DAELIM CORPORATION V BONITA CO LTD AND OTHERS

[2020] EWHC 697 (Comm), Queen’s Bench Division, Commercial Court, Andrew Baker J, 25 March 2020

Arbitration – Preservation of assets – Whether order should have been made – Arbitration Act 1996, sections 2(3) and 44(3)

In June 2019 Daelim, Bonita and EMIC entered into a termination and settlement agreement (TSA) under which they agreed early termination of the head charter between Daelim and Bonita, and a sub-charter between Bonita and EMIC. Under the TSA, EMIC was to pay around US$6 million to Daelim and US$0.5 million to Bonita. The charters were governed by LMAA arbitration clauses and the TSA was subject to arbitration in Hong Kong. A dispute arose as to the US$0.5 million owing to Bonita by EMIC. Daelim claimed that Bonita had assigned all rights to Daelim under the head charter and that it was entitled to be paid that sum. Daelim obtained an order from the High Court under section 44(3) of the Arbitration Act 1996 requiring EMIC to pay the money into court and restraining Bonita from commencing arbitration proceedings in Hong Kong. The judge granted the order in an ex parte hearing, but on the return date, having received undertakings from EMIC, confined the order to the anti-arbitration injunction.