E-Star Shipping and Trading Company Ltd v Delta Corporation Shipping Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Jacobs |
| Judgment Date | 07 November 2022 |
| Neutral Citation | [2022] EWHC 3165 (Comm) |
| Docket Number | Case No: CL-2022-000557 |
| Court | King's Bench Division (Commercial Court) |
[2022] EWHC 3165 (Comm)
Mr Justice Jacobs
Case No: CL-2022-000557
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Mr K Sharma (instructed by Kennedys Law LLP) for the Claimant
Mr Smith KC (instructed by Campbell Johnston Clark LLP) for the Defendant
Hearing dates: Monday 7 th November 2022
Approved Judgment
This Judgment was transcribed from the official recording by eScribers
This is an application by the Claimant (“E-Star”) for an anti-suit injunction, and separately, for relief under section 44 of the Arbitration Act 1996. E-Star's application has come on quickly. Informal notice was given to the Defendant on Friday 4 November 2022, the court having accepted that this was an urgent matter for which time would be made available today. Mr Smith KC has appeared for the Defendant. He has not been able, in the time available, to put in any evidence on behalf of the Defendant. He has therefore argued the case on the basis of the evidence adduced by E-Star, in particular, through the witness statement of Mr Kevin Okere, who is an advocate in Kenya acting for E-Star.
The anti-suit relief concerns proceedings which have been underway for some months in Benin, in relation to a cargo of rice. I will explain in more detail in a moment the factual background, but it is clear that the relief now sought goes well beyond the anti-suit relief typically sought in Commercial Court proceedings. The reason is that the proceedings in Benin, which E-Star seeks to injunct, have in fact run their course very substantially over the past three months. They have resulted in an order for the sale of the cargo, which is the subject matter of the Benin proceedings. The substance of the relief now sought is, in effect, a reversal of the order which has been made by the Benin court, after a contested hearing involving a large number of parties. That court is the Court of Commerce of Cotonou in the Republic of Benin, and I shall refer to it as “the Benin court”.
The order made by the Benin court is, in summary, follows. In a lengthy judgment originally given on 5 October 2022, and then, it appears, formally certified on 11 October 2022, the Benin court decided that various shippers and receivers (“the Benin plaintiffs”) would have to make payment for the cargo which was the subject of the proceedings, if they were to have delivery of that cargo. As the court says in the translation of the judgment (whose original language was French):
“Whereas, consequently, and subject to the above reservations, it is appropriate to rule that the various shippers of goods on board the vessel, MV ESHIPS PROGRESS, will have to fulfil their obligations to DELTA CORP SHIPPING PTE in order to claim any delivery.
That in the event that any person claiming goods embarked on the said vessel fails to fulfil the obligations relating thereto either by the person itself or its shipper, within a period of fifteen (15) days as from the present decision, Maître Monique KOTCHOFA FAIHUN, the aforementioned Court Bailiff, shall organize the sale by auction of the said goods, and shall hand over the proceeds to the DELTA CORPORATION SHIPPING PTE company in payment of its claim.”
Those orders were then reflected in the dispositive orders which the court made on page 27 of the translation of the judgment.
The application made by E-Star seeks to, in effect, reverse those orders. The present application is therefore not really for an anti-suit injunction, but rather for an anti-enforcement order. Indeed, the order sought goes somewhat beyond even that, because it seeks positively to require the Defendant to take steps to reverse the orders made by the Benin court after contested proceedings.
I should say, in passing, that a number of other claims were made by the Benin plaintiffs in the Benin proceedings, and indeed, by the defendants to those proceedings. It is apparent from the dispositive part of the judgment that, broadly speaking, all of those other claims were dismissed.
E-Star seeks, in addition to anti-suit relief, an order under section 44 (3) of the Arbitration Act. The substance of that application is to preserve any monies which may be paid by the shippers or receivers in Benin to the Defendant, in order to ensure that those monies are available, potentially, to the shippers or receivers who made the payment.
I have explained the nature of the relief sought, but it is now necessary to go back in time in order to understand the context in which the claim arises.
The present proceedings arise out of a chain of charterparties. At the top of the chain is a charter made between the head owners and the Defendant. The relevant vessel is called the ESHIPS PROGRESS, and it was owned by Eships Progress Limited (“Eships”). They had chartered it to the Defendant, whom I will hereafter simply call “Delta”, although I will need to explain in due course that there are two Delta entities which feature in the evidence and argument.
There was a chain of sub-charters, which can be summarised as follows. Delta sub-chartered to a company called Sea King Shipping Limited. The vessel was, in turn, time chartered to Eastern Multitrans Logistics PVT Limited. There was then a voyage charter dated 29 September 2021, to the present Claimant, E-Star. There were then various fixture notes or sub-charters under which E-Star agreed carriage contracts with a number of other entities. Accordingly, E-Star itself is somewhat removed, contractually at least, from Delta, and indeed, from the head owners, Eships.
The vessel loaded cargo in India, now some time ago, and in due course it proceeded with its cargo of bagged rice to Africa. It appears that hire was not paid all the way up the charter chain, and this led to a problem which arose at the first discharge port material to the present proceedings, which was Durban. Whilst the vessel was at Durban, there were various legal proceedings. The position is summarised in a settlement agreement dated 10 May 2022, which was entered into by, or at least proposed to be entered into by, a number of parties. I will come to the parties in a moment, but clause F of the recital summarises the position at Durban, as follows.
“Upon the vessel's arrival at Durban on 4 January 2022 bills of lading were not available and the vessel was not in a position to discharge. Hire was also unpaid to Eships, and Eships exercised rights of lien. Discharge at Durban was subsequently completed pursuant to an order of the Durban High Court once a berth became available. Thereafter, Eships suspended the vessel's service. In due course, Eships bunkered the vessel at its own cost and the vessel sailed for Abidjan.”
This settlement agreement was an agreement between various parties: Eships; Delta (the company subscribing the settlement agreement was Delta Corporation Shipping PTE Limited, which is the same name as the Defendant in these proceedings); E-Star; and various shippers identified in schedule A to the settlement agreement. There is an important issue as to whether the settlement agreement ever became effective. However, those were the named parties who would have been party to the agreement, at least if it had become effective.
The substantive terms of the settlement agreement are material to the present application in a number of ways.
Under clause 1 of the agreement, the shippers (i.e. the various companies and individuals identified in schedule A) agreed jointly and separately to remit various sums to the bank account of Eships. The bank account was specified in clause 1, as were the sums to be paid. Those sums amounted in total to just over USD 1 million.
Clause 2, on which some argument has focused in the course of today's hearing, provided as follows.
“Subject to and conditional upon payment and receipt of the sums referred to above, Eships and Delta hereby agree with all other parties to this agreement to continue the voyage from Durban to Abidjan and Cotonou, and thereupon to discharge and deliver the cargos referred to in the bills of lading listed in Schedule A hereto on Free Out terms but otherwise clear of all liens or other incumbrances, including port disbursements, which port disbursements shall be paid and borne by Delta/Eships. The terms of the time charter to Delta and the obligations thereunder shall remain unchanged by this agreement.”
The evidence indicates, at least judging from what later happened in Cotonou, that not all of the sums were in fact paid pursuant to the settlement agreement. The fact that the payments in full had not been made was a cause of the problems which later arose.
Although Mr Smith KC, in the course of argument, has placed some reliance on that clause, and the fact (as he submitted) that full payments had not been made pursuant to the settlement agreement, if binding. However, I do not consider that the question of whether full payment was or was not made is an issue which needs to be resolved or grappled with at the present stage. If there were to be an arbitration between any of the parties to this agreement, it is an issue which would fall within the remit of the arbitrators.
Clauses 3 to 6 of the settlement agreement contained various provisions relating to releases, undertakings, and matters of that kind, which is not necessary to describe in detail. Clause 7 provided that the agreement was subject to English law. Clause 8 was an arbitration agreement relating to any disputes. In relation to disputes between Eships and Delta, there was a nominated sole arbitrator. But if there were other disputes arising under the agreement...
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