Oceanconnect UK Ltd Anor v Angara Maritime Ltd
| Jurisdiction | England & Wales |
| Judge | Rix,Gross L JJ,Peter Smith J. |
| Judgment Date | 12 October 2010 |
| Court | Court of Appeal (Civil Division) |
| Date | 12 October 2010 |
Court of Appeal (Civil Division).
Rix and Gross L JJ and Peter Smith J..
David Bailey QC and Emma Hilliard (instructed by Chauncy & Co) for the appellants.
Stephen Males QC and Yash Kulkarni (instructed by Thomas Cooper) for the respondent.
The following cases were referred to in the judgment:
Acrux, The (No.3)ELR [1965] P 391.
Bankers Trust International v Todd Shipyards Corp (The Halcyon Isle)ELR [1981] AC 221.
The Heinrich BjornELR (1886) 11 App Cas 270.
Deutsche Bank AG v Highland Crusader Partners LPUNK [2009] EWCA Civ 725; [2009] 2 CLC 45; [2010] 1 WLR 1023.
Donohue v Armco IncUNK [2001] UKHL 64; [2002] CLC 440.
Fiona Trust & Holding Corp v PrivalovUNK [2007] UKHL 40; [2007] 2 CLC 553.
Mantovani v Carapelli SpAUNK [1980] 1 Ll Rep 375.
Masri v Consolidated Contractors International Co SALUNK [2008] EWCA Civ 625;[2008] 1 CLC 887; [2009] QB 503.
Mike Trading and Transport Ltd v R Pagnan & Fratelli (The Lisboa)UNK [1980] 2 Ll Rep 546.
Shipping — Bunkers — Anti-suit injunction — Conflict of laws — US maritime lien — Supply of bunkers under contract subject to US law and jurisdiction — Charterer failed to pay and became insolvent — Vessel arrested and released on provision of security and in accordance with escrow agreement providing for English law and jurisdiction — Owner issued English proceedings for negative declaratory relief — English judgment in owner's favour — Bunker supplier brought proceedings in US claiming maritime lien — Owner applied for anti-suit injunction — US proceedings not brought in breach of jurisdiction clause in escrow agreement — US proceedings not vexatious or oppressive — England not natural forum in respect of claim for US maritime lien — Anti-suit injunction discharged.
This was an appeal by the defendants against an anti-suit injunction restraining them from pursuing US proceedings.
The claimant (Angara) was a Marshall Islands company which time chartered its vessel to a Danish charterer (Britannia) on the NYPE form as amended. The first defendant entered into a contract with Britannia for the supply of bunkers to the vessel. The first defendant was an English company and the second defendant was its US parent. The agreement to supply bunkers was expressly made subject to US law and jurisdiction. Britannia did not pay for the bunkers and had become insolvent.
The defendants arrested the vessel in Amsterdam in respect of their claim for payment for the bunkers. The parties agreed the release of the vessel upon the provision by Angara of US$230,000 security and in accordance with the terms of an escrow agreement which was subject to English law and jurisdiction.
Angara then issued proceedings in the Commercial Court seeking a declaration that it was not liable to the defendants in respect of the sale of bunkers to Britannia pursuant to the supply agreement.
The defendants then obtained a warrant for the vessel's arrest in Louisiana, claiming a US maritime lien, and the vessel was arrested. The vessel was released after a copy of the escrow agreement was filed with the US court which had the effect of permitting the defendants to execute any US judgment against the funds in escrow.
Angara applied for an anti-suit injunction and the judge concluded that on its proper construction the escrow agreement was intended to provide for the English court to be the exclusive forum for the resolution of disputes between the parties in relation to the supply of bunkers and that the US proceedings were brought in breach of that agreement. If that was wrong, England was plainly the appropriate forum for the dispute and the ends of justice required the making of an anti-suit injunction. The defendants appealed.
Held , allowing the appeal:
1. Whether a provision as to jurisdiction contained in an agreement by way of security extended to the underlying disputes between the parties was a matter of construction of the agreement in question. On its proper construction the escrow agreement did not provide for the English court to have exclusive jurisdiction in respect of the underlying substantive claim. On a natural reading of the whole agreement in context the wording suggested that the jurisdiction for the resolution of the underlying claim had been left open. The escrow agreement was entered into to address security and the release of the vessel, not the jurisdiction for determining the claim. That consideration easily outweighed any presumption in favour of “one stop” adjudication. Had the parties wished to extend the escrow agreement to deal as well with the forum for resolving the claim, they could have done so; but the wording of the escrow agreement was not apt to do so. For the escrow agreement to be read as providing for exclusive English jurisdiction in respect of the claim involved an agreement between the parties that the defendants were to give up their US maritime lien. Whatever the attractions of “one stop” adjudication, the disadvantages for the defendants of that course were so obvious that any such agreement was improbable, the more especially as there was no need for the escrow agreement to stray into the territory of jurisdiction for the substantive claim. Therefore the anti-suit injunction could not be supported on the basis that the US proceedings were brought in breach of an exclusive English jurisdiction clause.
2. Once proper attention was paid to the importance to the defendants of the US maritime lien, it was difficult to see how the US proceedings could be categorised as vexatious or oppressive. As the defendants' claim for a US maritime lien was bound to fail in the English court but had to be taken to enjoy a strong chance of success in the US court, the English court was not the natural forum for the proceedings. Even if that was wrong, considerations of justice did not require the defendants to be restrained from proceeding in the US courts. To the contrary, considerations of justice pointed to the defendants being at liberty to proceed in those courts. Late though it might have been in terms of the English proceedings, the initiation of the US proceedings by the defendants could again not properly be categorised as vexatious or oppressive. It followed that the anti-suit injunction had to be discharged.
Gross LJ:
1. This is an appeal by the Appellants/Defendants from the order of Simon J, dated 6 October 2009, granted on the application of the Respondent/Claimant, requiring the Appellants forthwith to take all reasonable steps to withdraw the proceedings commenced by them before the United States District Court for the Western District Court of Louisiana (“the order”, “the anti-suit injunction” and the “US proceedings” as appropriate).
2. As will become apparent, the order is critical to the fate of the underlying dispute. That dispute, involving relatively modest sums, raises the question of whether the Appellants or the Respondent should bear the risk of a third party's failure to pay for a supply of bunkers. Unfortunately, by now, the costs are anything but modest.
3. The underlying facts, at the time the matter came before the learned Judge, can be shortly summarised. They begin as follows:
(i) The Respondent (“Angara”) is a Marshall Islands company and the owner of the “Fesco Angara”, a vessel registered in the Marshall Islands (“the vessel”). The vessel was managed from Vladivostok.
(ii) On 3 July 2008, Angara time chartered the vessel to, in the event, Britannia Bulkers A/S, Denmark (“Britannia”), as charterers, on the NYPE form as amended (“the charterparty”). Under the charterparty, it was, as to be expected, Britannia's obligation to provide and pay for bunkers.
(iii) The First Appellant is an English company. The Second Appellant is a corporation incorporated in the United States of America with its principal place of business in New York; it is the parent company of the First Appellant.
(iv) On or about 30 September 2008, the First Appellant entered into a contract with Britannia for the supply of bunkers to the vessel (“the supply agreement”), with payment to be made 30 days after delivery. The supply agreement was expressly made “subject to the Law and jurisdiction of the courts of the United States of America”.
(v) Bunkers were delivered to the vessel on or about 6 October 2008, at Puerto de Santos in Brazil.
(vi) The Second Appellant invoiced Britannia for the bunkers in the sum of US$177, 305.59. As is common ground, Britannia has not paid for the bunkers.
(vii) In late 2008, Britannia encountered financial difficulties and redelivered the vessel early to the Respondent. For its part, the Respondent gave credit to Britannia for the bunkers remaining on board at the time of redelivery. Britannia subsequently went into administration.
4. On 8 March 2009, the Appellants arrested the vessel in Amsterdam, in respect of their claim for payment for the bunkers. Some three days later, on 11 March 2009, the parties agreed the release of the vessel upon the provision by Angara of US$230,000 security and in accordance with the terms of an escrow agreement of that date (“the escrow agreement”).
5. The escrow agreement, to which Angara, the Appellants and MFB solicitors (“MFB”) are parties, provides as follows:
“WHEREAS
A. On 8 March…M.V. Fesco Angara (the vessel) was arrested at Amsterdam.
B. The arrest relates to a claim by OCEANCONNECT of USD 177,305.59 for the delivery of bunkers to the vessel in October 2008 at the request of Charterer Britannia Bulkers A/S, and a purported maritime lien (right of recovery) OCEANCONNECT have, individually and/or collectively, in connection therewith against Angara and/or the vessel (‘the Claim’).
C. ANGARA have agreed to deposit cash security, in the sum of USD 230,000 into an escrow account.
NOW in consideration of OCEANCONNECT agreeing, as more particularly outlined in clause 2...
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