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The High Court has ruled that State Immunity Act provisions do not apply as Trafigura seeks to enforce a multimillion-dollar arbitral award.
The English High Court has denied Ghana’s application to set aside an order permitting a subsidiary of Trafigura, GPGC, to serve documents via post and email in a contentious dispute concerning the enforcement of a USD 140 million arbitration award.
Trafigura, a multinational commodities-trading company based in Singapore, is the majority owner of GPGC, a power company which secured the award in January 2021 after an arbitral tribunal found that Ghana had unlawfully terminated a contract for the installation and operation of two power plants.
In November 2021, GPGC obtained permission from Mrs Justice Cockerill in the High Court to enforce the award as a judgment, pursuant to section 66(1) of the Arbitration Act 1996. In accordance with the requirements of the State Immunity Act 1978 (the SIA), it served the judgment on Ghana through diplomatic channels. The relevant section of the SIA confirms: “Any writ or other document required to be served for instituting proceedings against a State shall be served by being transmitted through the Foreign, Commonwealth and Development Office (FCDO) to the Ministry of Foreign Affairs of the State and service shall be deemed to have been effected when the writ or other document is received at the Ministry.”
Fast forward to March 2022 and GPGC applied for charging orders over five London properties owned by Ghana, including a property called Regina House. It also sought alternative service of those applications by post to Ghana’s High Commission addresses and by email to various officials in Ghana’s ministry of finance.
In April 2023, Mr Justice Robin Knowles granted the order for alternative service. He found that there was “good reason” to deviate from the usual method of service through the FCDO and authorised GPGC to effect service by post and email, as it had requested.
In May 2023 GPGC delivered the interim charging orders (ICOs), “the Knowles order” and other related documents to the recipients via post and email. Grace Mbrokoh-Ewoal, legal counsel at Ghana’s ministry of finance, responded to one of these emails, confirming that she had received the documents. On 24 May, Stephenson Harwood (GPGC’s solicitors) received an email from White & Case. The email indicated that White & Case was expecting to be instructed to represent Ghana soon and proposed a new schedule for GPGC’s applications. Following this communication, both sides agreed that a hearing scheduled for 30 May could be postponed.
However, in June 2022, Ghana applied to set aside the order for alternative service. It argued that each application for a charging order was a distinct set of proceedings that had to be served through diplomatic channels under the SIA. Ghana also raised concerns that the order was inappropriate, unlawful and unfair.
In dismissing Ghana’s application, Master Davison considered the wording of section 12 of the SIA which specifies that the “document(s) requiring service through diplomatic channels are ‘any writ or other document required to be served for instituting proceedings against a State’” (judge’s italics) and therefore whether serving documents post-arbitration could fall with the “instituting proceedings” definition. GPGC argued that the documents to be served were part of a continuing process and were therefore not instituting proceedings; rather, the applications being made “were simply steps in the enforcement proceedings so instituted and could therefore be served by one of the ordinary methods of service, or by alternative service”. This is, perhaps, best illustrated by The European Union v The Syrian Arab Republic [2018] in which Mr Justice Bryan ruled that the relevant provision in the Civil Procedure Rules (6.44), which has been adjudged to be coterminous with section 12 of the SIA on several occasions, “is not concerned with service of documentation once proceedings have been served upon a State”.
Aside from the definition of “instituting proceedings” the SIA also allows for service outside diplomatic channels if there is “good reason” for an alternative method of service; in this respect, Master Davison decided that the “good reason” test had been passed, because “this is a case where to require service through diplomatic channels would generate multiple periods of serious delay”. And, given that the lease on Regina House was soon to expire, any delay could prove critical to enforcement proceedings.
Master Davison therefore ruled in favour of GPGC and rejected Ghana’s application to set aside.
In GPGC v The Government of the Republic of Ghana, GPGC was represented by James Willan KC and Catherine Jung of Essex Court Chambers, instructed by Stephenson Harwood. Ghana was represented by Stephen Houseman KC and Luke Tattershall, also of Essex Court, instructed by White & Case.
Last week Goldman Sachs filed a multibillion-dollar arbitration claim in London against the Malaysian government in a dispute over a USD 2.5 billion settlement deal related to the 1Malaysia Development Berhad corruption scandal.
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