with clause 30 thereof;
ii. MOP is obliged to bring any challenge to the jurisdiction of the arbitral tribunal or the validity of the arbitration agreement before the Tribunal or before this Court; and
iii. The Nigerian Proceedings against SVS constitute a breach of the Bareboat Charter and in particular the arbitration agreement therein.
"We write to acknowledge receipt of your mails and to reiterate our earlier position conveyed to you vide our letters of 1st and 11th February, 2020 as well as our mails to you. In our email of 13th February, 2020, we stated our position clearly that we do not intend to participate in any shape or form in the proceedings before the High Court, Commercial Court, Queen's Bench Division as the proceedings thereat are a ploy to completely undermine the two suits instituted before the Federal High Court, Port Harcourt, Nigeria by our client [MOP]. Our client's position has not changed. It is not our client's desire or intention to participate in the proceedings as same is in contempt of the Federal High Court.
Our said client is desirous of continuing to pursue its claims before the Federal High Court here in Nigeria."
Background
(i) Commercial context
a) A claim for outstanding hire in the sum of US$1,209,137.50 plus late payment
interest, under clause 11.
b) Loss equivalent to the value of the Vessel
c) Additional damages caused by the collision and grounding of the Vessel.
d) Loss caused by MOP's failure to keep the Vessel insured, as MOP was
contractually obliged to do.
(ii) Agreement to arbitrate in London pursuant to English law
"(a) This Contract shall be governed by and construed in accordance with English law and any dispute arising out of or in connection with this Contract shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this Clause.
The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration proceedings are commenced.
The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its own arbitrator within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so within the 14 days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within the 14 days specified, the party referring a dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on both parties as if he had been appointed by agreement. Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator. In cases where neither the claim nor any counterclaim exceeds the sum of USD 50,000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced…."
(iii) The Nigerian proceedings
Injunctive Relief
Legal principles
"The High Court may by order (whether interlocutory or final) grant an injunction or appoint a receiver in all cases in which it appears to the court to be just and convenient to do so."
"Where, as in the present case, the foreign defendant is itself seeking (or has obtained) an anti-suit injunction, and thus the Court is asked to grant an anti-anti-suit injunction, caution is called for (see Raphael, para 5.49; see also General Star International Indemnity v Stirling Brown [2003] Lloyd's Rep IR 719, para 16). However, where the foreign proceedings are brought in breach of an exclusive jurisdiction or arbitration clause, anti-anti-suit injunctions are frequently granted – see, for example, Sabah Shipyard v Government of Pakistan [2003] 2 Lloyd's Rep 571, paras 40-42; Goshawk v ROP [2006] EWHC 1730 (Comm))."
"The present type of restraining order is commonly referred to as an "anti-suit" injunction. This terminology is misleading since it fosters the impression that the order is addressed to and intended to bind another court. It suggests that the jurisdiction of the foreign court is in question and that the injunction is an order that the foreign court desist from exercising the jurisdiction given to it by its own domestic law. None of this is correct. When an English court makes a restraining order, it is making an order which is addressed only to a party which is before it. The order is not directed against the foreign court: Lord Goff, SNI Aerospatiale v Lee [1987] AC 871 at 892. The order binds only that party, in personam, and is effective only insofar as that party is amenable to the jurisdiction of the English courts so that the order can be enforced against him. "An injunction will only be issued restraining a party who is amenable to the jurisdiction of the court, against whom an injunction will be an effective remedy": Lord Goff (ib)"
And at para 26:
"The making of a restraining order does not depend upon denying, or preempting, the jurisdiction of the foreign court. One of the errors made by the deputy judge in the present case was to treat the case as if it were about the jurisdiction of the Madrid court. Jurisdiction is a different concept. For the foreign court, its jurisdiction and whether to exercise that jurisdiction falls to be decided by the foreign court itself in accordance with its own laws (including conventions to which the foreign country may be a party). The jurisdiction which the foreign court chooses to assume may thus include an extraterritorial (or exorbitant) jurisdiction which is not internationally recognised. International recognition of the jurisdiction assumed by the foreign court only becomes critical at the stage of the enforcement of the judgments and decisions of the foreign court by the courts of another country. Restraining orders come into the picture at an earlier stage and involve not a decision upon the jurisdiction of the foreign court but an assessment of the conduct of the relevant party in invoking that jurisdiction. English law makes these distinctions. Indeed, the typical situation in which a restraining order is made is one where the foreign court has or is willing to assume jurisdiction; if this were not so, no restraining order would be necessary and none should be granted."
"If an injunction is granted, it is not granted for fear that the foreign court may wrongly assume jurisdiction to spite the plaintiffs, but on the sure ground that the Defendant promised not to put the plaintiff to the expense and trouble of applying to that court at all. Moreover, if there should be any reluctance to grant an injunction out of sensitivity to the feelings of a foreign court, far less offence is likely to be caused if an injunction is granted before that court has assumed jurisdiction than afterwards, while to refrain from granting it at any stage would deprive the plaintiff of its contractual rights altogether. In my judgment, where an injunction is sought to restrain a party from proceeding in a foreign court, in breach of an arbitration agreement governed by English law, the English court need feel no diffidence in granting the injunction provided it is sought promptly and before the foreign proceedings are too far advanced."
"… a party who wishes to enforce a jurisdiction clause should apply promptly once he is aware of a breach of the arbitration clause': …The statement of principle by Millet LJ in The Angelic Grace that an anti-suit injunction should be sought 'promptly and before the foreign proceedings are too far advanced' is clear and should be understood and applied in a common sense and straightforward manner."
61. My conclusion is that the bank is right to say that the present claim has not been brought promptly. In a case where there was a potential time bar expiring in January 2015, if ESL were to seek an anti-suit injunction, it needed to issue and serve a claim form here, in the absence of some good reason to the contrary, no later than the end of November 2014. ESL's decision to defer issuing a claim form pending its Qingdao jurisdiction challenge is not a good reason to the contrary, for three reasons both individually and in conjunction with each other:
(i) the decision was inconsistent with The Angelic Grace;
(ii) there was no objective justi?cation for thinking that the Qingdao jurisdiction challenge would be resolved speedily; and
(iii) there was no objective justi?cation for thinking that the Qingdao jurisdiction challenge would be successful."
"Injunctive relief may be sought (a) before any foreign proceedings have begun; (b) once they have begun; (c) within a relatively short time afterwards; (d) when the pleadings are complete; (e) thereafter but before the trial starts; (f) in the course of the trial; (g) after judgment. The fact that at some stage the foreign court has ruled in favour of its own jurisdiction is not per se a bar to an anti-suit injunction … But, as each stage is reached more will have been wasted by the abandonment of proceedings which compliance with an anti-suit injunction would bring about. That being so, the longer an action continues without any attempt to restrain it the less likely a court is to grant an injunction and considerations of comity have greater force.
Whilst a desire to avoid offence to a foreign court, or to appear to interfere with it, is no longer as powerful a consideration as it may previously have been, it is not a consideration without relevance. A foreign court may justifiably take objection to an approach under which an injunction, which will (if obeyed) frustrate all that has gone before, may be granted however late an application is made (provided the person enjoined knew from an early stage that objection was taken to the proceedings). Such an objection is not based on the need to avoid offense to individual judges (who are made of sterner stuff) but on the sound basis that to allow such an approach is not a sensible method of conducting curial business." (emphasis added)
"It is clear on authority that an applicant for an anti-suit or anti-enforcement injunction should apply 'promptly and before the foreign proceedings are too far advanced' However Mr Coleman, for Ecobank, submits that delay does not include any period during which the applicant sought to challenge the jurisdiction of a foreign court and the period pending the foreign court's decision on that challenge.
I cannot accept that proposition. Leggatt LJ in The Angelic Grace … described graphically the 'reverse of comity' were the English court 'to adopt the attitude that if a foreign court declines jurisdiction, that would meet with the approval of the English court, whereas if the foreign court assumed jurisdiction, the English court would then consider whether at that stage to intervene by injunction'. As Christopher Clarke J said in [the Transfield case] '… comity, which involves respect for the operation of different legal systems, calls for challenges … to be made promptly in whatever is the appropriate court'. Advent Capital PLC … cited by Mr Coleman in support of his submission, was a decision on its facts and is not authority for a principle in the form of Mr Coleman's proposition. It is of note that Morison J [in that case] included a quotation of Leggatt LJ's reference to the 'reverse of comity'."
"Furthermore, whilst the fact that resources of both the Hong Kong and the English court have been taken up dealing with this matter is regrettable, in the circumstances of this case - where the only matter with which the Hong Kong court has had to deal is the stay application itself and the proceedings have not progressed much further substantively - I do not accept that this should count as a factor against the grant of anti-suit relief if that would otherwise be appropriate." (§ 110)
"(1) There is no rule as to what will constitute excessive delay in absolute terms. The court will need to assess all the facts of the particular case, see Essar Shipping v. Bank of China.
(2) The question of delay and the question of comity are linked. The touchstone is likely to be the extent to which delay in applying for anti-suit relief has materially increased the perceived interference with the process of the foreign court or led to a waste of its time or resources - see Ecobank Transnational v Tanoh …"
(3) When considering whether there has been unacceptable delay a relevant consideration is the time at which the applicant's legal rights had become sufficiently clear to justify applying for anti-suit relief - see, for example, Sana Sabbagh v Khoury [2018 EWHC 1330 …"
"The significance of delay will depend on all the circumstances of a particular case. But some principles have been identified in the case law. First, even where there is a binding exclusive forum clause, the injunction should be sought promptly, and before the foreign proceedings are too far advanced. Second, the questions of delay and comity are linked. The more closely that the foreign court has become involved with the matter due to delay, the greater the interference with foreign court that an injunction is likely to produce, and so the stronger the factors against the grant of an injunction. Third, prejudice to the injunction defendant due to delay is significant, and if delay is not prejudicial it may be given significantly less weight. But delay is not necessarily immaterial in the absence of prejudice to the injunction defendant. The need to avoid delay arises from a variety of reasons including, in addition to prejudice to the injunction defendant, waste of judicial resources, the need for finality, and comity towards the foreign court. Fourth, and perhaps most importantly, the courts will take into account the extent to which the delay was justifiable or excusable in the circumstances; and will weigh delay against the importance of enforcing the forum clause. Even delay that can be criticized will often not be sufficient to justify refusing an injunction and thus permitting a breach of contract to continue. It seems that time taken in challenging the foreign court's jurisdiction does not in itself justify delay in applying for an anti-suit injunction." (§ 8.21)
The facts
i. At no point does MOP suggest that the arbitration agreement is in any way invalid.
ii. Instead, MOP allege that the commencing of arbitral proceedings is a "serious denigration and slight of Nigerian judicial system" and that given the facts of the substantive case, it would be "desirous" for the claim started by MOP in the Nigerian Courts to be heard.
iii. Further, MOP also allege that given the pandemic and resulting lockdowns, it is impracticable for MOP or any of its representatives to attend or participate in any arbitration in London.
Analysis
(1) The Nigerian proceedings were served on SVS a year ago, on 21 January 2020.
(2) On 10 February 2020 SVS sought a stay in favour of London arbitration.
(3) Because of several Covid-related delays, this stay application was not heard until 20 October 2020. Judgment has still not been handed down.
(4) Separately, on 4 June 2020 the Nigerian court granted MOP's application for an ex parte injunction, made on 13 May 2020, to restrain SVS and Sir Jeremy Cooke from proceeding with the arbitration.
(5) On 1 July SVS filed an application to set aside this injunction. On 24 July 2020 the Nigerian Court dismissed SVS's application. However, this hearing was only concerned with whether the application for an injunction amounted to an abuse of process.
(6) A hearing on the substantive issues related to the underlying arbitration agreement was listed for 20 November 2020; that hearing was subsequently adjourned to 2 March 2021 and so has not yet taken place.
(7) It follows that no substantive hearing - on the issue of whether the arbitration agreement debars MOP from an entitlement to injunctive relief - has yet been heard in Nigeria.
"20. Accordingly, it is apparent from the above, that SVS engaged with the Nigerian Proceedings as much as necessary to preserve its position and challenge jurisdiction. Given the advice of ACAS, I and SVS believed that the jurisdiction issue could be dealt with quickly and efficiently in Nigeria. SVS's applications had good prospects of success and getting an order from the Nigerian Court on jurisdiction would be favourable when and if it came to enforcement of an arbitration award in Nigeria.
21. However, due to the COVID-19 pandemic, other unforeseen delays and a particularly surprising judgment of the Nigerian Court, the resolution of the jurisdiction challenge in Nigeria has not been as simple and straightforward as envisaged."
"If there was an injunction in place that would clearly be a relevant matter and the English Court would clearly prefer not to be thought to be aiding a contemnor. But where the obtaining of the injunction was itself a breach of contract, and was seeking to prevent a party exercising its contractual right to bring proceedings in the English Court, the English Court must at least allow the proceedings to be commenced in its Courts. It does not necessarily follow that the English Court should grant an injunction to prevent proceedings in the foreign Court, but again the existence of the foreign injunction should not prevent it doing so, if the very obtaining of that injunction can be seen to have abused the rights of the litigant with the contractual right to come to England…"
"The present case is stronger than the Sabah case, since it contains an exclusive forum clause, whereas the English jurisdiction clause in the Sabah case was a non-exclusive one. In circumstances where the Defendant is bound by an arbitration clause, it is an egregious breach of contract for the Defendant not only to commence proceedings in a non-contractual jurisdiction but to obtain an injunction from that non-contractual forum to prevent the Claimant from itself vindicating the rights granted to it under the arbitration clause. Whilst the Bangladeshi court order is a relevant factor, where, as here, "the obtaining of the injunction can be seen to have abused the contractual rights of the litigant with the contractual right to come to England" to arbitrate, it is not a factor of any great weight."
Mandatory relief?
"The Claimant submits that this is an appropriate case [for a mandatory injunction] because (1) this case concerns a final order and therefore an established breach of contract; (2) it involves an exclusive forum clause; (3) the breach is particularly egregious in that it involves seeking to prevent the Claimant from exercising its contractual rights, and (4) it is necessary for such an order to made because of the interim injunction which is in place. I accept that these reasons justify the making of a mandatory order. In particular, given that the Defendant has already obtained an interim injunction from the Bangladeshi court, for the order to be practically effective it is important that the injunction granted by this Court be in mandatory form."
Declaratory relief?
"In cases such as the present where foreign proceedings have been commenced in breach of an arbitration clause the Courts have on numerous occasions granted declaratory relief in similar terms to those sought in this case, whether or not injunctive relief is also granted – see, for example, Through Transport Mutual Insurance Association v New India Assurance [2004] 2 CLC 1189; AES Ust-Kamenogorsk Hydropower Plant v Ust-Kamenogorsk Hydropower Plant JSC [2010] 1 CLC 519 (Burton J), para 20; and see Raphael, para 15.07. It is clear that the Court does have jurisdiction to grant such declarations, and the question whether they should do is a matter of the Court's discretion - see the decision of the Court of Appeal in AES Ust-Kamenogorsk Hydropower Plant v Ust-Kamenogorsk Hydropower Plant JSC [2012] 1 WLR 920 paras 36, 42, 64-5, 103-105."