Qingdao Huiquan Shipping Company v Shanghai Dong He Xin Industry Group Co Ltd, Court of Appeal - Commercial Court, September 25, 2018, [2018] EWHC 3009 (Comm)

Resolution Date:September 25, 2018
Issuing Organization:Commercial Court
Actores:Qingdao Huiquan Shipping Company v Shanghai Dong He Xin Industry Group Co Ltd

No. CL-2018-000521

Neutral Citation Number: [2018] EWHC 3009 (Comm)






Rolls Building

Fetter Lane

London EC4A 1NL

Tuesday, 25 September 2018



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B E T W E E N :



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MR P. RICHES and MR A. FELD (instructed by Holman Fenwick Willan) appeared on behalf of the Claimant/Applicant.

THE DEFENDANT/RESPONDENT did not attend and was not represented

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  1. This is an application by Qingdao Huiquan Shipping Company (``Owners'') for an interim anti-suit injunction restraining the Defendant, SDHX, from continuing proceedings against Owners before the Courts of the People's Republic of China (the ``Qingdao Proceedings''). In support of that application I have before me a witness statement of Mr Zhang Zhou of 31 July 2018 and a witness statement of Nicholas Poynder of 31 July 2018 and associated exhibits in relation to that which I have considered, and which I have been taken through during the course of this hearing.

  2. The background to this application is that by a settlement agreement dated 22 January 2014 (the ``Settlement Agreement'') Owners and a third party, which Owners say is related to SDHX, namely Emori (China) Company Limited (``Emori''), agreed to settle certain disputes between them arising in relation to the delivery of a cargo of nickel ore to China. That Settlement Agreement was governed by English law and contained a London arbitration clause.

  3. Turning to the background in a little more detail, by a trip time charter on 9 October 2013 (the ``Charter'') the Owners chartered the M/V Confidence Ocean (the ``Vessel'') to Safe Arrival Maritime Limited (``Charterers'') for the carriage of a cargo of nickel ore in bulk from Indonesia to China. Bills of lading dated 10 December 2013 were issued in respect of 45,000-odd wet metric tonnes of nickel ore in bulk (the ``Cargo'') loaded at Pomalaa, South East Sulawesi, Indonesia for discharge at ``Main Port of China Mainland.'' In the event, the receiver was the company I have just referred to, Emori (China) Co. Limited, who became the lawful bill of lading holders. The Charterers were in default in paying the hire under the Charter and on 20 January 2014 the Owners served on the Receivers a notice of lien over the Cargo and any other sub-freights which were owing or may become owing by the Receivers to the Charterers up to the amount equivalent to the outstanding sum due to the Owners under the time charter up to the amount of US$648,605.61.

    The Settlement Agreement

  4. That led to a written agreement being entered into between the Owners and the Receivers on 22 January 2014 (the ``Settlement Agreement''). Mr Li Guolin, who was the Receivers' lawyer at the time, signed that Settlement Agreement on behalf of the Receivers pursuant to an original power of attorney dated 18 January 2014. That Settlement Agreement was executed in Chinese and in English versions but in the English version the date of the agreement was wrongly entered at 22 January 2013 but it is clear from the Chinese version that the correct date was 22 January 2014. The English name of SDHX was also misspelt in that document but, as is said by Mr Zhou in his statement, those errors do not appear in the Chinese version and it appears that those errors crept in during the process of translation and Mr Zhou confirms that they do not reflect the agreement of the Owners and the Receivers.

  5. It is necessary to set out some of the terms of that Settlement Agreement in detail because they are of relevance to the events that subsequently occurred. The Settlement Agreement included the following clauses:

    ``The Receiver agrees to pay the Owners a lumpsum of US$640,000 to the Owners' nominated bank account detailed below (or equivalent RMB 3,910,848 @ exchange rate of 6.1107 to Owners' nominated RMB bank account detailed below) by 23 January 2014 in full and final settlement of (a) the Owners' claim for the outstanding hire up to 0630 GMT 25 January 2014 due to them under the Time Charter; and (b) the Owners' claim for the port fees and agency fees in relation to the Vessel's berthing alongside Lianyungang. Such payment will be made by the Receiver's authorised agent [SDHX]...

  6. The Owners shall bring legal proceedings against the Charterers for breach of the Time Charter. In case the Owners succeed in recovery of the outstanding hire from the Charterers up to the earlier date of (a) the actual completion of discharging of the Cargo, or (b) 2400 hours 30 January 2014 and succeed in recovery of the fees for cleaning the bottom fouling from the Charterers, the Owners shall repay the Receiver the recovered sum provided that such sum shall not exceed ... the amount received from the Receiver save that the Owners shall be entitled to obtain any recovery from the Charterers in relation to the Charterers' failure to [do certain matters] on redelivery in accordance with the terms of the time Charterer...

  7. This Agreement shall be governed by and in accordance with English law. Any dispute of claim (whether contractual or otherwise) arising under, out of or in connection with this Agreement shall be submitted to London Arbitration.''

  8. Therefore, the Settlement Agreement contained an arbitration agreement between the parties thereto whereby any dispute arising under, out of or in connection with this agreement i.e. the Settlement Agreement, and whether contractual or otherwise, was to be submitted to London arbitration.

  9. By clause 2, the Owners and Receivers agreed that the Receivers would procure payment to the Owners by SDHX as the Receivers' ``authorised agent'', but SDHX itself was not a party to the Settlement Agreement.

  10. The evidence before me is that on 23 January 2014 SDHX did indeed transfer RMB 3,910,848 into the Owners' account and the Cargo was subsequently released to the Receivers in accordance with the Settlement Agreement. As I have already said, the Settlement Agreement was signed by Mr Li Guolin under a power of attorney and the version of that Settlement Agreement which bears the stamp of the claimant also bears his signature, for and on behalf Emori (China) Co. Limited.

  11. However, matters do not stop there because on 27 January 2014 that agreement in both the English and Chinese versions was further signed and stamped by the Receivers and was emailed to the Owners by Emori on this occasion containing the stamp of Emori but otherwise being in identical terms, and that is of potential relevance in the light of the fact that, as will appear, SDHX now says that it had a separate oral agreement with the Owners and that it was under that agreement that it made the payment to the Owners on 23 January 2014. I should say that the Owners strongly dispute there was any such agreement, oral or otherwise, with SDHX itself, and their evidence is that the Settlement Agreement between the Owners and the Receivers was the only document recording the rights and obligations of each of the parties. That, then, was the events back in 2014.

  12. Over three years later, proceedings were to be commenced in China by SDHX. However, in the meantime, Owners commenced proceedings against Charterers in accordance with their obligation to do so under clause 6 of the Settlement Agreement in arrest proceedings in South Korea. The evidence before me is that they were unable to recover the sums due to them.

    The Qingdao Proceedings

  13. In April 2017, over three years after the Settlement Agreement, SDHX commenced proceedings in the Qingdao Shinan District Court seeking repayment of the sum it had transferred to the Owners under the Settlement Agreement, although, in fact, it was not until later, in July 2017, that Owners were formally served with...

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