• London HC rules that London P & I Club entitled to final anti-suit injunction & declaratory relief, grants same in respect of SL court proceedings brought by cargo claimants 
• Cargo interests bound by terms of arbitration agreement in P & I insurance contract, ‘pay to be paid’ clause applies

Justice Robert Andrew Bright, in the London High Court (HC), has ruled that a claim against the London Protection and Indemnity (P & I) Club over the sinking of the ‘MV X Press Pearl’ off the coast of Sri Lanka must be heard in the United Kingdom (UK).

The London Club successfully argued that the case brought by cargo interests in Sri Lanka should be halted and arbitration be brought to London.

The first to fifth defendants, the Sri Lankan Company Trico Maritime (Private) Limited, and Sri Lankan citizens L.D.P.T. Senanayake, S.D.K. Prasanna, T.M.J.N.M. Tennakoon and T.N. Aluthwaththa, respectively, did not appear and were not represented. All are parties who assert an interest in some of the cargo that was lost when the vessel sank.

The judgement followed the trial of this action, which was held on 12 April.

The proceedings arose out of the sinking of the container ship MV X-Press Pearl off Sri Lanka on 2 June 2021, for which the London Club was the P & I insurer. The proceedings arose out of legal proceedings commenced by each of the cargo claimants in Sri Lanka, in connection with their respective cargo claims. 

In response, the London Club commenced an arbitration claim in this jurisdiction (London, England), seeking a final anti-suit injunction and declaratory relief from this Court, in support, it was said, of its right to be sued only by a claim referred to arbitration in London, subject to the terms of the insurance contract.

Justice Bright said that, after many failed attempts at communication with the defendants, “I can only conclude that the cargo claimants made a deliberate decision not to engage with these proceedings or take part in the trial”. Justice Bright ruled that, “the claims being asserted in Sri Lanka against the Club are not independent of the insurance contract. They are claims that are founded on the existence of the insurance contract pursuant to which the Club is the vessel’s P & I insurer. Accordingly, whether under the ‘benefit and burden’ basis or on the basis that the obligation to arbitrate is a legal incident of the rights and obligations under the insurance contract, the cargo claimants are bound by the agreement to arbitrate in Rule 43.2 of the Club Rules (incorporated into the insurance contract by the certificate of entry) 30. It follows that the Club is entitled to be sued only by way of a reference to arbitration in London, and that the Club is entitled to an anti-suit injunction, unless there is a good reason why it should not be granted”.

(Insurance Marine News/Lexacology)