Sam Purpose AS v Transnav Purpose Navigation Ltd (Rev 2)

An anti-suit injunction should protect an English arbitration agreement, but it should not restrain a foreign arrest obtained solely to provide reasonable security for claims to be arbitrated in England. The court must examine the substance of the foreign proceedings and tailor any injunction to the particular risk. Relief is assessed at the hearing by reference to the position then existing. A previous breach does not, by itself, justify continuing or punitive injunctive relief. Material non-disclosure may justify discharge of an interim order, but the court retains a discretion to make a fresh order after considering all the circumstances.

The claimant shipowner and defendant charterers were parties to agreements containing London arbitration clauses. The defendant commenced substantive proceedings in Nigeria and obtained an arrest of the claimant’s vessel for unpaid sums. The claimant obtained an interim anti-suit injunction restraining continuation of the Nigerian proceedings.

Before the return hearing, the defendant applied in Nigeria for a stay under Nigerian Admiralty Jurisdiction Act 1991, while the claimant sought dismissal of the proceedings. The claimant sought a final injunction requiring discontinuance of the Nigerian proceedings. The defendant argued that it now sought only a stay while preserving the arrest as security. The issues were whether the historic breach required final mandatory relief and whether the claimant’s failure to disclose section 10 justified discharge of the interim order.

1. The court refused to grant final mandatory relief requiring the defendant to discontinue the Nigerian proceedings. The fact that the proceedings had originally been commenced in breach of the arbitration agreements did not irretrievably taint everything subsequently done in them.

2. Following Kallang Shipping v AXA [2009] 1 LRep 124, the court held that an anti-suit injunction does not ordinarily restrain a foreign arrest whose sole purpose is to obtain reasonable security for claims to be arbitrated or litigated in England. Relief may be granted where the foreign proceedings go beyond securing the claim, but it must be limited to what is necessary.

3. Whether the foreign proceedings exceed the purpose of obtaining security is fact-sensitive. The need for injunctive relief must be assessed at the hearing by reference to the current position, not simply the earlier breach. The jurisdiction is preventative, not punitive. The court relied on Proctor v Bayley (1889) 40 ChD 390, Kallang Shipping v AXA [2007] 1 LRep 160 and Green Flower Navigation Malta Ltd, Avin International Ltd v SC Santierul Naval SA Constanta 2002 WL 1876042.

4. The defendant’s original commencement of substantive Nigerian proceedings was an historic breach. However, the separate question was whether present conduct created a continuing risk to the arbitration. A historic breach might support a damages claim, but it did not automatically justify further injunctive relief.

5. The claimant’s failure to disclose section 10 of the Nigerian Admiralty Jurisdiction Act 1991 was material. Nevertheless, the claimant and its English advisers were entitled to rely on the Nigerian lawyer’s advice in the urgent circumstances, and the defendant had itself failed to refer to the provision. Considering the circumstances and the absence of prejudice, the court declined to discharge the interim order or refuse all further relief.

6. The court remained willing to consider limited negative relief preventing further steps beyond staying the Nigerian proceedings and maintaining the arrest, and adjourned argument on its precise form.

Not stated in the judgment.