Kensington International Ltd v Republic of Congo
| Jurisdiction | England & Wales |
| Judge | Lord Justice Moore-Bick,Lord Justice Carnwath,Lord Justice May |
| Judgment Date | 07 November 2007 |
| Neutral Citation | [2007] EWCA Civ 1128 |
| Docket Number | Cases No: A3/2006/1577; A3/2006/1848 & A3/2007/1801 |
| Court | Court of Appeal (Civil Division) |
| Date | 07 November 2007 |
[2007] EWCA Civ 1128
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION (COMMERCIAL COURT)
Mr. Justice Cresswell, Mr. Justice Field & Mr. Justice Gross
2002 Folios 1088, 1281, 1282 & 1357
Lord Justice May
Lord Justice Carnwath and
Lord Justice Moore-Bick
Cases No: A3/2006/1577; A3/2006/1848 & A3/2007/1801
Mr. Jeffrey Gruder Q.C. and Miss Philippa Hopkins (instructed by Ince & Co) for the appellants
Mr. Jonathan Nash Q.C., Mr. P. Ratcliffe and Mr. H. Knox (instructed by Dechert LLP) for the respondent
Hearing dates : 2 nd– 4 th October 2007
Judgement
The Appeals
Before the court are three appeals arising out of various proceedings brought by Kensington International Limited (“Kensington”) in support of its attempt to execute a number of judgments obtained in the Commercial Court against the Republic of Congo (“the Congo”). The first in time is an appeal against an order made by Cresswell J. on 26 th May 2006 dismissing an application by the first two appellants, Vitol Services Limited and Vitol Broking Limited, to discharge an order made by Gloster J. on 10 th April 2006 restraining them from making any payments to the Congo under or pursuant to contracts for the purchase of petroleum or petroleum products entered into between 1 st January and 10 th April 2006. For convenience I shall refer to Vitol Services Limited and Vitol Broking Limited as “the UK Vitol companies”. The injunction was granted under section 25 of the Civil Jurisdiction and Judgments Act 1982 in support of proceedings in Geneva by Kensington against Vitol S.A., the parent of the UK Vitol companies, seeking to attach in execution of the English judgments certain debts alleged to be owed by it to the Congo.
The second appeal is against an order made by Field J. on 26 th July 2006 in the exercise of the court's Norwich Pharmacal jurisdiction requiring the UK Vitol companies and two of their employees, Mr. Gilles Chautard and Mr. Shlomo (“Sam”) Lambroza, to disclose certain information about two cargoes of oil which had been, or were about to be, shipped from the loading terminal at Pointe Noire.
The third appeal is against an order made by Gross J. on 13 th July 2007, also in the exercise of the court's Norwich Pharmacal jurisdiction, requiring the UK Vitol companies and Mr. Chautard and Mr. Lambroza to disclose certain information relating to payments said to have been made in Hong Kong by or on behalf of Vitol S.A. to employees or representatives of the Congo by way of bribes.
Background
For present purposes the essential background to these proceedings can be described quite shortly. Kensington is a financial institution which acquired, no doubt at a significant discount, sovereign debt on which the Congo had defaulted with a view to recovering the outstanding sums by legal action. Between 20 th December 2002 and 23 rd January 2003 it obtained four judgments in the Commercial Court for over US$110 million which the Congo has ignored and which Kensington has since been attempting to enforce. The Congo is now a significant producer of crude oil which it sells on the world market under contracts with independent oil traders such as the Vitol group, but it does not maintain substantial assets abroad that are amenable to execution. Kensington has therefore tried to execute the judgments by attaching debts due to the Congo before payment has been made. Although part of the judgment debt has been recovered, about US$93 million is still outstanding.
In various proceedings judges of the Commercial Court have found that the Congo has been taking elaborate steps to conceal its oil trading activities in order to prevent Kensington from identifying any resulting assets that might be seized in execution. They have also found that it is strongly arguable that Vitol S.A. and companies within the Vitol group have co-operated with the Congo in order to assist it to achieve its purpose. It is unnecessary for present purposes to describe these activities in any detail; if necessary, reference may be made to the judgment of Cooke J. in Kensington International Ltd v Republic of Congo (The 'Nordic Hawk') [2005] EWHC 2684 (Comm) and to the judgments of Cresswell J. and Field J. in the present proceedings.
On 3 rd April 2006 Kensington applied to the Court of First Instance in Geneva for an interim attachment of debts said to be owed by Vitol S.A. to the Congo arising from the sale and purchase of crude oil. That was the first step in proceedings designed to enforce the English judgments. The contracts under which the debts in question were said to have arisen had been made by Global Oil Trader Mauritius (“GOTM”), a company incorporated by Vitol S.A. in Mauritius for the purposes of trading with the Congo. GOTM is a wholly-owned member of the Vitol group whose ultimate parent is Vitol S.A. In the Swiss proceedings Kensington contends that GOTM is merely a mask (“faux nez”) for Vitol S.A. and that accordingly any debts owed by GOTM to the Congo should be treated as debts owed by Vitol S.A. and amenable to attachment.
On 4 th April 2006 the Court of First Instance granted an interim attachment order preventing Vitol S.A. from making payment to the Congo of
“tous avoirs, créances, actifs en compte, compte courant”,
which, according to the translation provided to us, means “any property, debts, assets on account, checking account”. However, the Swiss lawyers who have given expert evidence in the proceedings do not agree about the precise scope of the order.
The UK Vitol companies provide various commercial services exclusively to the Vitol group in connection with its oil trading and related activities. These include arranging for the shipment and carriage of cargoes and paying for oil purchased from third parties. The interim attachment order made by the Court of First Instance is not directed to those two companies and Kensington was therefore concerned that they might discharge debts owed by GOTM to the Congo by making payments to it or to others on its behalf and thereby frustrate the attempt to enforce the judgments in Geneva. In order to prevent them from doing so Kensington applied to join the UK Vitol companies to its actions against the Congo for the purposes of obtaining an order restraining them from making any such payments. It also sought wide-ranging disclosure of both information and documents.
The application came before Gloster J. without notice on 5 th April 2006. The judge granted an order restraining the UK Vitol companies until further order from making payments to a range of Congolese parties on behalf of companies in the Vitol group, including GOTM and Vitol S.A., under the transactions identified in the schedule to the order. These included transactions relating to specific cargoes identified by the name of the carrying vessel and two groups of transactions between Vitol parties and Congolese parties identified simply by date. These were
“3. Every Transaction other than those identified in paragraph 2 above, in the period from 1 January 2006 to 10 April 2006.
4. Every Transaction on or after Tuesday 11 April 2006.”
The judge also granted orders for disclosure of information relating to those transactions.
On 7 th April the UK Vitol companies applied to discharge the judge's order insofar as it related to cargoes carried on the 'New Vision' and the 'Elizabeth Angelikossi'. After hearing extensive argument Gloster J. dismissed that application on 10 th April and refused permission to appeal. However, Kensington agreed to a variation of the order restraining the UK Vitol companies from making payments under or in relation to the transactions referred to in paragraph 4 of the schedule.
The proceedings before Cresswell J.
On 26 th May 2006 the matter came before Cresswell J. on the application of the UK Vitol companies to discharge the order of Gloster J. in its entirety on the grounds that it had been wrongly granted and for an order that Kensington should pay damages pursuant to the cross-undertaking which is routinely required of a party who seeks interim relief of this kind. They also sought a declaration that the Vitol group was free to buy oil from the Congo on any terms it thought fit, provided the sale was not at an under value. For present purposes it is necessary to refer to only two aspects of those proceedings, namely, (i) the application to set aside that part of the order which required the UK Vitol companies to provide details of any future shipments of oil from the Congo as soon as the information became available to them (what was described in argument as the order for “rolling disclosure”) and (ii) an application (made as an alternative to the application to set aside altogether the order restraining payment to the Congolese parties) to limit the scope of the injunction expressly to “debts due or accruing due”. The latter application may seem a little surprising at first sight, but it was part of the UK Vitol companies' case that any payments made to the Congo by way of pre-payments for oil to be purchased in the future were loans rather than debts and as such were not amenable to execution under the third party debt order procedure set out in CPR Part 72 or the equivalent procedure in Geneva.
Shortly before the hearing Kensington...
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