Andrew Burrows QC, sitting as a Judge of the High Court – and shortly to be a Judge of the Supreme Court – handed down judgment on 22 August 2019 in an interesting anti-suit injunction case in which a number of members of Twenty Essex were involved.
The judgment concerns the return date hearing of two without notice anti-suits obtained earlier in the year by Gunvor and Clearlake, both against Xiang Da.
In short, Xiang Da were the owners of the vessel the Chang Hang Guang Rong (the “Vessel”). In the aftermath of a particular voyage, they were sued before the Singapore High Court by cargo receivers, China Base. Xiang Da sought to pass on the claims made by China Base to Clearlake (the Vessel’s voyage charterers) and Gunvor (the Vessel’s sub voyage charterers) by way of third-party proceedings in Singapore (analogous to England’s CPR Part 20 procedure) (the “Singapore Proceedings”).
Gunvor and Clearlake obtained without notice anti-suit injunctions from Bryan J (reported as Gunvor Singapore Pte Ltd v Xiang Da Marine Pte Ltd  EWHC 1536 (Comm)). Clearlake’s was primarily premised on the Singapore Proceedings, which at that time included contractual claims under the charter, constituting a breach of an exclusive London High Court jurisdiction clause (an “EJC”) in the charter between them and Xiang Da (the “Charter”). It was also based on the argument that claims under a letter of indemnity pursuant to which Xiang Da’s claims were in part being advanced were similarly caught by the Charter’s EJC.
Gunvor’s injunction, at this stage, was premised on the Singapore Proceedings being advanced against them as the shipper of the Vessel’s cargo, and thus subject to the EJC in that contract (a bill of lading). Gunvor did not accept that it was a party to the bill of lading, and so the injunction was obtained on a “quasi-contractual” basis.
The Return Date
At the Return Date, it was common ground that the Singapore Proceedings as originally constituted were a breach of the EJC in the Charter. Xiang Da had however proposed to amend its claims in Singapore to avoid some of the more obvious grounds for an anti-suit injunction which its original proceedings had presented, deleting all contractual claims against Gunvor and all contractual claims against Clearlake apart from claims under the letter of indemnity.
The charterparty contained an exclusive jurisdiction clause in favour of the English courts and the letter of indemnity, while also pointing in favour of the English courts, did so by a non-exclusive submission clause. Xiang Da argued that this occupied the field and displaced the exclusive jurisdiction clause. The Court, however, concluded that on its true construction the exclusive jurisdiction clause in the charterparty would apply to claims under the letter of indemnity an would not be displaced by the letter of indemnity clause as the two clauses were in fact consistent and did not clash. As a result Xiang Da was bound to bring its claims under the letter of indemnity in England. Since there were no strong reasons not to grant the injunction, then applying the principles in The Angelic Grace  1 Lloyds Rep 87, Clearlake’s application for an injunction to restrain the Singapore claims under the letter of indemnity was upheld.
So far as concerns Gunvor’s injunction, by the Return Date, Xiang Da had proposed amendments to the Singapore Proceedings, and narrowed its claims against Gunvor to claims that now lay only in tort. So, it was no longer pursuing the contractual claims against Gunvor which would have easily been caught by the EJC.
Nevertheless, even on that basis, Gunvor argued, the tortious claims in Singapore were still vexatious and oppressive and ought to be restrained. That was because they were, properly viewed, an attempt to circumvent the normal way in which claims were passed down a chartering chain from owner to charterer to sub-charterer. Xiang Da’s claim against Gunvor in Singapore essentially sought to leapfrog Clearlake. It was doing so, Gunvor said, because if Xiang Da did sue Clearlake, its direct contractual counterparty, in tort (or contract) then those claims would most certainly fall within the Charter’s EJC.
The Judge accepted Gunvor’s argument, and continued its anti-suit injunction on the vexatious and oppressive basis. Key in the Judge’s mind seems to have been that Xiang Da had attempted to manipulate the substance of its third-party claims against Gunvor in Singapore to avoid suing its natural contractual counterparty, Clearlake, under the Charter, and thus avoid the consequences of the EJC within it.
Clearlake had also argued that the tortious claims against Gunvor should be restrained at the suit of Clearlake, on the grounds that they were a breach of the exclusive jurisdiction clause which, Clearlake argued, not only prevented claims against Clearlake itself as party to the contract but also provided protection against connected claims against third parties such as Gunvor. This question of the effect of jurisdiction clauses with regard to claims against third parties has been controversial in the recent case law in cases such as Cavendish v Ghossoub  EWHC 2401 (Comm). The Judge considered this issue carefully and balanced the considerations for and against but concluded that, having decided to grant the injunction on behalf of Gunvor, on grounds of vexation, it was not necessary for him to decide it.
The Judge’s decision is significant as it illustrates the English Courts will in certain cases act to restrain foreign proceedings which are brought inconsistently with an EJC, even where the defendant abroad is not itself a party to the EJC in question, and is not being sued pursuant to the contract in which the EJC exists. This is therefore a broader jurisdiction than the quasi-contractual injunction, which has been explored in the caselaw in recent years.
Thomas Raphael QC leading Marcus Mander of 7KBW, acted for Clearlake, instructed by Kennedys LLP
Sara Masters QC acted for Xiang Da, instructed by HFW