OT Africa Line Ltd v Magic Sportswear Corporation & Ors

An English court will ordinarily enforce an exclusive jurisdiction clause governed by English law unless the party seeking to litigate elsewhere establishes strong reasons for departing from it. A foreign statute that permits proceedings in its own courts does not, without more, displace the parties’ contractual choice under the proper law.

Outside a closed international jurisdictional system, an anti-suit injunction may restrain a contracting party from pursuing foreign proceedings in breach of such a clause. The order regulates that party’s conduct; it does not determine or challenge the foreign court’s jurisdiction. Comity therefore does not ordinarily prevent relief necessary to protect the contractual bargain.

OT Africa Line Ltd, an English shipowner, issued a bill of lading for carriage from New York to Liberia. The bill provided for English law and the exclusive jurisdiction of the High Court in London. Canadian cargo interests and their subrogated insurers commenced proceedings in Canada alleging short delivery, relying on section 46(1) of the Marine Liability Act 2001.

OT Africa began English proceedings and obtained anti-suit relief. Langley J refused to stay the English proceedings, held that the Canadian insurers were properly joined, and continued injunctions restraining the Canadian litigation: [2004] EWHC 2441 (Comm). The cargo interests and insurers appealed. The central issue was whether the Canadian statute and the Canadian courts’ refusal to decline jurisdiction justified a stay or refusal of anti-suit relief.

1. Appeal dismissed unanimously. Lord Justice Longmore, with whom Lord Justice Rix and Lord Justice Laws agreed, upheld Langley J’s order.

2. The bill of lading’s choice of English law meant that English law was the proper law of the contract. Under English private international law, the effect and enforcement of the exclusive jurisdiction clause were therefore governed by English law. The clause gave the parties a prima facie contractual right to litigate only in England. The appellants had not shown strong reasons for a stay.

3. Section 46(1) of the Marine Liability Act 2001 gave the Canadian court jurisdiction and deprived the clause of effect in Canada. That did not require an English court to give the Canadian statute equivalent effect. The Hamburg Rules were not in force in either Canada or England, and Canada and England were not participating in a closed jurisdictional system requiring first seisin to prevail.

4. The insurers, having instigated the Canadian proceedings through subrogation, were necessary or proper parties to the English proceedings. If the cargo interests were restrained from acting inconsistently with the bill of lading, the insurers could likewise be restrained from authorising that contractual breach.

5. An anti-suit injunction was appropriate. A party who pursues proceedings in a non-contractual forum breaches an exclusive jurisdiction clause. Damages will not usually be an adequate remedy, and the injunction addresses the party’s conduct rather than the jurisdiction of the foreign court. Comity did not justify withholding relief: enforcing the parties’ chosen forum was not an attack on Canadian legislation or courts. The injunction also avoided duplicative proceedings and inconsistent outcomes.

• Court of Appeal (Civil Division): Appeal dismissed; Langley J’s order was upheld: [2005] EWCA Civ 710.
• High Court (Commercial Court): Langley J refused a stay, held the insurers properly joined, and continued or granted anti-suit injunctions: [2004] EWHC 2441 (Comm).