Kallang Shipping SA v Axa Assurances Senegal & Ors

An English court may restrain foreign proceedings where they breach an exclusive arbitration agreement, or where their pursuit is vexatious or oppressive. The court may also grant a personal injunction preventing a party from using foreign security proceedings, or insisting on security terms, in a way that directly or indirectly frustrates the agreed arbitration. The arresting court remains responsible for deciding the nature of security. The English court does not trespass on that jurisdiction when it restrains the conduct of the parties before it. Any further injunction must meet a continuing need and depends on the facts of the individual case.

The claimant owner sought to maintain anti-suit relief obtained from Cooke J after the vessel Kallang was arrested in Dakar in connection with cargo claims. The bills of lading incorporated English law and London arbitration clauses. The defendants applied to set aside the orders, service out and the jurisdiction over them. The claimant argued that the Senegalese security proceedings, refusal to accept a Club letter of undertaking and insistence on Senegalese bank security were intended to force resolution of the cargo dispute in Senegal.

The central issues were whether the defendants had used the Dakar proceedings to frustrate the arbitration agreement, whether implied contractual terms and oppressive conduct justified personal relief, whether Axa Senegal and Axa France were properly joined, and whether any fresh injunction should be imposed.

1. Applicable jurisdiction. Anti-suit relief may be granted where the foreign proceedings breach a contractual jurisdiction or arbitration clause, and where, absent such a legal right, their pursuit is vexatious or oppressive. The principles in Turner v Grovit and Donohue v Armco were applicable.
2. Frustration of arbitration agreement. The English court could not restrain an application to the Dakar court solely to obtain security, and the arresting court was entitled to determine the appropriate security. It could nevertheless restrain the defendants personally from insisting on security which required the cargo dispute to be resolved in Senegal, from submitting that only a Senegalese bank guarantee was acceptable, or from otherwise using the security process to render London arbitration ineffective.
3. Implied terms and oppression. On the good arguable case standard applicable at the interlocutory stage, the conduct of CCMN and Axa Senegal, including rejection of an adequate Club letter and insistence on security potentially unresponsive to a London award, amounted both to breach of implied terms of the arbitration agreement and to oppressive conduct. The approach was consistent with the principle in McKay v Dick that parties must do what is necessary to give effect to their contractual bargain.
4. Existing order. Had the full picture been before Cooke J, including the security character of the Dakar order, he would probably still have granted the injunction. The application to discharge that order was therefore refused. The claimant was entitled, at least on the interlocutory evidence, to restrain reliance on the Dakar order except for securing provision of the acceptable Club letter.
5. Future relief and parties. No new injunction was imposed because CCMN had undertaken to pursue the cargo claim only in London arbitration and there was no continuing need for relief. Axa Senegal was properly joined on the evidence. Axa France was not: its participation and alleged control were insufficient, and service was set aside against it. The court declined to construe the Club undertaking without further argument.