Magellan Spirit ApS v Vitol SA "Magellan Spirit"

An agreement conferring jurisdiction under Article 23 of the Lugano Convention must be clearly and precisely demonstrated. The party asserting it must have the better argument, but need not satisfy any heightened standard suggested by the phrase “much the better argument”.

An undisclosed agency depends on objectively manifested consent between principal and agent. Where a named legal person contracts without indicating an agency, convincing proof is required to displace the presumption that it contracted as principal. Rectification requires an objectively expressed prior consensus; it cannot implement terms which the parties would only hypothetically have agreed.

An anti-suit injunction enforcing a jurisdiction clause requires a contractual right. It must also be sought promptly. Delay alone may justify refusal, independently of progress in the foreign proceedings.

The owner of the vessel Magellan Spirit sought an anti-suit injunction restraining Vitol SA from pursuing a Nigerian cargo claim arising from the vessel’s grounding. Vitol SA cross-applied for a declaration that the English court lacked jurisdiction.

The vessel had been time-chartered to another Vitol Group company, Mansel Limited. That charter contained an exclusive English jurisdiction clause. The owner argued that Vitol SA was Mansel’s undisclosed principal, that the cargo bill of lading should be rectified to incorporate the charter’s jurisdiction clause, or that the parties had made a freestanding jurisdiction agreement.

The central questions were whether any agreement satisfying Article 23 of the Lugano Convention conferred jurisdiction on the English court, whether Vitol SA was contractually obliged not to sue in Nigeria, and whether delay independently precluded injunctive relief.

1. Application refused and declaration granted. The English court lacked jurisdiction to try the owner’s claim, and the owner had no contractual right to restrain Vitol SA’s Nigerian proceedings.
2. Article 23 of the Lugano Convention required the jurisdiction agreement to be clearly and precisely demonstrated. At the preliminary stage, the asserting party had to show that it had the better argument. Following JSC Aeroflot-Russian Airlines v Berezovsky [2013] EWCA Civ 784, the word “much” in the expression “much the better argument” added nothing and risked imposing too high a standard.
3. An undisclosed principal may sue and be sued on an authorised contract made on its behalf, but the agency relationship requires the objectively manifested consent of principal and agent. The private, subjective intention of the supposed agent is neither decisive nor relevant. Where a contract is made by a named legal person without any indication of agency, that person is presumed to contract as principal. Convincing proof is needed to displace that presumption.
4. The evidence showed an arrangement under which Mansel chartered the vessel for Vitol SA’s use and was reimbursed at cost. That arrangement was compatible with both companies acting as principals. It did not manifest an intention that Vitol SA should acquire rights or liabilities directly against the owner. Mansel therefore contracted as principal, and Vitol SA was not bound by the charter’s jurisdiction clause.
5. Rectification required an objectively expressed, continuing common intention which the instrument mistakenly failed to record. The parties had expressed a preference for bills of lading to refer to the charter, but had not manifested a consensus that the charter’s jurisdiction clause should be specifically incorporated. General incorporation language would not incorporate a clause confined to disputes arising under the charter. Rectification could not give effect to a merely hypothetical agreement which the parties might have reached had they appreciated the true contractual structure.
6. No freestanding jurisdiction agreement existed. A non-contractual written consensus may satisfy Article 23, but it creates no contractual right enforceable by an anti-suit injunction against proceedings in a non-member state.
7. In any event, the injunction would have been refused for fatal delay. Promptness and the extent to which foreign proceedings have advanced are separate, cumulative considerations. The owner waited more than five months after service, filed a merits defence in Nigeria, and allowed hearings and costs to occur. Challenging foreign jurisdiction or awaiting evidence did not justify that delay.

not stated in the judgment.