Certain Underwriters At Lloyds London v Syrian Arab Republic & Ors

INTRODUCTION

The Claimants have brought proceedings under CPR Part 8 on the basis of a final judgment rendered in their favour on 12 April 2012 and filed on 14 May 2012 by the United States District Court for the District of Columbia, in the sum of US$ 51,574,997.89 together with any post-judgment interest that may accrue. The United States not being a party to any relevant Convention with the UK for the mutual enforcement of judgments, the claim is brought at common law.

The final hearing of the Claimants’ claim took place on 5 February 2018, and I received on 6 February 2018 the Claimants’ supplementary note on certain matters on which I had invited written submissions.

None of the Defendants was present or represented at the hearing. I therefore considered at the hearing whether or not to proceed, taking account by analogy of the factors identified by the Court of Appeal in R v Hayward, Jones and Purvis [2001] EWCA Crim 168, [2001] 2 Cr. App. R. 11 at § 22.5. For the reasons I gave at the hearing, I concluded that it was right to proceed. Briefly, I was satisfied that:

I therefore indicated that I would proceed, and would assume that had they been present then the Defendants would have taken all available points. I am satisfied that the Claimants have done everything possible to assist me in identifying and considering the arguments available to the Defendants.

The key issues arising are:

The Claimants accept that even if judgment is given in their favour, separate issues may arise about immunity from enforcement pursuant to section 13 of the 1978 Act. Those are not issues for determination at this stage.

BACKGROUND TO THE CLAIM

The Claimants’ claim in the United States District Court arose from the 1985 hijacking of EgyptAir flight 648 and the loss to which that gave rise. The Claimants brought two sets of proceedings in the US District Court under action numbers 06CV-731 (filed in April 2006) and 08-CV-504 (filed in March 2008) against the present Defendants and a number of Libyan defendants. The latter were dismissed from the actions following the enactment of the Libya Claims Resolution Act of 2008.

The US District Court’s “Findings and Fact and Conclusions of Law” records that the claims against the present Defendants came before the court as the subject of an evidentiary hearing held from 3 to 7 May 2010 pursuant to which the court made its findings. The District Court’s summary of findings includes the following points:

The “Findings and Fact and Conclusions of Law” also recorded that:

SERVICE OF THE PROCEEDINGS

It is necessary to decide whether the present proceedings have been validly served on the Defendants.

Section 12 of the State Immunity Act 1978 provides, so far as relevant, that:

“12(1) Any writ or other document required to be served for instituting proceedings against a State shall be served by being transmitted through the Foreign and Commonwealth Office to the Ministry of Foreign Affairs of the State and service shall be deemed to have been effected when the writ or document is received at the Ministry.”

Section 14 provides that references to a State are to include references to any Government department (such as the Second Defendant), and the Court of Appeal held in Propend Finance Pty Ltd v Sing (17.4.97, 1997 WL 1103759) that this extends to individual employees or officers of the State such as the Third Defendant:

“The protection afforded by the Act of 1978 to States would be undermined if employees, officers (or as one authority puts it, “functionaries”) could be sued as individuals for matters of State conduct in respect of which the State they were serving had immunity. Section 14(1) must be read as affording to individual employees or officers of a foreign State protection under the same cloak as protects the State itself.”

The House of Lords held in Kuwait Airways Corp v Iraqi Airways Co (No.2) [1995] 1 W.L.R. 1147; [1995] 3 All E.R. 694 that (save where there is agreement to the contrary under s.12(6) of the Act) the requirements of section 12 are mandatory and good service cannot be made without adhering to them. As a result, service on a State’s Embassy in the UK was insufficient. The House of Lords approved the statement by Evans J at first instance that:

“In my judgment, the requirement of service at, not merely ‘on,’ the Foreign Ministry of the defendant state is no more and no less than the plain words of section 12(1) demands. Service is effected by transmission to the Ministry and takes effect when the document is received at the Ministry. In no sense is a diplomatic mission in a foreign state the same as the Ministry of Foreign Affairs of the sending state.”

CPR 6.44 requires a party wishing to serve a claim form or other document on a State to file in the Central Office of the Royal Court of Justice a request for service to be arranged by the Foreign and Commonwealth Office (“FCO”), accompanied by specified documents. The Senior Master will then send the documents to the FCO with a request that it arrange for them to be served. CPR 6.44(5) states that:

“An official certificate by the Foreign and Commonwealth Office stating that a claim form or other document has been duly served on a specified date in accordance with a request made under this rule is evidence of that fact.”

The question of service has been the subject of certain previous orders in these proceedings:

The steps taken formally to serve the present proceedings on the Defendants are as follows:

In addition, the other steps including the following have been taken to bring the proceedings and various stages of them (including the final hearing on 5 February 2018) to the Defendants’ attention:

I consider first whether by reason of DHL’s having taken the documents to the Syrian MFA in Damascus on 18 April 2017 (§ 16.iv) above) on behalf of the FCO, the present proceedings were “transmitted through the Foreign and Commonwealth Office to the Ministry of Foreign Affairs” and “received at the Ministry” within section 12 of the 1978 Act.

The Act contains no definition of the words “transmitted” or “received” in section 12, and counsel informed me that they had found no authority on their meaning other than the cases cited below. It seems likely that the word “received” is intended, at least, to indicate that it is not sufficient merely for documents to be transmitted in the sense of being dispatched: they must actually reach the relevant Ministry. Conversely, section 12 does not in my view require the documents to be accepted upon delivery: otherwise the recipient could evade service simply by declining to accept delivery.

The Claimants cited Pocket Kings v Safenames [2009] EWHC 2529 (Ch), where a claim was served on the US State Department but several months later returned by the Department to the British Embassy. It was held that that rejection of service in no way impugned the validity of the service of the proceedings. The decision supports the view that a subsequent rejection of the documents does not prevent valid service from having taken place. It is not on all fours with the present case, where it appears that the Syrian reception consignee refused to take the documents in the first place.

The Claimants also provided a solicitor’s note of a hearing before Teare J on 2 February 2018 in the proceedings EIB v Syrian Arab Republic (CL-2017-000508), according to which Teare J concluded that there was valid service under section 12 where an email had been sent to the Syrian MFA and no undeliverable notification received, indicating that the email had been received in the electronic repository or server – by contrast with the position in relation to a later email sent on 30 January 2018 for which a failure message had been received. Teare J is recorded as having accepted the submission that, following the Court of Appeal’s decision in Anson v Trump [1998] 1 WLR 1404 that ‘transmission’ (in the context there of service by fax) was complete when the complete document had been received into the recipient’s fax equipment, transmission by email was achieved when the email arrived in the electronic repository. That decision provides a helpful analogy for a case such as the present one where a document has physically arrived at the Ministry’s premises, whether or not it has been accepted, opened or read.

The Claimants also referred to two of the numerous definitions of the word “receive” in the Oxford English Dictionary, which include at 16a and b:

“To have (a thing) given or handed to oneself …” and

“To get (a letter, etc.) brought to oneself or delivered into one’s hands”

In the present case, the documents were not merely transmitted to the Syrian MFA but actually arrived within the Ministry’s premises. Further, it appears from the FCO’s letter quoted in § 16.iv) above that the consignee knew the identity of the sender, but refused to take the package and instead insisted on its removal from the premises. In these circumstances, there was no further step that could have been taken in order to effect service, and in my judgment no further step which needed to be taken. The documents had been transmitted to and received at the Syrian MFA, notwithstanding that the Ministry’s representative insisted on their immediate removal. I do not consider that the reception consignee’s refusal to take the package into his hands prevented it from having been received at the Ministry for the purposes of section 12, and I conclude that service under that section was complete when DHL proffered the package to the consignee.

In case I am wrong in that conclusion, I also consider the Claimants’ fallback application for an order dispensing with service. CPR 6.16(1) permits service of a claim form to be dispensed with by the court where the circumstances are exceptional, and CPR 6.28(1) makes similar provision for any other document which is to be served in proceedings. Applications under both provisions may be made without notice (see CPR 6.16(2)(b) and 6.28(2)).

The House of Lords in Kuwait Airways was not asked to, and did not, consider the possibility that service might be dispensed with. If dispensing with service would be inconsistent with the mandatory nature of section 12 of the 1978 Act then the court would not have power to make such an order. However, I do not consider there to be an inconsistency. Section 12 applies to “Any writ or other document required to be served for instituting proceedings against a State”. If, exceptionally, the court has made an order dispensing with service of the claim form instituting the proceedings, then it is not a document “required to be served” within section 12.

I asked the Claimants whether it would be possible and legally coherent for the court to conclude both that service had been validly effected and that service should be dispensed with. The Claimants submitted that it was, provided the latter order were made in the alternative. I accept that submission. It is not logically inconsistent for the court to decide that (a) service has been validly effected but (b) (in case that conclusion were wrong) the need for service can properly be dispensed with.

The Court of Appeal in Olafsson v Gissurarson (No.2) [2008] EWCA Civ 152, [2008]

The White Book commentary on CPR 6.16 refers to the Court of Appeal’s statement in Bethel Construction v Deloitte and Touche [2011] EWCA Civ 1321 that if, as was the case there, the facts could not support a good reason for exercising the discretion under CPR 6.15 then they could not amount to exceptional circumstances under CPR 6.16. CPR 6.15 allows the court to order substituted service, and according to the Notes to it was designed to assist claimants where defendants deliberately evade service. An important objective in the context of CPR 6.15 is to seek to ensure a high likelihood that the document in question will come to the defendant’s attention (see the discussion in Note 6.15.3 of Abela v Baardarani [2013] UKSC 44). I have therefore considered, as a factor relevant to the exercise of the CPR 6.16 power to dispense with service, whether the steps the Claimants have already taken are likely to have brought these proceedings to the Defendants’ attention. It seems to me that the answer is yes, given the repeated communications referred to in §§ 16 and 17 above, to both the Defendants and their former US counsel LWS, the absence of message failure messages prior to 12 January 2018, and LWS’s request on 8 January 2018 for the email attachment to be resent (which at least indicates a level of interest or concern over the contents of the Claimants’ solicitors’ communications in relation to this case).

Overall, I consider that this is a truly exceptional case in which it is right to make an order in the alternative dispensing with service of the proceedings and the other documents created in the course of the proceedings and which the Claimants have attempted to serve on the Defendants.

SUBMISSION TO JURISDICTION OF THE U.S. COURT

In the absence of any Convention or other instrument for mutual recognition of judgments, a foreign judgment in personam can be recognised only if it was delivered by a court which had jurisdiction according to English private international law. That means that the defendant must either have (i) been present in the foreign jurisdiction when proceedings were commenced, (ii) claimed or counterclaimed in those proceedings, (iii) previously agreed to submit to the jurisdiction, or (iv) voluntarily have submitted himself to the overseas court’s jurisdiction (see Rubin and another v Eurofinance SA [2013] 1 AC 236 § 7). In the present case (i)-(iii) do not apply, so the Claimants must show that the Defendants submitted to the US court’s jurisdiction.

In addition, as regards judgments given by overseas courts against States, section 31(1) of the Civil Jurisdiction and Judgments Act 1982 (“CJJA”) provides:

“31(1) A judgment given by a court of an overseas country against a state other than the United Kingdom or the state to which that court belongs shall be recognised and enforced in the United Kingdom if, and only if:

(a)

It would be recognised and enforced if it had not been given against a state; and

(b)

That court would have had jurisdiction in the matter if it had applied rules corresponding to those applicable to such matters in the United Kingdom in accordance with sections 2 to

11 of the State Immunity Act 1978.”

The Supreme Court in NML Capital v Argentina [2011] 2 AC 495 made clear that section 31 provides a separate gateway for the enforcement of judgments against States, over and above those provided for by the 1978 Act (see, in particular, §§ 4451).

The requirement in CJJA section 31(1) subparagraph (a) that the judgment would be recognised and enforced if it had not been given against a State imports, among other things, the requirement referred to above that the overseas court had jurisdiction according to English private international law, and hence in the present case that the Defendants submitted to the US court’s jurisdiction.

As to subparagraph (b), the only provision in sections 2 to 11 of the 1978 Act relevant to the present case is section 2:

“2.

Submission to jurisdiction

As a result, in the present case both CJJA section 31(1)(a) and 31(1)(b) (via section 2 of the 1978 Act) mean the Claimants need to show that the Defendants submitted to the US court’s jurisdiction.

The Defendants took no part in the US proceedings up to and including the evidential hearing and judgment at first instance referred to above. However, a number of steps were taken in relation to an appeal from that judgment, which the Claimants contend amounted to submission by the Defendants to the jurisdiction of the US court.

The original US judgment was entered in favour of the Claimants on 2 September 2011. The final judgment, being the judgment on which the present proceedings are founded, was entered on 12 April 2012 and filed on 14 May 2012 correcting a (significant) mathematical error in the original judgment. The key steps taken thereafter in the US proceedings were as follows.

The Defendants’ approach to the US proceedings in the present case may be contrasted with the approach they took in a case the previous year, Baker et al v Socialist People’s Libyan Arab Jamahirya et al (Civil Action No. 03-cv-0749). Each of the Defendants was a defendant to those proceedings, and represented by the same counsel (LWS) in the same court as the present case i.e. the US District Court for the District of Columbia. In Baker, LWS on behalf of the Defendants on 14 April 2011 filed a “Notice of Limited Appearance”:

“for the limited purpose of appealing the Clerk’s Judgment entered in this action on March 31, 2011, for lack of personal and subject matter jurisdiction, applying for a stay of enforcement of the Judgment pending appeal, and asserting the entitlement of the Syrian Arab Republic as a sovereign nation to sovereign immunity and equal sovereignty in the Courts of the United States”.

The Notice of Appeal and Application for a Stay Pending Appeal, filed on the same date, similarly began by stating that Syria “a sovereign state and Member of the United Nations and entitled as such to equal sovereignty among nations, … holds firmly to the conclusion that the Courts of the United States lack personal and subject matter jurisdiction to adjudicate actions against it for damages based on death and injury occurring entirely outside the United States …”.

In Rubin and another v Eurofinance SA [2013] 1 AC 236 the Supreme Court stated:

“159 The general rule in the ordinary case in England is that the party alleged to have submitted to the jurisdiction of the

English court must have “taken some step which is only necessary or only useful if” an objection to jurisdiction “has been actually waived, or if the objection has never been entertained at all”: Williams & Glyn's Bank plc v Astro Dinamico Cia Naviera SA [1984] 1 WLR 438, 444 (HL) approving Rein v Stein (1892) 66 LT 469 , 471 (Cave J).

…

161

The characterisation of whether there has been a submission for the purposes of the enforcement of foreign judgments in England depends on English law. The court will not simply consider whether the steps taken abroad would have amounted to a submission in English proceedings. The international context requires a broader approach. Nor does it follow from the fact that a foreign court would have regarded steps taken in the foreign proceedings as a submission that the English court will so regard them. Conversely it does not necessarily follow that because the foreign court would not regard the steps as a submission that they will not be so regarded by an English court as a submission for the purposes of the enforcement of a judgment of the foreign court. The question whether there has been a submission is to be inferred from all the facts.

162

It is in that context that Scott J said at first instance in Adams v Cape Industries plc [1990] Ch 433, 461 (a case in which the submission issue was not before the Court of Appeal):

“If the steps would not have been regarded by the domestic law of the foreign court as a submission to the jurisdiction, they ought not … to be so regarded here, notwithstanding that if they had been steps taken in an English court they might have constituted a submission. The implication of procedural steps taken in foreign proceedings must … be assessed in the context of the foreign proceedings.”

163

I agree with the way it was put by Thomas J in Akai Pty Ltd v People's Insurance Co Ltd [1998] 1 Lloyd's Rep 90, 97:

“The court must consider the matter objectively; it must have regard to the general framework of its own procedural rules, but also to the domestic law of the court where the steps were taken. This is because the significance of those steps can only be understood by reference to that law. If a step taken by a person in a foreign jurisdiction, such as making a counterclaim, might well be regarded by English law as amounting to a submission to the jurisdiction, but would not be regarded by that foreign court as a submission to its jurisdiction, an English court will take into account the position under foreign law.””

Green J in Swiss Life AG v Moses Kraus [2015] EWHC 2133 (QB) stated:

“61 Case law provides illustrations of the sorts of acts of participation in foreign proceedings which amount to submission. These include: pursuing acts as a plaintiff; pleading to the merits of a claim qua defendant without contesting jurisdiction; contesting jurisdiction but nonetheless proceeding further to plead to the merits; agreeing to a consent order dismissing the claims and cross claims; failing to appear in proceedings at first instance but appealing on the merits; taking no part in proceedings and allowing judgment to go against him in default of appearance but later applying to set aside the default judgment on non-jurisdictional grounds. …”

An example of submission by bringing an appeal was SA Consortium General Textiles v Sun & Sand Agencies [1978] Q.B. 279, where the majority of the Court of Appeal held that the defendants had submitted to French jurisdiction for the purposes of the Foreign Judgments (Reciprocal Enforcement) Act 1933 (Footnote: ¹) by an application to appeal out of time from a first instance judgment and by their subsequent appeal from that judgment. Lord Denning MR stated:

Older English cases, in particular Henry v Geoprosco International [1976] QB 726

CJJA section 33 was enacted in order to reverse that case law, as noted in Dicey, Morris and Collins, “The Conflict of Laws”, 15^th ed, § 14-070 and Briggs “Civil Jurisdiction and Judgments, 6^th ed., § 7.55. It provides:

Certain steps not to amount to submission to

As section 33(2) makes clear, section 33 relates specifically to cases not covered by the Brussels Convention and its successors. For the reasons indicated below, it is necessary though to give some consideration to the test of submission as it has developed in that context.

The Brussels Convention and its successors provided and provide a comprehensive regime covering both jurisdiction and the recognition and enforcement of judgments. One of the grounds on which a court can assume jurisdiction under this regime is submission; by contrast, submission is not relevant to the recognition and enforcement of judgements, because a key feature of the regime is that the Member State in which recognition or enforcement is sought may not question the originating court’s jurisdiction (see, e.g., Article 28 of the Brussels Convention, and, now, Article 45(3) of the Recast Brussels Regulation).

Article 18 of the Brussels Convention provided that:

“'Apart from jurisdiction derived from other provisions of this Convention, a court of a Contracting State before whom a defendant enters an appearance shall have jurisdiction. This rule shall not apply where appearance was entered solely to contest the jurisdiction, or where another court has exclusive jurisdiction by virtue of Article 16”.

The European Court of Justice held in Case C-150/80 Elefanten Schuh that:

“[16] … it follows from the aim of Article 18 that if the challenge to jurisdiction is not preliminary to any defence as to the substance it may not in any event occur after the making of the submissions which under national procedural law are considered to be the first defence addressed to the court seised. and

“[17] …Article 18 of the Convention must be interpreted as meaning that the rule on jurisdiction which that provision lays down does not apply where the defendant not only contests the court's jurisdiction but also makes submissions on the substance of the action, provided that, if the challenge to jurisdiction is not preliminary to any defence as to the substance, it does not occur after the making of the submissions which under national procedural law are considered to be the first defence addressed to the court seised.”

The issue that had arisen in Elefanten Schuh was whether in order to avoid submission a defendant had to confine himself to contesting jurisdiction, or could contest the jurisdiction as well as the substance of the claim, bearing in mind that in some Member States a defendant who raised the issue of jurisdiction alone might be barred from arguing the merits if his jurisdiction plea were rejected (§ 14).

Read literally, the ECJ’s conclusion quoted above might be taken to mean that no step taken by a defendant to invoke the merits jurisdiction of the court prior to submission of his defence could amount to submission to the jurisdiction, so long as in due course the defence included a challenge to jurisdiction. If so, the test for submission under Article 18 might diverge from the existing common law test applied in the context of enforcement of judgments, summarised above, under which a pre-defence step might well constitute submission to the jurisdiction. It might also be unclear how the test should be applied in the context of an appeal.

Observations made in certain English cases have suggested that the common law concept of submission should be assimilated to the Article 18 test as determined in Elefanten Schuh.

In Marc Rich & Co. A.G. v Società Italiana Impianti (The Atlantic Emperor) (No.2) [1992] I.L.Pr. 544 the Court of Appeal applied Article 18, as interpreted in Elefanten Schuh, in a case about submission to the jurisdiction under the Brussels Convention. In setting out the applicable provisions, Neill LJ (with whose judgment the other members of the court agreed) stated:

“[29] I should also read section 33 which reflects provisions which I have already read from Article 18. It is to be noted, however, that both section 32 and section 33 relate to judgments given by courts of overseas countries generally and are not restricted to judgments given in Convention countries. 'Judgment' is defined in section 50 as meaning (subject to exceptions which do not apply)

'any judgment or order (by whatever name called) given or made by a court, in any civil proceedings.'

Section 33, to which I earlier referred, is in these terms, under the rubric 'Certain steps not to amount to submission to jurisdiction of overseas court' :

'For the purposes of determining …'

I need not read subsection (2).” (emphasis added)

The Court of Appeal concluded that a defence submitted by Marc Rich in which “they made it abundantly clear in the pleading that the primary purpose of the document was to challenge the jurisdiction of the Genoa court” did not amount to a submission.

In Harada Limited v Turner [2003] EWCA Civ 1695 the Court of Appeal applied Article 18 in deciding whether there had been a submission to the jurisdiction of an employment tribunal. Simon Brown LJ referred to Elefanten Schuh and Marc Rich, and stated:

“[29] … the court does not have jurisdiction even if the defendant makes submission on the merits provided only that the challenge to the jurisdiction is made either before or at the same time as (and not merely after) the argument on the merits.

…”

…

“[32] … the whole rationale of [Article 18] is to allow the merits to be contested without prejudice to the question of jurisdiction provided only and always that the jurisdictional objection has not been delayed until after, under national procedural law, there has already been a submission to the jurisdiction.

Mance LJ stated:

“[50] … in countries whose procedure does not require any challenge to the jurisdiction to be made before any defence on the merits, a defendant’s right to challenge the jurisdiction is preserved as long as it has raised its challenge no later than the time of its first defence on the merits. The rationale being that any other result could be contrary to the defendant’s right to defend itself, it is absurd to suggest that the European or any other court would hold that a defendant was, after raising its initial challenge, unable to continue to defend itself to any extent necessary to avoid judgment being entered against it on the merits, pending final resolution of its challenge to the jurisdiction.”

The Court of Appeal concluded that there was no submission by a party who “clearly has contested jurisdiction from the outset; it raised its jurisdictional objection in its very first appearance” (§ 29) and, having tried unsuccessfully to have it adjourned, had participated in the merits hearing only under protest (§ 35).

In AES Ust-Kamenogorsk Hydropower Plant [2012] 1 WLR 920 the Court of Appeal held that a claimant in England relying on an arbitration clause, who had when sued in Kazakhstan done all it could to preserve its challenge to the jurisdiction there, had not submitted to the jurisdiction of the Kazakh court. Having lost on jurisdiction it joined issue on the merits pending renewing its jurisdiction challenge on appeal. In the course of his reasoning Rix LJ at § 174 referred to Neill LJ’s reliance on Elefanten Schuh when interpreting CJJA section 33, but did not regard it as determinative of the issues before the court in AES (§ 175). Stanley Burnton LJ agreed with the result, but also observed at § 201:

“I add that in my judgment it would be unfortunate if the principles applied by our courts on the question whether a litigant has submitted to the jurisdiction of a foreign court in non-EU cases were to differ from the principles applied by the Court of Justice and therefore our courts in cases under the Brussels and Lugano Conventions and now the Judgments Regulation.”

Wilson LJ agreed with both judgments.

Finally, in Ecobank Transnational v Tanoh [2016] 1 WLR 2231, the Court of Appeal refused an anti-suit injunction sought by a claimant in England who relied on an arbitration agreement and sought to restrain the enforcement of judgments the defendant had obtained in the Togolese Republic and the Republic of Cote d’Ivoire. One issue raised was whether the claimant had submitted to the jurisdiction of the court in Togo in circumstances where the court there had required jurisdiction and the merits to be dealt with together (§ 67). The Court of Appeal’s discussion of the case law included the following observation a propos Stanley Burnton LJ’s comment in AES quoted above:

“66 In his judgment Stanley Burnton LJ said that it would be unfortunate if the principles applied by our courts on whether a litigant had submitted to the jurisdiction of a foreign court in non-EU cases were different from the principles applied by the Court of Justice, and therefore our courts, in cases under the Brussels and Lugano Conventions and now the Judgments Regulation (Council Regulation (EC) No 44/2001). I would go further. The decision of the court in Harada in relation to section 33 was heavily influenced by the decision of the European court in relation to article 18 of the Brussels Convention. But, now that section 33 has been interpreted in the way that it has, it cannot be right that it should bear a different meaning in cases outwith the European context.”

I invited the Claimants to file a written submission addressing the implications (if any) for the present case of this line of cases, which was provided after the hearing. I have concluded that the Elefanten Schuh approach, even if adopted, would not alter the outcome of the present case, because:

Neither Elefanten Schuh nor any of the English cases referred to above had to consider the situation where a defendant takes a step to invoke the merits jurisdiction of the court before having filed any defence, still less the situation of submission by commencing an appeal. A relevant pre-defence step might be, for example, an application for an injunction or other interim relief, an application for disclosure or for further information, or an acknowledgment of service indicating an intention to defend the claim and not indicating an intention to contest jurisdiction. Despite the construction which might literally be placed on the Court of Justice’s formulation quoted in § 47 above, I do not consider that any of these cases holds that such a step may not amount to submission, and the formulation of Simon Brown LJ in Harada § 32 (quoted in § 53 above) is inconsistent with any such view. A fortiori, none of these cases supports the proposition that an appellate filing not reserving the appellant’s position on jurisdiction cannot amount to a submission, and in my view the Court of Appeal’s decision in SA Consortium General Textiles remains good authority for the proposition that it can.

If and in so far as (contrary to the points made above) the Elefanten Schuh approach could lead to a different outcome in the present case, I would conclude that it should not be applied in the context of the present case. That is because:

The statements in Rubin quoted in § 39 above indicate that the way in which the foreign court would characterise the steps taken in that court is relevant to the English court’s consideration of whether there has been submission, though it is not decisive.

The Claimants have adduced evidence of the relevant US law by two means:

The evidence indicates that there is no general requirement in US law for defendants to raise merits-based submissions as part of any challenge to jurisdiction. That is evident from findings as to US law made in Starlight at §§ 18 to 23 to the effect that:

Ms Langford’s report indicates that:

Ms Langford states in her evidence that “I have also inspected the full docket for the proceedings to ensure that I have a full understanding of the same”, and sets out the events which occurred in the proceedings after the original judgment. Based on this evidence, I conclude that unlike in Baker, the Syrian defendants in the present case did not accompany their Notices of Appeal by a Notice of Limited Appearance denying jurisdiction and asserting sovereign immunity.

I consider first whether the First Defendant (“Syria”) submitted to the jurisdiction of the US courts, because as indicated in section 5 below there is a separate issue as to which, if any, steps were also taken on behalf of the Second and Third Defendants.

In my judgment Syria did submit to the jurisdiction of the US courts, because:

Even to the extent that Syria in its Statement of Issues referred to an issue about the recoverability of particular property damages losses under the FSIA, that is more properly to be read as a substantive defence to a claimed loss, assuming jurisdiction to exist, than a challenge to jurisdiction. Ms Langford cites it as an example of Syria’s intention to challenge the lower court’s approach to the merits. In any event, Syria had by this stage already filed three Notices of Appeal, and a Motion for extension of time, in the terms I have already described.

The result is the same even if it is appropriate to apply the Elefanten Schuh approach. To the extent that it is possible to find an analogy in these appellate proceedings for the service of a defence, it was in my view the service of the Notices of Appeal, each of which included a merit-based objection to the judgment appealed from but contained no assertion that the US courts lacked jurisdiction by reason of, or that the claims were barred by, sovereign immunity. The simple fact is that Syria at no stage made any such challenge, save to the extent that its January 2013 response contained one: but that was too late to prevent Syria from having submitted by its filings in the appeal up to and including Syria’s motion to withdraw the appeal.

Moreover, as the Claimants point out, the circumstances here were very different from those in Ecobank and Harada (and indeed Elefanten Schuh itself). Here it is not the case that Syria could have done nothing further to distance itself from the US courts’ jurisdiction:

I therefore conclude that Syria submitted to the jurisdiction of the US courts for the purposes of English private international law. Accordingly, and for the same reasons, I conclude that:

The Notices of Appeal and other filings in the US Court were made by LWS who, at the end of each document, referred to themselves as “Attorneys for the Syrian Arab Republic”. The Notices began by stating that “Notice is hereby given that the Syrian Arab Republic, named as a defendant in the above consolidated cases, hereby appeals …”

The question therefore arises whether all three Defendants submitted to the US Court’s jurisdiction, or only Syria itself.

The Claimants submit that all three Defendants submitted, relying on the following factors:

The Claimants also relied on the reference in the Plaintiff’s Motion to Confirm Final Judgment to the Magistrate Judge having “ordered damages to be assessed against the Syria Defendants” (emphasis added) and the statement in the US District Court’s April 2014 Memorandum Order that “Although the Syrian defendants never answered nor appeared before this Court they did file a Notice of Appeal” (emphasis added). These documents post-dated LWS’s January 2013 filing, so the point about LWS’s failure to take exception to them in that filing does not arise.

The arguments here are in my view finely balanced. However, I have come to the conclusion that all of the Defendants submitted to the US courts’ jurisdiction, because:

In these circumstances I conclude that the steps which LWS took in relation to the appeal in the US court were taken on behalf of all three of the Defendants, and all three thereby submitted to the US courts’ jurisdiction. The conclusions I reach in relation to Syria in § 70 above therefore also apply to the Second and Third Defendants.

As well as the requirement that the foreign court had jurisdiction according to English private international law, it is necessary to show in an action at common law on a foreign judgment that:

I am satisfied that these requirements are satisfied in the present case. As part of reaching that conclusion I have satisfied myself that the Defendants were given proper notice of the US proceedings (see, in particular, § 9.ii) above), and that the US court awarded damages on a compensatory basis without any element of multiple, penal or exemplary damages.

INTEREST

The US court awarded the Claimants the sum of US$51,574,997.89 together with post-judgment interest. I have been provided with witness evidence from Ms Andrewartha, the solicitor acting for the Claimants (based on information from her firm’s New York office), that under US law post-judgment interest would have accrued at 0.18% compounded annually, amounting to US$310,715.68 at the time of commencement of these proceedings, and giving a primary sum sought as the debt then crystallised of US$51,885,713.57.

In addition, the Claimants seek interest on that judgment sum from the date of commencement of these proceedings and until payment. They do so on the basis of the average US Prime Rate applicable over the period from the date of issue to the present day. An up to date average rate and interest calculation to 5 February 2018 has been provided in Ms Andrewartha’s ninth witness statement, and I give permission to rely upon that statement. This produces a final sum of post-judgment interest sought to 5 February 2018 of US$4,694,619.36.

Going forward, the Claimants seek interest on the judgment sum at a rate of 4.5% (reflecting the current US Prime Rate) and amounting to US$6,396.87 per day.

Ms Andrewartha explains in her eighth witness statement that:

Whilst it might be argued that the US post judgment rate should continue to apply right up to the date on which judgment is given by this court, it is reasonable to apply the US Prime Rate at least from the date of commencement of these proceedings. That approach does no more than to compensate the Claimants, at a rate approximating to the real cost of borrowing, for being out of their money for that period.

The only aspect of the Claimants’ approach to interest at which I would cavil is the calculation of interest under section 35A on the aggregate of the amount of the US judgment plus the US post judgment interest of approximately US$310,715. I would accept that under the Foreign Judgments (Reciprocal Enforcement) Act 1933, which may serve as an analogy, section 2(6) provides that “[i]n addition to the sum of money payable under the judgment of the original court, including any interest which by the law of the country of the original court becomes due under the judgment up to the time of registration, the judgment shall be registered for the reasonable costs of and incidental to registration, including the costs of obtaining a certified copy of the judgment from the original court” (emphasis added); and section 2(2)(c) then provides that the sum for which a judgment is registered shall carry interest as if the judgment had been a judgment originally given in the registering court and entered on the date of registration. Thus the overseas judgment, including interest, is registered and then carries interest going forward.

However, the 1933 Act does not apply here, and the general position under section 35A noted in White Book note 9A-124 is that “the award of interest under s.35A must be for “simple interest” which is perhaps similar to the prohibition contained in proviso (a) to s.3 of the Act of 1934 against “the giving of interest upon interest” (see Bushwall Properties Ltd v Vortex Properties Ltd [1975] 1 W.L.R. 1659; [1975] 2 All E.R. 214).” Bushwall (which was reversed on other grounds at [1976] 1 W.L.R. 591) held that despite the former statutory proviso precluding an award of interest on interest, interest could be awarded on an amount of damages which had been calculated by reference to the interest cost of having to pay for a property immediately instead of in stages as had been agreed. In those particular circumstances the principal sum was held in reality not itself to constitute “interest” as such.

In the present case, I do not see a sufficient basis on which to award interest under section 35A on the post-judgment interest of US$310,715.68, and consider that that would represent an element of compounding whereas section 35A (as opposed to certain instances in equity and perhaps cases where interest can be claimed by way of damages) provides only for simple interest. I therefore consider that interest at Prime Rate (at the rates determined on the bases the Claimants have proposed) should be awarded under section 35A from 14 September 2015 on the US judgment sum of US$51,574,997.89 rather than upon US$51,885,713.57. This will necessitate a recalculation of the sums claimed by way of interest since 14 September 2015 and the daily rate going forward.

COSTS

As the final hearing was listed for and took not more than 1 day, the Claimants seek a summary assessment of their costs pursuant to CPD 44PD.9. The costs claimed were addressed in Ms Andrewartha’s Eighth and Ninth Witness Statements. Up to date statements of the costs claimed have been provided, detailing total costs of £545,153.89.

The Claimants invite the court to proceed with a summary assessment of costs on the grounds that:

44PD.9 § 9.2 does not in my view apply here, because the provision relied upon

Nonetheless, § 9.1 provides that “Whenever a court makes an order about costs which does not provide only for fixed costs to be paid the court should consider whether to make a summary assessment of costs”. Further, CPR 44.6(1) provides that “Where the court orders a party to pay costs to another party (other than fixed costs) it may either (a) make a summary assessment of the costs; or (b) order detailed assessment of the costs by a costs officer, unless any rule, practice direction or other enactment provides otherwise”. The court therefore has the power to make a summary assessment in the present case.

In the circumstances indicated in §§ 88 (ii) and (iii) above I am willing to accede to the Claimants’ request.

I have carefully considered the Claimants’ two Statements of Costs, respectively covering the periods up to and as from 13 October 2017, in the sums of £341,435.47 and £203,718.42. The detailed evidence filed for the hearing has given me a good sense of the amount and complexity of work involved in the proceedings. I am satisfied that the hourly rates, the hours spent, the division of work between more and less senior staff, and the disbursements, are broadly reasonable. On the basis that there will be no detailed assessment, I do not think it would be right to assess the costs at 100% simply on the basis of a broad sense of the reasonableness of the bill. On the other hand, I do not see any good basis in the present case on which to make any very substantial percentage discount to the sum claimed in order to reflect the inevitable uncertainties involved. In the circumstances I summarily assess the Claimants’ costs at £495,000.

In addition, I consider it appropriate in the present case, where the Claimants are likely to have been out of pocket for considerable periods of time as regards significant amounts of costs, to order interest on costs pursuant to CPR 44.2(6)(g) at the commercial rate of 2.5% per annum from the date the costs were incurred up to the date of my order. Interest thereafter should accrue at the judgment rate.

CONCLUSIONS

For the reasons set out above I shall enter judgment for the Claimants and approve an order reflecting the relief granted in this judgment.

I am grateful to Claimants’ counsel for their clear and helpful written and oral submissions.