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International Arbitration Forum

Eastern European Engineering Limited v. Vijay Construction (Proprietary) Limited

Case summary

At a glance

Parties
Eastern European Engineering Limited (EEEL) (Seychelles) v. Vijay Construction (Proprietary) Limited (Seychelles)
Case no.
Supreme Court of Seychelles CS 23/2019 (with MA100/2020 & MA101/2020); related English High Court case CL-2015-000613
Court
Supreme Court of Seychelles (E. Carolus J); High Court of England and Wales, Commercial Court (Andrew Baker J, Butcher J, Cockerill J)
Underlying award(s)
ICC Arbitration 18943, seated in Paris: partial award of 17 June 2013 on jurisdiction and final award of 14 November 2014 (sole arbitrator Andrew de Lotbinière McDougall)
Treaty
None; New York Convention; Seychelles Reciprocal Enforcement of British Judgments Act; English Arbitration Act 1996
Sector
Construction (hotel resort)
Outcome
The English High Court dismissed Vijay's application to set aside enforcement of the award (11 October 2018). The Seychelles Supreme Court registered the English orders for enforcement (30 June 2020) and then stayed execution pending appeal, on condition that Vijay provide a EUR 20 million bank guarantee (24 July 2020).
Amount
Award as entered in England: EUR 15,963,858.90, plus EUR 640,811.53 arbitration costs, USD 126,000 ICC costs and post-award interest (EUR 145,498.25, EUR 3,385,261.64 and EUR 39,200.25, all still accruing). English set-aside costs on the indemnity basis, with an interim payment of GBP 245,315.90. Condition of the stay: EUR 20,000,000 bank guarantee.

The dispute

EEEL, a Seychelles company in the Guta Group, made six contracts with Vijay Construction in 2011 to build the Savoy Resort and Spa on Mahé. The contracts were governed by Seychelles law and provided for ICC arbitration seated in Paris. EEEL terminated the contracts for defects and delay. A sole arbitrator held the terminations lawful and ordered Vijay to pay damages, interest and costs. Vijay's challenge failed in the Paris Cour d'Appel. The Seychelles Court of Appeal then refused recognition of the award in Seychelles because Seychelles was not then a party to the New York Convention. EEEL obtained leave to enforce the award in England and later sought to register the English orders in Seychelles under the Reciprocal Enforcement of British Judgments Act. Vijay argued that the orders were not "judgments" under that Act and that their effect was limited to Britain. It also argued that registering them was a "back-door" route around the Court of Appeal's ruling, that the maxim exequatur sur exequatur ne vaut (no enforcement order on another enforcement order) barred registration, and that the award had been obtained by fraud.

Key holdings

  1. Under Arbitration Act 1996 s.103(5), security for an award can properly be ordered only as the price of an adjournment that the award debtor itself seeks. Here EEEL had sought the adjournment, so the court refused to impose 'unless' terms enforcing Flaux J's EUR 7.5 million security order. It ended the adjournment and discharged the security order. [2017] EWHC 797 (Comm) ¶¶ 19–26
  2. The English court has jurisdiction to grant a worldwide freezing order in aid of enforcing a foreign award. It declined to do so: the link with England was weak, the Seychelles courts were the primary forum, and there was a risk of conflicting orders. It granted a freezing order limited to Vijay's assets in England and Wales. [2018] EWHC 1539 (Comm) ¶¶ 37–47
  3. Vijay's application to set aside enforcement was dismissed. Ground 1 (pre-arbitration notice requirement in clause 20) did not concern the composition of the tribunal, failed on the merits, and was barred by issue estoppel from the French decision. Ground 2 failed because Vijay had been given an ample opportunity to respond to the third Large expert report, and that report in fact reduced the sum awarded. [2018] EWHC 2713 (Comm) ¶¶ 59, 69, 82, 92–100
  4. Ground 3, the alleged interference with the witness Mr Egorov, failed for lack of causation. Vijay itself decided not to call him, and his evidence could not have made a substantial difference to the result. The court added that the public policy favouring finality would in any event weigh heavily against allowing a third challenge. [2018] EWHC 2713 (Comm) ¶¶ 122–136
  5. The Cooke and Cockerill orders are "judgments" under the Reciprocal Enforcement of British Judgments Act: they are orders in civil proceedings by which sums of money are made payable. The Rosseel line of cases on territorial restraint does not apply to a request to bring an English order into Seychelles, and Vijay's reciprocity objection was misconceived. CS 23/2019 ¶¶ 58–78
  6. The "back-door" argument lost its force because Seychelles became a party to the New York Convention in 2020. The maxim exequatur sur exequatur ne vaut does not apply, because the English court properly reviewed the arbitral process and added an award of post-award interest. None of the bars in section 3(2) applied, fraud and public policy included. Registering the orders was just and convenient, so the court ordered registration. CS 23/2019 ¶¶ 89–92, 102–114, 154
  7. EEEL's application for immediate execution on grounds of urgent necessity was dismissed. Execution was stayed pending appeal on condition that Vijay provide a EUR 20,000,000 bank guarantee within 14 days, and the attached bank accounts were released. MA100/2020 & MA101/2020 ¶¶ 10, 64–67

Procedural history

  1. 10 September 2012EEEL commenced the ICC arbitration. The sole arbitrator was appointed on 22 November 2012 and issued a partial award on jurisdiction on 17 June 2013.
  2. 14 November 2014Final award in EEEL's favour.
  3. 28 June 2016The Paris Cour d'Appel dismissed Vijay's annulment appeals. Vijay's further appeal to the Cour de Cassation was dismissed on 11 May 2017 because no memorandum had been filed.
  4. 18 August 2015Cooke J granted EEEL leave to enforce the award in England and entered judgment in its terms.
  5. 11 April 2017Andrew Baker J dismissed EEEL's applications on security, ended the adjournment and discharged the security order.
  6. 13 December 2017The Seychelles Court of Appeal refused recognition of the award in Seychelles, reversing Robinson J's decision of 18 April 2017.
  7. 20 June 2018Butcher J refused a worldwide freezing order and granted a freezing order limited to England and Wales.
  8. 11 October 2018Cockerill J dismissed Vijay's application to set aside the Cooke order.
  9. 30 June 2020The Seychelles Supreme Court ordered registration of the Cooke and Cockerill orders.
  10. 24 July 2020Ruling on the cross-applications: EEEL's application for immediate execution was dismissed, and execution was stayed pending appeal on condition of a EUR 20 million bank guarantee. The published documents do not show the outcome of the appeal.

Tribunal, counsel and experts

Decided by
For the claimant
Signature Litigation LLP · Cooke, Young & Keidan LLP · Alexandra Madeleine
For the respondent
Clyde & Co · Scarmans · Bernard Georges
Experts
Danny Large (claimant) · du Toit Malan (respondent)

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Keywords

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

Case ID
Supreme Court of Seychelles, No. CS 23/2019
Claimant
Eastern European Engineering Limited
Respondent
Vijay Construction (Proprietary) Limited
Section

Court: Seychelles, Supreme Court of Seychelles
Date of decision: 30 June 2020
Case number: CS 23/2019
Source: New York Convention case law case database.