In the nick of time: The effect of delay on anti-suit injunctions24 March 2021
"These cases shed light on how the court will deal with a failure to apply for an anti-suit injunction in good time and the impact of a conditional order on claims which are subject to a short one-year time-bar under the Hague/Hague Visby Rules."
Anti-suit injunctions (which prevent a party from issuing or continuing proceedings in breach of an arbitration or jurisdiction agreement) are an important tool through which parties, engaged in cross-border matters, ensure compliance with contractual bargains.
Once an applicant for an anti-suit injunction can demonstrate that its case is right “to a high degree of probability”, the respondent must prove that there are strong reasons not to grant the injunction. One key reason on which respondents frequently rely is delay in bringing the application. Where the court considers a delay is excessive, this is generally sufficient to defeat an application for an anti-suit injunction.
The decisions of the English High Court in Specialised Vessel Services Ltd v MOP Marine Nigeria Ltd¹ and in Times Trading Corporation v National Bank of Fujairah² are therefore significant, because though they involved substantial delays, the court still granted anti-suit injunctions. These cases shed light on the factors the courts take into account when determining whether a delay is excessive.
Specialised Vessel Services Ltd v MOP Marine Nigeria Ltd
The applicant (“SVS”) was the owner of the “SVS Cochrane”, which was chartered to the respondent (“MOP”) pursuant to a bareboat charter. On 9 October 2019, the vessel was involved in a collision with a tugboat in Nigerian waters. SVS had claims under the charter, which provided for London arbitration under English law. However, in November 2019 MOP commenced proceedings in Nigeria, claiming negative declarations regarding liability and an injunction preventing SVS from contacting MOP further in relation to the payment of hire. SVS entered a memorandum of conditional appearance to contest jurisdiction and, in May 2020, SVS also commenced arbitration. However, MOP obtained an ex-parte injunction from the Nigerian courts preventing SVS from pursuing the arbitration. In January 2021, SVS sought an anti-suit injunction (or more, accurately, an “anti-anti-suit injunction”) from the English court, restraining MOP from pursuing the Nigerian claims.
The Commercial Court recognised that there is no rule as to what will constitute excessive delay in absolute terms and it will need to assess all the facts of the particular case. It nonetheless recognised the main principles:
"The Court held that despite the year-long delay between SVS being served with the Nigerian proceedings and the issue of its claim for anti-suit relief, it would exercise its discretion to grant the application."
- The injunction should be sought promptly, before foreign proceedings are too far advanced;
- Delay and comity are linked – the more closely the foreign court has become involved in the matter due to the delay, the greater the interference with the foreign court that an injunction is likely to produce;
- Prejudice to the respondent due to delay is significant. If the delay is not prejudicial, it may be given significantly less weight; and
- The courts will take into account the extent to which the delay was justifiable or excusable in the circumstances.
The Court held that despite the year-long delay between SVS being served with the Nigerian proceedings and the issue of its claim for anti-suit relief, it would exercise its discretion to grant the application. The main reasons were:
- There had been no real progress in the Nigerian proceedings;
- Much of the delay had been caused by the Nigerian court process itself;
- SVS had sought to minimise costs by first seeking an order from the Nigerian court restraining the Nigerian proceedings;
- MOP had not disputed the validity of the arbitration agreement in the Nigerian proceedings; and
- The English court was not being asked to second guess any decision of the Nigerian court.
Times Trading Corporation v National Bank of Fujairah
Meanwhile, in Times Trading Corporation, the English High Court granted an anti-suit injunction despite a delay of over five months in applying for such relief.
"NBF had contended that there had been considerable delay – from November 2019 to March 2020. However, the Court did not consider this “a case of egregious delay” so as to “be minded to refuse the injunction on this ground alone”. "
Between 10-20 June 2018 the MV “Archagelos Gabriel” discharged its cargo in India against letters of indemnity, and without production of the original bills of lading. The bill holder, National Bank of Fujairah (“NBF”) bought a claim for mis-delivery under the bills, which incorporated a London arbitration clause and required any mis-delivery claim to be brought against the “carrier” within 12 months (i.e., by 20 June 2019). In January 2019 NBF commenced proceedings in rem in the Singapore High Court against the “owners and/or demised charterers of the vessel” for damages for breach of contract, and on 4 June 2019, just before the 12-month time-bar expired, NBF commenced London arbitration proceedings for mis-delivery by a notice addressed to the registered owner, Rosalind Maritime LLC (“Rosalind”), care of Times Navigation Inc. However, after the 12-month time-bar had expired, Rosalind alleged that the vessel was under bareboat charter to Times Trading Corp (“Times”) when the bills were issued, and that the bills were issued by Times rather than Rosalind. Rosalind therefore disputed the validity of the notice of arbitration. On 9 March 2020, Times applied to the English court for an anti-suit injunction preventing NBF from pursuing claims against it in the Singapore High Court. NBF indicated that it would consent to an unconditional stay of the Singapore proceedings regarding Rosalind but not regarding Times, and claimed that the bareboat charter (which it was not provided with until March 2020) was a sham.
The Commercial Court granted the interim anti-suit injunction, preventing NBF from continuing the Singapore proceedings. NBF had contended that there had been considerable delay – from November 2019 to March 2020. However, the Court did not consider this “a case of egregious delay” so as to “be minded to refuse the injunction on this ground alone”. One of the reasons considered, although not entirely accepted, was that the parties corresponded on the apparent footing that the Singapore proceedings would be stayed by consent. The conduct of Times (i.e. in not providing a copy of the alleged bareboat charter) and the ensuing correspondence between the parties, may also have been one of the factors that influenced the Court’s view of the delay. In any event, the injunction was granted on condition that Times undertake not to rely on any time-bar argument against NBF in the London arbitration.
It is worth noting that NBF filed an application under section 12 of the Arbitration Act 1996 to extend the time for commencing arbitration proceedings against Times. In a subsequent judgment³, it was observed that Times failed in its attempt to challenge the conditionality of the anti-suit injunction, and then did not seek to maintain the injunction (presumably because it was not prepared to surrender its limitation defence). However, NBF’s application for an extension of time to bring arbitration was granted, notwithstanding NBF’s culpable delay. It was held that in circumstances where the correspondence between NBF’s and Times’ lawyers resulted in a misleading impression as to the true identity of the carrier and consequently the correct party to the arbitration agreement, it would be unjust to hold NBF to the relevant time bar.
"The decision suggests that in the future, where the court is minded to grant an anti-suit injunction notwithstanding a delay, it may make the order “conditional”, ensuring that the applicant cannot use its delay to prejudice the respondent."
It is clear that a failure to apply for an anti-suit injunction promptly may result in the application being refused. However, the decision in Times Trading Corporation suggests that in the future, where the court is minded to grant an anti-suit injunction notwithstanding a delay, it may make the order “conditional”, ensuring that the applicant cannot use its delay to prejudice the respondent.
In the context of cargo claims, which are typically subject to a short one-year time bar under the Hague/Hague Visby Rules, such a conditional anti-suit injunction will be of particular utility, since a failure to bring proceedings before the correct forum in time may otherwise leave the cargo-claimant without any remedy. Indeed, in recognition of the potential value of such an arrangement, an anti-suit applicant may even pre-empt a conditional order by offering not to rely on a time-bar if arbitration is commenced within a specified period – as was seen recently in Grace Ocean Private Ltd v COFCO Global Harvest (Zhangjiagang) Trading Co Ltd, MV “Bulk Poland”⁴. As the ultimate outcome in Times Trading demonstrates, surrendering a limitation argument in favour of the claim being heard in the contractually agreed forum may ultimately be a sacrifice worth making.
  EWHC 333 (Comm)
  EWHC 1078 (Comm)
 National Bank of Fujairah (Dubai Branch) v Times Trading Corp  EWHC 1983 (Comm)
  EWHC 3343 (Comm)