SCHIFFAHRTSGESELLSCHAFT DETLEV VON APPEN G.m.b.H. v. VOEST ALPINE INTERTRADING G.m.b.H. SAME v. WIENER ALLIANZ VERSICHERUNGS A.G. AND VOEST ALPINE INTERTRADING G.m.b.H.

An assignee or subrogated insurer who seeks to enforce contractual rights must do so subject to the contractual arbitration agreement governing those rights. It cannot litigate the assigned claim abroad while disregarding an agreement requiring London arbitration.

An anti-suit injunction may restrain that conduct as equitable protection of the debtor's contractual entitlement. It does not depend on a novation or on the assignee having assumed general contractual liabilities. A claim to enforce that entitlement falls within the service-out jurisdiction for proceedings to enforce an English-law contract. Delay remains relevant, but does not necessarily defeat relief where there is no submission, waiver or material prejudice.

The time charterers and voyage charterers were parties to an English-law voyage charter containing a London arbitration clause. Following cargo damage and abandonment of the voyage, the insurer indemnified the voyage charterers and commenced proceedings in Brazil against the time charterers.

The time charterers obtained leave to serve proceedings out of the jurisdiction and an injunction restraining the insurer from continuing the Brazilian claim. Morison J upheld service and granted the injunction in modified terms, but set aside service on the voyage charterers: [1997] 1 Lloyds 179.

The insurer appealed against the service-out order and injunction. The time charterers cross-appealed on costs. The central issues were whether the Brazilian claim derived from the voyage charterers' rights, whether the insurer was bound by the arbitration clause, and whether delay or the form of the writ prevented relief.

1. Appeals dismissed unanimously. Lord Justice Hobhouse gave the leading judgment. Lord Justice Morritt agreed. The Vice-Chancellor agreed with the conclusions on every issue. The orders of Morison J were upheld.

2. The Brazilian action asserted rights acquired from the voyage charterers, not independent rights acquired from the Thai receivers. Those contractual rights arose under the voyage charter and were subject to its London arbitration agreement.

3. An insurer acquiring a contractual claim by subrogation or assignment takes it subject to the agreed method of enforcement. It may obtain the benefit of the claim, but cannot enforce it while rejecting the burden of arbitration. The court applied the reasoning in The Padre Island (No. 2) [1990] 2 Lloyds 191 and held that an injunction could protect the time charterers' equitable entitlement. The remedy did not require a novation or an ordinary cause of action for damages against the insurer.

4. The claim fell within RSC Order 11 rule 1(1)(d). The relevant questions were whether there was a contract and whether the claimant sought to enforce it against the defendant. An assignee enforcing rights under a contract, and a debtor seeking to require the assignee to observe an arbitration clause, could rely on that contract for service-out purposes. The restrictive observation in Finnish Marine Insurance v Protective National Insurance [1991] QB 1078 was confined to its context.

5. Delay did not bar relief. The Commercial Judge was entitled to find no submission, waiver or acquiescence, and to treat the undertaking concerning Brazilian costs as sufficient protection. The original writ, though obscure, pleaded the primary facts supporting the injunction and did not introduce a new cause of action contrary to the service-out authorities.

6. The cross-appeal on costs failed. Morison J was entitled to make no order as to costs below because of the time charterers' pleading and procedural changes.

• Court of Appeal (Civil Division): The insurer's appeals were dismissed and the time charterers' cross-appeal on costs was dismissed. The court upheld the injunction restraining the Brazilian proceedings and the order permitting service out.
• Commercial Court (Morison J): The court upheld leave to serve the insurer out of the jurisdiction and granted a modified injunction. It set aside leave as against the voyage charterers and made no order as to costs: [1997] 1 Lloyds 179.