Key Facts
- •Claimants (Owners) sought urgent injunctive relief against Respondents (Charterers) to re-deliver two vessels under bareboat charterparties.
- •A Termination Event occurred under the Head BBCPs when the Guarantor's shareholding in GHH fell below 77.4%.
- •Owners served a Termination Notice and initiated arbitration proceedings.
- •Charterers challenged the Termination Notice and Owners' entitlement to relief on various grounds.
- •The Vessels were not in the possession of Charterers but sub-sub-chartered to a third party.
- •The application was brought under s.44 of the Arbitration Act 1996 and s.37(1) of the Senior Courts Act 1981.
Legal Principles
Section 44 of the Arbitration Act 1996 allows the court to make orders regarding arbitral proceedings, including interim injunctions, if the arbitral tribunal is unable to act effectively or in urgent cases to preserve evidence or assets.
Arbitration Act 1996, s.44
The court's power under s.44(3) is not limited to freezing injunctions and search orders but can extend to compelling performance of a disputed contractual obligation in urgent circumstances to preserve assets, which can include disputed contractual rights.
Cetelem SA v Roust Holdings Ltd [2005] 1 WLR 355
The court must exercise caution when granting interim mandatory injunctions under s.44(3) that might determine issues the parties agreed to resolve through arbitration. The closer the injunction comes to deciding arbitral issues, the more wary the court should be.
Zim Integrated Shipping Services Ltd v European Container KS [2013] EWHC 3581 (Comm); Euroil Ltd v Cameroon Offshore [2014] EWHC 52 (Comm)
An arbitral tribunal generally lacks the power to grant interim injunctive relief unless expressly conferred by the parties.
Zim Integrated Shipping Services Ltd v European Container KS [2013] EWHC 3581 (Comm); Arbitration Act 1996, s.38(4)
For an interim mandatory injunction, the applicant must satisfy the enhanced American Cyanamid test.
American Cyanamid test
Outcomes
Owners' application for relief under s.44(3) of the 1996 Act was refused.
The court found insufficient urgency to justify intervention before the arbitral tribunal could act. Granting the injunction would effectively pre-empt the arbitration by making a final determination on disputed contractual rights.