ZHD v SQO

On an interim application for an anti-suit injunction, the claimant must establish to a high degree of probability that a valid arbitration agreement governs the dispute. If it does, and the application is prompt and the foreign proceedings have not materially advanced, an injunction will ordinarily be granted unless strong reasons against it are shown.

The court gives little or no weight to forum-convenience factors which the parties are taken to have considered when choosing London arbitration. Delay is assessed by reference to progress, prejudice and interference with the foreign court, rather than by elapsed time alone. A contractual time bar ordinarily provides no reason to refuse relief where it resulted from the defendant’s own failure to arbitrate.

The owners sought an interim and final anti-suit injunction restraining SQO from pursuing Vietnamese proceedings concerning cargo damage under a bill of lading. They also sought permission for service out of the jurisdiction and alternative service.

The bill of lading incorporated the terms of a sub-charter, including a London arbitration clause. SQO had commenced the Vietnamese action after the vessel was released from arrest. The Vietnamese court had enrolled and accepted the case, but had not finally determined jurisdiction or heard the merits. The central issues were whether the arbitration clause bound SQO, whether the application was sufficiently prompt, and whether strong reasons justified refusing relief.

1. Arbitration agreement. The owners established to a high degree of probability that the sub-charter’s arbitration clause was incorporated into the Congenbill bill of lading. The reference on the bill’s face to the charter dated 18 April 2019 identified the relevant sub-charter. English law governed incorporation. SQO was bound under section 3 of the Carriage of Goods by Sea Act 1992 because it had taken delivery and made a claim under the contract of carriage. Its Vietnamese claim fell within the broad arbitration clause.
2. Promptness and progress. The application was made promptly enough. The Vietnamese proceedings had progressed very little on the merits, the jurisdictional challenge remained live, and SQO suffered no material prejudice. Delay is assessed by its effect on foreign-court resources, comity and prejudice, not by elapsed time alone.
3. Strong reasons. Enrolment and acceptance of the Vietnamese case did not establish final jurisdiction. Even a foreign court’s assumption of jurisdiction would not necessarily bar relief. The owners had not submitted to that jurisdiction. The expiry of the Hague Rules one-year time bar was attributable to SQO’s decision not to arbitrate in time and was no reason to refuse relief; SQO could apply for an extension under section 12 of the Arbitration Act. The commencement of London arbitration was likewise no bar.
4. Orders. An interim anti-suit injunction was granted, including a mandatory requirement that SQO use best endeavours to procure a stay of the Vietnamese action. A return date was directed. Permission was granted for service out under CPR 62.5(1)(c), alternatively CPR 6.36 and Practice Direction 6B paragraph 3.1(6)(c), and for alternative service by email under CPR 6.15, 6.27 and 6.37(5)(b)(1).