Sonatrach v Statoil
2014
COMMERCIAL COURT
United Kingdom
CORAM
- THE HONOURABLE MR JUSTICE FLAUX
Areas of Law
- Arbitration Law
2014
COMMERCIAL COURT
United Kingdom
CORAM
AI Generated Summary
The case involved Sonatrach and Statoil in a dispute over four inter-connected agreements from 2008. An arbitration tribunal awarded in favor of Statoil, which Sonatrach challenged under section 68 of the Arbitration Act 1996, alleging the tribunal overlooked critical evidence and mischaracterized testimonies. The court found no serious irregularity by the tribunal and upheld the enforcement of the award as a judgment, though the service on Bredin Prat was retrospectively validated.
The Honourable Mr Justice Flaux:
Introduction and background
The claimant in the application under section 68 of the Arbitration Act 1996 in 2013 Folio 731 is the Algerian state oil company, to which I will refer as “Sonatrach”. The defendant (to which I will refer as “Statoil”) is a subsidiary of the Norwegian oil company Statoil ASA, in which the Norwegian Government is the majority shareholder. Sonatrach’s application is to set aside an arbitration award dated 30 April 2013 conducted under the auspices of the International Chamber of Commerce (“ICC”) before three well-known Swiss and French jurists: Professor Pierre Tercier, Dr Wolfgang Peter and Professor Charles Jarrosson. Although arbitration hearings took place in Lausanne and Paris, the seat of the arbitration was London. Hence the English court is the supervisory court.
In addition to its section 68 application, Sonatrach seeks to set aside the Order of Cooke J dated 11 July 2013 in 2013 Folio 935, granting Statoil as claimant permission under section 66 of the Act to enforce the Award in the same manner as a judgment. In particular, Sonatrach seeks to contend that the Order for alternative service on Bredin Prat (the Paris lawyers who represented Sonatrach in the ICC arbitration) was defective and to set aside that part of the Order which required Sonatrach to pay Judgments Act interest on the outstanding amounts from the date of the Order.
The underlying dispute concerned Sonatrach’s failure to comply with its obligations under four inter-connected contracts (“the 2008 Agreements”) concluded on 1 March 2008 after more than twelve months of negotiations:
A Framework Agreement dated 1 March 2008 governed by French law, and subject to ICC arbitration. It provided for, inter alia:
(a) The reservation by Statoil of a certain amount of firm transportation capacity on two of its pipeline systems in favour of Sonatrach; and
(b) The conclusion of heads of agreement (“HOAs”) for the sale by Sonatrach and purchase by Statoil of liquefied natural gas (“LNG”) between 1 April 2009 and 31 March 2024, including reservation of a guaranteed portion of Statoil’s re-gasification capacity at Cove Point, such agreements being conditional upon the agreements reserving re-gasification and pipeline capacity. Provision was also made for a separate HOA regulating additional sales of LNG from Sonatrach to Statoil between 2009 and 2014.
(2) A HOA dated 1 March 2008 for the sale by Sonatrach and the purchase by Stato