Anti-Suit Injunctions Available To Restrain Non-EU Proceedings

Niagara Maritime SA v. Tianjin Iron & Steel Group Company Limited (MV Good Luck) [2011] EWHC 3035 (Comm)

The English Commercial Court has granted an anti-suit injunction to restrain proceedings commenced by cargo interests in China in breach of a London arbitration clause incorporated into a bill of lading. This decision is a welcome reminder that, although anti-suit injunctions are no longer available to restrain proceedings commenced in other European Union member states contrary to an arbitration jurisdiction clause (as decided by the ECJ in the Front Comor in 2009), they are still available where those proceedings have been commenced outside the EU.

The Niagara decision provides a useful summary of the circumstances in which the English courts are prepared to exercise their discretion to grant anti-suit injunctions.

The background facts

This case arose when the unfortunately-named MV Good Luck collided with seven vessels in succession and then grounded off Singapore while carrying a cargo of iron ore for delivery in China. General Average was declared and a Lloyd's Open Form ("LOF") was signed. Vessel and cargo were salved and the cargo was eventually delivered in October 2009. Cargo interests were required to put up salvage security. In March 2010, a general average adjustment was published which assessed cargo interests' contribution at about US$240,000. This was not paid.

The cargo was carried under a bill of lading in the Congen Bill form dated 7 July 2009, which contained a clause expressly incorporating an arbitration clause providing for English law and LMAA arbitration.

Despite this, cargo interests (the receivers and their subrogated cargo insurers) commenced proceedings in the Tianjin Maritime Court in China in October 2010, seeking an indemnity in respect of their salvage contribution. In December 2010, the owners challenged the jurisdiction of the Chinese court on the grounds that the claim was plainly a claim "relating to or arising out of or in connection with" the bill of lading and thus within the scope of the arbitration clause incorporated into the bill of lading. In June 2011, the Tianjin Maritime Court rejected the owners' objection to jurisdiction, stating that the arbitration clause had not been effectively incorporated. The owners appealed that decision and at the time of the owners' application to the Commercial Court for an anti-suit injunction, the outcome of that appeal was pending.

In the meantime, the owners...