Sam Purpose as v Transnav Purpose Navigation Ltd
| Jurisdiction | England & Wales |
| Judge | Judge Waksman |
| Judgment Date | 03 March 2017 |
| Neutral Citation | [2017] EWHC 719 (Comm) |
| Docket Number | Case No. CL-2017-000054 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 03 March 2017 |
[2017] EWHC 719 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
COMMERCIAL COURT
Rolls Building
His Honour Judge Waksman QC
Sitting as Judge of the High Court
Case No. CL-2017-000054
Ruth Hosking (instructed by Tatham Macinnes LLP) appeared on behalf of the Claimant/Applicant
Chirag Karia QC (instructed by Jackson Parton) for the Defendant/Respondent
JUDGMENT APPROVED
Judge Waksman QC:
INTRODUCTION
On 1 February 2017, I granted an initial anti-suit injunction in conventional terms. The hearing was ex parte on notice and in fact, I had the benefit of a skeleton argument from the Defendant although it did not appear at the hearing, nor was it represented.
There is an approved transcript of my judgment that day, which sets out the relevant background.
Today is the return day of that injunction and also the final hearing of this claim for permanent injunctive relief. The position of the claimant is that it now wants the usual final form of the injunction which is not merely that the Defendant should be restrained from pursuing or continuing the foreign litigation but that is should not take positive steps to discontinue it. The Defendant's position today is that there should be no further injunctive relief.
The Claimant, Sam Purpose AS ("Sam") is the owner of a vessel called Sam Purpose. It has a claim against the Defendant charterers Transnav Purpose Navigation Limited ("Transnav") in respect of unpaid hire and other charges in the region of US$500,000 but also damages, following Sam's termination of the charter party by reason of Transnav's alleged default. Sam however, also owes Transnav US$2.43m by reason of the other contractual arrangements made between them, as set out in more detail in my earlier judgment. On that footing, a net sum of about US$2m is owed by Sam to Transnav.
However, Sam says that it has a very substantial additional claim for damages arising out of Transnav's repudiation of what was a six-year charter, and the present estimate of that claim is about US$3m. If that is taken into account, then Sam becomes the net creditor as it were, and significantly so. Both parties are to some considerable extent in straightened financial circumstances.
The vessel ended up in the port of Lagos. It was first arrested in October 2016 by creditors unconnected with Transnav. Sam has not offered any security in respect of that prior arrest but says that it has the financial resources to do so, provided that the later arrest to which I am now turning, is removed.
That later arrest was effected by Transnav on the basis of the liquidated sums owed to it by Sam to which I have already referred. Transnav issued proceedings in the Nigerian High Court on 10 January 2017. An order for the arrest swiftly followed on 19 January.
The relevant suite of agreements made between Sam and Transnav, including the charterparty all contained a London arbitration clause. There is no dispute but that the subject matter of the substantive claim in Nigeria falls squarely within that clause. Indeed, as a result of this dispute, Sam had commenced an arbitration here under the various relevant agreements, by notices of appointment, dated 7, 16 and 23 January 2017, Transnav appointed its nominated arbitrator and joined in the arbitration proceedings but reserving the right to challenge the jurisdiction of the arbitrators. Nothing much has happened in the arbitration since then.
As I set out later in this judgment, it is well-established that the Court's power to make an anti-suit injunction does not extend to the situation where the other party has simply arrested a vessel as security for the underlying claims to be arbitrated. Had Transnav had the ability in Nigeria to arrest the vessel without more, so as to stand as security for its claims to be brought by way of arbitration here, Sam could have no complaint.
However, it was submitted to me (on the basis of Nigerian law as summarised by Mr Afun, Sam's first Nigerian lawyer) that in Nigeria, it was impossible to obtain the arrest of a vessel without commencing the substantive claim there as well. And to judge from Transnav's skeleton argument produced to me at the last hearing, that much appeared to be common ground.
On the face of it, then, there was jurisdiction to issue an anti-suit injunction in respect of the Nigerian proceedings on the usual basis that their inception had violated the various arbitration agreements subsisting between the parties. Therefore, as a first step, Transnav was prevented by an injunction from maintaining or continuing those proceedings. And if, by a final injunction, they were ordered to cease those proceedings, if the effect of that was that the arrest would be discharged as well, then so be it. See further, paragraphs 11, 13, 20 and 21 of my judgment.
Since the making of that order, a number of things have happened. First of all, by 29 January, Sam had also consulted another lawyer, Mr Atoyebe and the intention was that he would replace Mr Afun. There was some delay in dealing with this and indeed both the new and old lawyers had filed conditional appearances in the Nigerian proceedings. Points were taken about this and who was the correct lawyer to serve. For present purposes, all I need to record is that this issue has now gone away because the Nigerian Court has accepted today that there had been a valid change of representation.
More significantly, on 8 February and on the face of it, in clear breach of the injunction Transnav applied for judgment in default on its substantive claims against Sam and that application was due to be heard on 23 February. Unsurprisingly Sam took exception to that and advised Transnav that his was a breach of the injunction and it would take proceedings against the individuals concerned for contempt of court. This, equally unsurprisingly, prompted Transnav to withdraw its application for judgment in default on 13 February. There is still no clear reason why this exercise was attempted at all. Meanwhile, on 10 February, Mr Atoyebe filed an application on behalf of Sam challenging the jurisdiction of the Nigerian Court. Essentially what it said was that the inception of the original proceedings were themselves an abuse because they flouted the arbitration clauses and indeed did not even advert to them in the Statement of Claim and matters of that kind. If that application succeeded it would result in the dismissal of the proceedings entirely, including the original arrest. On 16 February, the application was adjourned at the request of Transnav to 24 February and there was then a further adjournment to 28 February because Transnav's lawyers said that the position as to the change of representation for Sam had not yet been formalised. There was then a yet further adjournment until today
In the meantime, on 23 February 2017, but subsequent to Sam's application to challenge jurisdiction, Transnav applied to stay its own substantive proceeding proceedings in Nigeria on condition that the arrest remain in place.
This was pursuant to s10 (1) and (2) of the Nigerian Admiralty Jurisdiction Act 1991 which state as follows:
"(1) without prejudice to any other power of the Court, where—
(a) it appears to the Court in which a proceeding commenced under this Act is pending that the proceeding should be stayed or dismissed on the ground that the claim concerned should be determined by arbitration (whether in Nigeria or elsewhere) or by a court of a foreign country; and
(b) a ship or other property is under arrest in the proceeding, the court may order that the proceeding be stayed on condition that the arrest and detention of the ship or property shall stay or satisfactory security for their release given as security for the satisfaction of any award or judgment that may be made in the arbitration or in a proceeding in the court of the foreign country.
(2) The power of the court to stay or dismiss a proceeding commenced under this Act includes power to impose any conditions as are just and reasonable in the circumstances…"
This provision had not been referred to at or before the hearing on 1 February, either by Sam in its evidence or submissions, or by Transnav in its skeleton argument. It is plainly relevant to the conduct of this matter going forward. Transnav has submitted that the failure by Sam to refer to it previously amounts to material non-disclosure which should lead in any event to the existing order being discharged and no further injunction being granted. I will deal with that particular submission later in this judgment.
Today there has been a further procedural development in the Nigerian Court. It has now pronounced itself satisfied as to the proper transfer of representation on behalf of Sam and it is now ready to hear both parties applications' ie Sam's application to dismiss and Transnav's application for a stay. It will do so at the same time. Sam's position perhaps understandably is that it does not join in the application for a stay since it has a more fundamental objection to the proceedings but if it fails to make that good, then it would support a stay which will dispose of them albeit leaving the arrest in place.
Both of those applications will now be heard on Tuesday 7 March. I considered whether, in the light of that, and in the light of an objection to some new evidence, whether there was any utility in having the hearing today rather than awaiting the outcome but Sam was keen that I should reach a view on the materials before me, not least because it was maintaining its position that it should have final injunctive relief of the discontinuance kind.
Sam's essential position is that neither s10 nor...
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