ECOM AGROINDUSTRIAL CORPORATION LTD V MOSHARAF COMPOSITE TEXTILE MILL LTD

[2013] EWHC 1276 (Comm), Queen's Bench Division, Commercial Court, Hamblen J, 20 May 2013

Arbitration - Anti-suit injunction - Judicial proceedings commenced in Bangladesh - Whether there was breach of an arbitration clause - Whether there was good reason not to grant anti-suit injunction - Declaratory relief - Senior Courts Act 1981, section 37 - Arbitration Act 1996, section 7

Ecom agreed to sell to Mosharaf about 1,500 mt of Brazilian raw cotton to be shipped in three equal instalments in July, August and September 2011. Payment was to be made by irrevocable and confirmed letters of credit opened a month prior to the due date of each shipment. The contract incorporated the Rules and Bylaws of the International Cotton Association under which all disputes, if not settled amicably, were to be resolved under English law by arbitration in accordance with ICA Rules. There was a further provision stating that any "technical or quality" dispute was to be referred to arbitration. Mosharaf refused to open the first letter of credit. Ecom stated its intention to go to arbitration, and did so on 28 November 2011. Mosharaf responded without warning, on 19 January 2012, by commencing judicial proceedings in Bangladesh, seeking a declaration that the contract was either illegal and void under Bangladeshi law, or that it had been frustrated. Mosharaf further asserted that the dispute fell outside the arbitration clause because it was not a "technical or quality" dispute. Mosharaf also sought a permanent injunction restraining Ecom from continuing with the arbitration. Mosharaf also obtained an interim anti-suit injunction in respect of the arbitration. Ecom appealed against that order, but no date was fixed for the hearing of that appeal. In the present case Ecom sought relief from the English courts.