The Anti-Anti Suit Injunction: The Fight by Australian Courts to Protect Rights Created Under Australian Legislation Extra Territorially

• Author: Danella A Wilmshurst - Amy J Lay
• Position: Partner, Ebsworth & Ebsworth - Solicitor, Ebsworth & Ebsworth
• Pages: 61-63

THE ANTI- ANTI SUIT INJUNCTION: THE FIGHT BY AUSTRALIAN COURTS TO

PROTECT RIGHTS CREATED UNDER AUSTRALIAN LEGISLATION EXTRA

TERRITORIALLY

A Case Summary: Pan Austra lia Shipping Pty Ltd v The Ship

‘Comandate ’ [2006] FCA 881 (Unreported, Rares J, 22 June 2006)

Dane lla A Wilmshurst∗ a nd Am y J Lay°

Bac kg round to the Pro cee ding

The plaintiff to the proceeding, Pan Australia Shipping Pty Ltd (“Pan”), a company incorporated in Australia,

was the time charter of the Liberian flagged vessel MV “Comandate” (“the Vessel”). The Vessel was intended

to be utilised by Pan in Australian coastal trade. On 9 June 2006, Pan applied for the arrest of the Vessel. The

writ pursuant to which the vessel was arrested claimed:

1. damages arising out of the breach of the charter in the sum of $2.5 million;

2. interest;

3. the arrest of the Vessel; and

4. an order for the return or cancellation of a standby letter of credit previously delivered to the owners of

the Vessel by Pan.

The application for arrest was made in some haste as the Vessel was intending to leave the Australian

jurisdiction on the date of its arrest, after having been detained by the Australian Maritime Safety Authority up

to that morning. There was evidence before Rares J that the substantial dispute concerned the suitability of the

Vessel to engage in Australian coastal trade and the respective obligations of the parties to ensure the Vessel and

its crew were suitable for such a trade.

The Vessel was arrested on 9 June 2006 and the parties entered into negotiations for the release of the Vessel.

The Vessel was released from arrest by consent on 14 June 2006 on the provision of a bank guarantee. On the

application for release of the Vessel from arrest, the Vessel itself purported to appear conditionally, to leave

open the possibility of challenging the Court’s jurisdiction to effect the arrest. On the inter partes hearing of the

application, the owner of the Vessel, Comandate Marine Corporation (“Comandate”), sought leave to amend its

appearance to appear on its own behalf while retaining its conditional nature. In the course of argument,

Comandate’s Counsel accepted the Court’s jurisdiction and requested that its appearance be entered

unconditionally.

The Applica tion

Pan applied for an injunction to restrain Comandate from taking any steps in the English High Court of Justice

to obtain an injunction seeking to restrain Pan from continuing with the proceedings, which were the subject of

the current Australian proceedings. Such an order, often described as an “anti-anti suit injunction”, was initially

made ex parte by Emmett J on 20 June 2006, and later continued, following an inter partes hearing by Rares J on

22 June 2006, notwithstanding Comandate’s application to discharge the order.

The Threa t of an Anti-Anti Suit Injunc tion

The unsigned charter annexed to the affidavit of Pan’s solicitor, which supported the application for arrest of the

Vessel, contained a London arbitration clause. The enforceability of the agreement as contained in this

document was in issue between the parties and the subject of subsequent interlocutory argument. In support of

its current application, Pan tendered an affidavit of its solicitor, which annexed a series of correspondence

between the parties’ solicitors. This correspondence demonstrated to the satisfaction of Rares J that, unless

restrained, Comandate would seek to move the High Court of Justice in England on the basis of the arbitration

clause for an anti-suit injunction preventing Pan from continuing its proceedings in the Australian Federal

Court.

∗Partner, Ebsworth & Ebsworth.

°Solicitor, Ebsworth & Ebsworth.

(2006) 20 A&NZ Mar LJ

61