General Dynamics United Kingdom Ltd v Libya

In proceedings to enforce an arbitration award against a foreign state, the document instituting the proceedings must be served through the Foreign & Commonwealth Office in accordance with section 12 of the State Immunity Act 1978. Where an arbitration claim form need not be served, the order granting permission to enforce is the instituting document for that purpose.

The court has no power under the Civil Procedure Rules to dispense with that service. Primary legislation cannot be overridden by procedural rules. The judgment nevertheless held that, if such a power existed, civil unrest, danger and prolonged uncertainty as to diplomatic service would constitute exceptional circumstances justifying its exercise.

General Dynamics United Kingdom Ltd obtained an ICC arbitration award against Libya and applied without notice under section 101 of the Arbitration Act 1996 for permission to enforce it in England. Teare J granted permission, entered judgment in the award’s terms and dispensed with service of the arbitration claim form, order and associated documents.

Libya applied to set aside the provisions dispensing with service and to vary the time for any application to set aside the enforcement order. The central issues were whether section 12 of the State Immunity Act 1978 applied, whether service could be dispensed with under CPR 6.16 or 6.28, and whether the circumstances in Libya were exceptional.

1. Instituting document. An application to enforce a New York Convention award may be made by arbitration claim form under CPR 62.18. Where the claim form is not required to be served, the order granting permission to enforce is the document required to be served for instituting proceedings against the state. Section 12 must be construed in the context of the State Immunity Act 1978, the European Convention on State Immunity and the statutory safeguards given to foreign states.
2. Mandatory diplomatic service. Section 12 requires service through the Foreign & Commonwealth Office, unless the state has agreed another method. Service is not merely a means of communicating the claim. It properly invokes the court’s jurisdiction over a foreign state, preserves the state’s two-month response period and enables the statutory conditions for default judgment to be satisfied.
3. No power to dispense with service. CPR 6.16 and 6.28 cannot authorise dispensation with service required by section 12. CPR 6.1 confirms that the Civil Procedure Rules do not apply where an enactment makes different provision. The court therefore respectfully declined to follow Certain Underwriters at Lloyd’s of London v Syrian Arab Republic, [2018] EWHC 385 (Comm), Havlish v Islamic Republic of Iran, [2018] EWHC 1478 (Comm), and the relevant ruling in European Union v Syrian Arab Republic, to the extent that they supported dispensation with service.
4. Alternative conclusion. If the court had power to dispense with service, the circumstances would have been exceptional. The evidence showed civil unrest, armed militia activity, danger around the Ministry of Foreign Affairs, closure of the British Embassy and an unpredictable delay, potentially exceeding a year, in diplomatic service. Impossibility was not required, and the absence of a prior attempt at diplomatic service was only a factor. The public interest in enforcing arbitration awards and Libya’s knowledge of the proceedings also mattered.
5. Order. Paragraphs 4 and 5 of Teare J’s order were set aside. Paragraph 6 was varied so that the period for Libya to apply to set aside the enforcement order ran from two months after service of the order on the Ministry of Foreign Affairs, and the award was not to be enforced meanwhile. Paragraph 7 stood, but was likewise not enforceable pending any set-aside application.

First-instance decision. The judgment set aside and varied parts of the order made by Teare J on 20 July 2018.