QINGDAO HUIQUAN SHIPPING CO V SHANGHAI DONG HE XIN INDUSTRY GROUP CO LTD

[2018] EWHC 3009 (Comm), Queen's Bench Division, Commercial Court, Mr Justice Bryan, 25 September 2018

Arbitration - Interim anti-suit injunction - Jurisdiction to make award against third party - Delay

QHSC chartered the vessel Confidence Ocean to SAML for the carriage of a cargo of nickel ore from Indonesia to China. Bills of lading were issued dated 10 December 2013, and ECCL became lawful holders of the bills. SAML defaulted in paying hire, and QHSC served on ECCL a notice of lien over the cargo and sub-freights, totalling US$648,605.61. By a Settlement Agreement dated 22 January 2014 ECCL was to pay US$640,000 in full and final settlement of the hire claim. QHSC was to bring proceedings against SAML seeking damages for breach of the time charter, and in the event of recovery the sum would be paid to ECCL up to the amount of ECCL's payment. The Settlement Agreement was governed by English law and disputes "arising under, out of or in connection with this Agreement" were to be submitted to London arbitration. ECCL’s payment was to be by SDHX as agent for ECCL, although SDHX was not itself a party to the Settlement Agreement. Payment was made by SDHX and proceedings were brought by QHSC against SAML but nothing was recovered. In April 2017 SDHX commenced proceedings against QHSC in the Qingdao Shinan District Court seeking repayment of the sum paid under the Settlement Agreement. The proceedings were served in July 2017. SDHX relied upon a separate oral agreement between itself and QHSC for repayment. QHSC objected to the jurisdiction of the Qingdao Shinan District Court on two grounds: the claim was a maritime dispute, and therefore the claim had to be heard by the Qingdao Maritime Court; and under the Settlement Agreement SDHX's claim could be brought only in arbitration in London. On 5 December 2017 the Qingdao Shinan District Court ruled that the matter should be transferred to the Qingdao Maritime Court for the validity of the arbitration clause to be determined. That decision was upheld on appeal on 15 June 2018. QHSC issued an arbitration claim form 1 August 2018, seeking an interim anti-suit injunction against SDHX from pursuing the claim in China. SDHX failed to appear despite being served.