Glencore International AG v Exter Shipping Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Rix,Lord Justice Robert Walker |
| Judgment Date | 18 April 2002 |
| Neutral Citation | [2002] EWCA Civ 528 |
| Docket Number | Case No: A3/2001/2607 |
| Court | Court of Appeal (Civil Division) |
| Date | 18 April 2002 |
[2002] EWCA Civ 528
THE VICE-CHANCELLOR
Lord Justice Robert Walker
and
Lord Justice Rix
Case No: A3/2001/2607
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION
COMMERCIAL COURT
(Mr Justice Moore-Bick)
Royal Courts of Justice
Strand,
London, WC2A 2LL
Iain Milligan QC and Richard Southern (instructed by Messrs Clyde & Co) for the Respondent
Peregrine Simon QC and Rachel Toney (instructed by Messrs Holmes Hardingham) for the Appellants
This appeal essentially raises the question whether there is jurisdiction in the English court to impose an anti-suit injunction against four foreign shipowners in respect of their complaint in the United States District Court for the Northern District of Georgia. The shipowners have participated in complex multi-party litigation in England, known as the Metro litigation, but they submit that, partly because their participation was always limited and partly because over time that participation has been still further eroded by settlement and discontinuance, the English court lacks jurisdiction to make the order complained of.
The argument on jurisdiction has been complicated by the use of the concept in three or even four different senses, which need to be kept distinct. The first is territorial jurisdiction or in personam jurisdiction, which raises the question whether for the purpose of the injunction granted the court has jurisdiction over each or any of the four shipowners; or to put the matter the other way round, whether for these purposes the shipowners are amenable to the jurisdiction of the court. It is submitted on their behalf that the position may differ from one of them to the other. Such a question only arises because the shipowners are foreign. The second sense would, I think, apply even if the shipowners were English parties and raises the question whether the litigation to which the shipowners and Glencore are parties enables Glencore on a procedural level to claim an anti-suit injunction against them. This is said by the shipowners to depend on technical questions about rules of procedure, which Glencore submits may be supplemented in case of need by the inherent jurisdiction of the court. There is some uncertainty as to whether these first and second senses are properly separate. The third sense raises the question as to the source of what I shall call the power to grant an anti-suit injunction. I do not think that it is disputed that the modern source is statutory, now found in section 37(1) of the Supreme Court Act 1981. And the fourth is concerned with the jurisdictional conditions precedent which the jurisprudence of the courts has imposed on the use of section 37(1) to grant anti-suit injunctions, primarily the requirement of unconscionable conduct. That depends on an analysis of the structure of the litigation both here and in Georgia.
The judgment appealed from is that of Moore-Bick J, who granted the injunction sought against all four shipowners. His judgment was handed down on 8 November 2001. Since then, there have been two further decisions in the House of Lords on the subject of the anti-suit injunction, in Donohue v. Armco Inc [2002] 1 Lloyd's Rep 425 and Turner v. Grovit [2002] 1 WLR 107. Timing difficulties have also caused a change of representation on both sides, which may have brought in its train some change of emphasis.
The parties and the Metro litigation
The applicant (here the respondent) is Glencore International AG ("Glencore") and the parties injuncted (here the appellants) are Crest Shipping Ltd ("Crest", the owner of the Epic), Exter Shipping Ltd ("Exter", the owner of the Shoko), Stanley Shipping Ltd ("Stanley", the owner of the Cherry) and Wyndham Shipping Ltd ("Wyndham", the owner of the Addax). Each of these vessels was employed on several occasions in carrying cargoes of fuel oil to and from a floating storage and blending facility operated by Metro Trading International Inc ("MTI") off Fujairah for some years prior to MTI's collapse in February 1998. At the time of that collapse those vessels were in the course of performing time charters for MTI as charterer. The vessels (and others also involved) were managed by Dynacom Tankers Management Ltd ("Dynacom").
I gratefully adopt the judge's description of the so-called Metro litigation to which MTI's collapse gave rise. A fuller description can be found in his judgments on Phases 1 and 2 of that litigation, see [2001] 1 Lloyd's Rep 283 (Phase 1) and 1 August 2001 (unreported, Phase 2).
Glencore was the largest among several oil traders which used MTI's facilities, and when it was discovered that the stocks held at Fujairah fell massively short (by some 2 million tonnes) of the total amount claimed by those such as Glencore asserting title to such oil, a receivership order was made by Tuckey J in the Commercial Court on 3 March 1998. Under that order the receivers were given power to get in and sell the oil remaining in storage as well as cargoes of fuel oil afloat ex storage which had been sold by MTI at a time when the buyers had been warned that its title to sell was disputed. About $50 million has been collected in this way and is held by the receivers for the benefit of the competing claimants, who include not only oil companies such as Glencore, but banks who financed MTI and the cargoes afloat, purchasers of the oil, shipowners such as members of the Dynacom group, and insurers. In all 35 different actions were started in this jurisdiction alone, involving over 50 parties.
The management of this litigation raised difficult problems. In November 1999, by which time all relevant jurisdictional challenges had been resolved as a preliminary step, a two day case management conference, at which all litigants including the four shipowners 1 were represented, established a strategy for the litigation's future conduct. The strategy was to resolve the parties' disputes not on a case by case basis, nor by selecting individual actions as test cases (as in the Lloyd's litigation), but by tackling the issues across the whole extent of the litigation in a number of phased trials. The issues of Phase 1 were then defined, and the issues of Phase 2 formulated for future definition. All parties were permitted to be represented at the various phases in a manner designed to avoid unnecessary duplication. It is not in dispute that, although the various actions were not formally consolidated, all the parties to them were to be bound by the determination of the issues, whether they actively participated in them or not.
Phase 1, which dealt with issues of proper law and the law relating to the passing of title, both under English law and the law of Fujairah, was tried in the summer of 2000. Phase 2, which dealt with issues relating to the relationship of Glencore and MTI, was tried in the spring of 2001. Phase 3, which will deal primarily with the question of the
banks' security interests in stocks of oil held by MTI, has been fixed for trial later this year. Later phases will deal with other outstanding issuesThe essence of the judgment in Phase 2 is that Glencore owned the oil at least up to its delivery into storage off Fujairah and at all times up to its sale by Glencore to MTI by ITT (in tank transfer) contract; that until that transfer MTI was not and knew that it was not entitled to use or dispose of the oil; and thus that any such prior dealings with the oil by MTI were wrongful. The question of MTI's actual (express or implied) authority to sell or deliver to third parties such oil in which Glencore retained title was answered to the effect that MTI had no such authority, and that Glencore did not know that MTI had been disposing of such oil. All this was in the context of an overarching agreement between Glencore and MTI regulating such matters (referred to as "JV2").
The four shipowners (as well as other Dynacom group parties) have participated throughout these proceedings, in which they have been represented by Holmes Hardingham and counsel. They participated fully in the hearings which led to the making of the receivership order, at further directions hearings in the summer of 1999 dealing with jurisdiction, at the key case management conferences in November 1999 and (relating to Phase 2 and later phases) in December 2000, and at an application in November 2000 to adjourn the Phase 2 trial. Mr Gee QC represented Stanley at the Phase 1 trial and Stanley and Exter at the Phase 2 trial. Exter, Crest and Wyndham did not actively participate in the Phase 1 trial, nor Crest and Wyndham in the Phase 2 trial, but they are all bound by the results, as they accept.
Actions 1998 Folios 219, 273 and 654
So much for a global view of the Metro litigation to date. It is now necessary to consider more closely the actions within the Metro litigation in which the shipowners are named parties.
The earliest of them is Folio 219, indeed this precedes even Tuckey J's receivership order, having been commenced on 16 February 1998. In it the shipowners (and three other owners within the Dynacom group) claim unpaid hire and bunker charges and/or damages under their respective time charters with MTI. It was an immediate response to news of MTI's apparent insolvency. On the same day these claimants obtained a worldwide Mareva injunction from Toulson J against MTI in the sum of US$2.8 million. Toulson J's order specifically covered the oil cargoes currently being carried by the C...
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