In this case, the High Court was required to consider Article 25 of the Recast Brussels Regulations (Brussels Recast) and in particular, the formal requirements to establish consent to an exclusive jurisdiction clause (EJC). Hancock J (the Judge), concluded that a clear consensus in writing was required when the contract between the parties had been concluded orally.

Factual background

Pan Ocean Co Ltd (Pan Ocean) was the demise charterer of the “GRAND ACE 12” (the Vessel) under a charterparty containing an EJC in favour of the English courts. The Vessel was sub-chartered to Clearlake Shipping Pte Ltd (Clearlake).

China-Base Group Co Ltd (China-Base) was the buyer in a sale contract for the purchase of light cycle oil. The seller was purportedly a company associated with Clearlake.

The Vessel loaded about 36,360 mt of light cycle oil and gas oil at Zhoushan and Taichung. Pan Ocean issued accurate bills of lading. The Vessel then proceeded to Subic Bay where she loaded a further 50 mt of gasoil, for which no separate bill of lading was issued. Switch bills of lading falsely naming the load port for the entire cargo as Subic Bay, Philippines, and misdescribing the entire cargo as light cycle oil, were issued in accordance with Clearlake’s instructions by, it is said, an agent of Pan Ocean.

The cargo was subsequently discharged in China. China-Base accepted the cargo, but did not present any bill of lading or letter of indemnity. China-Base then sought the release of similarly misdescribed cargo that had been impounded by the Chinese authorities because of said misdescription. China-Base, having paid all the relevant fees and taxes to secure the cargo’s release, then brought a claim against Pan Ocean for loss and damage suffered as a result of, inter alia, false statements in the switch bills.

China-Base issued a writ in rem in Singapore on 13 April 2017. The statement of claim was produced on 14 July 2017. The Vessel was arrested in Singapore on 28 February 2018 and released against a club letter of undertaking on 3 March 2018. Pan Ocean applied to have the writ set aside and claimed the arrest was wrongful.

Pan Ocean then issued High Court proceedings in England claiming an anti-suit injunction (ASI) restraining China-Base from continuing the proceedings in Singapore. China-Base claimed that the English Court lacked jurisdiction to make this order, as the Singapore courts were already seized.

The Court was required to consider whether:

  1. there was a binding EJC; and
  2. if so, should an ASI be granted?

Legal issues

1. Was there a binding EJC?

There were three issues for the Judge to consider:

  1. Was there a contract at all between Pan Ocean and China-Base
  2. did that contract contain an EJC in favour of the English courts
  3. did the EJC comply with Article 25 of Brussels Recast (which was applicable irrespective of the parties’ domicile)?

Given the likely impact that consideration of (a) and (b) would have had ongoing proceedings in Singapore, the Judge decided to consider these only if he was satisfied that the English Court had jurisdiction.

Therefore, the main issue was whether there was an Article 25 compliant EJC.

Under Article 25, an EJC must be:

  1. in writing or evidenced in writing
  2. in a form which accords with practices which the parties have established between themselves
  3. in international trade or commerce, in a form which accords with a usage of which the parties are, or ought to have been, aware, and which in such trade or commerce is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade or commerce concerned

The Judge considered the relevant authorities, giving particular emphasis to the judgment in the case of Galeries Segoura -v- Rahim Bonakdarian [1976]. This was a case in which the European Court of Justice (ECJ) held that clearly and precisely demonstrated consent was required for an EJC to exist between the parties. The ECJ further stated that the purpose of the Article 25 (then Article 17) formalities was to uncontrovertibly establish such a consensus.

The Judge accepted this reasoning and concluded that:

  1. Under Article 25 clearly and precisely demonstrated consent is required. This consent is not established purely by the fact that the EJC itself is in writing. Further positive consensus may need to be evidenced in some circumstances
  2. Although there is some flexibility in the application of Article 25, in the absence of a written agreement there must at least be written confirmation that the parties consent to the EJC
  3. None of the authorities considered directed that agreement to an EJC could be established solely from the conduct of the parties for the purposes of compliance with Article 25

Therefore, the Judge concluded that even on the assumption that there was a contract between the parties, there was not an Article 25-compliant and binding EJC.

2. If there was a binding EJC, should an ASI be granted?

Although the Judge had already made findings to the contrary, he went on to consider whether, if there had been a binding EJC, an ASI should be granted.

The first question was whether the claimant had submitted to the jurisdiction of the Singapore courts. Under the authority of Astro Dinamico [1984] 1 WLR 438., Pan Ocean would be deemed to have submitted to the jurisdiction of a particular court if he had taken actions that went beyond the taking of purely defensive steps and positively invoked the jurisdiction of that court. China-Base argued that Pan Ocean had done so by bringing a positive claim for wrongful arrest and associated damages.

Pan Ocean denied that the claim for wrongful arrest was a claim for damages. The application was for an order that the arrest was wrongful and did not include a claim for damages.

Whilst the Judge struggled with the claimant’s argument as a matter of principle, he stressed that the context of the case was key. In his view, the lack of reference to damages in either the claimant’s affidavits supporting the application or the Singaporean court’s judgment, demonstrated that the sole purpose of the claimant’s application was for the arrest order to be set aside. He consequently held that the claimant had not submitted to the jurisdiction of the courts of Singapore.

The other substantive question for the Judge to consider was whether the claimant was precluded from obtaining an ASI on the basis of delay. The Judge found that:

  1. The Vessel was arrested on 28 February 2018 – the clock for the ASI started to run from this date
  2. Rather than taking steps to obtain an ASI, the claimant took deliberate steps to set aside the arrest instead
  3. The claimant continued to challenge jurisdiction, which led to two hearings (one at first instance and one appeal)
  4. It was only shortly before the appeal that the claimant made its ASI application

In light of the above, the Judge held that the application had not been brought either promptly or before the foreign proceedings were too far advanced. Therefore, he concluded that even if there had been a binding EJC, he would have declined to grant an ASI.

Accordingly, the claimant’s application was dismissed.

This case demonstrates that unequivocal and clear language is required to demonstrate that the parties agree to an exclusive jurisdiction clause. In certain circumstances, even a written exclusive jurisdiction clause will have to be confirmed by the parties in writing in order to comply with Article 25. It also reinforces the importance of not delaying if a party intends to make an ASI application.