In the “ANNA BO”, where Clyde & Co acted for the successful claimant, the Court found that an arbitration clause in a time charterparty had been validly incorporated by reference in a bill of lading. The Court also clarified the nature of its power grant an injunction restraining foreign proceedings in breach of an arbitration agreement.
Facts and Claims
The claimant was the owner of the “ANNA BO”, which had required salvage services after its cargo of nickel ore liquefied during a voyage from Indonesia to China. The defendant was the notify party identified in the bill of lading.
The bill of lading stated on its face “Freight payable as per CHARTER-PARTY dated 11/04/13” and stated on its reverse “All terms and conditions, liberties and exceptions of the Charter Party, dated as overleaf, including the Law and Arbitration Clause, are herewith incorporated.”
The charterparty referred to on the face of the bill of lading was a time charterparty entered into between the claimant and charterers, and contained an arbitration clause stating that any dispute arising under it or any bill of lading issued under it was to be resolved by London arbitration with English law to apply.
The claimant commenced English arbitration proceedings against the defendant under the bill of lading, seeking an indemnity due to the loading of a dangerous cargo. The defendant commenced Chinese court proceedings seeking to recover expenses incurred in transhipping the cargo as well as the defendant’s proportion of salvage and general average contributions. The claimant therefore sought an anti-suit injunction from the English High Court restraining the defendant from pursuing proceedings other than by arbitration in London.
The defendant opposed the anti-suit injunction on three grounds, namely that:
- It was unclear whether the time charterparty and its arbitration clause had been incorporated into the bill of lading as it was arguable that the charterparty referred to on the face of the bill of lading was not the time charterparty but rather a voyage charterparty dated 28 November 2013.
- The Court’s power to grant the anti-suit injunction was subject to the requirements of s.44 of the Arbitration Act 1996, which governed situations such as this where arbitration had been commenced or was being contemplated. These requirements included a requirement as to urgency, which was not satisfied in this instance.
- There were other strong reasons not to grant the injunction; principally that it could prejudice the defendant’s claim under its insurance policy by preventing the defendant from taking steps to mitigate its loss through bringing Chinese proceedings against the claimant.
The Court found that an anti-suit injunction was appropriate in the circumstances, holding the following:
- The bill of lading effectively incorporated the time charterparty of 11 April 2013 and its arbitration clause. Mr Justice Philips noted that where reference to a charterparty in a bill of lading was left blank it could be inferred that a voyage charterparty was intended to be incorporated (“SLS EVEREST” considered); however, this was not such a case as the bill of lading made “clear and unambiguous” reference to the 11 April 2013 charterparty on its face. As such, even the reference in the bill of lading to freight (as would be payable under a voyage charterparty) did not prevent incorporation of the time charterparty.
- An anti-suit injunction is not for the purposes of, or in relation to, arbitral proceedings but rather for the purposes of enforcing the negative promise in the arbitration agreement not to bring foreign proceedings (AES Ust-Kamenogorsk followed). As such, the Court’s power to grant an anti-suit injunction came from s.37 Senior Courts Act 1918 and not s.44 of the 1996 Act, whose requirements did not therefore have to be satisfied for the court to make the injunction.
- Although the Court in any case disagreed that granting the injunction would necessarily prejudice the defendant’s insurance claim, it also noted that the defendant’s contractual rights against third parties such as its insurers were not something for which the claimant could be responsible given that they were not relevant to the relationship between the defendant and the claimant.
Whilst the Court’s decision to grant the anti-suit injunction may not have been surprising in the circumstances, its reasoning is relevant, importantly confirming previous case law stating that there is no bar to a time charterparty being incorporated in a bill of lading .
The Court has also helpfully confirmed that its power to grant an anti-suit injunction is not related to arbitration proceedings and that a party’s contractual relations with third parties should have no bearing on the decision to grant such an injunction or not.