STARLIGHT SHIPPING CO V TAI PING INSURANCE CO

[2007] EWHC 1893 (Comm), Queen’s Bench Division, Commercial Court, Mr Justice Cooke, 1 August 2007

Arbitration – Temporary anti-suit injunction – Judicial proceedings commenced in China in breach of arbitration clause – Arbitration commenced in London – Application to court to grant anti-suit injunction – Jurisdiction of court – Discretion – Arbitration Act 1996, sections 39 and 44 – Supreme Court Act 1981, section 37 – Whether court empowered to grant relief in favour of non-party – CPR Parts 6.20 and 62

The defendant insurers, having indemnified cargo owners for lost cargo, commenced a subrogation action in China against the owners and managers of the vessel on which the cargo had been carried. The bills of lading issued to the cargo owners incorporated an arbitration clause specifying arbitration in London. The insurers also instituted arbitration proceedings in London, and the owners sought a temporary anti-suit injunction from the English court preventing the insurers from continuing with the action in China. Cooke J held as follows. (1) The court had power to grant interim relief under both sections 37 of the Supreme Court Act 1981 and section 44 of the Arbitration Act 1996, but the relationship between the two had not yet been resolved. (2) Proceeding on the assumption that there was jurisdiction under section 37, that jurisdiction ought not to be exercised unless the procedural requirements attaching to section 44 had been established. (3) Those requirements had been established on the facts, in that the matter was one of urgency and the arbitrators would not be able to proceed to the grant of a permanent injunction (having no power to grant a temporary injunction) until it was too late to stop the hearing in China. (4) There was no good reason for the court in its discretion to refuse relief to the owners. (5) The court had no jurisdiction to grant relief to the managers, as they were not parties to the arbitration clause.