Impala Warehousing and Logistics (Shanghai) Company Ltd v Wanxiang Resources (Singapore) Pte Ltd
| Jurisdiction | England & Wales |
| Judge | Mr. Justice Teare |
| Judgment Date | 15 January 2015 |
| Neutral Citation | [2015] EWHC 25 (Comm) |
| Docket Number | Case No: 2014 FOLIO 1109 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 15 January 2015 |
Mr. Justice Teare
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Rolls Building, 7 Rolls Buildings
Fetter Lane, London EC4A 1NL
Simon Picken QC and Adam Turner (instructed by Reed Smith LLP) for the Claimant
Andrew Fletcher QC and Christopher Harris (instructed by Edwin Coe LLP) for the Defendant
Hearing dates: 17 December 2014
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Wanxiang Resources (Singapore) PTE Limited ("Wanxiang") claims to be the owner of a quantity of aluminium which has been stored in a warehouse in Qingdao, China. Warehouse certificates were issued by Impala Warehousing and Logistics (Shanghai) Co. Limited ("Impala Shanghai") in respect of the aluminium to Rabobank International to whom the goods had been pledged as security. The sums advanced by Rabobank International have been paid off and, it is said, the warehouse certificates have been endorsed to Wanxiang. It appears that Impala Shanghai have not delivered the goods to Wanxiang because Wanxiang has commenced proceedings in China against Impala Shanghai seeking delivery of the goods. It did so on 5 August 2014.
On 19 September 2014 this court granted Impala Shanghai an interim anti-suit injunction. The injunction restrained Wanxiang from continuing with the proceedings in Shanghai. The basis on which such injunction was sought was that the warehouse certificates upon which Wanxiang was suing in Shanghai contained an exclusive jurisdiction clause in favour of the courts of England. At the hearing in September 2014 (which was ex parte but on notice) at which Mr. Fletcher Q.C. did not appear it was common ground that there was such an exclusive jurisdiction clause. What was said on behalf of Wanxiang was that Wanxiang's claim in fact lay under a different contract, a tripartite Collateral Management Agreement ("the CMA"), which did not contain such a clause. I asked counsel for Wanxiang to explain the basis upon which Wanxiang were suing Impala Shanghai in China. No explanation was given. I was critical of Wanxiang's position. Wanxiang appeared to be putting forward one argument in Shanghai (a claim based upon the warehouse certificates) and a different and inconsistent argument here (a claim based upon the CMA).
When Wanxiang acknowledged service it was said the jurisdiction of this court would be challenged and that expert evidence of Chinese law would be filed which would explain the basis of Wanxiang's claim in China. But no steps were taken to challenge the jurisdiction of this court and no such expert evidence of Chinese law explaining the basis of the claim in Shanghai was ever forthcoming.
Impala Shanghai then learnt that the Chinese proceedings would be advanced by the court even if Wanxiang did nothing to advance them themselves. The proceedings "had a life of their own" which would continue even if Wanxiang complied with the anti-suit injunction.
These developments led Impala Shanghai to issue a further application in this court seeking a final anti-suit injunction coupled with a mandatory injunction ordering Wanxiang to discontinue the Chinese proceedings. In the alternative an interim mandatory injunction to the same effect was sought. The basis of both applications was that the proceedings in Shanghai were (i) vexatious (on the grounds that Wanxiang was maintaining proceedings in Shanghai which it was telling this court had no foundation) and (ii) were in breach of the exclusive jurisdiction clause in favour of England.
Somewhat late in the day Wanxiang filed evidence. However, in essence that evidence merely confirmed that Wanxiang's claim lay under the CMA. Nothing was said by way of explanation of the proceedings in China under the warehouse certificates. Indeed Miss Sun said that "it is wrong to say that production of the warehouse certificates to the warehouse will allow us to take delivery" and that "the warehouse certificates do not govern the relationship between the warehouse, the bank and ourselves." So Impala Shanghai continued with their application.
When the application came on for hearing on 17 December 2014, Mr. Fletcher QC, on behalf of Wanxiang, made two important submissions. First, he submitted that the warehouse certificates did not contain an exclusive jurisdiction clause in favour of England. On their true construction the governing jurisdiction clause was that contained in the CMA notwithstanding that Impala Shanghai was not a party to the CMA. This submission, which can now be seen to have been foreshadowed in paragraph 15 of Mr. Fletcher's Skeleton Argument, was elaborated or explained in counsel's oral submissions. Second, he submitted that Wanxiang did in fact have a claim against Impala Shanghai under the terms of the warehouse certificates. This submission only emerged during counsel's oral submissions.
In a brief reply (of necessity because time was limited) Mr. Picken QC, on behalf of Impala Shanghai, submitted that the case that there was no exclusive jurisdiction clause in favour of England was unsupportable and that the alleged change of position with regard to the China proceedings lacked any credibility. He therefore maintained his application.
The basis of the proceedings in China
Whilst Mr. Fletcher stressed that the CMA was the governing contract he said that any claim against Impala Shanghai, which was not a party to the CMA, had to be brought under the warehouse certificates. That was the only contract to which Impala Shanghai was a party. He accepted that the evidence which had been filed on behalf of Wanxiang did not say this in terms. Indeed, it had to be significantly re-written so that, for example, Miss Sun's statement that "the warehouse certificates do not govern the relationship between the warehouse, the bank and ourselves" should be read as saying that "the warehouse certificates do not exclusively govern the relationship between the warehouse, the bank and ourselves."
Mr. Picken submitted that this suggestion lacked any credibility in circumstances where it had not been advanced at the September hearing, where there had been no challenge to the jurisdiction, where the evidence of Chinese law explaining the basis of the claim in China which had been foreshadowed in the Acknowledgment of Service had not been forthcoming and where the evidence later adduced by Wanxiang was wholly silent on the subject and indeed said that "the warehouse certificates do not govern the relationship between the warehouse, the bank and ourselves."
There is undoubted force in Mr. Picken's criticisms. It would have been very simple for evidence to be adduced by a Chinese lawyer to the effect that the claim against Impala Shanghai lay in a contract or indeed in a bailment on the terms of the warehouse certificates. But no such evidence was adduced.
However, I do not consider that I can dismiss Mr. Fletcher's submission so easily. By letter dated 6 June 2014 Impala Shanghai acknowledged that Wanxiang was the owner of the aluminium stored under the warehouse certificates. Looked at from the viewpoint of English law one can readily understand that Wanxiang has a claim against Impala Shanghai in bailment upon the terms of the warehouse certificates. There was no evidence that Chinese law was any different in this respect from English law. Indeed, the way in which Wanxiang's claim is expressed in Shanghai is consistent with the English law position although the language of contract rather than of bailment is used. Thus the claim form says:
"………the Plaintiff is the holder of the warehouse receipts, that is, the title owner of the goods. The defendant sent a letter to the Plaintiff on 6 June 2014……confirmed that the Plaintiff was the owner of the goods under the specific warehouse certificates………..In view of the above facts, the Plaintiff considers that the warehouse certificates are evidence of title to the goods which could be transferred lawfully and validly, and the Defendant as the issuer of the warehouse certificates should fulfil its responsibility to supervise and obligation to deliver the goods under the warehouse certificates……."
In those circumstances I do not consider that I can dismiss Wanxiang's belated explanation of their claim as lacking in all credibility. That being so the case based upon Wanxiang's conduct being vexatious loses its force and cannot found an application for a mandatory injunction. It can no longer be said that Wanxiang wishes to maintain an action in China against Impala Shanghai under the terms of the warehouse certificates whilst telling this court that no claim can be founded upon the warehouse certificates.
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