Oceanconnect UK Ltd & Anor v Angara Maritime Ltd [2010] EWCA Civ 1050

Case No A3/2009/2442[2010] EWCA Civ 1050IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
Mr Justice Simon
2009 (330)
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 12/10/2010
Before
LORD JUSTICE RIXLORD JUSTICE GROSSMR JUSTICE PETER SMITH
Between
Oceanconnect UK Ltd & anr.AppellantsAngara Maritime LtdRespondent
(Transcript of the Handed Down Judgment ofWordWave International LimitedA Merrill Communications Company165 Fleet Street, London EC4A 2DYTel No: 020 7404 1400, Fax No: 020 7404 1424Official Shorthand Writers to the Court)
David Bailey QC and Emma Hilliard (instructed by Chauncy & Co.) for AppellantsStephen Males QC and Yash Kulkarni (instructed by Thomas Cooper) for RespondentHearing Hearing dates : 16 th July 2010
JudgmentLORD JUSTICE GROSS :INTRODUCTION AND HISTORY
[1]This is an appeal by the Appellants/Defendants from the order of Simon J, dated the 6th October, 2009, granted on the application of the Respondent/Claimant, requiring the Appellants forthwith to take all reasonable steps to withdraw the proceedings commenced by them before the United States District Court for the Western District Court of Louisiana (“the order”, “the anti-suit injunction” and the “US proceedings” as appropriate).[2]As will become apparent, the order is critical to the fate of the underlying dispute. That dispute, involving relatively modest sums, raises the question of whether the Appellants or the Respondent should bear the risk of a third party’s failure to pay for a supply of bunkers. Unfortunately, by now, the costs are anything but modest.[3]The underlying facts, at the time the matter came before the learned Judge, can be shortly summarised. They begin as follows: i) The Respondent (“Angara”) is a Marshall Islands company and the owner of the “Fesco Angara”, a vessel registered in the Marshall Islands (“the vessel”). The vessel was managed from Vladivostok. ii) On the 3rd July, 2008, Angara time chartered the vessel to, in the event, Britannia Bulkers A/S, Denmark (“Britannia”), as charterers, on the NYPE form as amended (“the charterparty”). Under the charterparty, it was, as to be expected, Britannia’s obligation to provide and pay for bunkers. iii) The First Appellant is an English company. The Second Appellant is a corporation incorporated in the United States of America with its principal place of business in New York; it is the parent company of the First Appellant. iv) On or about the 30th September, 2008, the First Appellant entered into a contract with Britannia for the supply of bunkers to the vessel (“the supply agreement”), with payment to be made 30 days after delivery. The supply agreement was expressly made “subject to the Law and jurisdiction of the courts of the United States of America”. v) Bunkers were delivered to the vessel on or about the 6th October, 2008, at Puerto de Santos in Brazil. vi) The Second Appellant invoiced Britannia for the bunkers in the sum of US$177, 305.59. As is common ground, Britannia has not paid for the bunkers. vii) In late 2008, Britannia encountered financial difficulties and redelivered the vessel early to the Respondent. For its part, the Respondent gave credit to Britannia for the bunkers remaining on board at the time of redelivery. Britannia subsequently went into administration.[4]On the 8th March, 2009, the Appellants arrested the vessel in Amsterdam, in respect of their claim for payment for the bunkers. Some three days later, on the 11th March, 2009, the parties agreed the release of the vessel upon the provision by Angara of US$230,000 security and in accordance with the terms of an escrow agreement of that date (“the escrow agreement”).[5]The escrow agreement, to which Angara, the Appellants and MFB solicitors (“MFB”) are parties, provides as follows:
“ WHEREAS A. On 8 March….. M.V. Fesco Angara (the vessel) was arrested at Amsterdam. B. The arrest relates to a claim by OCEANCONNECT of USD 177,305.59 for the delivery of bunkers to the vessel in October 2008 at the request of Charterer Britannia Bulkers A/S, and a purported maritime lien (right of recovery) OCEANCONNECT have, individually and/or collectively, in connection therewith against Angara and/or the vessel (‘the Claim’). C. ANGARA have agreed to deposit cash security, in the sum of USD 230,000 into an escrow account. NOW in consideration of OCEANCONNECT agreeing, as more particularly outlined in clause 2 below, to (1) lift their arrest of the Vessel and (2) refraining from taking any action against ANGARA for the purposes of obtaining security for the Claim other than as specifically provided at Clause 4 below, IT IS HEREBY AGREED AS FOLLOWS: 1. ANGARA shall immediately pay the sum of USD 230,000….(the ‘Escrow Payment’) into the London client account of MFB…. 2. Upon receipt by MFB of the amount of USD 230,000, OCEANCONNECT’s Dutch lawyers will be instructed to take immediate steps to release the Vessel from arrest in Amsterdam. 3. The Escrow Monies shall be dealt with in the following manner: 3.1 The final total amount which ANGARA or the Vessel FESCO ANGARA are ordered to pay OCEANCONNECT, individually and/or collectively, in respect of the Claim by virtue of a judgment (which is not or no longer subject to appeal) rendered against ANGARA by a competent court of law having jurisdiction in the matter hereinafter mentioned, or by virtue of a valid arbitration award which is not or no longer subject to appeal shall be paid to OCEANCONNECT from the Escrow Monies within 14 days of receipt by MFB of copies of such final unappealable arbitration award or court judgment in respect of the Claim…. 3.5 This Agreement will come to an end and the entirety of the Escrow Monies shall be remitted to… ANGARA within twelve months and 14 days of the date of this Agreement unless before or within twelve months from the date of signing hereof legal proceedings have been instituted with relation to the Claim against ANGARA or the Vessel in a competent court of law or tribunal having jurisdiction in the matter, or a settlement agreement has been concluded between the parties. 3.6 This Agreement will also come to an end and the entirety of the Escrow Monies shall be remitted to ANGARA if the proceedings before the court or the arbitration proceedings, referred to above have led to a decision, which is not or no longer subject to appeal, that the court or arbitrator(s) lack(s) jurisdiction or that…OCEANCONNECT has no right to claim or that the claim of…OCEANCONNECT is dismissed or that the proceedings are struck out for want of prosecution, or if the proceedings have been finally withdrawn by OCEANCONNECT without an amicable settlement having been concluded. 4. All costs and disbursements incurred by…. MFB shall be for the account of OCEANCONNECT in any event. 7. This Escrow Agreement shall be governed by and construed in accordance with English law and any dispute arising hereunder or relating hereto or arising in connection herewith shall be referred to the exclusive jurisdiction of the High Court of England and Wales. ”
[6]It might, perhaps, have been anticipated that the Appellants would commence proceedings to pursue their claim following entry into the escrow agreement. However, on the very next day, the 12th March, 2009, Angara issued proceedings in the Commercial Court in London for negative declaratory relief, viz., seeking a declaration that it was not liable to the Appellants in respect of the sale by the Appellants to Britannia of bunkers pursuant to the supply agreement.[7]On the 13th April, 2009, the Appellants served a Defence and Counterclaim, claiming an entitlement to payment from Angara on the grounds of conversion, bailment and unjust enrichment. The Appellants additionally relied upon US law and the law of the Marshall Islands in support of their claims. Unsurprisingly, the Appellants did not challenge the English jurisdiction, given that the First Appellant is an English company. Perhaps more noteworthy is the fact that the Appellants did not seek a stay of the English proceedings.[8]On the 16th May, 2009, Angara served a Reply and Defence to Counterclaim. The Appellants served their Reply to Defence to Counterclaim on the 10th July, 2009. Prior thereto, the Appellants had served a Request for Further Information and various responses were subsequently served by Angara, culminating in a response on the 17th August, 2009.[9]With pleadings now closed, a Case Management Conference (“the CMC”) was listed for the 9th October, 2009.[10]On the 25th September, 2009, the Appellants obtained a warrant for the vessel’s arrest in Louisiana, for, in my judgment, the sole purpose of founding jurisdiction for an in rem claim based on a maritime lien under US law. The vessel was arrested on the 30th September, 2009. The vessel was released on the 2nd October, 2009, after the Appellants had filed a copy of the escrow agreement with the US Court as a “substitute res”. The effect of this is that Angara is regarded as having given security in the US in the form of the escrow agreement and that the Appellants can execute any US judgment against the funds in escrow.[11]Also on the 2nd October, 2009, Angara issued an application for an anti-suit injunction. That application was promptly listed before Simon J on the 6th October, 2009 and resulted in the order under appeal.

THE JUDGMENT

[12]In, with respect, a succinct and effectively ex tempore judgment, Simon J preferred the Angara arguments to those then advanced by the Appellants and granted the anti-suit injunction. As

the Judge saw it:

“ 6. The broad impression conveyed by the terms of the [escrow] agreement is that, in relation to this relatively modest claim, the matter was to be resolved by reference to the escrow account and by litigation in the English courts, and the parties proceeded on this basis.”
[13]Simon J concluded that on its proper construction cl.7 of the escrow agreement was intended to provide for the English court to be the “exclusive forum” for the resolution of disputes between the parties in relation to the supply of bunkers and that the US proceedings were brought in breach of that agreement.[14]The reasons for the learned Judge’s conclusion may be summarised as follows: i) First, it made good commercial sense for the parties to wish that all their disputes should be resolved in one forum, particularly in relation to what was, in commercial terms, a relatively small sum. ii) Secondly, the escrow agreement envisaged both an in personam and an in rem claim. iii) Thirdly, although the escrow agreement did not specifically state that the parties submitted to the exclusive jurisdiction of the English court in relation to all disputes as part of the preamble, they had used very wide words in cl. 7 (set out above). The US proceedings fell “very clearly” within those words. Moreover, any judgment could only be enforced under the escrow agreement. iv) Fourthly, the Judge was not dissuaded from his conclusion by cl. 3 of the escrow agreement. He accepted the submission of Mr. Kulkarni, counsel for Angara, that cl. 3 provided “the process” by which recovery was to be made under the escrow agreement. The Judge acknowledged that the wording in cl. 3 was, of itself, not consistent with a firm agreement that only the English court was to have jurisdiction but pointed to the fact that if the Appellants were correct, then they would have been entitled to arrest the vessel at any port to found jurisdiction – and, the Judge thought, to do so repeatedly within the 12 months period provided by the escrow agreement. The Judge accepted Mr. Kulkarni’s further submission that cl. 3 could have been very much better expressed. In particular, the reference to arbitration “which was plainly not a potential means of dispute resolution” undercut the weight the Appellants had attached to the phrase “a competent court of law having jurisdiction”.[15]It followed from this conclusion that were the Appellants to pursue the US proceedings, it would involve a breach by them of the exclusive jurisdiction agreement contained in cl. 7 of the escrow agreement.[16]Counsel then appearing for the Appellants submitted that, in these circumstances, the Judge should only grant the injunction on terms that the Appellants be permitted to advance a counterclaim in this jurisdiction on the basis of a US maritime lien. The Judge was not prepared to impose any such terms. If the Appellants wished to advance a counterclaim relying on a US maritime lien, it was for them to apply in the usual way.[17]Having given his decision on the basis that cl. 7 of the escrow agreement constituted an exclusive jurisdiction clause governing the merits of the underlying dispute regarding the supply of bunkers to the vessel, the Judge, understandably, dealt briefly with the position which would have prevailed had he not come to that conclusion. Earlier in his judgment, the Judge had noted the Angara submission that, even on this footing, the court should grant an anti-suit injunction on “established principles”.

The Judge went on to pose a two-stage test:

[18]first, was England the forum conveniens for the dispute? He answered that question by saying “…plainly, yes…”; there was nothing to suggest otherwise. Secondly, if so, the Judge asked whether the ends of justice required making the order. To that question too, the answer was yes.

The Judge referred to a witness statement from an Angara witness; the witness had pointed out that:

“…the parties had agreed to the dispute being determined in the English court, at least to the limited extent upon which this hypothesis proceeds.”
Next,

the Judge observed that the matters raised in the US proceedings were:

“…very similar, if not identical, to those that arise in the English proceedings.”
The Judge drew attention to the costs already incurred in the English proceedings and to the stage reached with regard to the pleadings. The CMC was listed for a date later that week and bundles had already been prepared. Angara would be potentially prejudiced if the US proceedings were allowed to continue:
“ The United States proceedings give rise to unnecessary parallel litigation with the usual attendant expense and legal uncertainty from having the issues, which are not exactly the same issues but they very significantly overlap, determined by different courts.”

EVENTS POST-DATING THE JUDGMENT

[20]As already foreshadowed, the CMC was heard on the 9th October, 2009. The order made (“the CMC order”) provided for the case to be transferred to the Mercantile Court, no doubt because of the relatively small sums in issue. The CMC order went on to make provision for disclosure, the exchange of witness statements, the preparation of bundles and the like. The trial date was to be not before the 1st February, 2010, with an estimated length of 1-2 days. In due course, the trial date was fixed for the 15th and 16th February, 2010.[21]The procedural history had not quite yet run its course. At another CMC, on the 7th January, 2010, HHJ Mackie QC dismissed an application by the Appellants for a stay of the trial, pending the outcome of the present appeal, for which permission to appeal had by then been granted. HHJ Mackie QC did so, however, on the following terms (“the savings order”):
“ …UPON the Court indicating that any declaration which the Court may make in these proceedings shall not address and shall leave to the Court of Appeal (in the pending appeal….) the decision as to whether the Defendants are entitled to advance a claim or counterclaim based on a US maritime lien in the courts of the USA or England, and upon the Claimant agreeing to amend the Particulars of Claim to reformulate the declaration sought by the Claimant accordingly.”
[22]The trial was conducted by HHJ Mackie QC. By his judgment dated 29th March, 2010, HHJ Mackie QC determined the dispute in Angara’s favour, subject only to the matters which are the subject of this appeal, preserved by the savings order. Although the Appellants’ standard terms had included a retention of title clause and Angara accepted that there had been a conversion of the bunkers remaining on the vessel after redelivery of the vessel when the charterparty came to an end, Angara submitted that it had purchased the bunkers from Britannia, a “buyer in possession”, in good faith and without notice of the Appellants’ rights. Accordingly, under s.25(1) of the Sale of Goods Act 1979, it had acquired good title to the bunkers. HHJ Mackie QC accepted Angara’s submission, concluding, inter alia and as a matter of fact, that the charterparty had been terminated by agreement on terms that Angara would pay for any bunkers remaining on board – and not as the result of Angara accepting a repudiation of the charterparty by Britannia.[23]On the 18th June, 2010, in the light of the conclusions of fact reached by HHJ Mackie QC, Moore-Bick LJ refused the Appellants permission to appeal.[24]It will now be apparent why this appeal is central to whether the Appellants or Angara should bear the risk of Britannia’s failure to pay for the bunkers supplied to the vessel. If the appeal is dismissed that will be the end of the Appellants’ claim; in practical terms, they cannot recover from Britannia; they have failed against Angara in the English court and they would be enjoined from pursuing their claim for a US maritime lien in the Louisiana courts. If, per contra, the Appellants are at liberty to pursue their US maritime lien claim in the Louisiana proceedings (or, on suitable terms, in this jurisdiction), then, although this court has heard no argument on the matter and no concessions have been made, it is not or not readily apparent what defence will be forthcoming to enable Angara to resist that claim.

THE PRINCIPAL ISSUES

[25]As it seems to me, the principal issues on the appeal are as follows: i) Did cl.7 of the escrow agreement provide for the exclusive jurisdiction of the English court in respect of the underlying “Claim” (as defined in the escrow agreement)? (“Issue (I): Exclusive jurisdiction?”) ii) If the answer to Issue(i) (I) is “no”, was Angara nonetheless entitled to the anti-suit injunction? (“Issue (II): Vexatious or oppressive?”) iii) If the answer to either Issue (I) or Issue(ii) (II) is “yes”, should terms have been imposed, permitting the Appellants to pursue their claim for a US maritime lien before the English court? (“Issue (III): Terms?”)

THE RIVAL CASES ON THE APPEAL

[26]For the Appellants, Mr. Bailey QC (who, as with his junior had not appeared below) developed his submissions along the following lines. The Judge had treated the anti-suit injunction as an instrument of case management and had sought to achieve what he considered to be a commercially sensible solution. In so doing, however, the Judge had failed properly to construe the escrow agreement and had failed to apply the correct legal principles in the exercise of his discretion.[27]As to Issue (I), the Judge erred in that cl. 7 of the escrow agreement did not deal with the jurisdiction in which the underlying “Claim” was to be brought. Cl. 7 dealt and dealt only with jurisdiction relating to security. Cl. 3 belied any notion of cl.7 amounting to an agreement to refer the underlying dispute to the exclusive jurisdiction of this Court. It was not surprising that the escrow agreement had not resolved the question of jurisdiction for the Claim; the focus of the escrow agreement was to effect the release of the vessel as quickly as possible. Moreover, given that the Claim involved or included a US maritime lien, the jurisdiction in which it was to be pursued was crucial; it was inherently unlikely that the parties would have agreed to a jurisdiction in which that claim must fail. The escrow agreement preserved the status quo; it was akin to a “club letter” and was an agreement confined to security; jurisdiction for the underlying Claim was left open.[28]Any presumption that the parties opted for “one stop” dispute resolution (as in Fiona Trust v Privalov [2007] UKHL 40; [2008] 1 Lloyd’s Rep. 254), was inapplicable. To the contrary, just as jurisdiction agreements covering substantive disputes did not preclude a party taking steps to obtain security in some other jurisdiction, so here, it did not follow that the agreement as to jurisdiction, contained in the escrow agreement, extended to jurisdiction for the underlying disputes: see, Mike Trading and Transport Ltd v Pagnan & Fratelli (The “Lisboa”) [1980] 2 Lloyd’s Rep. 546. It was noteworthy that the prohibition on further arrests in the escrow agreement only related to further arrests for the “purposes of obtaining security” for the Claim. Further arrests for the purposes of founding jurisdiction were not prohibited; the answer to multiple arrests (if unjustified) lay in res judicata, rather than an unwarranted extension of the scope of cl. 7.[29]If cl. 7 did extend to the jurisdiction governing the underlying Claim, then cl. 3 of the escrow agreement, with its reference to a “competent court of law having jurisdiction”, made no sense; all the more so, given the further reference in cl. 3 to arbitration. In his treatment of this point, the Judge had erred in failing to take account of the fact that it remained open to the parties to refer the dispute as to the underlying Claim to an ad hoc arbitration. “Claim”, as defined in the Recitals of the escrow agreement was referred to only in cl. 3 and not at all in cl. 7. The Judge had failed to construe the escrow agreement as a whole or in context. In order to do so, cl. 7 would have to give way to cl. 3, even if the wide wording of cl. 7 might be capable of extending to cover jurisdiction for the underlying Claim.[30]Issue (II) arose on the assumption that the US proceedings had not been brought in breach of an English jurisdiction clause. On this hypothesis, an injunction could not be justified. The Judge had again erred. This was a “single forum” case and considerations of comity pointed firmly against the grant of an injunction. The Judge had given no consideration to the potential injustice to the Appellants if enjoined from pursuing their claim for a US maritime lien in the US where that claim stood a very high chance of succeeding; the effect of the injunction was to confine the Appellants to proceedings in this jurisdiction where that claim must fail. If, contrary to the above, this was an “alternative forum” case, then England was not the natural forum for the dispute but even if it was, the Appellants had a legitimate interest in pursuing their US proceedings. The Judge had failed to grapple with the requirement that those proceedings must be vexatious or oppressive before an injunction could properly be granted. He had failed to have regard to considerations of comity and to the test in Deutsche Bank AG v Highland Crusader Partners LP [2009] EWCA Civ 725; [2010] 1 WLR 1023. It was not to be overlooked that Angara (not the Appellants) had commenced the English proceedings, seeking a negative declaration.[31]As to Issue (III), Mr. Bailey realistically did not press the imposition of terms if he was wrong on Issue(i) (I) (so that the US proceedings had been brought in breach of an English jurisdiction clause). But if Issue(ii) (II) arose and if it was, contrary to his submissions, appropriate for an injunction to be granted so as to ensure that all proceedings were brought within this jurisdiction, then any such injunction should only be granted on terms which permitted the Appellants to pursue their claim for a US maritime lien here – something they could not otherwise do because English law does not recognise a maritime lien for necessaries.[32]For Angara, Mr. Males QC (who did not appear below) submitted that the judgment of the Judge should be upheld. His judgment had been both succinct and right. The Judge had not been unduly influenced by considerations of case management; the fact that this was a modest claim was a matter he was entitled to take into account. The parties were unlikely to agree to multiple jurisdictions in order to resolve a dispute over a relatively modest amount. There was nothing unlikely about an agreement to resolve the underlying Claim in this jurisdiction. That did not involve giving up on the Claim. In the English proceedings, the Appellants had throughout asserted that they were entitled to succeed; albeit that their Claim was not as straightforward in this jurisdiction as in the US, it was not doomed here. The Appellants would indeed have succeeded in the English litigation but for the conclusion arrived at by HHJ Mackie that the charterparty had been consensually terminated – perhaps not an everyday occurrence.[33]Turning to Issue (I), the Judge had considered the escrow agreement as a whole. It was true that he started with cl. 7 but he had to start somewhere. The very wide wording of cl. 7 was such that it was, at the least, capable of applying to the underlying disputes. Was cl. 7 negated or qualified? The Appellants relied on cl. 3 and on the proposition that agreements for security were different. Neither of those submissions had force.[34]Cl. 3 was not so clear as to negate or qualify the wording of cl. 7. The escrow agreement contained errors; the reference to cl. 4 in the Recitals was meaningless; the reference to arbitration in cl. 3 was likewise an error. The suggestion of an ad hoc arbitration was not very likely. Cl. 3 contained much by way of boilerplate language. In any event, on Angara’s case it was possible to read cll. 3 and 7 together: the English Court was the “competent court of law having jurisdiction in the matter hereinafter mentioned”; no other court had been “hereinafter mentioned”. Cl. 7 of the escrow agreement dealt with how the dispute was to be determined; cl. 3, as the Judge had said, with the process by which recovery was made against the escrow account. The Appellants’ construction, unattractively, contemplated the possibility of multiple arrests for the purpose of founding jurisdiction.[35]There was no rule of law that agreements as to security were somehow different: see, Mantovani v Carapelli [1980] 1 Lloyd’s Rep. 375. It was no more than a question of construction of the agreement under consideration. There was, in any event, no particular reason why a jurisdiction clause in an escrow agreement should be limited to issues going to security. The presumption in Fiona Trust (supra) was applicable. There was much good sense in the judgment. There was no or no ready analogy with “club letters”; in the case of a club letter, there was an agreement between the potential claimant and a third party (the club); by contrast, the escrow agreement here was entered into between the parties to the underlying dispute.[36]So far as concerned Issue (II), the facts needed to be considered at the time the matter came before the Judge. The Appellants had let the English proceedings continue and costs to be incurred before they had initiated the US proceedings. The Judge had the relevant principles well in mind; this was not a “box ticking” exercise. The Appellants’ stance before the Judge had been different; the Judge had been told during the hearing before him (by counsel then representing the Appellants) that the claim for a US maritime lien could be pursued in this jurisdiction, although the Appellants were not bound to do so. In any event, this was not a “single forum” dispute as that concept was properly understood; the Appellants had potentially good claims in this jurisdiction, which they had pursued in the English litigation. It was impossible to say that the Judge had reached an erroneous conclusion or had exercised his discretion irrationally, whether this was a “single forum” or an “alternative forum” case. In any event, if he had, then it was for this Court to exercise the discretion afresh. The Angara case was now even stronger in the light of the judgment of HHJ Mackie QC in its favour. That judgment was a fact which could not be ignored; see, Masri v Consolidated Contractors Int (UK) Ltd (No.3) [2008] EWCA Civ 625; [2009] QB 503. The English proceedings had thus been concluded.[37]As to Issue (III), the Judge was entitled to rule as he did. It was for the Appellants to have applied to amend in the usual way, if they wished to plead a further cause of action; they had not done so. DISCUSSION THE LEGAL FRAMEWORK

DISCUSSION

[38]This appeal falls to be considered within a well established legal framework, conveniently summarised as follows.[39]First, as to maritime liens: i) Under English conflict of laws rules, recognition of a right to enforce a maritime lien is a matter to be determined according to the lex fori. ii) Under English law it is long settled that there is no maritime lien for necessaries. iii) The categories of maritime lien capable of recognition under English law can now only be extended by statute. iv) The mere fact that statute confers a jurisdiction in rem does not mean that under English law the claim in question assumes the nature of a maritime lien. While, therefore, in this jurisdiction, a supplier of bunkers to a vessel will be entitled to proceed by way of an action in rem – provided only that the bunkers constitute “necessaries” – the supplier will not enjoy a maritime lien as a matter of English law. See: The Heinrich Bjorn (1886) 11 App Cas. 270; The Acrux [1965] P 391; The Halcyon Isle [1981] AC 221; Maritime Liens, D.R. Thomas (Volume 14, British Shipping Laws, 1980), at paras. 15-16; Enforcement of Maritime Claims, D.C. Jackson (4th ed., 2005), at paras. 2.41 – 2.42 and 2.111. v) Accordingly, save by way of the Court imposing terms, the Appellants could not pursue their claim for a US maritime lien in this jurisdiction.[40]Secondly, whether a provision as to jurisdiction contained in an agreement by way of security extends to the underlying disputes between the parties, is a matter of construction of the agreement in question. There is no rule of law in this regard. As with any contract, security agreements are to be construed in context and not in a vacuum. Depending on all the circumstances, the context may be significant and may serve to reduce the weight otherwise to be attached to the presumption in favour of “one stop” adjudication (Fiona Trust, supra). For completeness, absent very clear wording, pragmatic considerations suggest that it will be unlikely for a jurisdiction clause governing a substantive claim to preclude applications brought solely for the purpose of obtaining security in some other forum: The Lisboa, supra. But even in those circumstances, the question is ultimately one of construction, as illustrated by Mantovani v Carapelli (supra).[41]Thirdly (and leaving aside the provisions of the Brussels I Regulation and previous conventions, irrelevant here), when proceedings are pursued abroad by a defendant in English proceedings, in breach of an exclusive English jurisdiction clause (or an English arbitration clause), the English court will ordinarily exercise its discretion, by way of anti-suit injunction, to secure compliance with the contractual bargain, in the absence of strong reasons for not doing so – the burden of showing such strong reasons resting on the contract-breaker: Donohue v Armco [2001] UKHL 64; [2002] 1 Lloyd’s Rep. 425, per Lord Bingham, at [24]. The general rule is thus clear, though the matter remains one of discretion and there is no inflexible rule.[42]Fourthly (and again putting to one side the provisions of the Brussels I Regulation and previous conventions), when proceedings are pursued abroad by a defendant in English proceedings over whom the English court has personal jurisdiction, other than in breach of an exclusive English jurisdiction clause (or English arbitration clause), the party seeking an anti-suit injunction from the English court must generally show that the proceedings before the foreign court are vexatious or oppressive. In order to do so, it is generally necessary to show that(1) England is the natural forum and(2) justice requires that the claimant in the foreign court should be restrained from proceeding there. Although the jurisdiction of this Court is exercised in personam, considerations of comity dictate the exercise of caution before an anti-suit injunction is granted in such circumstances; the matter is and remains one of discretion; the mere fact that the foreign proceedings are vexatious or oppressive does not necessarily mean that an anti-suit injunction will be granted: Highland Crusader (supra), per Toulson LJ, at [50] and following.[43]Fifthly, over and above the need for caution when considering anti-suit injunctions in alternative forum cases, i.e., those where the decision for the court is in which forum the claim should proceed, particular caution is required in single forum cases, i.e.:
“ when the cause of action relied on in the foreign court cannot be advanced in England, and there is no cause of action available (as a matter of English domestic or private international law) to the claimant to allow him to win before the English courts… ”
Dicey, Morris and Collins, on The Conflict of Laws (14th ed.), at para. 12-077). The need for particular caution in single forum cases is readily apparent; as the only possible forum is the foreign forum, the risk of injustice is very real:
“ The decision the court has to make is therefore not in which forum the claims should proceed, but rather whether they should proceed at all.”
The Anti-Suit Injunction, Thomas Raphael, at para. 5.19.[44]I turn to the principal Issues.

ISSUE (I): EXCLUSIVE JURISDICTION

(I) : EXCLUSIVE JURISDICTION

[45]There is no or no serious dispute that if, on its true construction, cl. 7 of the escrow agreement provided for the English court to have exclusive jurisdiction in respect of the underlying substantive Claim, then the anti-suit injunction was properly granted. There would be no “strong reasons” for not enforcing the contractual bargain. There is likewise no or no serious dispute that cl.7 did constitute an exclusive English jurisdiction clause insofar as it was applicable. The critical question is whether the Judge was right to conclude that the scope of cl.7 extended to the Claim.[46]There is, with respect, much to be said for the Judge’s conclusion. It would have the effect of ensuring that all proceedings took place in a single jurisdiction, that of the English court. In a dispute relating to a modest sum, the practical attraction of such a solution, at least at first blush, is readily apparent.[47]But the question remains as to whether that is indeed what the parties agreed. After anxious reflection, I do not think that they did. I am unable to accept that cl. 7 legislated for the jurisdiction in which the Claim was to proceed. Notwithstanding the very considerable width of its wording, I think that cl. 7 was confined to the province of the escrow agreement itself, as distinct from the underlying substantive Claim. My reasons follow.[48]First, the escrow agreement is be construed as a whole and in context.[49]Secondly, cl. 3 of the escrow agreement tells strongly against the construction of cl.7 advocated by Angara. On a natural reading, the wording of cl.3.1 suggests that the jurisdiction for the resolution of the Claim has been left open. Though cl.3 could have been much better expressed and though there may well be a “boilerplate” element in the reference to arbitration contained in cl. 3.1 – as an ad hoc arbitration must be somewhat unlikely – even so, the presence of the arbitration wording serves to reinforce the impression that the question of the forum for the resolution of the Claim has not been resolved by cl. 7. Mr. Males sought to address these obvious concerns by way of the submission that the English court referred to in cl. 7 was the (and the only) court “having jurisdiction in the matter hereinafter mentioned” in cl. 3. With respect, I cannot agree. If cl. 7 had been intended by the parties to extend to the jurisdiction for determining the Claim, then the wording of cl. 3 is remarkable; had they so intended, the parties could simply have said so. It would also be very curious if cl. 7 was intended to govern the Claim, given that it makes no reference to it. Notably, the only references to the Claim are contained in cl. 3 - and cl. 3, on its face, leaves open the question of the jurisdiction in which the Claim is to be determined. Moreover, though cl.3 did, as the Judge held, undoubtedly address the “process” by which recovery was to be made under the escrow agreement, I cannot agree that it was confined to such matters of “process”. I therefore conclude that cl. 3, of itself, poses formidable difficulties for Angara’s case; on Angara’s construction of the escrow agreement it would not be at all easy to read cll. 3 and 7 together.[50]Thirdly, turning to the context of the escrow agreement, I regard it as unsurprising that the parties left open the jurisdiction for determining the Claim. As Mr. Bailey submitted, the object of the escrow agreement was to achieve the release of the vessel from arrest as speedily as possible by the provision of security. Further and although there can be no simplistic equation of the escrow agreement with a typical club letter, I agree with Mr. Bailey that the analogy is not unhelpful. To my mind, such contextual considerations easily outweigh any presumption in favour of “one stop” adjudication. The escrow agreement was entered into to address security and the release of the vessel - not the jurisdiction for determining the Claim. Whichever jurisdiction that was did not require immediate consideration or reconsideration in the escrow agreement. Had the parties wished to extend the escrow agreement to deal as well with the forum for resolving the Claim, they could have done so; but, as already discussed, the wording of the escrow agreement was not apt to do so.[51]Fourthly, I think it improbable that the parties agreed to exclusive English jurisdiction for determining the underlying Claim. Though the Appellants did have an arguable case under English law and may even have been unlucky not to prevail before HHJ Mackie QC, there is a stark distinction between the Appellants’ relatively straightforward claim for a US maritime lien and the significantly more complex claims in tort, bailment and restitution with which they were left in England. As already foreshadowed, it is well known that(1) in English private international law, the recognition of a right to enforce a maritime lien is a matter for the lex fori: and(2) there is no maritime lien for necessaries under English law. For the escrow agreement to be read as providing for exclusive English jurisdiction in respect of the Claim involves an agreement between the parties that the Appellants were to give up their US maritime lien. Whatever the attractions of “one stop” adjudication, the disadvantages for the Appellants of that course are so obvious that any such agreement must be improbable, the more especially as there was no need for the escrow agreement to stray into the territory of jurisdiction for the substantive claim. Of course there is the possibility that the Appellants might have unwittingly entered into a disadvantageous bargain but there is no basis for supposing that was the case here.[52]Fifthly, it must be acknowledged that the width of the wording of cl. 7 (“any dispute arising hereunder or relating hereto or arising in connection herewith”) is capable of being read as extending to the jurisdiction for determining the Claim. However, for the reasons already given, I am amply satisfied that cl. 7 is not to be read literally in that fashion. It is not so much (as Mr. Males submitted) a question of cl. 3 negating or qualifying cl. 7; it is instead a matter of reading the escrow agreement as a whole and making sense of it in context.[53]For completeness: i) Both parties sought to place reliance on the preamble to the escrow agreement, which refers to a potential claim in personam as well as a potential claim in rem. For my part, I am not persuaded that the preamble assists either party’s case. ii) A further pointer as to the scope of the bargain struck in the escrow agreement appears from the “consideration” provisions. The escrow payment (as defined) was to be made in consideration of the Appellants lifting the arrest and refraining from taking any action against the vessel “for the purposes of obtaining security for the Claim” – not, it may be noted, for all purposes. Unless therefore, cl. 7 was to be construed in accordance with the Angara submissions, there was no express prohibition on an arrest of the vessel in another jurisdiction for the purposes of founding jurisdiction for the substantive Claim. iii) This last point, however, was somewhat double-edged. Both before the Judge and before this Court, counsel for Angara emphasised that on the Appellants’ construction of the escrow agreement, Angara was exposed to the risk of multiple arrests for the purpose of founding jurisdiction. Although that is admittedly not an attractive feature of the Appellants’ construction of the escrow agreement, too much should not be made of it. In addition to considerations of res judicata (or abuse of process), any over-enthusiasm for multiple arrests was likely to be curbed by the provisions and pitfalls of cl. 3.6; if they were not to lose their security, the Appellants would need to take care as to where they instituted proceedings. In any event, however, this unattractive feature of the Appellants’ construction, even if weighed in the balance, does not dissuade me from the view which I take as to the correct construction of cl. 7 of the escrow agreement; the difficulties of the rival Angara case as to the scope of cl. 7 are simply too many.[54]I accordingly conclude that, with respect, the Judge’s decision on Issue(i) (I) cannot stand. The answer to Issue (I) must be “no”. The anti-suit injunction cannot be supported on the basis that the US proceedings were brought in breach of an exclusive English jurisdiction clause. I turn to Issue(ii) (II) which now, unlike before the Judge, assumes decisive importance.

ISSUE (II): VEXATIOUS OR OPPRESSIVE?

[55]Once this Issue is reached, the starting point is to be reiterated: the Appellants’ pursuit of the US proceedings does not involve a breach of an exclusive English jurisdiction clause. The principles governing the grant of an anti-suit injunction in such circumstances have been outlined above and are themselves well-known. To the extent that the Appellants suggested the contrary, I am unable to accept that the Judge did not have them in mind. That the Judge expressed himself briefly is neither here nor there. As Mr. Males rightly submitted, this is not a “box ticking” exercise.[56]The inquiry is instead whether, in the light of those principles, the decision to which the Judge came can be upheld. With respect, I do not think it can. The attractions of “one stop” English adjudication are again apparent here. But, unfortunately and possibly - it is difficult for this Court to tell - because of the way the Appellants’ arguments were presented before the Judge, the importance to the Appellants of a forum in which their claim for a US maritime lien could be pursued, was obscured. Viewed in this light, the US proceedings did not involve unnecessary parallel litigation; nor were the issues raised in the US proceedings, insofar as material, “very similar, if not identical” to those arising in the English proceedings. Once proper attention is paid to the importance to the Appellants of the US maritime lien, it is difficult to see how the US proceedings could be categorised as “vexatious or oppressive”, even assuming in favour of Angara that this was not a true “single forum” case (given that the Appellants did have available a cause of action which arguably allowed them to succeed in this Court). As the Appellants’ claim for a US maritime lien was bound to fail in this Court and (at the least) must be taken to enjoy a strong chance of success in the Louisiana court, I am unable to accept that the English court was the “natural forum” for the proceedings in question. However, even if I were wrong about that, I cannot see that considerations of justice require the Appellants to be restrained from proceeding in the US courts. To the contrary, I think that considerations of justice point to the Appellants being at liberty to proceed in those courts. It is, after all, in those courts, not here, that the Appellants’ claim for a US maritime lien may succeed. To hold otherwise, is to doom that claim to failure.[57]It therefore seems plain to me that had an anti-suit injunction been sought by Angara at the outset of the English proceedings, any such application would have been bound to fail. Angara would have failed to show that the US proceedings were “vexatious or oppressive”, in practical terms a necessary pre-condition for the success of that application. Moreover this would have been so, whether this matter is properly characterised as a “single forum” or “alternative forum” case – so rendering unnecessary any extended discussion as to which it is.[58]No doubt sensing such difficulties, Mr. Males concentrated his fire on the facts as they were when the matter came before the Judge. By then the English proceedings had reached the close of pleadings and not insignificant costs had been incurred. There had not hitherto been a hint from the Appellants of their intention to pursue a claim for a US maritime lien. The CMC in the English proceedings was but days away. Against this background, I can readily understand the Judge’s reaction to the emergence of US proceedings, so to speak, out of the blue.[59]Even so, I am unable to agree that the grant of the anti-suit injunction was proportionate or appropriate. True it is that the Appellants had let the English proceedings run on unchallenged (there had, for instance, been no application for a stay) but a sense of proportion should not be lost; those proceedings had reached the close of pleadings but neither disclosure nor the exchange of witness statements had yet taken place. Further, there is no evidence that the Appellants missed any opportunity of an earlier arrest of the vessel with a view to founding jurisdiction for their claim for a US maritime lien. Still further, although it is perhaps best not to speculate, the Appellants’ reluctance to flag in advance an intention of arresting the vessel in any particular jurisdiction is, at the least, understandable. All these considerations suggest that late though it may have been in terms of the English proceedings, the initiation of the US proceedings by the Appellants could again not properly be categorised as “vexatious or oppressive”. Such considerations are reinforced, when it is kept in mind that the English proceedings involved Angara seeking a negative declaration; as already foreshadowed, proceedings by Angara for relief of this nature, so promptly instituted, were not obviously to be anticipated immediately following the escrow agreement.[60]For completeness, I do not think that Angara’s case can be assisted by events post-dating the judgment of Simon J, including the fact of HHJ Mackie QC’s judgment in its favour. It will be recollected that Angara had successfully opposed the Appellants’ application for a stay of those proceedings. Suffice to say of Masri (supra) that its facts are so far removed from those of this case that it does not provide any assistance; no questions arise here of the need to protect this jurisdiction or the integrity of the judgments of this Court.[61]It follows that the Appellants are entitled to succeed on Issue (II), which must be answered “no”. I am conscious that the Judge’s decision on this Issue did very much involve an exercise of discretion. However, the failure to grapple with the importance to the Appellants of its claim for a US maritime lien and a jurisdiction in which that claim could succeed, has the unavoidable consequence that the exercise was flawed. If the upshot is that this Court needs to exercise that discretion afresh, then, in my judgment, the anti-suit injunction must be discharged and Issue (II) answered in the manner already indicated.

ISSUE (III): TERMS?

[62]In the light of my decision on Issues (I) and (II), this Issue does not arise. I therefore add only this in relation to Issue (II). Had Angara succeeded on Issue (II) (contrary to the conclusion to which I have come), then I would have regarded it as appropriate to impose terms permitting the Appellants to pursue their claim for a US maritime lien before the English court.

CONCLUSION

[63]In my judgment the appeal succeeds, the anti-suit injunction must be discharged and the order of Simon J set aside. MR JUSTICE PETER SMITH[64]I agree. LORD JUSTICE RIX[65]I also agree.

Cited in 2 later judgments