England and Wales High Court (Commercial Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		5 August 2005

Mr. Justice Cooke :

Introduction

1. The Court is concerned here with two applications: -

i) The Defendant (Kookmin) applies under CPR 11(1)(a) for a declaration that the Court has no jurisdiction over Kookmin in the present action.

ii) The Claimant (Trafigura) applies under CPR 25.1(1)(a) for an anti-suit injunction to restrain Kookmin from continuing with the proceedings against it which Kookmin has commenced in South Korea.

2. The question of the Court's substantive jurisdiction over Kookmin must be determined first.

The underlying facts

3. Kookmin is a bank domiciled in Korea. Trafigura is a Dutch exporter. Through its Singapore office, Trafigura entered into a contract for the C&F sale of cargo of decant oil with a Korean company, Huron Co. Ltd. Trafigura's Singapore office dealt with both the Singapore and Korean offices of Huron. The contract was governed by English law. Trafigura had in turn purchased the cargo from Pertamina who were the shippers of the oil from Indonesia.
4. Kookmin, on the application of Huron, issued a letter of credit (L/C) to Trafigura in the sum of $5,920,000 in respect of the shipment of the cargo from Balongan, Indonesia to South Korea. The L/C was advised through the ANZ Bank in London and was available by negotiation through any bank. The terms of the L/C are of significance because it provided for payment against "full set 3/3 original Bills of Lading issued to or endorsed to the order of Kookmin Bank Seoul, Korea marked freight payable as per charterparty", together with Trafigura's commercial invoice and independent inspectors' reports at the load port. The L/C went on to provide at field 47A(M): -

"If documents required are not available at the time of negotiation, payment shall be made against below documents:

a) Seller's commercial invoice…

b) Seller's letter of indemnity…in the following format".

5. The L/C then set out the prescribed form of letter of indemnity (LOI) which was to be addressed to Huron (as is common ground between the parties) and not to Kookmin. This is clear because it refers to the agreement to sell the cargo to "yourselves", which can only refer to Huron. The LOI includes the following: -

"Although we have agreed to sell the said cargo to yourselves, we have been unable to provide you with the full set of original 3/3 clean onboard Bills of Lading…and other original shipping documents covering the said sale…

In consideration of your paying the full purchase price…we expressly warrant that we have marketable title to the goods and that we have the full right and authority to transfer such title to you and to effect delivery of the said cargoes.

We further agree to make all reasonable efforts to locate and surrender you, as soon as possible, the full set of original Bills of Lading (or 2/3 Bills of Lading and Masters receipt for 1/3 of original Bills of Lading) and to protect, indemnify and hold you harmless from any and all damages costs and expenses…"

6. The LOI went on to provide that it was to be governed by and construed in accordance with the laws of England with each party expressly submitting to the exclusive jurisdiction of the English Courts in London.
7. The cargo was shipped on the vessel Shanghai under a charterparty with Trafigura and Bills of Lading were issued which were apparently non-conforming, inasmuch as the port of shipment was specified as "Balongan, West Java" rather than "Balongan, Indonesia" and the discharge port was referred to as "the port of Korea" as opposed to "one safe port/berth in South Korea". Furthermore there was no reference to "freight payable as per charterparty", with the bill providing for freight to be deemed earned on commencement of loading. These discrepancies were noticed by Mr. Goh of Trafigura in Singapore but the last discrepancy did not concern him. There was a further discrepancy, which he did not notice. The bill provided for the cargo to be discharged "unto made out or endorsed to the order of ANZ Bank, London" as opposed to "issued to or endorsed to the order of Kookmin Bank Seoul, Korea" as the L/C provided.
8. On the evidence produced to this Court, loading took place between 15^th and 18^th November 2003 and 3 original Bills of Lading dated 18^th November were issued to Pertamina as shippers of the cargo. These were governed by Indonesian law. The originals remained in the hands of Pertamina but some of the discrepancies became known to Mr. Goh in Singapore and these were raised with Pertamina without any immediate response. The vessel arrived at Pyongtaek on 29^th November 2003 and it seems that discharge commenced the following day into a bonded warehouse, according to the claim form later presented by Kookmin to the Korean Court. Discharge took place against instructions given by Trafigura pursuant to Clause 36 of the Charter which they had concluded with the Owners of the vessel Marelia, through their Managers Tanker Pacific Management. The terms of Clause 36 of the Charter were those in the standard BP form, and the request was to discharge all cargo to Huron without production of the original Bills of Lading on the basis of the LOI that was contained in that Clause.
9. The solution adopted by Trafigura to the problem of payment under the LOC in the light of the discrepant Bills of Lading was to follow the alternative course for which the L/C provided, namely to supply its commercial invoice and the LOI, in the prescribed format, to ANZ Bank in London which it did on 12^th December 2003. This was done by Trafigura's trade finance department in London. By this time the ship had completed discharge, leaving the port on 2^nd December but presumably the cargo (in store at the bonded warehouse, as it appears to have been), was released upon acceptance of the documents presented and on payment to Trafigura, which appears to have taken place on about 31^st December 2003. It is of course common practice in the oil trade for shipping documents to be unavailable at the discharging port and for cargo to be delivered against a letter of indemnity of differing kinds, although there are known dangers in such a procedure. It is also common procedure for one bill of lading to be carried by the Master on the vessel.
10. On 12^th January 2004, Kookmin sent a message to the ANZ Bank in London in the following terms: -

"We received LOI I/O (instead of) original documents. Please send original documents which is mentioned by LOI ASAP…"

11. The message was passed on to Trafigura's trade finance department and then to Mr. Goh in Singapore who was asked to contact Pertamina to ascertain the whereabouts of the original Bills of Lading, which he did on 15^th January 2004. He followed this up with Trafigura's Jakarta office representative and on or about the 19^th January 2004 obtained the first set of original Bills of Lading in their discrepant, or arguably discrepant form. He then went to the office of Tanker Pacific Management with them to exchange these original bills for new original bills which were intended to conform. That was effected, although Captain Sanjiv Pandyala of Tanker Pacific Management insisted that a remark be added to the new bills to indicate that the voyage had been completed. He wrote the words "voyage accomplished, null and void" on the back of the bills and Mr. Goh also signed alongside that endorsement. One of the three originals of the new set was retained by Tanker Pacific Management on behalf of the Master and Captain Pandyala gave a receipt to Mr. Goh on behalf of the Master, together with the other two sets of the new bill. On the next day Mr. Goh sent the two sets which he then had, plus the Master's receipt, to the Trafigura representative in Indonesia so that these documents could be passed to Pertamina for transmission up the banking chain, which is what appears to have happened.
12. Although there is little direct evidence of this, it is clear, in my judgment that those documents are in the hands of Kookmin since, in the claim form in Korea, reference is made to Trafigura's failure to supply "all original copies of the bill of lading" and to the retention of one of the three original copies in its custody or that of one of the other Defendants. Later statements from Kookmin appear to confirm this.
13. Over a year later, without any prior warning, on 18^th March 2005, Trafigura received the claim form issued in the Korean Court where proceedings had been commenced by Kookmin against Marelia (the Owners), Tanker Pacific Management (the Managers), Pertamina (the Shippers), and Trafigura who were both Sellers and party to the L/C.

i) As expressed in the Korean claim form, the claim against the ship Owners, Managers and Shippers is for delivery of the cargo to Huron otherwise than against presentation of a bill of lading. Whether this is put as a breach of the bill of lading contract, or as conversion is unclear but there is express reference to gross/wilful negligence in mis-delivering the cargo.

ii) The claim against Trafigura is expressed thus: -

"[Trafigura] sold the shipment to Huron. [Trafigura] even though it has received the payment in its entirety through the letter of credit following the sales transaction, failed to restitute all original copies of the bill of lading to [Kookmin] and one of the three original copies remains in its custody to date. If any of the Defendants is found in possession of this copy of the bill of lading, this would constitute fraud, whereby [Trafigura] received the payment for the shipment with no intention to forward the remaining original bill of lading. If such proves to be the case, [Trafigura] is responsible for the damages caused to [Kookmin] by its fraudulent action and the amount of the compensation would equal the full amount of payment issued through the letter of credit."

14. The basis of this allegation appears to rest at the point when payment was obtained by Trafigura with the intention of not sending the original Bills of Lading to Kookmin rather than on the subsequent failure to send them, and on a fraudulent intention at the time of obtaining such payment. As developed in the evidence and argument, this depended upon presentation of the LOI component of the documents when non-conforming Bills of Lading were said to be available to Trafigura.
15. Huron is now insolvent and Kookmin has not been reimbursed for its payment under the L/C to Trafigura. It is accepted by Kookmin that not only is the LOI expressly subject to English law and exclusive jurisdiction, but that the L/C is arguably subject to English law. In my judgment it is plain that the L/C is governed by English law as the incorporation of the prescribed form of LOI in it includes the English law and jurisdiction clause, the parties envisaged that documents would be presented in London to the ANZ Bank (although this was not mandatory) and the sale contract between Trafigura and Huron was likewise subject to English law and exclusive jurisdiction.

CPR 6.20(5)(c) & (d) and 6.20(7)

16. For the reasons set out, Kookmin accepts that the claims advanced by Trafigura for declarations fall within CPR 6.20(5)(c) as claims in relation to contracts which are governed by English law. The declarations sought are as follows: -

"On the true construction of the LOI and/or the L/C, the Claimant did not undertake or represent that it would (or intended to) provide all the Bills of Lading to the Defendant and/or that in the premises and/or in any event, the Claimant is under no liability to the Defendant arising out of any failure to provide all the Bills of Lading to the Defendant or arising out of any lack of intention to do so and/or the Defendant is obliged to pursue any claim asserting such liability before the English High Court and not otherwise"

17. Insofar as the declaration is in respect of the LOI, it also falls within CPR 6.20(5)(d), being a claim in relation to a contract which contains a term to the effect that the Court shall have jurisdiction to determine any claim in respect of it, if Kookmin is a party to such a contract on the terms of the LOI. At the time of issuing the proceedings it appeared that this might be in issue and so the claim might also fall within CPR 6.20(7), namely as a claim for a declaration that no contract exists on the terms of the LOI, as between Kookmin and Trafigura, where, if such contract was found to exist, it would be one which was governed by English law and contained an English Courts jurisdiction clause. It is plain, therefore, that the application which was made by Trafigura to serve out of the jurisdiction falls within the terms of CPR6.20.

Other jurisdictional principles

18. As Trafigura has sought permission of the Court for service out of the jurisdiction upon Kookmin, it is for Trafigura, now that this is challenged, to show that England is the appropriate forum in which to bring its claims. As is made plain by Lord Goff in the Spiliada [1980] AC 460 at page 481, the burden is on Trafigura to show that England is clearly the appropriate forum, as compared with other possibilities.
19. In this connection it is pointed out by Kookmin that what is sought by Trafigura is negative declaratory relief which means that the Court must approach the question of jurisdiction with particular caution (see Messier – Dowty Ltd v Sabina SA [2000] 1WLR 2040 at paragraph 42). The Court should not however be reluctant to exercise jurisdiction, if the grant of negative declaratory relief is useful, provided the matter is approached with appropriate circumspection. Kookmin however says that the declarations sought relate to the LOI when Kookmin is not making a claim under the LOI, but the declarations sought in fact relate to the letter of credit and the LOI and the contractual structure in which the tort claims are brought. Furthermore in Kookmin's skeleton argument, it maintains that it is pursuing claims for fraudulent misrepresentation because the LOI was presented, with the implied, representation that Bills of Lading were "not available" since that was the precondition for the presentation of the LOI. The other claims put forward, when translated into English law terms, are for restitution, breach of the L/C and conversion, but for wilful or negligent causation of loss under Article 750 of the Korean Civil Code, if expressed in Korean law terms.
20. Kookmin relies on the proceedings which it has already commenced in Korea and upon the fact that there are multiple parties to that Action which means, in its submission, that it is desirable that all claims against all parties should be heard by the same Court to avoid the risk of inconsistency and duplication of costs.
21. Attention is drawn to the many and varied cases which this Court has heard on the subject of lis alibi penders. Attention is drawn by both parties to connecting factors such as the location of witnesses, the location of various acts that might be in issue and the documents which will have to be considered, as well as to the nature of the issues to be determined.
22. In determining the issues which arise in the context of the Court's exercise of its jurisdiction under CPR 6.20, it is necessary to explore the question of the Korean Court's jurisdiction and the Korean proceedings as they relate to Trafigura's claims, as is apparent from the submissions made by Kookmin. Although I am here primarily concerned with Trafigura's claims, both parties agree that the claims of Kookmin are inter-related and refer to the undesirability of two sets of proceedings, which is not only self-evident but much discussed in decisions of this Court and higher courts in this country. The analysis of the claims advanced by Kookmin in Korea, their overlap with the declarations sought by Trafigura and the question of the exclusive jurisdiction of the English Court are all interrelated and I deal therefore with these matters together.
23. I have already indicated the nature of the claim as originally framed in Korea, by reference to the claim document which was sent to Trafigura. Matters have developed since then and Kookmin has adduced evidence from Mr. Kang who is the lawyer acting for it in the Korean proceedings, as to the claims which will be pursued by amendment, now that further information is available. Trafigura has adduced evidence from Mr. Yoon, the senior partner of the firm instructed by Trafigura in Korea in reply. I am of course conscious that it is not possible for this Court to reach definitive decisions on questions of Korean law where there is conflicting evidence, and I have that very much in mind when considering the issues which arise in the context of the Korean proceedings, where claims are made within the framework of Korean law. Nonetheless there are some matters which are both clear as a matter of English law in respect the L/C and the LOI, which are governed by that law.

The L/C and Kookmin's claims in relation to payment under it

Fraudulent Misrepresentation

24. The construction of the wording of the L/C is a matter of English law. It was expressly subject to the Uniform Customs and Practice for documentary credits as set out in ICC Publication No.500 (1993 Revision). The provisions of the LOC are clear with regard to the documents to be presented to the accepting bank. Under Field 46A Trafigura was required to present a full set of 3/3 original Bills of Lading, together with other documents, in order to obtain payment. Upon receipt of documents, under the UCP, the issuing bank was required to determine, on the basis of the documents alone, whether or not they appeared on their face to be in compliance with the terms and conditions of the credit. Absent any waiver of compliance by the customer, the bank would refuse to take up the documents. If the documents comply then, under the term of the UCP, the bank must pay.
25. Under Field 47A(M) payment could be made against other documents "if documents required are not available at the time of negotiation". It is self-evident that the "documents required" are documents which conform to the terms of the credit and which would trigger payment. It is clear therefore that the provision in Field 47A(M) is intended to apply where conforming documents are not available so that this provision is directly applicable not just where there are no documents available but also where there are non-conforming documents which are available. The argument raised by Kookmin to the effect that the provision is inapplicable where Trafigura had available to it Bills of Lading which were non-compliant is to be rejected out of hand. It follows that, contrary to Kookmin's submissions, the presentation of the LOI cannot in itself constitute a representation that Trafigura did not have any Bills of Lading available to it. At most it could constitute a representation that it did not have conforming documents available to it which, it is common ground, was true.
26. In consequence, there can be no argument available to Kookmin of a misrepresentation on the basis put forward, let alone a fraudulent one. Since the L/C and LOI fall to be construed in accordance with English law it is impossible to construe their provisions as amounting to an implied representation of the kind which is alleged in Korea on the facts as they are shown by the documents and evidence.
27. Kookmin abjures reliance upon the LOI and any representation in it perhaps because it was not addressed to it, and perhaps because of the terms of the governing law and exclusive jurisdiction clause. As a matter of construction of that document where reference is made to inability "to provide you with the full set of original 3/3 clean onboard Bills of Lading… and other original shipping documents covering the said sale", this self-evidently refers to inability to provide compliant documents for the purpose of the letter of credit for which the sale contract provided. The LOI is addressed to Huron and must be read in the context of the sale contract which referred, in Clause 8, to payment under the letter of credit against presentation of specified documents including compliant Bills of Lading. The clause went on to say that "if any of the above documents are not available then Trafigura should present its commercial invoice and LOI in the format prescribed", which was identical to that referred to in the L/C.
28. There cannot be the slightest doubt therefore that, as a matter of construction of the L/C and, for good measure, the LOI and Sale contract, there is no room for any implied representation of the kind advanced by Kookmin. In order to find a misrepresentation on the basis alleged, the Korean Court would have to examine the terms of the contracts and determine their meaning and effect as a matter of English law, as I have just done. On that basis, the claim for fraudulent misrepresentation is doomed to fail.

Restitution

29. A further claim will be made, according to Kookmin's counsels' skeleton argument for restitution on the basis that payment was made under the L/C under the mistaken belief that no Bills of Lading had been issued and that the cargo remained under the control of the carrier. Once again, this depends upon a construction of the L/C and LOI since it is not suggested that there was any other relevant contact between Kookmin and Trafigura, prior to payment on about 31^st December 2003. The only contacts made were in the context of setting up the L/C, in furnishing documents under the L/C and in the correspondence of 12^th January 2004 when Kookmin sought "original documents which is mentioned by LOI" and thereafter received the two sets of revised original Bills of Lading and the Master's receipt for the third set. As there is no allegation of any express representation nor any basis for suggesting that any mistaken belief of Kookmin was induced by Trafigura, this claim for restitution is equally hopeless.

Breach of the L/C

30. For exactly the same reasons, any allegation of beach of the L/C in presenting an LOI when Bills of Lading were in fact available, in discrepant form, has no prospect of success.

Conversion/wilful or negligent damage

31. The basis of Kookmin's claim under Korean law, according to Mr. Kang is Article 750 of the Korean Civil Code which provides that any person who causes loss to or inflicts injuries on another person by an unlawful act, wilfully or negligently, shall be bound to make compensation for damages arising therefrom. The unlawful acts on which Kookmin relies are set out as the acts by Trafigura in the course of the letter of credit transaction which caused Kookmin's loss of its security interests in the cargo. These are set out in paragraphs 7 and 11-16 of Mr. Kang's witness statement, to which Mr. Yoon's witness statement refers at paragraphs 8-10. An analysis of the points made in paragraphs 7.1 – 7.4 of the former's witness statement shows that, although framed as a tortious cause of action, the substance of what is alleged appears to depend upon the nature of the L/C and its provision for the use of the LOI as a means to trigger payment.

i) In para 7.1, it is said that under Korean law, if Bills of Lading are required to be presented to an issuing bank for payment under a letter of credit, the beneficiary must present valid Bills of Lading, otherwise the issuing bank receives no value or security for its payment. It is then said that if the beneficiary knowingly presents invalid bills and the issuing bank makes payment without knowing that they are invalid, this would constitute a fraud. As is plain from the facts outlined above and from Mr. Yoon's witness statement, all that the L/C, governed by English law, requires is that conforming documents be presented. The bank is not permitted, under the UCP, to refuse payment if conforming documents are presented unless those documents are fraudulent. No B/Ls were presented under the L/C because the LOI was presented instead. The presentation of the LOI was not a fraudulent act for the reasons already given and was accepted as a conforming document and payment made accordingly. It is a matter for the bank issuing the letter of credit to provide for the documents which are to be presented and, providing those documents are authentic, the bank must pay. That is what happened in the present case.

ii) In para 7.2 it is said that under Korean law, when presenting the documents to an issuing bank, the beneficiary must not wilfully or negligently make a false statement or representation which is material to the issuing bank's decision as to whether or not to make payment under the letter of credit. For the reasons already given, there is no evidence of any kind of any wilful or negligent false statement in the presentation of the documents. The documents presented here were accepted as conforming and were authentic documents so that there can be no question of any implicit false representation in their presentation.

iii) In para 7.3, it is said that under Korean law, the beneficiary under any letter of credit must not act detrimentally to the issuing bank's security interests in the cargo. Thus, if the Bills of Lading to be presented to the issuing bank for payment describe that bank as consignee, the beneficiary must not allow or take any part in the delivery of the cargo to a third party who is not the holder of the bill of lading. If the beneficiary wilfully or negligently does so and the issuing bank cannot take the cargo as a result, it would constitute a conversion. This really appears to be the basis of the claim that is currently being made, as set out in para 11 of Mr Kang's statement, namely that Trafigura conspired with the ship Owners to deliver the cargo to someone other than the bill of lading holders. The problem with this argument is that it once again ignores the relationship of Kookmin to Trafigura, which is governed by the English law L/C. The L/C provided in terms for presentation of the LOI, where conforming documents were not otherwise available and Kookmin agreed to pay on the basis of that LOI. With an English law contract governing the position, there cannot be any room for a tortious claim which runs directly counter to the contract, whatever the governing law of the tort, upon which Kookmin seeks to rely. As Mr. Yoon points out, it is up to a bank to issue letters of credit on terms which provide it with satisfactory security and if it provides for payment against a letter of indemnity addressed to its customer and not to itself, where the LOI in turn provides for the provision of two sets of Bills of Lading and a Master's receipt for the third set to the customer, after payment has been made, it cannot have any valid claim against the beneficiary who has complied with the terms of the L/C, just because the bank has no security in respect of its claims against its customer.

iv) In para 7.4, Mr. Kang states that under Korean law, if a beneficiary invalidates or depreciates the value of the Bills of Lading wilfully or negligently when it presents them to the issuing bank for payment, and the issuing bank suffers any loss, this would give rise to a cause of action in tort. Once again this ignores the terms of the L/C and the unilateral undertaking by Kookmin to Trafigura. Since Kookmin undertook to make payment against the LOI, with the terms in the LOI which provided for later sending of documents to its customer, no question of invalidating or depreciating the value of the Bills of Lading in presentation to it actually arises.

32. Kookmin's case, as set out in paras 11-16 of Mr Kang's statement, depends upon its assertion that it should have received Bills of Lading which gave it property rights in the cargo which it could have asserted against the carrier and thus avoided loss by exposure to its customer. The terms of the L/C and LOI did not however so provide in the circumstances which obtained, because the L/C provided for payment against the LOI which provided for two sets of the B/Ls and a Master's receipt to be sent, not to Kookmin but to Huron, although the means of transmission actually adopted was the banking chain. Where payment was made under the L/C against the LOI however, there was no provision for Kookmin to receive B/Ls at all, whether as security or otherwise.
33. The Sale contract provided for property to pass to the Buyer at the ship's flange at the load port and at the time when discharge instructions and delivery to Huron took place, the shipping documents were still in the control of the shippers who were entitled to change their delivery instructions to the ship Owners. No conversion could take place at either point because Kookmin had no entitlement to the cargo, no entitlement to any B/L and no interest in the cargo. Kookmin had agreed to pay against the LOI. Once payment was made under the L/C on presentation of the LOI, there could not be any issue as to who was entitled to the cargo, as between Trafigura and Huron and the ship owners were entitled to deliver the cargo to Huron on Trafigura's and Pertamina's instructions. It is Kookmin's misfortune that it failed to make appropriate arrangements which gave it a contractual right against the carriers or some form of security against its customer in respect of reimbursement of the sum which it had paid under the L/C, whether by requiring the LOI to provide for delivery of original B/Ls to it, rather than its customer or by some other means.
34. If complaint is made against Trafigura about what occurred after payment against the LOI, it can only be based upon the terms of the LOI, to which Kookmin was not a party, as it has repeatedly said. If it is not a party, it can have no claim under the LOI, whereas, if it did have such a contractual claim, it would be subject to the jurisdiction clause in favour of the English Courts. Kookmin agreed to pay against the commercial invoice and the LOI with the obligation in the latter to deliver Bills of Lading and/or a Master's receipt to Huron, not to itself. If documents were then delivered in accordance with the terms of the LOI, there could not be any unlawful act vis-à-vis Huron, nor an unlawful act as against Kookmin.
35. No case is expressly made by Kookmin that the Bills of Lading and the receipt which Mr. Goh obtained and put into the banking system for onward transmission did constitute a breach of the terms of the LOI, nor is any express reliance placed upon the unlawfulness of such breach against Huron as constituting an unlawful act as against Kookmin. The argument was however made that the sending of null and void Bills of Lading through the banking chain and the retention of one of the sets of Bills of Lading by the Master were unlawful acts falling within Article 750 of the Korean Civil Code. Whereas as a matter of English law, compliance with the provisions of the L/C and the LOI for which it provided leaves no room for complaint on the part of Kookmin, I cannot find that acts which constitute non-compliance with the terms of the LOI, to which Kookmin was not a party, could not in any circumstance constitute an unlawful act as against Kookmin. Whilst it seems to me on the evidence of Korean law highly unlikely, I cannot conclude that such a claim is bound to fail. The putting of the null and void documents into the banking chain, rather than sending them to Huron direct, might be said to indicate a consciousness of the bank's interests in receipt of Bills of Lading which should have been made "to the order of Kookmin Bank". It is just arguable that sending such Bills of Lading in accomplished null and void form, which was a breach of the LOI unless waived, was a negligent act which caused damage to them.
36. The unlawful acts of Trafigura set out in para 16 of Mr Kang's statement are said to be the presentation of the LOI to Kookmin, the transfer of one set of the revised B/Ls to the Owners, against the Master's receipt, the addition of the words "voyage accomplished null and void" on the other two sets and the supply of two sets to Kookmin, thereby invalidating them as documents of title. This claim tallies with and amplifies the claim which appears in the Korean Claim Form. Whereas the unlawfulness of Trafigura's conduct in English law falls to be judged by reference to the contractual position and the English law contracts leave no room for a claim in tort where the contracts are fulfilled, where there is non-fulfilment of the LOI, a claim under Korean law may just run. I cannot therefore say that there is no prospect of success in any tort claim against Trafigura.

The interrelationship between the English action and the Korean action - the appropriate forum

37. According to Mr. Kang, the claim in Korea will be amended to incorporate the new elements to which I have referred. Although the declarations sought by Trafigura, in their current form, might not be entirely apposite to cover each of the points to be raised in Korea, declarations as to contractual rights, designed to meet the fresh claims to be brought in Korea, would, it is said by Trafigura, eliminate the scope for the advancement of such claims. In my judgment although there is, or will be, an almost complete overlap, inasmuch as the terms of the L/C and the LOI provide a complete answer to all the claims sought to be brought if the contracts were fulfilled, the argument as to unlawful acts when failing to fulfil the terms of the LOI means that the decision on the contractual position may not entirely negate a claim under the law of tort of Korea.
38. Most of the arguments about the connecting factors to one jurisdiction or to the other carry little weight. The English Court is clearly the appropriate forum to decide questions of construction of the L/C and LOI, the UCP and, to the extent that it matters, the Sale contract. This, in my judgment, is the key point, both in relation to Trafigura's claim and in relation to Kookmin's claims, because the latter cannot be disentangled from the former. English law issues of construction and issues relating to letters of credit governed by English law are much better determined by an English Court. This conclusion as to the appropriate forum is reinforced by the following additional points: -

i) The claim made against Trafigura is one of fraud, either by presenting the LOI under the L/C or by conspiring with the ship Owners to deprive Kookmin of security it should have had. The Trafigura witnesses required to deal with such allegations would be in its trade finance department in London (which presented the documents to ANZ) the individuals in Singapore (such as Mr Goh who liaised with the ship's managers in Singapore) and those representatives of the managers. Conceivably Trafigura's representatives in Indonesia and the Pertamina representative there could also be relevant witnesses.

ii) There are unlikely to be issues of fact relating to the discharge and delivery of cargo, since the documents will show the dates on which these events occurred and the basis of it, which are hardly likely to be in dispute. It is hard to see what real evidence of any relevance will come from Korea in this connection.

iii) If the mechanics of presentation are in issue, the negotiation of documents took place in London where the advising bank is and any witnesses from it would be in London.

iv) Kookmin can pursue all its cross claims in London as Part 20 claims (counterclaims) to Trafigura's claims for declarations.

v) Kookmin could, if it so wished join the Owners, the Managers and Pertamina as "necessary and proper parties" to such Part 20 claims.

vi) Objection has been taken to the jurisdiction of the Korean Court, not only by Trafigura, but also by the shipowners and the managers, but the evidence establishes that, although there is room for the Korean Court to determine issues of jurisdiction, it does not usually do so as a preliminary issue, but as part of its decision, when determining the merits.

vii) The evidence also shows that there is no principle known to the Korean Courts of "appropriate forum" as such, although there is a general discretion in deciding on jurisdiction, where, as between the parties, fairness, convenience, expedition and economy are relevant factors. Here the Korean Court has adjourned a recent hearing to await the decision of this Court on the anti-suit injunction.

viii) The litigation in Korea has not progressed far and Kookmin has said it will need to amend its claims to assert what it has asserted in this Court.

ix) All the documents are in English, although this is a small factor.

39. Against this Kookmin say that the principle witness evidence is the evidence of Kookmin's personnel who no doubt work in Korea. It is however hard to see what evidence they would give which is relevant, other than a supposed reliance upon what I have found to be non-existent representations.
40. It appears that there may be little factual evidence which is required for determination of the points in issue for the reasons I have already given other than that which relate to the alleged conspiracy. The matter will otherwise be largely determined by decisions on the true meaning and effect of the English law contracts to which I have already referred. The proper law of the tort will have to be determined which may result in Korean law being applied, whether in Korea or England, although there is a dispute about this. In these circumstances it is clear to me that England is clearly the appropriate forum for determination of the matters raised in Trafigura's claim form and in any amendment thereto which may be required in order to meet the points raised by the proposed amendments which Kookmin have in mind in Korea, as well as being the appropriate forum for Kookmin's existing claim and its proposed amended claims.

Conclusion on service out of the jurisdiction.

41. It follows that I therefore reject Kookmin's application that the Court has no jurisdiction over it in respect of the present claims brought by Trafigura and refuse to set aside the order for permission to serve proceedings out of the jurisdiction upon Kookmin, whether or not the proceedings in Korea continue.

The anti-suit injunction

42. The injunction sought is an interim injunction but, as is usually the case with injunctions of this kind, the effect is virtually that of a permanent injunction. The authorities which set out the principles to be applied in giving such an injunction under the powers provided by Section 37(1) of the Supreme Court Act 1981 are well established.

i) The Court will grant an injunction where the pursuit of the foreign proceedings is "unconscionable", as is made clear by the House of Lords in Turner v Grovit [2002] 1 WLR107 at paragraphs 22-29, per Lord Hobhouse. The injunction is a personal remedy for the wrongful conduct of another party - a fault based remedial concept, in respect of conduct which the Court may describe as "vexatious" or "oppressive", but deriving from "the basic principle of justice".

ii) The Court will readily grant an injunction to restrain proceedings which are brought in breach of an exclusive jurisdiction clause save in circumstances where the Brussels Regulation applies – see Through Transport Mutual v New India Assurance Co. [2005] 1LLR 67 at paragraph 67 – 68. This is an example of the wider principle that an English Court will grant an injunction to prevent the pursuit of foreign proceedings which are vexatious, oppressive or unconscionable – see SNIA v Lee Kui Jack [1987] AC 871.

iii) Absent an agreement to the exclusive jurisdiction of the English Court, or some other special factor, a person has no right not to be sued in a particular forum. Where suit is brought in a foreign forum, the question whether or not that forum is an appropriate forum is a factor in assessing the conduct of the party suing there, for the purposes of considering whether to grant a restraining injunction, but if it is the only factor, it is easily overridden by other considerations (per Lord Hobhouse at para 25 of Turner (ibid)).

iv) To grant an injunction, the English Court must have a sufficient legitimate interest in the foreign proceedings, which means that if there is no contractual reason to prevent suit there, there must be proceedings in this country which require protection (per Lord Hobhouse at para 27 of Turner (ibid), by reference to the House of Lords' decision in Airbus Industries GIE v Patel [1999] 1 AC 119.

v) English law attaches a high importance to international comity and the perception of the foreign court of an interference in its proceedings, albeit indirect. There must therefore be a clear need for protection of the English proceedings (per Lord Hobhouse at para 29 of Turner (ibid) if an injunction is to be granted.

vi) An injunction should not be granted if its effect would be to deprive the claimant in the foreign action of an advantage in that forum of which it would be unjust to deprive him (Snia v Lee Kui Jak (ibid) at p 896).

43. To the extent therefore that any claim was brought under or in respect of the LOI, it would be caught by the exclusive jurisdiction clause in the LOI and an injunction would readily be granted. As I have already made plain, Kookmin repeatedly states that it eschews any such claim but, on the analysis set out earlier in this judgment, there are clear connections between its claims and the LOI and it is impossible to consider those claims without reference to the LOI.
44. Comparison is made by Trafigura with the decision of Morison J in BP International Ltd v Energy Infrastructure Group Ltd [2004] 1CLR 539 and in particular to paragraphs 24-26 and 30. There the defendant sought to set aside the order for service out of the jurisdiction or to obtain a stay on the basis of existing proceedings in Dallas. The learned Judge found that claims made in Dallas for fraud or in breach of an undefined fiduciary relationship in the making of the arrangements and the performance of them were not contractual claims but that the real issue was the effect of the contractual provisions on the extent of the alleged liability. It was that issue which the Claimant raised in the English proceedings, seeking negative declarations. Morison J held that the terms of the contract (which included a non-exclusive jurisdiction clause) were inevitably going to come into play and form a central part of the dispute. The tort and contractual position had to be considered together. But for the Claimants' submission to the Dallas jurisdiction, he said that he saw strong arguments for saying that there was sufficient overlap between the two set of proceedings to make England the only sensible place for the whole litigation, since that was the chosen non exclusive jurisdiction chosen by the parties to govern the contractual position. He clearly recognised that to allow the pursuit of contractual claims in one jurisdiction and tortious claims in another was not sensible or desirable, as would any court when faced with a lis alibi pendens situation. An anti-suit injunction might well have been granted to prevent the pursuit of the Dallas action, if an early application had been made, without submission to the Dallas court's jurisdiction.
45. Although the position is otherwise similar in many respects, there is here no binding jurisdiction clause in the L/C, but there is in the LOI. However Kookmin puts its case, even though it does not allege a breach of the LOI or a misrepresentation in it, its claims for breach of the L/C contract, for misrepresentation by presenting the LOI and for restitution of monies paid under the L/C require attention to be focused on both the L/C and the LOI together. The LOI contains an exclusive jurisdiction clause in favour of the English Courts and I have found that, for the claims advanced under and in relation to the L/C, the English Courts represent the appropriate forum. Equally the claims for conversion, negligence or wilful causation of damage, whether focused on events at discharge and delivery or on actions relating to the forwarding of revised Bills of Lading and the Master's receipt, require analysis of the English law contracts in the L/C, the LOI and the Sale contract and England is the appropriate forum for them also, even having regard to the need to apply the law of Korea if it is found to be the proper law of the tort..
46. I was also referred to paragraph 14.035 of Commercial Injunctions, 5^th edition where the author states that in a clear case where a Plaintiff in a foreign Court has no cause of action or there is a clear defence to the claim, the English Court can intervene to restrain him from pursuing those foreign proceedings. The decision of Thomas J (as he then was) in SIPC v Coral Oil Co. Ltd [1999] 2 LLR 606 is authority for this proposition. There the Judge found, at page 609, that the claim brought in the foreign proceedings had no real substance and that it fell within "that extremely rare category of cases which are in the true sense purely vexatious". He used the expression "utterly absurd" when describing the claim. If it can be shown that the claim in the foreign Court is bound to fail, then the making of such a claim be seen as frivolous and vexatious (see Midland Bank Plc v Laker Airways Ltd [1986] QB 689 at page 700).
47. There is no doubt as to the English Courts' interest in the Korean proceedings because of the Action brought here for declarations and the overlap between the issues which arise under the L/C and LOI (and Sale contract) and the claims which have been and, by amendment, will be brought in Korea. I have concluded that most of those claims are bound to fail on a proper construction of the L/C and LOI (and Sale contract) and a finding of their true meaning and effect in English law which governs them. The English Court has therefore a strong interest in the protection of its own proceedings and its findings.
48. There remains the question of an advantage to Kookmin of which it might be unjust to deprive it. This is said to be the advantage of suing multiple defendants in Korea. Since, however, the jurisdiction is challenged there and it is open to Kookmin to sue the shipowners, managers and Pertamina, here as necessary or proper parties to the claims against Trafigura, there is no unjust deprivation. The managers who were in Court said that they would accept the jurisdiction of this court. Any supposed advantage arising by reason of Korean law in relation to wrongs done in the context of the L/C relationship merely emphasises the need for this court to protect its own proceedings and any advantage gained would be unjust in the context of the agreed choice of law.
49. The vexatious and oppressive nature of the Korean proceedings are thus, according to Trafigura, revealed. The real ground of complaint, Trafigura says, appears in paragraph 11 of Mr. Kang's statement where he says that when Kookmin requested the 3 original Bills of Lading (by reference to the LOI), it instead received from Trafigura, via ANZ Bank, 2 original Bills of Lading marked "voyage accomplished, null and void" which meant that it did not have any contract with the shipowners or any document of title upon which to base a claim against the Owners and never had any special property in the cargo. It never became a holder of a valid bill of lading, because in the circumstances where the LOI was used to trigger payment under the L/C, there was no obligation on Trafigura to procure that. There can be no valid complaint in relation to the L/C because conforming documents were presented and, on its own case, Kookmin has no claim under the LOI because it was not a party to it. As property under the Sale contract had passed to Huron at the load port, all the issues which arise are truly issues between Kookmin and Huron in circumstances where Kookmin had not made provision in the L/C for the appropriate documents to be sent to it, to give it the rights it now wishes it had, in circumstances where the LOI was used to trigger payment.
50. I find this reasoning compelling but nonetheless cannot say that it is a conclusive answer at this stage to Kookmin's claim. If there was any failure in the provision of spent Bills of Lading, it was a breach of the LOI contract with Huron, who suffered no damage because it received the cargo. What the contractual position was between Kookmin and Huron has not been revealed. Huron might well have waived the breach and is almost certainly not concerned by it, but the acts in question could just constitute negligent unlawful acts which damaged Kookmin (and perhaps foreseeably so).
51. As I have already mentioned, in considering whether or not to grant an anti-suit injunction, the principles of comity must be borne in mind. In Airbus Industrie GIE v Patel [1999] 1 AC 119, the House of Lords stressed the importance of comity and the need for an English Court to have sufficient interest in the foreign proceedings in order to restrain them. There is a need for caution in this context, and in the absence of a directly applicable exclusive jurisdiction clause as between the parties, and bearing in mind the exceptional nature of any finding of unconscionability on the basis of claims which are doomed to fail, whilst sympathetic to Trafigura I cannot conclude that the pursuit of the Korean proceedings is doomed to fail and is therefore unconscionable. Trafigura's application just falls short of the standard required for the grant of such an injunction.
52. In my judgment therefore England is the appropriate forum for the determination of all disputes which arise in relation to the L/C and LOI (and Sale contract) and for Kookmin's claims which are largely bound to fail by reason of those instruments. Because of the residual possibility of success under Article 750 of the Korean Civil Code however, I cannot treat this claim in the same way as the Court treated Coral's claim against SIPC, and, because there is no breach of any exclusive jurisdiction clause, I consider that I cannot grant an injunction to restrain Kookmin from continuing with the Korean proceedings.
53. In my judgment it would make sense for the Korean court either to stay its own proceedings on the basis that England is the appropriate forum to determine the issues between the parties, or, at the very least, to await the English court's decision on the claims submitted to it, whether those of Trafigura alone or those of Kookmin also. That, however, is a matter for the Korean court to decide for itself and out of respect for that court I would not want to be thought to be pre-empting its decision.