ICTSI Middle East DMCC v The Government of the Republic of Sudan

Hearing date: 18 May 2021

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.

This is the judgment on the Claimant's application for summary judgment (the “Application”). The hearing of the Application was adjourned on 23 February 2021 at the request of the Defendant (“Sudan”), at the original hearing on that date and the revised hearing date of 18 May 2021 was fixed.

The Application is supported by a witness statement of Mr Hans-Ole Madsen a Director of the Claimant dated 31 July 2020 and two witness statements from Mr Andrew Williams of Holman Fenwick Willan LLP solicitors acting for the Claimant dated 1 February 2021 and 7 May 2021 (“Williams 3” and “Williams 4”).

Sudan has not filed any evidence in response or any cross applications to challenge service or jurisdiction.

Background

The Application relates to monies said to be due under a refund bond dated 8 January 2019 (the “Refund Bond”) between the Claimant and Sudan as amended by a Deed of Amendment dated 28 February 2019. The Refund Bond relates to a concession agreement dated 27 December 2018 (the “Concession Agreement”) between the Claimant and Sea Ports Corporation of Sudan (“SPC”) relating to the operation of the terminal at Port Sudan through a Sudanese subsidiary of the Claimant incorporated for this purpose (the “Company”).

Clause 11.1 of the Concession Agreement required the Company to make an upfront payment, the first instalment of which amounted to €410 million and was expressed to be subject to receipt of an indemnity from Sudan.

On 13 January 2019 the Claimant made the first instalment of the upfront payment of €410 million to SPC (the “Upfront Payment”).

It is the Claimant's case that it is entitled to a refund of that payment under the Refund Bond in accordance with its terms.

Sudan appears to have made two repayments to the Claimant in a total amount of approximately €222 million. The first payment of approximately €195 million was made in July 2019 and a second payment of approximately €27 million was made in December 2019. The amount of principal claimed as currently outstanding is approximately €188 million.

In addition the Claimant seeks a sum of approximately €91 million under the Refund Bond as amended by the Deed of Amendment as its costs of funding. The total claimed by the Application is therefore approximately €279 million.

Chronology

The claim was issued on 12 July 2019.

By an order dated 3 July 2020 Jacobs J confirmed that Sudan had been validly served with the documents instituting the claim.

In accordance with the extension of time granted for service of the claim, the deadline for service of the defence was 6 July 2020.

The Application was issued on 31 July 2020.

The Application was originally due to be heard on 23 February 2021. On 22 February 2021 Sudan made an application to adjourn the hearing for three months.

At the hearing on 23 February 2021 the Deputy Judge granted the adjournment. The Deputy Judge further directed (inter alia) that Sudan should pay €7 million into court and set out directions for Sudan to file any challenge to jurisdiction/order relating to service/response of evidence by 30 March 2021. Sudan has not complied with those directions.

It is also relevant to note the following by way of background events in Sudan during the relevant period, taken from submissions made by counsel for Sudan at the hearing on 23 February 2021:

i) President al-Bashir was removed from office in April 2019 following a popular uprising, which began in December 2018, but the military retained power until August 2019 at which point a power sharing agreement was entered into with the pro-democracy movement.

ii) Since August 2019, Sudan has been governed by a transitional regime made up of a mixture of ministers from the previous regime and ministers from a pro-democracy background. In early February 2021 a new cabinet was appointed with additional ministers from rebel groups but pursuant to a peace deal which was brokered in October 2020.

Absence of the Defendant

The preliminary issue to note is that Sudan did not attend the adjourned hearing on 18 May 2021 but the court determined to proceed in its absence under CPR 23.11.

The court was referred to the factors taken into account by Henshaw J in HC Trading Malta Ltd v Savannah Cement Ltd [2020] EWHC 2144 at [4].

By an order dated 3 July 2020 Jacobs J confirmed that Sudan had been validly served with the documents instituting the claim.

I am of the view on the evidence of Mr Williams (paragraphs 15–17 of Williams 3) that the Application has been duly served on Sudan.

I also note the evidence (paragraph 45 of Williams 4) that supporting documents were served by email and courier on 3 February 2021 on the Sudanese Embassy in London. I note that the response by email that day was that Sudan indicated that it wished the matter to go to arbitration and then by email on 15 February 2021 sought a stay of the proceedings.

However at the hearing on 23 February 2021 Sudan was represented by counsel and the revised hearing date of 18 May 2021 was fixed following its request for an adjournment.

Notwithstanding this, Sudan has not complied with the terms of the order made on 23 February 2021 for a payment into court and in relation to costs, and has made no apparent efforts to engage in the proceedings since that date, having filed no evidence in response to the Application. The solicitors representing Sudan at the last hearing came off the record, having ceased to act on 16 March 2021. However according to the evidence of the letter on the court file dated 21 April 2021, the previous solicitor, Mr Dovey, met with Sudan on 17 March and 20 April 2021.

As referred to above, this is a claim under the Refund Bond and there is express provision in that Refund Bond for English law and the jurisdiction of the English courts.

Having regard to all these matters I am satisfied that it is appropriate in the circumstances for the court to proceed to hear this Application in the absence of the Defendant.

COVID

In the light of the current pandemic the hearing on 18 May 2021 was held remotely but Sudan were notified of the remote hearing and sent details of the link to enable Sudan to participate using the email addresses which it had previously used to communicate with the Claimant.

Permission for the Application

The first issue to address is the requirement for permission for the Application pursuant to CPR 24.4(b)(i) in circumstances where Sudan has filed no acknowledgement of service and no defence.

The court was referred to the guidance referred to by Cockerill J in Valla PTC Ltd v Faiman [2020] EWHC 1819 (Comm) at [16]. Cockerill J cited part of the judgment of Henshaw J in DVB Bank SE v Vega Marine Ltd [2020] EWHC 1494 (Comm). I note in particular the following passage of the judgment of Henshaw J by reference to the European Union v Syria [2018] EWHC 1712 (Comm):

“[58.] Bryan J summarised the principles relevant to the exercise of the court's discretion under CPR 24.4(1) in European Union v Syria:

‘(1) The purpose of the rule are to ensure that no application for summary judgment is made before a Defendant has had an opportunity to participate in the proceedings and to protect a Defendant who wishes to challenge the Court's jurisdiction from having to engage on the merits pending such application.

(2) Generally, permission should be granted only where the Court is satisfied that the claim has been validly served and that the Court has jurisdiction to hear it. Once those conditions are met there is generally no reason why the Court should prevent a Claimant with a legitimate claim from seeking summary judgment.

(3) The fact that a summary judgment may be more readily enforced in other jurisdictions than a default judgment is a proper reason for seeking permission under CPR 24.4(1).’ (§ 61)”

I turn then to consider the preconditions referred to above.

Was the claim validly served?

I have regard to the Order of Jacobs J of 3 July 2020 that there has been good service of the claim form. That order has not been formally challenged.

“The Claim Form, Particulars of Claim and all other documents required to be served to institute this claim were validly served on the Defendant on 14 April 2020 via the Foreign & Commonwealth Office pursuant to CPR 6.44”

I note that since that order was made, the response pack and a certificate of service has been received by letter dated 27 October 2020, which also enclosed the FCO confirmation stating that the documents were served upon the Ministry of Foreign Affairs on 10 April 2020. The order of Jacobs J was served on 9 December 2020 through the British Embassy in Khartoum on the Ministry of Foreign Affairs.

Does the court have jurisdiction?

Clause 11 of the Refund Bond provides for English law and jurisdiction and although there was correspondence in February 2021 from Sudan which...