The French State v The London Steam-Ship Owners' Mutual Insurance Association Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Butcher |
| Judgment Date | 06 October 2023 |
| Neutral Citation | [2023] EWHC 2474 (Comm) |
| Court | King's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2023-000293 |
In the Matter of the Arbitration Act 1996
And in the Matter of An Arbitration
[2023] EWHC 2474 (Comm)
THE HON Mr Justice Butcher
Case No: CL-2023-000293
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT (KBD)
Royal Courts of Justice
Strand, London, WC2A 2LL
Anna Dilnot KC and Naomi Hart (instructed by K&L Gates LLP) for the Claimant
Christopher Hancock KC and Alexander Thompson (instructed by Wikborg Rein LLP) for the Defendant
Hearing dates: 8–9 August 2023
Approved Judgment
This judgment was handed down remotely at 10.30am on Friday 6 October 2023 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).
THE HONOURABLE Mr Justice Butcher
This action is an arbitration claim, in which the Claimant (‘the French State’) seeks to appeal two partial awards made by an arbitral tribunal consisting of Dame Elizabeth Gloster DBE pursuant to s. 69 Arbitration Act 1996 (‘AA 1996’). Those awards are: (a) a ‘partial final award’ dated 8 February 2023 (‘the First Partial Award’), and (b) a ‘second partial award’ dated 2 May 2023 (‘the Second Partial Award’). Together, I will refer to the two awards as ‘the Awards’.
The matters which have been argued at the hearing on 8–9 August 2023, and which I now have to resolve are:
(1) Whether the French State needs and should be granted an extension of time to seek leave to appeal the First Partial Award;
(2) To the extent that the French State does not need, or is granted, an extension of time, should the French State be granted leave to appeal the Awards; and
(3) If it is, should the French State's appeals against the Awards succeed.
Background
These matters overlap with, and the background to them is in large part the same as the background to, the AA 1996 applications made by the Kingdom of Spain (‘Spain’) in relation to the Awards of Sir Peter Gross, which I have dealt with in my judgment in relation to those applications which is being handed down at the same time as this one (‘the 2023 Spain Judgment’). Given this, I will not set out the common background, which can be taken from that judgment (and from the various judicial summaries of the facts which are referred to in it). I will also adopt the defined terms used in the 2023 Spain Judgment, save to the extent that there are separate defined terms in this judgment.
There are, nonetheless, certain particular matters relevant to the French State which need to be specifically mentioned, and which can be summarised as follows:
(1) The French State was one of the claimants in the Spanish proceedings, who, in about June 2010, made a civil claim against the Defendant (‘the Club’) under Article 117.
(2) The Defendant (‘the Club’) commenced a different arbitration against the French State from that which it commenced against Spain, by notice of arbitration dated 16 January 2012. Mr Alistair Schaff QC was appointed as arbitrator. Mr Schaff issued his award in the arbitration involving the French State on 3 July 2013. In that award he granted substantially the same relief granted to the Club against Spain in his award of 13 February 2013.
(3) The French State had taken no part in that arbitration. It did, however, resist the Club's s. 66 AA 1996 application in respect of the Schaff award against it, and brought its own application challenging the substantive jurisdiction of the tribunal under s. 67 and/or s. 72 AA 1996. The French State was accordingly a party to and represented at the hearings before Hamblen J in October 2013, and the Court of Appeal in January 2015.
(4) The Spanish proceedings ultimately resulted in an order of the Provincial Court of La Coruña of 1 March 2019 providing, inter alia, that the French State was entitled to seek enforcement against the Club of up to about €117 million, and that the Spanish State was entitled to seek enforcement up to about €2.355 billion and various other Spanish claimants further amounts, subject to the US$1 billion limit in the insurance contract.
(5) On about 11 January 2019 the Club served a notice or further notice of arbitration on the French State. In the absence of any agreement by the French State, the Club issued an Arbitration Claim Form, seeking the appointment of Dame Elizabeth Gloster as sole arbitrator pursuant to s. 18 AA 1996. On 14 February 2020, that application was heard by Foxton J. The French State did not attend that hearing or make any submissions. Foxton J held that the French State was not immune from the proceedings, by reason of s. 9 State Immunity Act 1978 (‘SIA’), because it had agreed in writing to refer the Club's claims to arbitration and the s. 18 AA 1996 application related to the arbitration. Further Foxton J held that the requirements of s. 18 AA 1996 were met, and appointed Dame Elizabeth Gloster as the sole arbitrator in the reference.
(6) In the arbitration, in summary, the Club sought declarations that the French State was in breach of its obligations not to pursue the non-CLC claims other than by way of London arbitration, injunctive relief, and an order that the French State pay to the Club such sums as the Club is ordered to pay to the French State in any jurisdiction in which the Spanish Judgment is recognised or enforced, as well as compensation for its costs of defending the non-CLC claims in Spain.
(7) A hearing in the arbitration took place before Dame Elizabeth Gloster on 6–8 and 19–22 July 2021. The French State participated in this hearing. On 20 June 2022 the CJEU handed down its judgment in the Reference. K&L Gates LLP, for the French State, provided a copy of that judgment to Dame Elizabeth Gloster. On 22 June 2022 she said that, having read the judgment, she did not require submissions from the parties to the arbitration to complete her award. Neither party sought to persuade her otherwise. During July 2022 the parties exchanged submissions on a different authority, UK P&I Club v Republica Bolivariana de Venezuela (The ‘Resolute’) [2022] EWHC 1655 (Comm) and its relevance to the issues before the tribunal. After that there were no further written or oral submissions in the arbitration, and Dame Elizabeth Gloster proceeded to produce her first award.
(8) The French State, unlike Spain, has not sought, or obtained, an order seeking to have the Spanish Judgment registered in England pursuant to the Brussels I Regulation.
Dame Elizabeth Gloster produced the First Partial Award on 8 February 2023. In that First Partial Award, in summary, Dame Elizabeth Gloster:
(1) Set out the factual and procedural background (paras. 6–55);
(2) Identified the issues which arose for decision (para. 56). There were six principal issues: Issue I as to her jurisdiction; Issue II as to the effect, if any, of the Club's participation in the Spanish quantum proceedings; Issue III as to whether there should be the grant of declaratory relief in favour of the Club; Issue IV as to whether there could and should be the grant of equitable compensation to the Club; Issue V as to whether she could and should grant injunctive relief restraining the French State from enforcing any of the judgments of the Spanish Courts anywhere in the world outside Spain; and Issue VI as to whether the Club should be granted damages under s. 50 SCA instead of or in addition to an anti-enforcement injunction;
(3) Resolved the jurisdiction issue (Issue I) in favour of the Club (paras 57–62);
(4) Found (in relation to Issue II) that the Club had not submitted to the jurisdiction of the Spanish Courts by its participation in the quantum proceedings there (paras. 63–81);
(5) Held (in relation to Issue III) that she should exercise her discretion to grant declaratory relief to the effect that the French State, by maintaining direct civil claims in Spain and by taking steps in Spain to enforce the order of the Provincial Court of La Coruña of 1 March 2019 was in breach of its obligations in equity not to pursue such claims other than by way of London arbitration; and that if it took further steps, in Spain or elsewhere, to enforce that order, or any other order of the Spanish Courts upholding or enforcing such claims, it would be in breach of its obligations not to pursue such claims other than by way of London arbitration (paras. 81–85);
(6) Concluded (in relation to Issue IV) that she, as the tribunal, had the power to award equitable compensation to the Club in respect of the French State's past and future breaches of its equitable obligation to pursue direct claims only in London arbitration; and that as a matter of discretion she should make such an order (paras 87–149);
(7) Concluded (in relation to Issue V) that she had jurisdiction to grant an injunction restraining the French State from enforcing any of the judgments of the Spanish Courts, and that as a matter of discretion she should grant such an injunction (paras 150–202);
(8) Said (in relation to Issue VI) that she considered it neither necessary nor appropriate to decide on this, as she had already concluded that it was appropriate to make an order for the payment of equitable compensation (including contingently on future breaches by the French State of its equitable obligation) (paras. 203–204).
In paragraph 205 of her First Partial Award Dame Elizabeth Gloster set out the relief which, ‘subject to hearing further from the parties as to the precise terms of the order’, she proposed to grant to the Club. This paragraph contained the following proposed relief:
‘(1) A declaration that the Respondent is, by maintaining the direct civil claims brought...
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...39 The relevant principles were helpfully summarised by Butcher J in France v London Steam-Ship Owners Mutual Insurance Association [2023] EWHC 2474 (Comm) at [17] and [18] and I shall apply 40 I am in no doubt that the Interim Award of 11 August 2022 was an “award” so that time then start......