STEAMSHIP MUTUAL UNDERWRITING ASSOCIATION (BERMUDA) LTD V SULPICIO LINES INC

[2008] EWHC 914 (Comm), Queen’s Bench Division, Commercial Court, Mr Justice Walker, 4 April 2008

Arbitration – Action commenced in Philippines in breach of arbitration clause – Application for permanent anti-suit injunction – Whether court had jurisdiction to grant injunction – Whether discretion to issue injunction should be exercised – Supreme Court Act 1981, section 37 – CPR r 62.5

Sulpicio, a Filipino company which operated a fleet of ferries and general cargo vessels, entered them with the claimant P&I Club. Clause 47 of the Club’s Rules was a tiered dispute resolution clause. Clause 47(i) provided that, in the event of any difference or dispute whatsoever, between or affecting a Member and the Club and concerning the insurance afforded by the Club, there was to be a reference to adjudicators. Under cl 47(ii), if the Member did not accept the decision, or if the Directors or Managers of the Club so decided, the dispute or difference was to be referred to arbitration in London under the Arbitration Act 1996. By cl 47(vi) the Rules were governed by English law. Following the constructive total loss of one of the vessels, cover was terminated. Sulpicio commenced judicial proceedings in the Philippines, alleging that the Club was obliged to honour its liabilities under the Rules, and that the Club had committed fraud by terminating the cover. The Club sought a permanent anti-suit injunction under s 37 of the Supreme Court Act 1981 (not under s 44 of the Arbitration Act 1996, which applies only to interim relief in the case of urgency). Walker J held that: (1) the English court possessed jurisdiction on two separate grounds, that the claim was in respect of a question affecting arbitration (in which case the court possessed jurisdiction under CPR 62.5(c)), and the dispute arose under an arbitration agreement governed by English law’ (2) there was a binding arbitration clause which extended to the dispute; and (3) it was appropriate to grant anti-suit relief, given Sulpicio’s unconscionable and unlawful conduct and the absence of any delay on the part of the Club.