VTB Commodities Trading DAC v JSC Antipinsky Refinery

Under the Arbitration Act 1996, an application to continue or vary an urgent without-notice injunction after urgency has ceased is a fresh application. The applicant must satisfy the statutory requirements for non-urgent court intervention, including tribunal permission or written agreement.

Material non-disclosure ordinarily leads to discharge, but the court retains a discretion to continue relief where the omission was peripheral, caused no prejudice and could readily be cured. Specific performance of contracts for future unascertained goods is subject to a strong presumption against relief. Exceptional circumstances, such as an effectively unique supply or a non-functioning market, are required.

VTB sought continuation of a worldwide freezing order and a cargo injunction granted without notice under section 44 of the Arbitration Act 1996 in support of London arbitrations concerning prepaid supplies of vacuum gasoil. Antipinsky applied to discharge the orders for alleged material non-disclosure. VTB also sought orders concerning remaining cargo on a floating storage vessel.

The court first considered whether it had jurisdiction to continue the urgent orders after the urgency had passed. It then considered the effect of the non-disclosure, whether the cargo injunction was effectively specific performance of contracts for unascertained goods, and whether the existing sale order should be continued.

Disposition. The worldwide freezing order was continued, subject to amendment. The cargo injunction was discharged. The application for a further sale order concerning the remaining cargo was refused.

1. Jurisdiction. A without-notice order made under s.44(3) ordinarily expires at the return date. An on-notice application to continue or vary it is a fresh application. Once the matter is no longer urgent, the court must satisfy s.44(4), and must also consider whether the tribunal is unable to act effectively under s.44(5). The earlier urgent order does not confer continuing jurisdiction. The preliminary view in The Nicholas M [2008] 2 Lloyds Rep 602 was not followed. The court nevertheless had general case-management power to adjourn the return date and maintain the existing orders pending tribunal permission.
2. Non-disclosure. VTB should have disclosed the deed which might have affected its title to part of the claim. The usual sanction for material non-disclosure is discharge, but the court has a discretion to continue or replace the order. Here the omission concerned only part of the claim and a possible future issue, caused no prejudice, and was effectively cured. The subsequent arbitral award for the full debt was an additional reason to continue the freezing order. An innocent typing error in the standard wording did not justify discharge.
3. Cargo injunction. Although expressed as a negative restraint, the order was in substance an order for specific performance. Section 52 of the Sale of Goods Act 1979 supported a strong presumption against specific performance of contracts for future unascertained goods. Equitable relief outside the section remained possible, but only exceptionally. Re Wait [1927] 1 Ch 606 illustrated the conceptual and practical difficulties. Sky Petroleum Ltd. v V.I.P. Petroleum Ltd. [1974] 1 WLR 576 was distinguishable because there was no general market failure. Financial difficulty, double-selling, prepayment and competing claims did not establish an exceptional case.
4. The sale order relating to the Polar Rock was premised on the cargo injunction. Once that injunction was discharged, the basis for the sale order fell away. The order had also been performed so far as the named vessels were concerned, leaving no extant order for the balance.

The judgment records earlier interim orders and hearings before Waksman J, Teare J, Sir William Blair, Knowles J, Moulder J and Sir Jeremy Cooke, together with directions and permission from the arbitral tribunal. This was a first-instance decision on the applications before Lord Justice Phillips.