Trafigura Maritime Logistics PTE Ltd v Clearlake Shipping PTE Ltd

Where an injunction has been refined to identify precisely what must be done and by when, the final order should generally omit superseded general wording that may create confusion. A party’s contractual obligation to provide security remains independent of a sub-charterer’s performance. The court should not rewrite that obligation merely to avoid potentially wasted costs. Indemnity costs require conduct outside the norm; a breach of contract alone is insufficient, particularly where there is no misuse of judicial facilities. Under section 51 of the Senior Courts Act 1981, the court may order a sub-charterer to pay costs incurred by a charterer and the charterer’s liability for the owner’s costs where that is just in all the circumstances, assessed by reference to causation and the parties’ actual conduct.

The judgment concerned the form of orders and consequential costs following the court’s earlier decision granting mandatory interim relief in two related commercial actions: one between Trafigura and Clearlake, and another between Clearlake and Petrobras. The earlier order required Clearlake and Petrobras to provide security for the release of a vessel arrested in Singapore.

The court resolved disputes about the precision of the order, the relevant working days, whether Clearlake’s obligation could be postponed pending Petrobras’s payment, the reservation of rights, concurrent case management, the basis and allocation of costs, and payments on account.

1. The court declined to retain general wording requiring the provision of such security as might be required. The order should state the precise obligation and deadline, because retaining broader wording after precision has been supplied could confuse the parties, particularly where the order contains a penal notice. Any genuinely unforeseen need for further security could be addressed under liberty to apply.

2. Public holidays in Singapore were relevant to calculating the deadline because payment into court had to be made there. Both Clearlake and Petrobras were therefore required to pay by 11 May 2020.

3. Clearlake’s contractual obligation to Trafigura was not conditional on Petrobras performing its obligations to Clearlake. Allowing Clearlake to wait until it was known whether Petrobras had paid would rewrite the contractual obligation and expose Trafigura to a risk for which it was not contractually responsible. There would therefore be no staggered payments.

4. Indemnity costs were refused. The court explained, by reference to National Westminster Bank v Rabobank [2008] 1 Lloyd’s Rep. 16, that indemnity costs require conduct out of the norm. In that authority the relevant breach involved misuse of judicial facilities by commencing proceedings contrary to an anti-suit or jurisdiction clause. That additional feature was absent here. A breach of contract, a failed defence, or the existence of a contractual indemnity did not itself justify indemnity costs.

5. The court accepted that it had jurisdiction under section 51 of the Senior Courts Act 1981 to order Petrobras to pay costs incurred by Clearlake and, where just, Clearlake’s liability for Trafigura’s costs. The approach in Aiden Shipping v Interbulk, The Vimeira [1986] AC 965 illustrated circumstances in which such an order could be made.

6. Applying that principle, Petrobras was ordered to bear Clearlake’s costs of resisting Trafigura’s ex parte application and Clearlake’s liability for Trafigura’s costs of that application, because Petrobras’s refusal to provide security materially caused Clearlake to incur those costs. Petrobras was not liable for Clearlake’s costs of resisting the later inter partes relief, because Clearlake advanced its own case rather than merely passing Petrobras’s arguments through the contractual chain. Costs were reduced by 50 per cent after 15 April 2020, assessed on the standard basis, with payments on account of £72,000, £60,000 and £63,000 as specified in the order.

The judgment was a first-instance decision determining the form of orders and costs following the court’s earlier judgment in the related proceedings.