The High Court has refused First Modular Gas Systems Limited’s application to continue an injunction stopping Citibank Europe plc from paying Bosai Energy Technology Corporation under a letter of credit for a gas processing plant project in Nigeria. It also proposed vacating the interim order made on 7 January 2023.
In a judgment delivered on 5 September 2023, Mr Justice Rory Mulcahy found that the requested injunction did not qualify as an interim measure in aid of arbitration under the Arbitration Act 2010 and the UNCITRAL Model Law. The arbitration had been initiated against Ennovate Consultants Incorporated. First Modular intended to join Bosai, but Bosai denied being bound by the arbitration clause. The judge found that First Modular had not established even an arguable basis, including under Nigerian law, for treating Bosai as bound. He concluded the court lacked jurisdiction to grant the injunction on that basis.
The judge also considered whether the injunction should be granted if the court had jurisdiction. He said a party seeking to stop payment under a letter of credit must show it is seriously arguable that fraud is the only reasonable inference. First Modular alleged that the claimed shipment of 11 compressed natural gas cylinders was fraudulent, pointing to differences from the pro forma invoice and its inability to locate the shipment after it reportedly reached Apapa Port, Nigeria.
The judgment records that Bosai’s evidence was that the cylinders had been procured and shipped, and that a bill of lading documented the shipment. The Nigerian Customs Service said the vessel arrived but that the bill of lading was not found on the relevant rotation number. The shipment had not been located by the hearing. The judge said the conflicting affidavit evidence and the possibility of an innocent explanation meant fraud was not the only reasonable inference. He was not satisfied that First Modular met the required threshold.
The court proposed that the respondents receive their costs in the injunction motions. It made no order on a separate motion by Ennovate and Bosai to set aside the January orders. The judge invited written submissions on any different form of order and listed the matter for final orders on 13 October 2023. The judgment therefore records proposed orders; it does not state the final orders made at that later listing.