Trafigura PTE Ltd v Emirates General Petroleum Corporation
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE FLAUX,THE HON. MR JUSTICE TOMLINSON,Mr Justice Tomlinson |
| Judgment Date | 26 January 2010 |
| Neutral Citation | [2009] EWHC 1613 (Comm),[2010] EWHC 87 (Comm) |
| Date | 26 January 2010 |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: 2009 Folio 350,2009 Folio No 350 |
[2009] EWHC 1613 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Mr Justice Flaux
2009 Folio No 350
MR ROBERT BRIGHT QC and MR RICHARD WALLER (instructed by Reed Smith) appeared on behalf of the Claimant.
MR AL-MIDFA appeared on behalf of the Defendant.
: This is the judgment on the defendant's application challenging the jurisdiction of the court and seeking to set aside the service of proceedings on them in Dubai and, following on from that, to discharge an anti-suit injunction granted by Cooke J on 23 April 2009, and continued by me on the return date of 5 June 2009.
The application arises in a somewhat unconventional way, in this sense, that the defendants have not, in fact, entered an acknowledgement of service as required by the Civil Procedure Rules. Therefore, this application is not made as it formally should be, pursuant to Part 11 of the Civil Procedure Rules.
However, at the outset of the hearing today, Mr Al-Midfa, who is the General Manager of the defendant and who has full authority to act on its behalf and to whom I have given permission to represent it before this court, a matter to which I will return below, was asked in terms whether his company accepted that the service that the Dubai court bailiff sought to make upon the defendants of the proceedings on 14 May 2009 was good service. Mr Al-Midfa indicated that his company accepted that it was. Even had he not accepted that, on the materials before the Court it is clear that good service of the proceedings was effected on the defendants on 14 May 2009 for the purposes of the application of the relevant provisions of the Civil Procedure Rules. I have in mind the document emanating from the court bailiff concerning his attempt to serve and the fact that the defendant's representatives refused to accept the documents, together with the letter of advice from Mr Briggs, a UAE lawyer, to the effect that, in his opinion, that constituted good service in accordance with the local law.
The claimants, Trafigura Pte Ltd are a company in the well-known oil trading group. They were the sellers and the defendants were the buyers, under a term contract, number 154876, for the sale of 390,000 metric tons of gasoil, to be delivered in the United Arab Emirates in the period from 27 January to 31 December 2008. The defendants awarded the contract to the claimant on the basis that 13 cargoes would be supplied during that period.
The claimant's case is that the contract contained an English law and exclusive jurisdiction clause. That clause provides so far as relevant:
“This contract shall be governed by and construed in accordance with English law. The parties hereby agree to submit all disputes hereunder to the exclusive jurisdiction of the English High Courts in London.”
The claimant's case is also that the contract was originally agreed in January 2008, on the basis that the seller would be another company in the Trafigura Group, Trafigura Beheer BV, a Dutch company which has its main place of business in Switzerland.
Because the gasoil was to be sourced in the Far East, and for other internal reasons, the group wanted the seller, in the event, to be the Singaporean company in the group, Trafigura Pte Ltd, the claimant, and accordingly, on the claimant's case, the contract was novated to that company on or about 21 February 2008.
The formal contract document was dated 5 March 2008, although, for reasons which I will elaborate later in the judgment, it was not signed until July 2008.
Shipments began under the contract in March 2008, and three, or possibly four, shipments were delivered and paid for by the defendants without any problems. The current dispute relates to the next two shipments on the Grace Victoria and the Hellespont Promise. Those cargoes were duly delivered in the UAE. Invoices were issued. Just short of $42 million is due in respect of the Grace Victoria and just over $40 million due in respect of the Hellespont Promise.
Neither sum has been paid. Initially the defendants indicated that they would be paying, once there had been approval from the Ministry of Finance. However, in late December 2008, by which time the cargoes had evidently been consumed, the defendants started seeking to justify non-payment by reference to their own quality specifications, which they said had been set out in their tender document and which, on their case, they say were the terms upon which they agreed to buy the cargo. The defendants alleged that the two cargoes as supplied by the claimant had failed to comply with those quality specifications. The defendants also sought to justify non-payment by reference to United Arab Emirates law and stated that the matter was within the jurisdiction of the United Arab Emirates' courts.
The claimants issued the present proceedings in this court on 16 March 2009, and since the defendants declined to appoint solicitors to accept service, although I note that in relation to other matters they have instructed Clyde & Co, the claimants sought and obtained permission to serve the proceedings out of the jurisdiction.
After that the defendants engaged in threats to take legal proceedings in the United Arab Emirates in breach of the exclusive jurisdiction clause, and it was in those circumstances that Trafigura applied for and obtained from Cooke J, on 23 April, the anti-suit injunction, restraining the defendants from taking proceedings other than in England.
His order provided for service by a variety of methods, and service by all those methods has been carried out. The return date was fixed for 5 June, on the basis that it would be likely to be the Friday after the time for acknowledgement of service expired, on the basis that the claimant expected to serve on 8 May. In the event, they only served on 14 May, so the time for acknowledgement actually expired on 5 June itself.
As I have already indicated, the defendants did not file and have not filed an acknowledgement of service, but, on 4 June, they filed a document described as “Defence”, which set out their grounds for objecting to the jurisdiction of the English courts and why it was said that the dispute was one that should be heard before the UAE courts.
That document was signed by Mr Al-Midfa, the General Manager, who appeared on their behalf at the return date, and reiterated, in his oral submissions to me, the grounds set out in that document.
On that occasion I indicated that the issue whether the English court has jurisdiction was a matter for the English court, not for the United Arab Emirates court, and ordered that the issue of jurisdiction should be determined at the hearing today, setting a timetable for the serving of evidence by the claimant in response to the defendant's allegations. At that hearing I also indicated that, although I was prepared to allow Mr Al-Midfa to represent the defendants on that occasion, the defendants would be well advised to obtain English solicitors and counsel. In fact, it appears that earlier this week the defendants did instruct Mr Richard Lissack QC by way of direct access, and may even have had a consultation with him, but, by the afternoon of 24 June, he had been disinstructed. It is probably not sensible to speculate as to why that is, but it means that the defendants continue to be represented by Mr Al-Midfa.
Again I allowed him to represent the defendants, although with some reluctance, for two reasons. Firstly, he is at the heart of the factual dispute which the defendants seek to raise, and it seems to me that he is likely to be a witness in due course. In those circumstances, it is not really appropriate for him to represent the defendants, although, as I have indicated, I have allowed him to do so on this occasion.
Secondly, I suspect that the lack of representation on behalf of the defendants on this occasion is, in one sense, tactical. The defendants clearly have the financial means and, as Mr Bright says, the level of sophistication, to instruct English solicitors and counsel. As I have already indicated, in relation to another dispute, they have instructed Clyde & Co. Accordingly, this is not a case in which the defendant comes before the court as a litigant in person who is unable to obtain legal assistance. The defendants are well able to seek legal assistance. For whatever tactical reason they have simply chosen not to do so.
At all events, in response to the defence document produced on the last occasion, the claimant served two detailed witness statements from the employees who were involved in the negotiation of this and other contracts between the parties, one from Mr Amjad Habbas, the manager of the Trafigura Group Middle East Operations based in Dubai, and one from Miss Alana Thompson, the Contracts Administration Manager for the Trafigura Group based in London. Those statements include voluminous exhibits of contract documentation and email exchanges.
The hearing bundles were sensibly sent by those who instruct Mr Bright QC and Mr Waller to the chambers of Mr Lissack, on the basis that Mr Al-Midfa was going to be there on Wednesday of this week. Mr Al-Midfa was indeed there on Wednesday this week but, for whatever reason, chose not to take away the hearing bundles and as a consequence had not seen those bundles until the hearing today. Mr Bright, who appears on behalf of the claimant, has made every possible effort to ensure that Mr Al-Midfa has been made...
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