UK P&I Club N.v v. República Bolivariana De Venezuela Rcgs “Resolute”
| Jurisdiction | England & Wales |
| Judge | Sir Ross Cranston |
| Judgment Date | 28 June 2022 |
| Neutral Citation | [2022] EWHC 1655 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Claim No. CL-2021-000075 |
[2022] EWHC 1655 (Comm)
Sir Ross Cranston
Sitting as a High Court Judge
Claim No. CL-2021-000075
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
COMMERCIAL COURT (QBD)
IN THE MATTER OF THE ARBITRATION ACT 1996
IN THE MATTER OF AD HOC ARBITRATIONS
Royal Courts of Justice
Strand, London, WC2A 2LL
David Lewis QC and Alexander Thompson (instructed by Kennedys Law LL) for the Claimants
Poonam Melwani QC and Jamie Hamblen (instructed by Roose + Partners) for the Defendant
Hearing dates: 4, 5 May 2022
This judgment was handed down by the Judge remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be 10:30 on Tuesday 28 June 2022
I INTRODUCTION
This case arises out of the total loss of a Venezuelan navy patrol vessel, the BVL Naiguatá GC-23, in early 2020. The loss was the result of a collision with the RCGS Resolute, an ice-classed cruise liner, which engaged in tourism to Antarctica. The Resolute was insured by the first claimant, UK P&I Club NV. Following the loss Venezuela brought civil claims in 2020 in the courts of Dutch Curaçao and in Venezuela itself. In February 2021 the claimants sought an anti-suit injunction in this court against Venezuela on the basis that these claims were in breach of the arbitration clause in the contract of insurance with the Resolute's owners. In ex parte proceedings the following month this court granted an interim anti-suit injunction against Venezuela.
The main issues in these proceedings are first, whether Venezuela is bound to arbitrate in London the claims it has advanced in the Venezuelan court, and secondly, whether it is entitled to immunity under the State Immunity Act 1978 from a permanent anti-suit injunction to restrain it from pursuing both sets of foreign proceedings. If this court were to grant a permanent anti-suit injunction it seems that it would represent the first time that the English courts have taken such action directly against a state without the state having somehow agreed.
II BACKGROUND
As indicated the Naiguatá is owned by Venezuela. At the time of the collision the Resolute was owned by Bunnys Adventure & Cruise Shipping Company Ltd, chartered under a bareboat charter to White Swan Shipping Inc, and managed by Columbia Cruise Services GmbH & Co KG as head managers and Columbia Shipmanagement Ltd as sub-managers. The first claimant, UK P&I Club NV, is a subsidiary of the second claimant, United Kingdom Mutual Steam Ship Assurance Association Ltd. Both are mutual insurance associations providing protection and indemnity (“P&I”) insurance to their members under written contracts of insurance. In the judgment the first claimant is referred to as “the Dutch Club”, the second as “the English Club”, and the claimants collectively as “the Clubs”.
The casualty involving the Resolute and the Naiguatá occurred on 30 March 2020. In outline the Naiguatá had been sent to intercept the Resolute, there was an altercation, and the vessels collided. As a result, the Naiguatá suffered serious damage to her hull, took on substantial amounts of water, and sank. There is no agreement as to how the casualty occurred or where, including whether in territorial or international waters. It is common ground that after the collision the Resolute sailed to nearby Curaçao, where it arrived on 31 March 2020.
The proceedings in outline
Venezuela's claims in Curaçao (in the amount of c. €125 million) and in Venezuela (in the amount of c. €300 million) are against the Resolute, its owners and head managers, and the Clubs as the vessel's P&I insurer. They were instituted between April and September 2020. In some respects the defendants in the proceedings were misnamed but nothing turns on that for the present proceedings.
The Clubs' proceedings for anti-suit relief are on the basis that Venezuela's claims in Venezuela and Curaçao were, in substance, claims to enforce the terms of the contract of insurance between the Dutch Club as insurer and its members, especially the owners, as assureds: Through Transport Mutual Insurance Association (Eurasia) Ltd v New India Assurance Co (The Hari Bhum) (No 1) [2004] 1 Lloyd's Rep 206 (Moore-Bick J) and [2005] 1 Lloyds Rep 67 (CA). Accordingly, the parties are bound by the contract of insurance, including the London arbitration and English law clauses, so that it is contrary to its terms for Venezuela to pursue claims against the Clubs other than in London arbitration. Further, the Clubs contend, the parties are bound by any contractual defences available to the Clubs.
The Clubs issued their service and injunction applications and the arbitration claims on 15 February 2021, seeking interim and final anti-suit injunctions restraining Venezuela from pursuing its claims otherwise than in London arbitration.
On 10 March 2021 HHJ Pelling QC, sitting as a High Court judge, heard the service and injunction applications. He gave a fully reasoned judgment the following day: [2021] EWHC 595 (Comm). He held that Venezuela was not immune from proceedings or an anti-suit injunction and granted interim relief as well as orders in relation to service out and alternative service of various documents (other than the application notice and arbitration claim form).
On 14 May 2021 the Clubs served a notice of arbitration on Venezuela, appointed their arbitrator, and invited Venezuela to appoint an arbitrator in accordance with the terms of the arbitration clause in the contract of insurance. In the arbitration the Clubs seek substantive relief in relation to the underlying merits of Venezuela's claims, including declarations of non-liability and an award of equitable compensation in respect of any loss suffered in the foreign proceedings.
In November 2021 Venezuela filed an Acknowledgment of Service in this court indicating an intention to contest jurisdiction and to defend the claims. The following month it served notices on the Clubs appointing its arbitrator in each of the references, without prejudice to its jurisdictional objections. The parties have agreed to a stay of the arbitration until after this hearing has concluded.
In January this year Venezuela made Part 11 applications contending that it had state immunity from suit and contesting the order granting permission to serve out. Venezuela also requested any extension of time necessary to make these applications. The parties' stance is that it is unnecessary for me to consider whether Venezuela should be granted an extension of time or, indeed, whether service was properly effected.
By agreement of the parties and confirmed in an order which Knowles J made in March this year, this hearing concerns both whether the interim anti-suit injunction granted by HHJ Pelling QC should be made final, as well as Venezuela's objections regarding state immunity and jurisdiction. For present purposes the Clubs have given assurances that Venezuela will not be regarded as having waived immunity or submitted to the jurisdiction.
The contract of insurance
The Resolute was entered with the Dutch Club in respect of P&I cover from 20 February 2020. Under the contract of insurance, the Dutch Club agreed to provide P&I cover for the owners, bareboat charterers and managers of the vessel in respect of, inter alia, collision liabilities. The contract of insurance was subject to the 2020 Club Rules (the “Rules”). The Rules provide for 100 percent cover, include the usual P&I “pay to be paid” clause, make liability subject to any laws pertaining to limitation, and exclude cover for war risks perils, and certain sanctions risks.
The Rules are governed by English law (Rule 42). Rules 40B-C provide for any disputes to be referred to the adjudication of the directors of the Clubs, which the directors may then waive, enabling the parties to refer the dispute “to the arbitration in London of two Arbitrators (one to be appointed by the Association and the other by such Owner or such other person) and an Umpire to be appointed by the Arbitrators, and the submission to arbitration and all the proceedings therein shall be subject to the provisions of the English Arbitration Act, 1996, and any statutory modification or re-enactment thereof.”
Rule 40D then provides:
“No Owner or such other person shall be entitled to maintain any action, suit or other legal proceedings against the Association upon any such difference or dispute…(ii) if the reference to such adjudication shall have been waived, unless and until such difference or dispute shall have been referred to arbitration as provided in paragraph (C) of this rule and the Award in such reference shall have been published…”.
Proceedings in Curaçao
Venezuela commenced civil proceedings before the Curaçao court on 2 April 2020, seeking a pre-judgment arrest of the Resolute in support of claims it intended to bring against its owners. The vessel was arrested. The owners petitioned for the release of the Resolute as well as summary dismissal of the civil proceedings. The petition alleged that the Resolute had not rammed the Naiguatá, rather the Naiguatá rammed the Resolute; that the Resolute was on an innocent passage; and that her bulbous bow was virtually indestructible, the vessel being of the highest ice class, as a result of which the Naiguatá had been damaged and possibly sunk by repeatedly ramming the Resolute. The court subsequently dismissed the owners' petition.
Some eight weeks later, Venezuela commenced civil proceedings in Curaçao by...
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