Suek AG v. Larcher Trading Limited

At a glance

Parties

Suek AG (Switzerland) v. Larcher Trading Limited (Limassol, Cyprus)

Case no.

Foreign Decision No. 5/2018 (ECLI:CY:EDLEM:2019:A53)

Court

District Court of Limassol, Cyprus – Chr. G. Philippou (Χρ. Γ. Φιλίππου), District Judge

Forum and rules

Recognition and enforcement under the New York Convention (Cyprus Law 84/1979), Law 121(I)/2000 and the International Commercial Arbitration Law 101/1987

Underlying award(s)

LMAA award (FALCA Rules) by sole arbitrator Simon Gault, London, 30 November 2016, as corrected on 24 December 2016

Treaty

New York Convention 1958

Sector

Coal trading

Outcome

Application granted: the LMAA award was registered and declared enforceable in Cyprus, with costs for the applicant.

Amount

Award: USD 237,692.42 plus costs of GBP 2,860. Costs of the Cyprus application awarded to Suek AG, to be assessed by the Registrar.

The dispute

Suek AG, a Swiss company trading Russian coal, sold coal worth at least USD 1,136,575.82 to Larcher Trading Limited, a Cypriot company, under two sale agreements of 17 October 2008 and 30 January 2009. In an agreement dated 7 December 2010, governed by English law with LMAA arbitration in London, Larcher acknowledged the principal debt and agreed to pay interest. Larcher paid the principal in instalments, the last on 28 September 2012, but did not pay the interest. Suek started LMAA arbitration. Larcher did not take part, and sole arbitrator Simon Gault issued an award on 30 November 2016, corrected on 24 December 2016, for USD 237,692.42 plus costs. Suek then applied to the Limassol court for recognition and enforcement. Larcher objected on several grounds: the Article IV documents were defective, in particular because the original arbitration agreement was not produced; the translations were inadequate; it had not received proper notice and could not present its case (Article V(1)(b)); the award was not binding (Article V(1)(e)); the application was premature because Larcher had filed a challenge under section 72 of the Arbitration Act in the English Commercial Court; and enforcement would be contrary to public policy.

Key holdings

1. Failing to produce the original arbitration agreement was not enough on its own to refuse enforcement. Both originals were in Larcher's possession, which Larcher did not deny, and the copy had been attached to the claim submissions. Following Alliance Bank JSC v. Metropol (Cyprus) Ltd, the court applied the more-favourable-right principle (Article VII(1)) and Article 7(3) of Law 101/1987. It rejected objections 1, 2 and 6. p. 21
2. Larcher received proper notice. Clause 10.2 of the agreement allowed delivery by hand, courier, fax or email, and did not require two methods. All the documents had been delivered by hand by a private process server to Larcher's registered office, which was also its contact address under clause 16. The court gave no weight to the alleged email notifying a change of address: it was an untranslated Russian email about a coal order. pp. 22–24
3. Larcher's claim that the parties orally agreed to waive interest was an afterthought. It differed from the position Larcher took in the earlier Cyprus liquidation proceedings, and no English-law opinion was filed on whether a written agreement could be varied orally. p. 22
4. A pending set-aside application at the seat does not automatically suspend enforcement. Article VI gives the court discretion to adjourn, and Larcher showed no reasonable prospect of success for its English challenge. p. 24
5. The award was binding (Article V(1)(e)). Larcher produced no evidence or English-law opinion to the contrary and no English order suspending the award. Clause 14.2 made the award final and binding, and the arbitrator certified on 13 March 2018 that it was final, binding and enforceable. p. 25
6. Both translations met Article IV(2): the translation of the award certified through the Press and Information Office, and the translation of the arbitration agreement by a sworn private translator supported by an affidavit. pp. 25–29
7. The public policy argument was raised only vaguely and was not a formal ground of objection. In any event, public policy applies only in exceptional circumstances and nothing justified it here. The application was granted, with costs following the event. p. 30

Procedural history

1. 7 December 2010Parties conclude the arbitration agreement acknowledging a debt of USD 1,136,575.82 plus interest; the originals were signed in January 2011.
2. 5 October 2015District Court of Limassol sets aside Suek's liquidation petition No. 403/2014 against Larcher because no award existed yet.
3. 9–20 November 2015 / January 2016Notices on the appointment of an arbitrator and the start of the arbitration are served at Larcher's registered office. The LMAA President appoints Simon Gault as sole arbitrator.
4. 30 November 2016LMAA award issued; Larcher did not take part in the arbitration.
5. 24 December 2016Corrected award issued under FALCA Rule 25.
6. 13 September 2018Larcher files a section 72 challenge (CL-2018-000953) in the English Commercial Court.
7. 30 January 2019District Court of Limassol grants recognition and enforcement of the award.

Tribunal, counsel and experts

Decided by

• Chr. G. Philippou (Χρ. Γ. Φιλίππου) Judge, District Court of Limassol

For the claimant

Michael Kyprianou & Co. LLC

For the respondent

Agathokleous-Neophytou & Co LLC (Αγαθοκλέους-Νεοφύτου & Σία ΔΕΠΕ) · Candey Limited

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Keywords

• New York Convention
• recognition and enforcement
• Cyprus
• LMAA
• FALCA Rules
• coal
• Article IV
• original arbitration agreement
• more-favourable-right provision
• Article VII(1)
• notice of arbitration
• Article V(1)(b)
• Article V(1)(e)
• pending set-aside
• section 72 Arbitration Act
• certified translation
• Press and Information Office
• public policy

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