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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 >> AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC [2010] EWHC 772 (Comm) (16 April 2010)
URL: http://www.bailii.org/ew/cases/EWHC/Comm/2010/772.html
Cite as: [2010] 1 CLC 519, [2010] 2 Lloyd's Rep 493, [2010] 2 All ER (Comm) 1033, [2010] EWHC 772 (Comm)
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QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Strand, London, WC2A 2LL |
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B e f o r e :
____________________
| AES UST-KAMENOGORSK HYDROPOWER PLANT LLP |
Claimant |
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| - and - |
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| UST-KAMENOGORSK HYDROPOWER PLANT JSC |
Defendant |
____________________
Antony White QC (instructed by Reed Smith LLP) for the Defendant
Hearing dates: 25, 26 March 2010
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Crown Copyright ©
- This has been the hearing of an application by the Defendant Ust-Kamenogorsk Hydropower Plant JSC ("JSC") to challenge the jurisdiction of this Court to entertain the proceedings brought against it by the Claimant AES Ust-Kamenogorsk Hydropower Plant LLP ("AESUK"), and to consider the continuation of the anti-suit injunction given in favour of AESUK by Andrew Smith J on 31 July 2009, and continued by Teare J on 21 August 2009, and the grant of final relief on its Arbitration Claim Form. Mr White QC, on behalf of JSC, has made it plain that JSC has only appeared for the purpose of challenging the jurisdiction, and, although it has consented to the simultaneous hearing of AESUK's substantive claim, he is not taking any part in it, although plainly all the submissions he has made in support of JSC's jurisdictional challenge would fall to be considered by the Court, in the event of such challenge failing, in the course of its consequential consideration of the grant of substantive relief in favour of AESUK.
- JSC and AESUK, which are both companies incorporated and carrying on business in the Republic of Kazakhstan, are effectively the owners and grantors (JSC) of a 20-year concession, and the grantees and lessees (AESUK) of such concession, to operate hydroelectric plant and equipment and produce hydroelectric energy in Kazakhstan. The precise contractual arrangements, though considerably canvassed in lengthy evidence, have not in the event been material at the hearing. In summary, JSC has become entitled to the rights of the Republic of Kazakhstan (RK) pursuant to the Concession Agreement dated 23 July 1997, made between RK and AES Suntree Power Ltd ("Suntree") (which immediately assigned its rights to an associated company Tau Power BV (a Dutch Company) ("Tau")), as a result of a Deed of Adherence and an Amended Concession Agreement, both dated 2 October 1997: and AESUK has become entitled to the rights of its parent or affiliate Tau as a result of a Transfer Agreement between RK, JSC and AESUK dated 1 October 2007.
- The dispute before this Court has revolved around an arbitration clause contained in the Concession Agreement: it is common ground that the same clause was incorporated into the Amended Concession Agreement, and in this judgment I shall make no further differentiation between the two agreements, referring only, where appropriate, to them as the Concession Agreement. Although by Clause 31 it was provided that "this Agreement shall be subject to and governed in accordance with Kazakhstan legislation", there is no dispute that the arbitration clause contained in Clause 32 is to be governed by, and to be construed in accordance with, English law. It reads as follows:
- Although it did not in the event become material during the hearing, it should be recorded that there was also a provision, Clause 9, in the Transfer Agreement above referred to whereby:
- AESUK still continues to operate the concession, but it is apparent that matters have become progressively more fraught between the various parties, and there has been a number of proceedings in the courts of Kazakhstan, culminating in that brought by JSC against AESUK in the Specialist Inter-District Economic Court of East Kazakhstan Oblast ("the Economic Court") by a Statement of Claim dated 12 June 2009. Those proceedings, to which I shall refer further below, prompted, after the failure on 28 July 2009 of AESUK's motion to dismiss the proceedings by reference to Clause 32, the bringing of these proceedings in the Commercial Court, and the application for, and grant of, the anti-suit injunction referred to above.
- I should as briefly as I can summarise the previous proceedings:
- The proceedings referred to in paragraph 5 above, brought by JSC against AESUK on 12 June 2009 before the Economic Court, arose because of AESUK's failure to comply, after doing so in 2008, with a repeated Request for Information by JSC on 2 April 2009 about the value of the concession assets. AESUK brought, on 24 June 2009, an application to dismiss such claim, based upon Clause 32 and the requirement for arbitration. The Economic Court on 28 July 2009 rejected AESUK's motion to dismiss the claim, upon the ground that "[JSC's] requirements consist of providing information about [JSC's] property and they are based on Articles 188, 264 [of the RK Civil Code], and references to the [Concession] Agreement are made to explain the reasons for transferring the right of property use from [JSC] to [AESUK]". Further the Court relied on the judgment of the Supreme Court, in the proceedings between RK and Suntree and Tau, that Clause 32 was void.
- The Economic Court thus proceeded to consider JSC's claim pursuant to the Request for Information. AESUK then took three steps, more or less simultaneously:
- An appeal by AESUK to the Regional Court, again relying upon Clause 32, seeking that the Economic Court's judgment be quashed and seeking substitution of a ruling leaving JSC's claim unconsidered by the Court (as opposed to in arbitration), was dismissed on 11 September 2009. The Regional Court held that JSC was entitled to the information requested in accordance with Article 188 of the RK Civil Code "since such an action is not restricted by the law or contract" and rejected AESUK's reliance upon Clause 32, because it had been declared invalid by the Supreme Court on 8 January 2004.
- Since September 2009, a considerable mass of evidence, including expert evidence as to Kazakhstan law, has been prepared for the purpose of the application and cross-application before me. The parties have agreed that the existing Request for Information by JSC, which had been the subject of the Kazakhstan proceedings, would be withdrawn, but no undertaking has been given, despite a request by AESUK's solicitors dated 18 December 2009, either that a Request for Information would not be resubmitted, or that other proceedings would not be commenced in Kazakhstan, notwithstanding Clause 32. By letter dated 10 August 2009, Allen & Overy, on their various clients' behalf, wrote to the Prime Minister of RK reserving its right to pursue claims in arbitration at the International Centre for the Settlement of Investment Disputes (ICSID), and I understand there has been some contact between the parties, but there has been no resolution, and no application for ICSID arbitration, and it has been necessary for this hearing to take place.
- Mr Eder QC, who has appeared for AESUK with Ms Jessica Wells, relied before Andrew Smith J, and before me, on a Claim Form seeking the following:
- Andrew Smith J granted an interlocutory injunction, in effectively the form sought, until a return date on 21 August 2009. On that date the injunctive relief was continued by Teare J by consent until after the termination of JSC's application to challenge the jurisdiction of the Court, in a form whereby JSC was "restrained and/or prohibited from taking any steps to enforce and/or seek to satisfy the judgment of the Regional Court dated 5 August 2009 ("the Judgment") and will not request from the Claimant reimbursement of the state duty and/or provision of the information the subject of the Judgment and will, within seven days withdraw the existing Request for Information subject to [AESUK] not relying on the fact of withdrawal of the Request in any appeal of the Judgment".
- The hearing today so far as AESUK's claim is concerned, by agreement between the parties (without prejudice to JSC's case on jurisdiction), is for the grant of such declarations or further or other relief and the grant of a final order: alternatively the continuation of the interlocutory injunctive relief.
- Necessarily prior to my decision in that regard has been the resolution of the Defendant's jurisdictional challenge, which was of course opened first by Mr White, and responded to by Mr Eder, who necessarily combined his response to such challenge with his case for the relief he seeks. Mr White, in order properly to preserve the jurisdictional position, made no express response to Mr Eder's submissions in the latter aspect, but inevitably I have taken account of all the submissions made by both sides in the course of my determinations.
- Mr Eder sought to muster two fallback arguments, in case they should be necessary. One of them involved a proposed amendment to the Claim Form, relating to reliance, further or in the alternative, on Clause 9 of the Transfer Agreement, referred to in paragraph 4 above, and the other involved reliance in the alternative on a further jurisdictional "gateway", pursuant to CPR 6.36 and Practice Direction B paragraph 3.1, which was not relied upon before Andrew Smith J.
- I have not addressed either of these two arguments in the course of my determination of the present jurisdictional challenge. So far as the former is concerned, it became speedily clear that if Mr Eder could not succeed by reference to Clause 32, Clause 9 would not, at any rate at this stage, assist him in justifying the order he has obtained, and that in any event the existence of Clause 9 adds nothing to his jurisdictional case in respect of Clause 32. With regard to the latter case, I am satisfied that, although hereafter AESUK might, if unsuccessful at this stage, be able to rely on an alternative gateway, the well-established principles in Parker v Schuller [1901] 17 TLR 299 CA, reiterated as recently as 2007 in ED & F Man Sugar Ltd v Lendoudis [2007] 2 Lloyd's Rep 579 would prevent that course: and that the case relied upon by Mr Eder of The Ikarian Reefer (No 2) [1999] 2 Lloyd's Rep 621, in which retrospective permission to serve out was given where no permission had originally been sought (but the ground for it was not in doubt), but in which neither Parker v Schuller, nor subsequent cases recited in Lendoudis such as Metall und Rohstoff AG v Donaldson Luftkin & Jenrette Inc [1991] QB 391 CA, were cited, would not assist Mr Eder in justifying the order of Andrew Smith J.
- Mr White's jurisdictional challenge to the grant of the injunction by Andrew Smith J, to the intent that his order and consequently service of the proceedings on JSC should be set aside, were made on the following eight bases, although, as will be seen, some of them coalesced or ran in tandem:
- For reasons which will become apparent, I take these together. Mr White's case is as follows:
- Mr Eder's submissions in response are as follows:
- I conclude, as Mr Eder must have anticipated, that he is unable to rely on s44, for the reasons plainly set out by Mr White. Consequently the gateway within CPR 62.5(1)(b) is not available. However, for the reasons given by Mr Eder set out sequentially above, I am entirely satisfied that there is jurisdiction for the Court to entertain a claim for a declaration, and therefore an anti-suit injunction, even where there is no actual or intended arbitration proceedings, where the relief is sought and, because, as Lord Hobhouse put it in Turner at paragraph 27, this Claimant is "relying upon a contractual right not to be sued in the foreign country because of an arbitration clause [and thus] he has by reason of his contract a legitimate interest in enforcing that right against the other party to the contract".
- I am however concerned to underline the submission of Mr White, which Mr Eder fully accepted, and which lay behind the judgment of Thomas J in Vale do Rio, namely that there should not be usurpation or ouster of the very arbitration jurisdiction which AESUK is anxious to enforce and engage. It is that to which, in my judgment, s1(c) of the 1996 Act is primarily directed, together with such provisions as s30 and s32. I bear in mind particularly the warning of Clarke LJ in Cetelem at paragraph 71 that the court "must take great care not to usurp the arbitral process". The declaration to which AESUK's claim should be limited, and which chimes with its intention, is that there be a declaration that JSC cannot bring the claim, the subject matter of the present Kazakhstan proceedings, or any other claim arising out of or in connection with any matter or thing in relation to the provisions of the Concession Agreement (as amended), otherwise than by commencing arbitration proceedings in the International Chamber of Commerce in London, and pursuant to its Rules: and that the injunction should be similarly directed to enjoining the present proceedings and the bringing of any other claims, as above described, otherwise than in ICC Arbitration. I conclude that this falls squarely within the permission that was given by Andrew Smith J, save that the relief is in a slightly different form, if necessary to be construed as falling within the provision for "further or other relief" expressly included in the Arbitration Claim Form.
- As can be seen, I have been in respectful disagreement with Thomas J's view as to the construction of CPR 65.2 in paragraph 59 of his judgment. I do not consider that that passage was necessary to his conclusion in relation to the facts of that case, and, for that reason, am in any event unpersuaded by Mr White's submission that subsequent draftsmen have been concurring in his construction. However, that apart, I do not conclude, nor need to conclude, that I disagree with Thomas J's conclusion, or with the practice that he thereby sanctioned and approved, albeit that it may cause the delay to which Mr Raphael referred in his book that, where a party wishes to make a claim in an arbitration, he should, or ought ordinarily to, commence that arbitration before seeking any substantive declaratory relief, particularly as he can, in the meantime, during what Morison J in Econet (at paragraph 14) described as the "crack between the moment of the application and the time when the arbitral tribunal can be formed" be protected by interlocutory orders. However, particularly, given Thomas J's approach in paragraphs 51 and 52 to non-mandatory interpretation of s(1)(c), I conclude that a party which wishes, if to be sued at all, only to be sued in arbitration, does not need to follow that course, and can take the course followed by AESUK.
- Accordingly, I have no doubt that there is at least a good arguable case both that AESUK had and has an arbitration claim, and that there is an available gateway. As to the gateway, I accept Mr Eder's submissions as to the availability of 62.5(c) (while, for the reasons above, rejecting reliance on 62.5(b)).
- If necessary I would conclude that he is also entitled to rely on the gateway in CPR 6 Practice Direction B (para 3.1(20), which provides that there may be service out of the jurisdiction where:
- In those circumstances Mr Eder does not need his fallback gateway by reference to paragraph 3.1(6)(c) in Practice Direction B in respect of "a claim made in respect of a contract where the contract is governed by English law". This argument, namely one that, even if he cannot fit within a gateway to enforce his claims in respect of an arbitration clause governed by English law, he can rely on the same clause simply as a matter of a contract governed by English law would seem to me more likely to be successfully met by Mr White's Latin maxim referred to in paragraph 18(ii) above. However, in any event, I have concluded that I am not entitled to consider that issue at this stage, by virtue of the authority of Parker v Schuller and subsequent cases referred to in paragraph 16 above, preventing the judge reconsidering the original grant of service out of the jurisdiction from granting permission under a different paragraph from that under which permission was originally granted.
- Mr White's case on behalf of JSC was and is that AESUK is not party to Clause 32 or the Concession Agreement. This was conceded by Mr Eder in paragraph 8.2 of his skeleton for this hearing as follows:
- This concession is now matched by a concession made in the course of the hearing by Mr White that, as a matter of Kazakhstan law, there is a good arguable case that Clause 32 confers a benefit on AESUK: indeed his expert Professor Maggs, in his second report, could be said to go further when he says (at paragraph 2(2)) that he now agrees with Professor Suleimenov (AESUK's expert) that "substantive rights ... do extend to [AESUK] under Clause 23.10 of the Amended Concession Agreement". There is therefore no need for any detailed analysis of the contractual arrangements for the purposes of my decision on this issue, or indeed any of the issues before me. What however Professor Maggs retains is his disagreement that this meant that, at Kazakhstan law, any procedural right to compel arbitration extended to AESUK.
- However, Mr White conceded in the course of the hearing that the proper analysis is that, once it be the case that, at Kazakhstan law, AESUK is entitled to the benefit of Clause 32, it is then a question of English law as to whether AESUK can enforce its terms. This must be an issue which substantive English law governs, as being the law of the arbitration clause, and, insofar as any procedural matters arise, also English law as the lex curiae of the arbitration there specified. There was in the event no dispute between Counsel that the answer fell to be found, as a matter of English law, in the Contracts (Rights of Third Parties) Act 1999. The dispute was thus limited to one as to the effect of that Act.
- Mr White referred to Through Transport, in which an injunction was refused (although a declaration was granted), where the insurer, New India, was not a party to the arbitration agreement, and wanted to seek to enforce and (unlike the present case) make a claim in, arbitration, but, (i) the 1999 Act was not referred to in that case, and indeed was not in play, because (ii) New India was not a party for whose benefit the relevant arbitration contract was entered into, nor became entitled to that benefit. But the issue here revolved and revolves wholly around sections 8 and 1 of the 1999 Act, as both Counsel accepted.
- S8, to which Mr White referred, reads as follows:
- Mr White submitted that this section simply dealt with how the third party should be treated "for the purposes of" the Arbitration Act 1996, such that it does not assist directly in relation to the question before me as to the bringing of an arbitration claim. But that, in my judgment, is plainly too blinkered a view of s8. S8 is certainly dealing with, and making entirely clear the position in relation to, arbitration. But the starting point is that there is a "right under s1 to enforce a term". So the real issue can only relate to whether AESUK, as a matter of English law, has a right under s1 to enforce a term. S1 reads, in material part:
- There is in my judgment no doubt whatever that, at English law, AESUK, being entitled to the benefit of Clause 32, is entitled to the benefit of, and consequently entitled to enforce, by way of declaratory and injunctive relief, its right to arbitration, pursuant to s1, and, in due course, s8, of the 1999 Act.
- It is in this context that the "Hot and Cold Issue" arises, because it is only in relation to the inconsistent statements made in various Kazakhstan proceedings as to whether or not AESUK is a party to Clause 32 that the argument is sought to be made by Mr White. He relies on the decision of Sir Nicholas Browne-Wilkinson V-C in Express Newspapers plc v News UK Ltd [1990] 1 WLR 1320, in which he concluded that Express Newspapers could not blow hot and cold by taking inconsistent positions in two sets of English proceedings, so that it was not entitled to rely on an otherwise available defence in the second proceedings. He also relies on a statement by Mr Raphael in his book, at paragraph 8.13, when he says "If the injunction claimant behaves in a way which is inconsistent with the contractual forum being the sole forum for dispute resolution, such as himself starting proceedings in the non-contractual foreign court, this can be a powerful factor against enforcing an exclusive forum clause." Such kind of "inconsistent behaviour" would be of course behaviour of an entirely different character to that alleged in this case. What is said is that Suntree and Tau, AESUK's parents, made statements in the proceedings referred to in paragraph 6(iii), when dealing with the fact that AESUK had brought the proceedings referred to in paragraph 6(ii) above, in two of its pleadings that AESUK was not a party to the Concession Agreement and had "never assumed any rights or obligations under the Agreement and [does] not possess such". JSC itself averred the contrary, namely that AESUK is such a party of course in its turn entirely inconsistently with what it is arguing now, in one of its (responsive) pleadings. As to all this:
- I am entirely satisfied that on the fourth and seventh issues JSC fails.
- Again the starting point is that English law governs the Clause. As set out in paragraph 17(v) above, at English law an arbitration clause falls to be construed very widely in this regard. Mr White says that the claim in the Kazakhstan proceedings is a proprietary claim under Articles 188 and 264 (as referred to in paragraph 7 above), and that JSC is not relying on the Concession Agreement and that no dispute arises out of, or in connection with, it. However, JSC's case is set out in the papers before me:
- AESUK put this in issue (see paragraph 8(ii) above). On any analysis at English law there must be at least a good arguable case that the claim made in the Kazakh proceedings by JSC (and denied by AESUK) necessarily involves a dispute in connection with the Concession Agreement and whether the 'proprietary' claim is trammelled by, or arises notwithstanding, the Agreement: and thus falls within the scope of Clause 32.
- Mr White accepts that Clause 32 must be construed at English law, by which it is governed. He did not raise any argument to counter the fact that at English law the construction of Clause 32 is clear:
- If the English courts were applying a policy similar to that of the Kazakhstan Court, whereby there cannot be any arbitral inhibition upon a decision about tariffs, then this Clause would not therefore fall foul of it. Mr White submits however that, notwithstanding, the English Court must respect the conclusion of the Kazakhstan Supreme Court that Clause 32 offended against its public policy. Mr White recognises that the starting point must be s32 of the Civil Jurisdiction and Judgments Act 1982, which reads in material part as follows:
- He accepts therefore that the decision of the Kazakhstan Court prima facie falls within s32(1)(a), so that the English Court must not recognise or enforce it. He submits however that the provisions of subsections (2) and (3) entitle this Court to recognise the Kazakhstan Court decision, and submits that this Court should do so. He submits that the decision, particularly that at first instance by Waller J, in Philip Alexander Securities and Futures Ltd v Bamberger [1997] I.L.Pr 73, should be followed. In that case a German court had refused to recognise an arbitration agreement because such arbitration was overridden by local consumer legislation. Waller J distinguished such anti-suit injunction cases as The Angelic Grace [1995] 1 Lloyd's Rep 96, because, unlike in that case where it was not "contemplated that the Italian judge would be offended by the grant of an injunction or regard it as an interference", the "German courts were apparently taking the view that their citizens have the right, as consumers, to come to their courts on the basis that under German law arbitration agreements were invalid" (paragraphs 82-83). Mr White recognised that the same conclusion was not reached in Akai Pty Ltd v People's Insurance Co Ltd [1998] 1 Lloyd's Rep 90, in relation to Australian insurance law (at p100) or by the Court of Appeal in OT Africa, in relation to a Canadian consumer statute, but in this case there has been a clear finding, specifically dedicated towards this clause, by the Supreme Court of Kazakhstan in the exercise of its own public policy, and the English court should exercise the same caution, and reach the same conclusion, as in the case of Philip Alexander Securities.
- Mr Eder sought to explain the Philip Alexander case as affected by the particular care being taken by the English court not to exercise a jurisdiction inconsistent with that of a court of another member of the European Community, as was suggested by Aikens J in The Ivan Zagubaski [2002] 1 Lloyd's Rep 106, and points to the subsequent development, which now makes it impossible for an English court to grant an anti-suit injunction in such a case, since The Front Comor [2009] 1 Lloyd's Rep 413 (ECJ) not of course applicable here. He also points out that Leggatt LJ's reasons in the Court of Appeal at paragraph 47-48 for upholding the refusal of an anti-suit injunction were not quite the same as those of Waller J. But in any event, Mr Eder returns to s32. He submits that s32(1) is the beginning and end in this case. The contract was governed by English law, which provided for a binding arbitration clause, and the UK court should not recognise the Kazakhstan court's decision to the contrary. He refers to the decision on very similar facts by Cooke J in Tamil Nadu Electricity Board v ST-CMS Electric Co [2008] 1 Lloyd's Rep 93, a case in which Akai and OT Africa were cited, although Philip Alexander Securities was not. In Tamil Nadu, Cooke J was not deciding the grant or otherwise of an anti-suit injunction, but the setting was almost identical, in the sense that one party was asserting that it was not bound by the terms of an arbitration clause, which was governed by English law. It was asserted by that party that Indian law relating to determination of tariffs rendered the arbitration agreement unenforceable. Although there was no decision of an Indian court, there was no doubt about the effect of the Indian statutory legislation, and Cooke J concluded (at paragraph 40) that:
- I am entirely satisfied that there is at least a good arguable case that the Kazakhstan court decision has no effect on this English law arbitration clause, and consequently that it is valid and enforceable:
- The relevant events are set out in paragraph 8 above. AESUK's motion to dismiss by reference to Clause 32 failed on 28 July in the Economic Court. It is common ground that there is only an opportunity to appeal once in the Kazakhstan court, i.e. there is nothing similar to our system of bringing an interlocutory appeal, or appealing on preliminary points. AESUK's expert, Professor Suleimenov, at corrected paragraph 99 of his report explains that:
- The Economic Court went straight on to deal with the merits at the hearing on 5 August (which AESUK, armed with the benefit of Andrew Smith J's Order referred to in paragraph 11(ii) above, sought unsuccessfully to adjourn). At the same time as presenting its application to this Court, AESUK put in under protest (as set out in paragraph 8(ii) above) a defence on the merits. It is also common ground that at Kazakhstan law there is no such thing as a protest to the jurisdiction. The court will take no notice of it. JSC's second expert, Dr Mukhamedshin said in his report as follows:
- After losing on the merits (after the unsuccessful attempt to adjourn), AESUK then appealed on both grounds, as it was entitled to do, and lost (paragraph 9 above). There has, at any rate as yet, been no further appeal to the Supreme Court. The conclusion of JSC's expert Dr Mukhamedshin is (at paragraph 97):
- The conclusion of Professor Suleimenov, is:
- Mr White naturally starts his case that there has been submission by reference to s33 of the Civil Jurisdiction and Judgments Act 1982, which reads in material part:
- He submits that AESUK engaged in the merits, and consequently submitted to the jurisdiction of the Kazakhstan courts, albeit doing so under protest and at the same time as bringing their proceedings before this Court. He relies on passages in Dicey, Morris & Collins on the Conflict of Laws (14th Ed) at 14-063 to 14-066. At 14-063 the authors state "If his challenge to the jurisdiction of the foreign court is successful, no question of submission arises. If it is unsuccessful and he goes on to contest the case on the merits, he will have submitted to the jurisdiction of the foreign court." The same appears in paragraph 14-064: "If the defendant in the foreign court fails on any of these issues, but nevertheless goes on to defend the case on the merits, he will be regarded as having submitted." In paragraph 14-066 it is stated: "Some systems of law require or allow a defendant to plead to the merits at the same time as, and as an alternative to, an objection to the jurisdiction ... [A plea on the merits put forward in this way] ... should not ... be ... regarded [as a submission], provided at least that, having lost on the issue of jurisdiction, the defendant does not put forward his case on the merits."
- Mr White referred to Akai at 96-97, where Thomas J states: " the question for the court, in determining whether the steps taken by a party in an overseas court amounts to a submission ... is whether the step was only necessary or useful if the party was not objecting to the jurisdiction. A step that is not consistent with or relevant to the challenge to the jurisdiction, or obtaining a stay, will usually be a submission to that jurisdiction. The Court must consider the matter objectively: it must have regard to the general framework of its own procedural rules, but also to the domestic law of the Court where the steps were taken." Then, by reference to s32(3), set out in paragraph 38 above, Thomas J states that that section "makes it clear that the English Court is not bound by the decision of the foreign Court or that a person has submitted; it must follow that an English Court is not bound by the characterisation of the step as a submission merely because the law of the foreign Court would regard it as a submission."
- Although there is no Kazakh law put in expressly on the point, Mr White suggests that AESUK could have taken the course of not appearing at the merits hearing, instead of doing what they did do (paragraph 8(iii) above), and still have been able thereafter to appeal, if not the merits case then in any event the jurisdiction case. I have already set out above in paragraph 45 Professor Suleimenov's opinion that AESUK had de facto no other choice than to take the course it did. Mr White, while accepting that, in a passage relied on by Mr Eder in the Atlantic Emperor No 2 [1992] 1 Lloyd's Rep 624 at 633, the Court of Appeal per Neill LJ stated that it was important that s33 should not be construed too narrowly, nevertheless pointed out that in that case the defendant was found to have submitted.
- Mr Eder points out that in Akai Thomas J concluded that what was in fact an unconditional entry of an appearance did not amount to a submission, and he submits that the taking of such a step is more significant than the course taken by AESUK in this case, and that the assessment must be one of fact in each case:
- It is clear that even if Dr Mukhamedshin rather than Professor Suleimanov is right as to the effect in Kazakh law of what occurred, I am not bound by the characterisation by a Kazakh court (per Thomas J, quoted in paragraph 48 above). In my judgment the significant fact is the simultaneity and combination of the three steps referred to in paragraph 8(i), (ii) and (iii) above, coupled with the fact that even the appearance at the merits hearing under cover of the purportive protest was accompanied by production of, and reliance upon, Andrew Smith J's order. The purpose of all this was in my judgment still to continue to protest the jurisdiction, notwithstanding the defeat at what was then a first instance court. Mr White understandably described what occurred as AESUK trying to 'have their cake and eat it', but in my judgment when they took the steps in question they were still pursuing arbitration, and the three passages referred to in paragraph 47 above from Dicey, Morris and Collins can be simply distinguished by reference to the fact that in this case AESUK did not fail and then "go on [my underlining] to defend the case on the merits". During the period 28 July to 4 August 2009 it was at all times still endeavouring to contest the jurisdiction, and its revelation of its case on the merits in the course of that, and prior to its unsuccessful appeal, did not in my judgment amount to a submission.
- For the purposes of Mr White's challenge to the jurisdiction, there is the issue whether the relevant test is, as he submits, a good arguable case, or a serious issue to be tried (see paragraph 17(vi) above). Without resolving that issue, I am satisfied that Mr Eder has at least a good arguable case that there was no submission or waiver, and that AESUK is still entitled to pursue its arbitration claim.
- Mr White originally submitted that AESUK did not lay before Andrew Smith J the fact that there might be facts such as to suggest that there had been a submission because of a reliance in the Kazakhstan courts by AESUK on the merits. In the course of the hearing however he accepted that he was wrong in that regard. All that he is left with is his case that the allegedly inconsistent statements of Suntree and Tau as to whether AESUK was a party to and/or entitled to the benefit of the Concession Agreement was not brought to the judge's attention (relevant to the Hot and Cold Issue). In the circumstances, I am entirely satisfied that the omission of such matter was not material.
- I therefore dismiss the jurisdiction challenge, but I have done so on the basis that the declaratory and injunctive relief should be limited as set out in paragraph 21 above. To obtain an anti-suit injunction it is sometimes said that a claimant must show that the conduct of the defendant has been vexatious. I do not myself consider that it is necessary so to find if by that is meant more than (in the case, for example, of parallel proceedings), the claimant has been 'vexed' by this in the sense of the old Latin tag 'nemo debet bis vexari'. In this case it is simply that I am to be satisfied that AESUK is entitled to rely on the arbitration clause, and consequently entitled to relief to restrain a breach of it. I am satisfied that there is, as I have said, at least a good arguable case that it is in an ICC arbitration (and if necessary by further reference, whether under s32 or s67) that any remaining issues can and should be canvassed, including any question going to the jurisdiction of the arbitrators.
- It is in that context that I turn to consider the substantive claim, now in the notional absence of Mr White. I have given careful consideration to each of the issues, and am satisfied that for the reasons I have given none of them stand in the way of or amount to an arguable defence to the grant of the (limited) final declaratory and injunctive relief to which I conclude the Claimant is entitled. It may be that no arbitration will take place, and that JSC will conclude that it will not further pursue its claim under the Request for Information. However it has become entirely clear to me in the course of these proceedings that the reality of the dispute between these parties does not relate to the present Kazakhstan proceedings, but relates to the forum in which any other outstanding disputes may fall to be resolved arising in respect of this 20-year concession. I am satisfied that any dispute prima facie falling within Clause 32 ought to be pursued by JSC in ICC Arbitration, and, as I have said, in and during such arbitration there will be the opportunity, if so advised, for any proper challenge to be made to the jurisdiction of the arbitrators or the applicability of the arbitration clause. I am satisfied however that, on the facts before me, the relief should be granted, and on a final basis.
- I shall hear Mr Eder on the precise form of the relief, and also in relation to his wish to seek an amendment in respect of Clause 9, a matter which presumably will have to be considered before the order is finally drawn up.
Mr Justice Burton :
"32. Dispute Resolution
32.1 Subject to the provisions contained in Clauses 17.8 and 17.9, should any dispute or difference arise out of or in connection with any matter or thing in relation to the provisions of this Agreement and the transactions contemplated by the parties, then the Party or Parties shall issue a Notice to the other Party or Parties, and shall supply full details of the dispute or difference.
32.2 In the event of any such dispute or difference being notified pursuant to Clause 32.1, the Authorised Persons of each of the Parties shall promptly meet together and negotiate in good faith and take all practicable steps in order to try and resolve the same as quickly and economically as possible.
32.3 Should the Parties not have resolved the dispute or difference at the expiry of a period of one (1) month (unless otherwise extended by agreement of the Parties in writing) from the date of any Notice issued in accordance with Clause 32.1 such dispute or difference shall be settled by arbitration in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce ["ICC"] in force at the relevant time.
32.4 In accordance with the Rules of Conciliation and Arbitration of the [ICC] ("Rules"), the Parties have agreed that there shall only be one (1) arbitrator who shall be appointed by mutual agreement between the Parties. If the Parties fail to reach agreement as to the identity of the arbitrator to be appointed within thirty (30) Days of the expiry of the one (1) month period referred to in Clause 32, the arbitrator shall be appointed upon the application of any party to the dispute or difference by the President or Vice-President for the time being of the [ICC] of London and the arbitration shall be commenced and carried out as soon as is possible.
32.5 The arbitration shall be carried out and conducted in London, England and shall be in the English language.
32.6 The finding of the arbitration shall be final and binding on the Parties and by way of appeal or otherwise no dispute or difference shall be referred to the courts or to arbitration (other than in compliance with the requirements of this Clause 32 in the case of arbitration) .
32.7 Each of the Parties hereby represents and warrants that it can validly and unconditionally consent under Kazakstan Legislation to the referral of the matters as set out in this Agreement to an Expert, to the arbitration agreement contained in this Clause 32, as well as the other dispute resolution mechanisms referred to in this Agreement.
32.8 The Parties hereto agree to exclude any right of application or appeal to any court which would otherwise have jurisdiction in the matter in connection with any question of law arising in the course of the Expert or arbitration reference or out of the award. However the Parties may make an application to any court for enforcement of any Expert decision or arbitral award (including execution of such judgment), including enforcement of any such decision or award granting interlocutory relief against a Party, and for the obtaining of any evidence (whether by discovery of documents, interrogatories, affidavits or testimony of witnesses or whatsoever) which the Expert or arbitrators direct shall be admitted in the Expert or arbitral proceedings."
The reference in subclause 32.1 to Clauses 17.8 and 17.9 and to an Expert and an Expert decision in subclauses 32.7 and 32.8 is to the fact that separate provision was made by Clause 17 for the determination of tariffs, with disputes resolved by an independent expert as there provided.
"The [Concession Agreement's] provisions regarding governing law and dispute resolution through arbitration shall be deemed to be incorporated in this Transfer Agreement."
Clause 4 of the Deed of Adherence also incorporated Clause 32 by reference.
i) On a date sometime in late 2001 a claim was made by RK in the East Kazakhstan Regional Court ("the Regional Court") seeking recovery of debts allegedly due under the Concession Agreement. It is not entirely clear which parties were the defendants, but reliance was placed by those defendants on Clause 32, on the basis that the disputed debt could only be resolved by international arbitration in London. The Kazakhstan Court upheld that challenge and dismissed the claim on 26 December 2001.
ii) It appears that at about the same time AESUK applied to the Ust-Kamenogorsk City Court to challenge an Order that had been made on 17 May 2001 to include them in the State Register of Market Entities Holding a Dominant (Monopolistic) Position on a Specific Commodity Market for the year 2001. AESUK's claim against the relevant department of RK's Agency for the Regulation of Natural Monopolies, Protection of Competition and Support for Small Business was issued on 10 October 2001 and was dismissed by judgment dated 27 May 2002. It seems that such Order is renewed annually, and AESUK tried again in the following year to challenge a renewed Order dated 29 July 2002 for its inclusion on the same Register, by a claim dated 12 August 2002, which was dismissed on 15 July 2003.
iii) On 23 November 2002 the Committee of State Property and Privatisation of the Ministry of Finance of RK issued proceedings in the Regional Court against Suntree and Tau, seeking a declaration that the Concession Agreement was invalid. Suntree and Tau applied to dismiss the claim, relying on Clause 32, on 18 December 2002, which challenge was upheld by the Regional Court on 19 December 2002. RK appealed to the Supreme Court of the Republic of Kazakhstan, but the appeal was dismissed by the Supreme Court on 30 January 2003, by reference to Clause 32, which (as recorded in the judgment translated from the Russian) "provides for the resolution of all disputes and misunderstandings between the parties in the arbitration in the International London Chamber of Commerce": however the Supreme Court expressly stated that:
"Should the Plaintiff consider that he was misled or deceived about the nature of the court of arbitration or the transaction itself while concluding the arbitration clause, the plaintiff shall have the right to appeal to court with a separate claim on declaring the arbitration clause invalid ..."
iv) RK took up this suggestion, although not apparently upon the basis there outlined. They commenced proceedings in the Regional Court against Suntree and Tau, claiming annulment of Clause 32, on a basis to which I will refer below, by claim dated 9 April 2003. Suntree and Tau filed a motion for dismissal of the claim by reference to the requirement for arbitration in London. By ruling dated 12 May 2003, the Regional Court concluded that it did have jurisdiction to try the claim that the arbitration clause be invalidated, and an appeal by Tau and Suntree to the Supreme Court was rejected on 19 June 2003. The matter was returned to the Regional Court to hear RK's claim for a declaration that Clause 32 of the Concession Agreement was invalid, and, on 26 September 2003, that Court dismissed the claim. However, RK appealed to the Supreme Court, and, by judgment dated 8 January 2004, the Supreme Court allowed RK's appeal, and held that Clause 32 of the Concession Agreement is invalid. The grounds for this decision were twofold:
a) The judgment concluded that "Article 32 stipulates that any dispute or difference, including those involving tariffs, may be settled by arbitration": i.e. it read Clause 32 as though, far from excluding the provisions of Clauses 17.8 and 17.9, it included them. Based upon this construction it concluded that "if tariff-related disputes are referred to arbitration, this may entail awards entered in favour of the Defendants and thereby benefit them as compared to other power companies operating in the Republic. Therefore the operations of the Defendants, which are natural monopolists, would come beyond the control of the Republic of Kazakhstan ... In this connection, this Collegium has found that Article 32 of the Agreement is in conflict with the legislation of the Republic of Kazakhstan and is to be invalidated pursuant to Article 158.1 of the Civil Code. In addition, this Collegium is of the opinion that the arbitration clause is unenforceable in practice. Thus, it follows from the text of the clause that any dispute not related to tariffs may be resolved only after the procedures set forth in Articles 17.8 and 17.9 with respect to tariffs are followed, which is logically senseless."
b) The second ground was the Court's conclusion that "based on the literal meaning of the texts of Articles 32.3 and 32.4, these Articles only refer to the Rules of Conciliation and Arbitration of the International Chamber of Commerce and to the procedure of the appointment of an arbitrator, rather than specify the arbitration body itself. This Collegium considers the above facts as a further evidence of unenforceability of the arbitration clause."
i) It launched these proceedings and obtained the ex parte anti-suit injunction from Andrew Smith J on 31 July 2009.
ii) It put in a Defence to JSC's complaints, making plain its case that "the [Concession] Agreement does not establish a duty for [AESUK] to provide [JSC] with information on assets", and that neither Article 264 nor 188 were applicable, prefacing such case as follows, emphasising its reliance upon Clause 32 and its entitlement to arbitration in London:
"... Furthermore, the decision rendered by the Civil Division of the Supreme Court of the Republic of Kazakhstan dated 08.01.2004, and which is referred to by the Plaintiff who claims that the arbitration agreement was found to be null and void, has no mandatory (prejudicial) effect on the Respondent (who is not a party to the dispute where the aforementioned decision of the Supreme Court of the Republic of Kazakhstan was rendered).
On 28 July 2009 the court issued a decision stating that the Respondent's motion to dismiss the case for lack of jurisdiction was denied. The Respondent disagrees with the aforementioned decision; it deems it unlawful and insists that the Court has no jurisdiction over this dispute.
For this reason, in order to prevent an incorrect interpretation of its actions with respect to the filing of this response, and the participation in the trial involving the dispute, as if it constitutes consent to review this dispute in the Court, or as if it constitutes a waiver of the jurisdiction of the arbitration court, at this stage of the review in the case, the Respondent makes a special stipulation that it does not abandon its position with regard to the jurisdiction of the arbitration court in this dispute.
Accordingly, the Respondent specifically informs the court and the other parties to the [Concession] Agreement of the fact that the submission of this response, or the participation of the Respondent in the trial involving the dispute, should not be construed as the recognition by the Respondent of the jurisdiction of the Court over this matter, or as the Respondent's waiver of transfer of the dispute to the arbitration court. The Respondent continues to insist that the dispute must be reviewed according to the provisions of [Clause 32] ... by the arbitration court in London, according to the arbitration rules of the International Chamber of Commerce."
iii) By motion dated 4 August 2009, AESUK brought to the attention of the Economic Court the existence of these proceedings, and the Order of Andrew Smith J, and moved a motion to suspend the proceedings. There is a translation of a transcript of events at the Economic Court on 5 August 2009, and there is a dispute between the parties as to precisely what occurred, which I am not in a position to resolve. However the hearing lasted, including a withdrawal by the presiding judge to the conference room to review the papers and consider his decision, one hour 25 minutes, and the Court concluded that there was improper reliance upon Clause 32, and that JSC's claim for the information requested should be upheld.
The Issues
i) a claim for two declarations. The first, put shortly, is that Clause 32 is valid and enforceable. The second is that the current dispute between AESUK and JSC (as to the enforceability of the Request for Information) falls within Clause 32.
ii) an injunction pursuant to s44 of the Arbitration Act 1996 ("s44") and/or s37 of the Senior Courts Act 1981 ("s37") (i) restraining and/or prohibiting [JSC] from "commencing and/or pursuing legal proceedings before the [Economic Court] or elsewhere in respect of any matters which [AESUK] and [JSC] have agreed to arbitrate by Clause 32 and, in particular, from continuing the proceedings issued in the [Economic Court] on 22 June 2009 ("the Kazakhstan Proceedings")" and (ii) that [JSC] be "required to take all steps necessary to postpone, adjourn, discontinue and/or stay the Kazakhstan Proceedings":
iii) legal fees and costs:
iv) further or other relief.
i) He submits that there is no arbitration claim within CPR 62.2 which can be pursued in these proceedings by AESUK. Even on the assumption that Clause 32 entitles AESUK to complain that JSC is in breach of contract by issuing these proceedings, rather than pursuing its claim against AESUK in London arbitration, AESUK cannot bring in English proceedings any of its claims, be they for declarations or injunctions, without either having first commenced such arbitration, or having the intention to bring such arbitration proceedings themselves, which it is apparent, now that 8 months have passed since Andrew Smith J's order, AESUK did not, and do not, intend to bring. Mr White relies primarily on the decision of Thomas J in Vale do Rio Doce Navegaηao SA and another v Shanghai Bao Steel Ocean Shipping Co Ltd and another ("Vale do Rio") [2000] 2 Lloyd's Rep 1 to support such proposition. AESUK must have a good arguable case that it can establish an arbitration claim before surmounting the jurisdictional hurdle of obtaining permission to serve such arbitration claim out of the jurisdiction within CPR 62.5. A good arguable case has been defined by Waller LJ in Canada Trust Co v Stolzenberg (No 2) [1998] 1 WLR 547 at 555 as reflecting that "one side has a much better argument on the material available". Christopher Clarke J, in a case where there was disputed evidence, Cherney v Deripaska [2008] EWHC 1530 (Comm) recorded it as the need for the Court to be "satisfied that the Claimant's contentions provide a much better, or at any rate a better, argument in favour of there being the ground for jurisdiction alleged than of there not being one". ("The Arbitration Claim Issue".)
ii) Closely allied with this first ground of challenge is Mr White's submission that, in any event, even if the Claimant has a good arguable case as to the existence of an arbitration claim within CPR 62.2, AESUK cannot rely upon any of the gateways put before Andrew Smith J, namely CPR 62.5(1)(b), CPR 62.5(c) and paragraph 3.1(20)(a) of CPR 6 Practice Direction B. It is common ground that this too must be tested by the existence or otherwise of a good arguable case. ("The Gateway Issue".)
iii) Mr White submits that there is no good arguable case for declaratory or injunctive relief based upon Clause 32, because Clause 32 has been declared void by the Kazakhstan Supreme Court. Although he accepts that Clause 32 is governed by English law, he submits that the English courts should recognise such decision of the Kazakhstan Supreme Court in relation to the operation of Kazakhstan public policy with regard to matters occurring within Kazakhstan. ("The Validity Issue").
iv) He then submits that there is no good arguable case that AESUK is a party to the Concession Agreement or entitled to enforce Clause 32 ("the Party Issue"). This is closely related to the "Hot and Cold Issue" referred to at (vii) below.
v) Notwithstanding that he accepts that the scope of Clause 32 must be construed at English law (and hence by reference to Fiona Trust v Privalov [2008] 1 Lloyd's Rep 254 HL) he submits that there is no good arguable case that JSC's claim, the subject matter of the Kazakhstan proceedings based upon the Request for Information, falls within the scope of Clause 32. ("The Scope Issue").
vi) The next issue is as to whether AESUK has, as Mr White contends, submitted to the jurisdiction of the Kazakhstan courts: notwithstanding the fact that it did so under protest (see paragraph 8(ii) above) Mr White submits that, by putting forward a defence on the merits to the Regional Court, AESUK has submitted to the Kazakh jurisdiction and is no longer entitled to rely upon Clause 32. He submits that this is a question of AESUK needing, and failing, to surmount a jurisdictional hurdle of establishing an arbitration claim, and thus falling within the relevant gateway (if AESUK is otherwise successful on the first two issues): so it must show a good arguable case. Mr Eder submits that this is a question which goes to the merits of AESUK's claim. AESUK thus simply needs to show that there is a serious issue to be tried on the merits, such that all it must show is that the claim has "a reasonable prospect of success", enough to fend off a challenge on a 'reverse Part 24 application' by a defendant: see Seaconsar Far East Ltd v Bank Markazi [1994] 1 AC 438 at 452D and Islamic Republic of Pakistan v Zardari [2006] 2 CLC 667 [2006] EWHC 2411 per Lawrence Collins J at para 136. This is, on the authorities, a lower test. ("The Submission Issue").
vii) The "Hot and Cold issue" arises because Mr White submits that AESUK, or rather in fact AESUK's parents, Suntree and Tau, have taken a stance at various stages in Kazakhstan proceedings inconsistent with that now taken by AESUK in relation to the "Party Issue". He accepts that his client, JSC, has also done so, but submits that the fact that the Claimant (or the Claimant's parent companies) did so affects its right to relief from the court.
viii) There was what might have been called a "Non-Disclosure Issue", by reference to a case as to what matters were disclosed by AESUK to Andrew Smith J on the ex parte application. Apart from pointing out that the facts relevant to the "Hot and Cold Issue" were not drawn to the attention of Andrew Smith J, Mr White has effectively abandoned reliance on this head.
I shall deal with each of these issues in turn.
The Arbitration Claim and Gateway Issues
i) AESUK's claim and the injunction sought and obtained, and the gateways relied upon, are based in part upon s44. The gateway (CPR 62.5(1)(b)) expressly relied upon was that "the claim is for an order under s44 of the 1996 Act". S44, which gives the same power of making orders in respect of relevant matters to a court for the purposes of, and in relation to, arbitral proceedings, as it has for the purposes of, and in relation to, legal proceedings, provides in material part:
"(3) If the case is one of urgency, the court may, on the application of a party or proposed party to the arbitral proceedings, make such orders as it thinks necessary for the purpose of preserving evidence or assets.
(4) If the case is not one of urgency, the court shall act only on the application of a party to the arbitral proceedings (upon notice to the other parties and to the tribunal) made with the permission of the tribunal or the agreement in writing of the other parties.
(5) In any case the court shall act only if or to the extent that the arbitral tribunal, and any arbitral or other institution or person vested by the parties with power in that regard, has no power or is unable for the time being to act effectively."
Mr White submits, while accepting that this was a case of urgency, and that there was no arbitral tribunal in existence at the time when the application was made, that to found a claim by reference to s44 the order can only be justified if made on the application of a "party or proposed party to the arbitral proceedings". Thus there must be, if not actual, certainly intended/proposed, proceedings. In all the reported cases (for example Cetelem SA v Roust Holdings Ltd [2005] 1 WLR 355 CA and Econet Wireless Ltd v Vee Networks Ltd [2006] 2 Lloyd's Rep 428) the assistance that has been given by the court pursuant to s44 has been on the basis that there is a pending or intended arbitration and, as Clarke LJ put it in paragraphs 67 and 71 of his judgment in Cetelem, the court would, if there were not an arbitration on foot, ensure the "obtaining of appropriate undertakings from the claimant that the substantive rights of the parties would ultimately be resolved by arbitration". So too, Staughton LJ stated in The Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd ("Eurotunnel") [1992] 2 Lloyd's Rep 7 at 13, that the power of the court under the equivalent (but not identical) predecessor of s44, s12(6) of the Arbitration Act 1950, could be exercised "before there has been any request for arbitration or the appointment of arbitrators, provided that the applicant intends to take the dispute to arbitration in due course". In this case, there is, and has been, no arbitration commenced by AESUK (not even the one that its solicitors proposed in the letter to the Prime Minister of Kazakhstan referred to above (to which, in any event, the provisions of s44 would not apply)), and hence, particularly as s44 provides only for an interlocutory, and not a final, injunction, no case can have been or can now be based upon s44.
ii) Mr White submits that the same argument applies to the availability of relief by reference to s37, whereby:
"(1) The High Court may by order (whether interlocutory or final) grant an injunction in which it appears to the court to be just and convenient to do so."
He submits that the principles ought not to be different, given that the Court would be giving relief in support of arbitral proceedings, by reference to the well known Latin maxim (and like all such surviving maxims better expressed in Latin than any equivalent English) "generalia specialibus non derogant" namely if there is a special provision governing a situation within which a case would be expected to, but does not, fit, it is not ordinarily appropriate to fall back on general provisions to provide an answer. He refers to the approach to s37 in Parker v Camden LBC [1986] 1 Ch 162 at 173. He further points out that, although there are cases in which, contrary to such primary submission, s37 has been found available where s44 is not, indeed such as Cetelem itself (see Clarke LJ at paragraphs 44 and 74), in fact in all the reported cases in which s37 has been applied in support of arbitral proceedings, there has been an existing arbitration.
iii) He submits that declaratory relief is not available where there is no existing or intended arbitration. He refers to s1(c) of the Arbitration Act 1996 in which one of the general principles underlying the Act is recorded as being that "In matters governed by this Part, the court should not intervene except as provided by this Part", which he submits imposes a degree of caution on the court's intervention, and points to the express power under s30 of the Act providing for the competence of an arbitral tribunal to rule on its own jurisdiction (previously a matter of some dispute by reference to what became known as the "Kompetenz Kompetenz" argument). He submits therefore that for the High Court to entertain declaratory relief in relation to the competence of the arbitral tribunal/validity of the arbitration agreement, except where the point is expressly referred to them, either during an arbitration (s32 of the Act) or after its conclusion (s67 of the Act), would be a usurpation of arbitral proceedings. He recognises that in fact one such declaration was made and upheld in the Court of Appeal in Through Transport Mutual Insurance Association (Eurasia) v New India Assurance Co Ltd [2005] 1 Lloyd's Rep 67 namely a declaration "that the defendant is bound to refer any claims against the claimant to arbitration in accordance with the arbitration clause" (see paragraph 63(a) of the judgment of Clarke LJ), but points out that in that case the "usurpation" point was not argued and, as he submits significantly, there was already an arbitration proceeding on foot in that case. The foundation of his case in this regard is the decision of Thomas J in Vale do Rio. In that case, the owners wished to pursue in arbitration a party (Bao Steel) which denied that it was party to such arbitration agreement, and brought proceedings for a declaration that Bao Steel was a party. Bao Steel in fact took no part in the English proceedings, but another party, the brokers, through whose agency Bao Steel was said to be bound, included in their case that the Court had no jurisdiction to grant declaratory relief against them the contention that the 1996 Act did not permit the owners to make an application for a declaration against Bao Steel that there was an arbitration agreement. Thomas J concluded that such course was not open to the owners. In paragraphs 51 and 52 of his judgment he relies significantly upon s1(c) of the Act, though recognising that "the use of the word "should" as opposed to the word "shall" shows that an absolute prohibition on intervention by the Court in circumstances other than those specified in Part 1 was not intended". He then concludes as follows:
"53. If the owners are right, then a party to an arbitration agreement which is disputed can obtain the decision of the Courts without being subject to the restrictions by the simple step of not appointing an arbitrator.
54. I do not consider that this can have been the intention. The Act sets out in very clear terms the steps that a party who contends that there is another party to an arbitration agreement should take. First he should appoint an arbitrator. If the other party appoints an arbitrator, then s31(1) makes it clear that his appointment of an arbitrator does not prevent him challenging the substantive jurisdiction of the tribunal. If the other party does not appoint an arbitrator, then the default provisions (s17) or failure of appointment procedures (s18) apply. Once the arbitral tribunal is constituted, then in accordance with the policy of the Act it is for that tribunal to rule on its own jurisdiction, save in the circumstances specified in s32. Any award made can then be challenged under s67. The rights of the party who challenges the existence of the arbitration agreement and takes no part are protected by s72; he is given the right of recourse to the Courts in the circumstances set out. Those provisions, in my view, provide a clear and workable set of rules which the owners should have followed in this case. I can see no reason which would justify the Court intervening in the circumstances of this particular case, as it is no different from many others."
Thus, Mr White submits, unless I were to decline to follow the decision of Thomas J, there is persuasive authority to support his case that there can be no declaratory relief by the Court without existing or intended/proposed arbitral proceedings. As AESUK has not commenced such proceedings, and indeed has expressly said that it does not intend to do so (because its contention is that it is for JSC, if it wishes to bring its claim, to do so only in arbitration), then, in the light of Vale do Rio, it cannot claim declaratory relief.
iv) If AESUK cannot claim declaratory relief, then there is no substantive claim to which to attach s37: neither declaratory relief in court proceedings nor an existent (or proposed and, by now, commenced) arbitration. A s37 injunction cannot, submits Mr White, stand alone as a separate cause of action, a proposition for which he relies on the Siskina (Siskina (Owners of cargo lately laden onboard) v Distos Compania Naviera SA [1979] AC 210). He refers to the dictum of Rix LJ in OT Africa Line Ltd v Magic Sportswear Corporation & others [2005] 2 Lloyd's Rep 170 at paragraph 63, whereby, referring to Lord Hobhouse's speech in Turner v Grovit [2002] 1 WLR 107 HL, he said:
"to reflect the interest of comity and in recognition of the possibility that an injunction, although directed against a respondent personally, may be regarded as an (albeit indirect) interference in the foreign proceedings, an injunction must be necessary to protect the applicant's legitimate interest in English proceedings."
v) Alternatively, in the course of argument, Mr White relied upon the fallback argument that, if s37 could stand alone, it could only do so by way of surrogate for implied declaratory relief, which would be objectionable for the same reason as declaratory relief itself, as set out in (iii) above.
vi) Accordingly Mr White submits that there is no arbitration claim which can have formed the basis of an application to serve out of the jurisdiction. As did Thomas J in Vale do Rio, Mr White too had to address the wording of CPR 62.2, which reads as follows:
"(1) In this section of this Part 'arbitration claim' means
(a) any application to the court under the 1996 Act
(b) a claim to determine
(i) whether there is a valid arbitration agreement;
(ii) whether an arbitration tribunal is properly constituted; or what matters have been submitted to arbitration in accordance with an arbitration agreement;
(c) a claim to declare that an award by an arbitral tribunal is not binding on a party; and
(d) any other application affecting
(i) arbitration proceedings (whether started or not); or
(ii) an arbitration agreement."
On the face of it this plainly means that there are arbitration claims capable of being brought in the High Court other than an application to the Court under the 1996 Act which latter of course would refer inter alia to an application under s44. Thomas J addressed this in paragraph 59 of his judgment:
"59. The owners also argued that the terms of [the then equivalent of CPR 62.2, which used the expression "arbitration application" as opposed to "arbitration claim" as in the present Rule] supported their contention. That paragraph defines the term "arbitration application" as including not only an application to the Court under the Arbitration Act but proceedings to determine whether there is a valid arbitration agreement. They therefore submitted that the fact that the practice direction contemplated proceedings to determine whether there was a valid arbitration agreement as a separate category from an application to the Court under the Arbitration Act showed that it was contemplated by the draftsman of these provisions there would be applications such as the present which did not lie under the terms of the Act. I cannot accept that argument. The short answer to it is that the definition of an "arbitration application" was intended to be all embracing and no doubt the draftsman, out of an abundance of caution, included [the equivalent of 62.2(b)] to spell out the terms of the Act (or just possibly to cater for an oral arbitration agreement). It cannot possibly affect the construction of the Act."
This completed Thomas J's conclusion, and Mr White referred to a passage in The Anti-Suit Injunction (OUP 2008) by Mr Thomas Raphael at paragraph 15.07 in which, while critical of it, Mr Raphael referred to the practice approved by Thomas J as being "the court's existing practice":
"In the circumstances, it is unclear whether the court's existing practice can be sustained, even though requiring s32 to be complied with would produce impractical consequences, as it introduces delay and also cannot be triggered before the tribunal has been appointed."
Mr White submitted that the fact that no material change has been made to this aspect of the CPR since Vale do Rio supports that the draftsmen consider Thomas J's construction to be correct.
vii) Mr White then added an argument which was not put to Thomas J, or, if put, did not find its way into his judgment, namely that if, contrary to his contentions, the claim for a declaration (CPR62.2(b)(i) or under s37 (which would be "any other application affecting arbitration proceedings, whether started or not" within CPR 62.2(d)) were otherwise an arbitration claim, neither falls within the gateway for service out of the jurisdiction (such that, in this case, service and the order of Andrew Smith J should be set aside), where arbitration proceedings neither exist nor are intended. The relevant gateway in this regard is CPR 62.5(1)(c), namely when:
"(c) the claimant
(i) seeks some other remedy or requires a question to be decided by the court affecting an arbitration (whether started or not), an arbitration agreement or an arbitration award; and
(ii) the seat of the arbitration is or will be within the jurisdiction or the conditions in s2(4) of the 1996 Act are satisfied."
He submits that subclause (c)(ii) requires that there either be an arbitration with its seat in London or that there will be such arbitration, and because such arbitration proceedings do not exist and AESUK has no intention of bringing them, such gateway requirement is not fulfilled.
viii) Accordingly, submits Mr White, the provision in CPR 62.5(1) by which the "court may give permission to serve an appropriate claim form out of the jurisdiction" cannot be satisfied, because the prescribed arbitration claim form, in fact used in these proceedings by AESUK, does duly provide, in its format, not only for the recital "In an arbitration claim between " but also the further recital "In the matter of an [intended] arbitration between ". In this case AESUK's solicitors filled out such form as if there were such an intended arbitration, with AESUK as the respondent (i.e. intended by JSC).
i) He clearly has some difficulty in relation to s44. His submission is that the words 'proposed party' should be read, as he puts it, constructively. Given that his case is that, if AESUK's claim is to be pursued at all, it should be pursued in arbitration proceedings, he, Mr Eder, is thus proposing that JSC be a party, and thus that, if such arbitration proceedings are commenced by JSC, as they should be, AESUK would then be a party.
ii) So far as s37 is concerned, his submission is simply that if s44 is not wide enough to cover this situation, s37 plainly is. It is clear, not only from the paragraphs in Cetelem, referred to in paragraph 18(ii) above, but from passages in a number of other reported decisions, such as Sokana Industries Inc v Freyre & Co Inc [1994] 2 Lloyd's Rep 57 at 66, Elektrim SA v Vivendi Universal (No 2) [2007] 2 Lloyd's Rep 8 at paragraphs 48, 52 and Starlight Shipping Co v Tai Ping Insurance Co Ltd [2008] 1 AER (Comm) 593 at paragraphs 19, 29, that the ambit of s37 is wider, and that, although the relationship between s37 and s44 has yet to be fully worked out, s37 may be available when s44 is not.
iii) There is in any event no reason why s37 should not be available, particularly since it is expressly available for the purpose of granting a final order, whereas s44 is limited to the power to make interlocutory orders. Mr White, submitted Mr Eder, is wrong to seek to refer to the Siskina as supporting any proposition that s37 must be parasitic, in the sense of not being able to stand alone: Lord Mustill made it clear in Eurotunnel (in the House of Lords [1993] AC 334) at 362C that "the doctrine of the Siskina, put at its highest, is that the right to an interlocutory injunction cannot exist in isolation, but is always incidental to and dependent on the enforcement of a substantive right, which usually, although not invariably, takes the shape of a cause of action". Where, as here, the s37 order that is being sought is a final order, it can indeed be so sought in support of a cause of action, the cause of action being the enforcement of the arbitration clause.
iv) There is, Mr Eder submits, no usurpation of the arbitral proceedings by the course taken by AESUK to prevent JSC's claim being pursued outside arbitration. Indeed the reverse is the case. Where, as here, a claimant is not a party who wishes to bring a claim in arbitration proceedings, but only wishes not to be sued outside arbitration, then the closest analogy is to an application for a stay, which would be appropriate if the court proceedings, allegedly in breach of the arbitration agreement, were being brought within the jurisdiction. In those circumstances the dictum of Staughton LJ in Eurotunnel in the Court of Appeal at p13 would be apt:
"The defendant in the Court proceedings who applies for a stay may not have any claim which he wishes to make against the plaintiff, or any reason either to start an arbitration or to carry out any preliminary action before there can be one; he may merely wish to resist the plaintiff's claim. I can see no reason why he should not say to the plaintiff: "I dispute your claim. If you wish to pursue it, you must carry out the preliminary step and then proceed to arbitration. I am ready and willing to arbitrate if you do, but if you go to court instead, I shall apply for a stay."
Mr Eder contends that Mr White's reference to the dictum of Rix LJ in OT Africa does not assist. Given that Rix LJ was expressly basing himself upon the speech of Lord Hobhouse in Turner v Grovit, he must be taken in this context only to be saying that "an injunction must be necessary to protect the applicant's legitimate interest in there being English proceedings". Although, at paragraph 28 of his speech, Lord Hobhouse referred to English law requiring, in a forum non conveniens case, "the applicant to show a clear need to protect existing proceedings", he had already made the position quite clear in paragraph 27 as to the law where there was a pre-existing contractual right:
"27. The applicant for a restraining order must have a legitimate interest in making his application and the protection of that interest must make it necessary to make the order. Where the applicant is relying upon a contractual right not to be sued in the foreign country (say because of an exclusive jurisdiction clause or an arbitration clause), then, absent some special circumstance, he has by reason of his contract a legitimate interest in enforcing that right against the other party to the contract. But where he is relying upon conduct of the other person which is unconscionable for some non-contractual reason, English law requires that the legitimate interest must be the existence of proceedings in this country which need to be protected by the grant of a restraining order."
v) It is in this context that Mr Eder submits that the decision of Thomas J in Vale do Rio must be approached. He submits that it is apparent from Thomas J's approach to s1(c) in paragraphs 50 to 52 (set out in paragraph 18(iii) above), and his abjuring of any absolute prohibition, that he is not making a decision based upon presence or absence of jurisdiction. Thomas J concluded his consideration, in this passage of his judgment, of the question of declaratory relief against Bao Steel in these words in paragraph 60:
"I conclude that for this still further reason the Court has no jurisdiction to allow this arbitration application against the brokers."
But Mr Eder submits that this was in fact a reference, understandable in the circumstances, to whether this court had jurisdiction to hear the proceedings, i.e. as to whether there should be service out, and that he was not laying down any absolute bar to the bringing of declaratory (not to speak of injunctive) relief where there was no existing arbitration in England. He submits that the course proposed by Thomas J makes absolute sense where there is to be an arbitration, because the claimant wishes to enforce the arbitration clause and make a claim in it. In those circumstances, it is not appropriate to usurp the decision of such arbitration tribunal which the claimant itself wishes to form, by having the court pre-judge the validity of the clause. If such a claimant wishes to bring a claim in arbitration, it is appropriate that he should get it started, and then there are the various statutory routes whereby the same issue might still come back in front of the court if, in the event, the proposed defendant takes part in the arbitration and challenges its jurisdiction. But Mr Eder submits that that is not apt where the claimant in the English proceedings does not want an arbitration: he simply does not wish to be sued otherwise than in an arbitration, and he should not be needlessly driven to launch an arbitration for a 'negative declaration'. Consistent with the words of Lord Hobhouse in Turner, there is, submits Mr Eder, no reason, and nothing in the Arbitration Act which leads to the conclusion, that such a claimant cannot seek a declaration and/or an injunction.
vi) He then submits that CPR 62.2(1) reads straightforwardly. If one excludes any presumption, derived from Thomas J's judgment, that there cannot be a claim for declaratory relief without an attendant arbitration, nothing in CPR 62.2 itself supports the proposition that subsection (1)(a) is to be construed as 'all embracing' (despite the catch all words in (1)(d)) or negates the common sense approach that the provision in subsection (1)(a) in respect of "any application to the court under the 1996 Act" is intended to be different from, and additional to, a claim by reference to subparagraph (1)(b), being a "claim to determine whether there is a valid arbitration agreement", (or for that matter claims or applications within subsection (1)(c) and (d)). The speculation that (1)(b) might apply (and apply only) to oral arbitration agreements, given their extreme rarity, is a much less likely construction than the straightforward one that there is indeed room for such a declaratory claim (such as was made and allowed in Through Transport, as referred to in paragraph 18(iii) above). Mr Eder submits that the very existence in the CPR of such a provision for an application for declaratory relief to constitute an arbitration claim is consistent with his argument; otherwise, absent the (much less likely) all embracing construction or the suggested reference to an oral arbitration agreement, it would mean that the CPR was ultra vires the Act.
vii) Consequently, says Mr Eder, there is an arbitration claim which falls within the gateway provided by CPR 62.5(1)(c). The content of the prescribed form cannot override the meaning of the rule, but, in any event, either the way in which AESUK's solicitors here completed the form (referred to in paragraph 18(viii) above) is acceptable, or it would be appropriate simply to delete the inapt part of the form. He then addresses Mr White's submission referred to in paragraph 18(viii) above. He submits that the reference to the "seat of the arbitration" is to its contractual location, and submits that this carries no implication as to whether such arbitration has or has not commenced. If the seat of the arbitration is provided to be London, then that is where the arbitration ought to take place. As for the provision as to where the seat will be, Mr Eder puts forward two explanations. The first is that, in this case, London is where the arbitration will be if the party to be enjoined from court proceedings decides to comply with its contractual obligation by bringing the claim within arbitration: alternatively, he submits, that the words may be used to allow for those arbitration clauses in which more than one seat is provided for at the option of one or other party, not an infrequent situation, particularly in freight claims. Mr Eder might have added that, within the same subclause, there is the express cross-reference to s2(4) of the 1996 Act, the provision by which a court may exercise a power where "no seat of the arbitration has been designated or determined", in which provision it is quite clear that the reference to a seat is to a location (or absence of location) carrying with it no implication of whether the arbitration has or has not commenced indeed the reverse.
"20. A claim is made -
(a) under an enactment which allows proceedings to be brought and those proceedings are not covered by any of the other grounds referred to in this paragraph."
Mr White submitted that this could not be the catch-all that it otherwise appears to be. He submitted that it must be in replacement for the old subclauses under RSC Rule 11(1)(o) to (s) and (u), which listed a large number of specific statutes under which claims could be made. But I do not see any connection between this obvious catch-all clause and the earlier, and now overtaken, method of listing a number of specific statutes (not to speak of the fact that the subparagraphs containing those specific statutes were interrupted by 11(1)(t), being a claim for money had and received). The claim for which this gateway is sought is the claim for an injunction under s37. This is an enactment otherwise falling within subparagraph (20)(a), and there is plainly a connection with the jurisdiction by virtue of the fact that the injunctive relief is sought in order to enforce a contract which is governed by English law. I see no reason why that gateway should not be available, so that, if I am wrong to conclude that the gateway at 62.5(c) is available for both the declaratory relief and the injunctive relief under s37, then permission should, in any event, have been granted in respect of the s37 claim, which would be sufficient for Mr Eder's purposes. I conclude that there is at least a good arguable case for both gateways.
The Party Issue
"While AESUK is not a party to the ... Amended Concession Agreement, it is entitled to rely on the arbitration agreement in clause 32 by virtue of clause 23.10 of the ... Amended Concession Agreement, which provides: "All and any rights of [Tau] under this Agreement shall automatically extend also to ... [AESUK]."
"8. Arbitration provisions
(1) Where
(a) a right under section 1 to enforce a term ("the substantive term") is subject to a term providing for the submission of disputes to arbitration ("the arbitration agreement"), and
(b) the arbitration agreement is an agreement in writing for the purposes of Part 1 of the Arbitration Act 1996,
the third party shall be treated for the purposes of that Act as a party to the arbitration agreement as regards disputes between himself and the promisor relating to the enforcement of the substantive term by the third party.
(2) Where
(a) a third party has a right under section 1 to enforce a term providing for one or more descriptions of dispute between the third party and the promisor to be submitted to arbitration ("the arbitration agreement"),
(b) the arbitration agreement is an agreement in writing for the purposes of Part 1 of the Arbitration Act 1996, and
(c) the third party does not fall to be treated under subsection (1) as a party to the arbitration agreement,
the third party shall, if he exercises the right, be treated for the purposes of that Act as a party to the arbitration agreement in relation to the matter with respect to which the right is exercised, and be treated as having been so immediately before the exercise of the right."
"Right of third party to enforce contractual term
(1) Subject to the provisions of this Act, a person who is not a party to a contract (a "third party") may in his own right enforce a term of the contract if
(a) the contract expressly provides that he may, or
(b) subject to subsection (2), the term purports to confer a benefit on him.
(2) Subsection (1)(b) does not apply if on a proper construction of the contract it appears that the parties did not intend the term to be enforceable by the third party.
(3) The third party must be expressly identified in the contract by name, as a member of a class or as answering a particular description but need not be in existence when the contract is entered into.
(4) This section does not confer a right on a third party to enforce a term of a contract otherwise than subject to and in accordance with any other relevant terms of the contract.
(5) For the purpose of exercising his right to enforce a term of the contract, there shall be available to the third party any remedy that would have been available to him in an action for breach of contract if he had been a party to the contract (and the rules relating to damages, injunctions, specific performance and other relief shall apply accordingly)."
i) Mr Eder says that these were statements made by the parent company, and not by AESUK itself: which Mr White says is an irrelevance.
ii) Mr White submits that it is not relevant that his client has acted inconsistently: the point is that it is Mr Eder's client which is claiming relief. But it is in fact Mr White's client which is claiming the relevant relief before me at the moment, namely on the basis that AESUK is not a party to Clause 32, and if the hot and cold argument works at all, it is a kind of estoppel to prevent a party from making a case. However in any event:
iii) now that the issue is conceded, for the reasons set out above, to be one of the proper application of the 1999 Act at English law to assumed facts, none of this is in my judgment of any relevance.
The Scope Issue
i) The Statement of Claim in the Kazakhstan proceedings reads (in a passage which is also quoted by JSC's expert Professor Maggs in his first report):
"Clause 3 Article 188 Civil Code of RK stipulates the right of the proprietor to take any actions with respect to his property as far as it is not limited by law and rights of others ... Thus, if fulfilment of subjective property rights does not violate the rights and interests of others or the law, the proprietor has the right to these actions. Therefore [JSC] has the right to request any information from [AESUK] relating to the state of its assets, because this act is not limited by law or the Agreement."
The judgment of the Regional Court, given in favour of JSC on AESUK's appeal (referred to in paragraph 9 above), concluded that "[JSC] as a property owner and in accordance with Article 188 of the RK Civil Code had the right to request information concerning its property (assets), since such an action is not restricted by either law or contract."
ii) In his witness statement in this case on JSC's behalf, Mr Ustyantsev explained at paragraph 15 that:
"Reference to the Concession Agreement was made by [JSC] in the Kazakh proceedings to
(a) explain why [AESUK] is in possession of [JSC's] property; and
(b) demonstrate that there is nothing in the Concession Agreement that precludes the exercise by [JSC] of its rights under Article 188 ..."
The Validity Issue
i) Clause 32 plainly excludes the issue of tariffs, and requires any dispute about tariffs to be dealt with under Clause 17. The conclusions to the contrary, and to the effect that Clause 32 either deals with tariffs or is complicated by them, by the Supreme Court of Kazakhstan, as set out in paragraph 6(iv)(a) above, is plainly wrong as a matter of English law.
ii) Similarly it appears impossible to construe Clause 32 at English law other than by reaching the conclusion that arbitration by the ICC and subject to its Rules is sufficiently defined. Accordingly at English law the conclusion to the contrary effect by the Supreme Court of Kazakhstan, set out in paragraph 6(iv)(b) above, is also plainly wrong.
"32(1) Subject to the following provisions of this section, a judgment given by a court of an overseas country in any proceedings shall not be recognised or enforced in the United Kingdom if
(a) the bringing of those proceedings in that court was contrary to an agreement under which the dispute in question was to be settled otherwise than by proceedings in the courts of that country
(2) Subsection (1) does not apply where the agreement referred to in paragraph (a) of that subsection was illegal, void or unenforceable or was incapable of being performed for reasons not attributable to the fault of the party bringing the proceedings in which the judgment was given.
(3) In determining whether a judgment given by a court of an overseas country should be recognised or enforced in the United Kingdom, a court in the United Kingdom shall not be bound by any decision of the overseas court relating to any of the matters mentioned in subsection (1) or (2)."
"Whatever the changes in the substantive law of India, which constitutes the proper law of the [main agreement], and whatever Indian issues of policy inform those changes, that cannot affect the proper construction of the separate arbitration agreement, which is governed by English law and which will take no account of such changes unless matters of English public policy so require."
This applies all the more in this case where, although there is a decision of the foreign court, the decision of that court, which concluded that the clause offended against Kazakhstan public policy, was arrived at as a result of a misconstruction of the clause governed by English law.
i) There is no question of English public policy which, on an English law construction of this clause, is offended by it. If anything, there is the English public policy favouring the enforcement of arbitration clauses, although, as was made clear in the Wadi Sudr [2010] 1 Lloyd's Rep 193 at 124 to 126, that would not be sufficient. But it is nevertheless the starting point from the point of view of s32(1) of the 1982 Act.
ii) S32(1) does not apply if the agreement was void, by reference to s32(2); but in determining whether a judgment should be recognised, subsection 32(3) provides that a United Kingdom court "shall not be bound" by any decision of the overseas court as to whether the agreement was void. As I am not so bound, I am, in my judgment, entitled to conclude (a) that the construction of the clause by the Kazakhstan court at English law (and seemingly without the benefit of any assistance as to English law) was wrong (b) that it would seem to be the consequence that Clause 32 does not therefore offend against any Kazakhstan public policy. For those reasons, and because the Clause does not offend against any English public policy, not being otherwise bound by s32(1), I shall not recognise or enforce the overseas court's decision.
The Submission Issue
"a ruling of the court to dismiss a petition on lack of jurisdiction (ruling to dismiss an application to stay the statement of claim by virtue of the existence of an arbitration agreement) is classified as a ruling that may not be appealed in a court appeal separately from the decision of court on the substance of the dispute ... In accordance with Article 344 ... objections with respect to this court ruling may only be included in an appeal from a final court decision on the substance of the dispute."
"96. ... Kazakh law simply does not allow a defendant to not submit to the jurisdiction of a Kazakh court once the court finds that it has the jurisdiction to adjudge the case.
97. It is the cornerstone principle of Kazakh law that a court judgment that comes into force must be complied with by all. The concept of reserving the right to arbitrate and thereby to disobey or disregard the judgment which declares the arbitration clause invalid is simply alien and non-existent in Kazakh law. The law in Kazakhstan does not allow parties to reserve the right to arbitrate a dispute regardless of the outcome of the court case."
"It must be clearly understood therefore that for Kazakh law purposes, AES submitted to the jurisdiction of the Kazakh Court."
"98. In my view, the actions of AESUK described above clearly demonstrate that AESUK did all it could to contest the jurisdiction of the Kazakhstani court with respect to this case at each case of the judicial proceedings.
and then in corrected paragraph 99
99. ... If the court dismisses an application objecting to jurisdiction, the defendant de facto has no other choice than to participate in the court hearing of the substance of the dispute and to appeal a decision of the court on jurisdiction in accordance with Article 344 of the Civil Procedural Code only after the decision on the merits has been reached. I would also note that AESUK took part in the hearing of the substance of the dispute subject to the unequivocal and unambiguous reservation of its right to arbitrate."
"Certain steps not to amount to submission to jurisdiction of overseas court
(1) For the purposes of determining whether a judgment given by a court of an overseas country should be recognised or enforced in England ..., the person against whom the judgment was given shall not be regarded as having submitted to the jurisdiction of the court by reason only of the fact that he appeared (conditionally or otherwise) in the proceedings for all or any one or more of the following purposes, namely
(a) to contest the jurisdiction of the court;
(b) to ask the court to dismiss or stay the proceedings on the ground that the dispute in question should be submitted to arbitration or to the determination of the courts of another country;
(c) to protect, or obtain the release of, property seized or threatened with seizure in the proceedings."
i) AESUK was protecting itself given that it was still insisting on pursuing its arbitration case, whether on appeal in Kazakhstan, or in any event as a result of the issue of proceedings in England, there might still be an arbitration in which there was the risk that a judgment in Kazakhstan might be influential as to what Kazakh law is.
ii) He submitted that s33 of the 1982 Act is not exclusive. It simply gives examples of the "certain steps [which are] not to amount to submission to [the] jurisdiction of [the] overseas court". The issue is still whether what actually happened amounted to a submission, informed by what was permitted and permissible in the domestic courts.
iii) Whereas Mr White refers to that part of the words used by Thomas J in Akai, quoted in paragraph 48 above, which refers to a step not being "consistent with or relevant to the challenge to the jurisdiction", it is not clear whether those words are intended to be cumulative or alternative. Mr Eder submits that what AESUK did was entirely consistent with its (continued) challenge, and points out that when Thomas J comes to conclude his consideration of the issue on p97 he picks the test only on the basis of consistency:
"A broad test is to be applied as to the purpose of the steps taken in the foreign court and submission is not to be inferred from the fact that the defendant appeared in foreign proceedings in circumstances obviously and objectively inconsistent with a submission to that jurisdiction."
The Non-Disclosure Issue
Declaratory and Injunctive Relief