Petrosaudi Oil Services (Venezuela) Ltd v (1) Novo Banco S.A.; (2) PDVSA Servicios S.A.; (3) PDVSA Services BV

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLord Justice Christopher Clarke,Lord Justice Lewison
Judgment Date25 January 2017
Neutral Citation[2017] EWCA Civ 32
Docket NumberCase No: A3/2016/3916 & A3/2016/3916(A)
Date25 January 2017

[2017] EWCA Civ 32

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM HIGH COURT, QBD, COMMERCIAL COURT

HHJ WAKSMAN QC

CL-2016-000572

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Lord Justice Lewison

and

Lord Justice Christopher Clarke

Case No: A3/2016/3916 & A3/2016/3916(A)

Between:
Petrosaudi Oil Services (Venezuela) Ltd
Appellant
and
(1) Novo Banco S.A.; (2) PDVSA Servicios S.A.; (3) PDVSA Services BV
Respondents

Jonathan Gaisman QC, Michael Bools QC, Joanne Box (instructed by Clyde & Co LLP) for the Appellant

(i) Akhil Shah QC (instructed by Addleshaw Goddard LLP) for the First Respondent and

(ii) Mark Howard QC, Richard Eschwege, Edward Ho (instructed by Stephenson Harwood LLP) for the Second and Third Respondents

Hearing date: 7 th December 2016

Approved Judgment

Lord Justice Christopher Clarke
1

After our judgment had been circulated in draft we received extensive submissions over the course of the following week as to the form of the order that we should make. In particular POS invited us to make an injunction precluding PDVSA or PVSA Services

"from pursuing or maintaining any application to (i) the Tribunal in the UNCITRAL Arbitration Proceedings between PDVSA and POS (the "Tribunal"); or (ii) the courts of France, seeking an injunction or any other order to restrain the Appellant from:

(1) receiving payment under the order to be made in this appeal;

(2) taking steps to enforce its rights as declared in this judgment under the SBLC; or

(3) making a demand on the SBLC or receiving payment under such a demand, including, but not limited to, PDVSA's application to the Tribunal by its solicitors', Stephenson Harwood's, letter of 10 November 2016 (whether as originally made or subsequently renewed)."

2

The application of 10 November 2016 was an application to amend PDVSA's statement of case in the arbitration so as to seek an interim injunction prohibiting POS from making demands under the SBLC save in respect of invoices which had satisfied the Article 141 requirements or had been held to be payable by the Tribunal, and for directions for the determination of that application. By Procedural Order 22 of 16 November 2016 the Tribunal permitted the amendment but said that it would not deal with the request for interim relief at that stage. On Friday13 January 2017 our judgment was handed down in draft on the usual conditions. On the same day PDVSA's solicitors sought the agreement of POS that the parties should send a joint note to me seeking permission to release the draft judgment or the substance of it to the Tribunal and that any payment pursuant to the judgment should be made within 5 Lisbon banking days from the date of hand down so as to enable the orderly resolution of the application by the Tribunal, or, if that was not possible, the court. That was a reference to the French court.

3

On Monday 16 January 2017 PDVSA's solicitors asked this court to lift the embargo on communication imposed by CPR 4OE para 2.4 so as to permit PDVSA (i) to inform the Tribunal in advance of the handing down of our judgment of the fact that the appeal had succeeded and that the court was presently intending to order the bank to make payment forthwith of the demands presented on 19 September 2016; and (ii) to use that information to update and renew the 10 November 2016 application in advance of that handing down.

4

We did not think that we should lift the embargo. Judgments are, usually, handed down in draft in order to allow for typographical corrections or the correction of obvious errors. We do not think that, in the present case, should mean that one party to the appeal should be allowed, by way of a partial (or complete) lifting of the embargo, to make use of the result contained in the draft judgment in order to seek relief designed to avoid POS obtaining the fruits of its success. It also seems to us undesirable for the arbitrators to be asked to make some interim ruling without the full judgment containing both the result and the reasoning before them.

5

We recognize that, as thing stand, this will mean that PDVSA will not be able to apply to the Tribunal or the French courts and present either this judgment, or the result of the appeal, before this judgment is handed down; and that there is likely to be no practical impediment to POS recovering from the bank under the SBLC pursuant to an order requiring payment within 2 business days. We do not, however, regard it as appropriate for this court to provide a further opportunity for an application for injunctive relief on account of the fact that in PO 16 the Tribunal declined to grant PDVSA any relief and that, so far, it has failed to deal with the request for interim relief sought on 10 November 2016, even though one possible result of the appeal has always been the one which we have reached.

6

There remains for consideration whether we should, as POS asks us to do, ourselves make some injunction of the sort sought by POS. As to that the salient facts are as follows. On 23 September 2016 PDVSA sought, in its skeleton of that date, as an alternative to reliance on the fraud exception, an interim injunction restraining the bank from paying out in respect of the demands under the SBLC on the basis that the drilling contract clearly precluded POS from making the demands. Judge Waksman ordered that PDVSA's entitlement to interim relief should be determined at trial.

7

PDVSA submits that POS' skeleton for trial reflects the fact that POS did not think that the judge was finally deciding the parties rights under the drilling contract. The skeleton addressed the test applied in MW High Tech Projects UK v Biffa Waste Services [2015] EWHC 949 (TCC) for determining whether an interlocutory injunction should be granted on the grounds that the beneficiary was precluded from calling on the letter of credit under the terms of the underlying contract. PDVSA had referred to this case in its 23 September skeleton. That test was whether the underlying contract clearly...

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