Considerations in Exercise of Court’s Power to Grant Anti-Suit Injunction

(1) Starlight Shipping Co. (2) Overseas Marine Enters. Inc. v. (1) Tai Ping Ins. Co. (2) Int’l Econ. & Trading Corp., Wugang Group, 2007 WL 2186944, [2007] EWHC 1893 (Queen’s Bench Div., Commercial Ct.)

In this case, the owner (Starlight) and the manager of a ship (Overseas) applied for an injunction restraining proceedings brought by the respondent insurer (Tai Ping) in the Maritime Court of Wuhan in China.  Starlight had chartered its vessel subject to an arbitration agreement which was incorporated into a bill of lading to which a sub-charterer (Wugang) had then become a party.  The ship and cargo were lost en route from Brazil to China.  Tai Ping commenced proceedings for recovery of sums paid in indemnification of Wugang.  Starlight and Overseas disputed jurisdiction of the Chinese court on grounds of breach of the arbitration agreement, and sought an injunction in the English Commercial Court in restraint of those proceedings.  Tai Ping and Wugang argued that they were not bound by the arbitration agreement as a matter of Chinese law.

The court found that Tai Ping and Wugang were bound by the arbitration agreement as a matter of English law and Starlight’s application was granted.  (Overseas, however, was not party to the arbitration agreement, and so proceedings against it could not be restrained on that basis.) 

The case is interesting because the court considered the interaction between the two sources of its power to grant injunctive relief, namely s.37 of the Supreme Court Act 1981 and s.44 of the Arbitration Act 1996 (which is only available if arbitration has begun or is about to begin).  Notably, it found that exercise of its discretion under s.37 was subject to the same considerations and restrictions as under s.44 (including a requirement as to urgency), and on the facts – including the current tendency of Chinese Maritime Courts to find arbitration agreements invalid – found sufficient urgency to justify an injunction under s.37.

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