Union Fenosa Gas SA v Arab Republic of Egypt 2020 EWHC 1723 Comm - 30 June 2020
The present application by the Respondent ("Egypt") arises out of an "ICSID" arbitration award issued in favour of the Claimant investor ("UFG") against Egypt. ICSID refers to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States ("the ICSID Convention", sometimes known as the Washington Convention). The registration and enforcement of the award in English courts is governed by the Arbitration (International Investment Disputes) Act 1966 ("the 1966 Act") and by CPR r. 62.21 which applies specifically to ICSID arbitration awards.
The central issue raised by the application concerns the procedure which a claimant needs to follow in order to enforce an award under CPR r. 62.21. That rule provides for a regime for the enforcement of ICSID awards which is different to the regime for enforcement under CPR r. 62.18 which applies to the vast majority of arbitration awards that are the subject of enforcement proceedings in the Commercial Court. Awards which are subject to CPR r. 62.18 are typically subject to the New York Convention: i.e. the Convention on the Recognition and Enforcement of Foreign Arbitral Awards adopted by the United Nationals Conference on International Commercial Arbitration on 10 June 1958.
In the present case, the award was that of an ICSID tribunal chaired by the late distinguished arbitrator, V.V. Veeder QC. It was issued on 31 August 2018. Enforcement proceedings in this jurisdiction were commenced by UFG later that year. A without notice application was then made for registration of the award pursuant to the provisions of CPR 62.21. That application was granted by Males J. on 19 December 2018.
Thereafter, UFG sought to serve the order which Males J. had made. No attempt, however, was made to serve the claim form which UFG had issued in connection with its application to register the award. On Egypt's case, UFG was required to do so, and indeed should have done so prior to obtaining any order for registration of the award. UFG's case is that it was not necessary to serve the claim form: it was only required to serve the order which Males J. had made. This is the key issue raised on the present application, although a number of other points are raised as well, including whether service of the order should be dispensed with (as subsequently ordered by Teare J.).
The service of an order on a state (or indeed a claim form, if required) is governed by CPR r. 6.44. Pursuant to these provisions, a request for service is to be lodged in the Central Office of the Royal Courts of Justice. The request is for service to be arranged by the Foreign and Commonwealth Office ("FCO"). The Senior Master will then send the documents to the FCO with a request that it arranges for them to be served. Assuming that service is successfully accomplished, the FCO will then ordinarily in due course produce an official certificate stating that the claim form or other document had been duly served on a specified date. This certificate is (under CPR 6.44 (5)) evidence of the fact stated.
In the present case, UFG did what it was required to do pursuant to CPR r. 6.44 in relation to the order of Males J. A request for service was lodged, and the relevant documents were then indeed passed to the FCO. The course of subsequent events is described in more detail below. In summary, UFG's solicitors (King & Spalding International LLP or "K&S") then encountered difficulties in finding out what had happened. No certificate was forthcoming, and K&S was in due course told that the relevant diplomatic bag sent from Egypt to London, and which would have been expected to contain the certificate, had been lost.
These events then led K&S to make a without notice application to the court in October 2019 for an order dispensing with service of the order of Males J. An application was also made for a declaration that UFG was not required to serve the claim form upon Egypt, since this was an issue which had by then developed in correspondence between K&S and the solicitors acting for Egypt. Teare J. granted both of these applications in an order made on 10 October 2019 ("the Teare J. order"). The Teare J. order gave Egypt the right to apply upon 14 days' notice to set aside or vary the order. Egypt now does so.
On 15 November 2019, a further without notice application was made to the court. UFG sought permission for alternative service in respect of, principally, the Teare J. order and the papers which had been lodged in support of it. Alternative service was sought on Egypt's solicitors, Cleary Gottlieb Steen & Hamilton LLP ("Cleary"), who had since June 2019 been corresponding on behalf of Egypt with K&S, but had not been authorised to accept service of any documents. Waksman J. granted that order ("the Waksman J. order"). This order (unlike the two previous orders) did not specifically refer to Egypt's entitlement to apply to set it aside. However, when Egypt became aware (via Cleary) of the Waksman J. order, it was readily agreed that Egypt was entitled to apply to set it aside and the parties agreed a timetable for so doing. Egypt now applies to set aside that order as well.
The present application therefore concerns, directly at least, the orders of Teare J. and Waksman J., rather than the original order of Males J. which granted registration. The essential reason for this is that Egypt contends that it has not yet been properly served with the order of Males J., or with the claim form required properly to initiate the present proceedings. Accordingly the time to set aside that order has not yet arisen.
Egypt advances three substantive grounds upon which these orders should be set aside.
The principal ground, which applies to both orders, is that UFG had failed to effect proper service of a claim form on Egypt, as required by CPR r. 62.21 and Part 8 of the CPR. It was this argument which was at the forefront of the submissions of Mr. Malek QC on behalf of Egypt. On behalf of UFG, Ms. Byrne did not dispute the proposition that if service of a claim form was indeed required, the two orders of Teare J. and Waksman J. should be set aside. Her argument was that it was not necessary to serve a claim form in the context of an application for registration of an ICSID award pursuant to CPR r. 62.21. She submits that such applications can properly be made without notice, and it is the resulting order which is required to be served.
Secondly, Egypt contends that there was no proper basis for Teare J. to dispense with service of the Males J. order. This argument arose if Egypt's primary argument was rejected: it was therefore directed at the question of service of the order for registration, rather than the claim form. In short, Egypt submitted that there are no exceptional circumstances which justified such an order. UFG submitted that, on the facts as now known, the test of 'exceptional circumstances' was not applicable. But in any event, such circumstances existed in the present case.
Thirdly, Egypt contended that there was no proper basis for Waksman J. to grant alternative service. Egypt again argued for a test of 'exceptional' or 'special' circumstances. But even if the test was lower, there was no good reason to allow alternative service in the present case. UFG disputed both of these propositions.
In addition to these substantive points, Egypt argued that UFG had failed to make full and frank disclosure on the without notice applications, and that this justified setting aside the orders even if there were no substantive grounds for doing so.