This was a joint hearing of two applications by the owners of the Flag Evi, Aline Tramp SA (first claimant) and its P & I insurers, the London Steam-Ship Owners’ Mutual Insurance Association Ltd (second claimant) for anti-suit injunctions against Al Hilal Company for Farms & Manufacturing (assured)’s insurers, Jordan International Insurance Company (defendant), seeking to restrain proceedings commenced against the claimants before the Aqaba Court of First Instance in Jordan.

The first claimant time chartered the vessel to disponent owners, Starboard Shipping & Trade SA (head charterer) on an amended NYPE 46 form. The head charterer sub-time chartered the vessel to Bunge SA Geneva (sub-time charterer) on an amended NYPE 46 form dated 5 March 2015 (trip charter). Purportedly, International Produce Ltd sub-voyage chartered the vessel to the sub-time charterer on an unsigned working copy of a Synacomex 2000 form also dated 5 March 2015 (Synacomex charter). This document was provided by the insurer’s solicitors.

A cargo of corn designated to the assured (by a C & F sale contract) pursuant to a Congen 1994 bill of lading issued on 20 March 2015 (corn b/l) was loaded onto the vessel at the port of loading. The vessel then proceeded to Rio Grande where a cargo of soybean meal designated to the assured pursuant to a Congen 1994 bill of lading issued on 7 April 2015 (soybean b/l) was loaded. The vessel then proceeded to Aqaba. Upon arrival, the Jordanian Ministry of Agriculture found two minor pockets of localized surface moulding on the cargo in holds 3 and 5 and rejected the whole of the vessel’s cargo of corn.

The assured asserted a cargo damage claim relating to the cargo shipped under the corn b/l against the first claimant for some US$3,592,489 and arrested the vessel. The first claimant disputed the assured’s cargo claim. The second claimant provided a letter of undertaking in the amount of US$4,726,149.96 which was accepted by the assured and the defendant. Accordingly, the vessel was released.

Notwithstanding the first claimant’s continued denial of liability, a mitigation agreement was entered with a stipulation that the rejected cargo be repurchased by the time charterer and sold on to a third party with the assured being paid US$2,660,625. Upon the receipt of this sum, the assured and defendant accepted a revised letter of undertaking (second letter of undertaking) from the second claimant for a reduced amount of US$2,059,648.96. The first claimant was then notified of a claim for the sum of US$1,046,747.65 (US$950,132.53 for alleged damage to corn cargo under the corn b/l; US$85,222.62 for alleged shortage of soybean cargo under the soybean b/l; US$11,392.50 for custom fees incurred) but rejected the claim.

The claimants became aware of the Jordanian proceedings and wrote to the defendant’s lawyers to have them discontinued. The defendant’s lawyers responded that they were not instructed to have these proceedings discontinued and further added that ‘it is standard procedure in Jordan to name the insurer as co-defendant’. The claimants filed challenges to the Aqaba Court. As for the rescheduled application to the English court, the defendant did not appear.

In the English court, the claimants relied on the first of two broad bases set out in The Angelic Grace to obtain an anti-suit injunction, arguing that the court should ordinarily show no diffidence in granting an anti-suit injunction where the respondent is in breach of contract by bringing the foreign proceedings (ie breach of arbitration or exclusive jurisdiction agreement), unless good or strong reasons can be shown to the contrary. The claimants further submitted that no different approach applies if the claim sought to be restraint is brought not by the insured but by the subrogated insurer.

The first claimant’s position was that both the corn b/l and the soybean b/l validly incorporated the English law and London arbitration provisions from the charterparty (whether trip charter or Synacomex charter) and hence the bills of lading were governed by English law and London arbitration.

The first claimant’s position was that the second letter of undertaking encapsulated an exclusive jurisdiction clause which read ‘This Letter of Undertaking shall be governed by and construed in accordance with English law and we agree to submit to the exclusive jurisdiction of the English Courts’ and hence was governed by English law and the exclusive jurisdiction of the English courts.

Held: The judge granted the anti-suit injunction sought by the first claimant, but dismissed the second claimant’s application for an anti-suit injunction.

The first claimant had a contractual right to resolve claims with English law and London arbitration for claims arising out of or in connection with the corn and soybean b/ls. As the assured’s right of suit against the first claimant under the bills of lading was a contingent benefit, it could not be enforced by demanding delivery of the goods and/or advancing a claim under the bills of lading without recognising the first claimant’s right to have any disputes arising arbitrated in London. Additionally, as the assured’s rights under the bills of lading were subrogated to the insurers, the insurers took those rights subject to the obligation to resolve disputes arising from or in connection with the corn and soybean b/ls with English law and London arbitration.

There was no good reason why an anti-suit injunction should be granted against the insurers on the owner’s application. The Hamburg Rules are not adopted in England, but are in force in Jordan. It was inferred that the defendant asserted that the effect of the Hamburg Rules was to give jurisdiction to the courts of Jordan as the courts of the place of discharge. Whether there was a good reason to grant an anti-suit injunction required careful consideration in cases where the competing forum has jurisdiction according to its own law: three considerations are reciprocity, how the public policy on which jurisdiction is based is regarded in this jurisdiction, and the nature of public policy and its intrinsic importance. Notably, the jurisdiction granted to the Jordanian courts by the Hamburg Rules was not an imperative jurisdiction designed to protect individuals or protect fundamental rights but a different, permissive, means of managing a bargain between international corporate counterparties than that embodied in a contract. Hence, the anti-suit injunction sought by the first claimant was granted.

For the second claimant, the judge found that the wording of the exclusive jurisdiction clause was couched not in the terminology of bilateral agreement, but in the language of unilateral submission. In construing the second letter of undertaking in its context, the judge found that the clause relied upon was not an exclusive jurisdiction agreement. The second claimant tried to rely on the second of two broad bases set out in The Angelic Grace (ie no breach of contract but defendant’s conduct was vexatious and oppressive). However, the judge did not find the Jordanian proceedings vexatious or oppressive and considered this matter to be within the remit of the Jordanian courts. Hence, the anti-suit injunction sought by the second claimant was dismissed.