ETI Euro Telecom International NV v Republic of Bolivia & Anor

The power under section 25 of the Civil Jurisdiction and Judgments Act 1982 supports substantive foreign court proceedings. It does not support foreign proceedings that merely preserve assets for an arbitration, nor does it extend to arbitral proceedings themselves.

Consent to ICSID arbitration ordinarily includes an agreement not to seek provisional measures from a national court unless the parties stipulate otherwise. State immunity from adjudication may be waived in relation to arbitration, but that does not remove the separate statutory immunity from injunctions and enforcement measures against a state.

An investor commenced ICSID arbitration against Bolivia following the nationalisation of its interest in a Bolivian telecommunications company. It obtained attachment relief over assets in New York and then secured English freezing orders over deposits held in London in the telecommunications company’s name.

Andrew Smith J set aside the English orders. He held that section 25 of the Civil Jurisdiction and Judgments Act 1982 did not confer jurisdiction by reference to either the New York attachment proceedings or the ICSID arbitration. He also found the relief inexpedient and Bolivia immune.

The investor appealed. The principal questions were whether section 25 extended to the New York proceedings or the arbitration, whether the ICSID regime made national interim relief inexpedient, and whether the State Immunity Act 1978 barred the order.

1. Appeal dismissed. The judge had made a proper case-management decision by determining the jurisdictional issues promptly.

2. Section 25 of the Civil Jurisdiction and Judgments Act 1982 and the 1997 Order concern foreign proceedings on the substance of the matter, although “substantive proceedings” may receive a liberal interpretation to promote international judicial co-operation. The New York proceedings sought only local attachment in aid of the ICSID arbitration. English relief directed to different assets in England could not be ancillary to that attachment. The New York proceedings therefore did not engage section 25.

3. Arbitral proceedings are not “proceedings” within section 25 and the 1997 Order. The original section expressly treated arbitration separately in section 25(3)(c). Its repeal upon the enactment of section 44 of the Arbitration Act 1996 was decisive. The exclusion of “arbitration” from the Brussels regime concerned court proceedings relating to arbitration and did not restore a section 25 power over arbitral proceedings. An ICSID arbitration was therefore outside section 25.

4. Although unnecessary to the result, consent to ICSID arbitration, Article 26 of the Convention and Rule 39(6) of the ICSID Arbitration Rules together amounted to an agreement not to seek provisional measures from a national court unless the parties agreed otherwise. Subject to possible exceptional circumstances, that agreement would ordinarily make section 25 relief inexpedient. The court did not decide whether an ICSID tribunal could grant security resembling a freezing order.

5. Bolivia was immune. Section 9 of the State Immunity Act 1978, concerning proceedings related to an agreed arbitration, did not override section 13’s separate prohibition on injunctions and enforcement measures against a state. A freezing order preserving property for eventual execution fell within section 13. The order against the telecommunications company could not independently survive and might itself affect property attributable to Bolivia.

6. Stanley Burnton LJ added that freezing relief against a third party against whom the claimant has no cause of action is especially exceptional. It requires clear evidence of exceptional grounds and must be exercised with great caution. Tuckey LJ agreed with both judgments.

1. Court of Appeal (Civil Division): The court dismissed the appeal and upheld the discharge of the freezing orders: [2008] EWCA Civ 880.
2. High Court, Commercial Court: Andrew Smith J set aside freezing orders made against Bolivia and Entel. No citation is stated in the judgment.