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John Campbell SC Success in multi-Jurisdictional international trade case.

18th January 2018

John Campbell SC recently acted for an international commodity broker, based in Switzerland, against its Chinese customer regarding a consignment of cobalt mined in the DRC and warehoused in South Africa awaiting export. The broker had declared force majeure under its contract with its customer, in part because the cobalt had been detained by South Africa’s National Nuclear Regulator. After some period of time, the customer declared a dispute and referred it, under the contract, for arbitration under the auspices of the London Metals Exchange. The customer sought delivery of the detained cobalt to it (alternatively damages) and shortly thereafter obtained ex parte relief from a South African court preventing the warehouses from moving the goods.

John was instructed on behalf of the warehouses and the broker. On the return day, the court reversed its earlier decision for many reasons including the failiure of the customer to make disclosure of relevant facts at the ex parte stage, not making an unequivocal tender of payment against delivery and because UK courts had jurisdiction in terms of Section 44 of the UK arbitration act. The customer then brought two further applications – one for leave to appeal and the other, in the event that leave was refused, for and extension of the injunction pending a further application to the Supreme Court of Appeal.

Both applications failed, no doubt for reasons including those set out above but the “overriding” considerations were (1) the UK courts’ jurisdiction, and (2)the ineffectiveness of the relief originally “procured behind the back” of the broker. The latter reason was the outcome of an argument that an injunction against the warehouses preventing removal of the cobalt, did not prevent its sale by the broker. The case reinforces the duty to make full disclosure in ex parte hearings and also the need to properly conceptualise the issue of jurisdiction in matters involving international trade.

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