Republic of Mozambique (acting through its Attorney General) v Privinvest Shipbuilding SAL (Holding) and Others
| Jurisdiction | England & Wales |
| Judge | Lord Hodge,Lord Lloyd-Jones,Lord Hamblen,Lord Leggatt,Lord Richards |
| Judgment Date | 20 September 2023 |
| Neutral Citation | [2023] UKSC 32 |
| Court | Supreme Court |
Lord Hodge, Deputy President
Lord Lloyd-Jones
Lord Hamblen
Lord Leggatt
Lord Richards
Supreme Court
On appeal from: [2021] EWCA Civ 329
Appellant
Nathan Pillow KC
Richard Blakeley
Ryan Ferro
(Instructed by Peters & Peters Solicitors LLP)
Respondents
Duncan Matthews KC
Ben Woolgar
Frederick Wilmot-Smith
(Instructed by Signature Litigation LLP)
Defendants/Respondents
(6) Privinvest Shipbuilding SAL (Holding)
(7) Abu Dhabi Mar Investments LLC
(8) Privinvest Shipbuilding Investments LLC
(9) Logistics International SAL (Offshore)
(10) Logistics International Investments LLC
Defendants
(1) Credit Suisse International
(2) Credit Suisse AG
(3) Mr Surjan Singh
(4) Mr Andrew James Pearse
(5) Ms Detelina Subeva
(11) Credit Suisse Securities (Europe) Limited
(12) Mr Iskandar Safa
Heard on 24 and 25 January 2023
Lord Hodge ( with whom Lord Lloyd-Jones, Lord Hamblen, Lord Leggatt and Lord Richards agree):
This appeal is concerned with the interpretation and application of section 9 of the Arbitration Act 1996 (“the 1996 Act”). In the context of a complex litigation a preliminary issue has been identified for determination concerning the scope of the relevant arbitration agreements and whether the matters in the legal proceedings before the English courts are matters which the parties have agreed to send to arbitration.
Section 9 of the 1996 Act provides:
“(1) A party to an arbitration agreement against whom legal proceedings are brought (whether by way of claim or counterclaim) in respect of a matter which under the agreement is to be referred to arbitration may (upon notice to the other parties to the proceedings) apply to the court in which the proceedings have been brought to stay the proceedings so far as they concern that matter.
…
(4) On an application under this section the court shall grant a stay unless satisfied that the arbitration agreement is null and void, inoperative, or incapable of being performed.”
The disputes between the Republic of Mozambique (“the Republic”) and the respondents have arisen from three transactions in 2013 and 2014, in which three special purpose vehicles (“the SPVs”), each of which is indirectly wholly owned by the Republic, borrowed money from London-based banks apparently to finance the purchase of equipment and services under three supply contracts with the sixth to eighth defendants (“the Privinvest supply companies”) in connection with the Republic's development of its Exclusive Economic Zone (“EEZ”), in particular through tuna fishing and the exploitation of its gas resources. As explained in 1(c) below, each of the Privinvest supply companies in back-to-back agreements sub-contracted its role to another Privinvest entity, the ninth and tenth defendants. I refer to the various Privinvest companies together as “Privinvest”. The London-based banks from whom the SPVs borrowed the funds to purchase the goods and services were Credit Suisse International (“CSI”), Credit Suisse AG (“CSAG”) and Credit Suisse Securities (Europe) Ltd (“CSSE”) (together “Credit Suisse”) and another bank, VTB Capital plc (“VTB”). Each of the supply contracts contained an arbitration agreement which I discuss in part 1(c) below. The borrowing was secured by sovereign guarantees which were signed by Mr Manuel Chang, who was then the Republic's Minister of Finance, purportedly acting on behalf of the Republic.
The Republic commenced proceedings in February 2019. In its Amended Consolidated Particulars of Claim (“ACPOC”) which were before Waksman J, the Republic claims that it is the victim of a conspiracy involving the defendants, including Privinvest and its ultimate owner and controller, Mr Iskandar Safa, whom it accuses of paying very substantial bribes (over US$136 million) to inter alios corrupt officials of the Republic and employees of Credit Suisse involved in the funding of the transactions, Mr Surjan Singh, Mr Andrew James Pearse, and Ms Detelina Subeva (the third, fourth and fifth defendants, respectively, whom I describe as “the CS team defendants”) and Mr Jean Boustani, who was said to be the lead salesman and negotiator for Privinvest in their dealings with the Republic and Credit Suisse. The conspiracy is said to have exposed the Republic to a potential liability of about US$2 billion under the guarantees and further macro-economic losses mentioned below. The Republic brings claims for bribery, conspiracy to injure by unlawful means, dishonest assistance, and knowing receipt, and makes proprietary claims.
In its defence, which was supplied after Waksman J had issued his decision and without prejudice to its section 9 challenge, Privinvest admits that certain payments were made by the sixth and ninth defendants (Privinvest Shipbuilding SAL (Holding) and Logistics International SAL (Offshore)) but denies that they were bribes and that Privinvest was involved in any conspiracy. Privinvest contends that the payments were, variously, investments, consultancy payments or legitimate remuneration for services rendered, or legitimate political campaign contributions, all of which were unconnected with the supply contracts and funding transactions or the guarantees which Mr Chang signed purportedly on behalf of the Republic. Privinvest contends that the supply contracts were valid, genuine and commercial contracts from which the Republic was to derive benefit.
On 19 December 2018 the United States Department of Justice commenced criminal proceedings against, among others, the CS team defendants, and Mr Jean Boustani. The CS team defendants pleaded guilty to federal offences during 2019. Mr Boustani was acquitted after a trial by a jury in December 2019.
In their defence to the Republic's action, the CS team defendants deny being part of any conspiracy against the Republic or related wrongdoing against it. Mr Singh, the third defendant, admits receiving secret commissions from Privinvest. Mr Pearse, the fourth defendant, admits receiving payments from Privinvest but denies that they were illicit. Ms Subeva, the fifth defendant, admits receiving funds from Mr Pearse which she understood to have come from Privinvest.
In their defences Credit Suisse admit that improper payments were made to the CS team defendants and infer that the payments to officials of the Republic were bribes. In June 2020 Credit Suisse issued Part 20 proceedings against Privinvest and ten individuals, including those alleged to have been the recipients of bribes.
Privinvest applied for a stay under section 9 of the 1996 Act by application notices dated 11 November 2019. At a directions hearing in April 2020 Waksman J resolved to address by way of preliminary issue Privinvest's contention that the Republic's claims against Privinvest fall within the arbitration agreements contained in the supply contracts entitling it to a mandatory stay of the legal proceedings under section 9 of the 1996 Act. The parties agreed that the judge was to decide the issue on the assumption that, as a matter of the governing Swiss law, both the Republic and the Privinvest subcontractors (the ninth and tenth defendants) are bound by those arbitration agreements. This appeal relates to the determination of that preliminary issue.
Since the judgment by Waksman J, which I summarise in part 2(a) below, the Republic has served Re-amended Consolidated Particulars of Claim (“RACPOC”) and Privinvest and Mr Safa have served a joint and detailed defence. Further, in 2019 Privinvest commenced various arbitrations in Switzerland against the SPVs and the Republic. Those arbitrations have effectively come to an end without any determination of the merits of the Privinvest claims.
The SPVs which entered into the supply contracts are Proindicus SA (“Proindicus”), Empresa Moçambicana de Atum SA (“EMATUM”) and Mozambique Asset Management SA (“MAM”).
On or about 18 January 2013 Proindicus and Privinvest Shipbuilding SAL (Holding) (“Holding”) executed a supply contract. The Proindicus contract was apparently for the supply of ships, aircraft and local infrastructure to enable the Republic to police its coastline and its EEZ. The contract is governed by Swiss law. The contract became effective upon payment of the total ex works price of US$366 million (less fees payable to Credit Suisse) on 22 March 2013. The Republic is neither a named party nor a signatory of the Proindicus supply contract. Privinvest alleges that as a matter of Swiss law the Republic is nevertheless a party to the contract.
As in the courts below, the parties have agreed for the purpose of the preliminary issue which is the subject of this appeal that the court is to proceed on the assumption that the Republic is bound by the arbitration agreements in this and the EMATUM and MAM supply contracts.
Clause L of the Proindicus supply contract contains a choice of law clause and an arbitration agreement. The clause provides:
“The governing law of this Contract (including all or any disputes pertaining to negotiations, formation or its execution) shall be Swiss law, excluding the convention of the United Nations on contracts concerning the international sale of goods dated 11.04.1980 (UNCITRAL/CISG).
The Customer and the Contractor base their relation with regards to this Project on the principles of good will and good faith.
All disputes arising in connection with this Project, if not amicably resolved between the parties shall finally be settled by ICC arbitration held in Genève, Switzerland. Such arbitration shall be undertaken in accordance with the...
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