Anti-suit injunction

In the area of conflict of law, anti-suit injunction is an order issued by a court or arbitral tribunal that prevents an opposing party from commencing or continuing a proceeding in another jurisdiction or forum. If the opposing party contravenes such an order issued by a court, a contempt of court order may be issued by the domestic court against that party.

It is often used as a means to prevent forum shopping. In recent years many jurisdictions have placed a high standard to obtain an injunction such as where the proceedings are “oppressive or vexatious”.

U.S. Bankruptcy Court Opinions (Court Case)

IN RE SEACARIERS, (S.D.N.Y. 11-28-2006) In re: MILLENIUM
SEACARIERS, et al., Chapter 11, Debtor. JAMAICA SHIPPING
Defendant. Case No. 02-10190 (JMP), Adversary Proceeding
No.: 02-02502 (JMP). United States Bankruptcy Court, S.D.
New York. November 28, 2006

HOLLAND & KNIGHT LLP, New York, New York, James H.
Hohenstein, Esq., Francesca Morris, Esq., Counsel for
Jamaica Shipping Company Limited.

BLANK ROME LLP, New York, New York, Jeremy J.O. Harwood,
Esq., Counsel for Orient Shipping Rotterdam, B.V.


JAMES PECK, Bankruptcy Judge Page 2

The Court of Appeals for the Second Circuit, in Millennium
II,[fn1] remanded certain issues to this Court relating to
the propriety of continuing in effect an anti-suit
injunction entered over four years ago. The questions
presented require, among other things: (i) application to
this case of the threshold factors to be satisfied before
granting an anti-suit injunction as enunciated in the China
Trade[fn2] and American Home[fn3] cases and (ii) provided
those factors are present, consideration of whether the
injunction, as issued, is overly broad and whether the
injunction should remain in effect under applicable
authority in this circuit for issuing a preliminary
injunction. Following a status conference and in accordance
with an agreed briefing schedule, the parties to this
adversary proceeding submitted opening briefs, reply briefs
and exhibits selected from an extensive record including
hearing transcripts. Oral argument took place on November
17, 2006.

Upon consideration of the presentations and the record,
this Court concludes that plaintiff, Jamaica Shipping
Company, Limited (“Jamaica” or “Plaintiff”), has not
satisfied the standards for continuation of the preliminary
injunction issued on July 31, 2002, enjoining certain
threatened litigation and arbitration proceedings demanded
by Defendant, Orient Shipping Rotterdam, B.V. (“Orient”) in
London. The decision to vacate the order granting the
preliminary injunction is based on lack of symmetry Page 3
between this litigation and the arbitration and the
material changes in circumstances that have occurred since
the injunction was first issued.

As stated in American Home and followed in China Trade,
there are two threshold factors to be met before courts in
this circuit will consider the merits of granting an
“anti-suit” injunction, namely: (i) that the parties in
both matters are the same and (ii) that the resolution of
the case before the enjoining court will be dispositive of
the matter being enjoined.[fn4] China Trade, 837 F.2d at
36. The Court of Appeals has directed this Court to review
the preliminary injunction granted in this case and
determine if the facts here meet both China Trade threshold
factors. They do not.

Wayland Investment Fund, LLC (“Wayland”) and Allfirst Bank
(“Allfirst”) are named as parties in the London arbitration,
but neither is a party in this adversary proceeding, and
determination of the adversary proceeding on the merits will
not necessarily dispose of all issues that may be presented
to the arbitration panel. In addition to failing the China
Trade test, Plaintiff is now a shell entity, the vessel
that is the subject of this litigation having been sold to
an unaffiliated third party long after entry of the
injunction. This fundamental change in Jamaica’s status
makes it difficult for Jamaica to present a persuasive
argument of irreparable harm. The Court concludes, as a
result, that the injunction should be vacated.[fn5] Page 4


The procedural history of the case is dense and involves
multiple appeals and remands. Background facts are set forth
in two opinions of the Court of Appeals for the Second
Circuit (Millennium II and Jamaica Shipping, Ltd. v. Orient
Shipping Rotterdam, B.V. (In re Millennium Seacarriers), 54
Fed. Appx. 333 (2d Cir. 2002)), a district court opinion
(Jamaica Shipping, Ltd. v. Orient Shipping Rotterdam, B.V.
(In re Millennium Seacarriers), 2005 U.S. Dist. LEXIS
21553) and an opinion of this Court entered in connection
with an earlier remand (Opinion After Remand, February 17,
2004, Docket No. 41).

The most recent remand is the latest twist in a remarkably
tenacious and long running battle between Jamaica and Orient
over whether this Court or a London arbitration panel is
the proper forum to answer the question of which, if
either, of two charter party agreements applies to the
vessel that is the subject of these agreements and to
resolve certain claims arising out of the applicable
charter party agreement. As a matter of bankruptcy law,
resolution of the dispute depends on finding whether any
valid agreement was assumed and assigned in connection with
the bankruptcy sale of the vessel. This requires a review
of the record and an interpretation of earlier proceedings
in the bankruptcy case of the Millennium Baltic, Inc. (the

With the passage of time, circumstances have changed
materially. Judge Blackshear, the bankruptcy judge who
presided over the sale of the vessel and issued the
injunction, has retired from the bench. The Debtor’s
bankruptcy case has been Page 5 dismissed.[fn7] Jamaica,
formed for the special purpose of holding title to the
vessel formerly owned by the Debtor (then known as the M/V
Millennium Baltic), transferred ownership of that vessel to
an unaffiliated third party purchaser. Today, Jamaica has
no ongoing operations or activities other than this
litigation and no assets other than whatever residual
interest it may have in certain collateral (the
“Collateral”) posted to secure release of the vessel after
it was arrested by Orient in Tunisia. The charter party
agreements, one dated May 8, 2001 between the Debtor and
Orient (the “May Agreement”) and the other dated December
31, 2001 between the Debtor and Orient (the “December
Agreement”), expired in accordance with their terms years

The prolonged period of cross-border maneuvering in this
case seems to have been avoidable and to have grown out of
an unfortunate mistake made in preparation for the
bankruptcy auction of the M/V Millennium Baltic. During
argument, counsel for Orient made clear his frustrations
with a process that from the perspective of his client
seemed fundamentally unfair. It is undisputed that counsel
for Orient sent a fax notification to the Debtor prior to
the sale hearing in 2002 advising that the schedule of
executory contracts contained an error (see Docket No. 62,
Affidavit of Jeremy J.O. Harwood in Support of Orient
Shipping Rotterdam’s Memorandum on Remand at pp. A-42-64).

Orient and the Debtor executed a new charter party
agreement prior to commencement of the bankruptcy case that
appears intended to replace the May Agreement, and
evidently this December Agreement should have been included
in the Debtor’s schedules submitted during the sale hearing
as the relevant and only then applicable charter party
agreement (see Docket No. 62, Affidavit of Jeremy J.O.
Page 6 Harwood in Support of Orient Shipping Rotterdam’s
Memorandum on Remand at p. A-183). Whether that December
Agreement is legally binding and enforceable against
Jamaica as purchaser of the M/V Millennium Baltic, however,
is in doubt as a consequence of the Debtor’s failure to
cure this error in the schedules annexed to the order
approving the sale of the M/V Millennium Baltic. Judge
Blackshear has already made a factual finding that the May
Agreement, not the December Agreement, was assumed and
assigned as part of the sale of the Millennium Baltic (see
Opinion on Remand, § 10).

Orient may have avoided this procedural morass if it had
taken steps to make its position clear to the Court in
advance of the sale hearing. Regrettably, counsel for
Orient did not provide sufficient notice to the Court of
the new charter party agreement in its objection to the
sale of the M/V Millennium Baltic, and counsel asserts that
he was not afforded an opportunity to press his objection
regarding the agreement during the auction itself. The
consequences of not correcting the record at that point
have been extremely negative: assumption and assignment of
the May Agreement instead of the December Agreement;
arresting of Jamaica’s vessel in Tunisia by Orient under
apparent authority of that December Agreement; posting of
security by or on behalf of Jamaica to secure the release
of the vessel; a demand for arbitration in London,
commencement of this adversary proceeding; issuance of an
emergency temporary restraining order and preliminary
injunction by this Court; multiple appeals including two
separate appeals to the Court of Appeals; and an earlier
remand opinion by this Court. Despite all of this Page 7
activity, nothing has been achieved on the merits. The
process has been protracted, inefficient and wasteful of

Given the record in the bankruptcy case and the resulting
uncertain status of the December Agreement, whether Orient
was justified in taking action in foreign jurisdictions
that adversely affected Jamaica’s asset and commencing an
arbitration in London as provided in the December Agreement
are subjects that may be decided by the arbitration panel
upon vacating of the injunction, or by this Court, provided
that the Court retains jurisdiction of the adversary



The general rule in this circuit is that proceedings
should ordinarily be dismissed when the underlying related
bankruptcy case is dismissed. In re Porges, 44 F.3d 159,
162 (2d Cir. 1995). Nonetheless, the retention of
jurisdiction after dismissal of a bankruptcy case may be
warranted depending upon four factors: (i) judicial
economy; (ii) convenience to the parties; (iii) fairness
and (iv) comity. Id. at 163. In Millennium II, the Court of
Appeals invites, but does not require, this Court to
reconsider the question of whether to retain jurisdiction
of this adversary proceeding due to the retirement of Judge
Blackshear. In its opinion, the Court of Appeals postulates
that Judge Blackshear, who handled this bankruptcy case and
who was personally familiar with the facts and
circumstances underlying this litigation, decided to retain
jurisdiction based, at least in part, on his familiarity
with case. Millennium II, 458 F.3d at 97 n. 3. Page 8

As the Court of Appeals concluded in Millennium II, this
Court has core jurisdiction over the adversary proceeding
and any decision to decline to exercise jurisdiction would
be discretionary at this point. See Millennium II, 458
F.3d at 95-97. Based on a review of the issues raised in
Jamaica’s complaint and proposed amended complaint,[fn9]
the Court believes that the exercise of jurisdiction over
this adversary proceeding is institutional and not a
personal attribute of any individual judge.

In considering the factors set forth in In re Porges,
judicial economy, fairness and convenience to the parties
and comity are best served by this Court’s continued
retention of jurisdiction. The adversary proceeding seeks
determinations as to a sale process that was administered
in and by this Court, and the record of proceedings in the
bankruptcy case is complete and readily susceptible to
interpretation by a bankruptcy judge who did not actually
preside over the bankruptcy auction. This Court, and not a
London arbitration panel, is the best forum to interpret
orders with respect to that auction, to interpret issues of
bankruptcy practice and bankruptcy law relating to
executory contracts, and to decide questions about the sale
and assignment of property of the Debtor’s estate. Both
parties to this litigation have counsel in New York, have
litigated extensively in the federal courts in New York and
have appeared in this litigation for over four years.
Indisputably, this is a convenient forum.

Upon reconsideration of its jurisdiction in light of the
dismissal of the Debtor’s case and after weighing the
factors set forth in In re Porges, this Court concludes
that it is entirely appropriate to continue to exercise
jurisdiction over the adversary proceeding. Page 9

China Trade Threshold Factors

As for the two-pronged China Trade standard for entering
and maintaining an anti-suit injunction, Jamaica fails to
satisfy either prong. The first China Trade threshold
factor is “whether the parties to both suits are the same.”
China Trade, 837 F.2d at 36. The parties in the London
arbitration include Wayland and Allfirst, neither one of
which is a party to this adversary proceeding. Wayland may
have aligned economic interests with Jamaica, but that is
not clear from the record. Wayland, which indirectly
controls Jamaica, was the holder of the largest percentage
of outstanding bonds secured by assets of the various
Millennium Debtors, and Allfirst was the indenture trustee
for the bondholders. Jamaica received title to the M/V
Millennium Baltic by a conveyance from Allfirst after
Allfirst obtained legal title to the vessel as a result of
its successful credit bid at the bankruptcy auction.

Jamaica’s interests may be sufficiently similar to those
of Wayland to satisfy the first threshold factor of the
China Trade test, but that has not been shown convincingly
on this record. Moreover, as an indirect subsidiary of
Wayland with no assets, Jamaica appears dependent upon the
kindness of affiliated entities for needed advances to fund
its litigation efforts. Jamaica may be an instrumentality
for the economic benefit of other members of its extended
corporate family, but it has made no direct showing of how
its economic interests match those of Wayland. Allfirst, as
former indenture trustee, sold the vessel to Jamaica and,
given its position in the chain of title, should be
indifferent to the outcome of the arbitration. There has
been no showing that Allfirst and Jamaica’s interests are
aligned. Page 10

The second China Trade threshold factor, requiring that
the litigation in this Court dispose fully of the
litigation in the foreign tribunal, also is not satisfied.
Although no answer has yet been filed to the complaint, it
is reasonable to anticipate that Orient will vigorously
defend on the merits. The litigation in this Court
conceivably will include arguments by Orient that the May
Agreement was modified by the parties conduct so that it
should be deemed to include the terms and conditions of the
December Agreement. Orient may also argue that it would be
both inappropriate and inequitable to bind Orient to an
invalid charter party agreement and seek a finding that the
December Agreement should be substituted for the May
Agreement to cure the error. Orient may make other creative
arguments. The outcome of the adversary proceeding at this
point cannot be predicted, and this is not the time to
identify every conceivable argument that Orient might
develop. In short, it is not possible to conclude that the
adversary proceeding will dispose of all issues in the
arbitration unless the Court were to find in Jamaica’s favor
on the merits. Since that outcome, while possible, is not
free from doubt, the second prong of the China Trade test
is not met.

No Irreparable Harm

In addition to failing to meet the China Trade threshold
tests for an anti-suit injunction, Jamaica no longer can
show any irreparable harm absent continuation of the
injunction. See MyWebGrocer, LLC v Hometown Info, Inc., 375
F3.3d 190, 192 (2d Cir. 2004) (articulating the test for
granting a preliminary injunction as whether the party
requesting the injunction has shown (i) irreparable harm
will ensue absent the injunction and (ii) either (a) a
likelihood of success on the merits or (b) sufficiently
serious Page 11 questions going to the merits to make them
fairly litigable and the balance of hardship tipping
decidedly in favor of the movant).

Predominantly, if not exclusively, the real dispute
between Jamaica and Orient has become an arm wrestling
match for procedural leverage with respect to the forum
that will resolve conflicting claims as to the disposition
of the Collateral, approximately $550,000 advanced by or on
behalf of Jamaica to obtain the release of the vessel after
its arrest by Orient acting under the authority of the
December Agreement. Rather than involving property of the
estate or claims of creditors, this adversary proceeding,
while nominally dealing with threshold questions of
contract assumption, is driven by the economic interests of
non-debtors seeking proceeds of a fund governed by English
law. Whether the May Agreement, the December Agreement or
neither agreement was assumed and assigned will impact
property of Jamaica (the Collateral) and claims of Orient
to the Collateral under the December Agreement.

Because of all the time spent jockeying for position and
arguing about the procedural preliminaries, the dispute that
led to the preliminary injunction and allegations of
irreparable harm no longer involves a ship on the high seas
and the risk of interrupted operations of that vessel.
During argument on November 17, 2006, counsel for Jamaica
acknowledged that his client had no assets other than its
claim for the return of the Collateral. Counsel also
confirmed that his legal fees are being advanced on
Jamaica’s behalf by a maritime management company based in
Hong Kong. Mounting legal fees, thus, do not harm the
plaintiff. Given the character of the dispute as it has
evolved, Jamaica, having become an empty shell as a result
of divesting itself of its single asset, is simply fighting
for advantage relative to the Collateral. Under these
changed Page 12 circumstances, Jamaica is unable to claim
irreparable harm or any continuing need for a preliminary


The lifting of the injunction may lead to the unfavorable
outcome of competing forums working at cross purposes,
potentially leading to inconsistent results. This would be
especially unfortunate after so much energy and effort
already have been expended to preserve the bankruptcy
court’s ability to review, interpret and clarify the
meaning of its own orders.

The Court believes that it would be in the interest of
justice, notwithstanding the termination of the anti-suit
injunction, for the adversary proceeding and the London
arbitration to move forward in a coordinated fashion. By
adopting such an approach, this Court can make additional
findings and conclusions to aid in resolving questions
about the Debtor’s bankruptcy case and its impact on the
December Agreement, and the arbitration panel can be guided
by such findings and conclusions in rendering any decisions
or awards regarding that agreement and the Collateral.
While this Court can do nothing to force the arbitrators to
accept and follow its findings, the Court expects the panel
to respect decisions of this Court in order to avoid
inconsistent results and in the interests of comity.

Within ten days after receipt of notice of this Memorandum
Decision, Orient shall submit an order, in form and
substance acceptable to Jamaica, providing for termination
of the preliminary injunction, with each party to bear its
own costs. Jamaica, in its discretion, may renew its Motion
to Amend its Complaint at any time. The Court shall Page
13 promptly schedule a status conference to further the
expeditious and economical resolution of the case.

[fn1] Jamaica Shipping, Ltd. v. Orient Shipping Rotterdam,
B.V. (In re Millennium Seacarriers), 458 F.3d 92 (2d Cir.

[fn2] China Trade & Development v. M.V. Choong Young, 837
F.2d 33 (2d Cir. 1987).

[fn3] American Home Assur. v. Insurance Corp of Ireland,
603 F. Supp 636 (S.D.N.Y. 1984).

[fn4] Once these threshold requirements are satisfied,
courts then are required to consider additional factors as
follows: “(1) frustration of a policy in the enjoining
forum; (2) the foreign action would be vexatious; (3) a
threat to the issuing court’s in rem or quasi in rem
jurisdiction; (4) the proceedings in the other forum
prejudice other equitable considerations; or (5)
adjudication of the same issues in separate actions would
result in delay, inconvenience, expense, inconsistency, or
a race to judgment.” China Trade & Dev. Corp., 837 F.2d at

[fn5] As a consequence of the decision to vacate the
injunction, the Court does not need to address the question
of whether the injunction is overly broad.

[fn6] U.S. Bankruptcy Court, S.D.N.Y. Case No. 02-10190.

[fn7] See Docket No. 7, Order dismissing Case Number
02-10190, January 28, 2005.

[fn8] The duration and intensity of the litigation activity,
however also suggest that the parties perceive a meaningful
tactical advantage will go to the winner.

[fn9] Jamaica filed a motion for leave to amend its
complaint (Docket No. 48). That motion was denied without
prejudice to filing it again after determination of the
Millennium II remand (Docket No. 57).