Black Swan Petroleum DMCC v Pemilik Dan/Atau Pencarter Demis Kapal atau Vesel Oceania (No Imo 9246633) Dari Pelabuhan Antwerp, Belgium (WA-27NCC-46-09/2023)

This brief judgment deals with the decision of this Court allowing the Plaintiff’s application under Enclosure 63 for an anti-arbitration injunction in respect of an LMAA Arbitration in London that was commenced by the Defendant.

Prior to the hearing of Enclosure 63, I had on 13.12.2023 dismissed an application filed by the Defendant under Enclosure 22 seeking, 2 inter alia, to strike out the Plaintiff’s Writ and Statement of Claim and or alternatively to stay the Plaintiff’s action.

In my judgment, I had found that the Defendant’s application under Enclosure 22 amounts to taking a step in the proceedings and thereby a submission to the jurisdiction of this Court.

The decision to allow the Plaintiff’s application under Enclosure 63 for an anti-arbitration injunction, to my mind, would be consistent with my decision in respect of Enclosure 22 and to avoid multiplicity of proceedings, preserves the integrity of the order made under Enclosure 22 and to prevent an abuse of the Court process.

On 14.9.2023, the Plaintiff filed its Writ in rem and obtained a Warrant of Arrest in respect of the Vessel. The Plaintiff arrested the Vessel on the same day

Five days after the Vessel was arrested, on 19.9.2023, the Defendant commenced an LMAA Arbitration in London against the Plaintiff by issuing its Notice of Arbitration (“the LMAA Arbitration”).

On 27.9.2023, the Defendant entered an appearance in this suit.

On 13.10.2023, the Plaintiff filed its Statement of Claim. Shortly before its Defence in this suit was due, on 26.10.2023, the Defendant filed its Notice of Application under Enclosure 22 which sought, among other things, to set aside the arrest, strike out the Plaintiff’s Statement of Claim and stay these proceedings in favour of the LMAA Arbitration.

On 24.11.2023, the Plaintiff filed an application to challenge the substantive jurisdiction of the Tribunal in the LMAA Arbitration (i.e. the “Jurisdictional Objection”).

Enclosure 22 was heard on 13.12.2023 and after hearing submissions by counsel, this Court dismissed the application in its entirety. This meant that the Defendant’s Defence became due on 27.12.2023.

On 15.12.2023, the Defendant filed an appeal against the whole of the decision in Enclosure 22 (“the Appeal”).

On 21.12.2023, the Defendant filed its Notice of Application under Enclosure 53 for a stay of these proceedings pending the determination of the Appeal.

On 22.12. 2023, at the Defendant’s request, the Plaintiff granted an extension of time to the Defendant to file its Defence by 3.1.2024. On the same day, the Tribunal in the LMAA Arbitration decided that it would determine the Jurisdictional Objection together with the merits of the LMAA Arbitration. In other words, the Tribunal was proceeding to hear the merits of the Defendant’s claims in the LMAA Arbitration.

On 2.1.2024, the Plaintiff filed its Notice of Application under Enclosure 63 seeking an anti-arbitration injunction to restrain the Defendant from pursuing, continuing and or proceeding with the LMAA Arbitration against the Plaintiff.

On 3.1.2024, the Defendant duly filed its Defence in these proceedings.

On 11.1.2024, the Tribunal in the LMAA Arbitration issued timelines in the LMAA Arbitration. These timelines envisage the exchange of witness statements as early as April 2024.

On 25.1.2024, the Tribunal by way of majority decision fixed a hearing for the LMAA Arbitration for five days commencing on 1.7.2024.

On 7.2.2024, this Court heard both the Enclosures 53 and 63 together. Enclosure 53 was dismissed with costs fixed at RM 10,000.00 and Enclosure 63 was allowed with costs fixed at RM 20,000.00.

The Defendant did not appeal against the decision dismissing Enclosure 53 but filed an appeal against the decision of this Court allowing the Plaintiff’s application under Enclosure 63.

In Jaya Sudhir a/l Jayaram v Nautical Supreme Sdn Bhd & Ors [2019] 7 CLJ 395 (“Jaya Sudhir”), the Federal Court held that where a party to an alleged arbitration agreement seeks an anti-arbitration injunction: (a) the injunction cannot cause injustice to the claimant 5 in the arbitration; and (b) the continuance of the arbitration must be oppressive, vexatious, unconscionable or an abuse of process.

Further, in Federal Land Development Authority & Anor v Tan Sri Haji Mohd Isa Dato Haji Abdul Samad & Ors [2020] 1 LNS 1958, it was decided that where there is an application to stay court proceedings in favour of arbitration and an opposite application to restrain arbitration proceedings pending the court action, either the stay pending arbitration is allowed and the anti-arbitration injunction is dismissed or the stay application is dismissed and the anti-arbitration injunction is allowed – the Court found that “[i]t would be a travesty if I were to allow or dismiss both applications”.

In the present case, I have already dismissed the Defendant’s stay application in Enclosure 22 on the grounds that the Defendant has taken a step in the proceedings. It must follow from my decision that this Court should allow the Plaintiff’s application under Enclosure 63 as it is the Court’s duty to enforce its orders and to prevent an abuse of process by allowing the Defendant to proceed with the LMAA Arbitration having submitted to the jurisdiction of this Court.

The Defendant’s contention that its application under Enclosure 22 was not a striking out application is inconsistent with my finding when I dismissed Enclosure 22. In fact, I had opined that the Defendant’s prayer for stay of proceedings in Enclosure 22 was an alternative application to be considered in the event the prayer to strike out were to be dismissed by this Court. Accordingly, I had found that the Defendant had by its application under Enclosure 22, submitted to the jurisdiction of this Court.

Thus, it would be incongruous for the Defendant, on one hand, to invite this Court to exercise its jurisdiction over the matter but at the same time seeking to proceed with the LMAA Arbitration. This will result in a multiplicity of proceedings with the attendant risks of inconsistent findings and conflicting decisions, not to mention incurring of unnecessary costs and time.

The granting of the anti-arbitration agreement will not be prejudicial to the Defendant as the Defendant can still put forward its claims in the LMAA Arbitration as a counterclaim. There is no relief sought by the Defendant in the LMAA Arbitration that cannot be granted by this Court.

As the Federal Court found in Jaya Sudhir, such multiplicity of concurrent proceedings and duplicity of issues ought to be avoided and circumvented. When there are co-extensive or overlapping proceedings in court and before an arbitral tribunal, it would be inappropriate and undesirable for the suit and the arbitration proceedings to run concurrently. The desire of courts to avoid disruption and multiplicity of litigation, in particular to avoid parallel proceedings and the risk of inconsistent findings, and to avoid the causing of inconvenience to third parties, rests on the court’s powers to protect its own proceedings and processes by granting anti-arbitration injunctions.

I agree with learned counsel for the Plaintiff that the continuance of the LMAA Arbitration is not only oppressive, vexatious and an abuse of process because of a multiplicity of proceedings, but also because it is the means by which the Defendant is trying to tie the 7 hands, and stifle the jurisdiction, of this Court. This abuse of process by the Defendant cannot be condoned, especially when the Defendant itself submitted to, and had invoked, the jurisdiction of this Court to hear this dispute.

Accordingly, it is my judgment that the Plaintiff is entitled to an anti-arbitration injunction in terms of prayers 1 and 2 of Enclosure 63 until the final determination of the Defendant’s appeal by the Court of Appeal against the decision of this Court dismissing the Enclosure 22 filed by the Defendant. The Defendant to pay the Plaintiff’s costs fixed at RM 20,000.00 subject to allocator. Dated the 6th day of March 2024 ONG CHEE KWAN Judge of the High Court of Malaya High Court of Kuala Lumpur, NCC2 Counsel:

Mr. Arun Krishnalingam, together with Lionel Noel and Tan Hui Ling for Plaintiff

Messrs. T S Oon & Partners (Kuala Lumpur) Mr. James David together with Foo Siew Yin and Ellia Fatanah for

Jaya Sudhir a/l Jayaram v Nautical Supreme Sdn Bhd & Ors [2019] 7 CLJ 395 2. Federal Land Development Authority & Anor v Tan Sri Haji Mohd