General Dynamics United Kingdom Ltd v The State of Libya

Section 12(1) of the State Immunity Act 1978 requires diplomatic service only of a document required to be served for instituting proceedings against a foreign state. In enforcement proceedings under CPR 62.18, an arbitration claim form and an enforcement order are not necessarily such documents where the rules permit proceedings to begin without service. The enforcement order must ordinarily be served, but service may be dispensed with in exceptional circumstances where the order is the state’s first notice. Notification to the state is appropriate but is not alternative service. A court cannot dispense with service where primary legislation makes it mandatory.

General Dynamics obtained an ICC award against Libya and sought enforcement in England under section 101 of the Arbitration Act 1996 and CPR 62.18. Teare J granted permission to enforce the award, entered judgment in its terms, dispensed with service, and directed that documents be couriered to Libyan addresses.

Libya applied to set aside the dispensation and related provisions, relying on section 12(1) of the State Immunity Act 1978. Males J held that the enforcement order had to be transmitted through the Foreign and Commonwealth Office and that service could not be dispensed with. General Dynamics appealed. The central issues were whether section 12(1) applied to the arbitration claim form or enforcement order, and whether service could be dispensed with.

1. Appeal allowed. The relevant parts of Males LJ’s order were set aside and Teare J’s order was restored, subject to the variations in the formal order.
2. Section 12(1) of the State Immunity Act 1978 is an ambulatory provision to be read by reference to English procedural law as it develops. Its references to writs, service, appearance and default must be understood through their modern procedural equivalents. It does not require that some document must always be served through diplomatic channels merely because proceedings are brought against a state.
3. Under CPR 62.18, an arbitration claim form for enforcement of an award may be issued and determined without notice and need not be served unless the court so orders. If service of the claim form is not ordered, the enforcement order is not the document instituting proceedings. It must ordinarily be served under CPR 62.18(8)(b) and CPR 6.44, but that service is not mandated by section 12(1) and may be dispensed with under CPR 6.16 or 6.28.
4. Where the enforcement order is the state’s first notice of the attempt to enforce an award, the court should apply the exceptional-circumstances test, despite the wider wording of CPR 6.28. Impossibility is not required. Civil unrest, danger, uncertainty and the Foreign and Commonwealth Office’s assessment that service would be dangerous and likely to take more than a year justified dispensation. Subsequent events could be considered insofar as they illuminated the circumstances existing when the original order was made.
5. Notification to the state should be arranged so that the responsible state organs learn of the order, but notification is not alternative service and cannot be used as a proxy for service on a state.
6. Alternatively, if section 12 required diplomatic service of the enforcement order, the court could not dispense with that statutory requirement. The contrary obiter view in Certain Underwriters at Lloyd’s of London v Syrian Arab Republic [2018] EWHC 385 (Comm) was disapproved and could not be treated as good law.
7. The formal order varied the period during which Libya could seek further variation, postponed enforcement and enforcement of costs, refused permission to appeal to the Supreme Court, made costs orders, and released the claimant from couriering documents to one specified Libyan address.

• Court of Appeal (Civil Division): allowed General Dynamics’ appeal, set aside the relevant parts of Males LJ’s order, restored and varied Teare J’s order, refused permission to appeal, and made consequential costs and enforcement directions.
• High Court, Queen’s Bench Division, Commercial Court: Males J held that the enforcement order had to be served through the Foreign and Commonwealth Office and that the court had no jurisdiction to dispense with that service.
• High Court, Queen’s Bench Division, Commercial Court: Teare J granted permission to enforce the ICC award under section 101 of the Arbitration Act 1996, entered judgment in its terms, dispensed with service, and directed notification by courier.