Key takeaways
Breach of exclusive jurisdiction clause
English Court will grant anti-suit injunction.
Letters of credit
Autonomous and unaffected by disputes arising out of underlying contract.
Foreign proceedings to obtain security
May not breach exclusive jurisdiction clause but depends on nature of proceedings.
Trafigura PTE Ltd v Societe Nationale de Raffinage [2026] EWHC 1914 (Comm) (30 July 2026)
In this case, the sale contract and related letter of credit both incorporated exclusive English jurisdiction clauses. Nonetheless, the buyer commenced court proceedings in Cameroon, seeking to suspend payment under the irrevocable letter of credit because it contended that the cargo was off specification.
The English Court granted firstly an interim anti-suit injunction and subsequently a final, mandatory anti-suit injunction to restrain the foreign proceedings.
The Court found that the foreign proceedings were not simply intended to obtain protective security in support of the substantive claim but were, at least in part, aimed at subverting the exclusive jurisdiction clause in the sale contract.
The background facts
Trafigura PTE Ltd (Trafigura), a Singapore incorporated trading house, and Societe Nationale de Raffinage (SONARA), an oil refining company, majority owned (96%) by the Republic of Cameroon, entered into a sale contract dated 6 October 2025 (Sale Contract), whereby Trafigura agreed to sell to SONARA 35,000MT (+/-5% at seller's option) of gasoil and 20,000MT (+/-5% at seller's option) of gasoline.
The gasoil was delivered and paid for without incident. However, a dispute subsequently arose in respect of the gasoline cargo.
Sale Contract Terms
The Sale Contract was governed by English law and, at clause 23G, provided for exclusive English Court jurisdiction, although it also stated that ‘Neither party shall be precluded from pursuing arrest, attachment and/or other conservatory, interlocutory or interim actions in any court or exercising any contractual rights in relation to the Product or Vessel provided for elsewhere in the Agreement.’
The Sale Contract incorporated the BP Oil International Limited General Terms and Conditions for Sales and Purchases of Crude Oil and Petroleum Products (2015 edition) as amended by the Trafigura Amendments 2019 (BPGTCs).
The Sale Contract required 50% of each cargo to be paid by SONARA by letter of credit (L/C) and 50% on an open account basis. Clause 11 set out the L/C terms, including that an irrevocable and workable L/C had to be opened in favour of Trafigura prior to each cargo discharging and, in any case, prior to the start of each cargo discharging operation. Payment under the L/C had to be made in Euros, net of any deduction, withholding, set-off, or counterclaim, against presentation of contractual documents (as defined in the L/C) in accordance with UCP 600.
Clause 16 of the Sale Contract provided for recovery of demurrage ‘via LC Channel’.
The L/C
On 28 November 2025, pursuant to its payment obligations under the Sale Contract, the L/C was opened by SONARA in favour of Trafigura for a maximum amount of EUR 6,492,254.79 +/-5%. The L/C issuing bank was BGFI Bank Cameroun SA (BGFI) and the confirming bank was Afrexim.
The L/C was widely worded and permitted Trafigura ‘TO CLAIM FOR DEMURRAGE AND/OR INTEREST AND/OR AND ANY OTHER AMOUNT OWED BY THE BUYER OR ITS AFFILIATES TO THE SELLER OR ITS AFFILIATES ON ANY ACCOUNT WHATSOEVER UNDER THE L/C…’
The L/C was governed by English law and incorporated an exclusive English Court jurisdiction clause. It was also stated to be subject to UCP 600.
Non-compliance of cargo
On 28 November 2025, the Vessel carrying the cargo arrived off Cap Limboh, Cameroon and tendered notice of readiness. Subsequent sampling of the cargo took place, and it was found to be off specification in respect of Research Octane Number (RON) and Gum Specification (GUM). SONARA indicated an intention to cancel the L/C, Trafigura requested further sampling, which also indicated that the cargo was off specification.
On 3 December 2025, SONARA informed Trafigura that the Vessel’s berthing had been cancelled due to the non-conformity of the cargo.
On 6 December 2025, a third sampling showed the cargo to be compliant, and a certificate of quality was issued by HYDRAC, an inspector appointed by the State of Cameroon.
Further samplings then took place at SONARA’s request, together with a colour test. SONARA continued to allege the cargo was non-compliant, Trafigura disagreed. On 20 December 2025, the Vessel was forced to vacate its berth.
On 24 December 2025, SONARA sent a letter purporting to reject the cargo on quality grounds and indicating it would cancel the L/C. On 6 January 2026, unbeknownst to Trafigura, SONARA wrote to BGFI, seeking to cancel or suspend the L/C and to extend the validity of the L/C for 30 days. BGFI agreed to extend the L/C but not to cancel it.
On 4 February 2026, SONARA commenced proceedings in the Limbe Court, Cameroon (Limbe Proceedings) seeking an order requiring BGFI to suspend payment to Trafigura until such time as confirmation of the quality of the cargo was obtained.
Trafigura continued to correspond with SONARA in attempts to resolve the dispute. Negotiations were unsuccessful and, in March 2022, Trafigura raised a jurisdictional objection to the Limbe Proceedings on the basis of the exclusive jurisdiction clause.
Trafigura also sought, and obtained, an interim anti-suit injunction (ASI) from the English Court to restrain SONARA from pursuing the Limbe Proceedings. It had argued that the Limbe Proceedings breached the exclusive jurisdiction clause in the Sale Contract and/or the L/C and/or were vexatious and oppressive.
At the same time, Trafigura sought to claim its losses, including any loss on the market price and demurrage which had accrued since the Vessel's arrival in Limbe, under the L/C. On 9 April 2026, Afrexim made payment to Trafigura in the full amount of the L/C but this left Trafigura with a loss of about USD 650,000.
Notwithstanding the ASI, SONARA requested the Limbe Court to proceed with the substantive arguments it had put forward. Trafigura opposed that application and the matter was adjourned. In July 2026, having recognised that it could not continue with its application before the Limbe Court because payment had already been made under the L/C, SONARA filed a Notice of Discontinuance of the Limbe Proceedings.
Trafigura nonetheless contended that the ASI should be maintained because the Limbe Proceedings had not yet been discontinued and because there remained distrust between the parties.
SONARA maintained that the ASI should never have been granted in the first place because Trafigura had not demonstrated to a high degree of probability that the Limbe Proceedings breached the exclusive jurisdiction clause.
The Commercial Court decision
The judge granting the interim ASI had found there was a high degree of probability that the Limbe Proceedings were a breach of the exclusive jurisdiction clause(s). The Court agreed that those proceedings were in breach of the Clause 23G exclusive jurisdiction clause.
The exception in Clause 23G permitted interim protective relief in support of the substantive claim to be brought other than in the English Court. The issue was whether the wording ‘other conservatory, interlocutory or interim orders’ was wide enough to extend to apply to an action in a foreign court to suspend payment under the L/C.
The Court stated that not just any interim step taken by SONARA would be within the exception – it would have to be ‘interim protective relief’ which suggested that the exception was to protect SONARA's position in relation to the underlying dispute being litigated in the English Court. Applying to suspend the payment under the L/C would not be such a protective measure as its only effect was to subvert the agreed allocation of risk in the Sale Contract.
The wording of the Clause 23G exception as a whole was directed at protective measures that were consistent with the parties’ ability to apply for security in a non-contractual forum, ancillary to the substantive claim being litigated in accordance with the exclusive jurisdiction clause.
Looking at the Limbe Proceedings, SONARA had sought to raise issues relating to the quality dispute before the Limbe Court in circumstances where the quality dispute was rightly litigated in the English Court. SONARA had not referred to the Sale Contract in those proceedings, nor had it indicated that the Sale Contract was governed by English law. Furthermore, it had not sought to discontinue the Limbe Proceedings as soon as payment had been made under the L/C but had waited three months before filing the Notice of Discontinuance.
The Court concluded that at least part of the purpose of the Limbe Proceedings was to bypass the exclusive jurisdiction clause in the Sale Contract and to 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 clause 23G of the Sale Contract.
Furthermore, given that the Limbe Proceedings were in breach of an exclusive jurisdiction clause, they were rightly categorised as being vexatious and oppressive.
Trafigura were, therefore, entitled to a final, mandatory ASI on this ground. Otherwise, there was a risk that the Limbe Proceedings might not be withdrawn, or other proceedings might be commenced.
Comment
The decision is a further reminder that the English Court will uphold exclusive jurisdiction clauses and grant ASIs as necessary to restrain breach of such clauses.
The case also highlights the well-established principle 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. That is a commercial decision by the buyer that will not be revisited by the English courts.
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