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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> General Dynamics United Kingdom Ltd v Libya [2019] EWHC 64 (Comm) (18 January 2019) URL: https://www.bailii.org/ew/cases/EWHC/Comm/2019/64.html Cite as: [2019] 1 Lloyd's Rep 309, [2019] 1 WLR 2913, [2019] BLR 159, [2019] EWHC 64 (Comm), [2019] 1 All ER (Comm) 825, [2019] WLR 2913, [2019] WLR(D) 30 |
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BUSINESS & PROPERTY COURTS OF ENGLAND & WALES
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Strand, London, WC2A 2LL |
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B e f o r e :
____________________
GENERAL DYNAMICS UNITED KINGDOM LIMITED |
Claimant |
|
- and – |
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STATE OF LIBYA |
Defendant |
____________________
Daniel Toledano QC and James Ruddell (instructed by Reed Smith LLP) for the Claimant
Hearing date: 18 December 2018
____________________
Crown Copyright ©
Lord Justice Males :
Introduction
Background
The order of Teare J
"(1) Pursuant to section 101(2) of theArbitration
Act 1996, the Claimant is given permission to enforce the
arbitration
award made on 5 January 2016 in ICC Case No. 19222/EM ('the Award') against the defendant in the same manner as a judgment or order of the Court and to the same effect.
(2) Pursuant to Civil Procedure Rule 62.19, such leave shall include interest accruing in the following amounts:
(a) interest at the annual rate of 5%, accruing in relation to the sum of £16,114,120.62, from 26 June 2013 until 21 June 2018, in the amount of £4,019,700.50; and
(b) interest on the same sum thereafter at a daily rate of £2207.41.
(3) Pursuant to section 101(3) of theArbitration
Act 1996, judgment be entered against the Defendant in the terms of the Award and comprising the following sums:
(a) the sum of £16,114 120.62, as prescribed in the Award;
(b) the sums of EUR 115,293.98, £990,089.58, CHF 631,332.24 and US $62,200.15 as prescribed in the Award;
(c) interest accruing from 26 June 2013 until 21 June 2018, in the amount of £4,019,700.50; and
(d) interest thereafter at a daily rate of £2207.41.
(4) Pursuant to Civil Procedure Rules 6.16 and 6.28, the Claimant has permission to dispense with service of theArbitration
Claim Form dated 21 June 2018, any Order made by the Court and other associated documents.
(5) The Claimant is to courier theArbitration
Claim Form, this Order and the associated documents to the following addresses:
(a) Interim General Committee for Defence, Ghaser Bin Gashour, Tripoli, Libya;
(b) The Ministry of Foreign Affairs, Ash Shatt St, Tripoli, Libya; and
(c) Sefrioui Law Firm, 72 Boulevard de Courcelles, 75017 Paris, France.
(6) The Defendant may, within two months of the date of this Order, apply to set aside this Order and the Award shall not be enforced until after the expiration of that period, or, if the Defendant applies to set aside this Order within two months of the date of this Order, until after the application has been finally disposed of.
(7) Pursuant to CPR r44.7 the Defendant shall pay the Claimant's costs of and incidental to this application, summarily assessed in the amount of £60,000.00"
The defendant's application
Section 12 of the State Immunity Act 1978
"A State is immune from the jurisdiction of the courts of the United Kingdom except as provided in the following provisions of this Part of this Act."
"(1) Any writ or other document required to be served for instituting proceedings against a State shall be served by being transmitted through the Foreign and Commonwealth Office to the Ministry of Foreign Affairs of the State and service shall be deemed to have been effected when the writ or document is received at the Ministry.
(2) Any time for entering an appearance (whether prescribed by rules of court or otherwise) shall begin to run two months after the date on which the writ or document is received as aforesaid.
…
(4) No judgment in default of appearance shall be given against a State except on proof that subsection (1) above has been complied with and that the time for entering an appearance as extended by subsection (2) above has expired.
(5) A copy of any judgment given against a State in default of appearance shall be transmitted through the Foreign and Commonwealth Office to the Ministry of Foreign Affairs of that State and any time for applying to have the judgment set aside (whether prescribed by rules of court or otherwise) shall begin to run two months after the date on which the copy of the judgment is received at the Ministry.
(6) Subsection (1) above does not prevent the service of a writ or other document in any manner to which the State has agreed and subsections (2) and (4) above do not apply where service is effected in any such manner. …"
Enforcement of awards under CPR 62.18
"(1) An application for permission under … section 101 of the 1996 Act … to enforce an award in the same manner as a judgment or order may be made without notice in anarbitration
claim form.
(2) The court may specify parties to thearbitration
on whom the
arbitration
claim form must be served.
…
(7) An order giving permission must –
(a) be served on the defendant by –
(i) delivering a copy to him personally; or
(ii) sending a copy to him at his usual or last known place of residence or business;
(8) An order giving permission may be served out of the jurisdiction –
(a) without permission; and
(b) in accordance with rules 6.40 to 6.46 as if the order were anarbitration
claim form.
(9) Within 14 days after service of the order or, if the order is to be served out of the jurisdiction, within such other period as the court may set –
(a) the defendant may apply to set aside the order; and
(b) the award must not be enforced until after –
(i) the end of that period; or
(ii) any application made by the defendant within that period has been finally disposed of. …"
Dispensing with service
"(1) The court may dispense with service of a claim form in exceptional circumstances."
"(1) The court may dispense with service of any document which is to be served in the proceedings."
The parties' submissions
(1) In the circumstances of this case, the order giving permission to enforce the award should be regarded as the document which instituted the proceedings.
(2) That was a document which was required to be served.
(3) Although the court had power to dispense with service of the order despite the terms of section 12 of the 1978 Act, that power should only be exercised in exceptional circumstances as the order was equivalent to a claim form.
(4) There were no exceptional circumstances in this case, in particular because the claimant had not even attempted to serve the order through the Foreign & Commonwealth Office and (if it had done so) there was no reason why the order could not have been served.
(1) The proceedings were instituted by the issue of an arbitration
claim form which was not required to be served on the defendant, while the order which was required to be served was not a document instituting the proceedings. Accordingly section 12 did not apply.
(2) Service of the order was governed by CPR 62.18(8) and CPR 6.44 but these provisions did not turn the order into a claim form; they merely provided that it could be served as if it were one.
(3) Accordingly the court had power to dispense with service and (because the order was not a claim form) the applicable dispensing rule was CPR 6.28 where the court's discretion is unfettered and there is no requirement to show exceptional circumstances, not CPR 6.16.
(4) In any event the circumstances in Libya were exceptional.
Was there a document required to be served for instituting proceedings?
"(1) In proceedings against a Contracting State in a court of another Contracting State, the following rules shall apply.
(2) The competent authorities of the State of the forum shall transmit
-- the original or a copy of the document by which the proceedings are instituted;
-- a copy of any judgment given by default against a State which was defendant in the proceedings,
through the diplomatic channel to the Ministry of Foreign Affairs of the defendant State, for onward transmission, where appropriate, to the competent authority. These documents shall be accompanied, if necessary, by a translation into the official language or one of the official languages, of the defendant State.
(3) Service of the documents referred to in paragraph 2 is deemed to have been effected by their receipt by the Ministry of Foreign Affairs.
(4) The time-limits within which the State must enter an appearance or appeal against any judgment given by default shall begin to run two months after the date on which the document by which the proceedings were instituted or the copy of the judgment is received by the Ministry of Foreign Affairs.
(5) If it rests with the court to prescribe the time-limits for entering an appearance or for appealing against a judgment given by default, the court shall allow the State not less than two months after the date on which the document by which the proceedings are instituted or the copy of the judgment is received by the Ministry of Foreign Affairs.
(6) A Contracting State which appears in the proceedings is deemed to have waived any objection to the method of service.
(7) If the Contracting State has not appeared, judgment by default may be given against it only if it is established that the document by which the proceedings were instituted has been transmitted in conformity with paragraph 2, and that the time limits for entering an appearance provided for in paragraphs 4 and 5 have been observed."
Does the court have power to dispense with service?
The authorities
"As it seems to me, s.12 means what it says. It deals with procedure. It is not to be confined to the court's 'adjudicative jurisdiction'. The two-month period is an acknowledgement of the reality that states do take time to react to legal proceedings. It is understandable that states should have such a period of time to respond to enforcement proceedings under ss.100 and following of the 1996 Act; not untypically, an award will be made in one country but enforcement may be sought elsewhere, perhaps in a number of jurisdictions, where assets are or are thought to be located. I therefore decline to read words into s.12 so as to preclude its application to the enforcement of awards under CPR 62.18."
"If the document instituting the proceedings is not required to be served then the subsection has no application. If an entry of appearance (now acknowledgement of service) is required then subsections (2) and (3) apply. If an entry of appearance (now acknowledgement of service) is not required then the subsections do not apply. If judgment in default of appearance (now acknowledgement of service) is sought then subsections (4) and (5) apply. If it is not sought then they do not apply."
"The House of Lords in Kuwait Airways was not asked to, and did not, consider the possibility that service might be dispensed with. If dispensing with service would be inconsistent with the mandatory nature of section 12 of the 1978 Act then the court would not have power to make such an order. However, I do not consider there to be an inconsistency. Section 12 applies to 'Any writ or other document required to be served for instituting proceedings against a State'. If, exceptionally, the court has made an order dispensing with service of the claim instituting the proceedings, then it is not a document 'required to be served' within section 12."
"I grant the order on the basis first that the order is not in conflict with section 12 of the State Immunity Act which only deals with the manner in which a foreign government should be served. It has been held in this court that the section does not deal with the question whether it is appropriate to dispense with service. The court has jurisdiction to dispense with service, and I have concluded that it is appropriate to do so in the circumstances of this case. …"
Conclusion
Dispensing with service
Disposal