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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> UK P&I Club NV & Anor v Republica Bolivariana De Venezuela (RCGS 'Resolute') [2022] EWHC 1655 (Comm) (28 June 2022) URL: https://www.bailii.org/ew/cases/EWHC/Comm/2022/1655.html Cite as: [2023] 1 All ER (Comm) 63, [2022] 1 WLR 4856, [2022] WLR 4856, [2022] EWHC 1655 (Comm), [2022] WLR(D) 293, [2023] 1 All ER 243 |
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BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
COMMERCIAL COURT (QBD)
IN THE MATTER OF THE ARBITRATION ACT 1996
IN THE MATTER OF AD HOC ARBITRATIONS
Re RCGS "Resolute"
Strand, London, WC2A 2LL |
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B e f o r e :
Sitting as a High Court Judge
____________________
(1) UK P&I CLUB N.V. (2) UNITED KINGDOM MUTUAL STEAM SHIP ASSURANCE ASSOCIATION LTD (formerly known as the UNITED KINGDOM MUTUAL STEAM SHIP ASSURANCE ASSOCIATION (EUROPE) LTD) |
Claimants |
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- and – |
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REPÚBLICA BOLIVARIANA DE VENEZUELA |
Defendant |
____________________
POONAM MELWANI QC and JAMIE HAMBLEN (instructed by Roose + Partners) for the Defendant
Hearing dates: 4, 5 May 2022
____________________
Crown Copyright ©
Sir Ross Cranston:
I INTRODUCTION
II BACKGROUND
The proceedings in outline
The contract of insurance
"No Owner or such other person shall be entitled to maintain any action, suit or other legal proceedings against the Association upon any such difference or dispute…(ii) if the reference to such adjudication shall have been waived, unless and until such difference or dispute shall have been referred to arbitration as provided in paragraph (C) of this rule and the Award in such reference shall have been published…".
Proceedings in Curaçao
The Venezuelan proceedings
III ANTI-SUIT INJUNCTION TO SUPPORT ARBITRATION CLAIMS
Legal principles
"Perhaps more controversially, the case law shows that injunctions may also fall within this principle even where the injunction defendant's substantive claims are said by the injunction defendant not to be contractual under the local law, and in turn are said not to fall within the exclusive forum clause, but would be viewed as contractual, and subject to the exclusive forum clause, under English principles of characterisation, if and to the extent they are coherent claims (even though the injunction claimant denies that there is, in fact, any such contractual relationship)."
Characterising the Venezuelan claims
(a) Venezuelan law and commentary on third party claims against insurers
"In no case may the objections [defences] that the insurer has against the insured be raised against the victims or respective successors in title…Notwithstanding, the insurer may make a claim against the insured when he or she has not paid the agreed premium…"
Article 62 imposed a 12 month limitation period on bringing a civil action.
"[T]he insurer is only liable to the victim in the terms of the insurance contract, not only within the limits of the insured sum in the contract, as it can be expressly deduced from Article 60 LT, but also subject to 'the insured terms'. Therefore, if from the policy annex it can be gathered that there is no liability or compensation for loss of profit or indirect damage, the victim cannot expect payment for said kind of material damage, even if the insured owner and driver are so liable (p.139 of original).…in no case may the exceptions that the insurer may have against the insured be opposed to the victim or his heirs, the guarantor not being able to argue in his defence the responsibility or fault of the insured or any other personal except with him…the insurer is under the obligation to pay the victim or his heirs what, by sentence, could result even if the insured has not paid the insurance premium agreed in the contract" (p.140)."
(b) The expert evidence: nature of direct action right against insurers
(c) Analysis
IV STATE IMMUNITY
A. Adjudicative immunity: section 1 SIA
(a) Section 3 (1)(a): commercial activity exception
"3. Commercial transactions and contracts to be performed in United Kingdom
(1) A State is not immune as respects proceedings relating to—
(a) a commercial transaction entered into by the State…
(2) This section does not apply if the parties to the dispute are States or have otherwise agreed in writing; and subsection (1)(b) above does not apply if the contract (not being a commercial transaction) was made in the territory of the State concerned and the obligation in question is governed by its administrative law.
(3) In this section "commercial transaction" means—
(a) any contract for the supply of goods or services;
(b) any loan or other transaction for the provision of finance and any guarantee or indemnity in respect of any such transaction or of any other financial obligation; and
(c) any other transaction or activity (whether of a commercial, industrial, financial, professional or other similar character) into which a State enters or in which it engages otherwise than in the exercise of sovereign authority; but neither paragraph of subsection (1) above applies to a contract of employment between a State and an individual.
(b) Section 9: the arbitration exception
B. Enforcement immunity from injunctive relief: section 13(2)(a) SIA
"13 Other procedural privileges
(1) No penalty by way of committal or fine shall be imposed in respect of any failure or refusal by or on behalf of a State to disclose or produce any document or other information for the purposes of proceedings to which it is a party.
(2) Subject to subsections 3 and 4 below
"(a) relief shall not be given against a State by way of injunction or order for specific performance or for the recovery of land or other property; and
(b) the property of a State shall not be subject to any process for the enforcement of a judgment or arbitration award or, in an action in rem, for its arrest, detention or sale."
Section 13(3) provides that section 13(2)(a) does not prevent giving relief with the written consent of a state, and section 13(4) that it does not prevent the issue of process in respect of property which is for the time being in use or intended for use for commercial purposes.
(a) Nature of section 13(2)(a): enforcement immunity
"Sections 2 to 11 deal with adjudicative jurisdiction. Sections 12 to 14 deal with procedure and of these, sections 13(2) to (6) and 14(3) and (4) deal in particular with enforcement jurisdiction."
(b) Is article 6 ECHR engaged?
(c) Justification of s.13(2)(a) as legitimate and proportionate: customary international law
(i) Customary international law as justification: the jurisprudence
"These observations are consistent with the view that in the absence of a recognised rule of customary international law, article 6 is satisfied if the rule applied by a Convention state lies within the range of possible rules consistent with 'current international standards.'": [24].
"The basis upon which one state is considered to be immune from the territorial jurisdiction of the courts of another state is that of par in parem, which effectively means that the sovereign or governmental acts of one state are not matters upon which the courts of other states will adjudicate."
(ii) Customary international law: the enforcement jurisdiction
"Any failure or refusal by a State to comply with an order of a court of another State enjoining it to perform or refrain from performing a specific act or to produce any document or disclose any other information for the purposes of a proceeding shall entail no consequences other than those which may result from such conduct in relation to the merits of the case..."
(d) Justification of s.13(2)(a) as legitimate and proportionate: domestic policy
"84 In this case we are not directly concerned with a state's immunity from the adjudicative or enforcement jurisdiction of another state but with an attendant procedural privilege accorded to states by the SIA...The procedure secures benefits for both claimant and defendant states in circumstances of considerable international sensitivity and where, without such a provision, difficulties are likely to be encountered in effecting service. It is also intended to prevent attempts at service by alternative methods, for example on state representatives or on diplomatic premises, which might all too easily constitute a violation of international law. It provides a means of service which is in conformity with the requirements of both international law and comity…"
Lady Arden agreed: [88], [92], [96], [99]-[100].
(e) Reading down section 13(2)(a)
V CONCLUSION