UK: "SEA WELLINGTON" – Anti-Suit Injunction Is Successfully Upheld In The English Court

Last Updated: 1 December 2015
Article by Bethan Bradley

In a recent judgment1, where Clyde & Co acted for the successful Applicant, the Commercial Court (Teare J) considered whether an anti-suit injunction in favour of English proceedings should be continued in circumstances where the Defendant claimed that it would be prejudiced in adducing evidence because of anticipated difficulties in obtaining visas for key witnesses to attend arbitration proceedings in London, and in using video-link evidence.

The Defendant in the Commercial Court proceedings was the receiver of a cargo of sugar carried from Sriracha, Thailand, to Port Sudan aboard the vessel, the "SEA WELLINGTON". The cargo was carried pursuant to a voyage charter on an amended Sugar Charter Party form, which contained a law and arbitration clause providing that it was governed by English law, and that all disputes arising out of, or in connection with, the charterparty should be referred to arbitration in London. The bills of lading for the cargo contained a clause which provided that the law and arbitration clause in the charterparty was incorporated.

Following discharge of the cargo, the Defendant, as holders of the bills of lading, brought a claim in the Sudan General Civil Court seeking damages in respect of cargo damage, alleging that some of the sugar cargo had become contaminated through contact with residues of the vessel's earlier cargo of coal.

The Applicant sought an anti-suit injunction from the Commercial Court to restrain the damages claim brought in Sudan by the Defendant on the basis that the Sudanese claim had been brought in breach of the law and jurisdiction clause incorporated into the bills of lading. In an initial hearing, an anti-suit injunction was granted by Knowles J.

Subsequently, the Defendant issued an application to the Commercial Court seeking to set aside the injunction.  The Defendant submitted that if the claim were to proceed in London rather than Sudan (where it asserted that all material events had taken place), it would suffer real prejudice in adducing evidence. In particular, the Defendant contended that there was a real danger that their key witnesses would be refused visas to travel to London, and they would therefore be unable to give evidence at the arbitration hearing. To support this submission, the Defendant said one of their directors had previously been denied a visa for travel to the UK on two recent occasions. The Defendant suggested that there was reason to suppose that their other witnesses would face  similar difficulties in obtaining visas to attend the hearing.

The Defendant also claimed that there was no real prospect of evidence being able to be given by video-link from Sudan, and witnesses would need to travel for two days to travel to another location to give evidence by video-link. The Defendant also claimed that there was no "equality of arms" if their witnesses were not able to give evidence in person, while the Applicant's witnesses would be able to do so.

In his judgment, Teare J rejected the Defendant's application to set aside the injunction. Teare J stated that it was established law that where there was an arbitration clause, an injunction should be granted unless there were strong reasons for not doing so, applying the case of the "Angelic Grace" [1995]. The judge stated that in relation to the Defendant's argument that there was a real danger that their witnesses would not be able to attend an arbitration hearing, it was unlikely that visas would be refused where the applications were based on a clear need to attend arbitration proceedings in London, and where the Defendant, who had purchased the cargo for USD 18 million, would have sufficient means to finance the trip.

The judge also stated that even if the Defendant's witnesses were not granted visas to attend an arbitration hearing in London, while there might have been the risk of an imbalance between those giving evidence in person and those giving evidence by video link in the early days of the technology when video-link quality was poor, that risk no longer existed. In the circumstances, Teare J concluded that it was appropriate to continue the anti-suit injunction, as the Defendant had not shown a strong reason not to do so.

Beth Bradley, Legal Director, together with Paul Collier, Associate, and Amy Stafford, Legal Executive, acted for the successful applicant


1 Hanaro Shipping Co Ltd (2) HR Wellington SA v Cofftea Trading Co Ltd (aka Cofftea Trading Co) (2015)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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