Congentra Ag v Sixteenthirteen Marine Sa [2008] Ewhc 1615 (Comm)

This case arose out of dispute between the owners and

charterers of a vessel called "Nicholas M". The

vessel was under a time charter providing for London

arbitration and English law.

Briefly, the cargo of soyabean meal that was shipped from

Argentina to St. Petersburg under a charter of the vessel was

found to be wet and mouldy upon discharge at St. Petersburg.

The owners and charterers disagreed as to the cause of the

damage and liability for it.

After discharge was completed, the vessel was detained at St

Petersburg for maintenance and repairs required by the

vessel's classification society, Bureau Veritas, who had

attended on board during discharge. There was also a further

reason for the detention: Port State Control had also been on

board and allegedly found a number of deficiencies including a

hole in the bilge tank and damage to the steelwork. By the time

the vessel was released, its next fixture had been

cancelled.

In the subsequent arbitration proceedings started in London,

owners contended that the charterers and consignees had

deliberately sought to delay the vessel's discharge and

departure from St. Petersburg by persuading the Port State

Control to go on board and detain the vessel, further that they

had done so in bad faith, resulting in a breach of the time

charter and wrongful interference with the owners'

business.

As a result, owners sought and obtained an attachment order

against charterers in New York. There were therefore two

parallel proceedings: London arbitration and New York Court

proceedings relating to the attachment.

Charterers challenged the New York attachment on the grounds

that it was wrongful. Inter alia, they argued that the

attachment was obtained in bad faith and that the subsequent

fixture would have been cancelled in any event because the

repairs ordered by BV would not have been completed in

time.

At the same time, the charterers applied to the English

court on an urgent ex parte basis for a freezing injunction.

[The injunction was sought to freeze assets belonging to the

Owner so as to satisfy any award made by the London tribunal

for wrongful attachment of Charterers' funds in New York].

The injunction was granted on the grounds of risk of

dissipation of assets by the owners. This risk was considered

sufficient to justify the court in intervening to grant a

freezing injunction pursuant to section 44(3) Arbitration Act

1996 which allows either party to an arbitration in a case of

urgency to apply to...