Kensington International Ltd (Claimant/Appellant) v Republic of the Congo and Another
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE WALLER,LORD JUSTICE KAY |
| Judgment Date | 13 May 2003 |
| Neutral Citation | [2003] EWCA Civ 709 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | A3/2003/1036 |
| Date | 13 May 2003 |
[2003] EWCA Civ 709
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
COMMERCIAL COURT
(MR JUSTICE MORISON)
QUEEN'S BENCH DIVISION
Lord Justice Waller
Lord Justice Kay
A3/2003/1036
MR E MCQUATER QC (instructed by Dechert, London EC4Y 1LJ) appeared on behalf of the Appellant
The Respondent did not appear and was not represented
On 20 December 2002 Cresswell J granted summary judgment in favour of the claimant ("Kensington") against the defendant ("the Congo") in the sum of US $56,911,991. He found that Kensington was the assignee of all right, title and interest in various sums due and owing from the Congo under the the terms of a loan agreement dated 18 April 1984. The assignors were not in fact the banks who were originally parties to the loan agreement, but banks who, it would seem, had taken on parts of the loan after 1984 in circumstances which for present purposes do not matter. The Congo was properly served with the proceedings but took no part in the summary trial. Cresswell J found that by clauses 9(i)-(iv) of the loan agreement the Congo had waived sovereign immunity from suit and from execution against its property.
Before Cresswell J Kensington also sought injunctive relief against the Congo to enforce certain other provisions of the loan agreement: first, the Congo's obligation not to create any mortgage, pledge or other security over any of its assets in favour of any creditor; and secondly the Congo's obligation to pay its creditors pari passu. Cresswell J was of the view that there ought to be a trial of the issue whether such injunctive relief should be granted and further thought that the court ought to be assisted by an amicus. An amicus was duly appointed and a trial of the issues relating to injunctive relief came on before Tomlinson J between 14 and 16 April 2003.
Tomlinson J refused to grant the injunctive relief. His judgment extends over some 54 pages. The reason why Tomlinson J refused the relief is of some relevance to the point that later came before Morison J and is now before us, and I will come back to those reasons so far as they are material.
But having failed to obtain that relief, which was of course an attempt at the very least indirectly to recover the debt found due, Kensington then moved without notice for Mareva or freezing relief. It sought orders in the terms that appear in the draft at tab 1 of the bundle. The draft is in the standard form that freezing orders now take, seeking an injunction against the Congo from removing from England and Wales any of its assets which are in England and Wales up to the value of US$60m, or in any way disposing of or dealing with or diminishing the value of any of its assets, whether they are in or outside England and Wales, up to the same value. The prohibition by paragraph 5 included the following assets in particular: (a) any property or assets directly or indirectly held by or owned by or controlled by Societie Nationale des Petroles du Congo ("SNCP") or SNCP UK or Olearius Ltd (a company incorporated in the Cayman Islands) and any assets in which any of those entities had an interest; and (b) the share capital of SNPC UK. There were also provided in square brackets at the stage the draft was before the judge an exception which would have allowed dealing in the ordinary course of business, and provisions by reference to which the Congo or SNPC or SNPC UK or Olearius could assume that a transaction was in the ordinary course of business if it had not received notice from the solicitors who had been informed about that dealing after at least 48 hours of notifying them of the transaction.
When the the matter came on before Morison J, he refused to hear Kensington's application ex parte and directed that notice be given to the Congo, to SNPC, to SNPC UK and to Olearius, at various addresses which are identified in a draft of the order that he made which has been handed up to us by Mr McQuater. He directed that notice be given with evidence in support by 7 May 2003, for a hearing to be listed on 16 May.
As was apparent from the draft to which I have referred, Kensington was seeking a freezing injunction not only in relation to the Congo but also in relation to assets of the entities SNPC, SNPC UK and Olearius, and it is the way these other entities fit into the picture which was the subject of the judgment of Tomlinson J. Briefly, SNPC was held by him to be a state entity and thus part of the Congo, and SNPC is responsible for the production and marketing of the Congo's oil. SNPC owns all the shares in the UK company SNPC UK Ltd and it appears that very substantial trading activities take place through SNPC UK Ltd in relation to oil produced in the Congo. The SNPC has endeavoured to organise its trading in oil so as to keep such oil and the proceeds of such oil out of the hands of creditors such as the banks or the assignees of banks such as Kensington, who loaned money to the Congo many years ago. Olearius is a Cayman Island company also set up for the purpose of trading in oil. The intention undoubtedly is that the assets of SNPC UK Ltd and Olearius will not be held by courts enforcing judgments against the Congo as assets of the Congo.
Before Tomlinson J...
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Notes
...No 2000/QR/92 (Court of Appeals of Brussels, 8th Chamber, 26 September 2000). 33 Kensington International Ltd v Republic of the Congo [2003] EWCA Civ 709. 34 FG Hemisphere Associates, LLC v DR Congo 455 F. 3d 575 (5th Cir. 2006). 35 455 F. 3d 575 (5th Cir. 2006). 36 [2007] EWCA Civ 148. 37 ......