Breach of the arbitration clause

The English courts will grant an anti-suit injunction under s37 of the Senior Courts Act 1981 to prevent a party to an arbitration clause from commencing judicial proceedings in breach of that clause. Louis Dreyfus Commodities Kenya Ltd v Bolster Shipping Co Ltd [2010] EWHC 1732 (Comm) is a rather curious case, involving Mexican procedures, where the defendant sought to join the applicant to judicial proceedings being brought against the applicant in Mexico. The question for Tomlinson J, which he answered in the negative, was whether the application constituted a breach of the arbitration clause.

Louis Dreyfus: the facts

On 12 February 2007 LDCK sold to LDC fob Mombasa 20,500 tonnes, 10% more or less at seller’s option, of South African white maize. The sale was on GAFTA terms and contained a GAFTA arbitration clause. On the same day LDC time-chartered the vessel Giorgios Carras, from the defendant, Bolster, for the carriage of grain from East Africa to Mexico. The time charter provided for arbitration in London under LMAA Rules. On 22 February 2007 LDC resold the maize to CHS, and CHS in turn resold the maize to a Mexican company, Suministros. A bill of lading was issued on 10 March 2010 and signed in Mombasa: LDCK was named as the shipper and Suministros was named as consignee. The bill of lading incorporated the arbitration clause in the time charter.