Introduction
 
In the recent case of Euronav Shipping NV v Black Swan Petroleum DMCC [2024] EWHC 896 (Comm), the English High Court considered an application by the claimant for a rare form of injunction – an anti-anti-arbitration injunction (“AAAI”), which (if granted) would require the defendant to discharge an anti-arbitration injunction (“AAI”) that it obtained from the High Court of Malaya (“AAI Order”) to restrain the prosecution by the claimant (“Euronav”) of an arbitration in the United Kingdom under the LMAA Terms of the London Maritime Arbitrators Association.
 
Background facts
 
Euronav was the owner of the Motor Tanker Oceania (“Vessel”) which was at all material times anchored at Sungai Linggi, Malaysia where it was used to store crude oil and oil-based fuels. Euronav entered into an agreement with Silk Straits Sdn Bhd (“Silk Straits”) whereby it made available to Silk Straits certain tanks on the Vessel for storage of fuel / crude oil (“Agreement”).
 
Section 17.2 of the Agreement empowers Euronav to terminate the Agreement if Silk Straits presented cargo that they know or ought to know was Sanctioned Cargo, i.e. cargo in which a party that has been sanctioned by a sanctioning authority (including the United States of America) has an interest.
 
Clause 24 of the Agreement provided: “… the rights and liabilities of the parties under this Agreement will be governed by the laws of Belgium. All disputes arising out of or in connection with this Agreement shall be finally settled under the CEPANI¹ Rules of Arbitration in accordance with the said Rules …”
 
The Agreement was amended by Addendum No. 1 which, inter alia, provided that “… subject to English law and any disputes arising from or in connection to it shall be resolved by reference to the High Court of England & Wales”. Addendum No.1 also contains a clause to the effect that where the terms of the Addendum conflicted with the terms of the Agreement, the terms of the Addendum would apply. The Judge held that the effect of these provisions was to substitute for the proper law and arbitration agreement in the Agreement.
 
In the current proceedings against the defendant, Black Swan Petroleum DMCC (“BSP”), Euronav sought to rely on Addendum No. 2 which was not signed and its validity disputed by BSP. Addendum No. 2 included a governing law and arbitration agreement in the following terms: Silk Straits subsequently entered into an agreement with BSP (“BSP Agreement”) under which BSP was permitted to store fuel or crude oil on the Vessel in some of tanks to which Silk Straits had the right of use pursuant to the Agreement. The BSP Agreement described Silk Straits as the “head charterer” but did not identify the owner of the Vessel. The Judge made a finding that the sub-bailee is Euronav, the bailee is Silk Straits and the owner / head bailor is BSP².
 
On 28 March 2023, BSP transferred a cargo of crude oil to the Vessel for storage (“Cargo”). On the same day, United Against Nuclear Iran (UANI), a non-profit and non-partisan organisation, wrote to Euronav alleging that the Cargo was Iranian oil, and its transfer to the Vessel was not consonant with the specific US sanctions already imposed on Iran’s energy, ports and shipping sectors.
 
Despite Euronav’s request, Silk Straits did not provide documentation to confirm that the Cargo was not of Iranian origin. Based on its own investigations, Euronav concluded that the shipping documents were probably forged and that the Cargo was of Iranian origin, traceable to two Iranian organisations that were sanctioned entities under U.S. sanctions law. Euronav also concluded that BSP either knew or ought to have known that the Cargo was Sanctioned Cargo.
 
In July 2023, the US District Court for the District of Columbia issued a seizure warrant on the Cargo and served the warrant on Euronav. Euronav surrendered possession of the Cargo to the U.S. Department of Justice. It also terminated the Agreement pursuant to Clause 17.2 by reason of the Cargo being Sanctioned Cargo under the Agreement.
 
On 14 September 2023, BSP obtained an arrest warrant for the Vessel from the High Court of Malaya on the basis that Euronav was a sub-bailee of the Cargo and by surrendering possession, Euronav had unlawfully converted the Cargo. Five days later, Euronav commenced arbitration proceedings against BSP in London alleging breach of the terms of the sub-bailment.
 
In October 2023, BSP served its Statement of Claim in the Malaysian proceedings on Euronav and informed the arbitration tribunal in London that it intended to contest the jurisdiction of the tribunal on the basis that there was no valid arbitration agreement between parties. In December 2023, the tribunal decided by a majority that BSP’s jurisdictional challenge should not be determined as a preliminary issue.
 
Euronav then applied to the High Court of Malaya for an order staying or striking out the claim in the Malaysian proceedings or for a stay under the Malaysian Arbitration Act 2005 on the basis that any dispute concerning the Cargo had to be resolved in the London arbitration. The said application was dismissed by Ong Chee Kwan J who concluded that by applying to strike out the Malaysian proceedings, Euronav had taken a step in the proceedings and was thus precluded from seeking a stay in favour of arbitration under the Malaysian Arbitration Act 2005. Euronav filed an appeal to the Malaysian Court of Appeal which is currently pending.
 
On 29 December 2023, BSP filed an application for an AAI in the High Court of Malaya, resulting in Euronav filing an application for an AAAI in the English High Court on 5 February 2024 to restrain BSP from pursuing or continuing with its AAI application in the High Court of Malaya and from seeking to prevent Euronav from pursuing its claims against BSP otherwise than in the London arbitration.
 
On 7 February 2024, the High Court of Malaya allowed BSP’s application and granted the AAI Order which restrained Euronav from continuing with the London arbitration until after Euronav’s appeal to the Malaysian Court of Appeal has been disposed of and from commencing any new arbitration proceedings in connection with the dispute concerning the Cargo.
 
The English High Court’s decision
 
The English High Court firstly confirmed that the applicable test for a contractual interim anti-suit injunction was one of “high degree of probability” of both the existence and breach of the arbitration agreement. The Judge rejected Euronav’s argument that the (lower) American Cyanamid test of “serious issue to be tried” should apply.
 
The Judge opined that there was a high degree of probability that an arbitration agreement was in force between the parties, on the footing that it is more likely than not that Silk Straits was willing to agree to the terms set out in Addendum No. 2. In support of his opinion, the Judge noted that the correspondence between Euronav and Silk Straits relating to the negotiations on Addendum No. 2 indicated that Silk Straits had persevered in negotiating certain commercial terms but did not reserve its rights or continue to pursue its initial request for a change of the governing law of the Agreement to Singapore law, and for disputes to be resolved by arbitration at the Singapore International Arbitration Centre. These factors and the fact the Silk Straits delivered the Cargo to the Vessel shortly thereafter, suggested that it was willing to accept the terms set out in Addendum No. 2 on the governing law and the venue of arbitration.
 
The upshot of the Judge’s aforesaid opinion is that the sub-bailment arising from the BSP Agreement would be on the terms of the Agreement as varied by Addendum No.2. The Judge also remarked that “but for the possible effect of the High Court of Malaysia’s conclusion that Euronav has submitted to its jurisdiction in relation to the subject matter of the arbitration”, His Lordship would be bound to reject BSP’s submission that its AAI application is not in breach of the arbitration agreement contained in Addendum No. 2.
 
However, the Judge declined to exercise the court’s discretion to grant the AAAI, holding that if the AAAI were to be granted in the terms sought, it would impact on the comity between the English and Malaysian courts in a manner that is inappropriate. The Judge also took into account the fact that Euronav had appealed against the High Court of Malaya’s decision on voluntary submission to jurisdiction, and the outcome of that appeal is still pending. Furthermore, the Court held that if the AAAI order was granted, it would result in duplicative proceedings in which Euronav hopes to obtain a favourable liability arbitral award before the Malaysian court could adjudicate on the issues that arise, in particular the issue on voluntary submission to jurisdiction. The Judge added that if he granted the AAAI order, he could be facilitating the possibility of conflicting judgments and findings with the consequences that flow from that.
 
The Judge also took into account the delay by Euronav in filing the application for AAAI (i.e. two days before the hearing of BSP’s application for an AAI in the High Court of Malaya). Euronav’s voluntary submission to jurisdiction in Malaysia was held to be a significant countervailing factor to seeking relief in London.
 
Nevertheless, the Judge did not dismiss Euronav’s application for AAAI outright, but adjourned the same, with liberty to restore the application if so advised, pending the final determination of the Euronav’s appeal concerning its submission to jurisdiction of the High Court of Malaya.
 
Comment
 
This decision of the English High Court affirms the long standing doctrine of comity which requires courts to exercise restraint in granting orders that could affect judicial proceedings in the courts of another jurisdiction.
 
Case note by Claudia Cheah (Partner) and Tan Pheng Chew (Associate) of the Dispute Resolution Practice of Skrine
 

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