SRS Middle East FZE v Chemie Tech DMCC
| Jurisdiction | England & Wales |
| Judge | Mr Justice Andrew Baker |
| Judgment Date | 02 November 2020 |
| Neutral Citation | [2020] EWHC 2904 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2020-000656 |
[2020] EWHC 2904 (Comm)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Rolls Building, Fetter Lane, London EC4A 1NL
Mr Justice Andrew Baker
Case No: CL-2020-000656
James Leabeater QC (instructed by Morgan, Lewis & Bockius LLP) for the Claimant
Riaz Hussain QC (instructed by Taylor Wessing LLP) for the Defendant
Hearing date: 28 October 2020
Judgment Approved by the court for handing down
(subject to editorial corrections)
If this Judgment has been emailed to you it is to be treated as ‘read-only’. You should send any suggested amendments as a separate Word document.
Introduction
By Claim Form dated 7 October 2020, the claimant seeks “ interim and/or final anti-suit injunctions” to restrain the defendant from pursuing proceedings in the Emirate of Sharjah, UAE, in contravention, the claimant says, of a binding arbitration agreement between the parties. The particular target of the Claim is an action commenced by the defendant on or about 15 September 2020 in the Sharjah Federal Court of First Instance (“the Sharjah Court”), Case No. SHCFICOM 2020/0005047 (“the Sharjah Claim”).
I heard the parties on 15 and 19 October 2020, for urgent case management, because a hearing in the Sharjah Claim was scheduled for 20 October 2020. The defendant undertook to appear in the Sharjah Court only to seek an adjournment, and I gave directions for service of these proceedings, an exchange of evidence, and a hearing on 28 October 2020 that, in the event, came on again before me. One direction as to evidence, under CPR 35.5(1), permitted the parties to adduce expert opinion evidence as to UAE law within any witness statements that were served rather than by way of expert report requiring permission under CPR 35.4(1) and other Part 35 formalities.
On 20 October, the defendant appeared in the Sharjah Court to seek an adjournment, as promised, and that hearing in the Sharjah Claim is now scheduled for 4 November.
Pursuant to my case management directions, the defendant acknowledged service on 21 October without stating any intention to contest jurisdiction but stating an intention to defend on the merits.
The claimant has not issued a separate Application Notice for interim relief, but Mr Hussain QC for the defendant confirmed that no procedural point was taken and that the defendant was content for me to treat the hearing as a full inter partes hearing of the application for interim relief notified by the Claim Form itself. I am grateful for that constructive procedural approach adopted by the defendant, taking its stand, as it has, on the merits of its position in respect of the arbitration agreement and the Sharjah Claim rather than taking up time over how precisely the issue has come before the court for those merits to be examined.
This is an unusual anti-suit injunction case raising a point on the propriety, as judged by reference to the orthodox Angelic Grace test, of steps taken by the defendant to obtain interim relief from a court to whose jurisdiction the claimant is subject but which is not the court of the seat of the arbitration, in support of substantive claims that the defendant has itself referred to arbitration in London, accepting its obligation to do so.
This is my judgment on the hearing referred to in paragraph 2 above, prepared under some pressure of time so that the parties know where they stand before the hearing in Sharjah the day after tomorrow.
Facts
In June 2018, the claimant engaged the defendant by a contract expressly governed by English law to engineer and construct a new tank storage terminal and connect it to existing infrastructure in the Al Hamriyah Free Zone in Sharjah. The dispute resolution provision of the contract related to any “dispute (of any kind whatsoever) … between the Parties in connection with, or arising out of, the Contract or the execution of the Works, including any dispute as to any certificate, determination, instruction, opinion or valuation of the Employer”. It provided for reference of any such dispute to the Employer's Representative (as defined in the contract) in the first instance (clause 20.4), and to arbitration if either party was dissatisfied with the result or if the Employer's Representative failed to give a decision (ibid). Where notice of intention to commence arbitration was given, clause 20.5 required certain structured efforts at amicable settlement to be made. Then, by clause 20.6, the contract gave this detail to the agreement to arbitrate:
“In the event the Parties are unable to reach an amicable settlement in accordance with sub-clause 20.5 above, then:
(a) the dispute shall be finally settled by arbitration in accordance with the Rules of Arbitration of the International Chamber of Commerce [‘ICC Rules’];
(b) the dispute shall be settled by three arbitrators appointed in accordance with these Rules;
(c) the arbitration shall be conducted in the English language, and
(d) the place in which the arbitration shall take place shall be London.”
Pursuant to the contract, a performance guarantee dated 26 February 2020, replacing an earlier guarantee dated 1 October 2018, was issued to the claimant by Orient UNB Takaful PJSC (‘Orient’) for US$4,075,000, which was 10% of the contract price. The performance guarantee is expressly governed by UAE law and the ICC458 Uniform Rules for Demand Guarantees.
On or about 16 April 2020, the claimant purported to terminate the contract for cause (essentially or primarily heavily delayed performance). By letter dated 16 April 2020, the claimant made demand upon Orient for payment under the performance guarantee, delivering up the original as required by its terms. The defendant does not accept that the claimant was entitled to terminate the contract, and says it is entitled to payments thereunder, including for alleged variations, and to extensions of time to complete the work.
The defendant commenced arbitration under clause 20.6 by a Request for Arbitration dated 4 June 2020. The arbitration has ICC Reference No. 25361/AYZ. The claimant filed an Answer to the Request dated 5 August 2020, which included counterclaims as well as defences. A tribunal of three arbitrators is now constituted and a first case management conference has been held, although that was not the case when any of the court proceedings to which I refer below were commenced.
Article 28 of the ICC Rules deals with “Conservatory and Interim Measures”. Article 28(1) provides that, unless the parties have agreed otherwise, “as soon as the file has been transmitted to it, the arbitral tribunal may … order any interim or conservatory measure it deems appropriate”, such measure to “take the form of an order, giving reasons, or of an award as the tribunal considers appropriate.”
Article 28(2) provides as follows:
“Before the file is transmitted to the arbitral tribunal, and in appropriate circumstances even thereafter, the parties may apply to any competent judicial authority for interim or conservatory measures. The application of a party to a judicial authority for such measures or for the implementation of any such measures ordered by an arbitral tribunal shall not be deemed to be an infringement or a waiver of the arbitration agreement and shall not affect the relevant powers reserved to the arbitral tribunal.
Any such application and any measures taken by the judicial authority must be notified without delay to the Secretariat. The Secretariat shall inform the arbitral tribunal thereof.”
The following court proceedings have been commenced:
(1) Proceedings in Sharjah brought by the defendant against the claimant and Orient for interim relief in support of the defendant's substantive claims against the claimant (‘the Interim Relief Claim’). The defendant's application was initially refused and an appeal against that refusal failed, but a further appeal by the defendant was allowed and a yet further (and final) appeal by the claimant has recently been rejected. The Interim Relief Claim was commenced on 17 May 2020 by an application made to the Court of Summary Matters at the Sharjah Court (‘the Summary Court’).
(2) A claim in the Dubai Court of First Instance, Case No. 669/2020, commenced on 24 June 2020, brought by the claimant against Orient on the performance guarantee (‘the Orient Claim’). There is no question but that the claimant was entitled to sue Orient in Dubai, if it wished to pursue its claim for payment under the performance guarantee. The claimant's commencement and pursuit of the Orient Claim could not possibly justify the defendant in breaching the arbitration agreement, as regards the pursuit of its claims against the claimant under the contract. Nor does it arguably amount to good reason why the defendant should not be restrained by injunction from breaching that agreement if it is doing so or threatening to do so. That is the position notwithstanding that, according to the defendant, Orient applied to bring the defendant into the Orient Claim as a third party, on the basis that if Orient was obliged to pay out under the performance guarantee it would say the defendant was obliged to indemnify it.
(3) The Sharjah Claim, commenced as I have said in mid-September 2020,...
To continue reading
Request your trial
-
M/v Pacific Pearl Company Ltd v Osios David Shipping Inc.
...English jurisdiction or arbitration clause ( The Kallang (No. 2) [2008] EWHC 2761, [2009] 1 Lloyd's Rep 124 at [79]; SRS Middle East FZE v Chemie Tech DMCC [2020] EWHC 2904 (Comm), [2021] 1 Lloyd's Rep 371 at [35]). He submitted that it follows from this that where reasonable security ha......
-
Aquavita International SA v Indagro SA
...a judgment on the merits, it is clear that the proceedings will involve a breach of the arbitration or jurisdiction clause: SRS Middle East FZE v Chemie Tech DMCC [2020] EWHC 2904 (Comm) and The Sam Purpose [2017] EWHC 719 (Comm). ii) The relief sought does not involve (even on an interim......
-
Linde Gmbh And Another v Ruschemalliance Llc
...merits being decided in accordance with the clause. The learned author then observed (citing SRS Middle East FZE v Chemie Tech DMCC [2020] EWHC 2904 (Comm)): “If security abroad through a foreign court cannot be preserved by qualifying the injunction, the court will still grant the anti-sui......
-
RSM Production Corporation v Gaz Du Cameroun SA
...paragraph and do not need to be pursued on the merits in order to obtain or retain the benefit of that arrest or relief. (See SRS Middle East FZE v Chemie Tech DMCC [2020] EWHC 2904 (Comm) at [43] per Andrew Baker J). Should the injunction be continued? Preliminary points 24 Before conside......