BANCO NACIONAL DE COMERCIO EXTERIOR SNC v EMPRESA DE TELECOMMUNICACIONES DE CUBA SA

[2007] EWCA Civ 662, Court of Appeal, Lord Chief Justice Phillips, Lord Justice Tuckey and Lord Justice Jacob, 4 July 2007

Conflict of laws – Freezing order – Claimant obtaining judgment in Italy and registering judgment in England – Court made domestic freezing order and subsequently a worldwide freezing order – Whether English court had jurisdiction to make worldwide freezing order – Whether risk of dissipation of assets – Council Regulation 44/2001, Article 47

The defendant, a Cuban company, guaranteed a debt owed to the claimant, a Mexican company. In April 2002, following a dispute between the two Governments, the Cuban Government issued a decree proclaiming that the guarantee provided by the defendant was void. The claimant commenced an arbitration in Paris against the debtor and obtained a favourable award, and at the same time it commenced judicial proceedings in Italy. The Italian court ruled that the ETC could not rely upon the decree and ordered it to pay damages of about US$167,000,000 plus interest and costs. BNC thereafter recovered about €32,000,000 in Italy. The Italian judgment was registered in England under European Council Regulation 44/2001, and in September 2006 the claimant obtained a freezing order against ETC’s domestic assets. The order was varied in October 2006 and became a worldwide order. The defendant argued that the English court had no jurisdiction to grant a worldwide freezing order. David Steel J at first instance ruled that such jurisdiction existed under Article 47. This decision was overturned by the Court of Appeal. It was held on appeal that Article 47 was concerned purely with the position prior to the registration of the judgment in England.