Tecnicas Reunidas Saudia for Services & Contracting Company Ltd v Petroleum Chemicals and Mining Company Ltd

Hearing date: 24 June 2025

Approved Judgment

This judgment was handed down remotely at 9.30am on Monday 14 July 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

A. INTRODUCTION

The Claimant, Tecnicas Reunidas Saudia For Services & Contracting Co. Ltd (“Tecnicas”), brings an arbitration claim against Petroleum Chemicals and Mining Company (“PCMC”) under section 67 of the Arbitration Act 1996 (the “Section 67 Application”) challenging a Partial Award on Preliminary Issues (the “Award”) as to “whether the Tribunal has jurisdiction to hear [PCMC's] principal claims” issued by an arbitral tribunal in an institutional arbitration under the auspices of the International Chamber of Commerce (“ICC”).

Tecnicas does so on the ground that the Tribunal had no jurisdiction to hear the claims relating to a dispute that arose between PCMC and Tecnicas, because (per Tecnicas) the parties never agreed to any arbitration under the auspices of the ICC, but only to an ad hoc arbitration in London before three arbitrators as set out in the arbitration clause in the Purchase Order, which formed part of a subcontract (the “Sub-Contract”) between the parties, and which had precedence over other documents forming part of the SubContract. The Sub-Contract itself was for part of the works in relation to the provision of engineering, procurement and construction work in connection with the Fadhili gas processing plant in Saudi Arabia.

The Section 67 Application had been fixed for this one-day hearing since February 2025 following PCMC's failure to file any Acknowledgement of Service (“AoS”) to Tecnicas' section 67 Arbitration Claim Form that was issued by Tecnicas in the Commercial Court on 15 November 2024 and served upon PCMC on 15 December 2024 (by emails to various individuals associated with PCMC in Saudi Arabia).

After such fixture, and as will appear, PCMC has issued, but has never had fixed, various applications of its own, including a challenge to jurisdiction and, inconsistently with that, a claim for reverse summary judgment and security for costs of the section 67 Application, including a requisite application for relief from sanctions and associated extension of time to file its Acknowledgment of Service. All these applications would logically precede the hearing of the Section 67 Application, but none of them (not even that for relief from sanctions) had been fixed by PCMC, and all parties were aware that the hearing on 24 June 2025 was the final substantive hearing on the Section 67 Application.

That remained the (highly unsatisfactory) position until the morning of the hearing, when the Court was informed, shortly before coming into Court, that Tecnicas was willing to agree to PCMC being granted relief from sanctions and an extension of time for Acknowledgment of Service on the basis that PCMC withdrew its challenge to jurisdiction based on allegedly defective service, so as to facilitate the Section 67 Application being heard, and PCMC being able to address the Court thereon. However the parties could not agree costs, and PCMC still sought to have heard its (unlisted) application for security for costs (and before the Section 67 Application), with the result that there was no concluded agreement between the parties (even subject to the Court's approval).

At the start of the hearing, both parties candidly acknowledged that this proposal would in any event necessitate PCMC making its (unlisted) application for relief from sanctions, in circumstances where it was a matter for the Court (and not the parties) as to whether relief from sanctions should be granted on the facts of the present case.

In order, so far as possible, to save the hearing of the Section 67 Application, I agreed, at the outset of the hearing, to hear PCMC's application for relief from sanctions and associated application for a retrospective extension of time to file an Acknowledgement of Service (the “Relief from Sanctions Application”)

In the event, and for the reasons set out in Part 1 of this judgment, I refused PCMC relief from sanctions, and dismissed the Relief from Sanctions Application, as a result of which all of PCMC's other applications fell away.

I was, however, keen to ensure that all arguments that were contrary to those advanced by Tecnicas on the Section 67 Application were before me, so that I could have regard to the same. I accordingly allowed PCMC to be heard orally, through its counsel Mr Singarajah, not as a party, but de bene esse.

The Section 67 Application proceeded on that basis, and it proved possible to conclude the oral hearing of the Section 67 Application within the available time, following which I reserved judgment on the Section 67 Application.

Part 1 of this judgment addresses the Relief from Sanctions Application, after which Part 2 addresses the Section 67 Application itself.

B. PART 1 – RELIEF FROM SANCTIONS APPLICATION B.1 Background

It is first necessary to provide a short overview of the history of events, before turning to the procedural history that has led up to the Relief from Sanctions Application.

In 2022, PCMC filed a claim against Tecnicas before the Commercial Court of Saudi Arabia. The Court declined jurisdiction, holding that the Purchase Order had provided for settlement of the dispute between the parties by arbitration.

PCMC then filed a request for arbitration before the London Court of International Arbitration (the “LCIA”). On 13 September 2023, the LCIA declined to initiate the arbitration and noted that PCMC were referring to an arbitration agreement which they were asserting contained references to the ICC.

Ultimately, on 6 October 2023, PCMC filed their request for arbitration against Tecnicas before the ICC. The detailed chronology of events thereafter, which included Tecnicas asserting that the ICC had no jurisdiction, resulted in the ICC bifurcating the arbitration proceedings and dealing first with the issue as to jurisdiction.

On 18 October 2024, the Tribunal rendered a Partial Award on the Preliminary Issues; namely “whether the Tribunal has jurisdiction to hear [PCMC's] principal claims”, insofar as they relate to the interpretation of the arbitration agreement, finding that it did have jurisdiction. Tecnicas issued the Arbitration Claim Form on 15 November 2024 challenging jurisdiction under section 67 of the Arbitration Act 1996.

Importantly, the Tribunal, PCMC and its representatives in the arbitration were notified of the challenge on the same day. Accordingly, PCMC knew of the challenge from 15 November 2024.

On 15 December 2024, Tecnicas served PCMC with a sealed Claim Form, the associated claim pack, and supporting documents in relation to the Section 67 Application and challenge to the tribunal's jurisdiction, by sending the same by email to various email addresses associated with PCMC in Saudi Arabia. In this regard, Tecnicas did not need permission to serve out of the jurisdiction in the context of the claim being an arbitration claim.

The email stated:

“We refer to the Tribunal's Partial Award dated 18 October 2024 (the Partial Award).

This email constitutes notice under section 67(1) of the Arbitration Act 1996 (the Act) to the Tribunal and each Member thereof, and to Petroleum Chemicals and Mining Company Limited that, on 15 November 2024, Tecnicas Reunidas Saudia For Services & Contracting Co. Ltd. (Tecnicas) applied to the courts of England and Wales pursuant to section 67 of the Act challenging the Partial Award and seeking an order that it is set aside. The representatives from Tecnicas are copied herein.

In accordance with Part 62.6 of the Civil Procedure Rules as part of this notice we attach the arbitration claim form and all written evidence in support thereof. Exhibit AF1 can be downloaded in the following link: [link given] …”.

PCMC then had 24 days (until 8 January 2025) to file an Acknowledgment of Service. It did not do so, notwithstanding that it had, sometime before this deadline, already instructed English solicitors. It is perhaps remarkable that those acting on behalf of PCMC did not immediately acknowledge service (as one would have expected them to do) not least if, as appears to be the case, they were contemplating the possibility of challenging jurisdiction/the validity of service, given that the consequence of a failure to acknowledge service by the deadline was that they thereby submitted to the jurisdiction of the English court.

Even more extraordinarily (given subsequent events) PCMC did not file an Acknowledgement of Service (accompanied by an application for an extension of time and relief from sanctions) in the weeks (or even well over a month) that followed, in the context of what was an arbitration claim, where expedition is of the essence of such arbitration proceedings.

Indeed, it was the Commercial Court itself that took the next step (furthering the need for expedition in arbitration proceedings). It emailed the parties' solicitors on 18 February 2025, stating that:

“The court would like to confirm that there has been no acknowledgment of service as it has been 3 months since the claim was filed. If so, we await listing instructions (time estimate and availability) to list this s.67...