Moscow City Council v Bankers Trust Company and Another
| Jurisdiction | England & Wales |
| Judge | Lord Justice Mance,Lord Justice Carnwath,The Vice-Chancellor |
| Judgment Date | 25 March 2004 |
| Neutral Citation | [2004] EWCA Civ 314 |
| Docket Number | Case No: A3/2003/1477 |
| Court | Court of Appeal (Civil Division) |
| Date | 25 March 2004 |
[2004] EWCA Civ 314
The Vice-Chancellor
Lord Justice Mance and
Lord Justice Carnwath
Case No: A3/2003/1477
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH
DIVISION COMMERCIAL COURT (COOKE J.)
Royal Courts of Justice
Strand,
London, WC2A 2LL
Mr Graham Dunning QC & Mr Paul Key (instructed by Hogan & Hartson) for the Appellants
Mr Michael Bloch QC (instructed by Clifford Chance LLP) for the Respondent (BTC)
Mr Michael Sullivan (instructed by Watson Farley & Williams) for the Respondent (IIB)
Introduction
Party autonomy is fundamental in modern arbitration law. S. 1 of the Arbitration Act 1996 provides that the provisions of Part I (sections 1–84)
"…. are founded on the following principles, and shall be construed accordingly-
(a) the object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense;
(b) the parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest;
(c) in matters governed by this Part the court should not intervene except as provided by this Part".
Among features long assumed to be implicit in parties' choice to arbitrate in England are privacy and confidentiality. The Act's silence does not detract from this. In its Report on the Arbitration Bill dated February 1996 (paragraphs 10–17), the Departmental Advisory Committee ("DAC") (chaired by Lord Saville) recorded that "there is …. no doubt whatever that users of commercial arbitration in England place much importance" on privacy and confidentiality "as essential features". The DAC cited a survey conducted among "Fortune 500" US corporations for the London Court of International Arbitration by the London Business School in 1992. It observed that it was open to arbitration institutions to express corresponding principles in their rules (as the UNCITRAL rules relevant in this appeal do) . It was the difficulty of reaching a statutory formulation, in the light of "the myriad exceptions" and the qualifications that would have to follow, that led the DAC to conclude that the courts should be left to continue to work out the implications "on a pragmatic case-by-case basis".
S. 68 is one of the safeguards "necessary in the public interest", mentioned in section 1. It enables a party to arbitral proceedings to
"apply to the court challenging an award in the proceedings on the ground of serious irregularity affecting the tribunal, the proceedings or the award".
Pursuant to The Civil Procedure (Amendment No. 5) Rules 2001 S.I. No. 4015 (L32), the relevant rules governing such applications have since 25 th March 2002 been CPR 62.2 to 62.10 ("Section I" of Part 62) . For the purposes of claims under the 1996 Act, CPR 62.2 contains a wide definition of "arbitration claim", which includes any application under s.68:
"62.2-(1) In this Section of this Part "arbitration claim" means-
(a) any application to the Court under the 1996 Act;
(b) a claim to determine-
(i) whether there is a valid arbitration agreement;
(ii) whether an arbitration tribunal is properly constituted; or
what matters have been submitted to arbitration in accordance with an arbitration agreement;
(c) a claim to declare that an award by an arbitral tribunal is not binding on a party; and
(d) any other application affecting-
(i) arbitration proceedings (whether started or not) ; or
(ii) an arbitration agreement.
(2) This Section of this Part does not apply to an arbitration claim to which Section II or III of this Part apply."
CPR 62.10 provides:
"(1) The court may order that an arbitration claim be heard either in public or in private.
(2) Rule 39.2 does not apply.
(3) Subject to any order made under paragraph (1) —
(a) the determination of—
(i) a preliminary point of law under section 45 of the 1996 Act; or
(ii) an appeal under section 69 of the 1996 Act on a question of law arising out of an award,
will be heard in public; and
(b) all other arbitration claims will be heard in private.
(4) Paragraph (3) (a) does not apply to—
(a) the preliminary question of whether the court is satisfied of the matters set out in section 45(2) (b) ; or
(b) an application for permission to appeal under section 69(2) (b) ."
CPR 62.11 to 62.16 ("Section II") regulate pre-1996 Act arbitration claims and include no equivalent of CPR 62.10.
The issue on this appeal is whether a judgment dismissing an application made under s.68 or failing that a Lawtel summary should be available either for general publication or for limited publication to specified financial institutions. The appellants, the Department of Economic Policy and Development of the City of Moscow and The Government of Moscow (together "Moscow"), submit that it should be. The respondents, Bankers Trust Company ("Bankers Trust") and International Industrial Bank ("IIB"), resist this. The judgment was given by Cooke J on 21 st March 2003, dismissing applications under s.68 by Bankers Trust and IIB, seeking respectively the remission and the setting aside of a single arbitrator's award dated 30 th May 2002 for serious irregularity. The following circumstances are already in the public domain: that the arbitration involved three sets of parties, Bankers Trust, Moscow and IIB; that the arbitration was under UNICTRAL rules in London; that Bankers Trust was claiming to recover funds allegedly advanced under a Credit Agreement No. 750 dated 24 th October 1997 made originally between Moscow and IIB; and that under the award Bankers Trust succeeded against IIB, but not against Moscow. UNCITRAL Rules provide:
"25.4 Hearings shall be held in camera unless the parties agree otherwise.
….
32.2 The awards shall be made in writing and shall be final and binding on the parties. The parties undertake to carry out the award without delay.
….
32.5 The award may be made public only with the consent of both parties".
The arbitration took place in private, and the award was published only to the parties. Bankers Trust's and IIB's application under s.68 were themselves heard "in private" under CPR 62.10(3) (b) . No contrary application or order was made under CPR 62.10 (1) .
Prior to and during the arbitration Bankers Trust gave notice to various financial institutions who had at IIB's or its instance acquired an interest as sub-participants in Credit Agreement No. 750; and, after receiving the award it wrote to those investors implying that its failure to establish any default by Moscow was due to a "surprising" application of Russian law by the arbitrator. While the London arbitration was in progress, on 23 rd October 2001 the City of Moscow issued an Offering Circular, through ING Barings and UBS Warburg as lead managers in London with Chase Manhattan (London) as trustee, to raise Euro 300,000,000 by way of loan participation notes due 2004. The Circular referred to claims against it in an ongoing arbitration by "an international bank" in respect of a loan allegedly made to it by a Russian bank, and recorded that Moscow contested these claims on the basis that it had never received the funds and said that it believed that the funds had been "improperly misappropriated" by the Russian bank. Further, the judgment which Cooke J handed down in writing on 21 st March 2003 was not marked private, and, although the point about privacy was immediately raised with him and stood over for further argument, Lawtel received a copy of the judgment, which in good faith it summarised on its website and by email to its 15,000 or so subscribers, in each case with a link to the full text on its website. Objection was at once raised by Bankers Trust and the material on Lawtel's website was deleted. There is no evidence that any subscriber in fact downloaded all or any part of the full transcript during the limited time that this was on the web. But the relevant email summaries remained, and may still remain, on computers belonging to all those subscribers who received the email summary.
Both before Cooke J and before us, Moscow's primary case has been that the judgment or failing that the Lawtel summary should be available for general publication. Only alternatively has Moscow applied for limited permission to send the judgment, or the Lawtel summary, to the sub-participants in Credit Agreement No. 750. There are two potential problems about this alternative. First, I find it difficult to see how, if such publication were permitted, publication could or would be restricted to sub-participants. But I do not think that could be critical if publication to them was otherwise justified, and it does not arise if more general publication is justified. Second, Bankers Trust has in its skeleton, although it did not stress this orally, objected that use of the sub-participants' identities for the proposed distribution would conflict with Moscow's implied obligation to keep confidential information obtained by way of disclosure in the course of the arbitration. That problem is not before us, and we are not in a position to adjudicate on it. Moscow's expressed reason for wishing for publication is that it should be able to demonstrate "to the international financial markets" or "investment community" generally that the arbitration award holding that it had not committed any sort of financial default "had been the subject of detailed and careful scrutiny by the Commercial Court which rejected all … attacks" upon it....
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