COSCO Shipping Specialized Carriers Co., Ltd. v PT OKI PULP & PAPER MILLS & 2 Ors
39 cases cited
(28 SG, 11 foreign)
Cited by 1 case
Catchwords
Arbitration — Restraint of proceedings — Foreign judicial Civil Procedure — Injunctions — Restraint of foreign judicial proceedings Arbitration — Agreement — Scope — Whether dispute arising for damage done by shipowner/carrier to a trestle bridge owned by the cargo shipper is a dispute “arising out of or in connection with” the contract of carriage evidenced by bills of lading
Practice Areas
Counsel (8)
Case Significance
COSCO Shipping Specialized Carriers Co, Ltd v PT OKI Pulp & Paper Mills and others and another matter [2024] SGCA 50 was decided by the Court of Appeal on 13 November 2024 in Civil Appeal No 29 of 2024 and Summons No 23 of 2024, with Steven Chong JCA delivering the grounds of decision of the court sitting with Sundaresh Menon CJ and Belinda Ang Saw Ean JCA. The appellant was COSCO Shipping Specialized Carriers Co, Ltd, and the respondents included PT OKI Pulp & Paper Mills and COSCO Shipping Specialized Carriers (Europe) BV, together with all other persons claiming damage, loss, expense or indemnity arising out of contact between the vessel "LE LI" (IMO No 9192674) and the jetty or structure at Tanjung Tapa Pier on or about 31 May 2022. The proceedings arose in the matter of Admiralty in Personam No 50 of 2022 (Summons No 2676 of 2023). The grounds of decision addressed the ambit and scope of the phrase "arising out of or in connection with this contract", specifically whether a dispute over damage done by the shipowner or carrier to a trestle bridge owned by the cargo shipper is a dispute arising out of or in connection with the contract of carriage evidenced by bills of lading, alongside the restraint of foreign judicial proceedings and injunctions. Statutes referenced included the Arbitration Act, the International Arbitration Act, the Limitation Act, the Sale of Goods Act, the Supreme Court of Judicature Act and the United States Carriage of Goods by Sea Act.
Summary
SUPREME COURT OF SINGAPORE
13 November 2024
Case summary
COSCO Shipping Specialized Carriers Co, Ltd v PT OKI Pulp & Paper Mills and others and another matter [2024] SGCA 50
Civil Appeal No. 29 of 2024
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Decision of the Court of Appeal (delivered by Steven Chong JCA):
Outcome: CoA allowed the appeal and granted an anti-suit injunction to restrain the first respondent from continuing proceedings in Indonesia for claims arising from an incident involving an allision between the appellant’s vessel and the trestle bridge purportedly owned by the first respondent in Palembang, Indonesia.
Pertinent and significant points of the GD
• The Court of Appeal considered the ambit and scope of the phrase “arising out of or in connection with this contract” in an arbitration agreement in the context where there was a contractual defence or reasonably foreseeable contractual defence to a tortious claim, and where there was a contractual cross-claim which arose from the tortious claim between the contracting parties.
• The Court of Appeal held that the “matter” jurisprudence under the approach for a stay under s 6 of the International Arbitration Act 1994 (2020 Rev Ed) (“IAA”) is likewise applicable to the approach for an anti-suit injunction based on an arbitration agreement. This demonstrates the undoubtedly close relationship between a stay and an anti-suit injunction where both are predicated on the breach of a valid arbitration agreement between the parties and draws further parallels between the applicable tests for both.
• The Court of Appeal held that in determining what are the matter(s) or dispute(s) which the parties have raised or foreseeably will raise in the foreign court proceedings, the court must ascertain the substance of the dispute or disputes between the parties. This also involves a consideration of the defences and all reasonably foreseeable defences to the claim or part of the claim.
• The Court of Appeal further held that the merits of an identified or reasonably foreseeable defence and/or cross-claim are generally irrelevant to the inquiry, as the genuineness or merits of the dispute is a matter which should properly be left to the arbitral tribunal to assess. This aligns the law governing anti-suit injunctions with the position in applications for a stay of proceedings based on an exclusive jurisdiction clause and under s 6 of the IAA.
• The Court of Appeal also cautioned against over-reliance on any presumption that parties must have intended that all disputes are to be heard together. If upon examining the text of the agreement and the nature of the competing claims, a claim is not within its ambit, then forum fragmentation is inevitable and the courts should not steer away from that outcome.
1 This was an appeal against the High Court Judge’s decision in HC/SUM 2676/2023 (“SUM 2676”) declining to grant the anti-suit injunction sought by the appellant on the ground that the Indonesian proceedings commenced by the first respondent was not in breach of the arbitration agreement incorporated in the nine bills of lading between the parties. The application in SUM 2676 and the appeal were both heard on an ex parte basis as the first respondent was no longer a party to the proceedings.
The material facts
2 Contracts of carriage were entered into between the appellant (as carrier) and the first respondent (as shipper), evidenced by or contained in nine bills of lading (“BLs”) in respect of the first respondent’s cargo loaded aboard the appellant’s vessel at Palembang port, Indonesia.
3 The BLs were each subject to an arbitration agreement which stipulated that “any dispute arising out of or in connection with this Contract, including any question regarding its existence, validity or termination shall be referred to and finally resolved by arbitration in Singapore …”.
4 The incident the subject of the dispute between the parties occurred when, shortly after loading the first respondent’s cargo at Palembang port, the appellant’s vessel allided with a trestle bridge of the jetty from which the loading had taken place, causing extensive damage allegedly in a sum of about US$269 million. The first respondent claimed to be the owner of the trestle bridge.
5 Several competing actions were thereafter commenced. The first respondent commenced a tortious claim against the appellant in Indonesia for losses arising out of the incident (the “Indonesian proceedings”). The appellant commenced a limitation action in Singapore and thereafter applied in SUM 2676 for an anti-suit injunction to restrain the Indonesian proceedings. The appellant also commenced arbitral proceedings (“SIAC Arbitration”) before the Singapore International Arbitration Centre against the first respondent for breaches including of the safe port warranty under the BLs.
6 After the first respondent unsuccessfully contested the jurisdiction of the Singapore courts in the limitation action and no appeal was filed against the High Court Judge’s decision on jurisdiction within the time limited for appealing, the first respondent then withdrew its notice of intention to contest in the limitation action. By the time the High Court Judge heard SUM 2676, the first respondent was no longer a party to the proceedings. Accordingly, the High Court Judge heard SUM 2676 and the Court of Appeal heard the appeal in CA/CA 29/2024 (“CA 29”) on an ex parte basis. The second respondent, who was represented by counsel, attended the hearings but otherwise did not play any active role in SUM 2676.
7 It also transpired that the arbitral tribunal had yet to be constituted in the SIAC Arbitration as the first respondent had filed an objection under Rule 28.1 of the SIAC Rules 2016, essentially on the ground that the claim fell outside the scope of the arbitration agreement.
The court’s ground of decision
The court’s jurisdiction and power to grant the anti-suit injunction
8 The source of the Court’s power to grant a permanent anti-suit injunction stems from s 18(2) read with para 14 of the First Schedule of the Supreme Court of Judicature Act 1969 (2020 Rev Ed): at [58].
9 The grant of an anti-suit injunction is a personal remedy and as long as the court has personal jurisdiction over the anti-suit respondent, the court would have jurisdiction to grant the anti-suit injunction. Where parties have made an express choice of the seat of the arbitration, the choice of seat embodies the parties’ submission to the curial jurisdiction of the seat’s court. An agreement to submit to the supervisory jurisdiction of the Singapore court or the parties’ choice of Singapore as the seat would also be sufficient to provide the basis to obtain permission for service out of jurisdiction: at [60]–[61].
10 In the court below, jurisdiction to grant the anti-suit injunction was not challenged by the first respondent (prior to its withdrawal from the proceedings). In any event, personal jurisdiction over the first respondent was clearly established having regard to the parties’ choice of Singapore as the seat: at [60].
11 A well-recognised feature of the supervisory and supporting jurisdiction of the seat court is the grant of injunctive relief to restrain a party from breaching its obligations under the arbitration agreement by bringing claims which fall within that agreement in court proceedings rather than in arbitration: at [65].
The scope of “arising out of or in connection with”
12 To determine whether an anti-suit injunction should be granted on the basis of an arbitration clause, the Court of Appeal held that the inquiry proceeds on the following two stages (at [68]):
a. at the first stage, the court should first determine what are the matter(s) or dispute(s) which the parties have raised or foreseeably will raise in the foreign court proceedings (the “Identification Issue”); and
b. at the second stage, the court must then ascertain whether such matter(s) or dispute(s) fall within the scope and ambit of the arbitration clause (the “Scope Issue”).
13 The Court of Appeal held that a unified approach should be adopted in considering the approach for a stay under s 6 of the International Arbitration Act 1994 (2020 Rev Ed) (commonly referred to as the “matter” jurisprudence”) and the approach for an anti-suit injunction based on an arbitration agreement. The “matter” jurisprudence includes the well-accepted principle that in approaching the Identification Issue, the court must ascertain the substance of the dispute or disputes between the parties. This also involves a consideration of the defences and all reasonably foreseeable defences to the claim or part of the claim: at [70]–[71].
14 The various legal “tests” formulated by the English courts over the scope of the relevant “connection” between a dispute and the contract in which the arbitration agreement is found were referred to by the High Court Judge. Nonetheless, the Court of Appeal emphasised that these tests are not intended or designed to be applied in a formulaic manner. There can be no universal test that applies to all such disputes since the ascertainment of the relevant “connection” would invariably be a highly fact-specific inquiry that requires the court to consider all relevant circumstances: at [2], [79] and [85].
15 The High Court Judge erred in construing the approach formulated by the English Court of Appeal in Aggeliki Charis Compania Maritima SA v Pagnan SpA (The “Angelic Grace”) [1995] 1 Lloyd’s Rep 87 (with the approach commonly referred to as the “Closely Knitted Test”) as applying only where the non-contractual claim may be recast as a contractual claim. The mere fact that the tort claim is not parallel to or could not be recast as a contractual claim does not necessarily mean that such a claim could not be said to have arisen out of or in connection with the contract: at [78]–[79].
The merits of the identified or reasonably foreseeable defence(s) or competing claim(s) are irrelevant
16 The merits of an identified or reasonably foreseeable defence and/or cross-claim are generally irrelevant to the inquiry, as the genuineness or merits of the dispute is a matter which should properly be left to the arbitral tribunal to assess: at [88] and [93].
Application to the facts
17 The High Court Judge erred in treating the tortious claim and contractual defence of “errors of navigation” under the BLs as discrete matters rather than as a composite inquiry to determine the connection between the two: at [96] and [103].
18 It was evident that the common “connection” between the first respondent’s tortious claim in Indonesia, the appellant’s contractual defence of “errors of navigation” under the BLs, and the appellant’s counterclaim for breach of the safe port warranty ultimately related to the cause of the allision. Once this was appreciated, it was clear that the parties must have contemplated that a pure tort claim for damage to the trestle bridge located at the loading jetty that was contractually provided for, caused during the performance of the contracts of carriage between the parties and where the foreseeable lines of defence included recourse to the provisions of those contracts, should be subject to the arbitration agreement: at [99], [102]–[103].
Conclusion
19 The Court of Appeal held that the Indonesian proceedings were commenced in breach of the arbitration agreement between the parties. The Court granted the anti-suit injunction sought by the appellant: at [114].
This summary is provided to assist in the understanding of the Court’s grounds of decision. It is not intended to be a substitute for the reasons of the Court. All numbers in bold font and square brackets refer to the corresponding paragraph numbers in the Court’s grounds of decision.
What was the key issue in COSCO Shipping v PT OKI Pulp & Paper Mills [2024] SGCA 50?
The Court of Appeal addressed the scope of the phrase "arising out of or in connection with this contract", including whether a dispute over damage to a trestle bridge owned by the cargo shipper fell within the contract of carriage evidenced by bills of lading.
Which judges decided COSCO Shipping v PT OKI Pulp & Paper Mills?
The Court of Appeal comprising Sundaresh Menon CJ, Steven Chong JCA and Belinda Ang Saw Ean JCA decided Civil Appeal No 29 of 2024 and Summons No 23 of 2024 on 13 November 2024. Steven Chong JCA delivered the grounds of decision of the court.
Statutes Cited
Cases Cited (39)
SG (5)
SLR (23)
[1997] 2 SLR(R) 148 [1997] 2 SLR(R) 291 [1999] 3 SLR(R) 432 [2004] 2 SLR(R) 457 [2005] 3 SLR(R) 719 [2005] 4 SLR(R) 494 [2007] 1 SLR(R) 629 [2009] 3 SLR(R) 936 [2009] 4 SLR(R) 732 [2014] 2 SLR 208 [2016] 1 SLR 373 [2016] 3 SLR 431 [2016] 5 SLR 455 [2018] 2 SLR 1271 [2019] 1 SLR 732 [2020] 1 SLR 456 [2020] 4 SLR 1014 [2022] 3 SLR 103 [2023] 2 SLR 77 [2024] 1 SLR 307 [2024] 1 SLR 56 [2024] 3 SLR 1282 [2024] 3 SLR 807
UK (9)
[1936] 1 Ch 365 [1981] AC 557 [1990] 1 AC 109 [2003] UKHL 26 [2007] UKHL 4 [2020] 1 WLR 4117 [2021] 1 WLR 5475 [2022] EWHC 1953 [2023] UKSC 32
AU (2)
[2004] HCA 35 [2006] FCAFC 192
Cited By (1)
Referenced in
Statutes interpreted in this judgment
Legal concepts & references
Judgment
Read the full judgment on the official Singapore Courts portal.
Read on eLitigationSource: eLitigation ([2024] SGCA 50)