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English High Court clarifies procedure for registration and enforcement of ICSID awards in England
English High Court clarifies procedure for registration and enforcement of ICSID awards in England
30 July 2020
Series
Blogs
30 July 2020
Background
In 2018, UFG (a Spanish company) obtained a $2bn ICSID award for claims against Egypt under a Spain/Egypt BIT (signed in 1992) and relating to a gas plant at Damietta. Consequently, UFG commenced enforcement proceedings in the English courts.
The process for registration and enforcement of ICSID awards in English courts is governed by the Arbitration (International Investment Disputes) Act 1966 (1966 Act) and CPR 62.21 (specific to ICSID awards). UFG successfully applied to the High Court for registering the award (without notice to Egypt).
Subsequently, UFG commenced steps to serve the order granting registration (following the provisions of CPR 6.44), but not the claim form. However, UFG’s solicitors faced difficulties in obtaining the required certificate evidencing service. They were told that the relevant diplomatic bag sent from Egypt to London was lost. Thereafter, UFG successfully obtained orders (i) dispensing with service of the registration order; and (ii) alternative service on Egypt’s solicitors (a law firm in London) of the order dispensing with service.
Issues before the court
Egypt sought to challenge those orders (i) and (ii) on various grounds. In this note we look at the first ground relied on it being the one of most general application. Egypt also sought to argue that those orders had been incorrectly granted but the judge’s dismissal of those challenges largely turned on the facts.
Registration application: requirement of service of claim form
This ground of challenge concerned the correct procedure to be followed in England for the registration of ICSID awards prior to enforcement. Egypt’s position was that CPR 62.21 required service of the claim form issued in respect of that application as that rule referred to use of CPR Part 8 (alternative procedure for claims) (see CPR 62.21(3)). Complete Part 8 proceedings would potentially involve issuing a claim form, the state’s acknowledgment of service of that claim form and determination of registration application (if contested) at a hearing.
UFG argued that the claim form need not have been served, and that such an application could be made without notice as the (i) 1966 Act did not make registration contingent on Egypt acknowledging service or disposing of the application on an inter partes basis; and (ii) enforcement process did not require ‘full blown’ Part 8 proceedings.
The court agreed with UFG, basing its reasoning on three key grounds. In summary (see [42-73]): First, CPR 62.21 did not expressly refer to the service of a claim form — which contrasted with other provisions in CPR 62 dealing with other arbitration claims which did. Second, the registration regime under CPR 62.21 also (under 62.21(2)) substantially incorporated procedural aspects of an English statutory regime for registration of foreign judgments, which did not require service of a claim form. If the complete Part 8 process applied, there was no reason for CPR 62.21(2) cross-referring to CPR 74.3 — which expressly permitted a ‘without notice’ registration application. Third, the reference to Part 8 therefore had to be read against that context, and CPR 8.1(6) provided that a rule or practice direction may, in relation to a specified type of proceedings, ‘disapply or modify any of the rules set out in this Part’. In this case, that rule was CPR 62.21(2).
Comment
This judgment recognises the importance of the efficiency of the ICSID enforcement process by taking a pragmatic approach towards required procedural steps. For example, it noted that while states will not receive advance notice of the registration application, that application will result from ICSID proceedings and states are bound to have such notice (see [73]). This indicates the court’s willingness to give due consideration to the (i) practical aspects of the enforcement process; and (ii) the UK’s legislative scheme for dealing with ICSID award — intended to make the enforcement process non-interventionist and accord sanctity to the ICSID award. Therefore, the case reinforces the UK’s status as an arbitration-friendly jurisdiction for all types of arbitral awards.
Click here for the judgment.