Leidos Inc v. The Hellenic Republic

At a glance

Parties

Leidos Inc (formerly Science Applications International Ltd.) v. The Hellenic Republic

Case no.

CL-2018-000672; [2019] EWHC 2738 (Comm)

Court

High Court of Justice, Queen's Bench Division, Commercial Court (England and Wales) – Mr Justice Jacobs

Underlying award(s)

ICC award of 2 July 2013 in case 16394/GZ/MHZ

Treaty

New York Convention, Article V(1)(e); Arbitration Act 1996, s 103(2)(f)

Sector

Public security systems (Athens 2004 Olympic Games)

Outcome

No order as to costs: each side bears its own costs of the enforcement and set-aside applications. A suspension of enforcement by the courts of the seat counts as a suspension of the award under s 103(2)(f).

Amount

Award: just under € 40 million, inclusive of arbitration costs, plus interest. Greece paid € 53,158,997.37 on 10 September 2019. Costs claimed: Leidos £ 215,647.78; Greece £ 53,576.03. Neither side recovered costs.

The dispute

Leidos obtained an ICC award against Greece on 2 July 2013 under a contract to develop a public security system for the 2004 Athens Olympic and Paralympic Games. Greece challenged the award in its courts. On 7 September 2018 the Greek Supreme Court suspended enforcement of the award until it ruled on Greece's cassation petition, and it confirmed the suspension in writing on 18 October 2018. On 30 October 2018 Teare J granted Leidos permission, on a without notice application, to enforce the award in England. Greece applied on 13 June 2019 to set that order aside under s 103(2)(f) of the Arbitration Act 1996, and also for material non-disclosure. The Greek Supreme Court then dismissed Greece's challenge on 20 June 2019, and Greece paid. The parties agreed by consent order that Greece would withdraw its set-aside application in principle, leaving only costs to be decided.

Key holdings

1. Under the Consent Order, the 11 October 2019 hearing was about costs only. Greece could not use the hearing to revive its set-aside application. Had the point arisen, the Court would have used its discretion to keep Teare J's order in place. ¶¶ 15–17
2. The Greek Supreme Court's orders of September and October 2018 'suspended' the award within s 103(2)(f) and Article V(1)(e) of the New York Convention. A suspension may be temporary. It need not be stated to have effect outside Greece. A suspension of the award's enforcement is not to be distinguished from a suspension of the award itself. Commentaries and Swiss and Swedish decisions support this view. ¶¶ 31–33
3. Even so, the enforcement application was not 'plainly misconceived'. The court keeps a narrow discretion to enforce even where s 103(2)(f) applies. If the set-aside application had been heard before the Greek Supreme Court ruled, it would very probably have succeeded. ¶¶ 29–30, 34
4. Leidos is the successful party. It obtained an enforcement order that was never set aside, the grounds of opposition fell away, and the award was paid at least in substantial part. The Court also took into account Greece's sustained but unjustified challenge to a valid award. ¶¶ 24–27, 35
5. Leidos failed in its duty of full and frank disclosure. It did not draw Teare J's attention to s 103(2)(f) and referred only to s 103(5). The omission was not deliberate, but it was material and highly culpable, and it justifies departing from the rule that the successful party recovers its costs. ¶¶ 37–40
6. Leidos should reasonably have accepted Greece's offer to stay the enforcement order. Its demand for security was inappropriate because a defence under s 103(2)(f) existed, and it was common ground that the court has no power to order security under that provision. Result: no order as to costs. The Court's provisional view was that the same applies to the costs of the 11 October hearing. ¶¶ 41–42

Procedural history

1. 2009ICC arbitration commenced.
2. 2 July 2013ICC award in favour of Leidos (then Science Applications International Ltd.).
3. June 2014 – 13 July 2017Athens Court of Appeals annuls the award (June 2014). The Greek Supreme Court reverses that decision (September 2016). On remand, the Athens Court of Appeal rejects the annulment petition by majority (13 July 2017).
4. 7 September 2018Greek Supreme Court issues an interim order suspending enforcement of the award. Written decision No. 158/2018 follows on 18 October 2018.
5. 30 October 2018Teare J grants Leidos permission to enforce the award in England on a without notice application. The order is served on Greece on 22 March 2019.
6. 13 June 2019Greece applies to set aside Teare J's order.
7. 20 June 2019Greek Supreme Court dismisses Greece's final challenge, which also lifts the suspension of enforcement. Greece pays € 53,158,997.37 on 10 September 2019.
8. 16 August 2019Consent Order sealed: Greece agrees in principle to withdraw its set-aside application, and a hearing is listed to decide costs.
9. 17 October 2019Judgment of Jacobs J: no order as to costs.

Tribunal, counsel and experts

For the claimant

King & Spalding LLP

For the respondent

Enyo Law LLP

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Keywords

• enforcement
• New York Convention Article V(1)(e)
• Arbitration Act 1996 s 103(2)(f)
• suspension of award
• stay of enforcement
• full and frank disclosure
• without notice application
• costs
• CPR 44.2
• security
• ICC award
• Greece
• Athens Olympic Games
• public security system
• Greek Supreme Court
• s 103(5) adjournment

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