Louis Dreyfus Commodities Kenya Ltd v Bolster Shipping Company Ltd

An anti-suit injunction requires proof of a clear breach of the relevant arbitration agreement. A party does not breach an arbitration clause merely by joining its contractual counterparty to foreign proceedings to obtain evidence or information, or by suggesting that a third party may have responsibility for the underlying loss. The clause must concern a dispute or difference between the parties arising from their contract. Where the foreign proceedings assert no claim between the contracting parties and seek no determination of their contractual rights, joinder will not, without more, breach the arbitration agreement.

Louis Dreyfus Commodities Kenya Ltd sought a final anti-suit injunction under section 37(1) of the Senior Court Act 1981. It argued that Bolster Shipping Company Ltd had breached an arbitration clause incorporated into a bill of lading by seeking LDCK’s joinder to cargo-damage proceedings before the Mexico City Federal District Court.

The Mexican proceedings were brought by the cargo receiver against various parties. The Owners sought LDCK’s involvement principally in connection with evidence about the cargo’s condition before shipment. The central issue was whether the joinder application asked the Mexican court to determine a dispute or difference between LDCK and the Owners arising from the bill of lading contract.

1. The application for a final anti-suit injunction was dismissed. The touchstone of the jurisdiction under section 37(1) of the Senior Court Act 1981 was the interests of justice, but a prerequisite to relief was proof of a clear breach of the arbitration clause.

2. The bill of lading clause required disputes or differences between LDCK and the Owners arising out of the contract to be referred to arbitration. The Owners’ Mexican application properly amounted to a request that LDCK be joined and potentially bound by the judgment. However, the Owners asserted no claim against LDCK and identified no dispute between them arising from the contract. The Mexican court was therefore not being invited to resolve a dispute between the contracting parties.

3. A party to an arbitration agreement does not undertake that, if sued by a third party, it will refrain from suggesting that the third party should seek recompense from the contractual counterparty. That conduct was not itself a breach.

4. The Owners’ use of the Mexican joinder procedure to obtain documents and information was not, without more, a breach of the arbitration clause. Such a conclusion would require an implied term preventing a party from obtaining evidence through another tribunal. The Owners did not assert a contractual right to LDCK’s cooperation, and the Mexican application contained no such assertion.

5. It was not demonstrated that the Owners’ resort to the established Mexican procedure constituted a breach of the arbitration agreement. The injunction application was accordingly dismissed.