05 März 2021 Joanne Denton ArbitrationLinks

English anti-suit injunctions: delay not always terminal

In Specialised Vessel Services Ltd v Mop Marine Nigeria Ltd [2021] EWHC 333, the English Commercial Court granted an anti-suit injunction to restrain court proceedings in Nigeria, despite these having been commenced over a year ago. The case illustrates the English court’s willingness to take into account all the circumstances when deciding whether delay is determinative.

The facts

In early January 2020, the claimant shipowner (SVS) sent a letter of claim to the defendant charterer (MOP) regarding damage caused to its ship by a collision. Despite the fact that the charter contained a London seated arbitration clause, in late January 2020, MOP brought claims against SVS in the Nigerian courts. In February 2020, SVS applied for a stay of the Nigerian proceedings in favour of arbitration. However, following several adjournments due to Covid-19, the stay application was not heard until October 2020 and judgment was reserved. In the meantime, in May 2020, SVS had commenced the arbitration but MOP successfully obtained an ex parte injunction from the Nigerian court against both SVS and the arbitrator restraining them from proceeding with the arbitration.  An application by SVS to set aside that injunction was dismissed albeit on technical grounds and without consideration of the relevance of the arbitration agreement. An appeal by SVS, including consideration of that issue, was listed for November 2020 but was adjourned until March 2021 as the judge had commenced his annual vacation.

SVS finally applied to the English courts for an anti-suit injunction in January 2021, a year after the Nigerian proceedings were commenced.

The judgment

Calver J granted the anti-suit injunction. Reviewing the legal principles and authorities on anti-suit injunctions, Calver J held that the English court will ordinarily grant an anti-suit injunction to restrain a breach of an arbitration clause provided the injunction is sought promptly and before the foreign proceedings are too far advanced (The Angelic Grace [1995] 1 Lloyd's Rep 87). This is both in the interests of fairness to the defendant and in the interests of comity to the foreign court. Calver J noted that what will constitute excessive delay will depend upon all the facts of the particular case, but that the longer the delay, the greater the perceived interference with the foreign court process and the greater the waste of the foreign court’s time and resources.

In granting the anti-suit injunction in the case before him, Calver J noted the following:

  • Whilst there was undoubtedly delay in applying for the anti-suit injunction, much of that delay was caused by the Nigerian court process.
  • SVS had acted reasonably in first applying for a stay in the Nigerian courts and appealing the Nigerian injunction as it had received Nigerian legal advice that those applications were likely to be successful and would be resolved quickly and efficiently. That, however, had not happened and once it became clear that the process would be substantially delayed, SVS had sought relief from the English court.
  • The Nigerian proceedings were not advanced and no consideration of the merits had taken place yet. Therefore, the English court was not being asked to second guess any decision of the Nigerian court.
  • No prejudice had been suffered by MOP by the delay, whose costs were incurred as a result of its own breach of the arbitration agreement.
  • MOP’s actions were an egregious breach of the clear arbitration clause, and MOP had at no stage contended that the arbitration clause was invalid.

Comment

Whilst English cases emphasise the need for a prompt application for an anti-suit injunction (such that, as a general rule, it will rarely be advisable for a party to delay), this case demonstrates the willingness of the English courts to take a pragmatic approach to the question of timing. All will, however, depend on the facts. In this case, the court appeared to be prepared to take a lenient approach because the claimant’s course of action had been reasonable, the delays in Nigeria were not foreseen or of its own making and at least some of the delays were attributable to the impact of Covid-19.

Click here for a copy of the judgment.