General Dynamics v Libya: Supreme Court rules on service of arbitration enforcement proceedings on foreign states

25 June, 2021

The Supreme Court has today handed down judgment in General Dynamics v Libya [2021] UKSC 22.

General Dynamics seeks to enforce an arbitration award of over £16 million plus interest and costs made in 2016 by an ICC tribunal against Libya.  On 21 June 2018, it issued proceedings in the High Court to enforce the award, and on 20 July 2018 the High Court issued an enforcement order granting General Dynamics permission to enforce the award in the same way as a judgment or court order pursuant to s. 101(2) and (3) of the Arbitration Act 1996.  In addition, the Court exercised discretion under CPR rr. 6.16 and 6.28 to dispense with formal service of the arbitration claim form and enforcement order on Libya.  Libya applied to vary the enforcement order to require formal service through the FCDO in accordance with s. 12(1) of the State Immunity Act 1978.  It succeeded at first instance, but General Dynamics succeeded before the Court of Appeal.

Libya appealed to the Supreme Court.  The majority of the Court (Lord Lloyd-Jones, Lady Arden and Lord Burrows) allowed the appeal.  The core finding of the majority was that a broad reading of s. 12(1) of the SIA 1978 is appropriate on account of the considerations of international law and comity, and the words “other document required to be served for instituting proceedings against a State” in s. 12(1) are wide enough to apply to all documents by which notice of proceedings in this jurisdiction is given to a defendant State.  In the context of enforcement of arbitration awards against a State, the relevant document will be the arbitration claim form where the court requires one to be served, or otherwise will be the order granting permission to enforce the award.  In cases to which s. 12(1) applies, the procedure which it establishes for service on a defendant State through the FCDO is mandatory and exclusive, subject only to the possibility of service in accordance with s. 12(6) in a manner agreed by the defendant State.

The majority also rejected General Dynamic’s further submissions that, even if s. 12(1) applies, in exceptional circumstances a court can dispense with service of the enforcement order under CPR rr. 6.16 and/or 6.28, and that the service requirements in s. 12(1) of the SIA 1978 may prevent a claimant from pursuing its claim, which would infringe article 6 of the European Convention on Human Rights as well as the constitutional right of access to the court and require a construction of s. 12(1) that allows the court to make alternative directions as to service in exceptional circumstances.

The judgment and a summary prepared by the Supreme Court are available here.

Lucas Bastin, led by Harry Matovu QC (Brick Court Chambers), instructed by Mark Handley, Sena Tsikata and Claudia King of Curtis, Mallet-Prevost, Colt & Mosle LLP, acted for the appellant.