High Court Grants Anti-suit Injunction To Prevent Foreign Proceedings From Undermining Letter Of Credit Payment Obligations

The High Court has allowed an application by a seller for a final anti-suit injunction (ASI) requiring a buyer to withdraw foreign proceedings seeking to suspend payment under a letter of credit (LoC). The court found that the buyer had commenced those proceedings in breach of the exclusive jurisdiction clause in the underlying sale contract: Trafigura PTE Ltd v Societe Nationale de Raffinage [2026] EWHC 1914 (Comm). 

The decision will be of interest to financial institutions involved in cross-border trade finance disputes concerning English law LoCs and demand guarantees. The decision is significant for two reasons. First, it clarifies the scope of carve-outs in exclusive jurisdiction clauses in an underlying sale contract permitting “arrest, attachment or other conservatory, interlocutory or interim actions” in foreign courts. Applying the ejusdem generis principle, under which general words are interpreted by reference to the specific words that precede them, the court confined the carve-out to protective or security measures (such as measures designed to preserve assets or obtain security for a claim) ancillary to substantive proceedings in the chosen forum and highlighted it is not a broad licence to pursue other forms of interim relief abroad. The court therefore held that proceedings seeking to suspend payment under an LoC fall outside the carve-out. Second, it reinforces the principle that parties cannot use foreign court proceedings to circumvent a contractually agreed “pay now, argue later” allocation of risk that underpins LoCs - even where there is a genuine underlying dispute about the quality of goods. The court emphasised that relief designed to prevent payment under an LoC is fundamentally different from relief intended merely to preserve a party’s position pending determination of the substantive dispute.

For parties with contracts containing similar jurisdiction clauses and LoC payment mechanisms, the decision confirms that the English courts will robustly protect both parties’ contractual bargain on jurisdiction and the autonomy of LoC payment obligations. 

Background 

Trafigura PTE Limited (Trafigura), a Singapore-incorporated commodities trader, agreed to sell gasoline and gasoil to Société Nationale de Raffinage (SONARA), a Cameroonian oil refining company majority owned by the Republic of Cameroon, under a sale contract dated October 2025 (the Sale Contract). The Sale Contract was governed by English law and contained an exclusive jurisdiction clause in favour of the English High Court (the EJC), subject to an exception permitting either party to pursue “arrest, attachment and/or other conservatory, interlocutory or interim actions in any court”. The Sale Contract required 50% of each cargo to be paid by an irrevocable and workable letter of credit. Pursuant to its payment obligations, SONARA procured the issuance of an irrevocable documentary LoC, issued by BGFI Bank Cameroun SA (BGFI) and confirmed by African Export Import Bank (Afrexim). The LoC was also governed by English law and subject to the exclusive jurisdiction of the English High Court. It required payment without any deduction, withholding, set-off or counterclaim.

A dispute subsequently arose over the quality of the gasoline cargo. Following the vessel's arrival off Cameroon, multiple rounds of sampling produced inconsistent results. SONARA alleged the cargo was off-specification and, purported to reject it on quality grounds, indicating that it would cancel the LoC despite its irrevocable nature. SONARA wrote to the issuing bank, BGFI, requesting the suspension of the LoC and an extension of its validity. BGFI extended the LoC but declined to suspend it, noting that it would be obliged to settle the LoC if compliant documents were presented, unless evidence of legal proceedings exempting it from payment was produced.

In February 2026, SONARA commenced proceedings in Cameroon (the Cameroon Proceedings), seeking an order requiring BGFI to suspend payment under the LoC until a conformity report from an international laboratory was produced. Trafigura raised a jurisdictional objection in the Cameroon Proceedings on the basis of the exclusive jurisdiction clauses, but this was rejected. Trafigura then applied to the High Court for an interim ASI, which was granted in April 2026. In the meantime, Afrexim made payment to Trafigura of the full value of the LoC. Despite this, SONARA maintained the Cameroon Proceedings for a further three months. Trafigura therefore applied to the High Court for a final mandatory ASI. SONARA challenged the application, arguing that the Cameroon Proceedings did not breach the EJC of the Sale Contract, as they fell within the exception in that they were “conservatory, interlocutory or interim” in nature and that it had never sought for the Cameroon Proceedings to rule on the underlying quality dispute under the Sale Contract.

Decision

The High Court allowed Trafigura’s application.

Applying the established principles governing ASIs, including those summarised in Times Trading Corporation v National Bank of Fujairah (Dubai Branch) [2020] EWHC 1078 (Comm),the court underlined that Trafigura had shown to the requisite high probability that the Cameroon Proceedings had been brought in breach of the EJC of the Sale Contract and that the making of the interim ASI had been fully justified. The court also said that since there was a risk that the Cameroon Proceedings may not be withdrawn or similar proceedings commenced in the future, a final mandatory ASI order should be made against SONARA.

The key aspects of the decision which will be of interest to financial institutions are set out below. 

Contractual Construction of the EJC 

The court accepted Trafigura’s argument that the exception permitting proceedings in other jurisdictions was confined to either party to the Sale Contract seeking security or protective measures ancillary to the substantive dispute under the Sale Contract. 

The court also accepted a further argument by Trafigura that the EJC did not permit an action in a foreign court seeking to suspend payment under the LoC, otherwise the whole fundamental basis for the autonomy of letters of credit in international commerce would be undermined. Under the Sale Contract, SONARA was obliged to provide an irrevocable LoC so that payment would be made "without any deduction, withholding, offset or counterclaim whatsoever." This encapsulated the overarching principle of the law of international trade that documentary credits are autonomous and insulated from disputes that may arise on the underlying contract. The central concept is that of "pay now, argue later", whereby the risk on the underlying contract is shifted from the seller to the buyer - a commercial decision that the courts will not revisit. Therefore, the exception in the EJC could not extend to allowing SONARA, the buyer, to apply for injunctive relief in a foreign court to interfere with the agreed payment mechanism and allocation of risk under the Sale Contract.

The court held that the EJC had to be construed in context and by reference to what would be the position if there was not the express exception. It was certainly plausible that the parties intended to make express what the effect of the EJC would be without the exception. It was accepted that it could not just be any interim step taken by SONARA that would be within the exception - it would have to be “interim protective relief” which suggests that it was to protect SONARA’s position in relation to the underlying dispute being litigated in the court. An application to suspend payment under the LoC would not be such a protective measure: its only effect would be to subvert the agreed allocation of risk in the Sale Contract.

In the court’s view, in that context, the ejusdem generis principle was likely to apply as an aid to construction. Otherwise, the words “interlocutory or interim” would be too wide, potentially incorporating non-protective relief. There was a high probability that the meaning of those words were limited by the preceding words, which all concerned protective measures such as arrest and attachment, and would all be consistent with the ability of the parties to apply for security in a non-contractual forum, ancillary to the substantive claim being litigated in accordance with the EJC. 

Purpose of the Cameroon proceedings 

The court noted that SONARA portrayed the Cameroon Proceedings as limited in scope and claimed that it was not seeking any determination of the underlying quality dispute. And that it merely was seeking a temporary suspension of payment while further testing took place. However, the court identified a “major flaw” in this argument: if further testing found the gasoline to be non-conforming and no settlement was achieved, SONARA would want the LoC suspension to continue until the underlying dispute was resolved. This meant the relief obtained in the Cameroon Proceedings would be used to subvert the bargain under the Sale Contract, by transferring the risk of non-payment back onto Trafigura. The notion of “pay now, argue later” would have been upended if the relief sought in the Cameroon Proceedings had been granted.

The court also noted that in its application in the Cameroon Proceedings SONARA:

• alleged the product was defective and sought an order from the Cameroon court to suspend payment under the LoC; 
• did not refer to the EJC or exhibit the Sale Contract; and 
• kept the proceedings alive after Trafigura had been paid under the LoC. 

The court concluded that the purpose of the Cameroon Proceedings were in part designed to bypass the EJC in the Sale Contract and subvert the agreed payment mechanism and risk allocation in it. They were not to obtain security for a substantive dispute to be tried in the High Court in London. They were not, therefore, within the proper meaning of the exception in the EJC of the Sale of Contract.

Accordingly, for all the reasons above, the court allowed Trafigura’s application for a final mandatory ASI requiring SONARA to withdraw the Cameroon Proceedings. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.