Transfield Shipping Inc v Chiping Xinfa Huayu Alumina Co Ltd

An interlocutory anti-suit injunction should generally be granted only where the applicant establishes a high degree of probability that a binding agreement requires the dispute to be determined in the chosen forum. A merely good arguable or strongly arguable case is insufficient where the injunction would effectively determine the issue before the foreign proceedings or arbitration are completed.

An application must also be made promptly after the alleged breach is known. Delay, particularly until the foreign proceedings are imminent, may independently justify refusal. Comity requires parties seeking to enforce jurisdiction or arbitration agreements to invoke the appropriate court’s assistance without undue delay.

Transfield sought an anti-suit injunction restraining Chiping from continuing proceedings in the Qingdao Maritime Court. Transfield contended that the parties had concluded a charterparty containing a London arbitration clause and that the Chinese proceedings breached that agreement.

Chiping disputed both the existence of a concluded contract and the arbitration agreement. The Chinese courts had rejected Transfield’s jurisdictional challenge, and a trial in China was due to begin shortly before the London arbitral tribunal was scheduled to determine jurisdiction. The central issues were whether Transfield had shown the necessary probability of a binding arbitration agreement and whether its application had been made sufficiently promptly.

1. The application was refused. The court accepted that an anti-suit injunction could be granted where parties had agreed to arbitrate in London, but the interlocutory threshold depended on the likely practical effect of the order.
2. Where an injunction would probably have a final effect by preventing a party from pursuing its foreign claim except before the arbitral tribunal, the applicant had to show a high degree of probability that a binding agreement containing the arbitration clause existed and that the applicant was entitled as of right to relief. A good arguable or strongly arguable case was insufficient.
3. Transfield had a good arguable case, but not a high probability of proving the agreement. The signed recap contained the maritime expression subject to details, ordinarily indicating that no binding contract exists until further details are agreed. The evidence did not clearly establish that the phrase was included by mistake or that the parties had agreed all outstanding terms.
4. The dispute over London or Hong Kong arbitration remained material. Transfield’s insistence on London was capable of amounting to a counteroffer, and Chiping’s silence did not generally constitute acceptance. The evidence concerning the relevant telephone conversation and the authority of Chiping’s representative was also unresolved.
5. The application was independently too late. Transfield had known for many months that Chiping denied the arbitration agreement and was pursuing proceedings in China. Its decision to pursue the Chinese appeal without promptly seeking relief in England created the risk that discretionary relief would be lost. The imminence of the Chinese trial did not cure that delay.
6. Respect for other legal systems did not justify postponing an application. Rather, comity required a party seeking to enforce an English jurisdiction or arbitration agreement to act promptly in the appropriate court. The anti-suit injunction was therefore declined on both the merits and delay.

The judgment records that the Qingdao Maritime Court rejected Transfield’s jurisdictional objection on 3 March 2009. The Shandong Higher People’s Court dismissed Transfield’s appeal on 11 November 2009. This High Court application for an anti-suit injunction was then refused.