ABB AG v Hochtief Airport GmbH and another
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE TOMLINSON,Mr Justice Tomlinson |
| Judgment Date | 08 March 2006 |
| Neutral Citation | [2006] EWHC 388 (Comm) |
| Docket Number | Case No: 2005 Folio No. 670 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 08 March 2006 |
[2006] EWHC 388 (Comm)
Mr Justice Tomlinson
Case No: 2005 Folio No. 670
IN THE HIGH COURT OF JUSTICE
COMMERCIAL COURT
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
David Waksman QC (instructed by CMS Cameron McKenna LLP) for the Claimant
Christopher Style, Solicitor-Advocate of Linklaters for the First Defendant
The Second Defendant did not appear and was not represented
Hearing dates: 19 and 20 January 2006
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
The court has before it a challenge to an award made by three professional lawyer arbitrators sitting as a tribunal to resolve an international commercial dispute. The arbitrators described the dispute as "a very high profile case, ….. which will have considerable impact not only on the business of Hochtief and ABB, but will also no doubt have a very considerable impact in Greece." The arbitration was conducted according to the Rules of the London Court of International Arbitration, hereinafter the "LCIA Rules" which in Article 26.9 include an irrevocable waiver of the right to any form of appeal, review or recourse to any State court or other judicial authority, insofar as such waiver may be validly made. The seat of the arbitration was London. The matters referred to arbitration were, so far as now relevant, governed by Greek law. By direction of the tribunal the International Bar Association (hereinafter "IBA") Rules on the Taking of Evidence in International Commercial Arbitrations were to apply. The challenge is made pursuant to s.68 of the Arbitration Act 1996 on the ground of serious irregularity. It is not suggested that the challenge is, by reason of Article 26.9 of the LCIA Rules, incompetent. However the bald recitation of the nature of the arbitration alone indicates that the court is operating in territory in which judicial restraint and sensitivity is required.
The Claimant ABB AG is a German company in the electrical industry. It was the First Respondent in the arbitration. The First Defendant Hochtief Airport GMBH to which I shall refer hereafter as "HTA" or "Hochtief" is a German construction company. Strictly it was an associated Hochtief company which carried out the relevant construction work but nothing turns on this. HTA was the Claimant in the arbitration. The Second Defendant Athens International Airport SA hereinafter "AIA" is the company which owns and operates the new Athens International Airport which opened in March 2001. AIA was the Second Respondent in the arbitration. It took no part in the arbitration and no part in the application before the court.
The Greek State owns 55% of the shares in AIA. HTA holds 40%. ABB at one time held and if the arbitrators' award stands still holds the remaining 5%. I am told that the holding of 5% of the shares is of great potential significance. There are apparently matters which can be accomplished by a vote of 60% of the shares which cannot be accomplished with only 55%.
In 2004 ABB purported to transfer its 5% holding to a Greek company Horizon Air Investments SA, a company in the Copelouzos Group of companies. I shall refer to this company hereinafter as "Horizon." The consideration for the transfer was €23 million. The suggestion is that the Copelouzos Group has close links to the Greek State and might therefore be expected to vote its shares together with the 55% State holding.
The arbitration was commenced by HTA in order to challenge the validity of the transfer of the shares. The arbitrators by their award declared that ABB's purported transfer of its shares in AIA to Horizon is null and void and further declared that AIA's purported registration of ABB's purported transfer is null and void. My understanding is that for the reasons set out above this has considerable implications for the parties and perhaps also for the Greek State.
The claim to impugn the transfer was complex and changed significantly part-way through the arbitration which in consequence was conducted in two sessions, 8 and 9 December 2004 and 16 March 2005. The parties then exchanged written Final Submissions in lieu of oral submissions at the conclusion of the evidence. The award is dated 19 July 2005.
In order to understand the nature of ABB's challenge to the award it is necessary to understand the issues which arose in the arbitration and the course which the arbitration took. For that purpose I propose substantially to adopt paragraphs 7 – 50 of the First Witness Statement of Guy Pendell, a solicitor acting on behalf of ABB. I believe that account to be largely non-controversial, although HTA would I think say that it is in some respects incomplete. For the purpose of setting the scene it will suffice.
A The Background
On 20 June 1991 the Greek State announced its intention to select a project leader, in which it would invest, to undertake and develop a new international airport in Athens. On 15 January 1992 the Greek State distributed a Request for Proposals to prospective Project Leaders, including Hochtief's parent company, Hochtief AG.
Following a substantial period of negotiation, including an aborted first agreement in about September 1993 (which was renegotiated by the new Greek Government), on 31 July 1995 an "Airport Development Agreement" hereinafter the "ADA" was signed and the Articles of Association for AIA were agreed. The parties to the ADA were ABB and Hochtief AG, together with Flughafen Athens-Sparta Projektgesellschaft mbh ("FASP," itself a joint venture between Hochtief AG and Flughafen Frankfurt Main AG) and H.Krantz-TKT GmbH ("Krantz") for the one part and, for the other, the Hellenic Republic ("the Greek State.") AIA was established pursuant to the ADA, incorporated in Greece in accordance with the laws of Greece and given the rights for the "design, financing, construction, completion, commissioning, maintenance, operation, management and development of the new Athens international airport." ABB, Hochtief, FASP and Krantz were the parties who built the new airport with the major engineering roles being taken by ABB and Hochtief. The ADA includes, at Article 44.3, provisions to refer certain disputes to arbitration in London in accordance with the LCIA Rules. The ADA was ratified by the Greek Parliament on 31 August 1995 and became part of Greek law. The Airport was completed and opened in March 2001.
Following the completion of the Airport, and as noted above, ABB sought to sell its shares in AIA to Horizon, a company belonging to the Copelouzos Group. On 11 November 2003 a notarial declaration was issued by Horizon by which it agreed to observe the terms of the ADA and to perform the obligations imposed on Ordinary Shareholders pursuant to the Articles of AIA. The notarial declaration was provided in order to comply with the requirements of Article 37.10.1 of the ADA which is set out in paragraph 15 below. A Share Sale and Transfer Agreement was signed between ABB and Horizon on 24 May 2004.
On 27 January 2004 Hochtief submitted its request for arbitration to the Registrar of the LCIA pursuant to Article 1 of the LCIA Rules seeking, among other things, declarations that:
(i) the transfer of ABB's shares in AIA to Horizon was null and void; and
(ii) AIA's subsequent registration of that share transfer was null and void.
On 23 March 2004 the LCIA Court appointed the tribunal, which consisted of Christopher Koch, a Swiss lawyer who I understand to practise in Athens, and possibly elsewhere, Professor Klaus Peter Berger, a German lawyer and Peter Leaver QC. Mr Leaver acted as the Chairman of the tribunal.
B The Parties' Positions prior to the First Hearing of 8–9 December 2004
Hochtief's Position
In its Statement of Case dated 6 May 2004, Hochtief put forward four principal arguments in support of its claims:
(i) that ABB, Hochtief, FASP and Krantz had entered into an oral consortium agreement (the "Oral Agreement") which prevented ABB from transferring its shares without Hochtief's consent (paragraph 25.4 of Hochtief's Statement of Case);
(ii) that such Oral Agreement amounted to a civil partnership pursuant to the Greek and German Civil Codes (paragraph 27 of Hochtief's Statement of Case);
(iii) that the notarial declaration given by Horizon did not comply with the requirements of Article 37.10.1 of the ADA, which, according to Hochtief, required, among other things, Hochtief's agreement, so that a unilateral declaration made by the proposed transferee of the shares would be insufficient (paragraph 51 of Hochtief's Statement of Case); and
(iv) that Hochtief made no such agreement with Horizon, and was entitled to withhold any such agreement (paragraph 66 of Hochtief's Statement of Case); this was because, according to Hochtief, it was reasonable for Hochtief to require Horizon to make a separate shareholder's agreement, which went beyond the terms of Horizon's unilateral declaration, in the light of:
(a) the contractual arrangements implementing the Athens International Airport project and the allegedly delicate balance of power between the Greek State and the Consortium Members; and
(b) the alleged Oral Agreement.
Hochtief thus asserted that the notarial declaration given by Horizon was insufficient to comply with Article 37.10.1 of the ADA.
Article 37.10.1 provides:
"At all times before Listing the Ordinary Shareholders shall ensure that no person other than an Ordinary Shareholder or an existing holder of Ordinary Share-Related Securities acquires Ordinary Shares or Ordinary...
To continue reading
Request your trial
-
Latvian Shipping Compay v The Russian People's Insurance Company (Rosno) Open Ended Joint Stock Company
...exercise of all other powers conferred on it. 30 The authorities on s. 68 of the Act were extensively reviewed by Tomlinson J in ABB AG v Hochtief Airport GmbH [2006] 2 Lloyd's Rep 1. I agree with the conclusions Tomlinson J came to on the basis of these decisions. He held that their effect......
-
TMM Division Maritima SA de CV v Pacific Richfield Marine Pte Ltd
...of curial recourse, tactically frustrate and delay the enforcement of the arbitral award: at [125] .] ABB AG v Hochtief Airport Gmb H [2006] 2 Lloyd's Rep 1 (folld) Ascot Commodities NV v Olam International Ltd [2002] CLC 277 (folld) Atkins Ltd v Secretary of State for Transport [2013] EWHC......
- The Government of India v Cairn Energy India Pty Ltd
-
The Secretary of State for the Home Department v Raytheon Systems Ltd
...The test will not be applied by reference to what would have happened if the matter had been litigated (see ABB v Hochtief Airport [2006] 2 Lloyd's Rep 1, paragraph 18). (c) The serious irregularity requirement sets a "high threshold" and the requirement that the serious irregularity has ca......
-
Award Dismissing A Claim For Inordinate And Inexcusable Delay Survives Challenge In The English Court
...a decision will be made on the papers or where the chance for oral submissions is limited. Following ABB AG v. Hochtief Airport GmbH [2006] 2 Lloyd's Rep 1 and Reliance Industries Ltd v Union of India [2018] EWHC 822, the Court held that a party has an opportunity to address a point if the ......
-
English Court Refuses To Set Aside Arbitral Award On Grounds Of 'Inadequate Reasons'
...["UMS"]. [7] Ibid at para 22, citing Margulead v Exide Technologies, [2005] 1 Lloyd's Rep 324 at para 41. [8] ABB v Hochtief Airport, [2006] 2 Lloyd's Rep 1 at para [9] Islamic Republic of Pakistan & Anor v Broadsheet LLC at para 43. [10] Ibid at para 40, citing UMS. [11]Ibid at para 46......
-
Table of cases
...III.26.324 ABB AB HVDC v McLaren Construction (Midlands and North) Ltd [2019] EWHC 1647 (TCC) II.9.139 ABB AG v Hochtief Airport GmbH [2006] EWHC 388 (Comm) III.25.246 Abballe v Alstom UK Ltd [2000] EWHC Tech 116 I.3.129, I.3.147, III.26.76 ABB Asea Brown Boveri Ltd v Hiscox Dedicated Corpo......
-
Arbitration
...Lord Steyn; Sinclair v Woods of Winchester Ltd (2005) 102 Con LR 127 at 137 [23], per HHJ Coulson QC; ABB AG v Hochtief Airport GmbH [2006] EWHC 388 (Comm) at [63], per Tomlinson J; Stern Trustees v Levy (2007) 113 Con LR 92 at 98 [23], per HHJ Coulson QC; Stern Trustees v Levy [2009] EWHC ......