Anti-suit application grounded: Magellan Spirit [2016] EWHC 454 (Comm)

Three members of 20 Essex Street were involved on both sides of a recent application for an anti-suit injunction in Magellan Spirit ApS v Vitol SA [2016] EWHC 454 (Comm).  The central issue in the case was whether there was an agreement conferring jurisdiction on the English High Court for the purposes of, among other things, the Lugano Convention.

In refusing the anti-suit injunction, Leggatt J held that even if a written consensus could  satisfy Article 23 of the Lugano Convention, it was not enough for an anti-suit injunction.   This is also a case in which delay in applying for an anti-suit injunction was a problem for the applicants (see too our post on Ecobank Transnational v Tanoh). 

The dispute in a nutshell

Timothy Hill QC and Richard Greenberg acted for the Claimant, the owner of the vessel “Magellan Spirit”. Andrew Baker QC acted for the Defendant, a Swiss trading company within the Vitol Group. The Claimant sought an anti-suit injunction to restrain the Defendant from pursuing proceedings against the Claimant in Nigeria on the basis of the parties’ alleged jurisdiction agreement in favour of the English High Court. The Defendant cross-applied for a declaration that the court had no jurisdiction over the claim.

The dispute arose out of a long-term gas supply contract by which the Defendant agreed to supply gas to a Korean company by delivery ex-vessel in South Korea. The Defendant time chartered the “Magellan Spirit” from a Bermudan company in the Vitol Group in order to effect delivery. The time charter was governed by English law and referred any disputes arising under it to the jurisdiction of the English High Court.

On its eighth voyage, the vessel was grounded when leaving port in Nigeria, causing several weeks of delay and rendering the cargo unavailable for delivery under the contract. This incident was the subject of the Defendant’s claim for loss and damage in the Nigerian courts, brought under the parties’ contract of carriage and relying on the Hamburg Rules.

There was no dispute as to the legal principles underlying either party’s application. The question was whether the Claimant could satisfy the Court that there was an agreement conferring jurisdiction on the English High Court, both for the purposes of its application and for the Defendant’s challenge to the Court’s jurisdiction under Article 23 of the Lugano Convention.

The Claimant’s arguments for the anti-suit injunction

The Claimant put its case in three ways:

  1. The Defendant is bound by the time charter’s jurisdiction clause, as the Defendant was the Bermudan charterer’s undisclosed principal.
  1. The bill of lading should be rectified to incorporate the time charter, including the law and jurisdiction clause.
  1. The parties entered into a free-standing exclusive jurisdiction agreement in favour of the English court.

The judgment

Leggatt J dismissed all three grounds.

As to the first, Leggatt J was unpersuaded on the evidence that the Bermudan charterer entered into the time charter as the Defendant’s agent. There was no agreement establishing an agency relationship between them. Nor could one be implied on the basis of their conduct. In particular, although the tenor of the evidence was that the vessel was chartered solely for the Defendant’s use and benefit, with neither profit nor loss flowing to the charterer, Leggatt J could discern no conduct signifying an intention that the Defendant would have rights against (or liabilities owing to) the Claimant.

As to the second ground, Leggatt J was not convinced that the parties’ exchange of emails manifested a common intention that the bills of lading issued during the life of the charter would incorporate its terms.

The final ground rested on the proposition that Article 23 of the Lugano Convention could be satisfied by a mere written consensus, as opposed to a legally binding contract. Leggatt J found that the parties reached no such consensus during their charter negotiations. In any event, even if it were proved, such a consensus would have been incapable of supporting an anti-suit injunction.

Leggatt J also concluded that the Claimant’s delay in making the application was a further ground for its dismissal.

For these reasons, Leggatt J refused the Claimant’s application and granted the Defendant’s declaration.