General Dynamics United Kingdom Ltd v The State of Libya

The court may dispense with formal service of an arbitration claim on a foreign state where doing so is consistent with State Immunity Act section 12. The section governs the manner of service; it does not prevent the court from deciding that service should be dispensed with. The court must balance the claimant’s interest in enforcing an arbitration award against the foreign state’s interest in receiving formal notice. Dispensation may be appropriate where the state is already aware of the award and enforcement steps, formal service presents substantial practical difficulties, and reasonable alternative steps will bring the proceedings to the state’s attention.

The claimant sought an order to enforce an arbitration award by registering it as a judgment of the court and recognising it as such. The State of Libya did not attend or appear. The claimant relied on evidence that Libya had been represented in the arbitration, knew of the award, and knew that it remained unpaid. Formal service under the applicable statutory procedure presented considerable difficulties because at least two entities claimed to be the State of Libya. The issue was whether the court should dispense with service.

1. The court had jurisdiction to dispense with service. The order did not conflict with section 12 of the State Immunity Act, which dealt with the manner in which a foreign government should be served rather than whether service should be dispensed with.
2. The court balanced the claimant’s interest in enforcing the substantial arbitration award against the defendant’s interest in receiving formal notice through service. The balance favoured dispensation because formal service would create considerable difficulties and otherwise prevent the claimant from pursuing enforcement until conditions in Libya became more normal.
3. The evidence established that Libya was aware of the award and of the claimant’s interest in enforcing it. The order was therefore unlikely in reality to prejudice Libya. The claimant would also take steps to bring the order to the attention of persons reasonably believed able to inform Libya of the proceedings.
4. The order sought was granted.