Big Port Service DMCC v. China Shipping Container Lines Co. Ltd.

Petitioner Big Port Service DMCC (“BPS”) was permanently enjoined from pursuing an arbitration against Respondent China Shipping Container Lines Co. Ltd. (“CSCL”) based solely on the district court’s recognition of the decision of a Singapore court, which the district court read as holding that BPS and CSCL did not have an agreement to arbitrate. In reaching this conclusion, the district court expressly declined to determine whether this Court’s four-factor test governing the grant of injunctive relief was satisfied. Rather, following case law from the Second Circuit, it concluded that an anti-arbitration injunction is automatically warranted whenever a court finds that the parties did not enter into a valid and binding agreement to arbitrate. The Second Circuit affirmed. This decision conflicts with the approach taken by the First, Seventh, Eighth, Ninth, and Eleventh Circuits, but is consistent with the Third and Fifth Circuits. For example, the Eleventh Circuit has recognized that there is no cause of action for “wrongful arbitration,” and that anti-arbitration injunctions can be granted only under the All Writs Act. The question presented is as follows: Whether the Second Circuit erred in recognizing a cause of action for a party seeking to avoid arbitration and in concluding that courts have remedial power—untethered to any federal statute and unconstrained by this Court’s precedents governing the grant of injunctive relief—to issue injunctions against arbitration.