COMPANIA SUD AMERICANA v HIN-PRO INTERNATIONAL LOGISTICS LIMITED

An agreement that claims shall be subject to English law and the jurisdiction of the English High Court will generally be construed as an exclusive jurisdiction clause, unless the contract provides otherwise. Proceedings brought abroad in breach of that clause justify an anti-suit injunction unless there are strong reasons to refuse relief. A contractual time bar does not ordinarily constitute such a reason where the defendant knowingly chose to sue abroad. Damages for breach are assessed by comparing the claimant’s position with the position in which no foreign proceedings were brought. The court need not conduct a hypothetical assessment of liability in proceedings that might have been brought in the contractual forum.

The claimant sought a permanent anti-suit injunction, declarations and damages after the defendant commenced numerous proceedings in China concerning alleged misdelivery of cargo carried under bills of lading. The bills provided that claims and disputes were subject to English law and the jurisdiction of the English High Court. The defendant ignored earlier English proceedings and injunctions concerning similar Chinese claims.

The central issues were whether clause 23 conferred exclusive English jurisdiction, whether the Chinese proceedings breached that clause, whether the expiry of the contractual time bar justified refusing an injunction, and how damages should be assessed.

1. Construction of clause 23. The first sentence, requiring claims and disputes to be subject to English law and the jurisdiction of the English High Court, was mandatory and exclusive. The words “If, notwithstanding the foregoing” in the later sentences created a fallback provision for cases where the English jurisdiction clause was rendered ineffective by mandatory foreign law, including the Hamburg Rules. They did not make the English jurisdiction non-exclusive.
2. The decision in Import Export Metro Limited v CSAV [2003] 1 Ll R 405 did not prevent that conclusion. In that case the parties and the court had proceeded without argument on the basis that the clause was non-exclusive.
3. Under The Angelic Grace [1995] 1 Ll R 87, an anti-suit injunction should be granted for breach of an exclusive jurisdiction clause unless strong reasons exist to refuse it. No such reason existed. The defendant had knowingly chosen the Chinese forum despite the claimant’s reliance on the clause and the English court’s earlier orders. The expiry of the one-year time bar therefore did not justify refusing relief.
4. The Chinese proceedings had been commenced in clear breach of clause 23. The court was satisfied that there was a good arguable case that fraudulent claims were being pursued in China and that the foreign proceedings placed unfair pressure on the claimant. A permanent mandatory anti-suit injunction was therefore granted.
5. Costs and sums paid or payable under judgments obtained in the foreign proceedings were recoverable as damages for breach of contract. Following the negative promise identified in Hydropower v AES [2013] 2 Ll R 281, the relevant comparison was with a situation in which no proceedings had been brought. The court would not assess hypothetical liability in proceedings that might have been brought in England. The claimant was entitled to damages equivalent to the sums awarded in China, and the worldwide freezing order was continued.

First instance decision. No appellate history is stated in the judgment.