Impala Warehousing and Logistics (Shanghai) Co Ltd v Wanxiang Resources (Singapore) PTE Ltd

An exclusive jurisdiction clause incorporated into a warehouse receipt may govern claims by a subsequent holder, even where the relationship is analysed as a bailment on terms rather than a contract. The receipt may constitute the operative contractual or bailment terms, notwithstanding a collateral management agreement between the warehouse group, the financier and the trader. An English court will ordinarily restrain foreign proceedings brought in breach of the clause unless strong reasons justify refusal. Potential non-recognition or non-enforcement of an English judgment in the country where relevant property is situated may constitute such a reason, but the circumstances are likely to be rare and depend on the evidence. A reasonable alternative arbitration offer may be relevant to whether prejudice is sufficiently established.

Impala Shanghai sought final mandatory and prohibitory anti-suit injunctions against Wanxiang in respect of proceedings brought in Shanghai. Wanxiang claimed delivery of aluminium, or damages, relying on warehouse certificates issued by Impala Shanghai and later endorsed to Wanxiang by Rabobank. The Shanghai courts rejected Impala Shanghai’s jurisdiction objection.

The issues were whether Wanxiang’s claim was contractual or non-contractual, whether the exclusive English jurisdiction clause had been incorporated, and whether strong reasons nevertheless justified refusing relief. The court also considered the effect of the collateral management agreement and the non-enforceability in China of an English judgment.

1. Characterisation. Wanxiang’s Shanghai claim was based on the warehouse certificates and was contractual in nature, or constituted a bailment on terms. The certificates were issued by Impala Shanghai and imposed obligations on the issuer towards the holder. The financing arrangement did not break the contractual nexus. Jakob Handte and Réunion Européenne were distinguishable because those cases concerned different relationships, including a sub-buyer’s claim against a manufacturer and a consignee’s claim against a person other than the issuer of the transport document.
2. Applicable terms. The collateral management agreement governed the tripartite relationship while Rabobank’s security was in place. It did not replace the terms of the warehouse certificates as between Impala Shanghai and Wanxiang after the certificates were endorsed and delivered to Wanxiang. The certificates were not mere receipts. They represented the cargo for practical purposes and governed the relationship with the warehouse.
3. Incorporation. The certificates clearly referred to Impala’s terms and conditions, directed the holder to the reverse side, and identified the website where the applicable warehousing terms could be found. This was reasonably sufficient notice. The website terms incorporated an exclusive English jurisdiction clause. The analysis of Teare J in Impala Warehousing and Logistics (Shanghai) Co Ltd v Wanxiang Resources (Singapore) PTE Ltd [2015] EWHC 25 (Comm) was accepted.
4. Anti-suit relief. The principle in Donohue v Armco Inc [2002] 1 Lloyd's Rep. 425 applied equally where the receipt relationship was characterised as a bailment on terms. Effect should ordinarily be given to the clause unless strong reasons existed. The possible inability to obtain recognition or enforcement in China, particularly if the claim concerned property situated there, could amount to a strong reason. On the evidence, however, the claimed prejudice was not sufficient. The goods might already have been shipped to Korea, and Impala Shanghai had made reasonable arbitration proposals.
5. The court therefore held that Impala Shanghai was entitled in principle to final mandatory and prohibitory injunctions. The precise terms, including any conditionality and liberty to apply, were left for submissions at hand-down.