E-Star Shipping and Trading Company Ltd v Delta Corp Shipping Ltd

An anti-suit injunction requires the applicant to establish, with a high degree of probability, that a binding arbitration agreement exists and governs the foreign dispute. A contractual provision making the agreement effective only upon signature by all parties may apply to the arbitration clause as well as the substantive terms. Anti-enforcement relief is exceptional and generally inappropriate after the foreign court has reached a reasoned decision, particularly where granting relief would create serious comity concerns. Delay is also a powerful reason to refuse relief. Section 44 relief likewise requires satisfactory evidence of a valid arbitration agreement and may be refused where comity weighs against intervention in foreign proceedings concerning assets within that jurisdiction.

E-Star sought an anti-suit or anti-enforcement injunction concerning proceedings in the Court of Commerce of Cotonou, Benin, relating to cargo carried on the ESHIPS PROGRESS. The Benin court had ordered receivers wishing to obtain delivery to pay freight to Delta and directed that the cargo could be sold if payment was not made. E-Star also sought relief under section 44(3) of the Arbitration Act 1996 to preserve any sale proceeds.

E-Star relied on an English-law settlement agreement containing an arbitration clause, but the agreement stated that it became effective only upon signature by all parties. Evidence of signature by all proposed parties was incomplete. The central issues were whether a binding arbitration agreement had been established, whether anti-suit or anti-enforcement relief was appropriate after the Benin proceedings had substantially concluded, and whether section 44 relief should be granted.

1. Anti-suit and anti-enforcement relief refused. E-Star had not established with a high degree of probability that the settlement agreement, and therefore its arbitration clause, was binding. Clause 9 expressly provided that the agreement became effective only upon signature by all parties. There was no sufficient evidence that every proposed party had signed, and no basis to infer waiver of the signature requirement (paras 38–46).
2. The court, rather than the arbitrators, had to determine whether a binding arbitration agreement existed when deciding an application for anti-suit relief. The doctrine of separability did not justify treating the arbitration clause as binding when the agreement as a whole was expressly conditional upon signatures by all parties (paras 40–44).
3. The relief sought was in substance anti-enforcement relief. The Benin proceedings had substantially concluded after a contested hearing involving numerous parties, and the Benin court had issued a detailed reasoned judgment concerning cargo within its jurisdiction. Granting an order requiring reversal or non-implementation of that judgment would raise serious comity concerns and was inappropriate (paras 48–50).
4. E-Star had also delayed. A party seeking anti-suit relief should generally act promptly and before the foreign proceedings have advanced too far. The delay both during the Benin proceedings and after the judgment of 5 October 2022 was unexplained and significant (paras 51–53).
5. Section 44 relief was separately considered and refused. There was no satisfactory evidence of an effective arbitration agreement. In addition, it would be inappropriate to grant relief designed to benefit parties who did not rely on the arbitration agreement, had not threatened arbitration in England, and were pursuing remedies in Benin. Comity required the English court to leave the Benin court to determine whether any further protection was appropriate (paras 55–65).
6. No return date was directed. Any further challenge would have to proceed by appeal (para 66).