CRESCENDO MARITIME CO V BANK OF COMMUNICATIONS CO LTD

[2015] EWHC 3364 (Comm), Queen's Bench Division, Commercial Court, Mr Justice Teare, 25 November 2015

Arbitration - Anti-suit injunction - Parties agreed to go to arbitration in London - Claims brought in Chinese courts - Whether there was good reason for refusing anti-suit relief

NH, a Chinese shipyard, agreed to construct and sell a vessel to Crescendo. The contract was governed by English law and disputes were to be referred to arbitration in London. The price was to be paid in instalments, and in the event of cancellation NH was required to repay the instalments. To guarantee such repayment, refund guarantees were provided by BCC - they were also governed by English law and disputes were subject to English arbitration. Crescendo funded its payment of instalments by a loan from Alpha, and Crescendo assigned the refund guarantees to Alpha Bank. The shipbuilding contract was terminated by NH in November 2011, and NH commenced arbitration in London seeking damages. Crescendo sought repayment under the repayment guarantees, but BCC refused to pay until the arbitration proceedings between NH and Crescendo had been resolved. Crescendo then commenced arbitration in London against BCC. Following application to the arbitrators, it was ruled by them that Alpha could be joined to the proceedings. BCC then decided to play no further part in the arbitration, and commenced proceedings in China against NH, Crescendo and Alpha, alleging that the shipbuilding contract had been fraudulently backdated by the parties to it and that the refund guarantees were of no effect. Crescendo and Alpha obtained the permission of the arbitrators to seek an anti-suit injunction, and that was granted by Males J. At the same time Alpha sought and obtained permission to serve proceedings for a declaration against BCC in China that Alpha was not party to any fraud. In 2014 the arbitrators issued awards holding that Crescendo had validly cancelled the shipbuilding contract, that NH was liable to repay the instalments and that there was no fraud and BCC should honour the refund guarantees if NH defaulted in repayment. Challenges to the awards were dismissed. In the present proceedings Crescendo sought a permanent injunction in respect of the Chinese proceedings, and Alpha's claim for declaratory relief remained outstanding.