Assuranceforeningen Gard Gjensidig v. The International Oil Pollution Compensation Fund 1971 [2014] EWHC 1394 (Comm).
Gard sought a freezing order against the 1971 Fund in support of Venezuelan proceedings and in respect of proceedings commenced in the Commercial Court. The 1971 Fund claimed immunity from the jurisdiction of the Court pursuant to the UK-1971 Fund Headquarters Agreement and the Order in Council that implements the HQ Agreement. The 1971 Fund enjoys immunity under the HQ Agreement from “any form of administrative or provisional judicial restraint, such as requisition, confiscation, expropriation or attachment”, but these words were not replicated in the Order in Council which granted immunity from suit and legal process subject to exceptions that include (i) actions brought against the 1971 Fund in accordance with the provisions of the 1971 Fund Convention or (ii) in respect of any loan or other transaction for the provision of finance.
Mr Justice Hamblen held that no injunction should be granted in respect of the Venezuelan proceedings because they were not brought in accordance with the Convention and, as such, the 1971 Fund enjoyed immunity from the Court’s jurisdiction. However, he held that the Commercial Court proceedings were arguably brought in respect of a loan or other transaction for the provision of finance and, as such, there was a good arguable case that the 1971 Fund was not entitled to immunity on the terms of the Order in Council. He held that effect must be given to the terms of the Order regardless of whether it means that the UK would be in breach of its obligations under the HQ Agreement. He did not decide whether the HQ Agreement intended the Fund should have immunity from freezing order, but indicated that the Order did not appear to confer the general immunity stated in the HQ Agreement and that there was force in the 1971 Fund’s argument that a freezing order was a provisional judicial restraint.
Professor Dan Sarooshi was one of the Counsel representing the 1971 Fund before the Commercial Court. He was instructed by Charles Brown of Reed Smith LLP, London.
