Jersey Unreported Judgments

Arbitration - representation seeking leave to enforce an award rendered under the International Court of Commerce in Paris.

[2013]JRC259

Royal Court

(Samedi)

23 December 2013

IN THE MATTER OF THE REPRESENTATION OF FITZPATRICK INTERNATIONAL LIMITED

AND IN THE MATTER OF ARTICLE 42 OF THE ARBITRATION (JERSEY) LAW 1998, AS AMENDED

Advocate F. B. Robertson for the Representor.

judgment

the deputy bailiff:

1.        The Representor is incorporated in England and Wales and has the benefit of an arbitral award (the "Award") rendered under the International Court of Commerce in Paris under the New York Convention on 23^rd December, 2011.  The original claimant in the arbitration was a subsidiary of the Representor known as Fitzpatrick Equatorial Guinea ("FEG").  The defendant to the Award is the Republic of Equatorial Guinea ("Equatorial Guinea").

2.        The Representor asserts that under the Award Equatorial Guinea was required to pay FEG the sum of €12,278,859.95 plus simple interest at 5% per annum from 14^th March, 2005 plus costs of £1,970,956.83 and $665,000.  It is asserted that Equatorial Guinea's counter-claim was dismissed.  By 11^th July, 2012, the amount due in respect of the principal sum, interest having been added, stood at €16,783,488.84.

3.        On 7^th January, 2012 FEG assigned the benefit of the Award to the Representor, its parent.

4.        There have been various challenges to the Award brought by Equatorial Guinea in the French courts.  On 12^th November, 2013, the different proceedings seeking to have the Award set aside were dismissed.  There remains the possibility in principle of an appeal to the Cour de Cassation, but it is said that such an appeal would be doomed to failure and furthermore that as a matter of French law, no stay of execution is permitted pending any such appeal, save in the most exceptional circumstances.

5.        The Representor seeks leave to enforce the Award in Jersey.  The reason for taking that step is that a Jersey registered company Luba Freeport Limited ("Luba") is said to be 37% owned by Equatorial Guinea.  There is said to be a likely revenue stream passing from Luba to Equatorial Guinea through that shareholding.  Accordingly the Representor seeks to be able to enforce the Award against that income stream but in order to do so needs to have disclosure of information (a) confirming the legal and beneficial ownership structure of Luba insofar as that ownership vests legally, beneficially, contingently, optionally or otherwise in Equatorial Guinea or in any state-owned agency thereof, or any individual connected with the presidency or government of Equatorial Guinea;  (b) disclosing monies payable to Equatorial Guinea or its agencies or individuals connected with it, whether now or in the future, so that enforcement process might take place against such income stream. 

6.        The representation is supported by two affidavits sworn by Mr David McCoy who is an associate in the firm of King & Spalding International LLP which has had carriage of the case against Equatorial Guinea on behalf of the Representor throughout the arbitration proceedings and subsequent enforcement proceedings in France, England, the United States, the Cayman Islands and the Bahamas.  Article 42 of the Arbitration (Jersey) Law 1998 (the "Law") provides as follows:-

"(1)     A Convention award shall, subject to the following provisions of this Part be enforceable in Jersey either by action or in the same manner as the award of an arbitrator is enforceable by virtue of Article 29.

(2)       Any Convention award which would be enforceable under this Part shall be treated as binding for all purposes on the persons as between whom it was made, and may accordingly be relied on by any of those persons by way of defence, setoff or otherwise in any legal proceedings in Jersey;  and any reference in this Part to enforcing a Convention award shall be construed as including references to relying on such an award."

7.      Article 29 is in these terms:-

"(1)     An award on an arbitration agreement may, by leave of the court on an application made ex parte, be enforced in the same manner as a judgment or order or the same effect;  and, where leave is so granted, the act of court shall specify the manner of enforcement."

8.        For the purposes of Article 42, a "Convention award" means an award made in pursuance of an arbitration agreement in the territory of a state which is a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards adopted by the United Nations conference on international commercial arbitration on 10^th June, 1958 in New York.

9.        The present application, insofar as it seeks leave to enforce the Award in Jersey, is made ex- parte consistently with Article 29.  The provisions of the Law are very similar to the relevant provisions in the Arbitration Act 1996 under which it appears the practice also exists for the presentation of ex-parte applications for recognition of an award.

10.      Article 43 of the Law is in these terms:-

"The party seeking to enforce a Convention award must produce -

(a) The duly authenticated original award or a duly certified copy of it; 

(b) The original arbitration agreement or a duly certified copy of it; and

(c) Where the award or agreement is in a foreign language, a translation of it certified by an official or sworn translator or by diplomatic or consular agent."

11.      The provisions of Section 102 of the UK Act are in very similar terms.

12.      The difficulty which arises here is that the Representor is unable to produce either the original arbitration agreement or a duly certified copy of it.  The evidence before us is that the Representor does not have an original or a certified copy of the contract, which includes the agreement to refer matters to arbitration, because when the dispute between FEG and Equatorial Guinea in relation to the contract first arose, a number of FEG's personnel are said to have been prevented from leaving the country by the Equatorial Guinea authorities, and a large number of documents belonging to FEG, including the original of the contract, were seized.  As a result, FEG and the Representor have not been in a position to obtain either the original contract or a certified copy.  On the face of it, this causes a problem to the Representor because of the apparently mandatory language of Article 43 - "must produce". 

13.      It is submitted that the requirement which finds its way into Article 43 appears to have emerged from Article IV of the New York Convention which provision is in identical terms.  It is said that the reason for this provision in the Convention was probably to protect a party from enforcement of an arbitral award based on a non-existent or a fraudulent arbitration agreement.  Indeed this would be consistent with Article 42 of the Law, having regard to the definition of "Convention award".  The Court will want to be satisfied that, before giving leave to enforce an award, it derives from an arbitration agreement which has properly been made, and that the award has been rendered in a state to which the Convention applies. 

14.      It is next said that Equatorial Guinea has not contested the existence of the arbitration agreement in all the proceedings that have taken place in France so far, and the Court can take great comfort from that.  Article 40 of the contract between FEG and Equatorial Guinea, which contains the relevant arbitration agreement, is set out as part of a preliminary ruling by the arbitral tribunal in the form of a partial award, and that is evident from the face of the Award.  Indeed it is set out in both English and Spanish, and then consideration is given to the detailed contentions of the parties as to the precise meaning and effect of the relevant wording - but neither party has suggested that Article 40 was not incorporated into the contract, or that the wording was not as quoted by the tribunal.  Indeed at paragraph 119 of the Award, the tribunal noted that "all parties are in agreement that Article 40 required the Parties to attempt to settle any difference in an amicable way.  The Parties had tried but failed to do so."

15.      We note that a similar problem - unsurprisingly given the similarity of the underlying legislation - arose on the application to Cooke J on 20^th January 2012 in the Commercial Court of the Queen's Bench Division.  In essence the submission made was that in the Terms of Reference and other documents throughout the arbitration, the parties make reference to the dispute resolution clause of the arbitration agreement in a consensual way, and indeed that this is incorporated by reference in the final award in respect of which a certified copy has been produced.  Thus it is said that a certified copy of the arbitration agreement has in effect been put before the Court.

16.      Given that there had been serious debate about the meaning of Article 40 but no debate about its actual content, the Representor asserts that we can be satisfied that indirectly a certified copy of the arbitration agreement has been produced.

17.      We note that Cooke J said after those submissions were made that "Yes.  Very good.  Well, you have persuaded me of that.  You may have to persuade someone else in the due course.  But there we are."

18.      We entirely endorse that approach.  We find that on the evidence produced, there has been an effective certified copy of the relevant provisions containing the arbitration agreement, and, secondly, that we are entitled to adopt a purposive approach to the construction of Article 43 so as to identify the vice with which the mandatory requirements are concerned.  That vice is the possibility that there had not in reality been any agreement to refer the relevant matter to arbitration at all.  Here there is no doubt that the arbitration did take place, and no doubt by the challenges brought in French courts that there was no issue as to whether the arbitration agreement was made as contended.  In those circumstances, applying the purposive approach to construction of the legislation we find on the facts here that a duly certified copy of the original arbitration agreement has in effect been produced. 

19.      We have noted the evidence from Mr McCoy that the absence of the original arbitration agreement or a certified copy of it did not trouble the US District Court in the Southern District of Texas in the course of the application for enforcement there.  We have also noted that the relevant order has been made in the Cayman Islands, although the Cayman decision appears not yet to have been served on Equatorial Guinea.  Finally for the record we have noted that no registration of the Award has been permitted in the Bahamas.  The difficulties with registration in the Bahamas do not persuade us that the approach we have taken to registration in Jersey is incorrect.

20.      Having regard to the evidence put before us in affidavit form, we consider the disclosure orders which are sought are entirely appropriate.  We therefore direct that Luba, within twenty-one days from service upon it of the order, disclose to the Representor's advocates full and comprehensive details of its legal and beneficial ownership structure, including in particular any interest in Luba (whether legal, beneficial, contingent, optional or otherwise) held by Equatorial Guinea or any agency or state-owned company thereof, or any individual connected with the presidency or government of Equatorial Guinea.

21.      We further order that Luba, within twenty-one days from service upon it of the order to this effect, discloses to the Representor's advocates details of any monies payable by Luba to Equatorial Guinea, any agency or state-owned company thereof, or any individual connected with the presidency or government of Equatorial Guinea, for any reason whatsoever, and whether payable now or at any time in the future.

22.      We direct Luba, within the same twenty-one day period, to disclose to the Representor details of its current registered office address in Jersey.

23.      We furthermore make the orders under paragraphs v, vi and vii of the Representation.

24.      There is liberty to the Representor, to Luba and to Equatorial Guinea to apply.

Authorities

Arbitration (Jersey) Law 1998.

Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

Arbitration Act 1996.