The Shell Petroleum Development Company of Nigeria Limited v Sunlink Energies and Resources Limited
[2023] EWHC 3135 (Comm)
Cupreus SARLv Whiteshell Group Ltd
19 December 2023
[2023] EWHC 3449 (Comm)
High Court
Two companies had a contract with an arbitration clause. One company sued the other in Morocco, ignoring the agreed arbitration. The English court stopped the Moroccan lawsuit because the dispute should have been resolved through arbitration. The company that started the lawsuit in Morocco had to pay costs for abusing the process.
Key Facts
- •Cupreus SARL (Morocco) and Whiteshell Group Ltd (BVI) had a supply agreement governed by English law with an arbitration clause (clauses 15-16).
- •Whiteshell commenced proceedings in Morocco concerning mortgages (security for the supply agreement) against Cupreus and mortgagors.
- •Cupreus sought an anti-suit injunction in England to restrain Whiteshell from pursuing the Moroccan proceedings.
- •Whiteshell argued the English court lacked jurisdiction and there was material non-disclosure by Cupreus.
- •The Moroccan proceedings involved determining the value of royalties and subsequently enforcing payment, even after an initial order stated the accounting was without prejudice to the merits.
Legal Principles
Construction of arbitration agreements: English law principles apply, requiring a holistic interpretation within the context of the entire contract and the parties' shared understanding.
English Contract Law
Anti-suit injunctions: Can be sought based on breach of an exclusive jurisdiction clause or arbitration agreement, or if the foreign proceedings are vexatious or oppressive. Different principles apply where proceedings are against a non-party to the agreement.
Clearlake Shipping PTA Ltd v. Xiang Da Cl [2019] EWHC 2284 (Comm)
Section 37 of the Senior Courts Act 1981: Allows for injunctions to enforce negative promises, such as not pursuing foreign proceedings in breach of an arbitration agreement.
Senior Courts Act 1981, Section 37
Indemnity costs: Generally awarded for conduct outside the norm, although in exceptional circumstances, merits can be considered.
Three Rovers (Tomlinson J)
Outcomes
The anti-suit injunction was continued.
The court found the dispute over whether sums were due under the supply agreement fell within the scope of the arbitration agreement. Pursuing the Moroccan proceedings was considered a breach of the agreement and vexatious.
Whiteshell's application to discharge the injunction was dismissed.
The court rejected Whiteshell's arguments regarding lack of jurisdiction and material non-disclosure.
Whiteshell ordered to pay Cupreus' costs on the standard basis, except for costs from December 7th, which were assessed on the standard basis.
While initial correspondence suggested agreement on the injunction and arbitration clause, Whiteshell's subsequent conduct in seeking a carve-out and attempting to recover its own costs was deemed outside the norm.
Summary assessment of Cupreus' costs: Specific items were allowed in full, while the balance was assessed at 75% due to the hourly rates being slightly above guideline rates.
A split approach was adopted due to the costs being partially awarded on an indemnity basis.
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