QUEEN'S BENCH DIVISION
St Dunstan's House
133-137 Fetter Lane
London EC4A 1HD
B e f o r e :
|Kensington International Limited||Claimant|
|Republic of the Congo||Respondent|
Smith Bernal WordWave Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Mr Khawar Qureshi as Advocate to the Court (appointed by the Attorney General)
Crown Copyright ©
MR JUSTICE TOMLINSON
1. The defendant to pay the claimant the sum of $56,047,443.31 together with the further sum of $538,137.12 in respect of interest from 13th September 2002 to 12th November 2002, and interest thereafter as per the terms of paragraph 7D of the particulars of claim.
2. Save as provided for in paragraph 3 below, the defendant be restrained, whether acting by itself, its servants or agents, including but not limited to SMPC or any other Congolese public entity or otherwise howsoever, from making or causing or procuring to be made any payments to creditors other than the claimant.
3. The defendant be permitted to make payments or to cause or procure payments to be made to creditors other than the claimant, provided that, at the same time as any such payment is made, the defendant makes or causes to be made a pro rata payment to the claimant.
4. The defendant be restrained, whether acting by itself, its servants or agents including but not limited to SNPC or any other Congolese public entity or otherwise howsoever, from creating any mortgage, pledge or other security or other preferential arrangement over any of the assets or revenues of the defendant or of any Congolese public entity including but not limited to SNPC in favour of any creditor.
"As to the second and third claims, both by way of negative injunction, the claims relying on the negative pledge clause and the pari passu clause, I suggested to Mr McQuater, on behalf of the claimant, that in view of the importance and nature of these claims, the court would be assisted by the appointment of an amicus. Mr McQuater has very sensibly taken instructions from his client and the claimant now accepts that the second and third claims should proceed to trial."
"This is the hearing of an application by the claimant, Kensington International Limited, for summary judgment under CPR part 24. Kensington is the assignee of all right, title and interest in sums totalling $11,999,999.80, said to be due and owing from the defendant, the Republic of the Congo, under the terms of a Loan Agreement dated 18th April 1984. These amounts, together with interest, have been outstanding for a long time and remain unpaid.
"2. Under Clause 19.1-4 of the Loan Agreement, the Republic of the Congo submitted to the jurisdiction of this court and waived immunity from suit and from execution against its property. I refer to the full terms of Clause 19. The Republic of the Congo has, according to the first witness statement of Mr Stephen Pearson, been duly served in accordance with the provisions of clause 19.2 of the Loan Agreement, and I so find. The Republic of the Congo has not acknowledged service.
"3. On 4th November this year, I gave the claimant permission to proceed by way of summary judgment under CPR part 24, not withstanding the defendant's failure to acknowledge service."
"The claimant's assignments have been recorded by the agent under the Loan Agreement BNP Paribas, which has also reconciled the amounts due to the claimant as being a principal sum of $12 million together with interest of £44,047,443.31, making a total due as at that 12 December 2002, $56,047,443.31. The claimant seeks judgment for this sum, together with further contractual interest up to 19th December 2002, in the sum of $864,548.16, calculated as set out in the particulars of claim. Thus, the total sum claimed is $56,911,991.47. BNP Paribas is also acting as reconciliation agent for the defendant in relation to the Loan Agreement and in that capacity, has fully reconciled Kensington's interest.
"8. Kensington claims the sum is due to it under the Loan Agreement in debt. The debt has been outstanding for a very considerable period of time and has been repeatedly tolled. The most tolling agreement is dated 22nd September 1997. That agreement expressly renounces any right to invoke any statute of limitation.
"9. The defendant has not appeared by solicitors or counsel today, although it has received a notice of this hearing.
"10. In my judgment, having considered the materials before the court, the defendant has no real prospects of successfully defending the claim. Accordingly I give judgment in favour of the claimant in the sum of $56,911,991.47."
"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."
"Where the claimant obtains default judgment under Part 12 on a claim against the state where the defendant has failed to file an acknowledgement of service, the judgment does not take effect until two months after service on the state of (a) a copy of the judgment and (b) a copy of the evidence in support of the application for permission to enter default judgment, unless the evidence has already been served on the state in accordance with an order made under part 12."
"Paid without any preferences, one above the other, by reason of priority of date of any such bond or otherwise howsoever".
"It should also be observed that the pari passu clause has nothing to do with the time of payment of unsecured indebtedness, since this depends upon contractual maturities. The undertaking is not broken merely because one creditor is, in fact, paid before another. In the case of a state borrower, the pari passu clause must bear a different construction, since a government cannot be liquidated, nor are there procedures for the pro ration of governmental debt on a state bankruptcy equivalent to those contained in corporate bankruptcies. Hence, a statutorily enforced hierarchy on forced dissolution is not in point. It is suggested that a pari passu clause in state creditors is primarily intended to prevent the legislative ear-marking of revenues of the government, or the legislative allocation of inadequate foreign currency reserves to a single creditor and is generally directed against legal measures which have the effect of preferring one set of creditors over the others or discriminating between creditors at a time when the state is unable to pay its debts as they fall due.
"It is thought that mere contractual arrangements, as opposed to legislation, should not conflict with the pari passu clause of the type specified above. The question depends on the circumstances and the matter does not appear to have received judicial attention in England. Areas where contracts may be sufficient to come within the clause might include settlings and debt compromise agreements involving more than one creditor and entered into by a bankrupt state."
"A court shall give effect to the immunity conferred by this section, even though the state does not adhere in the proceedings in question."
"The decision of this Appeal Tribunal in Senupta v Republic of India 183, Industrial Court Reports, 221, illustrates how seriously the court regards this obligation. [I interpose to point out that that is the obligation under Section 1 (2) of the State Immunity Act.] In that case, the foreign state did not appear to take the point on jurisdiction. The court asked for the appointment of an amicus to assist it. If the court has a duty under statute to give effect to the immunity conferred, even though the state does not appear to claim it, that duty may be all the greater in the case where the foreign state has, as here, expressly taken the point of immunity.
"Subject to subsection 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."
"Subsection 2 above does not prevent the giving of any relief or the issue of any process with the written consent of the state concerned, and any such consent which may be contained in a prior agreement, may be expressed so as to apply to a limited extent or generally that a provision merely submitting to the jurisdiction of the courts is not to be regarded as consent for the purposes of this subsection."
"The borrower consents generally in respect of any suit, action or proceedings arising out of or in connection with this agreement to the giving of any relief or the issue of any process in connection with any such suit, action or proceedings, including, without limitation, the making, enforcement or execution against any property whatsoever, irrespective of its use or intended use of any order or judgment which may be made or given in such action or proceedings."
"The borrower hereby and irrevocably appoints the Law Debenture Trust Corporation plc, Estates House, 66 Gresham Street, London, EC2B 7HX, as its agent for service and process in any such suit, action or proceedings in England ... provided that if at any time the People's Republic of the Congo maintains an embassy or consulate in London ... any process relating to proceedings arising out of or in connection with this agreement may be validly served on the borrower if served on the ambassador or consul general for the time being of the People's Republic of the Congo in London."
"Thank you for your letter of yesterday's sate and its enclosures. We have no record of the April 1984 Loan Agreement and we would comment that it is not unusual for us to discover that agreements refer to us as process agent even though we were not contacted about them at the at the time of the execution. In these circumstances, we are unable to do anything with the documents sent with your letter of 14th October 2002."
"The package received this morning regarding Kensington International Limited against the Republic of Congo should not have come to this office as we are the honorary consulate and do not have any political or financial connection with the Republic of Congo-Brazzaville. We therefore ask you kindly to collect the documents from us and forward those to His Excellency, M. Henri Lopes, Ambassade de La Republique Du Congo-Brazzaville, Ambassador for France and Great Britain, 37 Bis Rue Paul Valery, 75116, Paris, France. His Excellency Monsieur Henri Lopes is accredited at the Court of St James of her Majesty Queen Elizabeth II government but resident in Paris."
"The passage previously sent to the honorary consulate was in good faith sent by this office to the embassy in Paris. Another package has now been received from you, which will be returned to you. This is an honorary consulate, existing solely for the promotion of the Republic of Congo-Brazzaville in the UK. As an honorary office, there is no financial assistance received and no diplomatic bag. Consequently, there is no money available to pay for the transportation of your goods to Paris. These documents should be forwarded to an ambassador at an embassy or consul general at a consulate of the Republic of Congo and not to an honorary consulate."
"2. Mr Noté (several French words) is fully empowered to sign the agreement, the related agreement concerning management fee and all other documents in connection with the agreement on behalf of the People's Republic of the Congo."