Avobone NV v Aurelian Oil and Gas Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice Brian J.
• Judgment Date: 11 November 2016
• Neutral Citation: [2016] IEHC 636
• Docket Number: [2016 No. 132 MCA]
• Court: High Court
• Date: 11 November 2016

[2016] IEHC 636

THE HIGH COURT

McGovern J.

[2016 No. 132 MCA]

IN THE MATTER OF THE ARBITRATION ACT 2010

AND IN THE MATTER OF ORDER 56 OF THE RULES OF THE SUPERIOR COURTS

BETWEEN

AVOBONE N.V.

AND

AVOBONE POLAND B.V.

APPLICANTS

AND

AURELIAN OIL AND GAS LIMITED, AURELIAN OIL AND GAS POLAND SP. Z.O.O., ENERGIA, ZACHOD HOLDINGS S.P. Z.O.O.

AND

AOG FINANCE LIMITED

RESPONDENTS

Arbitration – International Law – Arbitration Act 2010 – Unconditional appearance – Administrative mistake – Challenge to jurisdiction – Enforcement of arbitral award

Facts: In the present case, there were two motions before the Court. The applicants in the first motion sought an order to enforce an arbitral award issued by the International Court of Arbitration of the International Chamber of Commerce in London in the jurisdiction of England and Wales and other ancillary orders. The respondent, by way of second motion, sought an order setting aside the unconditional appearance and in the alternative sought an order to the effect that unconditional appearance should be deemed to be conditional appearance entered for contesting jurisdiction. The applicants contended that by entering an unconditional appearance, the respondents had submitted to the jurisdiction of the Irish Courts. The applicants argued that the respondents had offered no explanation for the mistake claimed in entering an unconditional appearance.

Mr. Justice Brian J. McGovern granted an order to the applicants for enforcing the arbitral award and refused the reliefs sought by the respondents. The Court held that there was no basis or proper explanation furnished to the Court in respect to the alleged mistake or administrative error for setting aside an unconditional appearance or deeming it to be a conditional appearance. The Court found that the applicants established that the enforcement of the arbitral award in the present jurisdiction would result in a solid practical benefit to the applicants. The Court held that no valid challenge had been raised to the enforcement of the arbitral award in the present jurisdiction.

JUDGMENT of Mr. Justice Brian J. McGovern delivered on the 11th day of November, 2016

1 There are two motions before the court. The first in time is a motion brought by the applicants to enforce an arbitral award issued by the International Court of Arbitration of the International Chamber of Commerce in London in the jurisdiction of England and Wales on 21st May, 2015, together with a supplemental decision and an addendum on costs dated 5th October, 2015 (collectively referred to as ‘the award’). Further, or in the alternative, that relief is sought under Article 35 of the UNCITRAL Model Law., The applicant also seeks an order pursuant to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) enforcing the award in the State in the same manner as if the award was a judgment or order of the High Court. Judgment is sought in the sum of €20,863,818.44 with daily interest accruing from 6th April, 2016 until judgment in the amount of €2,523.75.

2 The second motion, brought later in time, is the respondents' motion to set aside an unconditional appearance entered on their behalf on the ground of mistake and in the alternative deeming it to be a conditional appearance entered for the purpose of contesting jurisdiction. The respondents also seek an order setting aside the order of Moriarty J. dated 12th April, 2016, giving the applicants leave to issue and serve notice of the within proceedings outside the jurisdiction. Alternatively, the respondents' seek an order staying the proceedings.

3 It was agreed between the parties that the respondents would proceed first and argue on the challenge to jurisdiction and that the court should later deal with the applicants' motion to enforce the arbitration award. The hearing proceeded on that basis.

Jurisdiction

4 An unconditional appearance was entered by the respondents to the proceedings on 10th June, 2016. The respondents' solicitor swore an affidavit in which he stated that he intended entering an appearance simply for the purpose of contesting jurisdiction but that ‘owing to an administrative error’ he entered an unconditional appearance.

5 The respondent relies upon the decision of the Supreme Court in Campbell International Trading House Limited v. Peter Van Aart [1992] 2 I.R. 305. In that case, the court held that an appearance to contest jurisdiction could be entered by virtue of a communication of such to the appellant. The respondents rely on an email of 20th April, 2016, as an early indication of an intention to contest jurisdiction. While the email questions the applicants' entitlement to enforce the arbitration in this jurisdiction in circumstances where the respondent companies have no assets in Ireland, it does not suggest that a conditional appearance will be entered for the purpose of contesting jurisdiction.

6 In the alternative, the respondents rely on Murray v. Times Newspaper Limited [1995] 3 I.R. 244. In that case, Barron J. adopted the decision in Campbell International Trading House Limited v. Peter Van Aart and O'Neill v. Ryan [1993] I.L.R.M. 557, as authority for the proposition that the court can entertain an application to strike out a claim on the ground that no jurisdiction is given to the courts even where there is an unconditional appearance. But he stated, at 251:-

‘However, it is clear from those decisions that there must be something in the nature of mistake or similar justifying circumstances before the application can succeed.’

7 The respondents also argue that in this case no significant steps have been taken such that the court could satisfy itself that the respondents are not entitled to challenge jurisdiction.

8 The applicants contend that, by entering an unconditional appearance, the respondents have submitted to the jurisdiction of the Irish courts and they rely on Popely v. Popley [2006] 4 I.R. 356 and Devrajan v. District Judge Ballagh [1993] 3 I.R. 377, as authority for the proposition that the respondents are required to provide a proper explanation for the original error and the continuation of engagement in the litigation process. The...