WESTWOOD SHIPPING LINES INC AND ANOTHER V UNIVERSAL SCHIFFAHRTSGESELLSCHAFT MBH; WESTWOOD SHIPPING LINES INC AND V GMB SCHIFFAHRTS GMBH (THE ATALANTA)

[2012] EWHC 1394 (Comm), Queen's Bench Division, Commercial Court, Mr Justice Christopher Clarke, 25 May 2012

Arbitration- Shipping - Demand for payment of the arbitral award - EC Regulation on Insolvency Proceedings (ECIR) - Recognition - Enforcement - Receivership application - Whether costs recoverable

Kimberley (owners of the vessel Atalanta) let the vessel to GMB who sub-chartered it to Westwood Shipping (the claimant) who then sub-sub-chartered it back to GMB. Kimberley withdrew the vessel for repairs and GMB cancelled the sub-sub-charter relying on a clause thereunder. The claimant brought arbitration proceedings against GMB under LMAA arbitration, obtained an award holding that the cancellation was invalid, and sought for payment according to the award. It also applied for enforcement of the award in this jurisdiction which was granted by Eder J. Meanwhile GMB changed its name to Universal Schiffahrtsgesellschaft mbH, an application was submitted in Germany to open insolvency proceedings, and a liquidator was appointed by a court order. There was also an agreement between Kimberly and GMB to deprive the claimant from the benefit of GMB's claim against Kimberley. Both the insolvency proceedings and the agreement were initially unknown to the claimant and it was informed by the solicitors of GMB/Universal that the payment would be made once it was possible to do so. The disputed issues were whether the receivership application should be struck out or stayed, and whether the costs incurred prior to and after the claimant became aware of the proceedings and the agreement should be recoverable.