Eastern European Engineering Ltd v. SJ (Seychelles) Ltd

At a glance

Parties

Eastern European Engineering Ltd (appellant; defendant below) v. SJ (Seychelles) Ltd (respondent; plaintiff below)

Case no.

SCA 52/2019, [2022] SCCA 25 (appeal from MA 101/2019, arising in CC 02/2019)

Court

Seychelles Court of Appeal

Treaty

Arbitration clause in the parties' contract (ICC arbitration); stay of proceedings under the Commercial Code

Tribunal

Fernando (President), Robinson JA, Tibatemwa-Ekirikubinza JA

Outcome

Appeal allowed (29 April 2022). The Supreme Court's refusal to stay the suit was quashed and a stay of CC2/2019 was ordered in favour of arbitration.

Amount

Costs awarded to the appellant.

The dispute

SJ (Seychelles) Ltd sued Eastern European Engineering Ltd in the Supreme Court of Seychelles on 28 January 2019, claiming damages for breach of contract (CC2/2019). The contract referred any dispute arising out of or in connection with it to ICC arbitration. Eastern European Engineering applied under the Commercial Code to stay the suit. SJ (Seychelles) conceded that the arbitration clause was not null and void. It argued instead that the clause was incapable of being performed: under the Court of Appeal's decision in Vijay Construction (Pty) Ltd v Eastern European Engineering Limited (CA15 & 18 of 2017), no foreign arbitral award could be enforced in Seychelles. The Supreme Court judge held that the arbitration agreement was void because any award would be unenforceable, and refused the stay. Eastern European Engineering appealed.

Key holdings

1. The respondent conceded that the arbitration agreement is not null and void. That concession also admits that the agreement can be performed and is valid and enforceable. The Supreme Court judge's approach was therefore wrong. ¶ 14
2. If a foreign arbitral award (a Convention Award) cannot be enforced in Seychelles, the arbitration agreement does not become null and void. The only result is an award that cannot be enforced in Seychelles. ¶ 15
3. The arbitration agreement is valid and enforceable. No one argued before the Supreme Court that the dispute fell outside the scope of the agreement. Both grounds of appeal succeed. ¶¶ 16–17
4. The respondent pointed out that Seychelles acceded to the New York Convention in 2019. The Court held that whether a Convention Award is enforceable in Seychelles does not arise for decision in this appeal. ¶ 18
5. The appeal is allowed in its entirety. The refusal of the stay is quashed and replaced with an order staying CC2/2019, with costs to the appellant. ¶¶ 19–20; Order

Procedural history

1. 28 January 2019SJ (Seychelles) Ltd files its plaint for damages for breach of contract in the Supreme Court (CC2/2019).
2. Eastern European Engineering applies to stay the suit (MA101/2019). The Supreme Court refuses the stay and orders the suit to proceed to a hearing on the merits. The published judgment does not give the date of that ruling.
3. 12 April 2022The Court of Appeal hears the appeal.
4. 29 April 2022Court of Appeal judgment: appeal allowed and the suit stayed in favour of arbitration.

Tribunal, counsel and experts

Decided by

• Tibatemwa-Ekirikubinza Judge, Seychelles Court of Appeal

For the claimant

Bernard Georges

For the respondent

Alexandra Madeleine

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Keywords

• stay of proceedings
• arbitration agreement
• null and void
• incapable of being performed
• ICC arbitration
• New York Convention
• Seychelles
• Commercial Code
• enforceability of foreign awards
• Vijay Construction
• Convention Award
• accession 2019
• breach of contract

Summary generated with AI from the published documents — refer to the award for the authoritative text.