Anti-Suit Injunctions - a question of time

1. On 27 February 2024, Mrs Justice Dias handed down judgment (unpublished) in relation to an anti-suit injunction.

2. Our Fanos Theophani (Partner), Cate Baddeley (Partner) and Emilie Bird (Trainee) of Preston Turnbull LLP represented the Claimant.

3. The decision will be of interest to shipping practitioners, in relation to proceedings commenced outside the scope of an agreed jurisdiction clause.

Facts

4. The hearing proceeded on agreed or undisputed facts:

1. The Claimant was the owner and the Defendant the head charterer of the Vessel.
2. The Vessel was chartered for a one-time charter trip for the carriage of cargo from offshore Lagos to Oghara, Nigeria (the “Charterparty”).
3. After the Vessel was redelivered to the Claimant in Nigeria, the Claimant presented invoices to the Defendant in respect of hire due pursuant to the Charterparty.
4. The Defendant refused to pay any hire due for the outstanding period, and instead, claimed that the Claimant acted in breach of the Charterparty for delaying loading operations.
5. There was, therefore, an ongoing dispute between the parties.
6. On or about 21 August 2023 the Defendant commenced an admiralty action in rem before the Federal High Court of Nigeria in the Lagos Division Holden at Lagos (the “Nigerian Proceedings”).
7. In the Nigerian Proceedings, the Defendant pursued a substantive claim for damages in excess of USD 100,000 for alleged breach of the Charterparty by the Claimant.
8. The Claimant first became aware of the Nigerian Proceedings on 6 November 2023, upon service of a Writ of Summons on the Master of the Vessel.
9. On 5 December 2023, the Claimant entered a ‘conditional appearance’ before the Nigerian Courts (without submitting to the jurisdiction) to challenge the courts’ jurisdiction and ensure that a default judgment could not be entered against the Claimant.
10. On 2 January 2024, the Claimant wrote to the Defendant to
    1. explain that the Nigerian Proceedings had been commenced in breach of the jurisdiction clause in the Charterparty; and
    2. request that the Defendant confirm their intentions for pursuing the claim in the Nigerian courts – to either obtain security for the claim or pursue the substantive claim.
11. On 15 January 2024, the Defendant wrote to the Claimant to confirm their view that, as performance of the Charterparty occurred in Nigeria, the Claimant submitted to the exclusive jurisdiction of Nigeria.
12. On 20 February 2024, the Claimant made an application to the English High Court for an anti-suit injunction against the Nigerian Proceedings.

The Charterparty

5. By the Charterparty, the Defendant agreed (in relevant part) to:

“ANY DISPUTE ARISING FROM OR IN RELATION TO OR IN CONNECTION WITH THE AKING/PERFORMANCE/TERMINATION OF THIS CHARTER PARTY SHALL BE DEALT IN ACCORDANCE WITH ENGLISH LAW AND UNDER THE JURISDICTION OF THE HIGH COURT OF JUSTICE IN LONDON. IN THE EVENT THAT THE TOTAL AMOUNT IN DISPUTE BEWEEN THE PARTIES, EXCLUDING INTEREST AND COSTS, DOES NOT EXCEED USD 100,000.00 THEN THE DISPUTE BE REFERRED TO LONDON ARBITRATION PURSUANT TO THE RULES OF THE LMAA SMALL CLAIMS PROCEDURE, ENGLISH LAW TO APPLY”.

The Applications

6. The Application before the Court sought

1. a mandatory injunction requiring the Defendant to discontinue and/or withdraw the Nigerian Proceedings pursuant to s.37(1) of the Senior Courts Act 1981;
2. a prohibitory injunction restraining the Defendant from pursuing any claim or application in any proceedings other than before the English High Court of Justice;
3. an indemnity from the Defendant against any damages or costs or expenses that might be awarded against the Claimant and/or the Vessel and/or the Master of the Vessel in the Nigerian Proceedings; and
4. reasonable loss and expenses incurred by the Claimant as a result of the Defendant’s breach of the Jurisdiction Agreement.

The Claimant’s Position

7. The Claimant brought the Application, arguing:

1. On the proper construction of the Charterparty, the parties agreed to confer exclusive jurisdiction on the English High Court to determine any dispute arising under or in relation to the Charterparty (where the total amount in dispute exceeded USD 100,000) (the “Jurisdiction Agreement”).
2. Accordingly, the Defendant undertook to advance any claims within the scope of the Jurisdiction Agreement before the English High Court, and the Defendant further undertook not to seek substantive relief in respect of such claims in any other forum.
3. In commencing and pursuing the Nigerian Proceedings, the Defendant has breached (and was in continuing breach of) the Jurisdiction Agreement.
4. The Claimant issued anti-suit proceedings and sought declaratory relief promptly.

The Defendant’s position

8. The Defendant made clear in the Nigerian Proceedings that, as performance of the Charterparty occurred in Nigeria, the Claimant submitted to the exclusive jurisdiction of Nigeria.

9. The Defendant, however, failed to acknowledge or attend the hearing.

Decision

The court will hold the parties to their agreements

10. The court’s primary concern is to uphold the parties’ bargain, absent strong reasons to the contrary.

11. The Judge rejected the submission that Nigeria had jurisdiction of the claim pursuant to the Nigerian Admiralty Jurisdiction Act. The parties contracted to rely on the exclusive jurisdiction of the English Courts. It is therefore for the English Court to determine its own jurisdiction, regardless of whether the Nigerian Court also believes it is entitled.

12. The fact that the Charterparty obligations were performed in Nigeria and/or documents relating to the claim are held in the Nigerian jurisdiction are not strong enough forum considerations to outweigh the Jurisdiction Agreement.

Timing and delay

13. The Judge noted that a Claimant is required to issue an anti-suit injunction application promptly upon service of proceedings outside of the contracted jurisdiction.

14. The issue of whether an application is issued “promptly” has to be reviewed in the context of the foreign proceedings. In particular, the Judge considered how far the Nigerian Proceedings had progressed since service of the Writ of Summons on the Claimant on 6 November 2023.

15. The Judge noted that:

1. The Claimant first challenged the Defendant’s Writ of Summons on 5 December 2023 by entering a conditional appearance in the Nigerian Court.
2. The Claimant was unclear as to whether the Defendant had issued the Nigerian Proceedings to (a) seek security for their claim or (b) have the substantive claim be heard in the Nigerian jurisdiction.
3. The Claimant knew from 15 January 2024 that the Defendant intended for the substantive claim to be heard in the jurisdiction of Nigeria.

16. The Judge decided on the facts of this case:

1. The Nigerian Court had adjourned the Nigerian Proceedings until 28 February 2024, and so nothing material had happened in the Nigerian Proceedings between 6 November 2023 and 27 February 2024;
2. It is not apparent that any prejudice had been caused by the Claimant’s delay in bringing the application;
3. It is the Defendant themselves who acted in breach of the Jurisdiction Agreement.

17. As such, the timing of the Claimant’s application did not go against the grant of an injunction.

18. The Judge therefore granted the application in the Claimant’s favour.

Conclusion

19. The decision serves as a useful reminder that

1. absent strong reasons to the contrary, an English court will look to hold the parties to an English law jurisdiction agreement; and
2. an application for an anti-suit injunction should be made promptly upon service of proceedings in an alternative jurisdiction.