JOL & Anor v JPM

Under Arbitration Act 1996, the court may grant an interim mandatory injunction under section 44(3) to preserve an asset, including a disputed contractual right. The jurisdiction is limited by urgency and by the need to respect the parties’ agreement to arbitrate. Urgency is not established merely because arbitration will take longer or because contractual performance is time-sensitive. Particular caution is required where the order would effectively determine an issue reserved for the arbitrators and could not realistically be reversed.

The claimants, owners of two vessels, applied urgently for interim mandatory injunctions requiring the defendant charterers to redeliver the vessels following an alleged termination event under bareboat charterparties. The underlying dispute had been referred to arbitration and both parties had appointed arbitrators.

The application was made under section 44 of the Arbitration Act 1996 and section 37(1) of the Senior Courts Act 1981. The court held that section 44 governed the application. The central issues were whether the statutory urgency requirement was met and whether the proposed relief would impermissibly determine matters reserved for arbitration.

1. Application refused. The application for relief under section 44(3) of the Arbitration Act 1996, in both its original and revised forms, was refused.
2. Because the underlying dispute had been referred to arbitration and a functioning tribunal existed, section 44 rather than section 37(1) of the Senior Courts Act 1981 applied.
3. Section 44(3) is not confined to freezing injunctions and search orders. Following Cetelem SA v Roust Holdings Ltd, a disputed contractual right may constitute an asset for that purpose, and an interim mandatory order may in an appropriate case compel performance of the principal obligation while leaving final resolution to arbitration.
4. That jurisdiction must be exercised sparingly. The mere fact that arbitration will take longer, or that delay causes progressive commercial prejudice, does not establish urgency. Here an arbitral hearing and award could realistically be achieved within six to eight weeks, and the evidence did not show a significant risk of physical deterioration or damage to the vessels.
5. The proposed redelivery order would effectively be final. It would determine disputed questions reserved for the arbitrators and could not realistically be reversed because the sub-charter chain would end and the owners would deploy the vessels. Those considerations required particular caution, consistently with Zim Integrated Shipping Services Ltd v European Container KS and Euroil Ltd v Cameroon Offshore.
6. Section 38(4) did not empower the tribunal to order interim enforcement of substantive rights under the guise of preserving property. An interim injunctive power would need to be conferred expressly under section 39, which the LMAA Rules did not do. A materially longer arbitral timetable might justify a later application with the tribunal’s permission under sections 44(4) and 44(5), but that possibility did not make the present application urgent.