2015 Folio 489 |
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Fetter Lane London EC4A 1NL |
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B e f o r e :
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SOPRIM CONSTRUCTION SARL |
Claimant/ Respondent |
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- and - |
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REPUBLIC OF DJIBOUTI |
Defendant/ Appellant |
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Ms Jennifer Haywood (instructed by Gibson Dunn & Crutcher) for the Defendant
Hearing date: 17 May 2016
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Crown Copyright ©
Mr Justice Leggatt:
"The Grantor [ie, the Republic] agrees that the Concessionaire, its Shareholders, Contractors, sub-concessionaires, managers, sub-contractors, their agents and expatriate personnel shall at a minimum be entitled to the following exemptions and benefits throughout the concession period."
A list of some 18 exemptions and benefits is then set out. Soprim relies particularly on paragraph 2:
"…exemption from any direct or indirect taxation including income tax…"
paragraph 7:
"…exemption from nationalization or any restrictive measures with respect to ownership of private property and the guarantee of private ownership of the concession's assets."
paragraph 15:
"The entry of the national gendarmerie and/or the local police force into the site will be upon request by the Concessionaire, except due to reasons of national safety and security…"
and paragraph 16:
"…freedom for the project to remain open without interruption, including public holidays, 24(twenty four) hours a day."
"Except as provided in this Addendum, the Original Concession Agreement, or the Amended Concession Agreement, the terms of this Addendum and those Agreements may be enforced and enjoyed only by Parties to this Addendum and those agreements and the operation of the Third Parties Act is excluded."
"1. 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."
"…the courts cannot be considered independent of the Government…"
and that:
"…political manipulation undermines the credibility of the judicial system."
Against that background, it is understandable that the parties to the Concession Agreement would want to create an environment which protected contractors and others involved in the project and made it more attractive for them to participate and to do so on competitive terms. That goal would be advanced if the benefits and exemptions specified in Article 12.1.3 of the Concession Agreement were made enforceable by the third parties themselves.
"the terms of this Addendum and those Agreements [i.e., the original Concession Agreement and the Concession Agreement as amended by the Addendum] may be enforced and enjoyed only by Parties to this Addendum and those agreements and the operation of the Third Parties Act is excluded."
Taking those words alone, they naturally mean that no term of the Concession Agreement or Addendum is enforceable by any third party and that any enforceable rights that would otherwise arise by operation of the 1999 Act are excluded.
"C. The Concessionaire has been in discussions with potential financiers for the project but requested that certain amendments be made to the Original Concession Agreement in order to facilitate the financing of the project on a non-recourse basis.
D. Pursuant to their mutual obligations under Clause 6.1 of the Original Concession Agreement and having agreed that the amendments requested by the potential financiers to the Project are reasonable and in the interests of obtaining financial assistance for the project on a non-recourse basis, the parties agree to amend the provisions of the original Concession Agreement in accordance with the terms of this Addendum."