General Dynamics United Kingdom Ltd v State of Libya
| Jurisdiction | England & Wales |
| Judge | Lord Lloyd-Jones,Lord Briggs,Lady Arden,Lord Burrows,Lord Stephens |
| Judgment Date | 25 June 2021 |
| Neutral Citation | [2021] UKSC 22 |
| Year | 2021 |
| Court | Supreme Court |
2020 Dec 15; 2021 June 25
Arbitration - Award - Enforcement - Claimant obtaining New York Convention arbitration award against foreign state - Judge making order granting permission to enforce award - Whether claimant required to serve order through Foreign, Commonwealth and Development Office or under CPR - Whether permissible to dispense with service -
An international arbitration tribunal in Geneva made a New York Convention award of £16m in favour of the claimant company against the defendant foreign state. The defendant made no payment of the sum awarded. In accordance with the procedure set out in CPR r 62.18F1, the claimant issued an arbitration claim form seeking the permission of the Commercial Court under section 101 of the Arbitration Act 1996F2 to enforce the award in the same manner as a judgment or order of the court in England and Wales. Teare J made an order (“the enforcement order”) granting permission to enforce the award under section 101 and dispensing with service of the arbitration claim form and the enforcement order under CPR rr 6.16 and 6.28 respectively, finding that there was significant civil unrest and instability in the defendant state which precluded formal service. The defendant applied to vary the enforcement order so as to require that it be served through the diplomatic process as set out in section 12(1) of the State Immunity Act 1978F3, which provided that any “writ or other document required to be served for instituting proceedings against a state” was to be served by being transmitted through the Foreign, Commonwealth and Development Office to the relevant state’s Ministry of Foreign Affairs, save where the state had agreed an alternative method of service under section 12(6) of that Act. Males LJ made the order sought, holding that section 12(1) was mandatory and so precluded service of the enforcement order being dispensed with. The Court of Appeal allowed the claimant’s appeal and set aside Males LJ’s order, holding that section 12(1) applied neither to the arbitration claim form (since no order had been made requiring its service) nor the enforcement order (since it was not the document which instituted the proceedings for enforcement of the award); that, rather, service was governed by the provisions concerning service on a foreign state set out in CPR r 6.44, which permitted dispensation of service under CPR rr 6.16 and 6.28; and that service of the enforcement order should be dispensed with under CPR r 6.28. The defendant appealed, arguing additionally that section 3(1) of the Human Rights Act 1998F4 required that section 12(1) be read so as to achieve compatibility with its right of access to the court under article 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms.
On the appeal—
Held, allowing the appeal (Lord Briggs and Lord Stephens JJSC dissenting), that the sovereign equality of states was a fundamental principle of the international legal order which, in cases where the power of the forum state was to be enlisted to seize assets of a defendant state, was best served by clear procedures whereby that state was given proper notice, in a manner consistent with its sovereign status, of any proceedings brought against it and afforded a fair opportunity to respond, thereby upholding the established principles of international law and the promotion of international comity; that consistent with such considerations and on its clear language, section 12 of the State Immunity Act 1978 established special procedural privileges in all cases where proceedings were commenced against a defendant state, including, by section 12(1), a mandatory requirement for service on the state through the Foreign, Commonwealth and Development Office save where some alternative manner of service had been agreed by that state in accordance with section 12(6); that in the particular context of proceedings to enforce an arbitral award against a state, the need for proper notice and fair opportunity to respond required that the state be served with either the arbitration claim form, in a case where the court required the claim form to be served, or, if it did not so require it, the order granting permission to enforce the award; that in either case that document was a “document required to be served for instituting proceedings against a state” and, absent any section 12(6) arrangement, fell to be served in accordance with section 12(1); that where section 12(1) applied, there was no power in the court to dispense with service pursuant to CPR rr 6.16 or 6.28, nor was section 12(1) to be construed, whether pursuant to section 3 of the Human Rights Act 1998 or the common law principle of legality, as implicitly allowing alternative directions as to service in exceptional circumstances where the claimant’s right of access to the court under article 6 of the Human Rights Convention would otherwise be infringed; and that, accordingly, there had been no ground for impugning Males LJ’s order requiring service of the enforcement order by diplomatic process (post, paras 30, 37, 39, 41, 43–44, 59, 60, 62, 76, 81, 84–85, 88, 92, 96, 99, 100).
Per Lord Lloyd-Jones JSC. There is no general discretion in the Foreign, Commonwealth and Development Office to decline to effect service. It is obliged to use its best endeavours to effect service in accordance with section 12 (post, para 33).
The following cases are referred to in the judgments:
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Al-Adsani v United Kingdom (Application No 35763/97) (
Alcom Ltd v Republic of Colombia [
Ashingdane v United Kingdom (Application No 8225/78) (
Attorney General v Edison Telephone Co of London Ltd (
Banque Commerciale Arabe SA v Popular Democratic Republic of Algeria (
Barker v Wilson [
Barton v Wright Hassall LLP
Belfast City Council v Miss Behavin’ Ltd
Belhaj v Straw
Benkharbouche v Embassy of the Republic of Sudan
Boru Hatlari Ile Petrol Taşima AŞ v Tepe Insaat Sanayii AS
Chapman v Kirke [
Cudak v Lithuania (Application No 15869/02) (
Director of Public Prosecutions v McFarlane
European Union v Syrian Arab Republic
European Union v Syrian Arab Republic
FG Hemisphere Associates LLC v Democratic Republic of the Congo [
Federal Comr of Taxation v ICI Australia Ltd (
Firebird Global Master Fund II Ltd v Republic of Nauru [
Garden Contamination Case (No 1) (
Ghaidan v Godin-Mendoza
Gold Reserve Inc v Bolivarian Republic of Venezuela
Golder v United Kingdom (Application No 4451/70) (
Havlish v Islamic Republic of Iran
Heiser (Estate of) v Islamic Republic of Iran
Holland v Lampen-Wolfe [
International Schools Service v Government of Iran (
Jones v Ministry of the Interior of the Kingdom of Saudi Arabia
Jurisdictional Immunities of the State (Germany v Italy) [
Kuwait Airways Corpn v Iraqi Airways Co (unreported) 16 April 1992, Evans J; [
L v Y Regional Government of X
La Générale des Carrières et des Mines v F G Hemisphere Associates LLC
Lake Macquarie Shire Council v Aberdare County Council (
Lloyd’s of London (Certain Underwriters at) v Syrian Arab Republic
London Steam-Ship Owners’ Mutual Insurance Association Ltd v Kingdom of Spain (The Prestige)
Military and Paramilitary Activities in and against Nicaragua (Nicaragua v United States of America) [
Nationwide Access Ltd v Customs and Excise Comrs [
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