Commercial Disputes Weekly – Issue 1889 January 2024

Injunctions – State Immunity
Following a collision between two vessels, Venezuela (owner of one vessel) commenced proceedings in the Venezuelan courts against the insurer of the other vessel. The insurer sought a final anti-suit injunction against Venezuela on the basis that it was bound by the arbitration agreement in the insurance agreement. The injunction was refused on the basis that Venezuela was immune from the grant of injunctive relief due to section 13(2) of the State Immunity Act 1978. The Court of Appeal rejected arguments put forward by the insurer that its rights of access to justice under article 6 of the European Convention on Human Rights were restricted. The refusal of an injunction was proportionate and justified because it was within the range of possible rules that were consistent with current international standards. The insurer could obtain redress for Venezuela’s breach of the arbitration agreement by a declaration or damages, and the insurer had not pointed to any real advantage in obtaining an anti-suit injunction.
UK P&I Club NV and another v Republica Bolivariana de Venezuela [2023] EWCA Civ 1497, 20 December 2023

Maritime – Cargo damage
Part of a cargo of soybeans was found to be heat-damaged on discharge. Owners admitted breach of their duty to take care of the cargo but disputed the claim on causation, title and quantum grounds. The Commercial Court held that the first claimant, who had been assigned the rights by Oilex, the lawful holders of the bills of lading, did have title to sue, notwithstanding that Oilex had received sums from a salvage sale of the damaged cargo and from the first claimant who had sold the cargo to them. Oilex (and therefore the first claimant) was able to recover full damages from the carrier despite making recovery by way of settlement under its sale contract. That settlement was not to be treated as mitigation of the breach for which credit had to be given to owners. The first claimant had shown that the discharge and salvage sale of the rejected cargo arose by reason of the owners’ breach. Owners had not established that the cargo interests had failed to mitigate its loss by refusing to allow manual segregation to continue, in not segregating more effectively and in concluding the salvage sale. Owners were liable for damages based on the difference between the sound CIF value of the rejected cargo and its actual value on discharge. The first claimant, as assignee, could not recover the ancillary costs because there was no evidence that these were losses that had been suffered by Oilex.
AMS Ameropa Marketing Sales AG Baloise Belgium SA v Ocean Unity Navigation Inc [2023] EWHC 3264 (Comm), 19 December 2023

Arbitration
Following an earlier judgment which held that three LCIA awards against Nigeria were procured by fraud and in a manner contrary to public policy, the Commercial Court has refused permission to appeal against that judgment. It concluded that none of the grounds for appeal had any prospect of success on appeal. The judge also decided to set the award aside rather than remit it to the tribunal for reconsideration. The situation was so serious that there was no real prospect of justice being done by the tribunal on reconsideration. The tribunal’s conclusions were based on false foundations, given P&ID’s actions and so it was inappropriate to remit the matter to the tribunal (as set out in section 68(3) Arbitration Act 1996).
The Federal Republic of Nigeria v Process & Industrial Developments Ltd [2023] EWHC 3320 (Comm), 21 December 2023

Maritime
The parties entered into various contracts for the sale of ships. The buyers failed to pay the deposits and the sellers gave notice cancelling the contract. They then commenced arbitration to recover the deposits. The buyers alleged that the sellers had wrongfully terminated the contracts because they should have cooperated to help the buyers conclude management agreements with vessel managers (the buyers said that they had not been able to do this because of the Covid-19 pandemic). This documentation was required to open the deposit accounts. The court held that the deposits could not be recovered as a debt because the condition precedent to payment of the deposits had not been fulfilled and there was no doctrine of ‘deemed fulfilment’. Nor could a party derive benefit from its own breach. However, the sellers could claim damages for the buyers’ alleged breaches and the award was remitted to the arbitrators for reconsideration of this point.
King Crude Carriers SA and others v Ridgebury November LLC and others [2023] EWHC 3220 (Comm), 15 December 2023

Should you wish to discuss any of these cases in further detail, please speak with a member of our London dispute resolution team below, or your regular contact at Watson Farley & Williams: