RSM Production Corporation v Gaz Du Cameroun SA
| Jurisdiction | England & Wales |
| Judge | Mr Justice Butcher |
| Judgment Date | 15 November 2023 |
| Neutral Citation | [2023] EWHC 2820 (Comm) |
| Court | King's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2023-000665 |
[2023] EWHC 2820 (Comm)
THE HON Mr Justice Butcher
Case No: CL-2023-000665
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Iain Quirk KC and Stephen Donnelly (instructed by Baker Botts) for the Claimant
James Leabeater KC and Daniel Khoo (instructed by Armstrong Teasdale) for the Defendant
Hearing date: 2 November 2023
Approved Judgment
This judgment was handed down remotely at 10.00am on 15/11/23 by circulation to the parties or their representatives by e-mail and by release to the National Archives (see eg https://www.bailii.org/ew/cases/EWCA/Civ/2022/1169.html).
This is an application by the Claimant (‘RSM’) to continue an anti-suit injunction granted by HHJ Pelling KC at a hearing without notice on 4 October 2023 (‘the ASI’).
The basis on which the ASI was sought and granted was, in brief, as follows.
(1) RSM is an independent oil and gas exploration and production company. The Defendant (‘GdC’) is RSM's contractual partner and the operator, under a series of agreements, in the development of the Logbaba hydrocarbons block in Cameroon.
(2) RSM sought the injunction to restrain GdC from continuing legal proceedings in Cameroon by which GdC had already provisionally attached about US$ 18 million of RSM's funds in a without notice procedure. RSM also believed that GdC would seek further relief in Cameroon by way of a without notice application to the Cameroonian court for payment of that money to GdC.
(3) RSM's contention was that those Cameroonian proceedings were brought in breach of an arbitration agreement contained in a Settlement Agreement dated 27 September 2021 (the ‘SA’) between RSM, GdC, and GdC's parent Victoria Oil & Gas plc (‘VOG’).
The ASI was varied by a consent order of Jacobs J made on 17 October 2023, to preserve the parties' respective positions in the Cameroonian proceedings pending the return date.
The return date hearing was held before me on 2 November 2023. GdC resisted the continuation of the ASI on four grounds, which may be summarised as follows:
(1) That the dispute RSM seeks to enjoin is not a dispute governed by an English-seated arbitration agreement, or at least RSM cannot show a high degree of probability that it is;
(2) There has been no breach of any arbitration agreement because GdC had merely sought and obtained interim relief in Cameroon in support of anticipated arbitration proceedings, and that it is established that seeking such interim relief does not breach an agreement to arbitrate;
(3) The English Court has no jurisdiction over GdC;
(4) There was a failure to make a fair presentation at the without notice hearing.
Background
The background to the current dispute is complex and contentious. It is both unnecessary and undesirable that I should say more about it than is strictly necessary for the purposes of putting in context and addressing the issue which I have to decide. What follows in this section of the judgment is not intended to be contentious.
The parties entered into a Joint Operating Agreement (the ‘JOA’) dated 6 December 2005. Under the JOA the parties' interests are 60% (GdC) and 40% (RSM). On 12 June 2017 the parties entered into a ‘Participation Agreement’ (the ‘PA’) with the national oil and gas company of Cameroon, Société Nationale des Hydrocarbures (‘SNH’). After the PA the respective interests in the Logbaba Project were GdC (57%), RSM (38%) and SNH (5%). The JOA remained in force between GdC and RSM.
The JOA is governed by Texas law and contains an arbitration agreement providing for ICC arbitration seated in Houston, Texas. The PA is subject to the laws of the Republic of Cameroon. Article 16 of the PA is entitled ‘Interpretation and Settlement of Disputes’ and provides as follows:
‘16.1 The Parties shall make reasonable efforts to amicably settle any dispute arising between them regarding this [PA]. Failing amicable settlement, the Parties hereby agree to submit to the International Centre for the Settlement of Investment Disputes (hereafter “ICSID”), any dispute arising from or related to this [PA] for purposes of settlement by arbitration in accordance with the provisions of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (hereafter “ICSID Convention”).
16.2 Any arbitral tribunal constituted pursuant to this [PA] shall consist of three (3) arbitrators being appointed in accordance with the ICSID Convention and Arbitration rules.
16.3 Any arbitral tribunal constituted pursuant to this [PA] shall apply Cameroonian law, in accordance with the provisions of this [PA] and the Contract.
16.4 The STATE hereby waives any right, for itself or its property, of sovereign immunity intended to stop the execution of a judgment rendered by an arbitral tribunal constituted in accordance with this [PA].
16.5 The arbitration shall take place in London, United Kingdom. The language used for the arbitral proceedings shall be English.
16.6 Any arbitration initiated pursuant to this [PA] shall be held in accordance with the ICSID Rules of arbitration in force of the day of its initiation.
16.7 The Parties hereby agree that for the purposes of Article 25(1) of the ICSID Convention, any dispute arising from or connected with this [PA] is a legal dispute arising directly out of an investment.
16.8 The Parties shall not be absolved of their obligations under this [PA] during the arbitration proceedings. However, the introduction of the arbitral proceedings suspends the execution of the contested act for the duration of said proceedings.
16.9 The judgment of the arbitrators shall be final and irrevocable. It binds the Parties and is executory, in accordance with Article 54 of the ICSID Convention. The Parties hereby waive, formally and without reserve, any right to oppose such judgment, to obstruct is execution by any means or to have recourse to any court or jurisdiction whatsoever, except for the recourse provided in Articles 50 and 52 of the ICSID Convention.
16.10 In the event of incompetence by ICSID for whatever reason to rule on or settle any dispute submitted to it under Article 15.1 above, any dispute, controversy or claim arising from or related to this [PA], or to the breach, cancellation or invalidity of this [PA], shall be settled by arbitration under the United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules actually in force. In such case, all the provisions of this Article 16, except for Articles 16.1 and 16.7, shall apply mutatis mutandis.’
On 10 October 2018 RSM commenced an ICC arbitration under the JOA. One of the claims made by RSM was that it ought to be reimbursed for certain expenditures on wells LA-107 and LA-108. These claims were, apparently, in respect of matters occurring before the remediation operations on well LA-108 which were then the subject of a claim in the UNCITRAL arbitration which I refer to below.
GdC contends that, in mid 2019, RSM had stated that it did not consent to or participate in remediation operations on well LA-108, and that GdC had said that it intended to go ahead with those operations on a ‘Sole Risk’ basis.
In February 2020 RSM commenced arbitration pursuant to UNCITRAL rules under the arbitration provision in the PA. One of the claims made in that arbitration related to what RSM contended was GdC's wrongful charging of costs relating to well LA-108. RSM sought an order enjoining GdC from charging RSM with costs associated with a remediation of that well, and sought to recover a sum of some US$ 4.3 million in respect of expenditure on that remediation. RSM contended that there had not been proper authorisation under the PA, and that GdC bore sole responsibility for such costs. GdC contended, in the arbitration, that there had been proper authorisation.
The SA was concluded on 27 September 2021. It provided, in part, that the parties agreed to ‘dismiss with prejudice the claims in the UNCITRAL arbitration set for hearing beginning on September 27, 2021, provided that this Settlement Agreement and the dismissal of the UNCITRAL arbitration shall have no effect on, and shall be without prejudice to, all of the claims in the pending ICC arbitration case No. 23991/MK.’ By clause III, 2b it was provided that ‘RSM's 40% share of the LA-108 remediation costs that have not yet been netted by GdC is US$ 2,657,350…’ This, RSM says, was then netted off against sums due to RSM.
By clause III, 1Ia, it was further provided that:
‘The LA-108 additional perforations operation proposed by GdC on June 4, 2021 (the “ LA-108 Workover”) is authorized to proceed, with RSM committed to fund its proportionate share of those costs up to but not exceeding US$ 125,000 payable in XAF equivalent (the “RSM Cap”); provided that if the costs exceed the RSM Cap, GdC will carry RSM for the balance of the operation at no cost to RSM, and RSM shall retain its entire proportionate working interest in the well without recourse, notwithstanding that RSM did not fund the entirety of its proportionate share of the costs of the LA-108 Workover.’
The Governing Law and Dispute Resolution provision of the SA was as follows:
‘The laws of England and Wales, exclusive of any conflicts of laws principles, shall govern this [SA] (including the arbitration agreement) for all purposes, including the resolution of all disputes between the parties.
Subject to the expert determination provisions described above, the dispute resolution provisions of Article 16 of the [PA] shall apply to all disputes arising out of the [SA], provided, however, that the parties agree that disputes shall be submitted...
To continue reading
Request your trial
-
Tyson International Company Ltd v GIC Re, India, Corporate Member Ltd
...to delay that which is inevitable. The position in this respect is similar to the recent judgment of Butcher J in RSM Production Corporation v Gaz Du Cameroun SA [2023] EWHC 2820 (Comm), where at the return date of an ASI, the Judge granted a continuation of the anti-suit relief and furthe......