National Iranian Oil Company v Crescent Petroleum Company International Ltd
| Jurisdiction | England & Wales |
| Judge | Mr. Justice Butcher |
| Judgment Date | 10 February 2023 |
| Neutral Citation | [2023] EWHC 300 (Comm) |
| Court | King's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2021-000620 |
[2023] EWHC 300 (Comm)
THE HON. Mr Justice Butcher
Case No: CL-2021-000620
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT (KBD)
The Rolls Building
7 Rolls Buildings
Fetter Lane
London EC4A 1NL
Mr. David Bailey KC and Ms. Jessica Sutherland (instructed by Eversheds Sutherland LLP) for the Claimant
Mr. Ricky Diwan KC, Dr. Tariq A. Baloch and Mr. Moeiz Farhan (instructed by McDermott Will & Emery UK LLP) for the Defendants
Approved Judgment On Application
This judgment was released to the National Archives on 13 February 2023 (see eg https://www.bailii.org/ew/cases/EWCA/Civ/2022/1169.html).
This is an application by the Defendants (‘Crescent’) for an order requiring the Claimant (‘NIOC’) to pay a component of the judgment debt into court by way of security as a condition of permission to appeal the summary dismissal of its section 67 challenge. As with many aspects of the dispute between these parties, the debate on this matter has already become protracted and I considered that it was important, if possible, to give this judgment at once rather than for there to be a further delay.
The nature of the dispute between the parties is set out in my judgment of 21st October 2022, [2022] EWHC 2641 (Comm). In that judgment I decided that Crescent failed in relation to its preliminary issue under section 73 of the Arbitration Act but it succeeded in its application for summary judgment on the basis that NIOC's section 67 application had no real prospect of success
Before it was handed down, that judgment had been circulated in draft. Both parties had submitted notes on points of difference on consequential matters on 20th October 2022. NIOC indicated that it sought permission for appeal in relation to the decision on summary judgment. Crescent indicated that it opposed permission to appeal. Crescent did not, whether contingently or otherwise, seek that permission to appeal should be made conditional. An order was made dated 21st October 2022, reflecting the main determinations expressed in the judgment, namely the answer to the preliminary issue and the summary dismissal of NIOC's section 67 application.
As that order provided, all consequential matters, including the question of the grant of permission to appeal, were adjourned to an oral hearing for the first convenient date, and the time for the filing of any Appellant's Notice was not to commence until the determination of all consequential matters at that hearing, or as the court should otherwise order.
The oral consequentials hearing took place on 9th November 2022 and lasted about half a day. Crescent and NIOC were both represented by leading and junior counsel. Crescent had served drafts of two orders which it wished the court to make, including that NIOC's application for permission to appeal should be refused.
At the hearing, much of the time was devoted to NIOC's application for permission to appeal. Crescent contended that permission to appeal should not be granted on any of the five grounds which NIOC put forward. Crescent did not make a suggestion that if permission to appeal were to be granted, it should be subject to a condition.
One of the grounds in respect of which NIOC had sought permission to appeal, namely Ground 1, was an alleged unfairness by reason of my having given insufficient reasons dealing with an aspect of its arguments. On 15th November 2022, I circulated the draft of a judgment giving additional reasons in relation to Ground 1. That judgment was handed down on 16th November 2022, [2022] EWHC 2906 (Comm). After that, as I had indicated that I would at the hearing on 9th November 2022, I gave the parties until 17th November 2022 to make short further submissions in writing on NIOC's application for permission to appeal, taking account of the judgment on additional reasons. NIOC served such submissions on 17th November. Crescent then asked whether it would assist if it put in further submissions and on 21st November it did so, dealing with NIOC's Ground 1. Those submissions did not make any suggestion that permission to appeal should be conditional. NIOC then served reply submissions on 23rd November 2022.
On 28th November 2022, I gave a ruling on permission to appeal in writing. That ruling stated in part:
“(5) … while I have taken a clear view on the section 67 challenge, I consider that NIOC should have permission to appeal in relation to its Grounds 2–5.”
I refused permission to appeal on Ground 1, as I considered that it stood no real prospect of success. The ruling does not make any reference to a condition or conditions on permission to appeal, as that was not a matter which had been mentioned up to this point by either party. I asked for a draft order to be submitted by the parties embodying the decision on permission to appeal.
What then happened was that NIOC's counsel team sent a draft order to Crescent's counsel team for agreement and on 1st December 2022 chased for a response. On the same day, one of Crescent's counsel wrote that it was hoped that Crescent would supply its edits on the draft on the following day. On 2nd December 2022, Crescent's counsel circulated a mark-up of the order, which included proposed orders that the permission to appeal granted to NIOC should be conditional on NIOC's paying into court within 30 days the amount of that part of the Partial Remedies Award which was the subject of the section 67 application, or such other amount as the court should consider appropriate, and that if payment was not made within 30 days the appeal to the Court of Appeal should be dismissed.
On 7th December 2022, Crescent informed NIOC that it anticipated that there would be no agreement and that it would apply to the court for directions on the next day. On 8th December 2022, it served a skeleton argument and witness statement supporting the imposition of a condition on permission to appeal. That application came before the court on 20th December. The hearing had been arranged in short order in an attempt to resolve the issue before the end of the Michaelmas Term. At the hearing, however, NIOC contended that the application should be dismissed as being too late and if that course was not taken on that occasion, then it needed more time to deal with the application. I considered that there was not sufficient time for the matter to be properly dealt with on 20th December and that, in any event, it was important that both sides should have sufficient time to put forward all the evidence and arguments which they considered to be germane. I accordingly adjourned that hearing and a date of 10th February 2023 was subsequently fixed for it.
At the hearing of 20th December, I was asked by NIOC to stay enforcement of that part of the Partial Remedies Award which is the subject of the section 67 application, but I declined to do so. This was reflected in the order which was drawn up and sealed shortly after the hearing of 20th December 2022.
The parties have both served further evidence and skeleton arguments in preparation for this hearing. Crescent contends that this is a case in which there are compelling reasons for the imposition of a condition on permission to appeal. It relies, in brief, on: (1) a risk of NIOC's disposing of its assets; (2) NIOC's strategy of obstruction; (3) a decision of the Dutch Public Prosecutor to reject a criminal complaint made by NIOC; and (4) further evidence of NIOC's stratagems as demonstrated in what Crescent called a frivolous application challenging the Geneva Tribunal on the grounds of lack of impartiality and/or independence for failing to fix hearing dates convenient to one member of NIOC's counsel team. NIOC contends that the application for the imposition of a condition on permission to appeal is too late. In any event, it contends that there are no compelling reasons for the making of such an order in this case.
Before considering these competing contentions, it is helpful to refer to the relevant Civil Procedure Rules. CPR 3.1(3) provides that:
“When the court makes an order, it may –
(a) make it subject to conditions, including a condition to pay a sum of money into court; and
(b) specify the consequence of failure to comply with the order or a condition.”
CPR 52.6(2) provides that:
“An order giving permission under this rule … may —
(a) limit the issues to be heard; and
(b) be made subject to conditions.”
CPR 52.18 provides:
“(1) The appeal court may –
(a) strike out the whole or part of an appeal notice;
(b) set aside permission to appeal in whole or in part;
(c) impose or vary conditions upon which an appeal may be brought.
(2) The court will only exercise its powers under paragraph (1) where there is a compelling reason for doing so.
(3) Where a party was present at the hearing at which permission was given, that party may not subsequently apply for an order that the court exercise its powers under sub-paragraphs (1)(b) or (1)(c).”
NIOC's first contention is that once unconditional permission to appeal has been granted by the court then it is too late for the actual grant of permission to be made subject to conditions. After unconditional permission has been given, then any question of the imposition of a condition is for the appeal court under CPR 52.18(1), and is one of the imposition of a condition upon which the appeal may be brought.
That submission appears to me to be correct. It is supported by the words of...
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