Arcelormittal USA LLC (a company incorporated under the laws of the State of Delaware) v Essar Steel Ltd (a company incorporated under the laws of Mauritius)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Jacobs |
| Judgment Date | 25 March 2019 |
| Neutral Citation | [2019] EWHC 724 (Comm) |
| Docket Number | Case No: CL-2019-000030,31 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 25 March 2019 |
and
And in the Matter of a Part 8 Claim
[2019] EWHC 724 (Comm)
Mr Justice Jacobs
Case No: CL-2019-000030,31
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Anthony Peto QC, Harish Salve, Andrew Scott & Isabel Buchanan (instructed by Mishcon De Reya LLP) for Arcelor Mittal USA LLC
Daniel Toledano QC & Scott Ralston (instructed by RPC LLP) for Essar Steel
Paul Stanley QC (instructed by CMS) for Essar Capital Services (UK)
Paul McGrath QC & Ruth Den Besten (instructed by Stephenson Harwood LLP) for Prashant Ruia and Sushil Baid
James Bailey (instructed by Lipman Karas LLP) for Joseph Seifert and Nicholas Harrold
Mark Beeley (of Orrick, Herrington & Sutcliffe (UK) LLP) for Andrew Wright
Gregory Denton-Cox (instructed by Thomas Cooper LLP) for Nigel Bell
Hugh Norbury QC (instructed by DWF LLP) for Essar Oil (UK) Limited, non-party
Hearing dates: 5 th, 6 th, 7 th March 2019.
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.
A: Introduction
These proceedings concern a worldwide freezing order, search orders and Norwich Pharmacal relief sought by ArcelorMittal USA LLC (“AMUSA”), and granted by Butcher J. at a without notice hearing on 14 January 2019, in aid of enforcement of an arbitral award made by a Minnesota-seated Tribunal of the ICC International Court of Arbitration on 19 December 2017. The Respondents and Defendants apply to discharge these orders.
The arbitration proceedings arose from a dispute under an agreement dated 17 December 2012 under which Essar Steel Minnesota LLC (“ESML”) agreed to supply iron ore pellets from its plant in Nashwauk, Minnesota to AMUSA for a period of 10 years. On 10 January 2014, by way of an amendment and restatement of the 2012 agreement, Essar Steel Limited (“Essar Steel”), the principal defendant in these proceedings and a Mauritius incorporated company, acceded to the agreement as a co-obligor along with ESML. AMUSA terminated the agreement on 27 May 2016 and this gave rise to a dispute as to the propriety of AMUSA's termination.
AMUSA referred the dispute to arbitration by way of a Request for Arbitration dated 9 August 2016. Since ESML had filed for bankruptcy pursuant to Chapter 11 of the US Federal Bankruptcy Code by then, the arbitration was pursued against Essar Steel alone. Essar Steel participated in the arbitration fully until August 2017. It filed an Answer and Counterclaim in November 2016, took part in the appointment of arbitrators in January 2017 and attended a telephonic case management conference in March 2017. Subsequently, in May 2017, AMUSA made requests for production of documents in the form of a “Redfern” schedule, to which Essar Steel responded and AMUSA replied. Some documents were produced but outstanding disputes were referred to the Tribunal for determination. The Tribunal made its determination on the document production issues on 9 August 2017 in Procedural Order No. 3. On the same day, Essar Steel informed the Tribunal that it would not be participating in the arbitration any further. Essar Steel asked the Tribunal to take into account the material that had been submitted to it already and to require AMUSA to prove its case to the appropriate standard.
The Tribunal issued its award on 19 December 2017. It found that AMUSA was entitled to around $1.3 billion as damages from Essar Steel in addition to costs and interest. The award has remained unsatisfied, and there presently appears to be no prospect of Essar Steel deciding to pay the amount of the award. Documents obtained as a result of proceedings in this jurisdiction, and orders made by Butcher J., demonstrate the intention of Essar Steel's owners to put that company into liquidation.
AMUSA has attempted to enforce the award in a number of jurisdictions. It brought proceedings in the US District Court for the district of Minnesota which recognised the award and granted relief to AMUSA in the same terms as those set out in the award. Essar Steel did not participate in these proceedings. AMUSA also obtained a provisional order from the Supreme Court of Mauritius on 22 February 2018 granting recognition and enforcement to the award. Following Essar Steel's application to set aside the provisional order and to stay the enforcement of the award, the Mauritian Supreme Court heard arguments from the parties on 20 September 2018. The Mauritian Court's judgment is pending, but apparently will not be available for some months.
AMUSA has also initiated proceedings in the Cayman Islands. On AMUSA's without notice application, which was made on the day after the without notice application was made to Butcher J. in England, the Grand Court of the Cayman Islands granted Norwich Pharmacal relief against two Cayman entities in the Essar Group – Essar Global Fund Limited (“EGFL”) and Essar Capital Limited (“ECL”). The return date for these proceedings was 13 February 2019 and the Cayman Court's judgment is awaited.
In January 2019, AMUSA commenced proceedings in England. By an Application Notice dated 10 January, it sought a worldwide freezing injunction against Essar Steel, and a search order against Essar Capital Services (UK) Limited (“Essar Capital Services”), Mr. Prashant Ruia (“Prashant”) and Mr. Sushil Baid (“Mr. Baid”). By a separate Application Notice the same day, AMUSA sought Norwich Pharmacal relief against Essar Capital Services, Prashant, Mr. Baid, Mr. Joseph Seifert (“Mr. Seifert”), Mr. Nicholas Harrold (“Mr. Harrold”), Mr. Andrew Wright (“Mr. Wright”) and Mr. Nigel Bell (“Mr. Bell”). Who these individuals and companies are, and how they relate to each other and to the present dispute, is described in Section B below.
AMUSA's without notice applications were heard in private on 14 January 2019. The application was supported by a 70 page affidavit from Mr. Nouroozi, a partner in Mishcon de Reya LLP, and a 51 page skeleton argument signed by counsel. Butcher J. granted AMUSA permission to enforce the ICC award as a judgment of the High Court. He also made a worldwide freezing order (“WFO”) and associated disclosure orders against Essar Steel. In doing so, Butcher J. was alive to the fact that Essar Steel was not present in the jurisdiction and that AMUSA had not shown that Essar Steel had any assets here. Nevertheless, he was persuaded that this was a sufficiently exceptional case to warrant a WFO against Essar Steel. He also granted a search order against Essar Capital Services, Prashant and Mr. Baid, and Norwich Pharmacal relief against Essar Capital Services, Prashant and Messrs Baid, Seifert, Harrold, Wright and Bell.
The matter came back before Butcher J. for a short hearing on 17 January 2019 to decide whether the search order should extend to the server of Essar Oil (UK) Ltd (“Essar Oil”) in its Stanlow refinery in Ellesmere Port. He concluded that it should not. Butcher J. heard the matter again on 28 January 2019, the ordered return date. At that hearing, the parties were agreed that this date would not afford the parties an opportunity properly to put forward their arguments. Accordingly, Butcher J. adjourned the return date to the week commencing 4 March 2019. In the meantime, he allowed the search of the imaged documents to continue, ordered that the search must be subject to a confidentiality club such that no information would be provided to AMUSA itself and asked the Supervising Solicitor to submit a report on the search to the court five days before the return date.
Extensive written arguments were served by the various parties for the hearing on the adjourned return date. The hearing occupied three full days, and oral submissions were made by counsel for AMUSA (Mr. Peto QC) and by the representatives of Essar Steel (Mr. Toledano QC), Essar Capital Services (Mr. Stanley QC), Messrs Prashant and Baid (Mr. McGrath QC), Mr. Bell (Mr. Denton- Cox), Messrs Seifert and Harrold (Mr. Bailey), and Mr. Wright (Mr. Beeley). Essar Oil was also represented (Mr. Norbury QC) for the purposes of seeking costs incurred as a result of the search orders. The issues for resolution at the hearing concerned whether the WFO, the search order, and the Norwich Pharmacal orders should be maintained. It was agreed, or at least largely agreed, that I should determine these issues as matters of principle, and leave for later determination issues relating to whether the wording of the various orders should (if maintained) be narrowed. I address in turn the WFO, the search orders, and the Norwich Pharmacal orders, and then the issues of costs.
Two matters should be noted at outset. First, there has been no application to discharge Butcher J's. order granting permission to enforce the award as a judgment of the High Court. Accordingly, there is now an undisputed judgment of this court which requires Essar Steel to pay the amount of the arbitration award, and there has been a default in relation to that judgment. There has been no attempt by Essar Steel, within the present proceedings, to advance any of the...
To continue reading
Request your trial
-
Hulley Enterprises Ltd (a company incorporated in Cyprus) v The Russian Federation
...of a risk of dissipation: see Great Station Properties v UMS Holding Limited [2017] EWHC 3330 (Comm) §§ 7, 10–11 and 51; ArcelorMittal USA LLC v Essar Steel Ltd [2019] EWHC 724 (Comm) § 38; Ras Al Khaimah Investment Authority v Bestfort Development LLP [2017] EWCA Civ 1014 §§ 25 and 54; M......
-
PJSC Bank “Finance and Credit” v Kostyantin Valentynovich Zhevago
...had been reached some three weeks earlier, albeit apparently without argument, by Jacobs J in Arcelormittal USA LLC v Essar Steel [2019] EWHC 724 (Comm). Permission to appeal was given in Idemia but the case settled before any judgment was given by the Court of Appeal. In the subsequent ca......
-
K v Z
...13th February 2019, unreported) at paragraph 69 (Kawaley J). 38 [2018] EWHC 2188 (QB) (at [8]–[12]) (Nicholas Cooke QC, J). 39 [2019] EWHC 724 (Comm) at [159] (Jacobs J). 40 [1994] 1 All ER 110. 41 Mercantile Group (Europe) AG v Aiyela [1994] Q.B. 366 page 374B (Hoffman LJ). 42 Arcelormi......
-
Njord Partners SMA-Seal LP v Astir Maritime Ltd
...946 (Comm) and Jacobs J who reached the same conclusion but apparently without argument in Arcelormittal USA LLC v Essar Steel Ltd [2019] EWHC 724 (Comm). I have been informed that the decision of Mr Richard Salter QC has been the subject of an appeal which has been heard but in respect of......