Vijay Construction v Eastern European Engineering Limited |04 September 2020

Mr Georges speaking to the press after the hearing (Photo: Joena Meme)

Vijay appeals court ruling for the last time

Even though the Court of Appeal has ended its sessions for the year it sat for a special hearing yesterday to hear the appeal of Eastern European Engineering Limited v/s Vijay Construction.

The hearing was made in front of the three justices of appeal ‒ President of the Court of Appeal Justice Anthony Fernando, Justice Mathilda Twomey and Justice Oagile Bethuel Key Dingake.

In his remarks, attorney for Vijay Construction Bernard Georges noted he was not happy with the ruling made by Justice Ellen Carolus on June 30, 2020 in which she recognised the two orders of the UK (United Kingdom) ruling which enforced the arbitrary reward rendered in Paris.

During the first hearing, Mr Georges remarked that enforcement of a foreign judgment and not a first judgment is problematic. He noted that at the time of the judgement (in 2014), Seychelles was not a part of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) but only passed the law this year, and this might have influenced judge Carolus’ ruling.

Mr Georges also stated that when the respondent chose to go to arbitration in Paris they did it at their own risk as at that time foreign judgments were not admissible in court.

“You cannot only look at the positive side of arbitration but also at the possible downside it may have matter on when enforcing the judgment,” he said.

In his second argument, he noted that it will benefit both parties if the whole issue could be re-litigated in our jurisdiction so that the judgment is enforceable without any issue.

On her part, Justice Twomey noted that this issue should have been resolved in Seychelles instead of internationally and she questioned Mr Georges’ motives of this argument now as he is on the “losing end”.

Justice Twomey also noted that the judgement given by the Paris court is still in existence and that each time somebody tries to enforce it and fails it doesn’t take away the fact that the award is there and still enforceable.

To recap the case in 2011, Eastern Europe Engineering Limited (EEEL) entered into six materially identical contracts with Vijay Construction (Proprietary) Limited (‘VCL’) for construction work for Savoy hotel. The six Contracts concluded for the execution of various construction works were dated as follows: Contract 1 (April 15, 2011); Contract 2 (August 4, 2011); Contract 3 (August 30, 2011); Contract 4 (September 30, 2011); Contract 5 (October 19, 2011); and Contract 6 (December 23, 2011).

Each contract in the six included similar arbitration clauses, which provided that, any dispute, disagreement, or claim arising under or from the contracts, including disputes on breach, termination, and validity of the contracts shall be finally settled by arbitration under the rules of Arbitration of the International Chamber of Commerce (ICC); the arbitral tribunal would consist of a sole arbitrator, and the place of arbitration would be in Paris.

Disputes arose between the parties, and EEEL subsequently terminated the contracts. Each of the contracts provided for ICC arbitration seated in Paris and included a requirement that “each party shall notify another party of such dispute” before commencing arbitration. VCL issued notices of dispute on July 9, 2012, following which EEEL referred the dispute to ICC arbitration. A sole arbitrator was appointed who ruled in an award dated November 14, 2014 that the termination of all contracts was lawful and VCL was entitled to damages and 80% costs recovery, resulting in an order that VCL pays approximately €14.4 million.

In summary, the award declared that EEEL had validly terminated the six contracts and ordered Vijay to pay EEEL the following sums at an interest rate of 8% per annum which in 2020 has totalled to 20 million euros.

Mr Georges added that the central issue in this case is that the respondent has an award which it cannot enforce in Seychelles, it therefore obtained the judgement on the award in a country which mechanistically allowed it to do so for execution in that country.

EEEL attorney Alexandra Madeleine did not want to comment.

Christophe Zialor