Oon & Bazul successfully resists a rare anti-anti-arbitration injunction before the English Courts

A team of lawyers led by our Managing Partner, Bazul Ashhab, acted for the successful respondent, Black Swan Petroleum (BSP), to resist an application made by Euronav Shipping (Euronav) for a rare form of anti-suit injunction, an ‘anti-anti-arbitration injunction’ (or AAAI), which was designed to require BSP to discharge an anti-arbitration injunction that it had obtained from the High Court of Malaysia (the ‘AAI Order’) and which itself restrained Euronav’s prosecution of a London-seated LMAA arbitration.

The judgment in Euronav Shipping NV v Black Swan Petroleum DMCC [2024] EWHC 896 (Comm) will be of interest to legal practitioners dealing with cross-border disputes which involve arbitration and court litigation.

Background

The parties have advanced various claims against each other arising out of a relationship of sub-bailment concerning a cargo of crude oil that was stored aboard a vessel owned by Euronav. Euronav contends the sub-bailment was on the terms of a certain storage contract with a third party, Silk Straits, which, via an addendum, included a London-seated LMAA arbitration agreement. BSP contends the relationship was for reward, not ‘on terms’, and thus that it was not bound by the putative arbitration agreement said to exist in the storage contract.

BSP commenced a claim against Euronav before the High Court of Malaysia. Euronav, for its part, commenced its claims against BSP in London arbitration. Euronav was later held to have submitted to the jurisdiction of the High Court of Malaysia in the course of seeking to have BSP’s claim there struck out. Off the back of that voluntary submission by Euronav, and when Euronav sought nevertheless to pursue the London arbitration, BSP sought the AAI Order from the High Court of Malaysia to restrain Euronav’s pursuance of the London arbitration.

Euronav then sought an AAAI from the High Court in London, seeking the discontinuance of the AAI Order in Malaysia, on the basis that BSP’s procurement of the AAI Order was a breach of the arbitration agreement in the storage contract. BSP argued it was not a breach, but even if it was, the court should decline to grant an AAAI for (amongst other things) the discretionary, strong reasons of comity, voluntary submission and delay.

Decision

The English Court confirmed the applicable test for a contractual interim anti-suit, even in a case like this one, was a ‘high degree of probability’ of both the existence and breach of the putative arbitration agreement. It formulated the test as being to establish a high degree of probability of establishing at trial the relevant matters on the balance of probabilities. It rejected Euronav’s argument that the (lower) American Cyanamid ‘serious issue to be tried’ threshold should apply.

The Court then held there was a high degree of probability that an arbitration agreement was in force between the parties via a sub-bailment on terms. The Judge also considered that there was a breach of the agreement by BSP in having obtained the AAI order, despite Euronav’s earlier submission in Malaysia.

However, the judge nevertheless declined to exercise the court’s discretion to grant the AAAI.  The Judge’s reasons included that it would be inconsistent with respect for comity with the High Court of Malaysia for the English court to intervene in the Malaysian court litigation, where Euronav had appealed the decision about its voluntary submission, and the outcome of that appeal was outstanding. He also held that Euronav had delayed in applying for the AAAI, and that its voluntary submission in Malaysia was a significant countervailing factor to seeking relief in London. The Judge therefore dismissed Euronav’s application.

Oon & Bazul LLP act for the Respondent in the LMAA proceedings and had instructed Oliver Caplin KC from Twenty Essex as Counsel for the AASI application before the English Court. TS Oon & Partners act for the respondent in the Malaysian proceedings.