Niagara Maritime SA v Tianjin Iron & Steel Group Company Ltd

Where a claimant establishes to the requisite high degree of probability that a binding arbitration agreement covers proceedings brought in a foreign court, the court will ordinarily enforce the agreement unless a strong reason justifies refusing relief. Delay is assessed in context. It carries limited weight where it is justified, the foreign proceedings remain at the jurisdiction stage, and the claimant has acted promptly after the arbitration agreement was challenged. The court may grant anti-suit relief where parallel proceedings risk inconsistent judgments, duplicated costs, or submission to the foreign jurisdiction, and damages would be inadequate or practically unobtainable.

The claimant shipowners sought continuation of an interim anti-suit injunction restraining the receivers and their subrogated insurers from pursuing proceedings in the Tianjin Maritime Court concerning cargo carried under a bill of lading.

The bill of lading incorporated the terms of a time charter, including an English law and London arbitration clause. The Chinese court had accepted jurisdiction, subject to appeal, while a London arbitral tribunal had ruled that it possessed jurisdiction. The central issues were whether the English court had jurisdiction to restrain both defendants and whether delay or other circumstances constituted a strong reason not to continue the injunction.

1. Jurisdiction. The court had jurisdiction under section 37(1) of the Senior Courts Act 1981. It also had jurisdiction under section 44 of the Arbitration Act 1996 in this urgent case, including against the receivers. The court was satisfied that section 37(1) independently supported relief against both the receivers and PICC.
2. Arbitration agreement. The owners had established to the requisite high degree of probability that the bill of lading incorporated a binding arbitration agreement. The arbitral tribunal had reached that conclusion after considering the respondents’ objections, applying English conflicts rules and the authorities on incorporation of arbitration clauses. The Chinese proceedings appeared to arise under the bill of lading and therefore fell within the arbitration clause.
3. Discretion. The governing principle was that the court would enforce an arbitration agreement unless a strong reason to the contrary was shown. Delay did not amount to such a reason. The relevant considerations included the extent to which the foreign proceedings had progressed, whether the delay was justified, and whether the claimant had waited for a foreign jurisdictional challenge rather than allowing the merits to unfold. Here, the owners had acted appropriately by first using the jurisdiction procedure under section 30 of the Arbitration Act 1996, and the Chinese proceedings had not progressed beyond jurisdiction.
4. Continuation of the injunction was appropriate. Refusal of relief could produce parallel proceedings, inconsistent judgments and duplicated costs. It could also force the owners either to defend the Chinese merits and risk submission to that jurisdiction or leave the proceedings undefended. Damages were potentially inadequate and might be practically unobtainable. The order made by Burton J was therefore continued.

This was a first-instance application for continuation of an interim order made by Burton J on 21 July 2011. No appellate decision is stated.