On 21 April 2010 ADM and BSS entered a Stock Financing Agreement (‘SFA’), contemplating the supply by ADM of soybeans to BSS pursuant to individual sales contracts and the provision of financing for such purchases. The SFA provided that Indonesia laws governed the agreement and the parties chose the non-exclusive jurisdiction of the District Court of Central Jakarta for the adjudication of any dispute. The parties thereafter entered numerous individual contracts for the sale of soybeans by ADM to BSS. The contract in question in the proceedings was made on 26 April 2012, pursuant to which ADM agreed to sell 66,000MT (+/-10%) of US Grade 2 or better yellow soybeans to BSS. That contract incorporated FOSFA 24, was subject to English law and included an arbitration clause with London as the arbitration seat.
On about 22 January 2013 BSS sent a debit note to ADM alleging the quality of the goods was not in accordance with the Contract of Sale. The parties reached an agreement to sell the balance of the goods and split the proceeds on a without prejudice basis. US$21,425,291.33 of the total purchase price remained unpaid and in dispute, ADM refuting BSS’s complaints as to the quality of goods.
II. THE COURT’S DECISION
Phillips J, found that ADM had a contractual right not to be sued in Indonesia and that BSS has identified no good reason for suing in that jurisdiction. However, ADM did not apply for an anti-suit injunction with appropriate despatch, but actively engaged with the Indonesian proceedings (both as to jurisdiction and substance) for more than a year. In those circumstances both general discretionary considerations and the needs of comity led the Court to refuse the application for an injunction to restrain the Indonesian proceedings.
Included in his reasons, Phillips J found that ‘ADM was clearly content for the matter to be dealt with by the Indonesian courts until those courts made a decision contrary to its interests, at which point it has belatedly sought the intervention of this court. ADM is, in a very real sense, attempting to have the best of all worlds, litigating in Indonesia on the basis that it would claim the costs as damages, and then resorting to this court whilst the issue it was previously content to leave to the Indonesian courts is pending in the Supreme Court of that country on ADM’s own appeal’.
Weighing against the claim by ADM was the finding by Phillips J that ADM engaged with the Indonesian litigation ‘knowing that it would claim the costs of the exercise from BSS in the arbitration. ADM’s delay in applying for an anti-suit injunction therefore caused BSS to incur both its own costs and liability for ADM’s costs’.
Delay in commencing the proceedings was an important factor (but not the sole reason for the refusal of the injunction sought). Phillips J noted that when ADM was served with the Indonesian proceedings, it ‘commenced the FOSFA arbitration, making the clear assertion that the Indonesian proceedings were brought in breach of the arbitration clause and seeking damages for that breach, but not claiming an anti-suit injunction in the arbitration or by application to this court’ (emphasis added). Phillips J found that by engaging in the Indonesian proceedings and the arbitration, ADM was responsible for the parallel proceedings and the risk of inconsistent decisions. The decision of Phillips J in the Queen’s Bench Division of the High Court of Justice in Adm Asia-Pacific Trading Pte Ltd (formerly known as Toepfer International Asia Pte Ltd) v Pt Budi Semesta Satria, should serve as an important warning to plaintiffs that they must act with all due expedition when seeking to obtain injunctive relief restraining court proceedings that otherwise seek to circumnavigate the arbitration process. More importantly plaintiffs should not give the impression that they are taking an each-way-bet between arbitration and litigation. Those plaintiffs who first engage with the litigation process (whether or not they commenced the proceedings) to see how it works out for them and then some time down the track, having hit a few hurdles then decide to restrain the court proceedings, may find the court unsympathetic.
This article may be cited as follows: Mark Clarkson, “Case Update: English Court Denies Anti-Suit Injunction Application on Basis of Delay (ADM Asia-Pacific Trading v Pt Budi Semesta Satria)” International Arbitration Asia (13 July 2016) <www.internationlarbitrationasia.com/English_Court_Denies_Anti_Suit_Injunction_Application_on_Basis_of_Delay>.