QUEEN’S BENCH DIVISION

(COMMERCIAL COURT)
 
Dec. 11, 1997
 
____________________

 
ASCOT COMMODITIES N.V.
v.
NORTHERN PACIFIC SHIPPING
 
(THE "IRINI A")
 
Before Mr. Justice TUCKEY
 
Bill of lading - Anti-suit injunction - Arrest of vessel in Lomé - Voyage charterers shipped cargo of
rice to Togo - Time charterers failed to pay hire - Voyage charterers obtained order compelling
owners to discharge cargo in Lomé - Vessel arrested and proceedings begun in Togo - Whether
owners entitled to an anti-suit injunction restraining proceedings by plaintiffs in Togo.
 
Owners time chartered their vessel Irini A to the time charterers in April, 1997. The time charterers let
the vessel to the first plaintiffs (Ascot) for the carriage of a cargo of bagged rice from Ho Chi Minh City to
West African ports: The voyage charter provided for English law and arbitrations. Bills of lading were
issued on behalf of the master for the cargo naming Lomé, Togo and one/two safe African ports West
Africa as discharge ports. The bill of lading expressly incorporated the terms of the voyage charter. The
time charterers defaulted on their payment of hire and the owners withdrew the vessel on July 14.
 
Thereafter Ascot issued a new set of bills of lading and cancelled the original bills. Owners did not
accept that the second bills were valid or binding on them and regarded themselves as common bailees
of the cargo while the vessel was still on passage to West Africa.
 
The plaintiffs replied that owners were obliged to carry the goods to Lomé.
 
While these events were taking place in June, July and August, 1997 the vessel put into Luanda and
the owners applied to the Angolan Courts to permit discharge of the cargo and establish a lien over it.
 
In response the plaintiffs issued an arbitration application and applied to the Court for an injunction
restraining owners from discharging the cargo in Luanda. Such application was granted and in the event
on Oct. 1, the vessel was ordered to proceed to Lomé and discharge its cargo against an undertaking
by the plaintiffs to pay the owners their expenses referable to the voyage.
 
The vessel sailed to Lomé and discharged her cargo whereupon the plaintiff arrested her and
commenced proceedings in Lomé.
 
The owners applied inter alia for an anti-suit injunction to restrain the proceedings in Togo.
 
-Held, by Q.B. (Com. Ct.) (TUCKEY, J.), that (1) the submission that in the correspondence between the
parties there was a jurisdiction agreement under which the parties agreed that the dispute now before
the Courts in Togo should be decided by the English Courts would be rejected; no such agreement
could be spelt out of the correspondence; such agreements need to be clearly established if they were
to be relied on in support of anti-suit injunctions; there probably was an agreement that the matter
should not be arbitrated but should be determined by the Commercial Court and it could be argued that
the bill of lading issues should be litigated in the Commercial Court in England but any such agreement
did not extend to include the claim for repayment now being made in Togo (see p. 199, col. 1);
 
 (2) it was for the party seeking an injunction to prove that the proceedings abroad were vexatious; for
that purpose he generally had to show that the plaintiff in a foreign Court could not obtain an advantage
from the foreign procedure which he could not obtain in the English Court (see p. 199, col. 2);
 
(3) this was not an appropriate case for the exercise of this jurisdiction which had obviously to be
exercised sparingly; the plaintiffs did have a juridical advantage in the sense that they had arrested the
vessel in Togo to obtain security for their claim; the effect of granting an anti-suit injunction would be
that the advantage they had gained by that arrest would be considerably reduced (see p. 200, col. 1);
 
(4) the owners had not shown that these proceedings were vexatious or oppressive; and the owners
had not satisfied the Court that they should have an anti-suit injunction (see p. 200, col. 2).
 
____________________

 
The following cases were referred to in the judgment:
 
Airbus Industrie GIE v. Patel, (C.A.) [1997] 2 Lloyd’s Rep. 8;
 
Bank of Tokyo Ltd. v. Karoon, (H.L.) [1987] 1 A.C. 45.
 
____________________

 
This was an application by the defendants Northern Pacific Shipping for an anti-suit injunction
restraining the proceedings by the plaintiffs Ascot Commodities in Togo where the defendants’
vessel Irini A was under arrest, the plaintiffs claiming U.S.$473,000 plus further sums which the plaintiffs
said they had expended in getting the vessel to Togo.
 
Mr. D. Garland (instructed by Messrs. Stephenson Harwood) for the plaintiffs; Mr. R. Lord (instructed
by Messrs. Barlow Lyde & Gilbert) for the defendants.
 
The further facts are stated in the judgment of Mr. Justice Tuckey.
 
JUDGMENT
 
Mr. Justice TUCKEY: This is an application for an anti-suit injunction by the defendant owners of the
vessel Irini A to restrain proceedings by the plaintiffs in Togo where the vessel is under arrest. The
circumstances in which this application comes to be made need to be recited at some length, because
the history is somewhat long and complicated.

 
Owners time chartered the vessel in April, 1997. The time charterers sub-chartered it to the first
plaintiffs, Ascot, for the carriage of a cargo of bagged rice from Ho Chi Minh City to West African ports.
The voyage charter provided for English law and arbitration. Bills of lading were issued on behalf of the
master for the cargo, naming Lomé, which is in Togo, and one/two safe ports West Africa as discharge
ports. The bill of lading expressly incorporated the terms of the voyage charter. The plaintiffs
subsequently paid 95 per cent. of the total freight due. However, the time charterers defaulted on their
payment of hire to owners. It is owners’ case that they accepted this breach as being a repudiation of
the time charter and withdrew the vessel on July 14.
 
Thereafter, Ascot, acting, as they claimed they were entitled to do, under cl. 52 of the voyage charter,
cancelled the original bills of lading and issued new ones naming Lomé and Matadi in Zaire as
discharge ports. Owners did not and do not accept that the second set of bills issued in this way were
valid or binding on them. They maintain that cl. 52 was not incorporated into the original bills of lading
and even if it was, before issuing split bills as this clause provides for, their consent as owners was
required and such consent was not sought or given. Their case is that they became common law
bailees of the cargo while the vessel was still on passage to West Africa.
 
The plaintiffs say that if owners are right about what they say in relation to the second set of bills, they
nevertheless, remained bound by the terms of the first set of bills to carry the cargo to Lomé so there
can be no justification for their claim to be compensated for the carriage of the goods as common law
bailees.
 
Owner’s riposte that the contract contained in the first set of bills was repudiated either when the
second set was issued or by letter dated Aug. 11, 1997.
 
While these events were taking place in June, July and August, 1997, the vessel was off the west
coast of Africa. On Aug. 14 it put into Luanda. Once it arrived there owners notified the plaintiffs’
solicitors that they intended to apply to the Courts in Angola to permit discharge of the cargo there and
establish a right to a lien over it. They did in fact make such an application, although it was not made
against the plaintiffs but against the defaulting time charterers.

Those moves prompted proceedings in the English Courts by the plaintiffs. They issued an arbitration
application before this Court in which they sought, among other things, an injunction to restrain owners
from discharging the cargo in Luanda.
 
This Court was concerned with the matter on a number of occasions, the detailed history of which is
unimportant. There were applications relating to what the vessel could and could not do. The Court
restrained the vessel from discharging at Luanda in September. Mr. Justice Clarke, directed that the
parties should make written proposals to one another as to how the underlying dispute about whether
there was a contract of carriage on either of the sets of the bills of lading should be determined and as
to whether the vessel should continue the voyage to Lomé, and, if so, on what terms.
 
There followed correspondence from which owners say it is clear that the parties agreed that their
disputes were to be decided by this Court. In other words, they contend that in that correspondence a
jurisdiction agreement was reached which precludes the proceedings which are on foot in Togo. That is
the first ground for the application for an injunction.
 
I will come back to the correspondence which is relied on in support of that assertion in due course,
but to continue with the history. The matter next came before Mr. Justice Colman on Sept. 30. Owner’s
position was that they were in principle willing to go to Lomé if their concerns were met. Those concerns
included the fact that they wanted to be paid their expenses of undertaking the voyage, which they had
made clear they would not be able to meet out of their own resources. Mr. Justice Colman ordered the
vessel to proceed to Lomé and discharge its cargo against an undertaking by the plaintiffs to pay
owners’ expenses referable to the voyage, totalling more than U.S.$400,000.
 
Following that order the vessel sailed to Lomé and discharged her cargo, whereupon the plaintiffs
arrested her and commenced the proceedings in question in Lomé. They claimed damage to and late
delivery of the cargo, but, more importantly, repayment of the sums which they had paid to owners as
part of the cost of obtaining the order from Mr. Justice Colman that the vessel should proceed to Lomé.
The nature of the proceedings can, I think, be fairly clearly discerned from the documents which have
been put before this Court. The claim is for U.S.$473,000-odd, plus further sums which the plaintiffs say
they have expended in getting the vessel to Lomé. They ask for the vessel to be sold at public auction in
satisfaction of the claim, interest and costs. The claim resulted in the arrest of the vessel and was fixed
for a summary hearing on Nov. 29. However, as a result of orders of this Court, which I will come to in a
moment, this hearing has been postponed until tomorrow.

 
In the meantime, owners started this application which sought, first of all, an injunction requiring the
plaintiffs to release the vessel from arrest on the basis that the arrest was in breach of an undertaking
given to the Court. This part of the application failed before Mr. Justice Colman on Nov. 21. He decided
that there was no breach involved in the arrest of the vessel.
 
The second part of the application sought the anti-suit injunction to restrain the proceedings in Togo.
Mr. Justice Colman made and I continued holding orders to prevent the proceedings going ahead on
Nov. 29. There is a dispute as to whether the plaintiffs complied with that order but the upshot of
whatever did or did not happen on that day is the Court did adjourn the case until tomorrow. So I now
have to decide whether or not there should be a full anti-suit injunction directed to preventing the
proceedings in Togo going further.
 
Before leaving these Togo proceedings I should add that the Court fixed, so far as the claim for return
of the money was concerned, the sum of U.S.$323,000 as the price of obtaining the release of the
arrest of the vessel in respect of that claim. Another sum was fixed in relation to the cargo claims, but I
do not think that is relevant for present purposes since if the arrest was maintained solely in relation to
the cargo claim it is fairly clear that owners’ club would put up security against that claim so as to ensure
the release of the vessel from arrest in that respect. However, as U.S.$323,000 is well short of the sum
claimed by the plaintiffs in the proceedings in Togo, they have appealed (as have owners) and the
appeal is due to be heard some time in January, 1998.
 
The only other fact I need mention before coming directly to the issues which arise on this application
is that very recently the owners’ mortgagees have said (although no concrete offer has been made) that
they would be prepared to put up security in the form of a bank guarantee to cover the U.S.$323,000.
That offer, if it can be called an offer, has been greeted with a certain amount of scepticism by the
plaintiffs’ solicitors in view of the fact that at all earlier stages in the proceedings owners have been
saying that they had no funds and, impliedly, no access to funds, hence the only way the plaintiffs could
get their cargo to Togo was by paying the cost of doing so.
 
As I have already said the first ground for the application for the injunction is that there was a
jurisdiction agreement under which the parties agreed that the dispute which is now before the Courts in
Togo should be decided by this Court.

Further or alternatively owners say the proceedings in Togo should be restrained because they are
oppressive and/or likely to cause injustice.
 
The jurisdiction agreement is said to have been in the correspondence between solicitors which
preceded the hearing on Sept. 30. The position at the time when this correspondence took place was
that the vessel was still in Luanda and owners were saying: "We want to discharge the cargo and
exercise a lien over it in Luanda, and anyway we cannot afford to take it to Lomé".
 
The legal issue had been joined about whether cl. 52 entitled the plaintiffs to do as they had done and
whether there was still on foot any valid contract carriage on this issue. Mr. Justice Clarke had already
held that each side’s case was arguable but it is important to note that at this stage no claim had or
could have been made by the plaintiffs for the recovery of the money that they eventually paid under the
order of Mr. Justice Colman to get the vessel to Lomé. That claim is a restitutionary claim. The plaintiffs
say they were forced into agreeing to pay for this voyage because at risk was this valuable cargo of rice,
about U.S.$5 m. worth, which owners were threatening to dump in Luanda, which, on the face of it,
would be in no one’s interests.
 
While I accept that behind that claim lies what Counsel have called the "bills of lading issues"; such a
claim could, I think, be made without reference to those issues. "Duress of goods" is how Mr. Garland
put it, or "total failure of consideration". But I do accept that at least as part of such a claim the Court
would have to resolve the issue as to whether there was or was not a contract on either of the sets of
bills of lading covering the relevant part of the voyage. Having made those observations about the
nature of the claim which is made in Lomé and the position as it was in mid September I turn to the
correspondence which is relied on. After the hearing before Mr. Justice Clarke the plaintiffs’ solicitors
wrote on Sept. 17 saying:
 
. . .The judge indicated yesterday that the disputes are likely to be subject to the arbitration clause in the
voyage charterparty as incorporated into the bill of lading contracts. We agree. Our clients would prefer
the matter to be resolved by a commercial judge.
 
Then they discussed how that might happen and how the point about cl. 52 would impact upon the
dispute between the parties. They refer to the fact that one of the cargo receivers was threatening to
bring claims against Ascot in respect of the late delivery of their proportion of the total cargo and what
the financial consequences of that would be. They refer to the fact that if the cargo was discharged at
Luanda they would be put to costs of about U.S.$750,000 for reshipping the cargo to Lomé, and the risk
of theft, loss and damage or deterioration in the cargo itself while it was in Angola.

 
Owners’ solicitors responded. Under the heading "Bill of Lading Dispute" they said:
 
Our clients agree that the dispute would best be resolved by a commercial court judge and not in
arbitration.
 
They then dealt with owner’s claims, saying that if they were right on the bill of lading issue they would
be entitled to U.S.$840,000 and asked for security for that claim.
 
That is the correspondence. The matter was not agreed in correspondence and came before Mr.
Justice Colman on Sept. 30. As I have said by then owners were saying: "Well, we will take this cargo to
Lomé if we are ordered to do so but our concerns, that is to say the money we need to do that must be
met before we are able to do so". On that basis the plaintiffs undertook to provide U.S.$410,000 to pay
for the costs of the voyage to Lomé. They also undertook to provide security for owners’ claims and
have done so. Owners undertook to repay to the plaintiffs any sums which this Court later determined
the plaintiffs should not have had to pay.
 
It is not contended by Mr. Lord, Counsel for owners, that this undertaking amounts to or evidences any
jurisdiction agreement. If there was an agreement one has to spell it out of the earlier correspondence
and to support owners’ case that agreement must have extended prospectively to the restitutionary
claim which is now made by the plaintiffs in Togo. I just cannot see that any such agreement can be
spelt out of the correspondence. Such agreements need to be clearly established if they are to be relied
upon in support of anti-suit injunctions. I think that there was an agreement that the matter should not be
arbitrated but should be determined by the commercial Court and one can argue that there was an
agreement that the bill of lading issues should be litigated in the commercial Court in England. But I do
not think that any such agreement extended to include the claim for repayment now being made in
Togo, although as I have already said, that claim might involve the Court having to consider the bill of
lading issues.
 
So, the question of whether this Court should grant an anti-suit injunction on the basis of a jurisdiction
agreement does not arise and therefore I need not consider the authorities to which I have been
referred which deal with the principles to be applied where that is the case.
 
However, in considering owners’ alternative case I do take account of the fact that the bill of lading issue
may be an issue which the Court in Togo would have to grapple with if it is to proceed and that arguably
there was an agreement that this issue should be litigated here.
 
In considering whether the proceedings in Lomé are oppressive and/or likely to cause injustice, I
remind myself of the principles which apply where the Court is asked to grant an anti-suit injunction
on that basis. It is accepted by both sides that what Lord Justice Robert Goff said in Bank of Tokyo
Ltd. v. Karoon, [1987] 1 A.C. 45 at p. 59 is still the law on this subject. He said:
 
. . .The jurisdiction must be exercised with extreme caution, indeed sparingly: this is partly because
concurrent proceedings in different jurisdictions are tolerated, but also because of a desire to avoid
conflict with other jurisdictions. For it is accepted as is indeed obvious, that courts of two different
jurisdictions, one in this country and one in a foreign country, can have jurisdiction over the same
dispute. It is not prima facie vexatious for the same plaintiff to commence two actions relating to the
same subject matter, one in England and one abroad.
 
It is for the party seeking an injunction to prove that the proceedings abroad are vexatious. For that
purpose he generally has to show that the plaintiff in a foreign Court could not obtain an advantage
from the foreign procedure which he could not obtain in the English Court.
 
I have been referred also to the case of Airbus Industrie GIE v. Patel, [1997] 2 Lloyd’s Rep.
8 (which is the subject of an appeal to the House of Lords) where Lord Justice Hobhouse in
considering the question of oppression or injustice said the Court had to consider what was the
natural forum and whether there was any prejudice to the party who had been subjected to the
foreign suit in question, against had to be balanced other factors which included the question of
legitimate juridical advantage.
 
Mr. Lord, in his submissions for owners, said that Togo was an inappropriate forum and England
was the appropriate forum for the resolution of this dispute. The parties had no connection with
Togo. The plaintiffs are a Swiss trading company. The owners are Greek. The vessel is flagged in
Malta. The dispute had no factual connection with Togo other than the fact that the cargo had been
delivered there, but it was only delivered there as a result of an order of this Court. With all
deference to the Courts of a foreign jurisdiction, the evidence before this Court was that the Courts
in Togo did not have the necessary experience to deal with a case of this kind. It would be dealing
with difficult questions of English maritime law which this Court was far better equipped to deal
with. England and English law were chosen by the parties for the resolution of any disputes they
had. Everything therefore points to England and away from Togo. Mr. Lord submits the plaintiffs
cannot show any juridical advantage by suing in Togo. The one they suggest, which is that under
Togolese law their claim may have priority over the claim of the mortgagees of this vessel is either not
made out from the evidence before the Court, or if it is, it should be considered as being an illegitimate
advantage since it flies in the face of international maritime law.

 
These are all factors which, of course, the Court has to bear in mind when exercising the discretion in
a case of this kind. But they do not persuade me that this is an appropriate case for the exercise of this
jurisdiction which has obviously to be exercised sparingly. It seems to me that the plaintiffs do have a
juridical advantage in the sense that they have arrested the vessel in Togo to obtain security for their
claim. That advantage is one which may result in them being able to get a judgment in the Court in Togo
speedily with which they can exercise a right to sell the vessel and have the money which they have laid
out paid back to them. The effect of granting an anti-suit injunction would be that the advantage they
have gained by that arrest would be considerably reduced. While proceedings here to determine the
issues which arise could probably be heard in a relatively short time, the evidence is that it would take
six to 12 months to enforce any judgment that this Court made in Togo. In the meantime the vessel
would remain under arrest, would be continuing to cost money in the shape of paying crew, insurance
and be subjected, perhaps, to other claims against it. So in that sense it is a wasting asset and one
would be wasting it further by granting an anti-suit injunction.
 
 There is also a question as to whether, if the Court did restrain the proceedings, the arrest itself might
be in jeopardy. The evidence is not crystal clear on this point but both experts on Togolese law do, it
seems to me, suggest that there is that risk. As to the Courts in Togo, I accept Mr. Garland’s
submission that this Court should be very slow to form views about the competence or otherwise of a
foreign Court to deal with a dispute of this or any kind. I am not persuaded on the evidence before me
that this is a factor which weighs against the plaintiffs in the exercise I have to perform. It is, of course,
important to note that in the Togolese Courts it is possible to challenge the Court’s jurisdiction. That is
an important factor to be borne in mind by this Court when deciding whether to grant an anti-suit
injunction. The evidence is that if they fail before me owners will challenge jurisdiction there and I take
that into account in considering whether it would be right to restrain those proceedings at this stage
without the Togolese Court itself being given the opportunity to decide whether it should take or decline
jurisdiction.
 
I do not think that owners have shown that these proceedings are vexatious or oppressive of them.
Their vessel is there. It is the subject of arrest. It is the subject of cargo claims, quite apart from this
claim. It would no doubt be convenient for them to restrain those proceedings and eliminate the potential
risk that if the plaintiffs succeed the vessel may be sold to satisfy their claim, but I do not think that is a
reason having regard to the history of this case, for saying that they should be entitled to the injunction
which they seek. While one can argue that England is a natural forum for the resolution of this dispute,
as Mr. Lord has done, I do not accept his submission that Togo is not also an appropriate forum for
resolving a dispute about a cargo or about the contract under which a cargo was to be taken to Togo in
a vessel which is now under arrest there facing other claims by cargo interests in that country.
 
At the end of the day it is for owners to satisfy the Court that they should have an anti-suit injunction,
and, as I said before lunch, I do not think they should have one.