Yukos Capital S.A.R.L. v OAO Tomskneft VNK

 
FREE EXCERPT

[2014] IEHC 115

THE HIGH COURT

[No. 34 MCA/2013]
Yukos Capital Sarl v Oao Tomskneft VNK
COMMERCIAL
IN THE MATTER OF THE ARBITRATION ACTS 1954 - 1998 AND IN THE MATTER OF SECTION 41 OF THE ARBITRATION ACT 1954 AND IN THE MATTER OF SECTION 7 OF THE ARBITRATION ACT 1980 AND IN THE MATTER OF SECTION 41 OF THE ARBITRATION ACT 1998 AND IN THE MATTER OF ORDERS 56 AND 56A OF THE RULES OF THE SUPERIOR COURTS

BETWEEN

YUKOS CAPITAL S.A.R.L.
APPLICANT

AND

OAO TOMSKNEFT VNK (OTKYTOYE AKTSIONERNOYE OBSHCHESTVO "TOMSKNEFT" VOSTOCHNAYA NEFTYANAYA KOMPANIA)
RESPONDENT

2013/34MCA - Kelly - High - 13/3/2014 - 2014 56 16492 2014 IEHC 115

RSC O.12 r26

ARBITRATION ACT 1980 S7

ARBITRATION ACT 1954 S41

ARBITRATION (INTERNATIONAL COMMERCIAL) ACT 1998 S14

UNCITRAL MODEL LAW ON INTERNATIONAL COMMERCIAL ARBITRATION ART 35

ARBITRATION (INTERNATIONAL COMMERCIAL) ACT 1998 S4

ARBITRATION ACT 1954 S4(1)

ARBITRATION ACT 1954 S4(2)

ARBITRATION ACT 1980 PART III

NEW YORK CONVENTION ON THE RECOGNITION & ENFORCEMENT OF FOREIGN ARBITRAL AWARDS ART III

NEW YORK CONVENTION ON THE RECOGNITION & ENFORCEMENT OF FOREIGN ARBITRAL AWARDS ART V

ARBITRATION ACT 1980 S9

ARBITRATION ACT 1980 S9(2)

ARBITRATION ACT 1980 S9(3)

KASTRUP TRAE-ALUVINDUET A/S v ALUWOOD CONCEPTS LTD UNREP MACMENAMIN 13.11.2009 2009/29/7254 2009 IEHC 577

JURISDICTION OF COURTS & ENFORCEMENT OF JUDGMENTS ACT 1998 S5

RSC O.11

GLENCORE GRAIN ROTTERDAM RBV v SHIVNATH RAE HARNARAIN CO 28 F 3D 114 (US)

FIRST INVESTMENT CORPORATION OF MARSHALL ISLANDS v FUJIAN MAWEI SHIPBUILDING LTD 703 F 3D 742 (US)

BORN INTERNATIONAL COMMERCIAL ARBITRATION VOL 2 2399

BORN INTERNATIONAL COMMERCIAL ARBITRATION VOL 2 2400

GATER ASSETS LTD v NAK NAFTOGAZ UKRAINY 2008 1 AER (COMM) 209

RSC O.11 r1(Q)

RSC O.11 r1(S)

RULES OF THE SUPERIOR COURTS SI 15/1986

RULES OF THE SUPERIOR COURTS (ARBITRATION) SI 361/2010

RSC O.11 r1(K)

RSC O.11 r1(L)

INTERNATIONAL COMMERCIAL BANK PLC v INSURANCE CORPORATION OF IRELAND 1989 IR 453

ANALOG DEVICES BV v ZURICH INSURANCE COMPANY 2002 1 IR 272

MCCREA v KNIGHT 1896 2 IR 619

INTERMETAL GROUP LTD v WORSALE TRADING LTD 1998 2 IR 1

SPILIADA MARITIME CORPORATE v CANSULEX LTD 1987 AC 460

HARRODS (BUENOS AIRES) LTD, IN RE 1992 CH 72

RSCO.11 r2(5)

TASARRUF MEVDUATI SIGORTA FONU v DEMIREL & ANOR 2007 4 AER 1014

THE HAGEN 1908 P 189

REDFERN & HUNTER ON INTERNATIONAL ARBITRATION PARA 11.14

TRIDON AUSTRALIA PTY LTD v ACD TRIDON INC 2004 NSWCA 146

WEST TANKERS INC v ALLIANZ SPA & ANOR 2011 AER 51

INTERNATIONAL ALLTEX CORP v LAWLER CREATIONS LTD 1965 IR 264

Litigation - Arbitration - Enforcement of arbitral award - Application to set aside an order of the High Court - Discretion - Appropriateness - Class of action - Resident outside jurisdiction - Assets - Cost, convenience and propriety - Arbitration Act 1980 - Rules of the Superior Courts

1

JUDGMENT of Mr. Justice Kelly delivered on the 13th day of March, 2014

Introduction
2

1. This is the respondent's application to set aside an order of Peart J. of 8 th February, 2013, granting the applicant leave to serve these proceedings outside the jurisdiction. The order is sought pursuant to O. 12, r. 26 of the Rules of the Superior Courts.

3

2. The respondent also seeks an order pursuant to the same rule or the inherent jurisdiction of the court setting aside the order of Peart J. which dispensed with the requirement for personal service of the proceedings and which granted leave to effect substituted service on the respondent.

Background
4

3. These proceedings seek (pursuant to s. 7 of the Arbitration Act 1980 and s. 41 of the Arbitration Act 1954) the enforcement in this State of an arbitral award made by the International Court of Arbitration of the International Chamber of Commerce in New York City on 12 th February, 2007.

5

4. Alternatively, an order is sought pursuant to s. 14 of the Arbitration (International Commercial) Act 1998 and Article 35 of the UNCITRAL Model Law (to which effect is given in Ireland by s. 4 of the Arbitration (International Commercial) Act 1998) enforcing the award in the State in the same manner as if it were a judgment of this Court. Judgment is sought in respect of the amounts dealt with in the award which are:-

6

(a) 3,838,794,521 RUR;

7

(b) 2,067,164,932 RUR;

8

(c) 1,348,727,671 RUR;

9

(d) USD$153,622;

10

(e) USD$121,603.28; and

11

(f) GBP£52,964.84.

The Parties
12

5. The applicant is a Luxembourg company which was incorporated on 31 st January, 2003. The respondent is a Russian open joint stock company. It is located at Burovikov Street, Tomsk Region, Strezhevoi in Russia. It is wholly owned jointly by OAO Rosneft through Rosneft's subsidiaries and 50% by OAO Gazprom through Gazprom subsidiaries. Rosneft is one of the biggest international oil companies in the world with its majority shareholding owned by the Russian Federation. Gazprom is a large global energy company employing over 400,000 people and accounting for 15% of global gas output.

The Loans
13

6. The award was made in respect of three loans made by the applicant to the respondent.

14

7. The first loan is the subject of an agreement made on 20 th July, 2004, with an addendum to that agreement of 22 nd November, 2005. The agreement was for a total amount not exceeding 2.3 billion RUR.

15

8. The second agreement was dated 27 th July, 2004, together with an addendum of 22 nd November, 2005 and was for a total amount not exceeding 1.24 billion RUR.

16

9. The third agreement was for a sum not exceeding 810 million RUR and was made on 4 th August, 2004, with an addendum of 22 nd November, 2005.

17

10. The applicant advanced the principal sums provided for in those agreements to the respondent. The total sum paid was 4,350,000,000 RUR.

18

11. The applicant contends that the respondent defaulted on the repayment of the loan, resulting in a demand being made in December 2005 for repayment of the total principal sums.

19

12. In the absence of payment of those monies, the applicant filed a request for arbitration in respect of the loans with the International Secretariat of the ICC International Court of Arbitration (the ICC). The applicant's entitlement to make such a request derived from clause 5.1 of each of the loans as amended by the addendum agreements of 22" November, 2005.

20

13. Under the addendum agreements, the original Article 5.1 was amended and restated so as to provide for any dispute to be finally resolved by arbitration in accordance with the then current Rules of Arbitration of the ICC. The addenda also provided that judgment on the award might be entered in any court having jurisdiction in respect thereof. They went on to provide that the seat of the arbitration would be New York City and that the language of the arbitration would be English. The matters in dispute were to be decided in accordance with the substantive law of the State of New York. The addenda provided that the dispute would be heard and determined by an Arbitral Tribunal consisting of three arbitrators, each of whom was to be independent and impartial.

The Arbitration
21

14. In the event, a single arbitrator, the late Dr. Robert Briner, was appointed. In his award, he records that the request for arbitration was sent by the ICC to the respondent on 20 th January, 2006, and that on 21 stFebruary, 2006, the respondent replied directly to the applicant, acknowledging receipt of the "legal claim". The respondent claimed in that letter that the parties had not validly agreed to ICC arbitration.

22

15. On 13 th February, 2006, the applicant proposed that the arbitration should be decided by a sole arbitrator, notwithstanding the provision for a tribunal consisting of three arbitrators. In his award, Dr. Briner stated that the respondent confirmed that it had no objection to the appointment of a sole arbitrator. This was done by letter of 20 th March, 2006, signed on behalf of the respondent by a management company.

23

16. On 2 nd June, 2006, Dr. Briner was appointed by the ICC Court of Arbitration as sole arbitrator.

24

17. As is recited in Dr. Briner's award, on 8 th June, 2006, by letter sent by DHL (a courier firm) to the respondent, he invited it (if it so wished) to give further reasons regarding its contention that the ICC Court was not competent to decide on disputes arising under the three loan agreements. No communication was received from the respondent.

25

18. Dr. Briner also records that on 27 th June, 2006, he sent draft terms of reference to the parties with a deadline of 7 th July, 2006, for comments. That deadline was extended at the applicant's request to 17 th July of that year, and the applicant confirmed that it had no comment. He did not receive any communication from the respondent. A statement of claim was delivered by the applicant on 11 th October, 2006. The award...

To continue reading

REQUEST YOUR TRIAL