SEFE Marketing & Trading Limited v Vitol S. A

Interim injunctive relief will be refused where, although there is a serious issue to be tried concerning the threatened suspension of contractual performance, the applicant has not shown that damages would be inadequate if the suspension later proves to be a breach.

Speculative commercial disruption, including the consequences of having to resolve a bona fide dispute through the courts, does not establish the necessary harm. The court may nevertheless encourage streamlined procedures for the prompt determination of the substantive contractual issue.

SEFE Marketing & Trading Limited applied for interim injunctive relief against Vitol S. A. The application concerned Vitol’s threatened suspension of performance under one of the parties’ contracts, following Vitol’s asserted right to terminate the wider commercial arrangement.

The court considered whether SEFE had shown a serious issue to be tried and whether refusal of an injunction would cause harm for which damages would not be an adequate remedy. The application was heard on 3 November 2022, with some commercial material considered in private session.

1. Application refused. The claimant had established, but only by a fine margin, a serious issue to be tried as to whether Vitol presently had the right to suspend performance.
2. The claimant had not shown that, if Vitol suspended performance and was later found to have acted in breach of contract, the resulting harm would be inadequately compensated by damages.
3. The court was not persuaded that suspension would cause the claimant significant short- or medium-term difficulties. The suggestion that suspension, together with the need to resolve a bona fide commercial dispute in court, would have a wider calamitous impact was speculative and could not justify relief.
4. The court therefore declined to grant any interim injunction. It nevertheless recognised that the substantive dispute could be commercially important, narrowly defined and suitable for expeditious resolution. The parties were encouraged to consider a highly streamlined process, potentially involving a joint application to the judge in charge, for a trial of no more than one sitting week.