Oceanconnect UK Ltd & Anor v Angara Maritime Ltd

A jurisdiction provision in an escrow or security agreement does not, merely because it is widely expressed, govern the forum for the underlying claim. Its scope depends on construction of the agreement as a whole and in context. Where its terms leave the substantive forum open and its purpose is security and release of property, the provision may be confined to disputes under the security agreement.

Absent breach of an English exclusive-jurisdiction clause, foreign litigation may be restrained only if it is vexatious or oppressive. The court must consider the natural forum, justice and comity, with particular caution where England cannot entertain the foreign cause of action. Parallel expense alone does not justify depriving a claimant of the forum in which its distinct claim may succeed.

Oceanconnect supplied bunkers to a vessel under a contract with the time charterer, which did not pay. Following the vessel’s arrest in Amsterdam, Oceanconnect and the owner, Angara, entered an escrow agreement under English law. Clause 7 gave the High Court exclusive jurisdiction over disputes arising under or connected with that agreement.

Angara began English proceedings for a negative declaration. Oceanconnect later arrested the vessel in Louisiana to found an in rem claim based on a United States maritime lien. Simon J held that clause 7 governed the underlying bunkers claim and granted an anti-suit injunction. The appeal concerned whether clause 7 had that scope and, if not, whether the United States proceedings were vexatious or oppressive so as to justify restraint.

1. Appeal allowed unanimously. Gross LJ, with whom Rix LJ and Peter Smith J agreed, discharged the anti-suit injunction and set aside Simon J’s order.

2. Clause 7 did not confer exclusive English jurisdiction over the substantive bunkers claim. Although its language was wide, the escrow agreement had to be construed as a whole and in its commercial context. Clause 3 contemplated a judgment of a competent court or an arbitration award and therefore left the forum for determining the claim open. The agreement’s purpose was to provide security and secure the vessel’s release, not to determine the merits forum. The one-stop adjudication presumption in [2007] UKHL 40 could not override that construction.

3. The United States proceedings were consequently not brought in breach of a jurisdiction clause. In such a case, an anti-suit injunction required the foreign proceedings to be vexatious or oppressive. The court had to consider whether England was the natural forum and whether justice required restraint, while exercising caution out of comity: [2009] EWCA Civ 725. Particular caution was appropriate where the foreign cause of action could not be advanced in England.

4. Under English law, a maritime lien is governed by the lex fori, and there is no maritime lien for necessaries. Oceanconnect’s United States maritime-lien claim therefore had to fail in England but had at least a strong prospect of success in Louisiana. The American proceedings were neither unnecessary parallel litigation nor substantially identical to the English claims. England was not the natural forum for that claim, and justice favoured allowing it to proceed. The late commencement of the American proceedings, the closed pleadings, and costs incurred in the English negative-declaration proceedings did not make restraint proportionate or appropriate.

5. Events after Simon J’s judgment, including the later English decision in Angara’s favour, did not assist Angara. The issue of terms did not arise. Gross LJ added that, had restraint otherwise been justified, terms permitting pursuit of the United States maritime-lien claim in England would have been appropriate.

• Court of Appeal (Civil Division) — allowed Oceanconnect’s appeal, discharged the anti-suit injunction and set aside Simon J’s order: [2010] EWCA Civ 1050.
• High Court (Commercial Court) — Simon J granted Angara an anti-suit injunction requiring Oceanconnect to withdraw the Louisiana proceedings, holding that clause 7 of the escrow agreement conferred exclusive English jurisdiction over the underlying claim.