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England and Wales High Court (Commercial Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Leidos Inc v The Hellenic Republic  EWHC 2738 (Comm) (17 October 2019)
Cite as:  EWHC 2738 (Comm),  WLR(D) 576,  Bus LR 385,  1 Lloyd's Rep 37
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QUEEN'S BENCH DIVISION
Fetter Lane, London, EC4A 1NL
B e f o r e :
| LEIDOS INC
|- and -
|THE HELLENIC REPUBLIC
Craig Morrison (instructed by Enyo Law LLP) for the Defendant
Hearing dates: 11th October 2019
Crown Copyright ©
Mr Justice Jacobs:
"The court SUSPENDS the enforcement of the arbitrary decision dated 2-7-2013 of the International Arbitrary Court of the International Trade Chamber in the case 16394/GZ/MHZ, until a decision of the Supreme Court is delivered on the petition for cassation dated 14-3-2018, exercised by the petitioning party against the decision 3567/2017 of the Appeal Court of Athens and on condition of the hearing of the petition for cassation on 3-12-2018."
"After the service to the petitioning party on 29-6-2018, a copy of the exemplification order of the above court decision, no further deeds of compulsory enforcement have been followed. From the enforcement of the attacked decision from the [arbitral] decision, it is speculated that a risk of damage will result against the petitioning party, the restitution of which will not be easy, since in case of affirmance of petition for cassation, the reinstatement of the things to the state before the enforcement and the recovery of such a big amount by the petitioning party (it already runs into 50,000,000 euros approximately) will not be easy, since the respondent is a foreign company, has not assets in Greece, whilst the petitioning party offered to pay the amount, asking the respondent to deposit a letter of guarantee, as per provisions of article 4 par.1 of law 3068/2002, and the latter refused by its letter dated 17-9-2018 to deposit a letter of guarantee, pleading unfoundedly an unconstitutionality of the above provision. Therefore, the petition under judgment should become accepted as substantially grounded, as especially specified in the enacting part of the decision."
"the enforcement of the arbitration award has been suspended until the judgment on the appeal application is issued. This means that, as far as the Greek legal order is concerned, Leidos cannot impose compulsory measures against the private property of the State to satisfy its claim which is accepted by the arbitration award, until a judgment has been given by the Supreme Court on the application for appeal".
"103.- Refusal of recognition or enforcement.
(1) Recognition or enforcement of a New York Convention award shall not be refused except in the following cases.
(2) Recognition or enforcement of the award may be refused if the person against whom it is involved proves –
(f) That the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, it was made.
(5) Where an application for the setting aside or suspension of the award has been made to such a competent authority as is mentioned in subsection (2)(f), the court before which the award is sought to be relied upon may, if it considers it proper, adjourn the decision on the recognition or enforcement of the award.
It may also on the application of the party claiming recognition or enforcement of the award order the other party to give suitable security."
Mr Allen's witness statement also made it clear that The Hellenic Republic's case was also based on an allegation of non-disclosure at the time of the without notice application. The essential ground of non-disclosure relied upon concerned the alleged failure of Leidos to draw Teare J's attention to the provisions of s 103 (2) (f), and The Hellenic Republic's potential case that enforcement should be refused on the basis of that section.
" AND UPON the agreement, in principle, of the Defendant to withdraw the Set Aside Application subject to recovery of its costs of the Set Aside Application
 AND UPON the listing of a half-day hearing 11 October 2019 to determine the issue of the award of costs relating to the Enforcement Order and the Set Aside Application "
The nature and scope of the 11 October hearing
a) There is no basis for supposing that there was a deliberate non-disclosure, and Mr Morrison in his submissions for The Hellenic Republic did not suggest otherwise.
b) The facts relating to the proceedings in Greece, including the order suspending enforcement in Greece, were clearly set out in the witness statement of Mr Pelecanos. The relevant failure concerned the fact that the court's attention was not drawn to the potentially significant legal consequence of those facts.
c) The effect of the Greek Supreme Court decision was to uphold the Award and the right of Leidos to enforce the Award. Accordingly, any possible substantive ground of challenge to the Award under s.103 completely fell away on 20 June 2019. My discretion as to whether to continue the order of Teare J would thus fall to be exercised at a time when Leidos had, as a matter of substance, established its right to the enforcement of the Award as a matter of principle.
d) I would regard it as inappropriate to discharge the order of Teare J on the basis of the innocent non-disclosure in October 2018 of a possible argument for resisting enforcement which, by the time of the determination of the application to set aside, had completely fallen away; and to do so in circumstances where the facts (albeit not the legal consequences) relating to that possible ground had been fairly disclosed.
Costs – the parties' arguments
a) A decision of the Swiss Federal Tribunal, which held that the term "suspended" covers a situation in which a court "noticing that a fault is likely to impact the award, prevents its enforcement until such time as the issue is settled substantively by the court examining the action to set aside the award";
b) A decision of the Swedish Supreme Court holding that the term "suspended" refers to a "situation where, after specific consideration of the matter, the foreign authority orders the setting aside of a binding and enforceable award or the suspension of its enforcement."
a) It is true that Mr Pelecanos did set out the facts concerning the suspension of enforcement. But I do not accept that this was sufficient to discharge the duty of full and frank disclosure. The legal significance of those facts was not properly referred to, notwithstanding sections in the other witness statements which identified points which The Hellenic Republic might take.
b) It is true that Leidos did refer to s. 103 (5) of the 1996 Act, and that this contains a cross-reference to s.103 (2) (f). But this was not sufficient: the cross-reference is simply for the purpose of identifying the "competent authority". There was nothing which told the court that there was any potentially applicable section other than s. 103 (5). Indeed, Mr Cockburn's witness statement referred to the possibility of an adjournment or stay under section 103 (5), thereby implying that this was the only applicable section and that there was only a pending challenge to the Award in Greece, rather than an already successful application to suspend enforcement.
c) Leidos said that it anticipated that there would be a hearing for the determination of its enforcement application, and that it would prepare a skeleton argument in advance of such hearing with additional details of the procedural status in Greece, as well as the legal bases of The Hellenic Republic's potential challenges to the grant of any enforcement order. It is not clear to me whether Leidos in fact applied for any hearing, and the usual practice is for without notice applications under CPR 62.18 to be determined on paper. However, the witness statements of Mr Cockburn and Mr O'Brien contained sections dealing with full and frank disclosure, and I do not consider that there could be any justification for including some points within those statements, and reserving others for a skeleton argument. In any event, if the determination of the application by Teare J on the papers took King & Spalding by surprise, and there was a concern that relevant materials had not yet been given to the court in relation to the requirement for full and frank disclosure, the court should have been promptly informed.
d) Leidos argued that the alleged material non-disclosure was procedurally barred because The Hellenic Republic had not issued an application to that effect. There was no substance to this point. Mr Allen's first witness statement took the point on full and frank disclosure fairly and squarely. Furthermore, I am dealing with the issue of how to allocate costs, and there can be no objection to reference being made to this point in that context without a separate application.