Boru Hatlari IIe Petrol Tasima as (also known as Botas Petroleum Pipeline Corporation Ltd) and Ors v Tepe insaat Sanayii as

JurisdictionJersey
CourtCourt of Appeal
JudgeLogan Martin JA
Judgment Date04 November 2016
Neutral Citation[2016] JCA 199D
Date04 November 2016

[2016] JCA 199D

COURT OF APPEAL

Before:

Sir David Calvert-Smith, President;

Robert Logan Martin, Q.C.; and

David Anderson, Q.C.

Between
Boru Hatlari IIe Petrol Tasima AS (also known as Botas Petroleum Pipeline Corporation Limited)
First Appellant
Turkish Petroleum International Limited
Second Appellant
Botas International Limited
Third Appellant
and
Tepe insaat Sanayii AS
Respondent

and

Nacap BV
Party Cited

Advocate P. G. Nicholls for the Appellants.

Advocate E. Moran for the Respondent.

Authorities

Botas v Tepe [2016] JCA 135.

Arbitration (Jersey) Law 1998.

State Immunity Act 1978.

State Immunity (Jersey) Order 1985.

Tepe v Botas [2016] JRC 012A.

Court of Appeal (Jersey) Law 1961.

Crociani v Crociani [2014] JCA 089.

La Generale des Carrières et des Mines v F G Hemisphere [2012] 2 CLC 709.

Republic of France v Dollfus Mieg et Cie SA and the Bank of England [1952] AC 582.

Compania Naviera Vascongado v Steamship “Cristina” and others [1938] AC 485.

Botas v Tepe [2016] JCA 067C.

Uprichard v Scottish Ministers [2013] UKSC 21, 2013 SC (UKSC) 219.

Trilogy Management Limited v YT Charitable Foundation (International) Limited [2012] (2) JLR 330.

La Generale des Carrières et des Mines v F G Hemisphere Associates LLC v Democratic Republic of Congo [2011] JCA 141B.

Syvret v AG [2015] JCA 020.

Investec Trust (Guernsey) Limited and another v Glenalla Properties Limited and others [2015] GCA 467.

Biogen Inc v Medeva PLC [1997] RPC 1.

Merchant International Company Ltd v Natsionalna Aktsionerna Kompaniia Naftogaz Ukrainy [2016] EWCA Civ 710.

Appeal relating to applications by the appellants and respondent following the judgment of the Court dated 8th Augusts, 2016.

Logan Martin JA
THIS IS THE JUDGMENT OF THE COURT
Introduction
1

This judgment relates to applications made by the appellants and the respondent following the substantive judgment of the Court dated 8 August 2016 ( Botas v Tepe [2016] JCA 135) on the appeal by the appellants and cross appeal by the respondent (“the substantive judgment”).

2

The first appellant is Boru Hatlari Ile Petrol Tasima AS, also known as Botas Petroleum Pipeline Corporation Limited (“Botas”) which is a company registered in Turkey and wholly owned by the Republic of Turkey (“the Republic”). The second appellant is Turkish Petroleum International Limited (“TPIC”) which is a company registered in Jersey. The third appellant is Botas International Limited (“BIL”) which is also a company registered in Jersey. TPIC and BIL are both wholly-owned subsidiaries of Botas. The respondent is Tepe Insaat Sanayii AS (“Tepe”) which is a company registered in Turkey. The party cited is Nacap BV which has taken no part in these proceedings.

3

The circumstances are set out in the substantive judgment and we do not repeat these. In summary, Tepe is seeking to enforce two international arbitration awards made against Botas (“the Awards”) by means of enforcement pursuant to the Arbitration (Jersey) Law 1998 and against assets belonging to Botas. By the time of the appeal, the assets in question comprised shares held by Botas in TPIC and BIL (together “the Shares”), and debts due by BIL to Botas.

4

Tepe presented two Representations to the Royal Court seeking leave to enforce the Awards and was granted ex parte an interim arrêt entre mains in respect of the shares held by Botas in TPIC, and this was subsequently extended to cover the shares held by Botas in BIL and the debts due by BIL to Botas. With respect to what was in issue before this Court, Botas filed pleadings in the Royal Court disputing the entitlement of Tepe to enforce the Awards in two respects. The first was that the Royal Court had no jurisdiction to make any order in respect of the Shares because the Republic has an interest in and/or control of the Shares such as to engage the principle of sovereign immunity by reference to the State Immunity Act 1978 of the United Kingdom (“the Act”) which was extended to the Bailiwick by the State Immunity (Jersey) Order 1985. The second was that the Royal Court had no jurisdiction in respect of the debts due by BIL to Botas on several grounds. Tepe contended that leave to enforce the Awards should be granted and the interim arrêt confirmed. In reply, Botas contended that the Representations should be dismissed and the interim arrêt lifted. After a hearing on the Representations before Sir Michael Birt, Commissioner, sitting with Jurats, the Royal Court gave judgment on 19 January 2016 (“the Royal Court judgment”) ( Tepe v Botas [2016] JRC 012A) in which it rejected the claim of sovereign immunity in respect of the Shares and confirmed the arrêt in that respect, but refused to confirm the arrêt in respect of the debts due by BIL to Botas.

5

The appellants appealed against the Royal Court judgment in respect of its confirmation of the arrêt in respect of the Shares and the respondent cross appealed in respect of the refusal of the Royal Court to confirm the arrêt in respect of the debts due by BIL to Botas. We do not repeat the respective grounds of appeal. For the reasons given in the substantive judgment, the appeal by the appellants was refused (albeit that this Court differed from the Royal Court on the section of the Act which was applicable), and the cross appeal by the respondent was also refused. As a result, the arrêt in respect of the Shares was confirmed and the arrêt in respect of the debts due by BIL to Botas was refused.

6

This judgment concerns a number of matters consequent upon the substantive judgment. The appellants have filed two Summonses. The first Summons is dated 19 August 2016 and it seeks a continuation of the stay of execution granted initially by the Royal Court pending the final determination of any appeal to the Privy Council. The second Summons is dated 26 August 2016 and in it the appellants seek the leave of this Court to appeal to Her Majesty in Council pursuant to art 14(a) of the Court of Appeal (Jersey) Law 1961 (“the 1961 Law”). The respondent has also filed two Summonses. The first Summons for the respondent is dated 5 September and it seeks payment by Botas, as the first appellant, to Tepe, as the respondent, of 80% of the costs of and incidental to the appeal and cross appeal, including the costs of incidental preliminary hearings before the Commissioner and before McNeill JA sitting as a single judge of this Court, for a payment on account to the respondent, and for the sum of £100,000 which was paid into Court by Botas as security for the costs of the appeal to be paid forthwith to the respondent. The second is an Amended Summons dated 16 September and it seeks the refusal of the appellants' application for leave or, if that application were to be granted, that the giving of leave should be subject to conditions: namely (a) that the first appellant, Botas, should provide security by way of a bank guarantee for the full sum of the judgment debt payable in respect of the Awards which currently stands at circa US$100 million; and (b) that Botas should take no steps to migrate the offices of TPIC and BIL to another jurisdiction or dilute the shareholding of Botas in TPIC or BIL without the permission of the Viscount or the Court; and further that if leave to appeal is granted to Botas as the first appellant, Botas should make a payment into Court of an unidentified sum as security for the costs of the appeal.

7

These matters were the subject of contentions for the appellants supported by a second and third affidavit sworn by Ms Jayne Gabrielle Bentham, the London solicitor representing the appellants, together with related exhibits, and supplemented by a skeleton argument and supplementary skeleton argument, and of contentions for the respondent supported by an affidavit sworn by Ms Lynne Calder, an associate solicitor representing the respondent, together with related exhibits. Given the potential significance in particular of the application by the appellants for leave to appeal to the Privy Council, these written submissions were the subject of an oral hearing on 3 November 2016 before all members of the Court which gave the substantive judgment. We deal with each of the matters in turn.

Leave to appeal
8

Both parties presented their positions on this topic at some length initially in their contentions and then in skeleton argument and in oral submissions. In order to explain our decision on the application for leave, we summarise these as follows.

The parties' contentions
9

In their contentions, the appellants proceed upon the basis that this Court has the power to grant permission to appeal pursuant to article 14 of the 1961 Law. The appellants refer to the standard which is adopted by the Judicial Committee of the Privy Council itself pursuant to paragraph 3.3.3(a) of its Practice Direction 3 (“the JCPC Practice Direction”) which provides that permission to appeal to the Privy Council is granted:

“in civil cases for applications that, in the opinion of the Appeal Panel, raise an arguable point of law of general public importance which ought to be considered by the Judicial Committee at that time, bearing in mind that the matter will already have been the subject of judicial decision and may have already been reviewed on appeal; an application which in the opinion of the Appeal Panel does not raise such a point of law is refused on that ground” .

The appellants also refer to the decision of this Court in Crociani v Crociani [2014] JCA 089, the judgment of Beloff JA at paragraphs 50 to 53, but that decision was concerned with the granting of leave to appeal from the Royal Court to the Court of Appeal pursuant to Art 13 of the 1961 Law and it was not referred to otherwise by either party.

10

The appellants begin by reviewing the substantive judgment, and then put forward a number of grounds which are said to disclose errors of law in the substantive...

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2 firm's commentaries
  • Change To The Test Regarding Leave To Appeal To The Privy Council
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    • 16 December 2016
    ...4th November 2016, the Court of Appeal in Botas v Tepe [2016] JCA 199D made clear that, in respect of applications made to it for permission to appeal to the Privy Council, its practice going forward will be to normally refuse such permission so as to enable the Judicial Committee of the Pr......
  • Court Of Appeal For Bermuda Clarifies Test For Leave To Appeal To The Privy Council
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    • Mondaq Bermuda
    • 18 December 2019
    ...existence of that point of law and of its importance, as well as the urgency of its determination, before granting leave (Botas v Tepe [2016] JCA 199D, in which Walkers acted for the The content of this article is intended to provide a general guide to the subject matter. Specialist advice ......

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