Eastern European Engineering Ltd v Vijay Construction (Proprietary) Ltd
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Cockerill |
| Judgment Date | 11 October 2018 |
| Neutral Citation | [2018] EWHC 2713 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2015-000613 |
| Date | 11 October 2018 |
[2018] EWHC 2713 (Comm)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
COMMERCIAL COURT (QBD)
Royal Courts of Justice
Strand, London, WC2A 2LL
Mrs Justice Cockerill
Case No: CL-2015-000613
Mr Benjamin Pilling QC and Mr Daniel Khoo (instructed by Cooke, Young, & Keidan LLP) for the Claimant
Mr Sandip Patel QC and Mr Muthupandi Ganesan (of Scarmans) for the Defendant
Hearing dates: 8, 9 October 2018
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.
The application
I have before me an application brought by Vijay Construction (Proprietary) Ltd (“VCL”) under section 103 of the Arbitration Act 1996. That application is to set aside the order of 18 August 2015 of Cooke J by which permission was granted to the Claimant (“EEEL”) to enforce an arbitration award dated 14 November 2014 in ICC Arbitration 18943 (“the Award”) and to enter judgment against VCL. That order also awarded EEEL the costs of the application, including the costs of entering the judgment.
VCL issued the application to set aside Cooke J's order on 23 October 2015 – nearly three years ago. As will be readily apparent, since then there has been a hiatus. That has come about because VCL brought proceedings in both France and the Seychelles to set aside the Award, on grounds which are essentially similar to those raised in this challenge. While those proceedings were pending Flaux J on 14 June 2016 stayed this application until the final determination of the French proceedings.
These proceedings are now live once more in circumstances where:
i) On 28 June 2016 the Cour d'Appel at Paris dismissed VCL's appeal;
ii) A further appeal to the Court of Cassation was not pursued and was terminated on 22 August 2017;
iii) On 18 April 2017 the Supreme Court of the Seychelles granted permission to EEEL to recognise and enforce the award in the Seychelles;
iv) On 6 November 2017 Andrew Baker J lifted the stay in these proceedings;
v) On 13 December 2017 the Seychelles Court of Appeal allowed VCL's appeal and refused recognition and enforcement of the Award in the Seychelles;
vi) On 13 March 2018 there was a case management conference setting directions for this hearing.
I should also note that between 7 September 2018 and 18 September 2018 VCL were unrepresented, Clyde & Co (who had previously represented VCL) having come off the record and Scarmans not yet having been formally instructed.
VCL advanced four arguments:
i) Ground 1: It contends that the arbitral tribunal (“the Tribunal”) lacked jurisdiction because its composition was not in accordance with the parties' agreement (section 103(2)(e)). The factual basis of this argument is the contention that EEEL failed to comply with a contractual dispute resolution procedure before commencing the arbitration.
ii) Ground 2: It contends that it was unable to present its case (section 103(2)(c)). The factual basis of this argument is that the Tribunal permitted EEEL to rely on a third report from its expert, Danny Large, but denied VCL a proper opportunity to respond to that report.
iii) Ground 3: It contends that EEEL interfered with a witness, Mr Egorov, preventing him from giving evidence in the arbitration, and that enforcement of the Award would therefore be contrary to public policy (section 103(3)). EEEL denies that there was any such interference.
iv) A fourth ground was initially advanced that because EEEL wishes to enforce the judgment entered by Cooke J in the Seychelles under a reciprocal enforcement statute, that is a means of circumventing a decision of the Seychelles Court of Appeal and therefore enforcement in this jurisdiction would be contrary to public policy (section 103(3)). That ground was sensibly not pursued before me by Mr Patel QC.
EEEL says that the three remaining grounds are also bad points. There is also a supplemental issue arising from the procedural history. EEEL says that VCL is issue estopped as regards the first two issues because VCL has already made an application in Paris to have the Award revoked in which proceedings VCL also relied on Grounds 1, 2 and 3. Alternatively it is said that because VCL has already pursued these grounds before the court with supervisory jurisdiction over the arbitration (i.e. the French court), and lost, and brought proceedings in the Seychelles to have the Award declared null and void on the same grounds there is a very strong policy in favour of upholding the Award in such circumstances.
There is a further procedural matter I should mention. On 28 September 2018 Andrew Baker J heard VCL's application for permission to cross-examine Mr Zaslonov and Mr Andriushkin (who have given statements for EEEL) in relation to Ground 3: an application opposed by EEEL. The Court adjourned the application to the present hearing, on the basis that there is a real possibility that this application can be determined without resolving the disputed facts relating to Ground 3. Mr Patel QC for VCL has argued that I should either determine the factual issues of witness interference in VCL's favour today, or should direct that the issues raise sufficient argument to make it appropriate to direct a trial of those issues.
The factual background
VCL and EEEL are companies incorporated in Seychelles. In 2011, EEEL hired VCL to carry out construction work for a hotel called the Savoy Resort and Spa. The works contracted were spread across 6 contracts. The terms of these contracts were materially identical. Disputes arose and EEEL terminated the contracts.
The arbitration clauses in the contracts were at clause 20. They provided:
“Clause 20.1 Amicable Settlement
Should any dispute arise between the Parties under or out of this Contract, or out of the execution and completion of the Works, or out of the remedying of defects and flaws, including disputes on any certificate, determination, instruction, opinion or valuation of the Employer, each Party shall notify another Party of such dispute, and both Parties shall try to settle such dispute amicably before any arbitration starts.
However, unless otherwise agreed between the Parties, the arbitration shall not start before expiration of a 2-month period starting on the day of the notice of a dispute, even though attempts may not be made to settle the dispute amicably.
Clause 20.2 Arbitration
Provided that the procedure described in Sub-Clause 20.1 of the Contract has been followed, any dispute, disagreement or claim arising under or from this Contract, including disputes on breach, termination and validity of the Contract shall be finally settled by arbitration under the Rules of Arbitration of the International Chamber of Commerce.…”
On 9 July 2012 VCL served two notices of dispute, one in relation to Contract 6, and the second relating to Contracts 1–5. EEEL referred the disputes to ICC arbitration on 10 September 2012; 2 months and 1 day after those notices. A sole arbitrator was appointed: a well-known solicitor-arbitrator from White & Case's Paris office, Andrew de Lotbinière McDougall. As detailed further below VCL raised a preliminary challenge to jurisdiction, claiming that these notices were not apt to trigger the arbitration provision. The Arbitrator held against VCL in a Partial Award.
The key issue in the arbitration was whether the termination of the contracts had been lawful; in particular whether EEEL had been entitled to terminate for cause based on defects, delay or failure to tender programmes. There was an alternative argument regarding termination for convenience. Issues arose as to the consequences if termination was lawful, including alleged outstanding payments for works performed, alleged overpaid amounts for works performed and damages said to be owed by each party to the other.
Procedural Order No 1, as is fairly usual in ICC proceedings, set out a detailed timetable for the proceedings. It envisaged the service of pleadings sequentially – ie. EEEL first with VCL to follow. Under that order there was a requirement to serve expert reports and witness statements with pleadings (including the reply). There was also provision for the Arbitrator to summon witnesses. There was no formal order for witness statements to stand as the evidence in chief but as regards examination in chief, the order envisages such examination being brief.
At the hearing it appears that the main issues related to (i) defects (all contracts) (ii) delay (all contracts) (iii) failure to submit programmes (Contracts 1–5) and bribery of Mr Egorov by VCL (all contracts).
The Tribunal held that the termination of all six contracts was lawful (on the basis of defects (for all contracts except Contract 3), delay (Contracts 1, 2, 5 and 6) and programmes (Contracts 1 – 5)), and that the Claimant was entitled to damages and costs. He ordered VCL to pay:
i) €12,857,171.04 under Contract 6 for damages, overpayments to VCL and the reasonable cost of completing the Savoy, and provision of reinforcement steel;
ii) €150,000 under Contract 6 for breaching its confidentiality provisions;
iii) €600,449.32 under Contracts 1–5 for damages for delays and provision of reinforcement steel;
iv) €640,811.53 representing 80% of EEEL's costs;
v) $126,000 i.e. 80% of EEEL's costs payable to the ICC.
After the Award was delivered VCL made a complaint to the ICC accusing it (via the arbitrator) of bias. That complaint was rejected.
I should also by way of background deal specifically with the factual position in relation to three features of the arbitration which correlate to...
To continue reading
Request your trial
-
Alexander Brothers Ltd (Hong Kong S.A.R) v Alstom Transport SA
...198 Mr Gledhill submitted that I needed no further evidence, pointing out that I had apparently made such a decision in Eastern European Engineering v Vijay Construction [2018] EWHC 2713 (Comm), [2019] 1 Lloyd's Rep. 1. But that is a false analogy. In that case there were two questions. O......
-
The Republic of India v Deutsche Telekom AG
...to English public policy. A similar approach was taken in Eastern European Engineering Ltd v Vijay Construction (Proprietary) Ltd [2018] EWHC 2713 (Comm) which concerned an allegation, amongst others, that a witness had been interfered with and prevented from giving evidence in the arbitrat......
-
BLL v BLM and another
...1 at 15; Inhenagwa v Onyeneho [2017] EWHC 1971 (Ch) at [58]; Eastern European Engineering Ltd v Vijay Construction (Proprietary) Ltd [2018] EWHC 2713 (Comm) at [46(i)]). Third, one can consider whether the CA Finding was a condition that had to be fulfilled in order for the Court of Appeal ......
-
Flashbird Ltd v Compagnie de Sécurité Privée et Industrielle SARL
...Austria, Italy and Brazil, as set out in footnote 1070. 28 A recent relevant English law decision is Eastern European Engineering Ltd v Vijay Construction (Proprietary) Ltd [2018] EWHC 2713 (Comm); [2019] 1 Lloyd's Rep 1 in which Cockerill J, citing the earlier Commercial Court decision i......
-
English High Court Refuses To Set Aside An Order For Enforcement Of An International Arbitration Award
...very heavily against allowing VCL a third challenge.” Eastern European Engineering Ltd. v. Vijay Construction (Proprietary) Ltd., [2018] EWHC 2713 (Comm) (Oct. 11, Jeanne Kohler function JDS_LoadEvent(func) { var existingOnLoad = window.onload; if (typeof window.onload != 'function') { wind......
-
Table of cases
...v Vijay Construction (pty) Ltd [2018] EWhC 1539 (Comm) III.26.183 Eastern European Engineering Ltd v Vijay Construction (pty) Ltd [2018] EWhC 2713 (Comm) III.25.75 Eastern Metropolitan regional Council v Four Seasons Construction pty Ltd [1999] WaSCa 144 III.25.53 Eastern Metropolitan regio......
-
Arbitration
...Provision for Amicable Settlement of Disputes” [1989] ICLR 33; Eastern European Engineering Ltd v Vijay Construction (Pty) Ltd [2018] EWHC 2713 (Comm) at [62]–[82], per Cockerill J. 282 International Research Corp PLC v Lufthansa Systems Asia Paciic Pte Ltd [2013] SGCA 55 at [54]–[63]. See ......