OT Africa Line Ltd. v Magic Sportswear Corporation & Ors

An exclusive English jurisdiction clause should generally be enforced unless strong reasons justify departure. The existence of foreign proceedings, even proceedings enabled by foreign legislation, does not of itself constitute such an exceptional reason. An anti-suit injunction operates personally against the party restrained, although it may indirectly affect foreign proceedings. The injunction may also extend to persons who deliberately assist a breach of an existing injunction. Where a party controls and funds litigation, a third-party costs order may be sought alongside a direct cause of action, and the two bases do not require an election.

The claimant, an English carrier, issued proceedings concerning an alleged short delivery under a bill of lading containing an exclusive English law and jurisdiction clause. The cargo interests had commenced related proceedings in Canada under section 46 of the Canadian Maritime Liability Act 2001. The Canadian court had declined jurisdictional objections and held Canada to be the appropriate forum, with a further appeal pending.

The claimant obtained an anti-suit injunction against the cargo interests and later joined their Canadian insurers. The insurers applied to set aside service, stay the English proceedings and discharge the injunction. The claimant sought an anti-suit injunction against the insurers. The central issue was whether the Canadian legislation and the risk of conflicting jurisdictions supplied exceptional reasons to depart from the parties’ exclusive jurisdiction agreement.

1. Service on the insurers. The claim based on procuring breach of contract could not support service out. Under sections 9(4) and 11 of the Private International Law (Miscellaneous Provisions) Act 1995, Canadian law governed whether the alleged tort occurred. Since Canadian law and the Canadian court’s jurisdiction enabled the insurers properly to bring the proceedings in Canada, it was fanciful to suppose that Canadian law also treated that conduct as tortious. The permission to serve under CPR 6.20(8)(a) was therefore set aside.
2. The alternative basis for service, namely a claim for a third-party costs order, was at least well arguable. CPR 6.20(17) and CPR 48.2 permitted the claimant to advance both a direct claim and a costs-only claim without making an election. The insurers controlled and funded the litigation, providing a good arguable case for a third-party costs order. Service on that basis was maintained.
3. Exclusive jurisdiction clause. Per Langley J, the principles in Donohue v Armco [2002] 1 Lloyd’s Rep 425 required enforcement of the exclusive jurisdiction clause unless strong reasons existed. The Canadian connections did not justify a stay. The place of issue of the bill of lading, payment of freight and OTAL’s Canadian office were insufficient to displace the parties’ chosen forum.
4. Section 46 of the Canadian Maritime Liability Act 2001 was permissive, not mandatory. It did not create an exceptional circumstance requiring the English court to refrain from enforcing the jurisdiction agreement. The risk of conflict between the courts, expense and possible inconsistent outcomes did not alter that conclusion.
5. An anti-suit injunction is directed personally against the party restrained, not against the foreign court. The court had jurisdiction to restrain persons who threatened or intended to assist a breach of an injunction. The insurers were acting directly and deliberately and could properly be restrained.
6. The insurers’ three applications were refused, save that permission under CPR 6.20(8)(a) was set aside. The claimant’s application for an anti-suit injunction under CPR 6.20(3) was granted.