Anti-Suit Injunctions against Local Court Orders for Discharge of Cargo in Sale Contract Disputes

September 16, 2022
LCI law - trade and energy news

Our team acted for the defendant in The Aquavita Eternity, which chartered the vessel to carry a cargo of ammonium sulphate from China to two Brazilian ports. The charterparty was governed by English law and provided for disputes under it to be arbitrated in London.

The vessel owner was told by the shipper of part of the cargo that bills of lading had not been released for that cargo because the charterer (which bought that cargo from it) had not paid for it and, at the shipper’s request, the owner refused to discharge the cargo without presentation of original bills. The charterer obtained a Brazilian court order requiring the owner to discharge the cargo, in response to which the owner applied to the English High Court for an anti-suit injunction against the charterer on the basis that this application breached the charterparty’s London arbitration clause.

The High Court judge considered whether the Brazilian court application was merely to obtain reasonable security for the claim (not a breach of the London arbitration clause) but decided it went beyond this (in breach the clause) because it effectively left nothing to be determined for the charterer in London arbitration – it bypassed the need for arbitration. The Court decision is the first of its kind to address this type of scenario.

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